Todd M. Leombruno
Executive Vice President and Chief Financial Officer at Parker-Hannifin
Thank you, Jenny. I'm going to begin here on slide 11 and just touch on some of the financial results. Jenny mentioned this, our FY '24 is off to a very strong start, really speaks to the alignment across our global team. We broke several records this quarter. We set records for sales and on an adjusted basis, segment operating margin, EBITDA margin, net income and earnings per share. If you look at the sales growth, it's up 15% versus prior year, obviously, strongly impacted by the net of acquisitions and divestitures.
You look at that impact, that was a little over 11% positive to our growth. Organic growth remained positive at 2.3%, and currency was actually a slight favorable 1% impact in the quarter. When you look at adjusted segment operating margin, it was 24.9%. That is an increase of 220 basis points versus prior year. And if you look at adjusted EBITDA margin, that was 24.8%, an increase of 150 basis points versus prior year. If you look at adjusted net income, we generated $776 million in net income.
And adjusted EPS was a record at $5.96. If you look at both of those items, it's a 26% improvement versus prior year. And we can't say this enough, it's our portfolio transformation and really consistent execution across the global team, just great work delivering a standout quarter here. And I'm really pleased to say that these results are consistent across all of our businesses. If you can move to slide 12, this just kind of details the 26% increase in earnings per share, that's $1.22 of improvement. What I really like about this chart, the main driver continues to be standout operating performance.
We increased segment operating margin dollars by nearly $250 million. That was $1.46 of our EPS growth. And while all segments contributed to growth, really the strength in our aerospace business was a major driver this quarter. If you look at income tax, that was $0.17 favorable this year. Really, that is solely based off of a few discrete items that settled in the quarter. We did have some headwinds on the other expense line of $0.27 and also the interest expense line of $0.10. But I will tell you, both of those items are simply related to timing with last year's funding of the Meggitt transaction.
We do not expect those to repeat going forward. And finally, corporate G&A and share count were just slightly unfavored at $0.02 each, and that is -- really that is in line with what we guided to. So nothing of concern there. So that's the walk to the record $5.96 in EPS, and it really is just driven off a broad-based offering improvements. Obviously, the Meggitt results are in there. The synergies are in there. And as you can see, strong record margins across all of the businesses, just great job by the team.
On slide 13, we'll just talk a little bit about segment performance. Every segment delivered adjusted operating margins over 24%. That's the first time in the history of the company that, that has happened. And it was really, again, just driven by strong performance, good volumes. Obviously, Meggitt synergies helped quite a bit, and really just the global team is very aligned. If you look at incrementals, we did 40% incrementals versus prior year, really proud of that number. And orders are positive at plus two versus prior year. And backlog coverage, as Jenny mentioned, really remains elevated.
And again, aerospace activity remains especially robust on the order line. So just great work there. And then lastly, I would just say as we celebrate that one year anniversary with Meggitt, we're really very pleased that those businesses continue to outperform. It's been a great addition to the company. If you look at North America specifically, sales volume is up 4.5%. We generated $2.2 billion of sales. Organic growth was slightly positive, just 0.5% there. And that was impacted by some destocking and channel rebalancing that we've kind of mentioned throughout the quarter.
If you look at adjusted operating margins, we did increase operating margins 150 basis points to 24.9%. And that was really just great execution and obviously cost controls. So great work there. And if you look at orders in North America, they did improve versus last quarter. They are minus 4%. They did improve from minus 8%. And backlog coverage in North America obviously remains strong as well. So great work to our North America team.
In the international businesses, sales were $1.4 billion. That is an increase of about 2.5% versus prior year. Organic growth in the segment was about negative 2%. So that was down. Organic growth in EMEA was positive 2%, right? So that was a plus. Latin America, also very positive at plus 8%. The impact of the segment was really driven by Asia Pacific, and that was about a negative 8% organic growth. And that's really just a result of mostly China softness that I think is well documented and also some tough comps that we had in the prior year.
