EX-1 2 esltq220186k.htm EXHIBIT 1 Exhibit
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 Earning Release
 
 

 
ELBIT SYSTEMS REPORTS
SECOND QUARTER OF 2018 RESULTS

Backlog of orders at $8.1 billion; Revenues at $892 million;
Non-GAAP net income of $58 million; GAAP net income of $92 million; Non-GAAP net EPS of $1.35; GAAP net EPS of $2.15

Haifa, Israel, August 16, 2018 – Elbit Systems Ltd. (NASDAQ: ESLT and TASE: ESLT), (the "Company") the international high technology company, reported today its consolidated results for the quarter ended June 30, 2018.

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:

Bezhalel (Butzi) Machlis, President and CEO of Elbit Systems, commented: “We are pleased with the second quarter year over year revenue growth of 9%, while maintaining the 10% year over year growth in our backlog.  This quarter, in particular, we see the fruits of our prior investment in Cyberbit. In line with our strategy of partnering with strategic investors to aid in the development of our commercial businesses, we had this quarter a $30 million external investment in Cyberbit. We believe that Cyberbit will further develop its business together with our new partner.

Furthermore, our strategy of enhancing organic growth with synergistic acquisitions continues. The results of this quarter for the first time include those of Universal Avionics Systems Corporation, a company we acquired that is active in the field of commercial avionics. This acquisition is part of our strategy of strengthening our footprint in this business area. Our combined portfolio will create strong synergies that we believe will ultimately generate further growth opportunities for us.”


Second quarter 2018 results:

Revenues in the second quarter of 2018 were $892.2 million, as compared to $818.3 million in the second quarter of 2017.

Non-GAAP (*) gross profit amounted to $254.8 million (28.6% of revenues) in the second quarter of 2018, as compared to $248.3 million (30.4% of revenues) in the second quarter of 2017. GAAP gross profit in the second quarter of 2018 was $250.0 million (28.0% of revenues), as compared to $242.3 million (29.6% of revenues) in the second quarter of 2017. The gross profit margin was affected by the mix of projects sold in the quarter.

Research and development expenses, net were $76.6 million (8.6% of revenues) in the second quarter of 2018, as compared to $67.1 million (8.2% of revenues) in the second quarter of 2017.

_____________
* see page 3

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Marketing and selling expenses, net were $69.9 million (7.8% of revenues) in the second quarter of 2018, as compared to $66.3 million (8.1% of revenues) in the second quarter of 2017.

General and administrative expenses, net were $37.0 million (4.2% of revenues) in the second quarter of 2018, as compared to $33.6 million (4.1% of revenues) in the second quarter of 2017. The lower expenses in the second quarter of 2017 resulted from revaluation of liabilities related to assets and activities acquired in prior years.

Other operating income, net in the second quarter of 2018 amounted to $45.4 million. This was the result of net gains related to valuation of shares in two of our Israeli subsidiaries in the cyber and medical instrumentation areas, due to third party investments.
 
Non-GAAP(*) operating income was $73.1 million (8.2% of revenues) in the second quarter of 2018, as compared to $82.7 million (10.1% of revenues) in the second quarter of 2017. GAAP operating income in the second quarter of 2018 was $111.8 million (12.5% of revenues), as compared to $75.3 million (9.2% of revenues) in the second quarter of 2017.

Financial expenses, net were $10.7 million in the second quarter of 2018, as compared to $6.8 million in the second quarter of 2017. The increase in financial expenses in the second quarter of 2018 was mainly a result of higher level of debt and increased libor interest rates.

Taxes on income were $7.3 million (effective tax rate of 7.6%) in the second quarter of 2018, as compared to $10.3 million (effective tax rate of 15.1%) in the second quarter of 2017. 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 other income that is not part of the taxable income.

Other expenses, net in the second quarter of 2018 amounted to $5.1 million. This was the result of an adjustment to the fair value of our investment in an Israeli subsidiary.

Equity in net earnings of affiliated companies and partnerships was $3.3 million (0.4% of revenues) in the second quarter of 2018, as compared to $4.8 million (0.6% of revenues) in the second quarter of 2017

Net income attributable to non-controlling interests was $0.1 million in the second quarter of 2018, as compared to $0.4 million in the second quarter of 2017.

