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Elbit Systems Reports Second Quarter 2013 Results

              Elbit Systems Reports Second Quarter 2013 Results

Backlog of orders over $5.8 billion;

Revenues at $703 million; Net income at $50 million;

Diluted net earnings per share at $1.17

PR Newswire

HAIFA, Israel, Aug. 13, 2013

HAIFA, Israel, Aug. 13, 2013 /PRNewswire/ -- Elbit Systems Ltd. (the
"Company") (NASDAQ: ESLT, TASE: ESLT), the international defense electronics
company, reported today its consolidated financial results for the second
quarter ended June 30, 2013.

In this release, the Company is providing its usual US-GAAP results as well as
additional non-GAAP financial data, which are intended to provide investors
with 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:

Bezhalel (Butzi) Machlis, President and CEO of Elbit Systems, commented: "I am
pleased to report the second quarter results, which reflect improvement in our
financial parameters. The growth in sales, supported by our backlog growth for
the fifth consecutive quarter, are encouraging. These achievements, in
addition to an improvement in profitability, operating margins and operational
efficiency, are a result of our ongoing cost-effectiveness efforts."

Machlis added: "We have recently decided to further enhance the effectiveness
of our R&D efforts and to manage them from an organization-wide perspective in
order to better identify and leverage market-leading, innovative solutions
that combine the full range of our broad technological capabilities. I am
confident that such measures will enable us to successfully meet global market
challenges and support maintaining our long-term growth and technological
leadership."

Second quarter 2013 results:

Revenues were $702.9 million in the second quarter of 2013, as compared to
$676.4 million in the second quarter of 2012. The main contributors to the
Company's revenues were the Airborne and C4ISR systems areas of operations. 

Gross profit was $203.1 million (28.9% of revenues) in the second quarter of
2013, as compared to $189.6 million (28.0% of revenues)  in the second quarter
of 2012. The non-GAAP gross profit in the second quarter of 2013 was $208.5
million (29.7% of revenues), compared to $194.8 million (28.8% of revenues) in
the second quarter of 2012.

Research and development expenses, net were $51.5 million (7.3% of revenues)
in the second quarter of 2013, as compared to $55.6 million (8.2% of revenues)
in the second quarter of 2012.

Marketing and selling expenses were $57.1 million (8.1% of revenues) in the
second quarter of 2013, as compared to $59.9 million (8.9% of revenues) in the
second quarter of 2012.

General and administrative expenses were $27.8 million (4.0% of revenues) in
the second quarter of 2013, as compared to $32.0 million (4.7% of revenues) in
the second quarter of 2012. General and administrative expenses in the second
quarter of 2013 benefited from income related to a legal settlement net of
expenses of $7.6 million.

Operating income was $66.7 million (9.5% of revenues), compared to $42.1
million (6.2% of revenues) in the second quarter of 2012. The non-GAAP
operating income in the second quarter of 2013 was $70.5 million (10.0% of
revenues), as compared to $54.1 million (8.0% of revenues) in the second
quarter of 2012.

Financial expenses, net were $12.7 million in the second quarter of 2013, as
compared to $2.3 million in the second quarter of 2012. Financial expenses,
net, in the second quarter of 2013 were comparatively high due to fluctuation
in foreign currencies during in the second quarter of 2013. In the second
quarter of 2012 the financial expenses were relatively low due to the
depreciation of the NIS against the US dollar.

Taxes on income were $5.1 million (effective tax rate of 9.4%) in the second
quarter of 2013, as compared to taxes on income of $2.8 million (effective tax
rate of 7.1%) in the second quarter of 2012.

Equity in net earnings of affiliated companies and partnerships was $2.5
million (0.4% of revenues) in the second quarter of 2013, as compared to $3.8
million (0.6% of revenues) in the second quarter of 2012.

Discontinued operations, net - in the second quarter of 2013 the Company sold
its holdings in a held for sale entity and recognized a gain of approximately
$1.0 million from discontinued operations.