However, if you look at operating margins, even with that negative 2% organic growth, we expanded operating margins by 100 basis points. And the segment finished at 24.1%. So our team members there are focused on productivity, cost controls. The team really expanded margins in a very, very tough environment. So just great, resilient performance across the segment there, very nice work. Order rates do continue to be choppy. They did decline to minus 8%. Really, that is conditions driven really out of Europe and China.
The standout for the quarter is our aerospace business, right? Just a stellar quarter from aerospace. Sales were $1.2 billion. That was an increase of 65% versus prior year. Organic growth, very robust at about 16%. And that was really broad-based, double-digit growth in all of the aerospace market platforms. So business is very strong there. Operating margins, unbelievable, a new record, increasing 610 basis points to 26%. Really, that was driven by healthy margins, rate increases at the airlines, strong aftermarket growth, really all those things contributing to great margin performance.
I will note, we did benefit from a few small favorable onetime contractual settlements in the quarter. And we do not expect those to repeat throughout the rest of our fiscal year. Aerospace orders, I already mentioned this, but plus 24% are very robust. Great future for the aerospace business. If you move to slide 14, just a quick look at cash flow. Our cash flow from operations increased 42% versus prior year. Cash flow from operations was $650 million. That's 13.4% of sales. Our free cash flow increased even more, 48% increase versus prior year, finished at $552 million for the quarter. That's 11.4% of sales, and free cash flow was 85%.
For the full year, we are committed to our strong cash flow generation profile. We are forecasting mid-teens cash flow from operations. And of course, we will extend our record free cash flow conversion of over 100% for another year. So great start to the year on cash flow. Moving to slide 15. I just want to touch real quick on our leverage reduction. I think everybody knows we are focused on our leverage reduction commitment.
We reduced debt in the quarter by $370 million. And just since the Meggitt close, we've reduced that by over $1.8 billion and improved our leverage by 1.2 times. Both of those numbers are ahead of what we originally scheduled. If you look at gross debt to EBITDA, it's now 2.6 times and net debt to adjusted EBITDA is now 2.5 times. And of course, we are still committed to forecast over 10 -- over $2 billion of debt paydown in FY '24. So great work there that... Looking forward on slide 16, just some details on guidance.
Basically, we are reaffirming our full year organic growth midpoint. We did incorporate September 30 currency rates. And we are increasing our margin and EPS expectations for the year. Reported sales growth for the year is now forecasted to be in the range of 2.5% to 5.5% or roughly 4% at the midpoint. That split will be just as it always is, 49% in the first half, 51% in the second half. We are raising our aerospace organic growth guidance 200 basis points from 8% in our prior guide, now 10%.
So that's great to see that business performing so well. Full year organic growth is tweaked just a little bit. The company will remain at 1.5%. Currency is a small offset, which is now expected to be just a slight headwind to our prior guide. Margins, if you look at margins, we're raising our margin expectation to 23.6%. At the midpoint, there's a range of 20 basis points on either side of that. And if you look at what we're forecasting on a year-over-year change, we're increasing that expectation to 70 basis points of margin expansion versus prior year.
It was 30 basis points in our prior guide. Incremental margins really just based off of the strong Q1 performance, we expect those to be around 40% for the full year. And if you look at the other items, corporate G&A, interest and other are relatively unchanged to what we guided to last quarter. Tax rate for Q2 through Q4, we expect to be 23.5%. So if you look at the full year, that will equate to about 23% on the tax line.
And EPS on an as-reported basis is now $19.13 at the midpoint, and adjusted EPS is $23. And the range on both of those items is $0.40 plus or minus. Split remains the same, 48% first half, 52% second half. And specifically for Q2, adjusted EPS is now expected to be $5.17 at the midpoint. And as usual, if needed, we have more guidance specifics that are included in the appendix, and that's all I had.
Jenny, I'll turn it back to you, slide 17.