Non-GAAP(*) net income attributable to the Company's shareholders in the second quarter of 2018 was $57.5 million (6.5% of revenues), as compared to $68.8 million (8.4% of revenues) in the second quarter of 2017. GAAP net income in the second quarter of 2018 was $91.9 million (10.3% of revenues), as compared to $62.6 million (7.6% of revenues) in the second quarter of 2017.

Non-GAAP(*) diluted net earnings per share attributable to the Company's shareholders were $1.35 for the second quarter of 2018, as compared to $1.61 for the second quarter of 2017. GAAP diluted earnings per share in the second quarter of 2018 were $2.15, as compared to $1.46 for the second quarter of 2017.

The Company’s backlog of orders for the quarter ended June 30, 2018 totaled $8,065 million as compared to $7,329 million as of June 30, 2017. Approximately 74% of the current backlog is attributable to orders from outside Israel. Approximately 55% of the current backlog is scheduled to be performed during 2018 and 2019.

Operating cash flow used in the six months ended June 30, 2018 was $1.1 million, as compared to $2.7 million provided in the six months ended June 30, 2017.

_____________
* see page 3

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Accounting policies update:

The Company adopted the new revenue recognition accounting standard ASC 606, effective January 1, 2018, using the modified retrospective approach. Financial results for reporting periods during 2018 are presented in compliance with ASC 606. Historical financial results for the reporting periods prior to 2018 are presented in conformity with amounts previously disclosed under the prior revenue recognition standard, ASC 605. The adoption of ASC 606 primarily impacts the Company's contracts where revenue was recognized using the percentage of completion units of delivery method, which under ASC 606 can be recognized over time because control is transfered continuously to the customer over the performance period for contracts recognized over time. As a result, the adoption of ASC 606 influenced part of the revenue growth in 2018.

The cumulative effects of the transition to ASC 606 on January 1, 2018, resulted in the following main adjustments: a $0.1 million increase in retained earnings, a decrease in inventories of approximately $81.9 million, an increase in contract assets (unbilled receivables) of approximately $78.8 million and a net decrease in customer advances and other contract liabilities and deferred tax assets in the aggregate amount of approximately $3.2 million.

According to ASC 606, customer advances are no longer deducted from inventories. Accordingly, on January 1, 2018, the open balances of inventories net and customer advances were grossed up in the amount of approximately $87 million.


* 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.

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Reconciliation of GAAP to Non-GAAP (Unaudited) Supplemental Financial Data:
(US Dollars in millions)

 
Six Months Ended
June 30,
 
Three Months Ended 
 June 30,
 
Year Ended
December 31,
 
2018
 
2017
 
2018
 
2017
 
2017
 
 
 
 
 
 
 
 
 
 
GAAP gross profit
$
485.4

 
$
463.5

 
$
250.0

 
$
242.3

 
$
997.9

Adjustments:
 
 
 
 
 
 
 
 
 
Amortization of purchased intangible assets
9.2

 
11.7

 
4.8

 
6.0

 
22.2

Non-GAAP gross profit
$
494.6

 
$
475.2

 
$
254.8

 
$
248.3

 
$
1,020.1

Percent of revenues
28.9
%
 
30.3
%
 
28.6
%
 
30.4
%
 
30.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP operating income
$
175.1

 
$
133.5

 
$
111.8

 
$
75.3

 
$
319.3

Adjustments:
 
 
 
 
 
 
 
 
 
Amortization of purchased intangible assets
12.8

 
14.7

 
6.7

 
7.4

 
28.6

Gain from changes in holdings
(45.4
)
 
—

 
(45.4
)
 
—

 
—

Non-GAAP operating income
$
142.5

 
$
148.2

 
$
73.1

 
$
82.7

 
$
347.9

Percent of revenues
8.3
%
 
9.5
%
 
8.2
%
 
10.1
%
 
10.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP net income attributable to Elbit Systems’ shareholders
$
141.6

 
$
108.2

 
$
91.9

 
$
62.6

 
$
239.1

Adjustments:
 
 
 
 
 
 
 
 
 
Amortization of purchased intangible assets
12.8

 
14.7

 
6.7

 
7.4

 
28.6

Fair value adjustment of investment
5.1

 
—

 
5.1

 
—

 
—

Gain from changes in holdings
(45.4
)
 
—

 
(45.4
)
 
—

 
—

Related tax benefits
(1.7
)
 
(2.5
)
 
(0.8
)
 
(1.2
)
 
