You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: Please advance to Slide 3.
In order to provide improved transparency into the operating results of our business, we provided non-GAAP measures, adjusted net earnings, adjusted earnings per share and adjusted segment earnings that exclude the severance and restructuring charges related to aligning our business to current market conditions.
Also as a courtesy to others in the question queue, please limit yourself to one question and one follow-up question per turn.
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Before we begin discussing our results and outlook, I want to send my deepest gratitude to the thousands of A. O. Smith employees who've been working under less than ideal conditions and we continue to keep our operations running, offices open and customers in hot and treated water.
To recap 2020, better than expected fourth quarter results drove our 2020 performance above our expectations.
North America water treatment grew 14% organically, driven by continued consumer demand for products promoting a safe home.
The direct-to-consumer channels with our Aquasana brand, retail outlets with their A.O Smith brand and the dealer channel all contributed to solid 2020 growth.
We believe industry shipments of U.S. residential water heaters, including tankless surge to a record, exceeding 10 million units or 8% growth over the prior year.
This assessment is based on our strong December shipments.
We believe the overall positive tone to new residential and safe at home remodel construction activity, including an increase in proactive replacement demand and channel inventories stocking related to extended lead times resulted in above trend growth in 2020.
Due to construction project delays and postponements in North America as well as pandemic-related weakness in restaurant and hospitality, new construction and replacement demand, we saw commercial water heater and boiler industry volumes declined by 8% to 10%.
We maintained our market share in both of these categories.
Progressive year-over-year improvement in consumer demand for our products in China continued in the fourth quarter.
As a result of higher volumes and diligent efforts by our team to reduce cost and reorganize, high single-digit margins were achieved in the second half of the year.
In North America, aside from the voluntary closure of our Mexican facility for several weeks in the second quarter, we remained operational throughout 2020 with no significant disruptions within our plants and our supply chain.
Pandemic-related safety protocols have been in place in our facilities and our offices.
Due to strong residential water heater demand coupled with soft quarantine-related absenteeism, our lead times remained above normal.
We continue to use temporary workers, swing shifts and expedited logistics in some cases to take care of our customers.
I would now like to turn the conference over to your host, Ms. Patricia Ackerman, Senior Vice President, Investor Relations, CRS and Treasurer.
You may begin again.
I believe you heard the introduction that I gave.
This may be redundant, but we think it's important to start from the beginning.
Before we begin discussing our results and outlook, I want to send my deepest gratitude to thousands of A.O. Smith employees who have been working under less than ideal conditions and we continue to keep our operations running, offices open and customers in hot and treated water.
To recap 2020, better than expected fourth quarter results drove our 2020 performance above our expectations.
North America water treatment grew 14% organically, driven by continued consumer demand for products promoting a safe home.
The direct-to-consumer channel with our Aquasana brand, retail outlets with our A.O. Smith brand and the dealer channel all contributed to solid 2020 growth.
We believe industry shipments of U.S. residential water heaters, including tankless, surge to a record, exceeding 10 million units or 8% growth over the prior year.
This assessment is based on our strong December shipments.
We believe the overall positive tone to new residential and safe at home remodel construction activity, including an increase in proactive replacement demand in channel inventory stocking related to extended industry lead times resulted in above trend growth in 2020.
Due to construction project delays and postponements in North America as well as pandemic-related weakness in restaurant and hospitality, new construction and replacement demand, we saw commercial water heater and boiler industry volumes declined by 8% to 10%.
We maintained our market share in both of these categories.
Progressive year-over-year improvement in consumer demand for our products in China continued in the fourth quarter.
As a result of higher volumes and diligent efforts by our team to reduce costs and reorganize, high single-digit margins were achieved in the second half of the year.
In North America, aside from the voluntary closure of our Mexican facility for several weeks in the second quarter, we remained operational throughout 2020 with no significant disruptions within our plants and our supply chain.
Pandemic-related to safety protocols remain in place in our facilities and offices.
Due to strong residential water heater demand coupled with self quarantine-related absenteeism, our lead times remain above normal.
We continue to use temporary workers, swing shifts and expedite logistics in some cases to take care of our customers.
All of these efforts result in inefficiencies and incremental costs.
To align our business with current global market conditions, we reduced headcount and incurred other restructuring costs, totaling approximately $6 million after tax in 2020.
The majority of these actions took place in China.
We published our second Corporate Responsibility and Sustainability Report in January and great proud of our accomplishments since our first report, particularly in employee engagement, safety, research reduction in our facilities and a product portfolio that both some of the most efficient products in their respective categories.
We introduced our first ever public greenhouse gas emission goal.
We strive to reduce GHG emissions by 10% by 2025.
Full year sales of $2.9 billion declined 3% compared with 2019, largely due to significant weakness in the China business in the first half of 2020.