Net income attributable to non-controlling interests was $3.0 million in the
second quarter of 2013, as compared to $1.2 million in the second quarter of
2012.

Net income, attributable to the Company's ordinary shareholders, was $49.6
million (7.1% of revenues) in the second quarter of 2013, as compared to $38.3
million (5.7% of revenues) in  the second quarter of 2012. The non-GAAP net
income in the second quarter of 2013 was $50.4 million (7.2% of revenues), as
compared to $48.2 million (7.1% of revenues) in the second quarter of 2012.

Diluted net earnings per share attributable to the Company's ordinary
shareholders were $1.17 in the  second quarter of 2013, as compared to $0.90
in the  second quarter of 2012. The non-GAAP earnings per share in the second
quarter of 2013 were $1.19, as compared to $1.14 in the second quarter of
2012.

The Company's backlog of orders as of June 30, 2013 was $5,804 million, as
compared with $5,777 million as of March 31, 2013 and $5,683 million as of
December 31, 2012. Approximately 67% of the backlog relates to orders outside
of Israel. Approximately 59% of the Company's backlog as of June 30, 2013 is
scheduled to be performed during the second half of 2013 and in 2014.

Operating cash flow was $60.9 million  during the first half of 2013, as
compared to $56.2 million  in the first half of 2012.

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 certain adjustments
as indicated in the table below.

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)
                             Six Months Ended  Three Months Ended  Year Ended

                             June 30           June 30             December 31
                             2013      2012    2013       2012     2012
GAAP gross profit            395.9     385.4   203.1      189.6    815.9
Adjustments:
Amortization of intangible   11.0      10.4    5.4        5.2      24.2
assets
Non-GAAP gross profit        406.9     395.8   208.5      194.8    840.1
Percent of revenues          29.4%     28.9%   29.7%      28.8%    29.1%
GAAP operating income        120.5     83.8    66.7       42.1     203.1
Adjustments:                                                   

Amortization of intangible   23.0      24.2    11.4       12.0     49.2
assets
Legal settlement, net        (7.6)     -       (7.6)      -        -
Non-GAAP operating income    135.9     108.0   70.5       54.1     252.3
Percent of revenues          9.8%      7.9%    10.0%      8.0%     8.7%
GAAP net income                                               
attributable to Elbit
Systems' shareholders        91.0      71.1    49.6       38.3     167.9
Adjustments:
Amortization of intangible   23.0      24.2    11.4       12.0     49.2
assets
Legal settlement, net        (7.6)     -       (7.6)      -        -
Gain from changes in         -         (2.3)   -          -        (2.3)
holdings
Adjustment of loss (gain)
from                         (0.8)     0.2     (1.0)      0.1      0.4
discontinued operations, net
Related tax benefits         (4.0)     (4.3)   (2.0)      (2.2)    (8.9)
Non-GAAP net income
attributable to              101.6     88.9    50.4       48.2     206.3
Elbit Systems' shareholders
Percent of revenues          7.3%      6.5%    7.2%       7.1%     7.1%
Non-GAAP diluted net EPS     2.41      2.09    1.19       1.14     4.88





Recent Events:

On May 30, 2013, the Company announced the settlement of a lawsuit against
Credit Suisse Group. Pursuant to the settlement, Elbit Systems withdrew its
lawsuit in return for the payment of an undisclosed amount.

On June 12, 2013, the Company announced that Midroog, an Israeli rating
agency, reaffirmed its "Aa1" rating (on a local scale), with a stable outlook,
of the Series "A" Notes issued by the Company in 2010 and in 2012.

On August 11, 2013, the Company announced, that its Australian subsidiary,
Elbit Systems of Australia Pty Ltd, was awarded a contract in the amount of
approximately $32 million U.S. dollars (approximately $35 million Australian
dollars) to supply the Australian Federal Police with an Investigation,
Intelligence and Incident Management Solution to be supplied over a four-year
period.

