The year-over-year impact of exchange rates in the fourth quarter to adjusted operating income was favorable by approximately 30 basis points. Now turning to our two segments. The Composite Materials segment represented 82% of total sales and generated an operating margin of 14.4%. The operating margin in the comparable prior year period was 12.7%. The Engineered Products segment, which is comprised of our structures and engineered core businesses, represented 18% of total sales and generated a 9.6% operating margin, as compared to 14.4% in the comparable prior year period. The softer margin year-over-year reflects the impact of higher infrastructure investments to support expected narrowbody rate ramps. Net cash provided by operating activities was $257 million in fiscal year 2023, compared to $173 million for the comparable period in 2022.
Working capital was a cash use of $27 million in 2023 to support higher sales. For the comparable prior year period, working capital increased $72 million. Throughout 2023, we focused on improving the efficiency of our inventory holdings, particularly reducing our buffer or safety stock that we’ve previously expanded when global logistics were strained. We are pleased with the actions by our team, and sequentially, inventory decreased $15.4 million from the end of the third quarter of 2023. We will continue to tightly manage our working capital. Capital expenditures on an accrual basis were $121.6 million in 2023, which included the previously Amesbury Massachusetts property purchases for approximately $38 million. Excluding this property purchase, 2023 accrued capital expenditures would have been approximately $83.6 million, compared to $69.8 million in the prior year period.
Free cash flow in 2023 was $148.9 million, which includes $7.5 million dividend received as part of the ACM joint venture sale, as well as a $1.9 million surplus received from the UK pension transaction. For comparison, free cash flow in 2022 was $96.8 million. Hexcel generated a strong free cash flow to adjusted net income, cash conversion ratio in 2023, of just over 96%. Going forward, we expect the conversion ratio of 100% or higher for a period of time, while CapEx remains at lower levels. Our strong free cash flow generation in 2023 resulted in us paying off our revolver balance during the fourth quarter. Our net debt position was $472.5 million at December 31, 2023, leading to a leverage ratio of approximately 1.3 times on a net basis — on a net debt basis.
Our ongoing net debt leverage ratio target remains at 1.5 to 2.0 times EBITDA. I would like to highlight the strategic derisking of the balance sheet by transferring a deferred pension plan in the UK to a third-party insurer, who assume all risks and liability and administers the plan. With this action, Hexcel received a $1.9 million of cash pre-tax, representing the surplus in the plan. There was also a non-cash charge of $70.5 million resulting from the required GAAP accounting. The Board of Directors declared a $0.15 quarterly dividend yesterday, which is an increase of 20% from the prior level. The dividend is payable to stockholders of record as of February 9, with a payment date of February 16. We did not repurchase any stock during the fourth quarter, the remaining authorization under the share repurchase program on December 31, 2023, was $187 million.
Expanding on Nick’s comments regarding our 2024 sales and adjusted EPS guidance, we are forecasting 10.4% sales growth at the midpoint and 21.5% adjusted EPS growth at the midpoint. In terms of our three markets, we expect 2024 Commercial Aerospace sales to increase mid-teens on a percentage basis. We forecast Space & Defense sales to increase mid-single digits, and we forecast Industrial sales to increase low to mid-single digits. We are guiding to free cash flow in excess of $200 million. We will provide guidance on additional financial metrics at the February Investor Day as well as provide our midterm outlook. With that, let me turn the call back to Nick
Nick Stanage: Thanks, Patrick. As we begin 2024, we do so with the largest backlog in Commercial Aerospace history, of more than 14,800 aircraft. That currently represents almost a decade of production for the OEMs, and based on our shipset content over $9 billion of future sales to Hexcel. The demand and the need for latest generation aircraft is quite apparent. The challenge for the industry is how fast the supply chain can ramp to meet that demand. Moreover, we recognize that a key element of the future of aerospace is lightweighting, lightweight materials for better performing, fuel efficient, more sustainable aircraft are being pulled and driven harder than they ever have in my history with Hexcel. Hexcel has the deepest and broadest portfolio of modern advanced composites and we are focused on delivering solutions to our customers.
Our market positions, customer relationships and sought-after technology lead our industry. Our Hexcel team is driving forward innovation to deliver lightweight and sustainable advanced composite solutions to make a better world. Everything we do at Hexcel is driven by our long-term relationships with customers who trust us to collaborate, innovate and perform. The opportunity ahead is larger and more exciting than ever. Audra, that wraps it up for the prepared remarks. We are now ready to take questions.
