HAIFA, Israel, March 20,
2018 /PRNewswire/ -- Elbit Systems Ltd. (the "Company")
(NASDAQ: ESLT) (TASE: ESLT), the international high technology
company, reported today its consolidated results for the fourth
quarter and full year ended December 31, 2017.
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. For a description of the
Company's non-GAAP definitions see page 5 below, "Non-GAAP
financial data". Unless otherwise stated, all financial data
presented is US-GAAP financial data.
Management Comment:
Bezhalel (Butzi) Machlis, President and CEO of Elbit
Systems, commented: "From both a financial and a strategic
perspective, 2017 was another good year for Elbit Systems.
Moreover, we ended the year on a high note, surpassing one billion dollars of revenue in a quarter for
the first time in our history. The business environment in which we
operate is robust. We are seeing a number of defense budgets
globally on the rise, with the areas in which we focus receiving
increased priority. Our business is geographically diverse, divided
fairly evenly among North America,
Europe, Israel and Asia-Pacific, providing an additional element
of stability to our business."
Mr. Machlis added, "We are particularly pleased with
the continued increase in our backlog, whose year-end level is up
11% versus last year, and which contains a higher portion of
longer-term projects than in recent years. The continued backlog
growth we have witnessed over the past few quarters translated into
fourth quarter revenue growth of 6% year-over-year. All this has
enhanced Elbit Systems' position as a leading global provider of
technologically advanced defense and homeland security
solutions."
Fourth quarter 2017 results:
Revenues in the fourth quarter of 2017 were
$1,009.6 million, as compared to
$953.7 million in the fourth quarter
of 2016.
Non-GAAP(*) gross profit amounted to
$288.7 million (28.6% of revenues) in
the fourth quarter of 2017, as compared to $288.5 million (30.3% of revenues) in the fourth
quarter of 2016. GAAP gross profit in the fourth quarter of
2017 was $283.5 million (28.1% of
revenues), as compared to $280.8
million (29.4% of revenues) in the fourth quarter of 2016.
The decline in the gross profit rate was mainly as a result of the
mix of programs sold in the quarter.
Research and development expenses, net, were $72.5 million (7.2% of revenues) in the fourth
quarter of 2017, as compared to $67.0
million (7.0% of revenues) in the fourth quarter of
2016.
Marketing and selling expenses, net, were $81.2 million (8.0% of revenues) in the fourth
quarter of 2017, as compared to $88.8
million (9.3% of revenues) in the fourth quarter of
2016.
General and administrative expenses, net, were
$26.2 million (2.6% of revenues) in
the fourth quarter of 2017, as compared to $37.6 million (3.9% of revenues) in the fourth
quarter of 2016. The significant decrease in general and
administrative expenses in the fourth quarter of 2017 resulted
mainly from revaluation of liabilities related to assets and
activities acquired in prior years.
Non-GAAP(*) operating income was $110.5 million (10.9% of revenues) in the fourth
quarter of 2017, as compared to $97.3
million (10.2% of revenues) in the fourth quarter of 2016.
GAAP operating income in the fourth quarter of 2017 was
$103.6 million (10.3% of revenues),
as compared to $87.5 million (9.2% of
revenues) in the fourth quarter of 2016.
Financial expenses, net, were $9.7
million in the fourth quarter of 2017, as compared to
$9.2 million in the fourth quarter of
2016.
Taxes on income were $25.4
million in the fourth quarter of 2017, as compared to
$9.8 million in the fourth quarter of
2016. Taxes in the fourth quarter of 2017 included a
$10.9 million adjustment to deferred
tax assets as a result of the tax reform in the U.S. Taxes in the
fourth quarter of 2016 were somewhat lower than typical, mainly due
to settlements of tax audits for prior years.
Equity in net earnings of affiliated companies and
partnerships was $1.4 million in
the fourth quarter of 2017, as compared to a net loss of
$0.6 million in the fourth quarter of
2016.
Net income attributable to non-controlling interests was
$0.5 million in the fourth quarter of
2017, as compared to $0.7 million in
the fourth quarter of 2016.
Non-GAAP(*) net income attributable to the
Company's shareholders in the fourth quarter of 2017 was
$86.1 million (8.5% of revenues), as
compared to $77.7 million (8.2% of
revenues) in the fourth quarter of 2016. GAAP net income
attributable to the Company's shareholders in the fourth
quarter of 2017 was $69.4 million
(6.9% of revenues), as compared to $67.1
million (7.0% of revenues) in the fourth quarter of
2016.
