“Similar to last year, you should expect capital expenditures to be somewhat higher in the second half of the year, spending a little over 2% of sales for the year.”

In context

“of $1.1 billion, which is well ahead of what we had planned. However, there is still work to be done as we have working capital to unwind from the balance sheet. We expect a strong second half with the majority of cash generated in the fourth quarter, which should push us towards a cash conversion rate around 90% for the year, an improvement from what we were originally forecasting. Our full year cash estimate excludes the impact of the recent tax legislation. As you know, reversing the prior law's requirement to capitalize R&D expenses will provide us a cash benefit. We are still working to develop an estimate of the exact timing and amounts associated with how that will all unfold. Now turning to capital deployment. Capital expenditures were $198 million or 1.5% of sales in the quarter. Similar to last year, you should expect capital expenditures to be somewhat higher in the second half of the year, spending a little over 2% of sales for the year. We paid $402 million in dividends in the quarter, but we made no share repurchases largely due to our cash profile. Also in the quarter, we refinanced $750 million of notes that matured in May. We have no further debt maturities until next year. We ended the quarter with a cash balance of approximately $1.5 billion and a net debt position of $7.2 billion, down $1.2 billion from last quarter. Our net interest expense in the quarter was $88 million, compared to $84 million last year. That brings the interest expense for the first half of the year to $177 million, up from $166 million for the same period in 2024 due to our utilization of commercial paper. At this point, our expectation for interest expense for the year is approximately $330 million. Finally, the effective tax rate in the qua”