Quantcast
Last updated on April 18, 2014 at 12:24 EDT

Elbit Systems Reports Fourth Quarter and Full Year 2012 Results

March 13, 2013

HAIFA, Israel, March 13, 2013 /PRNewswire/ –

Improvement in key business parameters:

Revenues at $2.9 billion; Backlog of orders at $5.7 billion;

Net income of $168 million; EPS of $3.97

Elbit Systems Ltd. (the “Company”) (NASDAQ and TASE: ESLT), the international defense
electronics company, reported today its consolidated results for the fourth quarter and
full year ended December 31, 2012.

In this release, the Company is providing US-GAAP results as well as additional
non-GAAP financial data, which are intended to provide investors a more comprehensive
understanding of the Company’s business results and trends. Unless otherwise stated, all
financial data presented is GAAP financial data.

Management Comment:

Joseph Ackerman, President and CEO of Elbit Systems, commented: “I am pleased by our
2012 results, in which we reached a record in full year revenues and backlog, and I am
encouraged by our improvement in margins compared with last year. We are leveraging our
global intercompany synergies, which enable us to reduce operating expenses, to be more
efficient and to continue to improve profitability. We witnessed growth in the
Latin-America and Asia-Pacific regions, two markets characterized with growing defense
budgets, and this trend, as well as the global markets’ recognition of our innovative
solutions, have enabled us to resume our growth in 2012.”

Ackermancontinued: “2012 was my last full year with Elbit Systems, and I believe the
Company is very well positioned strategically, operationally and financially to face the
challenges ahead. At the end of March, after almost two decades at the helm, I will be
passing the baton to Bezhalel (Butzi) Machlis, who will succeed me as President and CEO.
Butzi is a highly regarded executive, and I believe the Company has a solid foundation
with a very capable management team, which will enable it to move ahead in 2013 and
continue on the path that Elbit Systems has forged in recent years.”

Michael Federmann, Chairman of Elbit Systems’ Board of Directors,added: “On behalf of
the Board of Directors and the entire Company, I would like to express our deep
appreciation for Yossi Ackerman’s remarkable contribution over his 31 years in the
Company. In his upcoming role as Vice Chairman of the Board, we look forward to continuing
to benefit from his experience and wisdom in the years to come. We welcome as his
successor Butzi Machlis, a talented manager with a well founded international reputation,
and I am confident that he will continue Yossi Ackerman’s legacy and lead the Company to
new achievements.”

Fourth quarter 2012 results:

Revenues in the fourth quarter of 2012 were $843.9 million, compared to $841.9 million
in the fourth quarter of 2011.

Gross profit amounted to $239.0 million (28.3% of revenues) in the fourth quarter of
2012, as compared to $141.7 million (16.8% of revenues) in the fourth quarter of 2011. The
gross profit in the fourth quarter of 2011 included an expense of $72.8 million, as a
result of the cessation of a program with a foreign customer. The non-GAAP gross profit in
the fourth quarter of 2012 was $247.6 million (29.3% of revenues), compared to $222.3
million (26.4% of revenues) in the fourth quarter of 2011.

Research and development expenses, net were $68.3 million (8.1% of revenues) in the
fourth quarter of 2012, as compared to $76.0 million (9.0% of revenues) in the fourth
quarter of 2011.

Marketing and selling expenses were $61.6 million (7.3% of revenues) in the fourth
quarter of 2012, as compared to $65.1 million (7.7% of revenues) in the fourth quarter of
2011.

General and administrative expenses were $38.9 million (4.6% of revenues) in the
fourth quarter of 2012, as compared to $34.8 million (4.1% of revenues) in the fourth
quarter of 2011.

Operating income was $70.2 million (8.3% of revenues) in the fourth quarter of 2012,
as compared to an operating loss of $34.1 million in the fourth quarter of 2011. The
operating loss in the fourth quarter of 2011 included the $72.8 million expense mentioned
above. The non-GAAP operating income in the fourth quarter of 2012 was $83.3 million (9.9%
of revenues), as compared to $53.2 million (6.3% of revenues) in the fourth quarter of
2011.

