Todd M. Leombruno
Executive Vice President and Chief Financial Officer at Parker-Hannifin
Thank you, Jenny. Just for reference, everyone, I'm going to start on slide 12 with just the Q3 financial summary. It was a stellar quarter for the company. Every number on this page highlighted in the gold box is a record for Q3, every single number. And Jenny did mention this, but we did surpass $5 billion in sales for the first time for a quarter in the history of the company. Reported sales were up 24% versus prior year. Organic sales were very robust at approximately 12% in the quarter, and that did extend our string of double-digit organic growth quarters. The net of acquisitions and divestitures did have a favorable impact on sales. That was approximately 15%. And currency still remains negative, but it's basically exactly as we forecast. It's minus 2.4% impact for the quarter and that is obviously unfavorable to prior year.
When you look at adjusted segment operating margins, we did exceed our forecast. We finished at 23.2% for the quarter. That's an increase of 50 basis points versus prior year. It's the first time in history of the company that we surpassed 23% for a full quarter. So impressive results really across the board. When you look at dollars on segment operating margin, we generated nearly $1.2 billion in segment operating margin dollars. That itself is a 27% increase from prior year. And it happens to be the second quarter in a row that the company has generated over $1 billion in adjusted segment operating dollars. When you look at EBITDA, another record here, we surpassed 24% for the first time. In the history of the company, we finished at 24.2% and adjusted net income of $772 or 15.2% ROS, was an improvement of 22% versus prior year.
And finally, when you look at EPS, adjusted EPS nearly $6, $5.93 for the quarter. That was an increase of $1.10 or 23% compared to prior year, just outstanding execution for the company for the quarter. When you look at sales, segment operating margin dollars, net income and earnings per share, every single one of those was an increase of greater than 20%. I can tell you, I'm just immensely proud of our team for the record performance. Meggitt is really truly adding value to the company, and the company is just executing soundly across the board. If you go to slide 13, this is just a walk on that $1.10 improvement of EPS year-over-year. And I mentioned on the last slide, the biggest driver of that is our increase in segment operating income dollars. We did basically an additional $250 million in segment operating income.
That 27% increase. That added $1.50 to EPS year-over-year. When you look at the corporate G&A and other that was a $0.23 favorable EPS impact that was primarily driven by lower salary and other benefit costs. Interest, as you all know, is a headwind. That was a $0.54 headwind, but 100% of that is attributed to the Meggitt acquisition and of course, what's going on in our rates. You look at income tax that was $0.09 unfavorable. Really, it's driven by some prior year favorable items that were discrete that aren't repeating this year. And really, that's the walk to the $5.93. It's really a stellar number, record 23% increase.
If you go to slide 14 across the segments, you can see, as I mentioned, it's really just across the board solid performance. Organic growth was a double-digit positive in every segment. We exceeded our margin expectations across the board and our legacy businesses really perform soundly with incremental margins above 30% in every single segment. Beginning this quarter on orders, we finalized the Meggitt structure. We felt good about that. And going forward, we are including Meggitt orders in both the prior and current period for comparison purposes. And we really feel that, that better reflects the transformed portfolio that Jenny mentioned earlier.
So all in, orders remain positive despite really some tough comps versus prior year and finished at plus 2%. Demand remains really broad-based across most of our markets. And Jenny also mentioned this, but I just want to reiterate, the dollar value of orders in the quarter was certainly the highest that we've had in FY 2023, and it did grow 9% sequentially from Q2. And of course, the backlog obviously is up 3% sequentially as well. So our team members are really just executing well to meet our customer expectations and really focus on delivering top quartile results.
If you look at the North American businesses, sales really strong at $2.3 billion. Organic growth was just under 12%. Adjusted segment operating margins nearly 23%. And if you remember, there is a dilutive impact on some of the Meggitt businesses that are in the Industrial North American businesses, but like I said before, the legacy business has really outperformed and strong sales growth in supply chains, improving gradually and really just great incrementals across those base businesses and really strong backlog and that demand is very solid across all of our North American businesses.