Non GAAP(*) diluted net earnings per share
attributable to the Company's shareholders were
$2.01 for the fourth quarter of 2017,
as compared to $1.82 for the fourth
quarter of 2016. GAAP diluted earnings per share attributable to
the Company's shareholders in the fourth quarter of 2017 were
$1.62, as compared to $1.57 in the fourth quarter of 2016.
___________
* see page 5
Full year 2017 results:
Revenues for the year ended December 31, 2017 were $3,377.8 million, as compared to $3,260.2 million in the year ended December 31, 2016.
For distribution of revenues by areas of operation and by
geographic regions see tables on page 14.
The leading contributors to our revenues were the airborne
systems and C4ISR systems areas of operation. The decrease in
revenues in the C4ISR area of operation was primarily due to a
decline in sales of command and control systems and unmanned
aircraft systems (UAS) in Latin
America. Revenues from land systems increased primarily due
to an increase in sales of land electronic warfare systems and
armored vehicle systems in Europe. Revenues in electro-optic
systems increased mainly due to an increase in sales of
reconnaissance systems and night vision systems in Asia-Pacific and directional infra-red
countermeasure (DIRCM) systems in the other geographic regions.
On a geographic basis, the increase in Europe was mainly a result of higher sales of
armored vehicle systems and radio systems. The decrease in
Asia-Pacific was mainly a result
of lower sales of tank fire control systems and UAS. The decrease
in Latin America was mainly a
result of decreased sales of command and control systems. The
increase in the "Other" geographical region was mainly due to an
increase in sales of UAS and DIRCM systems.
Cost of revenues for the year ended December 31, 2017 was $2,379.9 million (70.5% of revenues), as compared
to $2,300.6 million (70.6% of
revenues) in the year ended December
31, 2016.
Non-GAAP(*) gross profit for the year ended
December 31, 2017 was
$1,020.1 million (30.2% of revenues),
as compared to $990.8
million (30.4% of revenues) in the year ended December 31, 2016. GAAP gross profit in
2017 was $997.9 million (29.5%
of revenues), as compared to $959.6
million (29.4% of revenues) in 2016.
Research and development expenses, net, for the year
ended December 31, 2017 were
$265.1 million (7.8% of revenues), as
compared to $255.8 million (7.8% of
revenues) in the year ended December 31,
2016.
Marketing and selling expenses, net, for the year ended
December 31, 2017 were
$280.2 million (8.3% of revenues), as
compared to $271.0 million (8.3% of
revenues) in the year ended December 31,
2016.
General and administrative expenses, net, for the year
ended December 31, 2017 were
$133.3 million (3.9% of revenues), as
compared to $151.4 million (4.6% of
revenues) in the year ended December 31,
2016. The significant decrease in general and administrative
expenses in 2017 was mainly a result of revaluation of liabilities
related to assets and activities acquired in prior years, net of an
increase in wages and benefits as a result of the changes in the
NIS-U.S. dollar exchange rate .
Other operating income, net, for the year ended
December 31, 2016 amounted to
$17.6 million. This was the result of
net gains related to valuation of shares in two of our Israeli
subsidiaries in the energy and automotive areas, due to third party
investments.
Non-GAAP(*) operating income for the year
ended December 31, 2017 was
$347.9 million (10.3% of revenues),
as compared to $322.6 million (9.9%
of revenues) in the year ended December 31,
2016. GAAP operating income in 2017 was $319.3 million (9.5% of revenues), as compared to
$299.0 million (9.2% of revenues) in
2016.
The main reasons for the improvement in the operating income in
2017 were the increase in the gross profit as compared to 2016 and
the decrease in 2017 in general and administrative expenses as a
result of the revaluation of liabilities related to assets and
activities acquired in prior years.
__________
* see page 5
Other income, net, for the year ended December 31, 2016 amounted to $4.0 million. This was due to a capital
gain related to the sale of real estate acquired in prior
years.
Financial expenses, net, for the year ended December 31, 2017 were $34.5 million, as compared to $23.7 million in the year ended December 31, 2016. Financial expenses in 2017
were relatively high, mainly due to losses from exchange rate
differences. The 2016 financial expenses were lower due to gains
from various currencies exchange rates.
