Results of Operations
   The following table sets forth net sales and income by reportable segment and
on a consolidated basis:

                                                           Three Months Ended
                                                                March 31,
                                                           2009          2008
                                                             (In thousands)
      Net sales(1):
      Electronic Instruments                             $ 302,466     $ 340,375
      Electromechanical                                    250,400       270,822

      Consolidated net sales                             $ 552,866     $ 611,197


      Operating income and income before income taxes:
      Segment operating income(2):
      Electronic Instruments                             $  69,109     $  79,189
      Electromechanical                                     46,170        47,051

      Total segment operating income                       115,279       126,240
      Corporate administrative and other expenses           (9,077 )     (10,007 )

      Consolidated operating income                        106,202       116,233
      Interest and other expenses, net                     (17,578 )     (15,831 )

      Consolidated income before income taxes            $  88,624     $ 100,402

(1) After elimination of intra- and intersegment sales, which are not significant in amount.

(2) Segment operating income represents sales less all direct costs and expenses (including certain administrative and other expenses) applicable to each segment, but does not include interest expense.

Results of operations for the first quarter of 2009 compared with the first quarter of 2008
For the first quarter of 2009, the Company posted solid sales, operating income, net income and diluted earnings per share despite the ongoing global financial and economic crisis. The Company's results include contributions from the acquisitions of Drake Air and Motion Control Group ("MCG") in February 2008, Reading Alloys in April 2008, Vision Research, Inc. in June 2008, the programmable power business of Xantrex Technology, Inc. ("Xantrex Programmable") in August 2008, Muirhead Aerospace Limited ("Muirhead") in November 2008 and High Standard Aviation in January 2009. The Company expects the ongoing global financial and economic crisis to continue to have a negative impact on operating results in 2009. The full year impact of the 2008 acquisitions and our Operational Excellence capabilities will continue to have a positive impact on our 2009 results.
Net sales for the first quarter of 2009 were $552.9 million, a decrease of $58.3 million or 9.5% when compared with net sales of $611.2 million for the first quarter of 2008. The decline in net sales was primarily attributable to lower order rates as a result of the ongoing global financial and economic crisis, partially offset by the impact of the acquisitions mentioned above. The Company's internal sales declined approximately 15% for the first quarter of 2009, which excludes a 5% unfavorable effect of foreign currency translation. The acquisitions mentioned above offset approximately 10% of the Company's internal sales decline.
Total international sales for the first quarter of 2009 were $264.9 million or 47.9% of consolidated net sales, a decrease of $47.6 million or 15.2% when compared with international sales of $312.5 million or 51.1% of consolidated net sales for the first quarter of 2008. The decline in international sales resulted from decreased international sales from base businesses of $76.3 million, which includes the effect of foreign currency translation, partially offset by the impact of acquisitions completed in 2009 and 2008. The Company maintains a strong international sales presence in Europe and Asia in both reportable segments.

Results of Operations (continued)
New orders for the first quarter of 2009 were $487.4 million, a decrease of $168.6 million or 25.7% when compared with $656.0 million for the first quarter of 2008. As a result, the Company's backlog of unfilled orders at March 31, 2009 was $653.2 million, a decrease of $65.4 million or 9.1% when compared with $718.6 million at December 31, 2008. The Company has experienced lower order rates as a result of the ongoing global economic crisis.
Segment operating income for the first quarter of 2009 was $115.3 million, a decrease of $10.9 million or 8.6% when compared with segment operating income of $126.2 million for the first quarter of 2008. Segment operating income, as a percentage of sales, increased to 20.9% for the first quarter of 2009 from 20.7% for the first quarter of 2008. The decrease in segment operating income resulted primarily from the decrease in sales noted above and higher defined benefit pension expense, partially offset by profit contributions made by the acquisitions. The increase in segment operating margins was due to the Company's Operational Excellence capabilities and cost reduction initiatives, including the cost savings achieved in the first quarter of 2009 from the restructuring activities related to the fourth quarter of 2008 restructuring charge.
Selling, general and administrative ("SG&A") expenses for the first quarter of 2009 were $64.5 million, a decrease of $8.9 million or 12.1% when compared with $73.4 million for the first quarter of 2008. As a percentage of sales, SG&A expenses were 11.7% for the first quarter of 2009, compared with 12.0% the first quarter of 2008. The decrease in SG&A expenses was primarily the result of lower sales and the Company's cost savings initiatives. Base business selling expenses decreased approximately 19.2%, including the impact of foreign currency translation, for the first quarter of 2009, compared with the same period of 2008, which was in line with the Company's internal sales decline, including the impact of foreign currency translation. Selling expenses, as a percentage of sales, decreased to 10.0% for the first quarter of 2009, compared with 10.4% for the first quarter of 2008.
Corporate administrative expenses for the first quarter of 2009 were $9.1 million, a decrease of $0.9 million or 9.0% when compared with $10.0 million for the first quarter of 2008. As a percentage of sales, corporate administrative expenses were 1.6%, for both the first quarter of 2009 and 2008. The decrease in corporate administrative expenses was driven by the Company's cost saving initiatives, including the restructuring activities related to the fourth quarter of 2008 restructuring charge.
Consolidated operating income was $106.2 million or 19.2% of sales for the first quarter of 2009, a decrease of $10.0 million or 8.6% when compared with $116.2 million or 19.0% of sales for the first quarter of 2008.
Interest expense was $17.6 million for the first quarter of 2009, an increase of $2.5 million or 16.6% when compared with $15.1 million for the first quarter of 2008. The increase was due to the impact of the funding of the long-term private placement senior notes in the third and fourth quarters of 2008.
Net income for the first quarter of 2009 was $59.1 million, a decrease of $7.3 million or 11.0% when compared with $66.4 million for the first quarter of 2008. Diluted earnings per share for the first quarter of 2009 was $0.55, a decrease of $0.07 or 11.3% when compared with $0.62 per diluted share for the first quarter of 2008.

