Ellen Johnson
Chief Financial Officer at Interpublic Group of Companies
Thank you, Philippe. As a reminder, my remarks will track to the presentation slides that accompany our webcast. Beginning with the highlights on Slide 2 of the presentation, our second quarter revenue before billable expenses, our net revenue decreased 2% from a year-ago, with an organic decrease of 1.7%. Our organic net revenue decrease was 2.5% in the US and was 10 basis points in our international markets. Over the first six months of the year, our organic revenue decrease was 90 basis points.
Second quarter adjusted EBITDA before a small restructuring adjustment was $330.2 million and margin was 14.2%. Our diluted earnings per share was $0.68 as reported and $0.74 as adjusted. The adjustments exclude the after tax impacts of the amortization of acquired intangibles, the small adjustment to our previous restructuring actions and non-operating losses on the sales of certain small non-strategic businesses. It's important to note that our EPS includes the benefit of $0.17 per share related to the settlement of normal course Federal Income Tax Audits. We repurchased 1.3 million shares during the quarter and 3.5 million shares in the first half of the year.
Turning to Slide 3, you'll see our P&L for the quarter. I'll cover revenue and operating expenses in detail in the slides that follow. Here, I would just point out that our interest expense and interest income were both elevated compared to a year-ago, due to higher prevailing market interest rates and the pre-funding of our upcoming April 2024 maturity with the issuance in June of our $300 million 10-year note.
Turning to the second quarter revenue in more detail on Slide 4. Our net revenue in the quarter was $2.33 billion. Compared to Q2 '22, the impact of the change in exchange rates was negative 1% with the dollar stronger against currency in nearly all international markets with the notable exception being the era. Net acquisitions added 70 basis points. Our organic decrease of revenue before billable expenses was 1.7%. For the six months, our organic decrease 90 basis points.
At the bottom of this slide is a look at our segments. Our Media, Data & Engagement Solutions segment decreased 1.5% organically. Good growth at our Media business and this was more than offset by the performance of our digital specialist agencies as Philippe has noted. Our Integrated Advertising & Creativity Led Solutions segment decreased organically by 3.8%. The lower revenue from clients in the tech and telecom sector and a somewhat slower macroeconomic environment, we felt broadly across the more traditional agency. IPG Health was relatively flat in the quarter due to the timing of various campaigns ahead of what we believe will be a strong second half. At our Specialized Communications & Experiential Solutions segment organic growth was 3.7% with growth across our public relations and experiential disciplines.
Moving on to Slide 5, and organic net revenue growth by region. In the US, which was 66% of our net revenue before billable expenses in the quarter, our organic decrease was 2.5% against 8.3% growth a year-ago. Decreases in tech and telecom and at our digital specialists outlaid growth at our media, public relations and experiential offering. International markets were 34% of net revenue in the quarter and decreased by 10 basis points organically, again 7.1% growth last year. The UK grew 1.7% organically on top of 4.4% growth a year-ago. We were led by broad-based growth across our media, public relations, creative and experiential offering.
Continental Europe decreased 4.3% organically in the quarter compared with an 8.3% increase, a year ago. Lower revenue was mainly a result of decreases in Germany due to lower client spend and a client loss in the market. In Asia-Pac, we decreased 2.2% organically compared with growth of 4.8% a year-ago. Increases in India and China were more than offset by decreases in Japan and other national markets. Our organic growth in LatAm was 6.3% on top of 8.8% in Q2 '22 with increases across nearly all our national markets. And our other markets group, which is Canada, the Middle East and Africa, we grew 1.6% on top of 11% a year ago with notably strong growth continuing in the Middle East.
Moving on to Slide 6, and operating expenses in the quarter. Our net operating expenses, which exclude billable expenses, the amortization of acquired intangibles and the restructuring adjustment decreased 30 basis points from a year-ago compared with reported net revenue decrease of 2%. The result was our adjusted EBITDA margin of 14.2%. As expected, our margin decreased from a year-ago, when our organic growth was very strong at 7.9% and hiring lagged and severance was lower as well. It is worth noting however that at 14.2%, our second quarter margin is well above the comparable pre-pandemic quarter of 2019.