Dividend:

The Board of Directors declared a dividend of $0.30 per share for the second
quarter of 2013. The dividend's record date is August 27, 2013, and the
dividend will be paid on September 9, 2013, net of taxes and levies, at the
rate of 25%.

Conference Call:

The Company will also be hosting a conference call later today, August 13,
2013 at 9:00am 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 Number: 1 888 668 9141
UK Dial-in Number: 0 800 917 5108
ISRAEL Dial-in Number: 03 918 0609
INTERNATIONAL Dial-in Number: +972 3 918 0609

at 9:00am Eastern Time; 6:00am Pacific Time; 2:00pm UK Time; 4:00pm Israel
Time

This call will also be broadcasted live on Elbit Systems' web-site at
http://www.elbitsystems.com. An online replay will be available 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:

1 888 326 9310 (US) or +972 3 925 5921 (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 military and
commercial 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: www.elbitsystems.com.

Attachments:

Consolidated balance sheets
Consolidated statements of income
Consolidated statements of cash flows
Consolidated revenue distribution by areas of operation and by geographical
regions



Company Contact:
                                                  IR Contact:

                                                  
Joseph Gaspar, Executive VP & CFO
                                                  Ehud Helft
Tel: +972-4-8316663
                                                  Kenny Green
j.gaspar@elbitsystems.com
                                                  CCG Investor Relations
Dalia Rosen, VP, Head of Corporate Communications
                                                  Tel: 1-646-201-9246
Tel: +972-4-8316784
                                                  elbitsystems@ccgisrael.com
dalia.rosen@elbitsystems.com
                                                  
Elbit Systems Ltd.



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)
                                                       June 30,   December 31,
                                                       2013       2012
                                                       Unaudited  Audited
Assets
Current assets:
Cash and cash equivalents                              134,678    199,241
Short-term bank deposits                               19,212     15,444
Available-for-sale marketable securities               49,633     50,111
Trade and unbilled receivables, net                    829,178    688,129
Other receivables and prepaid expenses                 147,496    180,103
Inventories, net of customers advances                 787,332    751,247
Total current assets                                   1,967,529  1,884,275
Investments in affiliated companies, partnerships and  134,141    126,482
other companies
Long-term trade and unbilled receivables               234,233    229,687
Long-term bank deposits and other receivables          26,716     19,269
Deferred income taxes, net                             30,384     31,465
Severance pay fund                                     305,633    302,680
                                                       731,107    709,583
Property, plant and equipment, net                     487,124    501,286
Goodwill and other intangible assets, net              690,345    715,561
Total assets                                           3,876,105  3,810,705
Liabilities and Equity
Short-term bank credit and loans                       9,169      181
Current maturities of long-term loans and Series A     75,327     90,056
Notes
Trade payables                                         278,641    260,975
Other payables and accrued expenses                    702,391    704,450
Customer advances in excess of costs incurred on      459,286    453,382
contracts in progress
                                                       1,524,814  1,509,044
Long-term loans, net of current maturities             176,059    173,745
Series A Notes, net of current maturities              360,001    408,610
Employee benefit liabilities                           413,423    407,661
Deferred income taxes and tax liabilities, net         53,337     48,787
Customer advances in excess of costs incurred on       187,288    156,497
contracts in progress
Other long-term liabilities                            59,486     55,735
                                                       1,249,594  1,251,035
Elbit Systems Ltd.'s equity                            1,074,923  1,017,115
Non-controlling interests                              26,774     33,511
Total equity                                           1,101,697  1,050,626
Total liabilities and equity                           3,876,105  3,810,705





ELBIT SYSTEMS LTD.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands of US Dollars, except for share and per
share amounts)
                         Six Months Ended      Three Months Ended  Year Ended

