Kevin Coleman – Vice President of Investor Relations Frank Hermance – Chairman and Chief Executive Officer Robert Mandos – Executive Vice President and Chief Financial Officer.

John Baliotti – Janney Capital Markets Allison Poliniak-Cusic – Wells Fargo Securities Matt Summerville – KeyBanc Capital Markets Scott Graham – Jefferies Mark Douglas – Longbow Research Christopher Glynn – Oppenheimer Robert Mason – Robert W. Baird & Co. .

Ladies and gentlemen, thank you for standing by. Welcome to the AMETEK Second Quarter 2014 Earnings Conference Call. During the presentation all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. (Operator Instructions) As a reminder this conference is being recorded Tuesday, August 05, 2014.

I would now like to turn the conference over to Kevin Coleman, Vice President of Investor Relations. Please go ahead, sir..

Great, thank you Susie. Good morning. Welcome to AMETEK's second quarter earnings conference call. Joining me this morning are Frank Hermance, Chairman and CEO; and Bob Mandos, Executive Vice President and Chief Financial Officer. AMETEK's second quarter results were released earlier this morning.

These results are available electronically on market systems and on our website at the Investors section of ametek.com. A tape of today's call may be accessed until August 19 by calling (800) 633-8625 and entering the confirmation code number 21721081. This call is also webcasted. It can be accessed at ametek.com and at streetevents.com.

The conference call will be archived on both of these sites. I will remind you that any statements made by AMETEK during the call that are not historical in nature are to be considered forward-looking statements.

As such, these statements are subject to change based on various risk factors and uncertainties that may cause actual results to differ significantly from expectations. A detailed discussion of the risks and uncertainties that may affect our future results is contained in the AMETEK's filings with the Securities and Exchange Commission.

AMETEK disclaims any intention or obligation to update or revise any forward-looking statements. I will also refer you to the Investors section of ametek.com for a reconciliation of any non-GAAP financial measures used during this call. We'll begin today with some prepared remarks, and then we will take your questions.

I'll now turn the meeting over to Frank..

Thank you, Kevin, and good morning everyone. AMETEK had an excellent second quarter with very strong execution of our four growth strategies. In the quarter, we established records for all key financial metrics including orders, sales, operating income, operating margins, net income and diluted EPS.

Additionally, we ended the second quarter with a record backlog of $1.25 billion. We remained very active on the acquisition front. During the second quarter, we closed the acquisition of Zygo Corporation and acquired Luphos, a technology acquisition which is highly synergistic with Zygo and our Taylor Hobson and metrology businesses.

Subsequent to the end of the second quarter, we acquired Amptek, a provider of instrumentation used to identify composition of materials used in x-ray fluorescence. I will provide more details on our continued strong acquisition activity in a moment, but let me first provide the financial highlights for the quarter.

Sales in the quarter were up 13% to $990.7 million, organic sales increased 4%, while acquisitions added 8% and currency added 1%. Operating income for the second quarter was very strong. It increased 14% to $231.7 million from $202.6 million last year.

Operating income margin in the quarter was a record 23.4%, a 30 basis point improvement over the second quarter of 2013. Net income and diluted earnings per share were both up 17% over last year’s second quarter to 150.1 cents and $0.61 respectively. Our diluted earnings per share in the quarter were $0.02 above the high end of our guidance range.

Orders in the second quarter were very strong at $1.1 billion, up 21% overall from the prior year driven by solid organic growth and the contributions from recent acquisitions. The book-to-bill ratio in the quarter was 1.09.

Operating cash flow was $155 million for the second quarter up 21% from last years’ first quarter – second quarter, excuse me and operating working capital was excellent at 17.7% of sales. Turning our attention to the individual operating groups. The electronic instruments had an excellent quarter.

Sales were up 19% to $573.3 million on strength and our ultra precision technologies and material analysis businesses plus the contributions from the acquisitions of Controls Southeast, Creaform, Powervar, Teseq, and VTI. Organic sales were up 4%, acquisition s added 14% and foreign currency was a 1% tailwind.

EIG's operating income increased 17% to $151.5 million, and operating margins were 26.4%. Excluding the dilutive impact on operating margins of recent acquisitions, EIG's operating margins were 27.6%, up 80 basis points from last year's second quarter. The Electromechanical Group had a great quarter as well with strong operating performance.

Sales were up 6% to $417.4 million. Organic sales were up 4%, and foreign currency added 2%. Growth was broad-based with particular strength in our precision motion control and engineered materials interconnect and packaging businesses.

