Please keep in mind that our actual results could differ materially from these expectations.
Our boat business performed well, as anticipated, in the quarter, reaching double-digit adjusted operating margins for the first time in over 20 years.
Despite elevated production levels consistent with our plans for the year, the continued surge in retail demand is still driving historically low pipeline inventory levels, with 41% fewer boats in dealer inventory at the end of the first quarter, versus the same time last year.
Equally encouraging was the fact that the percentage of Brunswick female boat buyers in 2020, while still a minority, equaled the highest percentage on record and first-time female boat buyers entered at double that rate, which was a notable 700 basis points higher than the industry.
In Freedom Boat Club, we saw even more promising trends with the average Freedom member being almost three years younger than our typical boat buying customer, and female Freedom members making up 35% of our member base in 2020 and 2021.
Those recognized were chosen based on an independent survey of over 50,000 employees working for companies employing at least 1,000 people in their U.S. operations.
Consumers were also able to see Mercury's V-12 600 horsepower Verado in person for the first time, with many eager to repower their boats with this new, game changing engine.
Mercury gained share in each horsepower category over 50 horsepower in the first quarter, with outsized gains in nodes in excess of 200 horsepower.
As I mentioned earlier, Mercury launched its new 600 horsepower, V-12 Verado engine in February at Lake X in Florida to much fanfare.
Given the continued retail demand surge, 95% of our production slots are now sold for the calendar year, with many Whaler, Sea Ray and other models now sold out at wholesale well into 2022.
Freedom Boat Club also continues to exceed our growth expectations, now with over 40,000 memberships and 280 locations, which is more than 100 new locations since we acquired Freedom in 2019.
First quarter sales increased in each region, with international sales up 42% and sales in the U.S. up 47%.
The main powerboat segments were up 34% in the quarter, with Brunswick's unit retail performance ahead of market growth rates, especially in outboard boat categories.
Outboard engine unit registrations were up 21% in the first quarter, with Mercury significantly outperforming the market and taking market share as I discussed earlier.
First quarter net sales were up 48%, while operating earnings on an as adjusted basis increased by 116%.
Adjusted operating margins were 17% and adjusted earnings per share was $2.24, each being the highest mark for any quarter for which we have available records.
Finally, we had free cash flow usage of $23 million in the first quarter as we built inventory ahead of the prime retail selling season, which is very favorable versus free cash flow usages of $144 million in the first quarter of 2020 and $159 million in Q1 of 2019.
Revenue in the Propulsion business increased 47% as each product category experienced strong demand and market share gains.
In our Parts and Accessories segment, revenues increased 52% and adjusted operating earnings were up 83% versus first quarter 2020 due to strong sales growth across all product categories.
Adjusted operating margins of 21.3% were 350 basis points better than the prior year quarter, with strong sales increases, together with favorable sales mix, driving the robust increase in adjusted operating earnings.
In our boat segment, sales were up 44%, with 31% adjusted operating leverage resulting in 10.9% margins for the quarter.
Although it's only one quarter above our stated goal of double-digit margins, this is the third consecutive quarter of margins above 9%, and we believe that we can continue this trend throughout the year and beyond.
Operating earnings were also positively impacted by the increased sales and the lower retail discount levels versus 2020.
Our boat production continues to ramp consistent with our plans to produce in excess of 38,000 units during the year.
Despite producing approximately 9,400 units in the quarter, which is up 16% from the 4th quarter of 2020, we only added a few hundred units to dealer inventories given the continued robust retail market.
Our boat brands ended March with just under 19 weeks of boats on hand, measured on a trailing twelve-month basis, with units in the field lower by 41% versus same time last year.
We anticipate U.S. Marine industry retail unit demand to grow mid-to-high single-digit percent versus 2020; net sales between $5.4 billion and $5.6 billion, adjusted operating margin growth between 130 and 170 basis points, operating expenses as a percent of sales to remain lower than 2020, free cash flow in excess of $425 million; and adjusted diluted earnings per share in the range of $7.30 to $7.60.
We're also providing directional guidance regarding the second quarter, where we anticipate revenue growth of approximately 50% over the second quarter of 2020, with adjusted operating leverage in the low-20s percent.
As we look to the second half of the year, despite extremely challenging comparisons to 2020, we still believe that we will deliver top-line and earnings growth over the second half of last year.
I will conclude with an update on certain items that will impact our P&L and cash flow for the remainder of 2021.
The only significant update relates to the working capital usage for the year.
We now estimate a working capital increase of $80 million to $100 million for 2021, which together with the higher anticipated earnings, results in a stronger free cash flow projection of $425 million.
We still plan to retire approximately $100 million of our long-term debt obligations, as we repaid $9 million in the first quarter and $60 million already in April.
We repurchased $16 million of shares in the quarter, and plan to continue our systematic approach throughout the year.
We anticipate spending $250 million to $270 million on capital expenditures in the year to support, and in some cases accelerate, growth initiatives throughout our organization.
We are also raising our dividend, for the ninth straight year, to $0.335 cents a share, or a 24% increase, as our strong cash position enables us to raise our dividend earlier in the year than usual, and keep our payout ratio close to our target 20% to 25% range, and continue to provide strong returns to our shareholders.
Just a reminder that while we will not be providing a full financial update during this event, Ryan will be providing an abbreviated update on our 2022 financial targets, which will include further details regarding the substantial increase of our 2022 earnings per share target to between $8.25 and $8.75 per share as announced today.

Summary:
Please keep in mind that our actual results could differ materially from these expectations.
Mercury gained share in each horsepower category over 50 horsepower in the first quarter, with outsized gains in nodes in excess of 200 horsepower.
Adjusted operating margins were 17% and adjusted earnings per share was $2.24, each being the highest mark for any quarter for which we have available records.
Operating earnings were also positively impacted by the increased sales and the lower retail discount levels versus 2020.
We anticipate U.S. Marine industry retail unit demand to grow mid-to-high single-digit percent versus 2020; net sales between $5.4 billion and $5.6 billion, adjusted operating margin growth between 130 and 170 basis points, operating expenses as a percent of sales to remain lower than 2020, free cash flow in excess of $425 million; and adjusted diluted earnings per share in the range of $7.30 to $7.60.
We're also providing directional guidance regarding the second quarter, where we anticipate revenue growth of approximately 50% over the second quarter of 2020, with adjusted operating leverage in the low-20s percent.
As we look to the second half of the year, despite extremely challenging comparisons to 2020, we still believe that we will deliver top-line and earnings growth over the second half of last year.
I will conclude with an update on certain items that will impact our P&L and cash flow for the remainder of 2021.
The only significant update relates to the working capital usage for the year.
Just a reminder that while we will not be providing a full financial update during this event, Ryan will be providing an abbreviated update on our 2022 financial targets, which will include further details regarding the substantial increase of our 2022 earnings per share target to between $8.25 and $8.75 per share as announced today.