Taxes on income for the year ended December 31, 2017 were $55.6 million (effective tax rate of 19.5%), as
compared to $45.6 million (effective
tax rate of 16.3%) in the year ended December 31, 2016. The effective tax rate was
affected by the mix of the tax rates in the various jurisdictions
in which the Company's entities generate taxable income. Taxes on
income in 2017 included a $10.9
million adjustment to deferred tax assets as a result of the
tax reform in the U.S.
Equity in net earnings of affiliated companies and
partnerships for the year ended December
31, 2017 was $11.4
million (0.3% of revenues), as compared to $5.2 million (0.2% of revenues) in the year ended
December 31, 2016. The increase in
2017 was a result of higher revenues and better profitability in
some of our affiliated companies.
Net income attributable to non-controlling interests for
the year ended December 31, 2017 was
$1.5 million, as compared to
$1.9 million in the year ended
December 31, 2016.
Non-GAAP(*) net income attributable to the
Company's shareholders for the year ended December 31, 2017 was $273.9 million (8.1% of revenues), as compared to
$254.2 million (7.8% of revenues) in
the year ended December 31, 2016.
GAAP net income attributable to the Company's
shareholders in the year ended December
31, 2017 was $239.1 million
(7.1% of revenues), as compared to $236.9
million (7.3% of revenues) in the year ended December 31, 2016.
Non-GAAP(*) diluted net earnings per share
attributable to the Company's shareholders for the
year ended December 31,
2017 were $6.41, as compared to
$5.95 for the year ended
December 31, 2016. GAAP diluted
net earnings per share attributable to the Company's
shareholders in the year ended December
31, 2017 were $5.59, as
compared to $5.54 in the year ended
December 31, 2016.
Backlog of orders for the year ended December 31, 2017 totaled $7,647 million, as compared to $6,909 million as of December 31, 2016. Approximately 73% of the
current backlog is attributable to orders from outside Israel. Approximately 65% of the current
backlog is scheduled to be performed during 2018 and 2019.
Operating cash flow for the year ended December 31, 2017 was $100.9 million, as compared to $208.0 million in the year ended December 31, 2016. The lower level of operating
cash flow in 2017 was mainly a result of lower collection of
receipts from customers.
___________
* see page 5
Accounting policies update:
ASU 2014-09, "Revenue from Contracts with Customers" (ASC 606),
is effective for the Company beginning January 1, 2018. The Company adopted ASC 606 on
January 1, 2018 using the modified
retrospective method.
The adoption of the new standard will primarily impact the
Company's contracts where revenue was recognized using the
percentage-of-completion units-of-delivery method, with the
possible resulting impact being revenue that may be recognized
earlier in the performance period when costs are incurred, as
opposed to when units are delivered. This change may also impact
the Company's balance sheet presentation with a possible decrease
in inventories, an increase in contract assets (i.e., unbilled
receivables) and a net increase to retained earnings to primarily
reflect the impact of converting units-of-delivery contracts to the
cost-to-cost method for recognizing revenue and profits.
The cumulative main effects of the transition to ASC 606
resulted in an adjustment on January 1,
2018, of a $1.7 million
increase in retained earnings, a decrease in inventories of
approximately $82 million, an
increase in contract assets (unbilled receivables) of approximately
$80 million and a net decrease in
customer advances and other contract liabilities and deferred tax
assets in the aggregate amount of approximately $3 million.
IMI Transaction:
During 2017 and the beginning of 2018, the Company participated
as a potential purchaser in the tender process administered by the
Israeli government for the sale of of IMI Systems (formerly
Israel Military Industries Ltd.) On March 11, 2018, the Israel Treasury Ministry
announced the approval of its Committee for the Sale of State
Shares to sell IMI Systems to the Company. Further to the
Company's response to press reports on February 14, 2018, the Company is continuing the
discussions with the Israeli Government regarding the conditions to
complete the transaction.