Financial expenses, net were $10.6 million in the fourth quarter of 2012, as compared
to financial income, net, of $9.6 million in the fourth quarter of 2011. Financial income,
net, in the fourth quarter of 2011 was high due to income from currency hedging activities
and interest on the settlement of the ImageSat debt transaction.

Taxes on income were $2.9 million in the fourth quarter of 2012, as compared to a tax
benefit of $6.9 million in the fourth quarter of 2011. Taxes on income in the fourth
quarter of 2011 were impacted by a net loss before tax of $24.0 in the fourth quarter of
2011.

Equity in net earnings of affiliated companies and partnerships was $2.3 million (0.3%
of revenues) in the fourth quarter of 2012, as compared to $4.8 million (0.6 % of
revenues) in the fourth quarter of 2011.

Net income attributable to non-controlling interests was $1.8 million in the fourth
quarter of 2012, as compared to $0.4 million in the fourth quarter of 2011.

Loss from discontinued operations, net was $0.1 million. The amount reflects a net
loss related to a held-for-sale business acquired during 2010, as part of the acquisition
of the Mikal group of companies.

Net income attributable to the Company’s shareholders in the fourth quarter of 2012
was $57.2 million (6.8% of revenues), as compared with a net loss of $13.0 million (1.5%
of revenues) in the fourth quarter of 2011. The non-GAAP net income in the fourth quarter
of 2012 was $67.9 million (8.0% of revenues), as compared to $60.6 million (7.2% of
revenues) in the fourth quarter of 2011.

Diluted net earnings per share attributable to the Company’sshareholders were $1.36
for the fourth quarter of 2012, as compared with a diluted net loss per share of $0.31 for
the fourth quarter of 2011. The non-GAAP diluted earnings per share in the fourth quarter
of 2012 were $1.62, as compared to $1.42 in the fourth quarter of 2011.

Full year 2012 results:

Revenues for the year ended December 31, 2012 were $2,888.6 million, as compared to
$2,817.5 million in the year ended December 31, 2011. The leading contributors to the
Company’s revenues were the airborne systems and C4ISR systems areas of operations. The
major increase was in the airborne systems area of operations, primarily due to the
increased revenues from North American customers of avionic system, aerostructures and
maintenance services. The decrease in the land systems area of operations was mainly due
to a decline in revenues of fire control and life support systems in Israel and North
America.

In our reporting of distributions of revenues by geographic regions we have updated
the definition of our geographic regions as shown in the attached table of Distribution of
Revenues. This update was made to enhance the visibility of distribution of revenues by
geographic regions in light of the growing importance of our business in the Latin
American and Asia-Pacific regions.

Cost of revenues for the year ended December 31, 2012 was $2,072.7 million, as
compared to $2,085.5 million in the year ended December 31, 2011. Cost of revenues in 2011
included an expense of $72.8 million related to the cessation of a program with a foreign
customer as mentioned above.

Gross profit for the year ended December 31, 2012 was $815.9 million (28.2% of
revenues), as compared with gross profit of $732.0 million (26.0% of revenues) in the year
ended December 31, 2011. The gross profit margin in 2012 increased mainly as a result of
the mix of programs sold in the year. The gross profit in 2011 was reduced by the expense
of $72.8 million related to the cessation of the program mentioned above. The non-GAAP
gross profit in 2012 was $840.1 million (29.1% of revenues), as compared to $835.7 million
(29.7% of revenues) in 2011.

Research and development expenses, net for the year ended December 31, 2012 were
$233.4 million (8.1% of revenues), as compared to $241.1 million (8.6% of revenues) in the
year ended December 31, 2011.

Marketing and selling expenses for the year ended December 31, 2012 were $241.9
million (8.4% of revenues), as compared to $235.9 million (8.4% of revenues) in the year
ended December 31, 2011.

General and administrative expenses for the year ended December 31, 2012 were $137.5
million (4.8% of revenues), as compared to $139.3 million (4.9% of revenues) in the year
ended December 31, 2011.

Operating income for the year ended December 31, 2012 was $203.1 million (7.0% of
revenues), as compared with operating income of $115.7 million (4.1% of revenues), in the
year ended December 31, 2011. In 2011, excluding the above mentioned expenses of $72.8
million, operating income was $188.5 million (6.7% of revenues). The non-GAAP operating
income in 2012 was $252.3 million (8.7% of revenues) compared with $245.8 million (8.7% of
revenues) in 2011.