EMG's operating income increased 10% to $92.1 million, and operating margins were superb at 22.1% up 100 basis from last year’s second quarter at a record level. Now turning to our four growth strategies of operational excellence, global and market expansion, new product development, and strategic acquisitions. First, I will touch on acquisitions.

We continue to remain very active as evidenced by our record M&A activity over the past 12 months. With the Zygo, Luphos and Amptek acquisitions, we have now acquired eight businesses over the last 12 months, deployed nearly $1 billion in capital, and acquired approximately $460 million in revenue.

Thus far in 2014, we have deployed approximately $570 million in capital and acquired over $285 million in sales on five acquisitions. Importantly, our acquisition pipeline remains very strong. Now let me provide some highlights on the three recent acquisitions. We completed the acquisition of Zygo on June 20th.

Total capital deployed on the acquisition was approximately $280 million net of cash acquired. Zygo has annual sales of approximately $165 million. Zygo is truly a great strategic fit with AMETEK. We are very excited about this acquisition and are pleased to welcome the Zygo team to AMETEK.

Zygo is a leading provider of non-contact metrology solutions, high precision optics and optical assemblies for use in semiconductor, medical, life sciences, industrial, and aerospace and defense end-markets. They have a high value, differentiated technology capability, along with a strong brand within the optical and metrology markets.

Zygo’s leading position in non-contract optical metrology directly complements our strength in contract metrology, expanding our capabilities in this very attractive market. As previously indicated, we expect sizable synergy through elimination of public company, costs, sourcing savings, and through leveraging our global infrastructure.

Also in the second quarter, we acquired Luphos, a small, yet highly strategic technology acquisition. Luphos provides us with exciting technology which is highly complementary to our existing metrology technology. Luphos’s core technology is used in the measure of complex aspheric optical surfaces through non-contract methods.

Our Taylor Hobson metrology business provides similar measurement capabilities through contact metrology technology. So this way, we really have both technology capabilities either non-contact or contact metrology capabilities.

The addition of Luphos expands our metrology capabilities across a broader range of surface finishes and profiles, thereby providing our customers a broader product portfolios to serve their various applications and they are headquartered outside of Frankfurt, Germany.

Lastly, subsequent to the end of the second quarter, we completed the acquisition of Amptek. Amptek is a privately held manufacturer of instrumentation and detectors used to identify the composition of materials using x-ray fluorescence.

Amptek’s products are sold to OEMs that manufacture non-destructive testing devices to measure element of composition in metal production, pharmaceutical products, electronics and environmental samples.

Amptek is another excellent strategic acquisition for us as it provides us with attractive sensor and detector technology as well as strong R&D developments capabilities which will help to accelerate future technology developments for our served markets.

In addition, Amptek Detector Technology opens up new market and application opportunities in bench top and life sciences applications. They are headquartered in Bedford Mass and have annual sales of approximately $30 million and they are a very, very profitable company. Now, turning to global and market expansion.

Global and market expansion continues to be a key driver for our growth as we are increasingly expanding our presence in attractive higher growth market segments and geographic regions. In the second quarter of 2014, international sales represented 56% of our total sales, and this was up from 54% of sales in the second quarter of 2013.

The increase in international sales percentage was driven by strong organic growth in Asia and the benefit from recent acquisitions. Organic sales in Asia were up mid-teens on a percentage basis in the second quarter, with broad-based strength across our businesses.

This strong growth reflects the benefits of our continued focus on expanding our sales, service and distribution capabilities in this region.

We will continue to make investments to develop and expand our global sales channels, service capabilities, and manufacturing footprint in order to position our businesses to capitalize on the attractive global growth opportunities. Now, turning to new product developments.

New product development is a key internal growth driver and critical to our long-term health in growth. We have consistently grown our investment in RD&E to ensure we are developing the right products to serve our customers and markets. In 2014, we expect to spend approximately $210 million, a 17% increase over 2013.

And we are excited about some recent new product introductions. Creaform, which we acquired in 2013, is a leader in portable 3D scanning technology. During the second quarter, Creaform introduced two new portable 3D scanners. The Go!SCAN 3D and the HandySCAN 3D, that represents breakthroughs in terms of speed accuracy and versatility.

The Go!SCAN 3D is a white light scanner that offers accurate, high speed scanning of practically any object and it’s suitable for engineering and CAD projects that require full color 3D models or direct scan to print capabilities.

The HandySCAN 3D is a metrology grade laser scanner that achieves ground-breaking accuracy resolution in measurement rates, operating 25 times faster than previous versions. This truly a breakthrough kind of product.

The HandySCAN 3D is suitable for all stages in the product developments life cycle from design, prototyping, testing, assembly, production and quality control. Both the Go!SCAN 3D and the HandySCAN 3D rely on Creaform’s new VX application software to quickly and seamlessly integrate digital scans into 3D printing or CAD process applications.

