You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: During today's call, Bob will provide an overview of the third quarter results and discuss the current state of our operations and markets.
Shashank will discuss the details of our third quarter performance, provide our initial outlook for the fourth quarter and offer a revised outlook for the full year 2021.
Following our remarks, we will address questions related to the information covered during the call.
These statements are subject to numerous risks and uncertainties that could cause the actual results to differ materially.
For information concerning these risks, see Watts' publicly available filings with the SEC.
I request that questions be limited to one, plus a follow-up, to ensure everyone has an opportunity to participate.
If you have additional questions, please rejoin the queue.
First, I must recognize the efforts of all our employees for their sustained commitment while dealing with continued supply chain and logistics challenges and the delta variant.
Our team has maintained a customer focus and have worked diligently to deliver on our promises to them.
The team produced another strong quarter despite supply chain and logistics challenges.
We delivered record third quarter sales, adjusted operating margin and adjusted earnings per share.
All regions' sales grew organically by double digits.
Our results benefited from the continued economic recovery as well as price and volume tailwinds.
Cash generation remains a focal point.
Year-to-date, we have increased our free cash flow by 26% as compared to last year.
Shashank will review the financial results in more detail momentarily.
In late September, we purchased Sentinel Hydrosolutions in an all-cash transaction.
Sentinel, a $6 million sales business, provides leak detection solutions mostly to the high-end residential market.
Sentinel's systems are designed to detect leaks in water pipes, plumbing fixtures and appliances, and will automatically shut off water when a leak is detected.
This acquisition further expands our developing focus in leak detection technology.
Like many companies, we're dealing with supply chain and logistics challenges.
We previously mentioned concerns involving components used in our electronics products.
Since then, supply chain and logistics issues have gotten more dynamic.
We are seeing disruptions across the board in all regions, impacting many of our core raw materials and components.
Lead times, on average, have more than doubled, and suppliers are dealing with labor constraints.
We're addressing these and other problems daily to maximize customer order fulfillment.
Our expectation is that supply chain and logistics disruptions will continue into 2022.
We are monitoring this issue closely.
Now let me talk about the markets.
In general, markets have continued to be positive.
GDP expectations in most regions portend a solid finish to 2021 for repair and replacement in both commercial and residential end markets.
In the Americas, single-family residential new construction remains strong, and we've seen some pickup in multifamily starts as well.
Repair and replacement business in both nonresidential and residential end markets remains strong.
We still see pent-up demand in older projects, while new project starts are still lagging.
Contractors are also dealing with materials and skilled labor shortages at job sites in addition to substantial inflation on project costs.
In Europe, German and Italian OEMs continue to benefit from government energy efficiency subsidies.
Repair and replacement was again strong in France.
We are beginning to hear customer feedback that there is more uncertainty heading into Q4 as projects are being delayed due to material and labor shortages, as well as an across-the-board inflationary impact on project costs.
The team is watching this trend closely.
In APMEA, underlying market demand has improved but is being impacted by the pandemic.
New Zealand and Australia have both had recent lockdowns affect their economies.
China market demand has been steady, but is being impacted by a potential correction in the housing market in COVID outbreaks that caused lockdowns, which impacts both suppliers and customers.
China is also experiencing power outages, which is further exasperating the supply chain.
Finally, given our performance in the third quarter and our expectations for Q4, we are raising our full year sales outlook.
Sales of $455 million were up 18% on a reported basis and up 17% organically, driven primarily by the global economic recovery.
Foreign exchange and acquisitions combined had a favorable year-over-year impact of $5 million.
Adjusted operating profit of $66 million increased 24% and adjusted operating margin of 14.4% increased 60 basis points as volume, price and productivity more than offset the impact of supply chain challenges, logistics inflation, incremental investments, incentives and business normalization costs.
Adjusted earnings per share increased by 32% for the reasons just cited in addition to lower interest expense and reduced foreign currency transaction losses.
The adjusted effective tax rate of 26.9% is 40 basis points lower year-over-year.
For GAAP purposes, we recorded a charge of $0.9 million related to the previously announced restructuring of our Mery facility in France.