Financial expenses, net for the year ended December 31, 2012 were $26.1 million, as
compared to $13.6 million in the year ended December 31, 2011. The financial expenses in
2011 were lower primarily as a result of income from currency hedging activities, a gain
from exchange rate differences and the settlement of the ImageSat debt transaction.

Taxes on income for the year ended December 31, 2012 were $17.1 million (effective tax
rate of 9.7%), as compared to taxes on income of $13.6 million (effective tax rate of
13.1%) in the year ended December 31, 2011. The effective tax rate is affected by the mix
of the tax rates in the various jurisdictions in which the Company’s entities generate
taxable income, and the settlement of tax audits including adjustments for prior years.

Equity in net earnings of affiliated companies and partnerships for the year ended
December 31, 2012 was $11.2 million (0.4% of revenues), as compared to $15.4 million (0.5%
of revenues) in the year ended December 31, 2011.

Loss from discontinued operations, net for the year ended December 31, 2012 amounted
to $0.6 million as compared to a loss of $16.0 million in 2011. The amount in 2011
reflects a net loss related to an impairment of a held-for-sale investment acquired during
2010, as part of the acquisition of the Mikal group of companies. The net loss from
discontinued operations in 2011 (after deducting the minority interest and tax) amounted
to $9.5 million.

Net income attributable to non-controlling interests for the year ended December 31,
2012 was $2.6 million, as compared to a net loss of $0.5 million in the year ended
December 31, 2011. Excluding the loss related to impairment of an asset held-for-sale, the
net income attributable to non-controlling interests in the year ended December 31, 2011
was $6.0 million (0.2% of revenues).

Net income attributable to the Company’s shareholders for the year ended December 31,
2012 was $167.9 million (5.8% of revenues), as compared with $90.3 million (3.2% of
revenues) in the year ended December 31, 2011. The net income in 2011 included the net
effect of the cessation of a project with a foreign customer mentioned above, which
amounted to $62 million. The non-GAAP net income in the year ended December 31, 2012 was
$206.3 million (7.1% of revenues), as compared to $206.6 million (7.3% of revenues) in the
year ended December 31, 2011.

Diluted net earnings per shareattributable to the Company’sshareholders for the year
ended December 31, 2012 were $3.97, as compared with $2.09 for the year ended December 31,
2011. The non-GAAP diluted net earnings per share in the year ended December 31, 2012 were
$4.88, as compared to $4.79 in the year ended December 31, 2011.

The Company’s backlog of orders for the year ended December 31, 2012 totaled $5,683
million, as compared with $5,528 million as of December 31, 2011. Approximately 67% of the
current backlog is attributable to orders from outside Israel. Approximately 68% of the
current backlog is scheduled to be performed during 2013 and 2014.

Operating cash flow for the year ended December 31, 2012 was $198.4 million, as
compared to $190.9 million in the year ended December 31, 2011.

Non-GAAP financial data:

The following non-GAAP financial data is presented to enable investors to have
additional information on the Company’s business performance as well as a further basis
for periodical comparisons and trends relating to the Company’s financial results. The
Company believes such data provides useful information to investors by facilitating more
meaningful comparisons of the Company’s financial results over time. Such non-GAAP
information is used by the Company’s management to make strategic decisions, forecast
future results and evaluate the Company’s current performance. However, investors are
cautioned that, unlike financial measures prepared in accordance with GAAP, non-GAAP
measures may not be comparable with the calculation of similar measures for other
companies.

The non-GAAP financial data includes reconciliation adjustments regarding non-GAAP
gross profit, operating income, net income and diluted EPS. In arriving at non-GAAP
presentations, companies generally factor out items such as those that have a
non-recurring impact on the income statements, various non-cash items, significant effects
of retroactive tax legislation and changes in accounting guidance and other items which,
in management’s judgment, are items that are considered to be outside of the review of
core operating results.