Creaform is seeing extremely strong growth in 2014 through the success of their new product introductions and their market expansion efforts. AMETEK’s ORTEC product group introduced a number of new products including a new series of high purity germanium detectors, the profile S and C series.

These new radiation detector products provide exceptional resolution across the entire energy range while also improving efficiency at the lower energies. Further cementing ORTEC’s leading position and nuclear radiation detection and identification systems.

ORTEC also launched their PINS3 Portable Chemical Identification System leveraging our experience with radiation detection, this new product safely and quickly identifies hazardous chemicals inside munitions or chemical storage containers by conducting non-destructive gamma ray analysis.

The system is completely portable for liquid nitrogen or shielded radioactive sources. From an overall perspective, revenue from products introduced over the last three years was 22% of sales in the second quarter up from 21% in the last year’s quarter.

Lastly, I’ll touch on OpEx, we continue to see tremendous results from our various operational excellence initiatives. Our management teams and employees continue to do an excellent job driving operational improvements through their businesses, leveraging the numerous operational excellence tools we have in place throughout the company.

Key tenets of our operational excellence activities include Lean Manufacturing, Six Sigma in our factories and back-office operations, Design for Six Sigma in our new product development efforts, global sourcing and strategic procurement initiatives, moving our production to low-cost locales and value engineering.

Through our global sourcing and strategic procurement initiatives, we recognized $18 million in savings in the second quarter and as a result of the continued strong efforts of our team.

We now expect approximately $95 million in total cost savings in 2014 through our operational excellence initiatives including $65 million in savings through our global sourcing and strategic procurement initiatives. This is up from $90 million in total cost that we targeted at the end of the first quarter.

Turning to the outlook, for the remainder of 2014, we continue to expect our businesses to show solid growth during 2014 with balanced organic growth across both operating groups.

We now anticipate 2014 revenue to be up low double-digits on a percentage basis from 2013 reflecting continued solid core growth and the contribution from recent acquisitions. Organic growth is expected to be up low to mid-single-digits for all of AMETEK and for both operating groups.

Earnings for 2014 and 2013 excluding one-time Zygo integration costs are expected to be incurred in the third and fourth quarter. This is an increase from our previous guidance of $2.32 to $2.37 and reflects stronger operating performance, plus the benefits from the Zygo acquisition.

Third quarter 2014 sales are expected to be up mid-teens on a percentage basis from last year's second quarter with organic growth up low to mid single-digits. We estimate our earnings to be approximately $0.59 to $0.61 per diluted share, up 13% to 17% over last year's third quarter excluding one-time Zygo integration costs.

So in summary, we delivered exceptional performance in the quarter. Our results and increased guidance for 2014 reflect the continued strong execution of our growth strategies. Our balance sheet remains strong and we generate significant cash flow that provides us with plenty of liquidity to operate the business and pursue our acquisition strategy.

Our excellent backlog, strong portfolios of businesses, proven operational excellence capabilities, and a successful focus on strategic acquisitions, should enable us to perform extremely well for the remainder of 2014. Bob will now cover some of the financial details, and then we'll be glad to take your questions.

Bob?.

Thank you, Frank. As Frank noted, we had an excellent second quarter with strong overall results. I will provide some further details. Core growth in selling expenses was in line with core growth in sales in the quarter. General and administrative expenses were 1.2% of sales, in line with last year's second quarter.

The effective tax rate for the quarter was 28%, versus last year's second quarter rate of 29.4% and in line with our guidance. The lower tax rate in the quarter was a result of our ongoing international tax planning activities. For 2014, we expect our tax rate to be between 28% and 29%.

As we have said before, actual quarterly tax rates can differ dramatically, either positively or negatively, from this full year rate. On the balance sheet, working capital, defined as receivables plus inventory less payables, was 17.7% of sales in the second quarter versus 17.9% in last year’s second quarter.

Strong working capital management will remain a key priority. Capital expenditures were $15 million for the quarter, for the full year of 2014, capital expenditures are expected to be $70 million. Depreciation and amortization was $33 million for the quarter, full year 2014 depreciation and amortization is expected to be approximately $142 million.

Operating cash flow was $155 million in the second quarter, up 21% over last year’s second quarter. Free cash flow was $140 million in the quarter, up 19 over last year’s second quarter.. For the full year, we expect free cash flow to be approximately 110% of net income.

Total debt was $1.6 billion at June 30, up $188 million from the 2013 year end largely the result of the Zygo acquisition. Offsetting this debt is cash and cash equivalents of $283 million, resulting in a net debt-to-capital ratio at June 30 of 27.8%.

