Todd M. Leombruno
Executive Vice President and Chief Financial Officer at Parker-Hannifin
Okay. Thank you, Jenny. I'm going to start on Slide 9 and I'm just going to really quickly go through the FY '24 Q2 financial summary. As Jenny mentioned, the second quarter was an extremely strong quarter for us. It was a great finish to the first half of our fiscal year. And once again the team set an unbelievable amount records for the quarter.
If you look at the slide, every number in that gold column is a second quarter record. We set new highs for sales, segment operating margin, EBITDA margin, net income and earnings per share. Total sales growth was plus 3% in the quarter. All of that 3% was organic. Just a reminder, this is the first full quarter that we have Meggitt in both the current and prior year periods.
The net impact of divestitures and currency basically offset each other. Divestitures was slightly unfavorable at 0.3%, currency was slightly favorable at 0.5%. When you look at the margins, Jenny already mentioned it, with 24 -- 24.5%, with an increase of 300 basis points versus prior year. And adjusted EBITDA margin reached 25.7%, that was an increase of 330 basis points versus prior year. If you take a look at net income, we did $802 million on an adjusted basis, that is a 16.6% return on sales. That was a 30% increase versus prior year. And lastly, adjusted earnings per share, a record for the quarter, $6.15, that was up 29% from prior. Just an exceptional second quarter and again unbelievable margin expansion and what I really like about it, it was very consistent across all of our businesses as Jenny just shared on that last slide.
If you go to Slide 10, this is the earnings per share bridge. And this chart really shows what a high quality quarter it was for the company. The 29% in adjusted earnings per share that's -- that amounted to an additional $1.39 of earnings per share in the quarter. Main driver of this continues to be excellent operating performance. If you look at segment operating income dollars, that increased by $173 million in the quarter, that accounted for just a little over $1 of that EPS growth. And that equated to 74% of the increased earnings per share in the quarter. Clearly, Aerospace Systems was a major driver of improvement, but what is really impressive is both industrial businesses also contributed to the increase in segment operating income dollars.
If you look at tax, that was $0.18 favorable versus prior year, again, just driven by some discreet items. Other expense was favorable $0.12 versus prior year. That was mainly the result of currency changes and some favorable pension expense. Interest expense was $0.10 favorable versus prior. That really is a result of our successful efforts to reduce outstanding debt over the last 12 months. I'll talk about that in a little bit later in the deck.
Corporate G&A and share count were just both slightly higher than prior year, just a net $0.03. And those are the components of the increase in adjusted earnings per share. Really it's just strong margin performance across the company, continue with some great outstanding performance from the Meggitt business.
If you go to the next slide -- excuse me if you go to Slide 11, we'll talk about the segment performance, that's detailed on Slide 11. Couldn't be prouder of the broad-based margin expansion, really driven by The Win Strategy, Jenny mentioned this, but our synergies are ahead of schedule. We did increase that synergy number. Aerospace demand really remains very-very high. So just a nice consistent execution across our businesses across all of our global team members. You can see that segment operating margin, 24.5% at the bottom of the page, up 300 basis points, incrementals were stellar at over 100%, and orders remained positive at plus 2% versus prior year and backlog really remains resilient. Total backlog dollars did increase slightly sequentially as well. And Jenny mentioned this, but total backlog remains at near record levels, and aerospace activity remains especially robust.
If you look at the North American businesses, sales volume reached $2.1 billion in the quarter. Organic growth was down 1.5% versus prior year. That was driven by continued destocking, some channel rebalancing and really some softness in off-highway markets. However, what is impressive out of the North American team is that adjusted operating margins did increase 240 basis points to a second quarter record of 24.2%, that was just really driven by excellent execution, some great efficiency improvements and really some tight cost controls. Orders in North America also remained consistent to prior quarter. They remained at down minus 4%.
If you look at the international businesses, sales were $1.4 billion, slightly positive versus prior year. Organic growth was essentially flat, which was better than we were forecasting. Organic growth in EMEA was positive at 0.7%, Latin-America was positive at 9.2% and Asia-Pac did improve, it did come in at negative 2.5%, really just being pulled down by the slower-than-expected recovery in China. But also what's impressive there is adjusted operating margins did expand 110 basis points in these businesses and also finished at a second quarter record of 23%. That international team continues to be focused on productivity improvements, expanding margins and being very resilient across the segment even in a low-growth environment, very impressive results.