In the Company’s non-GAAP presentation, the Company made the following adjustments:
(1) added back amortization of purchased intangible assets, (2) added back significant
reorganization, restructuring and other related expenses, (3) added back impairment of
investments, including impairment of auction rate securities, (4) subtracted gain from
changes in holdings, including revaluation of the previously held shares at the
acquisition date when a business combination is achieved in stages (step-up), (5) added
back impairment loss from discontinued operations, (6) excluded the impact of the
cessation of a program with a foreign customer and (7) excluded the income tax effects of
the foregoing.

These non-GAAP measures are not based on any comprehensive set of accounting rules or
principles. The Company believes that non-GAAP measures have limitations in that they do
not reflect all of the amounts associated with the Company’s results of operations, as
determined in accordance with GAAP, and that these measures should only be used to
evaluate the Company’s results of operations in conjunction with the corresponding GAAP
measures. Investors should consider non-GAAP financial measures in addition to, and not as
replacements for or superior to, measures of financial performance prepared in accordance
with GAAP.

Reconciliation of GAAP to Non-GAAP (Unaudited) Supplemental Financial Data:

(US Dollars in millions)

                                        Three Months
                                           ended                Year ended
                                        December 31             December 31
                                      2012        2011   2012      2011      2010
        GAAP gross profit              239.0      141.7  815.9     732.0     797.9
        Adjustments:
        Amortization of purchased
        intangible assets                8.6        7.8   24.2      30.9      25.0
        Cessation of program(1)            -       72.8      -      72.8         -
        Reorganization,
        restructuring and other
        related expenses(2)                -          -      -         -      12.8
        Non-GAAP gross profit          247.6      222.3  840.1     835.7     835.7
        Percent of revenues            29.3%      26.4%  29.1%     29.7%     31.3%
        GAAP operating income (loss)    70.2     (34.1)  203.1     115.7     207.4
        Adjustments:
        Amortization of purchased
        intangible assets               13.1       14.5   49.2      57.3      47.7
        Cessation of program(1)            -       72.8      -      72.8         -
        Reorganization,
        restructuring and other
        related expenses(2)                -          -      -         -      16.4
        Impairment of investments(3)       -          -      -         -       1.3
        Gain from changes in
        holdings(4)                        -          -      -         -     (4.8)
        Non-GAAP operating income       83.3       53.2  252.3     245.8     268.0
        Percent of revenues             9.9%       6.3%   8.7%      8.7%     10.0%
        GAAP net income (loss)
        attributable to Elbit
        Systems' shareholders           57.2     (13.0)  167.9      90.3     183.5
        Adjustments:
        Amortization of purchased
        intangible assets               13.1       14.5   49.2      57.3      47.7
        Cessation of program(1)            -       72.8      -      72.8         -
        Reorganization,
        restructuring and other
        related expenses (2)               -          -      -         -      16.4
        Impairment of investments(3)       -          -      -       0.5       1.3
        Gain from changes in
        holdings(4)                        -          -  (2.3)         -    (17.6)
        Adjustment of loss (gain)
        from discontinued
        operations, net (5)              0.1        0.1    0.4       9.5     (0.5)
        Related tax benefits           (2.5)     (13.8)  (8.9)    (23.8)     (8.9)
        Non-GAAP net income
        attributable to Elbit
        Systems' shareholders           67.9       60.6  206.3     206.6     221.9
        Percent of revenues             8.0%       7.2%   7.1%      7.3%      8.3%
        Non-GAAP diluted net EPS        1.62       1.42   4.88      4.79      5.13

(1) Adjustment of expenses related to cessation of program, which resulted in
write-off of inventories and other related costs.

(2) Adjustment of reorganization, restructuring and other related expenses in 2010 are
mainly due to write-off of inventories in the amount of approximately $13 million related
to the acquisition of Soltam and ITL.

(3) Adjustment of impairment of available-for-sale marketable securities and an
impairment of intangible assets.

(4) Adjustment of gain from changes in holdings includes the income from the sale of
investments in affiliated companies of $2.3 million in 2012, a sale of Mediguide shares of
$12.8 million in 2010, and an adjustment of net gain in the amount of $4.8 million,
related to revaluation of a previously held investment, due to accounting treatment as a
business combination achieved in stages during 2010.