At June 30, we had approximately $700 million of cash and existing credit facilities to fund our growth initiatives. During the quarter, we closed the acquisition of Zygo Corporation and acquired Luphos bringing our cumulative expenditures for acquisitions in 2014 to approximately $570 million.

Also in the second quarter, we announced a 50% increase in it from $0.06 per share. This dividend increase will raise the annualize dividend payout to $0.36 per share. In summary, we had a very strong second quarter, establishing records for essentially all key financial metrics, strong balance sheet and cash flows..

Great. Thank you, Bob. Susie, we'll now open it up for questions..

Thank you. (Operator Instructions) Our first question is coming from the line of John Baliotti with Janney Capital Markets. Please proceed with your question..

Thank you. Good morning. Frank, I was wondering, I was kind of looking at, maybe focusing on M&A a little bit. I was just, you continue, cash continues to go up in your balance sheet and you continue to do deals and your working capital as a percent of sales continues to go down or certainly stay in line despite the deals.

I was wondering, is there a way to quantify how much of deals that you are doing right now or funded by improvements – and now that the businesses that you have bought, but the businesses that have been core to AMETEK over the years?.

Yes, I think the best way look at this, John, is that the majority of the savings that we get and the improvements we get are in the existing businesses, but the existing businesses would include what we acquired in the previous year, not what we acquired this year.

And we obviously look at both the acquired companies as well as the existing businesses, but because the existing businesses are so much larger in totality, the majority of the improvements come from the existing business – but we are able to offset that with the existing business improvements and sort of the year that we acquire the company.

But then in succeeding years we will work very aggressively to improve the working capital of those acquired companies. So, I think the focus and sort of the real answer to your question is that as the existing business is where the majority of this is coming from including the acquisitions from the previous year..

Right, and just a follow-on to that, it seems like – and I think in the past you’ve said that, even though you have a rigorous M&A team and a due diligence process, you tend to sort of scatter your deals for lack of a better term in different areas.

But it seems like, of the last seven deals, if I have it right about five of them have been more in the metrology, whether it’s contact or non-contact, if you throw to include Creaform in there as complementary to that, I was just wondering, is there – is it greater confidence or interest in that area or is just randomness?.

It’s more randomness in terms of where the deals come from, John and when you look at where those deals went, although your macro view is absolutely correct that are in these sort of metrology areas. Where they end up in AMETEK is different.

For instance, the Amptek acquisition is going to end up in our materials analysis division, where Zygo is ending up in our ultra precision technology division. So, it may seem like, they are all going in the same place, but they are not. We have an internal thought process that we don’t like to do two acquisitions in the same business unit.

We might do it in the same division but it would be in different business units just to reduce the risk and only on a few occasions have we not adhered to that..

Great, thanks, Frank, and congratulations..

Thank you..

Thank you. Our next question is coming from the line of Allison Poliniak from Wells Fargo. Please proceed with your question..

Hi, good morning guys..

Hello, Allison..

Hi, Allison..

I am just sort of riding on that product portfolio question and sort of the ultra precision technology, you’ve done a lot of acquisitions there.

Is, outside of sort of organic ideas, is that product portfolio filled out or do you certainly need more immediate end-markets or a different technology there?.

Yes, we have now done a really superb job of putting key technology into this particular business. So four of the markets that we are focusing on – we now have an excellent portfolio of technologies and we really don’t need additional technologies for that market.

However, we can expand the market penetration of UPT and go into other markets and that’s pretty much the strategy that we have used across the company that we get into an area, we fill out the technologies and capabilities for grid access to specific niche markets and then we were on adjacencies that are around that that are really new market segments and we can do that either through acquisition or we can do it through basically internal developments.

And I think you may have heard me talk previously about sort of the finger approach which is the way we think about how we bring the deals into AMETEK and every time we do a sizable acquisition it opens up another set of fingers that we can basically add on either additional acquisitions or additional markets through – or internal R&D activities..

That’s great. Thank you..

You bet..

And then just a lot of moving parts obviously on the EBIT line with the acquisition, so how should be we thinking about that, maybe EIG versus AMG in the back half of the year?.

Well, as we’ve talked about these – if you look at the margins, the margins in EIG are very, very good. They were at 26.4% in the quarter and EMG is where the margin opportunity is and we continue to do really well on those margins. EMG was a 22.1% if my recollection is correct which was up 100 basis points.

So, as we go forward, you are going to see more margin improvement coming out of EMG than EIG and again, through sort of randomness of the acquisitions, a large number of the acquisitions we’ve done in the last say couple of years have ended up in EMG or excuse me, EIG and therefore there tends to be a bit of a dilutive impact on the margins in EIG.