* 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)
|
|
Three Months
ended
|
|
Year
ended
|
December
31,
|
December
31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
$
|
283.5
|
|
|
$
|
280.8
|
|
|
$
|
997.9
|
|
|
$
|
959.6
|
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
purchased intangible assets
|
5.2
|
|
|
7.7
|
|
|
22.2
|
|
|
31.2
|
|
Non-GAAP
gross profit
|
$
|
288.7
|
|
|
$
|
288.5
|
|
|
$
|
1,020.10
|
|
|
$
|
990.8
|
|
Percent of
revenues
|
28.6
|
%
|
|
30.3
|
%
|
|
30.2
|
%
|
|
30.4
|
%
|
|
|
|
|
|
|
|
|
GAAP operating
income
|
$
|
103.6
|
|
|
$
|
87.5
|
|
|
$
|
319.3
|
|
|
$
|
299
|
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
purchased intangible assets
|
6.9
|
|
|
9.8
|
|
|
28.6
|
|
|
41.2
|
|
Gain from changes in
holdings, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(17.6)
|
|
Non-GAAP operating
income
|
$
|
110.5
|
|
|
$
|
97.3
|
|
|
$
|
347.9
|
|
|
$
|
322.6
|
|
Percent of
revenues
|
10.9
|
%
|
|
10.2
|
%
|
|
10.3
|
%
|
|
9.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
attributable to Elbit Systems' shareholders
|
$
|
69.4
|
|
|
$
|
67.1
|
|
|
$
|
239.1
|
|
|
$
|
236.9
|
|
Adjustments:
|
|
|
|
|
|
|
|
Amortization of
purchased intangible assets
|
6.9
|
|
|
9.8
|
|
|
28.6
|
|
|
41.2
|
|
Capital
gain
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.9)
|
|
Impairment of
investments
|
—
|
|
|
2.5
|
|
|
—
|
|
|
2.5
|
|
Gain from changes in
holdings, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(16.4)
|
|
Tax effect and other
tax items, net*
|
9.8
|
|
|
(1.7)
|
|
|
6.2
|
|
|
(6.1)
|
|
Non-GAAP net
income attributable to Elbit Systems' shareholders
|
$
|
86.1
|
|
|
$
|
77.7
|
|
|
$
|
273.9
|
|
|
$
|
254.2
|
|
Percent of
revenues
|
8.5
|
%
|
|
8.2
|
%
|
|
8.1
|
%
|
|
7.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net
EPS
|
$
|
1.62
|
|
|
$
|
1.57
|
|
|
$
|
5.59
|
|
|
$
|
5.54
|
|
Adjustments,
net
|
0.39
|
|
|
0.25
|
|
|
0.82
|
|
|
0.41
|
|
Non-GAAP diluted
net EPS
|
$
|
2.01
|
|
|
$
|
1.82
|
|
|
$
|
6.41
|
|
|
$
|
5.95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Tax effect in 2017
includes $10.9 million related to the tax reform in the
U.S.
|
Recent Events:
On March 14, 2018, the
Company announced that it was awarded a $65
million contract by an Asian-Pacific country to provide a
comprehensive Search and Rescue solution. The project will be
performed over a three-year period.
On February 14, 2018, the
Company announced that further to reports in the press, the
discussions with the Israeli Government in regard to the
acquisition of IMI Systems are ongoing. If and when the conditions
are fulfilled for completing the transaction, the Company will make
an announcement as required by law.
On January 25,
2018, the Company announced that its subsidiary,
Elbit Systems of Australia Pty Ltd., was awarded a $150 million contract by the Australian
Department of Defence's Capability Acquisition and Sustainment
Group to provide Through Life Support services to the Australian
Defence Force for the Battle Management System Command and Control.
The contract is for a five-year base period. Optional extensions of
up to seven years may be exercised in the future.
On January 18, 2018, the
Company announced that it was awarded an approximately $85 million contract from a European country to
supply a range of advanced ground-based electronic warfare and
signal intelligence systems. The contract will be performed over a
four-year period.
On January 4, 2018, the
Company announced that Midroog Ltd., an Israeli rating agency
("Midroog"), reaffirmed Midroog's "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 December 20, 2017, the
Company announced that its subsidiary, Elbit Systems of America
LLC, through its wholly-owned subsidiary M7 Aerospace LP, was
awarded a contract from DynCorp International Inc. to provide Life
Cycle Contractor Support for the U.S. Army's C-26 and UC-35
aircraft fleet. The award is for a one-year base period of up to
$25 million and additional five
single year option periods. If all options are exercised, the total
contract value will be up to $176
million.
On December 19, 2017, the
Company announced that it was awarded a follow-on $46 million contract to supply additional
J-Music™ DIRCM self-protection systems to NATO, for its Airbus A330
Multinational Multi-Role Tanker Transport Fleet Program. The
contract will be performed over a four-year period.