                         June 30               June 30             December 31
                         2013       2012       2013       2012     2012
                         Unaudited                                 Audited
Revenues                 1,383,063  1,367,220  702,876    676,432  2,888,607
Cost of revenues         987,206    981,840    499,727    486,803  2,072,742
 Gross profit           395,857    385,380    203,149    189,629  815,865
Operating expenses:
Research and             102,543    114,411    51,494     55,645   233,387
development, net
Marketing and selling    112,849    121,281    57,095     59,920   241,911
General and              59,981     65,903     27,815     31,962   137,517
administrative
                         275,373    301,595    136,404    147,527  612,815
 Operating income     120,484    83,785     66,745     42,102   203,050
Financial expenses, net  (20,640)   (10,068)   (12,718)   (2,252)  (26,086)
Other income (expense),  44         (183)      53         (1,114)  78
net
Income before income     99,888     73,534     54,080     38,736   177,042
taxes
Taxes on income          9,668      9,315      5,064      2,755    17,099
                         90,220     64,219     49,016     35,981   159,943
Equity in net earnings
of affiliated companies  4,174      7,818      2,482      3,779    11,160
and partnerships
Income from continuing   94,394     72,037     51,498     39,760   171,103
operations
Income (loss) from
discontinued operations, 681        (427)      1,022      (271)    (616)
net
 Net income            95,075     71,610     52,520     39,489   170,487
Less: net income
attributable to          (4,113)    (465)      (2,965)    (1,226)  (2,608)
non-controlling
interests
Net income attributable
to Elbit Systems Ltd.'s  90,962     71,145     49,555     38,263   167,879
shareholders
Earnings per share
attributable to Elbit
Systems Ltd.'s
shareholders:
 Basic net earnings
per share
 Continuing         2.15       1.68       1.16       0.91     3.99
operations
 Discontinued       0.02       (0.01)     0.02       (0.01)   (0.01)
operations
 Total                 2.17       1.67       1.18       0.90     3.98
 Diluted net earnings
per share
 Continuing         2.14       1.68       1.15       0.91     3.98
operations
 Discontinued       0.02       (0.01)     0.02       (0.01)   (0.01)
operations
 Total                 2.16       1.67       1.17       0.90     3.97
Weighted average number
of shares used in                                              

 computation of basic  41,977     42,420     42,047     42,351   42,190
earnings per share
Weighted average number
of shares used in                                              

 computation of        42,146     42,538     42,217     42,412   42,277
diluted earnings per
share
Amounts attributable to
Elbit Systems Ltd.'s
shareholders
 Income from
continuing operations,   90,143     71,399     48,533     38,424   168,245
net of income tax
 Discontinued
operations, net of      819        (254)      1,022      (161)    (366)
income tax
Net income attributable
to Elbit Systems Ltd.'s  90,962     71,145     49,555     38,263   167,879
shareholders