As you can see on this slide, our ratio of total salaries and related expense as a percentage of net revenue was 68.7% compared with 66.9% a year-ago. Underneath that result, we delivered on our expense for base payroll, benefits and tax, which was 59.4% of net revenue compared to 56.5% a year ago. Our performance-based incentive compensation decreased as a percent of net revenue from 4.5% to 3.4% consistent with our revised outlook for the year. Severance expense was 1.7% of net revenue, which is somewhat elevated from typical [indecipherable] and compares with only 50 basis points a year-ago.
Our actions in the second quarter reflects steps to recalibrate the more traditional areas of the business where performances lagging, as well as to accelerate business transformation in our high-performing media vertical. We expect that we will increasingly see the benefits to margin of these severance actions as we move forward through the year. Temporary labor expense was 3.2% of net revenue compared with 4.4% in Q2 '22, which is consistent with its role as a variable and flexible expense when revenue growth slows. Each of these ratios was in the appendix on Slide 31.
Also on this slide, our office and other direct expense was 14.6% of net revenue compared with 14.7% in Q2 '22. And you need that improvement we continue to leverage our expenses for occupancy, which was 4.6% net revenue compared with 4.8% a year ago. All other office and other direct expense was 10% of net revenue compared with 9.9% in Q2 '22, which primarily reflects higher new business expense. Our SG&A expense was 60 basis points of net revenue.
On Slide 7, we present the detail on adjustments to our reported second quarter results in order to provide better transparency and a picture of comparable performance. This begins on the left-hand side with our reported results and from left to right steps through to adjusted EBITDA and our adjusted diluted EPS. Our expense for the amortization of acquired intangibles in the second column, was $21.2 million. The restructuring adjustment was a credit of $1.7 million. Below operating expenses and shown in column four, we had loss of $4.1 million in other expenses due to the disposition of a few small nonstrategic businesses.
At the foot of this slide, you can see the after-tax impact per diluted share of each adjustment, which bridges our diluted EPS as reported at $0.68 to adjusted earnings of $0.74 per diluted share. It is important to note that our tax provision in the quarter includes the benefit of $64.2 million related to the settlement of US Federal Income Tax Audits for the years 2017 through 2018, which is primarily non-cash. That is $0.17 per share, but you are technically not permitted to adjust for it, but it is a large discrete item that impact comparability, which is really why we wanted to make sure we called it out for you.
Slide 8, depicts similar adjustments for the six months. Adjusted diluted earnings per share was $1.11 for the period. This also includes the same $0.17 per share benefit in our tax provision.
On Slide 9, we turn to cash flow in the quarter. Cash used in operations was $35.2 million, which was due to working capital use of $281.2 million. Operating cash flow before working capital was $246 million. As a reminder, our operating cash flow is highly seasonal and can be volatile by quarter, due to changes in the working capital component. The magnitude of our receivables and payables means that the timing of collections and payments within any single quarter can significantly affect for working capital results.
And our investing activities used $121 million. We invested a portion of the proceeds of our note issuance in short-term treasury securities maturing before year-end. Capex in the quarter was $46.4 million. Our financing activities reflects debt issuance proceeds of $296.3 million. We paid out $119.4 in dividends and returned $50.2 million in share repurchases. Net cash from financing was $109.8 million. Our net decrease in cash for the quarter was $50.4 million.
Slide 10 is the current portion of our balance sheet. We ended the quarter with $1.63 billion of cash and equivalents, we added $103 million in short-term marketable securities to be held to maturity, which as I mentioned is before year-end.
Slide 11, depicts the maturities of our outstanding debt. As you can see on the schedule total debt at quarter end was $3.2 billion, that includes the new $300 million 10-year note, which prefunds our $250 million maturity in April 2024. Thereafter, our next maturity is not until 2028.
In summary, on Slide 12, our strong financial discipline continues and the strength of our balance sheet and liquidity mean that we remain well positioned, both financially as well as commercially. I would like to express my gratitude for the efforts of our people.
And with that, I'll turn it back to Philippe.