We actually consider that positive because what we want to do with those acquired companies is actually buy businesses that have lower margins and make them better. And therefore the return on invested capital turns out to be superb. But we’ve always been able to outgrow that as a company.

In other words, our margins are – the 30 basis points we are talking about includes, all of the dilution of the acquisitions and if we extract it out the 30 basis would be up in the 70, 80 basis points area, just to sort of put some numbers on it. So, that’s probably the best way I can answer your question, Allison..

Great. Thank you so much..

You bet..

Thank you. Our next question is coming from line of Matt Summerville with KeyBanc. Please proceed with your question..

Morning..

Hi, Matt..

With respect to the core business, Frank, I think you talked about orders been up total 21%.

Can you talk about what that looks like organically give the actual number is well if what your sort of core backlog looks like on a year-over-year basis?.

Yes, I think, I’ll try to do that off the top of my head and Bob, you can correct me if I don’t have exactly the right numbers here. But the organic growth in orders was in the 2%, 3% kind of area. If we look at the backlogs, the backlog was $1.25 billion and the most significant contributor to that was Zygo and Zygo was $83 million.

Did I get those numbers right?.

You got it..

I got them right. Okay..

And then, with respect to – you’ve obviously done a lot of M&A in the last 12 months and it sounds you are going to exclude the integration costs related to Zygo, but can you quantify the inventory step-up cost, the other acquisition expenses transaction costs that are still flowing through the P&L in aggregate for 2014?.

Yes, we have not yet finalized exactly what the integration cost of Zygo are going to be going forward and we are in the process of working with the Zygo team to refine that and by the next conference call, I’ll be able to quantify those for you.

But they won’t be minor and the reason is, you may recall, Matt, that we are looking for synergy in this deal that is extremely large. And we think there is tremendous synergy between, in particular the Zygo operation or Zygo business and AMETEK.

And that’s the reason why we did exclude those costs in our forward-looking guidance and we will get it quantified – I mean, it’s not sort of a material number, it will probably be on the order of $0.04 something like that in that kind of region but it has not been finalized..

And then, just a follow-up Frank, with respect to all the other deals you’ve done, there is inventory step-up costs, there is transaction costs, what is indeed flowing through the P&L that you are not calling out as one-time?.

Okay, well, I can give you some numbers for the second quarter. For instance, in the second quarter we had $1.6 million of costs that were used in terms of acquiring Zygo. Okay, and we are sort of separating those costs from going forward integration costs and that $1.6 million was in the P&L and we are just absorbing that.

So our earnings would have been – if we excluded that, it would have been $1.6 million higher and it was a very similar number in the first quarter for Zygo. So, just in that six months for one acquisition, we are talking $3.2 million which is basically a penny a share which we have absorbed.

And then there are other costs associated with the other deals but they are relatively small in comparison..

Great. Thank you, Frank. .

You bet, Matt..

Thank you. Our next question is coming from the line of Scott Graham with Jefferies. Please proceed with your question..

Hey, good morning, Frank, Bob, Kevin..

Hi, Scott..

Just somebody has to ask it, so Frank, hopefully you can go through your by business unit analysis for us, particularly, give us maybe a little bit more color than normal if possible on EMET which is the kind of first time we’ve kind of mentioned that possibly in some time?.

Yes, now I’d be glad to do that, Scott. Just put a star there. So I’ve got some notes, so I normally do regarding the business sort of sub-segments and I’ll start with EIG.

EIG aerospace business really had an excellent quarter, high single-digit organic sales growth and the growth was driven by our business and regional jet business along with continued strength in commercial aerospace.

We really expect continued strong performance in this EIG aerospace business throughout 2014 and the trends in OEM build rates for excellent commercial sales, while the continued ramp up that we’ve talked about before Scott, in key business and regional jet platforms, will drive significant demand for us, even though the business and regional jet market has not yet rebounded in a similar or in the way that commercial market has rebounded.

So what we are estimating for all of 2014 is that EIG aerospace should be up at least mid single-digits. But process businesses also had a great quarter. Overall sales were up mid-teens on a percentage basis and organic sales were up mid single-digits. Overall growth was driven by very good core growth in ultra precision technologies.

And material analysis divisions, the two we just talked about a few moments ago, combined with obviously the strong acquisitions we did in this segment which were Control Southeast, Creaform and VTI. For the full year, we expect our process businesses grow mid-teens overall with organic growth up low to mid-single digits.