International really outperformed in the quarter. Sales were $1.5 billion. Organic growth exceeded our expectations and finished at just about 10% organic growth versus prior year. Organic growth in the International segment was positive in all regions. EMEA was plus 11%, Asia Pac 8.5%, Latin America 8%. So all positive in every single region in the International segment. Adjusted operating margins were up 70 basis points, finished at 23.4%, really benefiting from that volume, that strong organic growth, but really some focus on cost control and productivity improvements really helped leverage result in the International segment this quarter.
Overall, this really strong performance across every region. And then finally, aerospace, secular trend we've talked a lot about. Sales were $1.2 billion. That's almost 90% increase from prior year. That is obviously clearly driven by the Meggitt acquisition. But organic growth led the company in aerospace at 14.5% versus prior year. And really just strong across the board, OEM and MRO commercial businesses, sales and orders are very strong, both being mid-20s positive. And interesting, this quarter, military OEM returned to flat versus down from prior quarter.
Operating margin is extremely sound, 23.5%. That's 160 basis point improvement year-over-year. Jenny mentioned it, that the Meggitt integration is going extremely well. Synergies are ahead of schedule. We did raise our synergy estimate for the quarter, $15 million and performance in those businesses continue to impress. Order rates in aerospace, obviously very strong. You look at that order number of plus 25%, but both strong in commercial and military end markets. Just really sound operational performance across the company, no weak spots at all.
Moving to slide 15, just talking about our year-to-date cash flow performance. Cash flow from operations was 12.8% of sales. $1.8 billion of cash generated so far this fiscal year, that's 16% over what we did last year. Free cash flow is 10.9%. Our capex remains right at 2% like we have been forecasting. There are some one-time transactions that were the result of the Meggitt transaction. That impacts our cash flow by 1.5 points. So without those transactions, those numbers I just gave you would be 1.5% better. And free cash flow continues to be greater than 100%. We're at 111% year-to-date.
And just I want to reiterate, for the full year, we continue to forecast cash flow from operations and free cash flow conversion of over $100 million and that free cash flow would be mid-teens for the year. If we go to the next slide, just touching on capital deployment and some leverage. We did increase our quarterly dividend. Our Board approved this last week to an 11% increase. The dividend payout is now $1.48. That is in line with our stated target of being in the range of 30% to 35% of our trailing five-year net income. And the increase this quarter does increase our annual record of increasing annual dividend paid from 66 years to 67 years. So long-standing record that we intend to keep.
On leverage, we did make some significant progress reducing leverage this quarter. We paid down approximately $650 million in debt in the quarter. If you look at our gross debt to adjusted EBITDA, it was 3.2, that's down from 3.6 last quarter, so 0.4 turns from Q2. And if you look at the net debt to adjusted EBITDA, finished the quarter at 3.1, that's down 0.3 turns from Q2. So we are pleased with the deleveraging progress. We are on track and we continue to target our leverage commitment of 2.0 times, and we are committed to delivering on our commitments there.
Looking at slide 17 and guidance. Obviously, we increased our guidance this morning. We have incorporated obviously the strong performance from Q3, but we've also increased our expectations for Q4. Full year sales growth at the mid point increases to 19% versus prior year, with organic moving up to 10%. That's up from 7% last quarter. When you look at the net impact of acquisitions and divestitures, we expect that to be about 12%. That's just up slightly from 11.5% last quarter and currency remains a headwind, no change to our prior guidance, but the full year, we expect it to be a minus 3.
When you look at adjusted segment operating margins, we've increased our full year guide by 40 basis points. We now are forecasting 22.5% for the full year. And the midpoint of adjusted EPS is raised to $20.75 for the full year with a range of plus or minus $0.15. Just some specific details for Q4. We expect organic growth to be approximately 4% in the quarter and segment operating margins to be approximately 22.6%. And finally, EPS for the quarter, we are forecasting $5.32 and at the midpoint, same range wrapped around that. And we've also included guidance by segment and several other details that could be useful for your models in the appendix. So with that, just a really solid quarter. Glad to increase our guide.
And with that, Jenny, I'll hand it back to you and ask everyone to reference slide 18.