Orders in the international segment did improve. If you remember last quarter, they remained at 8%, they did improve to minus 5%. And finally on Aerospace Systems, they delivered a standout quarter. Sales reached $1.3 billion, a 15% increase from prior year. All of that 15% is organic growth and volume just continues to be driven by commercial aftermarket growth that was in the quarter, up 25%. Operating margins reached a new record, increasing by 590 basis points to reach 26.5%. Really the healthy volumes, the favorable aftermarket mix, outstanding performance from the Meggitt business really all contributed to drive these record margins. We are increasing the synergies. Jenny went over that just briefly. Cumulative synergies, we're increasing from $150 million to $200 million and order rates in aerospace continue to remain plus 21% which is very robust.
The next slide, we'll talk about cash flow. Let's take a look at what we've done there. Our year-to-date cash flow from operations is $1.4 billion, that's 14% of sales. That is an increase of 26% versus prior year, just fantastic cash flow performance. If you look at free cash flow, that was $1.1 billion, that's up 11.9%, also increasing significantly, 29% increase from prior. Our cash flow conversion is year-to-date 86%. We really have the team remaining focused on being great generators and great deployers of cash, if we've to say that many times. Last week, our Board approved a quarterly dividend of $1.48 per share. That is our 295th consecutive quarterly dividend. Just a nice solid testament to our belief that we can be great generators and great deployers of cash.
When you look at the full year, we are increasing our expectations for free cash flow. We've increased that range to $2.8 billion to $3.1 billion, that's moving the midpoint up $150 million to approximately $3 billion. And of course, free cash flow conversion will be over 100% for the full year.
On the next slide, let's take a look at our progress on deleveraging. We did reduce debt another $400 million in the quarter. And just a reminder, since we closed Meggitt just five quarters ago, we have reduced debt by over $2.2 billion now and we've improved our leverage by 1.4 turns. Both of those figures are ahead of what we've originally committed to.
If you look at the metrics, gross debt-to-adjusted EBITDA is now 2.4, net-debt to adjusted EBITDA is 2.3 and we continue to forecast just approximately $2 billion of debt paid out in the fiscal year. And now based on the performance we've got year-to-date, we expect to achieve net leverage of 2.0 times by June of 2024, just great performance [Indecipherable].
Okay. On guidance, just a few details on guidance, you saw the increase in guidance. We are reaffirming our full year organic growth midpoint and increasing our margin and earnings per share expectations for the year. Our reported sales growth for the year is forecasted to be in the range of 3% to 5%, or roughly 4% at the midpoint and they are modeled 49% first half, 51% second half. In respect to organic growth, we are raising the aerospace organic growth midpoint by 200 basis points to 12% for the full year. We are also raising the international organic growth midpoint by 100 basis points to minus 2%, slightly better than what we gave you last quarter. Those increases are offset by a decrease in the North American organic growth midpoint by 200 basis pointss to minus 1.5%. Full year organic growth for the entire company remains the same as last quarter at plus 1.5%.
Moving on to margins, adjusted segment operating margin guidance is being raised to 24.3% at the midpoint, that's up 70 basis points from prior guidance. And if you look at it on a year-over-year basis, that would be a 140 basis points of margin expansion versus prior year. Meggitt synergies, we talked a lot about that, we're moving that to $200 million. Corporate G&A, interest and other are relatively unchanged from our prior guide. Tax rate is tweaked just a little bit. We expect the full year to be 22.5%, that's really based on the performance in the first half. We expect the second half to be 23.7% from a tax rate perspective. Full year as-reported earnings per share increased to $20.30 and full year adjusted earnings per share is increased to $24.20, both of those are at the midpoint.
And finally for FY24 Q3 adjusted earnings per share, we expect that to be $6 even at the midpoint. And as usual, we've included some more specifics in the appendix. So that's it on the increase of the guide. Jenny, I will hand it back to you and ask everyone to move to Slide 15.
