However we believe the strength of ourdefense and government businesses along with aggressive cost controls shouldallow Teledyne to outperform in such

However, we believe the strength of ourdefense and government businesses, along with aggressive cost controls, shouldallow Teledyne to outperform in such an environment.” Review of Operations (comparisons are with the firstquarter of 2008, unlessnoted otherwise) Electronics and CommunicationsThe Electronics and Communications segment`s first quarter 2009 sales were$310.0 million, compared with $301.3 million, an increase of 2.9%. First quarter2009 operating profit was $38.3 million, compared with operating profit of $40.3million, a decrease of 5.0%. The first quarter 2009 sales improvement resulted from revenue growth inelectronic instruments and defense electronics, partially offset by lower salesof other commercial electronics. The revenue growth in electronic instrumentswas driven by organic sales growth and acquisitions made in 2008. Organic salesgrowth in electronic instruments primarily reflected increased sales ofgeophysical sensors for the energy exploration market, partially offset by lowersales of electronic instruments for the environmental monitoring and industrialmarkets. The revenue growth in defense electronics was primarily driven byacquisitions made in 2008. Lower sales of other commercial electronics reflectedreduced sales of avionics, medical manufacturing services and other electroniccomponents.

The increase in segment revenue in the first quarter of 2009 fromacquisitions made in 2008 was $16.3 million Operating profit included pensionexpense under SFAS No 87 and No. 158, of $2.4 million in the first quarter of2009, compared with $0.8 million Pension expense allocated to contractspursuant to U.S. Government Cost Accounting Standards (“CAS”) was $0.6 millionin the first quarter of 2009, compared with $0.4 million. Engineered SystemsThe Engineered Systems segment`s first quarter 2009 sales were $88.8 million,compared with $83.5 million, an increase of 6.3%.

Operating profit was $8.1million for both the first quarter of 2009 and the first quarter of 2008. The first quarter 2009 sales improvement primarily reflected revenue growth incertain manufacturing programs including gas centrifuge service modules fornuclear power applications. Operating profit in the first quarter of 2009reflected the impact of higher revenue, which was offset by higher pensionexpense Pension expense under SFAS No 87 and No. 158, of $2.7 million in thefirst quarter of 2009, compared with $1.2 million. Pension expense allocated tocontracts pursuant to CAS was $2.4 million in the first quarter of 2009,compared with $1.8 million. Aerospace Engines and ComponentsThe Aerospace Engines and Components segment`s first quarter 2009 sales were$26.0 million, compared with $46.5 million, a decrease of 44.1%. The firstquarter 2009 operating loss was $4.3 million, compared with operating profit of$4.6 million.

Sales were lower in all end markets, including OEM piston engines andaftermarket engines and spare parts, due to lower demand in the general aviationmarket. The operating loss for the first quarter of 2009 primarily reflected theimpact of significantly reduced sales. Energy and Power SystemsThe Energy and Power Systems segment`s first quarter 2009 sales were $15.5million, compared with $20.5 million, a decrease of 24.4%. The first quarter2009 operating results were breakeven, compared with operating profit of $2.2million. First quarter 2009 sales reflected lower commercial hydrogen generator sales, aswell as lower sales in the turbine engine business. Operating results reflectedthe impact of lower sales and lower margins in the hydrogen generator andturbine engine businesses.

Additional Financial Information (comparisons are with the first quarter of2008, unless noted otherwise) Cash FlowCash used by operating activities was $7.6 million for the firstquarter of 2009,compared with cash provided by operating activities of $22.6 million. The lowercash provided by operating activities in 2009 was primarily due to higherpension contributions of $77.8 million, partially offset by an income tax refundof $30.9 million. Free cash flow (cash from operating activities less capitalexpenditures) was negative $20.7 million for the firstquarter of 2009, comparedwith free cash flow of $13.9 million and reflected higher pension contributions,partially offset by an income tax refund. At March 29, 2009, total debt was$361.6 million, which includes $355.0 million drawn on available credit lines,as well as other debt and capital lease obligations. Cash and cash equivalentswere $21.8 million at March 29, 2009. The company received $0.1 million from theexercise of employee stock options in the first quarter of 2009, compared with$1.8 million.