(5) Adjustment of loss from discontinued operations, net of tax and minority
interests, related to impairment of a held-for-sale investment acquired during 2010, as
part of the acquisition of the Mikal group of companies.

Recent Events:

On December 5, 2012 the Company announced that Elbit Systems Electro-Optics Elop Ltd.
A wholly-owned subsidiary, was awarded a contract from Israel Aerospace Industries Ltd. to
provide a space camera for the Italian OPTSAT 3000 observation satellite. The total
project, comprising the Jupiter advanced camera and additional services, is valued at
approximately $40 million and will be completed within three and a half years.

On December 31, 2012 the Company announced that it was awarded various contracts by
the Israel Ministry of Defense, in a number of fields of activity for a total value of
approximately $315 million.

On January 27, 2013, the Company announced that it received an approximately $35
million contract from the Israel Ministry of Defense for the development of advanced
features for Unmanned Aircraft Systems (“UAS”) to be supplied within three years.

On February 6, 2013, the Company announced that its subsidiary in Brazil , AEL
Sistemas S.A. (“AEL”), and Embraer Defesa e Seguranca S.A. (“Embraer Defesa”) signed an
agreement for the entrance of Avibras Divisao Aerea e Naval S.A. (“Avibras”) as a
shareholder of Harpia Sistemas S.A. (“Harpia”), envisaging joint collaboration on UAS in
Brazil. According to the agreement, Avibras will hold a 9% stake of the shareholdings in
Harpia, resulting in AEL owning 40% of Harpia’s shares, with Embraer Defesa remaining as
the major shareholder, with 51% of the shares.

On March 5, 2013, the Company announced that M7 Aerospace LLC (“M7″), a wholly-owned
subsidiary of Elbit Systems of America, LLC, will be working with BAE Systems to provide
logistics support for the T-34, T-44 and T-6 aircraft under a contract awarded to BAE
Systems by the Naval Air Systems Command (“NAVAIR”). Under its NAVAIR contract, BAE
Systems awarded M7 a subcontract of approximately $50 million to be performed over a
five-year period.

Dividend:

The Board of Directors declared a dividend of $0.30 per share for the fourth quarter
of 2012. The dividend’s record date is April 9, 2013 and the dividend will be paid on
April 22, 2013, net of taxes and levies, at the rate of 25%.

Conference Call:

The Company will be hosting a conference call today, Wednesday, March 13, 2013 at
10:00 a.m. Eastern Time. On the call, management will review and discuss the results and
will be available to answer questions.

To participate, please call one of the teleconferencing numbers that follow. If you
are unable to connect using the toll-free numbers, please try the international dial-in
number.

US Dial-in Numbers: 1 888 407 2553

UK Dial-in Number: 0 800 917 9141

ISRAEL Dial-in Number: 03 918 0610

INTERNATIONAL Dial-in Number: +972 3 918 0610

at: 10:00 am Eastern Time; 7:00 am Pacific Time; 2:00 pm UK Time; 4:00 pm

Israel Time

This call will also be broadcast live on Elbit Systems’ web-site at
http://www.elbitsystems.com. An online replay will be available from 24 hours after
the call ends.

Alternatively, for two days following the call, investors will be able to dial a
replay number to listen to the call. The dial-in numbers are:

1 888 782 4291 (US) or +972 3 925 5918 (Israel and International).

About Elbit Systems

Elbit Systems Ltd. is an international defense electronics company engaged in a wide
range of programs throughout the world. The Company, which includes Elbit Systems and its
subsidiaries, operates in the areas of aerospace, land and naval systems, command,
control, communications, computers, intelligence surveillance and reconnaissance
(“C4ISR”), unmanned aircraft systems (“UAS”), advanced electro-optics, electro-optic space
systems, EW suites, airborne warning systems, ELINT systems, data links and military
communications systems and radios. The Company also focuses on the upgrading of existing
military platforms, developing new technologies for defense, homeland security and
commercial aviation applications and providing a range of support services. For additional
information, visit: http://www.elbitsystems.com.