And again, I think it’s going to be pressing more towards the mid than the low. And the last part of EIG is power and industrial sales for that part of the business was up more than 30% in the second quarter and that growth was driven by the contributions from the acquisitions of Powervar and Teseq as well as mid single-digit organic growth.

And we expect overall sales for power and industrial to be up approximately 30% in 2014 and organic growth up low to mid single-digits. So, this business is definitely turning upwards now for us which is very, very good.

Obviously the aerospace and process businesses have been up and moving higher for a sustained basis, but the power business is now starting to show some strength. So if you sum those three parts of EIG, for all of EIG, we expect 2014 sales to be up high teens on a percentage basis with organic growth up that low to mid single-digits.

And moving to the second part of the company, EMG, our differentiated businesses had a very solid quarter with overall sales up mid single-digits organically on a percentage basis. And that strong growth came from our precision motion control and engineered materials interconnect and packaging business.

And Scott, you asked me to spend a little bit of time on the engineered material interconnect and packaging businesses, we have been talking about that business turning around, it didn’t turn around quite as quickly as we thought it was going to, but definitely now it has turned the corner.

You may remember that part of this business is involved with alloys that are used in titanium production that go into air craft and there was a situation where there was a lot of inventory in the supply chain and we thought this was going to clear but it is now cleared and we are basically seeing the results of that.

The other really good thing here is that this team has really embraced our international strategy and have done a lot of work in selling their products now outside the United States.

This was a largely US business and it’s rapidly now moving more in line with the rest of the company where a significant part of their business is outside the United States. So you sum it up. We just had that team in here and you can see a smile on their faces which is great.

And to finish then with the differentiated businesses, if you sum this up, we are expecting low to mid single-digit organic growth for all of 2014 obviously with a stronger growth in the second part of the year. And, the last part of the company is floor care and specialty motors.

Sales in floor care and specialty motors were up low single-digits in the quarter. So continued good performance there and that team expects sales for their business to be up low single digits organically for all of 2014.

So, if you look at all of EMG then, and take what I just said for the differentiated businesses as well as the floor care and specialty motors businesses, we expect overall sales growth of low to mid single-digits in 2014.

And finally then, if you look at AMETEK as a whole, combining the two segments, as I mentioned in my opening remarks, we now expect low double-digit sales growth overall with organic growth up low to mid-single digits and obviously in the second half of the year we are expecting a good organic growth.

We had a really fine July on order intake which I think just continues this trend and we are seeing the global autonomy just generally improve, it’s not a dramatic change, but, it sure feels better now than it did six months ago, let’s say. So, Scott, that was a lot, I hope that gives answer to your question..

Well, it totally does, Frank. Thank you. The answers on that one is always much larger than the question. And I think all of us thank you for always doing that for us.

If I could just ask one follow-up just on the M&A very quickly?.

Sure..

I think you – something you expressed a quarter or so ago was the desire to really kind of build out your power business and we really haven’t seen other than Powervar the acquisitions there in 2014.

How does the pipeline look for that area that I think you are still far getting?.

No, it looks very good and just to add on, in addition to Powervar, which we did at the end of last year, in the first quarter we acquired Teseq and that’s a power business. So, I am pretty pleased now if you take that whole power business, it has grown to about a $0.5 billion and it also has some diversification within it.

There is a roughly $220 million is in power, test and measurement equipment. There is another $200 million that is in battery back-up systems, that’s where Powervar went and there is about $80 million that’s in instrumentation that’s used in generation, transmission and distribution applications.

So, for a while, we were not growing the power business. We’ve now done to – we are out of $0.5 billion and that team has there on a $1 billion and that’s the way we are thinking about it. And in terms of the pipeline, yes, there are deals that we are actively looking at in power.

So, this is a good to buy because the market is just turning up and hopefully we can close some deals in this space and start to get towards that $1 billion level..

Frank, you again, thank you. .

You bet..

Thank you. Our next question is coming from the line of Mark Douglas with Longbow Research. Please proceed with your question..

Hi, good morning gentlemen..

Good morning..

Hi, Mark..

Bob, the payables?.

$383 million..

$383 million. Thank you. Frank, can you discuss the organic growth by region, maybe expand on the strong growth in Asia, but it sounds like a lot of that is you are just outgrowing the markets there with a lot of new initiatives in sales and marketing I would assume maybe some new products too.

But could you just walk through what happened in the different areas?.

Sure, I am glad to do that. Let’s look organically, organically, in the US, we were up low single-digits and similarly in Europe, we were up low single-digits and as you stated in your question, a significant part of our growth came out of Asia where that growth was up in the mid-teens organically.

If you look at the BRIC countries, just another cut, the BRIC countries were up 21% overall and about 13% organically. China, just is superb. China was up organically, almost 25% and total I think it was a number like 35%. You got that with that am I right? 35%..