Results of Operations (continued)
Segment Results
Electronic Instruments ("EIG") sales totaled $302.5 million for the first quarter of 2009, a decrease of $37.9 million or 11.1% when compared with $340.4 million for the first quarter of 2008. The sales decrease was due to an internal sales decline of approximately 14%, excluding an unfavorable 4% effect of foreign currency translation, driven primarily by EIG's process and industrial products businesses. Partially offsetting the sales decrease was the recent acquisitions of Vision Research and Xantrex Programmable.
EIG's operating income was $69.1 million for the first quarter of 2009, a decrease of $10.1 million or 12.8% when compared with $79.2 million for the first quarter of 2008. EIG's operating margins were 22.8% of sales for the first quarter of 2009 compared with 23.3% of sales for the first quarter of 2008. The decrease in segment operating income and operating margins was driven by the decrease in sales noted above and higher defined benefit pension expense, which was significantly offset by the cost savings achieved from the restructuring activities related to the fourth quarter of 2008 restructuring charge.
Electromechanical ("EMG") sales totaled $250.4 million for the first quarter of 2009, a decrease of $20.4 million or 7.5% from $270.8 million for the first quarter of 2008. The sales decrease was due to an internal sales decline of approximately 17%, excluding an unfavorable 5% effect of foreign currency translation, driven primarily by EMG's cost driven motors and engineered materials, interconnects and packaging businesses. Partially offsetting the sales decrease was the recent acquisitions of Drake Air, MCG, Reading Alloys, Muirhead and High Standard Aviation.
EMG's operating income was $46.2 million for the first quarter of 2009, a decrease of $0.9 million or 1.9% when compared with $47.1 million for the first quarter of 2008. EMG's decrease in operating income was driven by the decrease in sales, partially offset by profit contributions made by the acquisitions mentioned above. EMG's operating margins were 18.4% of sales for the first quarter of 2009 compared with 17.4% of sales for the first quarter of 2008. The increase in operating margins was primarily driven by Operational Excellence capabilities and cost reduction initiatives throughout the Group, including the cost savings achieved from the restructuring activities related to the fourth quarter of 2008 restructuring charge.
Financial Condition
Liquidity and Capital Resources
Cash provided by operating activities totaled $110.4 million for the first quarter of 2009, an increase of $33.9 million or 44.3% when compared with $76.5 million for the first quarter of 2008. The increase in operating cash flow was primarily the result of lower overall operating working capital levels, which includes a tax refund that resulted from the Company's higher year end 2008 defined benefit pension contributions. Free cash flow (cash flow from operating activities less capital expenditures) was $104.3 million for the first quarter of 2009, compared with $67.5 million for the same period in 2008. Free cash flow is presented because the Company is aware that this measure is used by third parties in evaluating the Company.
Cash used for investing activities totaled $44.3 million for the first quarter of 2009, compared with $81.5 million for the first quarter of 2008. For the first quarter of 2009, the Company paid $40.2 million for one business acquisition, net of cash received, compared with $74.9 million paid for two business acquisitions and one technology line, net of cash received, for the first quarter of 2008. Additions to property, plant and equipment totaled $6.1 million for the first quarter of 2009, compared with $9.0 million for the first quarter of 2008.
Cash used for financing activities totaled $14.1 million for the first quarter of 2009, compared with $54.2 million for the first quarter of 2008. The change in financing cash flow was primarily the result of $43.5 million used for repurchases of 1.0 million shares of the Company's common stock in the first quarter of 2008.

Financial Condition (continued)
At March 31, 2009, total debt outstanding was $1,094.4 million, compared with $1,111.7 million at December 31, 2008. Total long-term debt at March 31, 2009 was $1,085.1 million, with no significant maturities until 2012. The debt-to-capital ratio was 45.2% at March 31, 2009, compared with 46.3% at December 31, 2008. The net debt-to-capital ratio (total debt less cash and cash equivalents divided by the sum of net debt and stockholders' equity) was 42.0% at March 31, 2009, compared with 44.3% at December 31, 2008. The net debt-to-capital ratio is presented because the Company is aware that this measure is used by third parties in evaluating the Company.
As a result of the Company's cash flow activities discussed above, cash and cash equivalents at March 31, 2009 totaled $135.8 million, compared with $87.0 million at December 31, 2008. The Company's liquidity has not been impacted by the recent financial crisis nor do we expect liquidity to be impacted in the near future. Additionally, the Company is in compliance with all of its debt covenants, which includes its financial covenants, for all of its debt agreements. The Company believes it has sufficient cash-generating capabilities from domestic and unrestricted foreign sources, available credit facilities and access to long-term capital funds to enable it to meet its operating needs and contractual obligations in the foreseeable future. Forward-looking Information
Information contained in this discussion, other than historical information, is considered "forward-looking statements" and is subject to various factors and uncertainties that may cause actual results to differ significantly from expectations. These factors and uncertainties include the Company's ability to consummate and successfully integrate future acquisitions; risks associated with international sales and operations; the Company's ability to successfully develop new products, open new facilities or transfer product lines; the price and availability of raw materials; compliance with government regulations, including environmental regulations; changes in the competitive environment or the effects of competition in the Company's markets; the ability to maintain adequate liquidity and financing sources; and general economic conditions affecting the industries the Company serves. A detailed discussion of these and other factors that may affect the Company's future results is contained in AMETEK's filings with the Securities and Exchange Commission, including its most recent reports on Form 10-K, 10-Q and 8-K. AMETEK disclaims any intention or obligation to update or revise any forward-looking statements, unless required by the securities laws to do so.