Attachments:

Consolidated balance sheet

Consolidated statements of income

Consolidated statements of cash flow

Consolidated revenue distribution by areas of operation and by geographical regions

This press release contains forward looking statements (within the meaning of Section
27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange
Act of 1934, as amended) regarding Elbit Systems Ltd. and/or its subsidiaries
(collectively the Company), to the extent such statements do not relate to historical or
current fact. Forward looking statements are based on management’s expectations,
estimates, projections and assumptions. Forward looking statements are made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as
amended. These statements are not guarantees of future performance and involve certain
risks and uncertainties, which are difficult to predict. Therefore, actual future results,
performance and trends may differ materially from these forward looking statements due to
a variety of factors, including, without limitation: scope and length of customer
contracts; governmental regulations and approvals; changes in governmental budgeting
priorities; general market, political and economic conditions in the countries in which
the Company operates or sells, including Israel and the United States among others;
differences in anticipated and actual program performance, including the ability to
perform under long-term fixed-price contracts; and the outcome of legal and/or regulatory
proceedings. The factors listed above are not all-inclusive, and further information is
contained in Elbit Systems Ltd.’s latest annual report on Form 20-F, which is on file with
the U.S. Securities and Exchange Commission. All forward looking statements speak only as
of the date of this release. The Company does not undertake to update its forward looking
statements.

(FINANCIAL TABLES TO FOLLOW)

ELBIT SYSTEMS LTD.

CONSOLIDATED BALANCE SHEETS

(In thousands of US Dollars)

                                                         December 31, December 31,
                                                             2012         2011
                                                           Audited      Audited
        Assets
        Current assets:
        Cash and cash equivalents                             199,241      202,577
        Short-term bank deposits and marketable
        securities                                             65,555       21,693
        Trade and unbilled receivables, net                   688,129      669,524
        Other receivables and prepaid expenses                180,103      180,024
        Inventories, net of customers advances                751,247      761,269
        Total current assets                                1,884,275    1,835,087
        Investments in affiliated companies,
        partnerships and other companies                      126,482      110,159
        Long-term trade and unbilled receivables              229,687      162,762
        Long-term bank deposits and other receivables          19,269       12,215
        Deferred income taxes, net                             31,465       36,130
        Severance pay fund                                    302,680      283,477
                                                              709,583      604,743
        Property, plant and equipment, net                    501,286      517,608
        Goodwill and other intangible assets, net             715,561      763,072
        Total assets                                        3,810,705    3,720,510
        Liabilities and Equity
        Short-term bank credit and loans                          181        2,998
        Current maturities of long-term loans and Series
        A Notes                                                90,056      127,627
        Trade payables                                        260,975      303,601
        Other payables and accrued expenses                   704,450      756,529
        Customer advances in excess of costs incurred on
        contracts in progress                                 453,382      407,222
                                                            1,509,044    1,597,977
        Long-term loans, net of current maturities            173,745      302,255
        Series A Notes, net of current maturities             408,610      235,319
        Employee benefit liabilities                          407,661      394,115
        Deferred income taxes and tax liabilities, net         48,787       48,467
        Customer advances in excess of costs incurred on
        contracts in progress                                 156,497      154,696
        Other long-term liabilities                            55,735       59,961
                                                            1,251,035    1,194,813
        Elbit Systems Ltd.'s equity                         1,017,115      898,337
        Non-controlling interests                              33,511       29,383
        Total equity                                        1,050,626      927,720
        Total liabilities and equity                        3,810,705    3,720,510

ELBIT SYSTEMS LTD.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands of US Dollars, except for share and per share amounts)