Yes. .

So, all the efforts and you’ve heard me talking about the expansion in the BRIC countries, the expansion in Asia, they are really coming to fruition now and it’s just an exciting time and even though, many of our peer companies are talking about issues in China and issues in Asia.

We are simply outgrowing the market from both a product point of view and also we got very strong distribution capability there now. In Asia, we have approximately 300 people who are engaged in selling our products and that doesn’t include people in some cases were using distributors were not direct sales.

So it doesn’t include the number of sales people that will be on the street in essence thought those distributors. These are about 300 people that are our AMETEK employees and it’s just paying off in super dividends.

And you look at the lower organic growth in Europe and the US, we actually had a pretty difficult comparison that those numbers would probably be up closer to the mid single-digit area if you took out some of the large shipments that were done last year. So, just in general, Mark, we are feeling better, we are feeling better.

I can tell you that it’s easier than it was six months ago to put up the results that we are putting up and that’s because these economies are starting to move in a direction that’s helping. So, it’s a tailwind instead of a headwind.

And then you couple that with all of the operational things that we are doing and that’s what has given us these really superb results..

Well, thanks for that.

And then looking at your process business, can you discuss what’s happening in process, in particular what you are seeing in oil and gas?.

Yes, it’s a great question Mark and as you are aware, over the last few years, oil and gas has been the driver to process and what is happening now which actually I view quite favorably is that there is balance now across all of those process businesses. So, in essence, we saw very strong growth in the non-oil and gas business.

But oil and gas results are also good. It just wasn’t at the level that it was in terms of growth a year or two ago. So we are feeling pretty good about the process businesses, because, we’ve got that broad-based strength. We’ve talked a little bit about the ultra precision technology business.

That is doing even exclusive of the acquisitions is doing extremely well organically. Our med division had a really good quarter which is in the process area and also our measurement calibration technology division was fine. So, there is a broader base now and we are not as dependent just on oil and gas. Although just to expand a bit.

We see true opportunities in the fracking area. There is a lot going on in fracking. We think it’s going to expand in China and other places outside the US. So there are definite opportunities for us to continue to grow in oil and gas even as the market dynamics come down a bit from where they were a year or two ago..

Okay, thank you..

Sure, Mark..

Thank you. Our next question is coming from the line of Christopher Glynn with Oppenheimer. Please proceed with your question..

Thanks. Good morning..

Hi, Chris..

So what’s been asked, but just going back to the Asia mid-teens organic, obviously it sounds like a lot of internal execution there.

But just wondered if you could kind of add some commentary on to the extent that you are you’ve really just lifted these to higher run rates versus now you have tough comps for next year with Asia?.

Well, no, we think that – Chris, that we are going to continue to grow. So sure, we have improved our penetration in Asia. But we don’t consider it that it’s a new plateau that is going to be flat. We are going to continue to put investments in that region. We are putting in the BRIC countries which is a little bit broader obviously than just Asia.

We are putting in about 50 people this year. We are adding additional manufacturing capability in Asia and that is key to access to the markets there as you have products that are locally built.

So we are just going to continue to add to those regions and if you take China for instance, even though the GDP in China has come down from the 9% to 10% region to the 7%, 7.5% region. That GDP is still heck of a lot better than the US and Europe.

So, we are going to continue to put investments in those regions and if you look at what has transpired in the company and just step back, the area that we were underpenetrated in was Asia.

And if you look at the mix now of that 56% that is outside the United States, the mix has gone, it’s about 30% in Europe, it’s now 20% in Asia and I can remember that number when it was 10%. So, it’s now 20% and then you got 5% or 6% in sort of the other areas of the world. So, we are getting a better balance, but we are still not there.

It’s still the part of the world, where I don’t feel we have our fair share. And we are just going to continue to go after it and hopefully, although the comps will be a little bit more difficult next year. We are going to be able to show you increased performance over the levels of this year..

Thanks. Very helpful..

You bet..

Thank you. (Operator Instructions) Our next question is coming from the line of Nigel Coe with Morgan Stanley. Please proceed with your question..

Hey good morning guys. It’s Drew on for Nigel..

Hi Drew..

Frank, just a question on M&A going – or M&A accretion going forward.

I’m not sure how quantitative you can be here but maybe just qualitative given how much – how much synergy do you expect from the Zygo acquisition and then the other acquisitions to-date? Just what you are thinking about as far as accretion into 2015?.

