Continuing the pace of growth we saw in the first quarter, our North America water treatment business organically grew 19%.
Due to construction project delays and postponements in North America, we saw commercial water heater and boiler volumes decline, in line with our estimates of the industry declines of 20% to 25% in the quarter compared with last year.
To align our business with current market conditions, primarily in China and to a lesser extent in North America, we reduced headcount and incurred other restructuring costs totaling $6 million in the second quarter.
Second quarter 2020 sales of $664 million declined 13% compared to the second quarter of 2019.
As a result of lower sales, second quarter 2020 adjusted earnings of $73 million and adjusted earnings per share of $0.45 declined significantly compared with the same period in 2019.
Sales in our North America segment of $481 million declined 8% compared to the second quarter of 2019.
Organic growth of approximately 19% in North America water treatment sales was more than offset by lower commercial water heater volumes, lower boiler volumes, and a water heater sales mix composed of more electric models which have a lower selling price.
Rest of the World segment sales of $190 million declined 24% compared to the same quarter of 2019.
China sales declined 20% in local currency related to higher mix of mid-price products and further reductions in customer inventory levels.
China currency translation negatively impacted sales by approximately $6 million.
On Slide 7, North America adjusted segment earnings of $108 million were 12% lower than segment earnings in the same quarter in 2019.
Certain costs directly related to the pandemic including temporarily moving production from Mexico to the U.S., paying employees during temporary plant shutdowns, facility cleaning, paying benefits for furloughed employees and other costs were $5.5 million in the second quarter.
Adjusted earnings exclude $2.2 million in pre-tax severance costs.
As a result, second quarter 2020 segment -- adjusted segment margin of 22.4% declined from 23.5% achieved in the same period last year.
Rest of the World adjusted segment loss of $2 million declined significantly compared with 2019 second quarter segment earnings of $22 million.
These results exclude $3.9 million in pre-tax severance and restructuring costs.
As a result of these factors, adjusted segment margin was negative compared with 9% in the same quarter of 2019.
Our corporate expenses of $10 million and interest expense of $3 million were similar to last year.
Cash provided by operations of $179 million during the first half of 2020 was higher than $144 million in the same period of 2019 as a result of lower investment in working capital, including deferral of our April estimated federal income tax payment to July, which was partially offset by lower earnings compared with the year ago period.
We had cash balances totaling $569 million and our net cash position was $288 million at the end of June.
Our leverage ratio at the end of the second quarter was 14.5% as measured by total debt to total capital.
We had $332 million of undrawn borrowing capacity on our $500 million revolver.
During the first half of 2020, we repurchased approximately 1.3 million shares of common stock for a total of $57 million.
Our 2020 adjusted earnings per share guidance excludes $0.03 per share in severance and restructuring costs included that were incurred in the second quarter.
We expect our cash flow from operations in 2020 to be approximately $350 million compared with $456 million in 2019, primarily due to lower earnings.
Our 2020 capital spending plans are between $60 million and $70 million and our depreciation and amortization expense is expected to be approximately $80 million.
Our corporate and other expenses are expected to be approximately $47 million in 2020, slightly higher than 2019 primarily due to lower interest income on investments.
We expect our interest expense to be $9 million in 2020 compared with $11 million in 2019.
Our effective income tax rate is expected to be between 23% and 23.5% in 2020.
Our assumptions assume no additional share repurchase resulting in an average diluted outstanding shares in 2020 of approximately 162.5 million.
We expect commercial industry water heater volumes will decline approximately 10% as job sites and business closures due to the pandemic delay or defer new construction and discretionary replacement installation.
We continue to target closure of 1,000 existing stores while targeting to open 500 small store relationships in Tier 4 through 6 cities.
Cost actions and restructuring activity are projected to result in $35 million of savings in 2020 over 2019, $15 million of which will be realized in the second half of 2020.
We expect year-over-year declines in local currency sales of 18% to 20% and protract sequential quarter-over-quarter growth in the second half of the year as China appears to be making sustainable progress in reopening their economy and keeping the virus in check.
We expect our North America boiler sales will decline approximately 10% for the full year.
Commercial boilers represent 65% to 70% of our boiler sales.
We project 20% to 22% sales growth in our North America water treatment products which include incremental Water-Right sales.
We ended 2019 with a $2.6 million loss in India and expect a similar loss in 2020 as a result of the pandemic.
We project revenue will decline by 7% to 8% in 2020 as strong organic North America water treatment sales and resilient North America residential water heater volumes are more than offset by weaker North America commercial water heater and boiler volumes and lower China sales, largely due to the pandemic.
We expect North America segment margin to be between 22.5% and 23% and Rest of World segment margins to be negative 1% to negative 2.5%.
We estimate replacement demand represents approximately 80% to 85% of U.S. water heater and boiler volumes.
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 returning cash to shareholders.

Summary:
Second quarter 2020 sales of $664 million declined 13% compared to the second quarter of 2019.
As a result of lower sales, second quarter 2020 adjusted earnings of $73 million and adjusted earnings per share of $0.45 declined significantly compared with the same period in 2019.
Our 2020 adjusted earnings per share guidance excludes $0.03 per share in severance and restructuring costs included that were incurred in the second quarter.
Our 2020 capital spending plans are between $60 million and $70 million and our depreciation and amortization expense is expected to be approximately $80 million.
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 returning cash to shareholders.