On December 6, 2017, the
Company announced that it was selected by the Israeli Ministry of
Defense to provide and operate flight simulators for the upgraded
C-130H and C-130J transport aircraft of the Israeli Air Force. The
contract value is in an amount of $74
million for a thirteen-year period, which includes a set up
phase of approximately three years and a ten-year operating
period.
Dividend:
The Board of Directors declared a dividend of $0.44 per share for the fourth quarter of 2017.
The dividend's record date is April 9,
2018. The dividend will be paid from income generated as
Preferred Income (as defined under Israeli tax laws), on
April 23, 2018, net of taxes, at the
rate of 20%.
Conference Call:
The Company will be hosting a conference call today,
Tuesday, March 20, 2018 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 Number: +1-888-668-9141
Canada Dial-in Number: +1-866-485-2399
UK Dial-in Number: +0-800-917-5108
ISRAEL Dial-in Number:
+03-918-0609
INTERNATIONAL Dial-in Number: +972-3-918-0609
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:
+1-888-326-9310 (US and Canada)
or +972-3-925-5904 (Israel and
International).
About Elbit Systems
Elbit Systems Ltd. is an international high technology company
engaged in a wide range of defense, homeland security and
commercial 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, advanced
electro-optics, electro-optic space systems, electronic warfare
suites, signal intelligence systems, data links and communications
systems and radios. The Company also focuses on the upgrading
of existing platforms, developing new technologies for defense,
homeland security and commercial aviation applications and
providing a range of support services, including training and
simulation systems.
For additional information, visit: www.elbitsystems.com or
follow us on Twitter.
Attachments:
Consolidated balance sheets
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 1943, 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.
Elbit Systems Ltd., its logo, brand, product, service and
process names appearing in this Press Release are the trademarks or
service marks of Elbit Systems Ltd. or its affiliated companies.
All other brand, product, service and process names appearing are
the trademarks of their respective holders. Reference to or use of
a product, service or process other than those of Elbit Systems
Ltd. does not imply recommendation, approval, affiliation or
sponsorship of that product, service, or process by Elbit Systems
Ltd. Nothing contained herein shall be construed as conferring by
implication, estoppel or otherwise any license or right under any
patent, copyright, trademark or other intellectual property right
of Elbit Systems Ltd. or any third party, except as expressly
granted herein.
(FINANCIAL TABLES TO FOLLOW)
ELBIT SYSTEMS
LTD.
|
CONSOLIDATED
BALANCE SHEETS
|
(In thousands of US
Dollars)
|
|
As of December
31,
|
|
2017
|
|
2016
|
|
Audited
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
156,074
|
|
|
$
|
222,810
|
|
Short-term bank
deposits
|
3,126
|
|
|
8,882
|
|
Available-for-sale
marketable securities
|
13,371
|
|
|
13,370
|
|
Trade and unbilled
receivables, net
|
1,406,563
|
|
|
1,232,591
|
|
Other receivables and
prepaid expenses
|
128,946
|
|
|
102,979
|
|
Inventories, net of
customers advances
|
902,954
|
|
|
840,266
|
|
Total current
assets
|
2,611,034
|
|
|
2,420,898
|
|
|
|
|
|
Investments in
affiliated companies, partnerships and other companies
|
172,338
|
|
|
180,962
|
|
Long-term trade and
unbilled receivables
|
295,396
|
|
|
189,688
|
|
Long-term bank
deposits and other receivables
|
38,082
|
|
|
15,917
|
|
Deferred income
taxes, net
|
51,358
|
|
|
79,639
|
|
Severance pay
fund
|
298,590
|
|
|
264,253
|
|
|
855,764
|
|
|
730,459
|
|
|
|
|
|
Property, plant and
equipment, net
|
495,716
|
|
|
474,109
|
|
Goodwill and other
intangible assets, net
|
752,403
|
|
|
726,398
|
|
Total
assets
|
$
|
4,714,917
|
|
|
$
|
4,351,864
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Short-term bank
credit and loans
|
$
|
133,750
|
|
|
$
|
5,027
|
|
Current maturities of
long-term loans and Series A Notes
|
67,556
|
|
|
228,956
|
|
Trade
payables
|
633,689
|
|
|
514,106
|
|
Other payables and
accrued expenses
|
835,394
|
|
|
828,716
|
|
Customer advances in
excess of costs incurred on contracts in progress
|
418,560
|
|
|
347,393
|
|
|
2,088,949
|
|
|
1,924,198
|
|
|
|
|
|
Long-term loans, net
of current maturities
|
119,514
|
|
|
475
|
|
Series A Notes, net
of current maturities
|
124,865
|
|
|
171,066
|
|
Employee benefit
liabilities
|
413,117
|
|
|
376,115
|
|
Deferred income taxes
and tax liabilities, net
|
68,159
|
|
|
60,098
|
|
Customer advances in
excess of costs incurred on contracts in progress
|
133,649
|
|
|
174,529
|
|
Other long-term
liabilities
|
48,692
|
|
|
78,142
|
|
|
907,996
|
|
|
860,425
|
|
|
|
|
|
Elbit Systems Ltd.'s
equity
|
1,708,310
|
|
|
1,559,840
|
|
Non-controlling
interests
|
9,662
|
|
|
7,401
|
|
Total
equity
|
1,717,972
|
|
|
1,567,241
|
|
Total liabilities and
equity
|
$
|
4,714,917
|
|
|
$
|
4,351,864
|
|
ELBIT SYSTEMS
LTD.
