Before we begin, I want to remind everyone that statements in this conference call, including words such as believe, expect, intend, anticipate, contemplate, estimate, plan, project, should, may, will or similar expressions, are forward-looking statements. They are subject to a number of factors that could cause the company's actual results to differ materially from what is indicated here. These factors include general economic conditions, including the severity of current economic and financial market conditions; the level of customer demand, particularly for capital products in the markets we serve; changes in supplier sales strategies or financial viability; political, economic or currency risks related to foreign operations; inventory obsolescence; copper price fluctuations; customer viability; risks associated with accounts receivable; the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks; potential impairment of goodwill; and risks associated with the integration of acquired companies. These uncertainties may cause our actual results to be materially different than those expressed in any forward-looking statements. We do not undertake to update any forward-looking statements. Please see the company's SEC filings for more information.At this point, I'll turn the call over to Ted. Theodore A. Dosch Thank you, Chris. Good morning and thank you, everyone, for joining us today. Before we discuss the current period operating results, I want to remind everyone of the divestiture of our Aerospace Hardware division in August of this past year and the impact that had on how we report. Our third quarter 2011 results, along with prior periods, were restated to reflect the Aerospace business as discontinued operations. All performance results included in this morning's fourth quarter earnings release and in our commentary to follow is based on results from continuing operations. With that, we are pleased to report another quarter of strong performance, in which the company delivered a 40-basis point operating margin improvement compared to the very strong sales growth and operating margin in the fourth quarter of 2010. In addition, we delivered our eighth consecutive quarter of double-digit leverage, with a 12% incremental operating profit on increased sales. Due to strong working capital management, we also had very strong cash flow performance during the quarter, with $113 million of cash provided by operating activities. In the fourth quarter, we reported an 8% increase in year-on-year sales. After adjusting for $30 million of sales from the acquisition of Clark Security Products in the fourth quarter of 2010, an estimated $16 million favorable effect of copper prices and $4 million of unfavorable foreign exchange effects, organic sales grew by 5% over the prior-year period.
Before discussing our end market and geographic segment performance, I want to take a moment to elaborate on the estimated impact of copper on the price of Cable products. Our estimate of the favorable impact on sales from copper pricing may appear high, based on the reduction in the average copper price in the fourth quarter of 2011 compared to the fourth quarter of 2010. As you know, copper is just one of many cost inputs to the manufacturer of cable, while normal marketplace supply and demand factors also play a major part in the determination of prices. However, you should also factor in the normal lag between when the spot market price changes and when it works its way through the supply chain. The methodology that we have continued to use for many years to estimate the impact of copper requires numerous assumptions of the various factors that influence the pricing of copper cabling, and is further complicated in recent periods since copper prices fell so rapidly in the fourth quarter of 2011, compared to a dramatic rise in the fourth quarter of 2010. Considering these many variables, our estimate of the impact of copper price could be overstated in either direction during periods like this, with rapid price changes.Returning to the discussion of our results, all 3 of our end markets, as well as each of our 3 geographic regions, continued to deliver year-on-year growth during the quarter. The 7% sequential drop in sales was primarily attributed to normal seasonality, combined with weaker foreign currency versus the U.S. dollar, less favorable copper effects and somewhat softer project business. As in recent quarters, our positive sales results, which are well in excess of broader GDP growth rates, reflect the combined impact of relatively minimal improvement in macroeconomic factors, combined with the success of our global strategic growth initiatives, which Bob will discuss in more detail later on in the call. Read the rest of this transcript for free on seekingalpha.com