Please note that during this call, management will reiterate forward-looking statements that were made in the press release issued this morning. Please refer to this press release as well as the company's SEC filings for a more detailed description of the factors that may cause actual results to differ materially from those anticipated. Also please note that this call is being simultaneously broadcast over the Internet.
I would now like to turn the call over to Michael Strianese. Mike, please go ahead.
Michael T. Strianese
Thanks, Eric, and good morning, everyone. Thanks for joining us. We started the year with a strong first quarter, overall. And as always I wanted to thank the 60,000 men and women of L-3 for just a tremendous job in the first quarter and their focus and excellent program execution.
We saw very strong orders combined with new awards, recompetes and follow-on business that drove the results this quarter. Internal funded orders were $4.1 billion, which generated a book-to-bill ratio of 1.14 and resulting in a backlog at March 31 of $11.4 billion.
Net sales were $3.6 billion, which were up -- essentially flat with the 2011 first quarter with our diluted earnings per share of $2.01, up from $1.85 in last year's first quarter, that's about a 9% increase.
The C3ISR business continued to lead with very strong performance, an increase in sales of about 16% compared to last year's first quarter. Driving the growth there were increased volumes for airborne ISR, logistics support and fleet management services for our DoD customers, as well as new business for international airborne ISR platforms.
Recent competitive wins helped us deliver solid sales in the AM&M segments, in the Contractor Logistics Support business area and an acquisition resulted in modest growth for Electronic Systems. Offsetting the sales performance were headwinds from the continued challenging defense environment where the largest impact was felt in the Government Services area. We continue to focus on growing and integrating businesses, generating maximum efficiencies from operations that are aligned with both customer and production requirements.