As a result of lower sales, adjusted earnings declined 3% to $351 million or $2.16 per share compared with $370 million or $2.22 per share in 2019.
Sales in our North America segment of $2.1 billion increased 2% compared with 2019.
Higher residential water heater volumes, growth in water treatment as well as full year of Water-Right sales were partially offset by lower U.S. commercial water heater volumes, lower boiler sales and our water heater sales mix composed of more electric models, which have a lower selling price.
Rest of the world segment sales of $800 million declined 14% from 2019.
Pandemic-related lock downs and weak end market demand primarily in China in the first half of the year and a higher mix of mid-priced products resulted in lower sales.
Currency translation of China sales favorably impacted sales by approximately $9 million.
Indian sales were also negatively impacted by the pandemic-related economic disruption and declined to $31 million compared with $39 million in 2019.
On Slide 7, North America segment adjusted earnings of $506 million increased 4% compared to 2019.
The increase in earnings was driven by favorable impact to earnings from higher residential water heater volumes, growth in water treatment sales, full year of Water-Right sales and lower material costs.
The impact to earnings from lower volumes of boilers and commercial water heaters and the mix skew to electric water heaters partially offset these factors.
Adjusted segment earnings exclude $2.7 million in pre-tax severance costs.
As a result, adjusted operating margin of 23% is slightly higher than in 2019.
Rest of the world adjusted segment earnings of $5 million declined significantly compared with 2019.
In China, the unfavorable impact from lower sales and the higher mix of mid-priced products which have lower margins than higher-priced products more than offset reductions in SG&A costs and temporary waivers for required social insurance contributions.
As a result of these factors, adjusted segment operating margin of 0.6% decline from 4.3% in 2019.
Our corporate expenses of $52 million were higher than in 2019, primarily driven by lower interest income.
Turning to Slide 8.
Record fourth quarter sales of $835 million increased 11% compared with the fourth quarter of 2019.
The increase in sales was largely due to higher residential water heater volumes in North America and higher sales in China.
As a result of higher sales and cost reduction initiatives earlier this year, fourth quarter earnings of $120 million or $0.74 per share increased significantly compared with 2019.
Please advance to Slide 9.
Record fourth quarter sales in North America segment of $561 million increased 7% compared with the same period in 2019, primarily driven by higher residential water heater volumes.
Rest of the world fourth quarter segment sales of $279 million improved 19% compared with the fourth quarter of 2019.
Currency translation of China sales favorably impacted sales by approximately $14 million.
Constant currency China sales improved 15% driven by mid single-digit growth in end market demand led by water treatment, replacement water treatment filters and gas tankless water heaters and a favorable mix between product categories compared with the fourth quarter of 2019.
On Slide 10, record fourth quarter North America segment earnings of $138 million increased 7% from the same period in 2019.
The increase in earnings was primarily driven by higher residential water heater volumes in North America and lower steel costs.
These factors were partially offset by logistic costs.
As a result, fourth quarter segment margin of 24.6% was slightly higher than 24.5% in 2019.
Rest of the World segment earnings of $31 million improved significantly from $1.5 million in the same quarter in 2019.
In China, higher volumes, reductions in SG&A costs and lower material costs drove higher earnings.
As a result of these factors, fourth quarter segment margin improved to 11.2% compared with 0.6% in 2019.
Our corporate expenses of $16 million in the fourth quarter were higher than the same period of 2019, primarily due to an increase in long-term incentives and lower interest income in the 2020 fourth quarter.
Advancing to Slide 11.
Cash provided by operations of $562 million during 2020 was higher than 2019.
Lower investments in working capital in 2020 were partially offset by lower earnings compared with the prior year.
Our liquidity and balance sheet remained strong.
Our cash balances totaled $690 million at the end of 2020 and our net cash position was $576 million.
At the end of 2020, our leverage ratio was 6% as measured by total debt to total capital.
We are in the process of refinancing our $500 million revolving credit facility, which expires at the end of the year.
We currently have no borrowings on this facility.
We expect to repurchase $400 million worth of share in 2021 through a combination of 10b5-1 program and open market purchases.
Recently, our Board increased the authorized shares on our share repurchase authority by 7 million shares.
Turning to Slide 12.
The midpoint of our range represents an increase of 13% compared with our 2020 results.
Our guidance assumes the conditions of our business environment and that of our suppliers and customers are similar in 2021 to what we have experienced in recent months and does not deteriorate as a result of further restrictions or potential shutdowns due to the COVID-19 pandemic.
We expect cash flow from operations in 2021 to be between $450 million and $475 million compared with $560 million in 2020, primarily due to higher earnings offset by higher investments in working capital than in prior year.
In 2021, capital spending plans are between $85 million and $90 million and our depreciation and amortization expense is expected to be approximately $80 million.
Our corporate and other expenses are expected to be approximately $51 million, slightly lower than in 2020.