|
CONSOLIDATED
STATEMENTS OF INCOME
|
(In thousands of US
Dollars, except for share and per share amounts)
|
|
Year
Ended
December
31,
|
|
Three Months
Ended
December
31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Audited
|
|
Unaudited
|
Revenues
|
$
|
3,377,825
|
|
|
$
|
3,260,219
|
|
|
$
|
1,009,604
|
|
|
$
|
953,722
|
Cost of
revenues
|
2,379,905
|
|
|
2,300,636
|
|
|
726,143
|
|
|
672,888
|
Gross
profit
|
997,920
|
|
|
959,583
|
|
|
283,461
|
|
|
280,834
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development, net
|
265,060
|
|
|
255,792
|
|
|
72,462
|
|
|
66,978
|
Marketing and
selling, net
|
280,246
|
|
|
271,037
|
|
|
81,244
|
|
|
88,786
|
General and
administrative, net
|
133,314
|
|
|
151,353
|
|
|
26,157
|
|
|
37,599
|
Other operating
income, net
|
—
|
|
|
(17,575)
|
|
|
—
|
|
|
—
|
Total operating
expenses
|
678,620
|
|
|
660,607
|
|
|
179,863
|
|
|
193,363
|
|
|
|
|
|
|
|
|
Operating
income
|
319,300
|
|
|
298,976
|
|
|
103,598
|
|
|
87,471
|
|
|
|
|
|
|
|
|
Financial expenses,
net
|
(34,502)
|
|
|
(23,742)
|
|
|
(9,693)
|
|
|
(9,246)
|
Other income,
net
|
48
|
|
|
3,967
|
|
|
11
|
|
|
25
|
Income before income
taxes
|
284,846
|
|
|
279,201
|
|
|
93,916
|
|
|
78,250
|
Taxes on
income
|
(55,585)
|
|
|
(45,617)
|
|
|
(25,434)
|
|
|
(9,805)
|
|
229,261
|
|
|
233,584
|
|
|
68,482
|
|
|
68,445
|
Equity in net
earnings (losses) of affiliated companies and
partnerships
|
11,361
|
|
|
5,224
|
|
|
1,443
|
|
|
(631)
|
Net
income
|
$
|
240,622
|
|
|
$
|
238,808
|
|
|
$
|
69,925
|
|
|
$
|
67,814
|
|
|
|
|
|
|
|
|
Less: net income
attributable to non-controlling interests
|
(1,513)
|
|
|
(1,899)
|
|
|
(517)
|
|
|
(702)
|
Net income
attributable to Elbit Systems Ltd.'s shareholders
|
$
|
239,109
|
|
|
$
|
236,909
|
|
|
$
|
69,408
|
|
|
$
|
67,112
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to Elbit Systems Ltd.'s shareholders:
|
|
|
|
|
|
|
Basic net earnings
per share
|
$
|
5.59
|
|
|
$
|
5.54
|
|
|
$
|
1.62
|
|
|
$
|
1.57
|
Diluted net earnings
per share
|
$
|
5.59
|
|
|
$
|
5.54
|
|
|
$
|
1.62
|
|
|
$
|
1.57
|
|
|
|
|
|
|
|
|
Weighted average
number of shares used in computation of
|
|
|
|
|
|
|
|
Basic earnings per
share (in thousands)
|
42,750
|
|
|
42,742
|
|
|
42,751
|
|
|
42,746
|
Diluted earnings per
share (in thousands)
|
42,753
|
|
|
42,752
|
|
|
42,753
|
|
|
42,755
|
ELBIT SYSTEMS
LTD.