Yes, I haven’t actually quantified what that is going to be in 2015. It’s not significant in 2014. We will pick up a few pennies in 2014, but obviously as we start to put our synergies in place, and as I mentioned before, we are working through that. On Zygo, we will be able to quantify that, but I really don’t have a number right now for that..

Okay, thank you..

Sure..

Thank you. Our next question is coming from the line of Rob Mason – Robert W. Baird. Please proceed with your question..

Yes good morning..

Hi, Robert..

Frank, I wanted to know, if you could give us a feel for what pricing may have contributed to the 4% core growth in the quarter? And maybe how that compares to what you were getting earlier in the year?.

Yes, it’s about the same and it was 1.5% in the second quarter, another measure of that, sometimes we talk about is pricing minus inflation, where inflation is essentially everything in the business. Salaries, materials, et cetera, et cetera and that number of pricing minus inflation was about 0.6%. So we focus on that.

So that we do in fact, get some of the pricing to the bottom-line. So, that’s the best quantification I can give you and these are also not what I would call exact numbers, they are not the easiest thing to establish.

But we have a practice in place that we are very consistent and so the numbers are comparable, but they are not what I would call a GAAP precise..

Sure, that’s helpful.

And perhaps I missed it when you gave the run down on the aerospace business, but how did the military portion do in the quarter and the outlook there for the balance of the year? And if you have any insight in 2015 on military, that would be helpful?.

It’s a great question and that was probably and has been for the first half of the year and for our forecast for the rest of the year, surprisingly good. It’s basically been in the low single-digit arena.

And we are just not seeing a really major impact of sequestration in the US, US is down some, but it’s being compensated by our international military business which is about half of the overall military business.

So, we actually thought it was going to be worst than what it is and I would say the outlook with everything I know in 2015 is going to be very similar. It’s not going to be a high growth segment, but it’s not going to be a major drain on the growth of the company..

Okay, that’s helpful. And lastly, we spent a fair amount of time today, just discussing your ultra precision portfolio.

Do you have a ballpark number on the size of the market that you are now addressing there? And give us a feel for what your share is?.

Yes, I think if you think about all of those businesses in UPT and you think about probably a 35% market share, and I am going to use rough numbers here, so, this is a $500 million business in very rough numbers.

So, you are talking about $1.5 billion kind of market opportunity, but as you know, this business, like most AMETEK businesses is very niche-oriented. So, you can define the market in ways that either make it a very small market share or a very high market share. What I’ve given you is sort of an average of the way we think about it.

But probably more importantly, it’s not only the share in that addressable market but as I said before, we have this internal process that we actually look at adjacencies around that. So we feel, we can continue to grow into other market segments.

So, I mean, a great example of this, I’ll switch to a different part of the company, but when you look at the genesis of our power business, that actually came out of our aerospace business.

We decided to take land gas turbines or excuse me – take aircraft engines and simply convert them to land gas turbines and that’s what got us started in the power business and now we have a $0.5 billion business.

So, you can sort of expand your market by taking technologies and putting them in other market areas or just doing – take in existing products and putting them in new markets. So there is, many different ways you can do this, but I think, that one-third or 33% market share is the most best way I can answer your question..

Okay, that’s great. Thanks, Frank..

Thank you. Our next question is coming from the line of Scott Graham from Jefferies, please proceed with your question..

Hi, I didn’t want to take up too much air time before, if you don’t mind just answering one more question from me, Frank..

Sure Scott..

The strength in the July orders, could you give us some little bit of color on that was it broad, was it a couple of businesses in particular and any type of number around that? Was that, you mean, that it was up more than the third quarter, whatever you can give us?.

I didn’t catch the last part of your question, Scott.

What was that?.

What was – when you say it was strong, did you mean to say that that’s because it was up more than in the third quarter or if you can give us a number or attach a number to it, that would even be better, but whatever you can do..

Okay, well, the trend is positive. It’s moving in an upward direction. The growth in orders was across the businesses it was not that we had one or two businesses that blew it out, it was – and I think that reflects the improvement in the overall global environment and when we look at July, it continued that trend. I really was focused on July.

I wanted to see, how strong the orders came in and it was very good. So now, we’ll have to look at what occurs obviously in August which – this tend to be a little bit slower month and then hopefully, very, very good in September. But, I can’t really quantify it for you except to say it was broad-based.

It was strong and I think it reflects the global environment from an organic viewpoint..

Thanks very much..

You bet, Scott..

Thank you. Mr. Coleman, there are no further questions at this time. I would like to turn the call back to you..

Great, thank you Susie. Thanks everyone for joining our call today. As a reminder a replay of the call maybe accessed at ametek.com and streetevents.com. And as always, I am available today for further questions at 610-889-5247. Thanks again..

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines. Have a great day..