                                                                  Three Months
                                               Year Ended             Ended
                                              December 31,        December 31,
                                             2012      2011       2012      2011
                                                   Audited            Unaudited
        Revenues                           2,888,607 2,817,465    843,917  841,863
        Cost of revenues                   2,072,742 2,085,451    604,879  700,164
        Gross profit                         815,865   732,014    239,038  141,699
                                             233,387   241,092     68,273   75,956
        Operating expenses:                  241,911   235,909     61,586   65,080
        Reserch and development, net         137,517   139,349     38,937   34,762
        Marketing and selling
        General and administrative           612,815   616,350    168,797  175,798
        Operating income (loss)              203,050   115,664     70,241 (34,099)
        Financial income (expenses), net    (26,086)  (13,569)   (10,562)    9,551
        Other income, net                         78     1,909          2      554
        Income (loss) before income taxes    177,042   104,004     59,681 (23,994)
        Taxes on income                     (17,099)  (13,624)    (2,895)    6,941
                                             159,943    90,380     56,786 (17,053)
        Equity in net earnings of
        affiliated companies and
        partnerships                          11,160    15,377      2,293    4,751
        Income (loss) from continuing
        operations                           171,103   105,757     59,079 (12,302)
        Loss from discontinued operations,
        net                                    (616)  (15,977)       (97)    (347)
        Net income (loss)                    170,487    89,780     58,982 (12,649)
        Less: net loss (income)
        attributable to non-controlling
        interests                            (2,608)       508    (1,773)    (393)
        Net income (loss) attributable to
        Elbit Systems Ltd.'s shareholders    167,879    90,288     57,209 (13,042)
        Earnings per share attributable to
        Elbit Systems Ltd.'s shareholders:
        Basic net earnings (losses) per
        share
        Continuing operations                   3.99      2.33       1.37   (0.30)
        Discontinued operations               (0.01)    (0.22)     (0.00)   (0.01)
        Total                                   3.98      2.11       1.37   (0.31)
        Diluted net earnings (losses) per
        share
        Continuing operations                   3.98      2.31       1.36   (0.30)
        Discontinued operations               (0.01)    (0.22)     (0.00)   (0.01)
        Total                                   3.97      2.09       1.36   (0.31)
        Weighted average number of shares
        used in computation of basic
        earnings per share (in thousands)     42,190    42,764     41,874   42,736
        Weighted average number of shares
        used in computation of diluted
        earnings per share (in thousands)     42,277    43,131     41,985   42,736
        Amounts attributable to Elbit
        Systems Ltd.'s shareholders
        Income from continuing operations,
        net of income tax                    168,245    99,778     57,267 (12,836)
        Discontinued operations, net of
        income tax                             (366)   (9,490)       (58)    (206)
        Net income (loss) attributable to
        Elbit Systems Ltd.'s shareholders    167,879    90,288     57,209 (13,042)

ELBIT SYSTEMS LTD.

CONSOLIDATED STATEMENTS OF CASH FLOW

(In thousands of US Dollars)

                                                             Year Ended December
                                                                     31,
                                                             2012          2011
                                                                   Audited
        CASH FLOWS FROM OPERATING ACTIVITIES
        Net income                                           170,487        89,780
        Adjustments to reconcile net income to net cash
        provided by operating activities:
        Depreciation and amortization                        138,796       150,618
        Write-off of impairment and discontinued
        operations, net                                          616        15,977
        Stock-based compensation                               3,326         1,996
        Amortization of Series A Notes discount and
        related issuance costs, net                              153           422
        Deferred income taxes and reserve, net                 6,579        (8,777)
        Loss (gain) on sale of property, plant and
        equipment                                              1,197        (1,645)
        Loss (gain) on sale of investment                       (829)        2,189
        Equity in net earnings of affiliated companies and
        partnerships, net of dividend received (*)            (1,602)        (270)
        Changes in operating assets and liabilities, net
        of amounts acquired:
        Increase in short and long-term trade receivables,
        and prepaid expenses                                 (91,988)      (65,062)
        Decrease (increase) in inventories, net               10,022       (95,363)
        Increase (decrease) in trade payables, other
        payables and accrued expenses                        (75,724)        17,225
        Severance, pension and termination indemnities,
        net                                                  (10,612)         1,879
        Increase in advances received from customers          47,961         81,946
        Net cash provided by operating activities            198,382        190,915
        CASH FLOWS FROM INVESTING ACTIVITIES
        Purchase of property, plant and equipment            (81,637)      (121,977)
        Acquisition of subsidiaries and business
        operations                                                 -        (12,173)
        Investments in affiliated companies and other
        companies                                             (4,241)       (13,555)
        Proceeds from sale of property, plant and
        equipment                                              7,335         15,059
        Proceeds from sale of investments                        705            329
        Investment in long-term deposits                        (779)          (609)
        Proceeds from sale of long-term deposits               2,849         40,396
        Investment in short-term deposits and
        available-for-sale marketable securities            (340,899)       (88,842)
        Proceeds from sale of short-term deposits and
        available-for-sale marketable securities             299,029        126,306
        Net cash used in investing activities               (117,638)       (55,066)
        CASH FLOWS FROM FINANCING ACTIVITIES
        Proceeds from exercise of options                      1,352          3,833
        Purchase of non-controlling interests                      -        (71,000)
        Repayment of long-term loans                        (319,601)       (73,666)
        Proceeds from long-term loans                        122,038        172,303
        Proceeds from issuance of Series A Notes             246,973              -
        Series A Notes issuance costs                         (2,035)             -
        Purchase of treasury shares                          (26,006)       (10,101)
        Repayment of Series A Notes and convertible
        debentures                                           (53,530)       (29,998)
        Purchase of convertible debentures of a subsidiary         -         (2,121)
        Dividends paid                                       (50,616)       (61,633)
        Tax benefit in respect of options exercised              161            169
        Change in short-term bank credit and loans, net       (2,817)       (12,117)
        Net cash used in financing activities                (84,081)       (84,331)
        NET INCREASE (DECREASE) IN CASH AND CASH
        EQUIVALENTS                                           (3,336)        51,518
        CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE
        YEAR                                                 202,577        151,059
        CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR     199,241        202,577
        * Dividend received from affiliated companies and
        partnerships                                           9,558         15,107