CONSOLIDATED
STATEMENTS OF CASH FLOW
(In thousands of US
Dollars)
|
|
|
|
Year Ended
December 31,
|
|
2017
|
|
2016
|
|
Audited
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
Net income
|
$
|
240,622
|
|
|
$
|
238,808
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
114,017
|
|
|
122,888
|
|
Write-off impairment on
marketable securities
|
—
|
|
|
86
|
|
Stock-based
compensation
|
13
|
|
|
70
|
|
Amortization of Series
A Notes discount (premium) and related issuance costs,
net
|
(92)
|
|
|
(92)
|
|
Deferred income taxes
and reserve, net
|
28,774
|
|
|
2,683
|
|
Gain on sale of
property, plant and equipment
|
(2,440)
|
|
|
(3,347)
|
|
Loss (gain) on sale of
investment and deconsolidation of subsidiary
|
1,358
|
|
|
(16,734)
|
|
Equity in net gain of
affiliated companies and partnerships, net of dividend
received(*)
|
(1,987)
|
|
|
(1,728)
|
|
Changes in operating
assets and liabilities, net of amounts acquired:
|
|
|
|
Increase in short and
long-term trade receivables and prepaid expenses
|
(315,236)
|
|
|
(297,439)
|
|
Increase in
inventories, net
|
(59,699)
|
|
|
(8,040)
|
|
Increase in trade
payables and other payables and accrued expenses
|
63,273
|
|
|
253,413
|
|
Severance, pension and
termination indemnities, net
|
2,003
|
|
|
315
|
|
Increase (decrease) in
advances received from customers
|
30,287
|
|
|
(82,881)
|
|
Net cash provided by
operating activities
|
100,893
|
|
|
208,002
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
Purchase of property,
plant and equipment and other assets
|
(107,880)
|
|
|
(124,221)
|
|
Acquisition of
subsidiaries and business operations
|
(25,440)
|
|
|
—
|
|
Investments in
affiliated companies and other companies
|
(4,964)
|
|
|
(19,277)
|
|
Deconsolidation of
subsidiary
|
—
|
|
|
(1,538)
|
|
Proceeds from sale of
property, plant and equipment
|
6,270
|
|
|
15,745
|
|
Proceeds from sale of
investments
|
12,067
|
|
|
—
|
|
Investment in long-term
deposits
|
(1,396)
|
|
|
(417)
|
|
Proceeds from sale of
long-term deposits
|
176
|
|
|
894
|
|
Investment in
short-term deposits and available-for-sale marketable
securities
|
(40,893)
|
|
|
(25,622)
|
|
Proceeds from sale of
short-term deposits and available-for-sale marketable
securities
|
46,491
|
|
|
36,619
|
|
Net cash used in
investing activities
|
(115,569)
|
|
|
(117,817)
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
Proceeds from exercise
of options
|
119
|
|
|
505
|
|
Repayment of long-term
loans
|
(167,425)
|
|
|
(48,250)
|
|
Proceeds from long-term
loans
|
118,623
|
|
|
—
|
|
Repayment of Series A
Notes
|
(55,532)
|
|
|
(55,532)
|
|
Dividends
paid
|
(75,300)
|
|
|
(68,447)
|
|
Change in short-term
bank credit and loans, net
|
127,455
|
|
|
5,027
|
|
Net cash used in
financing activities
|
(52,060)
|
|
|
(166,697)
|
|
NET INCREASE IN CASH
AND CASH EQUIVALENTS
|
(66,736)
|
|
|
(76,512)
|
|
CASH AND CASH
EQUIVALENTS AT THE BEGINNING OF THE YEAR
|
$
|
222,810
|
|
|
$
|
299,322
|
|
CASH AND CASH
EQUIVALENTS AT THE END OF THE YEAR
|
$
|
156,074
|
|
|
$
|
222,810
|
|
|
|
|
|
* Dividend received
from affiliated companies and partnerships
|
$
|
9,374
|
|
|
$
|
3,496
|
|
ELBIT SYSTEMS
LTD.