ELBIT SYSTEMS LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of US Dollars)
                                            Six Months Ended      Year Ended
                                            June 30,              December 31,
                                            2013            2012  2012
                                            Unaudited             Audited
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                  95,075     71,610     170,487
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization               64,475     68,816     138,796
Write-off impairment and discontinued       (681)      408        616
operations, net
Stock-based compensation                    252        364        3,326
Amortization of Series A Notes discount     (46)       422        153
(premium) and related issuance costs, net
Deferred income taxes and reserve, net      13,476     4,410      6,579
Loss on sale of property, plant and         175        41         1,197
equipment
Gain on sale of investment                  (514)      (791)      (829)
Equity in net earnings of affiliated
companies and partnerships, net of dividend (2,674)    (2,852)    (1,602)
received(*)
Changes in operating assets and
liabilities, net of amounts acquired:
Decrease (increase) in short and long-term  (113,820)  41,959     (91,988)
trade receivables, and prepaid expenses
Decrease (increase) in inventories, net     (36,085)   (46,414)   10,022
Increase (decrease) in trade payables,      437        (85,774)   (75,724)
other payables and accrued expenses
Severance, pension and termination          4,128      (4,930)    (10,612)
indemnities, net
Increase in advances received from          36,696     8,936      47,962
customers
Net cash provided by operating activities   60,894     56,205     198,383
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment   (32,950)   (39,154)   (81,637)
Investments in affiliated companies and     (4,975)    (500)      (4,241)
other companies
Proceeds from sale of property, plant and   3,041      2,218      7,335
equipment
Proceeds from sale of investments           2,000      705        705
Investment in long-term deposits            (494)      (244)      (779)
Proceeds from sale of long-term deposits    94         430        2,849
Investment in short-term deposits and       (20,050)   (285,356)  (340,899)
available-for-sale securities
Proceeds from sale of short-term deposits   15,710     286,324    299,029
and available-for-sale securities
Net cash used in investing activities       (37,624)   (35,577)   (117,638)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of options           6,455      803        1,352
Repayment of long-term loans                (23,547)   (223,026)  (319,601)
Proceeds from long-term loans               10,060     125,290    122,038
Proceeds from issuance of Series A Notes    -          243,954    246,973
Series A Notes issuance costs               -          -          (2,035)
Purchase of treasury shares                 -          (13,231)   (26,006)
Repayment of Series A Notes and convertible (55,535)   -          (53,530)
debentures
Dividends paid (**)                         (34,254)   (25,446)   (50,616)
Tax benefit in respect of options exercised -          -          161
Change in short-term bank credit and loan,  8,988      (3,099)    (2,817)
net
Net cash provided by (used in) financing    (87,833)   105,245    (84,081)
activities
NET INCREASE (DECREASE) IN CASH AND CASH    (64,563)   125,873    (3,336)
EQUIVALENTS
CASH AND CASH EQUIVALENTS AT THE BEGINNING  199,241    202,577    202,577
OF THE PERIOD
CASH AND CASH EQUIVALENTS AT THE END OF THE 134,678    328,450    199,241
PERIOD
* Dividend received from affiliated         1,500      4,539      9,558
companies and partnerships
**Dividends paid to the Company's shareholders and a minority shareholder of a
subsidiary.





ELBIT SYSTEMS LTD.
DISTRIBUTION OF REVENUES
CONSOLIDATED REVENUES BY AREAS OF OPERATION:
               Six Months Ended                   Three Months Ended
               June 30                            June 30
               2013              2012             2013             2012
               $         %       $         %      $         %      $         %
               millions          millions         millions         millions
Airborne       562.1     40.6    525.6     38.4   289.7     41.2   244.1     36.1
systems
Land vehicles  119.8     8.7     158.8     11.6   63.5      9.0    67.2      9.9
systems
C4ISR          498.5     36.0    478.9     35.0   258.3     36.7   260.1     38.4
systems
Electro-optic  159.5     11.6    144.7     10.6   78.4      11.2   76.2      11.3
systems
Other (mainly
non-defense
engineering    43.2      3.1     59.2      4.4    13.0      1.9    28.8      4.3
and production
services)
Total          1,383.1   100.0   1,367.2   100.0  702.9     100.0  676.4     100.0



CONSOLIDATED REVENUES BY GEOGRAPHICAL REGIONS:
                Six Months Ended                  Three Months Ended
                June 30                           June 30
                2013             2012             2013             2012
                $         %      $         %      $         %      $         %
                millions         millions         millions         millions
Israel          288.9     20.9   251.9     18.4   150.3     21.4   115.6     17.1
North           413.9     29.9   427.5     31.3   194.8     27.7   218.6     32.3
America
Europe     270.7     19.6   240.3     17.6   150.6     21.4   127.2     18.8
Asia Pacific    260.5     18.8   290.2     21.2   130.7     18.6   136.7     20.2
Latin America   132.5     9.6    120.4     8.8    67.1      9.6    63.9      9.5
Other countries 16.6      1.2    36.9      2.7    9.4       1.3    14.4      2.1
Total           1,383.1   100.0  1,367.2   100.0  702.9     100.0  676.4     100.0





SOURCE Elbit Systems Ltd.

Website: http://www.elbitsystems.com