ELBIT SYSTEMS LTD.

DISTRIBUTION OF REVENUES

Consolidated Revenues by Areas of Operation:

                                Year Ended                Three Months Ended
                               December 31,                  December 31,
                            2012           2011           2012           2011
                          $              $              $              $
                       millions   %   millions   %   millions   %   millions   %
        Airborne
        systems         1,054.5  36.5    969.4  34.4    261.0  30.9    274.2  32.6
        Land systems      374.5  13.0    405.3  14.3    110.2  13.1    121.2  14.4
        C4ISR systems   1,017.6  35.2    996.4  35.4    340.9  40.4    291.7  34.7
        Electro-optic
        systems           324.1  11.2    300.2  10.7    112.6  13.3    102.3  12.1
        Other (mainly
        non-defense
        engineering
        and production
        services)         117.9   4.1    146.2   5.2     19.2   2.3     52.5   6.2
        Total           2,888.6 100.0  2,817.5 100.0    843.9 100.0    841.9 100.0

Consolidated Revenues by Geographical Regions(*):

                                Year Ended                Three Months Ended
                               December 31,                  December 31,
                            2012           2011           2012           2011
                          $              $              $              $
                       millions   %   millions   %   millions   %   millions   %
        Israel            519.9  18.0    697.2  24.8    163.9  19.4    187.7  22.3
        North America     909.4  31.5    890.7  31.6    245.9  29.1    238.6  28.3
        Europe            561.1  19.4    552.4  19.6    193.1  22.9    191.4  22.7
        Latin America     258.8   9.0    165.5   5.9     82.8   9.8     72.3   8.6
        Asia Pacific      568.4  19.7    460.0  16.3    145.0  17.2    127.6  15.2
        Other
        countries          71.0   2.4     51.7   1.8     13.2   1.6     24.3   2.9
        Total           2,888.6 100.0  2,817.5 100.0    843.9 100.0    841.9 100.0

(*) The distribution of revenues by geographical regions has been modified in certain
respects from our reports in prior years. The regions of “Israel” and “Europe” remain
unchanged. The “U.S.” region has been changed to “North America”, which includes the U.S.
and Canada. We now also include two new regions: “Latin America” and “Asia-Pacific” (east
of the Caspian Sea). The remaining markets are included in “Other countries”.

        Company Contact:

        Joseph Gaspar, Executive VP & CFO
        Tel:  +972-4-8316663
        j.gaspar@elbitsystems.com
        Dalia Rosen, VP, Head of Corporate Communications
        Tel: +972-4-8316784
        dalia.rosen@elbitsystems.com
        Elbit Systems Ltd.

        IR Contact:

        Ehud Helft
        Kenny Green
        CCG Investor Relations
        Tel: 1-646-201-9246
        elbitsystems@ccgisrael.com

SOURCE Elbit Systems Ltd


Source: PR Newswire