DISTRIBUTION OF
REVENUES
Consolidated
Revenues by Areas of Operation:
|
|
|
|
Year
Ended
|
|
Three Months
Ended
|
|
December
31,
|
|
December
31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
$
millions
|
|
%
|
|
$
millions
|
|
%
|
|
$
millions
|
|
%
|
|
$
millions
|
|
%
|
Airborne
systems
|
$
|
1,272.10
|
|
|
37.7
|
|
|
$
|
1,242.30
|
|
|
38.1
|
|
|
$
|
374.9
|
|
|
37.1
|
|
|
$
|
342.3
|
|
|
35.9
|
|
C4ISR
systems
|
1,144.80
|
|
|
33.9
|
|
|
1,220.90
|
|
|
37.4
|
|
|
330.6
|
|
|
32.8
|
|
|
329.6
|
|
|
34.6
|
|
Land
systems
|
503.9
|
|
|
14.9
|
|
|
408
|
|
|
12.5
|
|
|
166.7
|
|
|
16.5
|
|
|
150
|
|
|
15.7
|
|
Electro-optic
systems
|
341.2
|
|
|
10.1
|
|
|
276
|
|
|
8.5
|
|
|
88.8
|
|
|
8.8
|
|
|
94.8
|
|
|
9.9
|
|
Other (mainly
non-defense engineering and production services)
|
115.8
|
|
|
3.4
|
|
|
113
|
|
|
3.5
|
|
|
48.6
|
|
|
4.8
|
|
|
37
|
|
|
3.9
|
|
Total
|
$
|
3,377.80
|
|
|
100
|
|
|
$
|
3,260.20
|
|
|
100
|
|
|
$
|
1,009.60
|
|
|
100
|
|
|
$
|
953.7
|
|
|
100
|
|
Consolidated
Revenues by Geographical Regions:
|
|
Year
Ended
|
|
Three Months
Ended
|
|
December
31,
|
|
December
31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
$
millions
|
|
%
|
|
$
millions
|
|
%
|
|
$
millions
|
|
%
|
|
$
millions
|
|
%
|
Israel
|
$
|
741.9
|
|
|
22.0
|
|
|
$
|
709.5
|
|
|
21.8
|
|
|
$
|
232.5
|
|
|
23.0
|
|
|
$
|
202.8
|
|
|
21.3
|
|
North
America
|
827.6
|
|
|
24.5
|
|
|
825.7
|
|
|
25.3
|
|
|
236.2
|
|
|
23.4
|
|
|
229.7
|
|
|
24.1
|
|
Europe
|
764.0
|
|
|
22.6
|
|
|
640.8
|
|
|
19.7
|
|
|
235.5
|
|
|
23.3
|
|
|
218.4
|
|
|
22.9
|
|
Asia-Pacific
|
670.5
|
|
|
19.8
|
|
|
801.6
|
|
|
24.6
|
|
|
160.0
|
|
|
15.9
|
|
|
206.5
|
|
|
21.6
|
|
Latin
America
|
193.4
|
|
|
5.7
|
|
|
212.8
|
|
|
6.5
|
|
|
44.1
|
|
|
4.4
|
|
|
61.4
|
|
|
6.4
|
|
Other
countries
|
180.4
|
|
|
5.4
|
|
|
69.8
|
|
|
2.1
|
|
|
101.3
|
|
|
10.0
|
|
|
34.9
|
|
|
3.7
|
|
Total
|
$
|
3,377.8
|
|
|
100.0
|
|
|
$
|
3,260.2
|
|
|
100.0
|
|
|
$
|
1,009.6
|
|
|
100.0
|
|
|
$
|
953.7
|
|
|
100.0
|
|
Company
Contact:
Joseph Gaspar, Executive VP &
CFO
Tel:
+972-772946663
j.gaspar@elbitsystems.com
David Vaaknin, VP, Head of Corporate
Communications
Tel:
+972-772946691
david.vaaknin@elbitsystems.com
Elbit Systems Ltd.
IR Contact:
Ehud Helft
Kenny Green
GK Investor
Relations
Tel: +1-646-201-9246
elbitsystems@gkir.com
View original
content:http://www.prnewswire.com/news-releases/elbit-systems-reports-fourth-quarter-and-full-year-2017-results-300616535.html
SOURCE Elbit Systems Ltd.