Our effective tax rate is assumed to be between 22.5% and 23% in 2021.
Average outstanding diluted shares of 160 million assumes $400 million worth of shares are repurchased in 2021.
Our businesses and the countries in which we do business continue to navigate through pandemic-related challenges, particularly in supply chain and logistics.
Our outlook for 2021 includes the following assumptions.
We project U.S. residential water heater industry volumes will be down 2% or 200,000 units in 2021.
We are encouraged by the positive tone in the new construction market.
Although, we believe some destocking will occur during 2021 as we expect industry lead times to improve throughout the year.
The timing of the destocking is difficult to predict as we have two price increases announced, one effective in February and the second one in April.
Destocking activity could be delayed until mid-year due to the pre-buy orders in advance of the price increases.
Further note on the 2021 price increases.
We have seen inflation our cost of supply chain, particularly steel and logistic costs.
Steel has increased nearly 50% since we announced our February 1 water heater price increase of 5% to 9%.
We announced a second price increase last week on water heaters effective April 1st, also between 5% to 9% depending on the type of water heater.
We expect commercial industry water heater volumes will further decline approximately 4% as pandemic impacted business delay, order for new construction and discretionary replacement installations.
In China, it is encouraging to see consumer demand for our China products progressively improve in 2020 and into January of 2021.
We accomplished much in China in 2020, which will allow us to profitably grow in 2021.
Those accomplishments include closing of 1,000 stores in Tier 1 and 2 cities, while efficiently expanding in Tier 4 through 6 cities, implementing programs to save $30 million in SG&A, which will carry over into 2021.
We've lapped a negative impact to earnings from mid-priced products.
We expect positive mix in 2021 from new products.
And we execute programs to result in a stronger and more nimble distributors.
We expect year-over-year increases in local currency sales between 14% and 15%.
We assume China currency rates remain at current levels, adding approximately $45 million and $3 million to sales and profits over the prior year respectively.
We expect our North America boiler sales will increase by mid single-digits in 2021.
Our expectations are based on several growth drivers.
First, industry growth of 3% to 4%.
We assume some pent-up demand after the industry decline in the low-teens levels in 2020.
The CAGR for commercial condensing boilers, which is over 50% of the boiler revenue, was 5% to 6% prior to 2020.
We believe replacement demand is still 85%.
A potential government stimulus package targeting infrastructure investment may free up some jobs that were postponed or halted in 2020.
The transition to a higher energy efficient boilers will continue, particularly as commercial buildings improve their overall carbon footprint.
In 2020, condensing boilers were 39% of the commercial boiler industry that represents our addressable market, which provides continued opportunity for our leading market share commercial condensing boilers.
New product launches including improvements to our flagship CREST commercial condensing boiler with a market differentiating oxygen sensor which continuing measures and optimizes boiler performance and the introduction of be 1 million BTU light duty commercial night FTXL boiler.
We project 13% to 14% sales growth in our North America water treatment products.
We believe the mega trends of health and safe drinking water as well as a reduction of single use plastic bottles will continue to drive consumer demand for our point of use and our point of entry water treatment systems.
We believe margins in this business could grow by 100 to 200 basis points, higher than the nearly 10% margin achieved in 2020.
And in India, fourth quarter sales were similar to the prior year.
We project 2021 full year sales to increase over 20% compared with 2020 and to incur a small loss of $1 million to $2 million.
Advance to Slide 14.
We project revenue will increase by approximately 10% in 2021 as strong North America water treatment and China sales enhanced by growth in boiler sales more than offset expected weaker North America water heater volumes.
Our 10% growth rate projection includes approximately $45 million of benefit from China currency translation.
We expect North America segment margins to be between 23% and 23.5% and Rest of World segment margins to be between 7% and 8%.
To Slide 15 please.
2020 was a challenging year.
We are pleased with our performance through the pandemic.
Particularly in these uncertain times, we believe A. O. Smith is a compelling investment for numerous reasons.
We have leading share positions in our major product categories.
We estimate replacement demand represents approximately 80% to 85% of U.S. water heater and boiler volumes.
We have a strong premium brand in China, a broad product offering in key product categories, broad distribution, a reputation for quality and innovation in that region.
Over time, we are well positioned to maximize favorable demographics in both China and India to enhance shareholder value.
We are very excited for the opportunity we see in our North America water treatment platform.
We have strong cash flow and balance sheet supporting the ability to continue to invest for the long-term with investments in automation, innovation and new products as well as acquisitions and return cash to shareholders.

user
q4 earnings per share $0.74.
remained operational with no significant covid-19-related disruptions within its plants or supply chain in recent quarter.
noted stability in its north america water heater manufacturing lead times in q4.
encouraged by resiliency of our north america water heater replacement demand.
expect tailwinds behind north america water treatment product sales driven by drinking water health and safety concerns.

assistant