We expect approximately $1 million more will be incurred in the fourth quarter.
We anticipate another $5 million to $6 million in restructuring costs in 2022 with respect to this plant closure upon completion.
As Bob noted, year-to-date free cash flow is up 26% to $120 million as compared to the same period last year.
This was driven by higher net income and lower capital spend.
We expect to maintain free cash flow conversion at 100% or more of net income for the full year.
Our balance sheet remains strong and provides ample flexibility.
The gross and net leverage ratios at the end of September were 0.6 times and negative 0.3 times, respectively.
Our net debt to capitalization ratio at quarter end was negative 8%.
During the quarter, we purchased approximately 25,000 shares of our common stock at an investment of $4 million primarily to offset dilution.
Turning to slide five, and our regional results.
Organic sales in all regions increased by double digits during the quarter, primarily from the continued strong economic recovery.
Reported regional sales also benefited from favorable foreign exchange movements.
In addition, the Americas had approximately $1 million in acquired sales.
Americas' organic sales increased 17% during the quarter, with broad growth across all of our major product categories driven by strong repair and replacement and single-family residential markets and price.
We had minimal benefit in the quarter from the U.S. South Central freeze.
Americas' adjusted operating margin declined by 30 basis points during the quarter as gross margin expansion from price, volume and productivity was more than offset by inflation, incremental investments, incentives and business normalization costs.
Europe sales increased over 14% organically, delivering another solid quarter with expansion in both the Fluid Solutions and Drains platforms.
Sales were up in all key regions, driven by the wholesale activity in France and Italy, continued strong OEM demand in Germany and Italy, driven by local government energy subsidies, and an uptick in Scandinavian sales due to a gradual recovery of the commercial and marine market.
Europe's adjusted operating margin expanded by 420 basis points, benefiting from volume, price and productivity, which more than offset inflation, incremental investments and business normalization costs.
APMEA continued its strong performance with sales up 33% organically.
The region saw double-digit growth in most locations, except for New Zealand, where sales were down due to COVID-related shutdowns.
Adjusted operating margin expanded by 400 basis points in APMEA in the quarter as trade and intercompany volume and productivity more than offset inflation and business normalization costs.
Moving to slide six, and general assumptions about our fourth quarter and full year 2021 outlook.
Our expectation for the fourth quarter is sales should expand by 10% to 14% over the fourth quarter of 2020.
We anticipate that fourth quarter adjusted operating margin should range from 13.4% to 13.8%.
Margins may be challenged due to the impact of inflation, especially from supply chain and logistics costs, as well as continued growth in business normalization costs and incremental investments.
Corporate costs should approximate $11 million to $12 million for the fourth quarter.
We expect interest expense sequentially will be flat to the third quarter.
The adjusted effective tax rate should approximate 26%.
Foreign exchange would be a headwind to last year should current rates persist throughout the fourth quarter.
As a reference, the average euro-dollar foreign exchange rate for the fourth quarter of 2020 was 1.19.
Please recall that for every $0.01 movement up or down in the euro-dollar exchange rate, our European annual sales are impacted by approximately $4 million, and our annual earnings per share is impacted by $0.01.
We expect seasonally strong cash flow to end the year.
For the full year 2021, we anticipate organic growth to be 14% to 17% or about 350 basis points higher at the midpoint than our previous outlook in August.
Full year adjusted operating margin, adjusted margin expansion and free cash flow expectations are anticipated to be in line with our previous outlook in August.
Other full year inputs are noted on the right with some minor changes since August.
To summarize, I'd like to leave you with a few key points.
Third quarter results were better than we anticipated and was aided by continued global demand and a strong repair and replacement market.
We continue to drive price and proactively manage the many supply chain issues to support our customers.
We continue to invest for the long term, including smart and connected solutions.
We have raised our full year 2021 revenue outlook.
Adjusted margin expansion remains in line with previous expectations.
Finally, given our strong results today and our already healthy balance sheet, we are well positioned to drive our strategy, including expanding our smart and connected offerings and executing on strategic M&A opportunities as they arise.

user
q3 sales rose 18 percent to $455 million.
increasing full year 2021 sales outlook.

assistant