6.2

Non-GAAP net income attributable to Elbit Systems' shareholders
$
112.4

 
$
120.4

 
$
57.5

 
$
68.8

 
$
273.9

Percent of revenues
6.6
%
 
7.7
%
 
6.5
%
 
8.4
%
 
8.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP diluted net EPS
$
3.31

 
$
2.53

 
$
2.15

 
$
1.46

 
$
5.59

Adjustments, net
(0.68
)
 
0.29

 
0.80

 
0.15

 
0.81

Non-GAAP diluted net EPS
$
2.63

 
$
2.82

 
$
1.35

 
$
1.61

 
$
6.41




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Recent Events:

On May 31, 2018, the Company announced that its wholly-owned subsidiary in Canada, GeoSpectrum Technologies Inc. was awarded a contract from STX Engine Co., to deliver a full end-to-end Underwater Sound Source System and software package to the Republic of Korea Navy. The system will be supplied by the end of 2018. The contract is in an amount that is not material to Elbit Systems.

On June 4, 2018, the Company announced that it’s wholly-owned subsidiary, Cyberbit Ltd. (Cyberbit), raised a $30 million investment from the private equity investor Claridge Israel L.P. Engaged in the cyber security area, Cyberbit provides the cyber training and simulation solution - Cyberbit Range and a consolidated detection and response platform that protects an organization’s entire attack surface across IT, OT and IoT networks.

On June 13, 2018, the Company announced that it’s subsidiary, Beyeonics Surgical Ltd. (Beyeonics), concluded a first round of funding, raising a $11.5 million investment from leading investment groups including an international corporation. Beyeonics develops innovative surgeon-centered visualization technologies that improve the surgeon’s efficiency and substantially enhance patient safety and surgical outcomes.

On June 19, 2018, the Company announced that the agreements reached between Elbit Systems and the Israeli Government for the acquisition of IMI Systems Ltd. (IMI), were approved by the Committee for the Tender of the Sale of State Shares and by the Board of Directors of the Company. The purchase price will be approximately $495 million (NIS 1.8 billion), with an additional payment of up to approximately $27 million (NIS 100 million) contingent upon IMI meeting certain performance goals.

On June 21, 2018, the Company announced that it was awarded an approximately $17 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 two-year period.

On June 28, 2018, the Company announced that in light of the progress in the acquisition of IMI by the Company, as announced by the Company on June 19, 2018, the Israeli rating agency Midroog Ltd. ("Midroog"), placed the Series "A" Notes issued by the Company in 2010 and in 2012 (the Notes") under review for downgrade (Credit Review). The Notes are currently rated "Aa1" (on a local scale). The Credit Review will be performed by Midroog following the closing of the acquisition transaction.

On August 7, 2018, the Company announced that it was awarded an approximately $85 million contract from the Israeli Ministry of Defense to supply electronic warfare suites for the Israeli Navy Sa'ar 6-class corvettes that will be tasked with the protection of Israel's Economic Exclusion Zone. The contract will be performed over a 10-year period.



 





 





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Dividend:

The Board of Directors declared a dividend of $0.44 per share for the second quarter of 2018. The dividend’s record date is September 4, 2018. The dividend will be paid from income generated as Preferred Income (as defined under Israel tax laws), on September 17, 2018, net of taxes and levies, at the rate of 20%.

Conference Call:

The Company will be hosting a conference call on Thursday, August 16, 2018 at 9:00 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
Canada Dial-in Numbers: 1 888 604 5839
UK Dial-in Number: 0 800 917 9141
ISRAEL Dial-in Number: 03 918 0609
INTERNATIONAL Dial-in Number: +972 3 918 0609

at: 9:00 am Eastern Time; 6:00 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 and Canada) or +972 3 925 5929 (Israel and International).

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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 airborne, land and naval systems, command, control, communications, computers, intelligence surveillance and reconnaissance ("C4ISR"), unmanned aircraft systems, advanced electro-optics, electro-optic space systems, EW 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

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



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.


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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)



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ELBIT SYSTEMS LTD.
CONSOLIDATED BALANCE SHEETS
(In thousands of US Dollars)
 
June 30,
 
December 31,
 
2018
 
2017
 
Unaudited
 
Audited
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
186,977

 
$
156,074

Short-term bank deposits and marketable securities
3,268

 
16,497

Trade and unbilled receivables, net
1,427,423

 
1,406,563

Other receivables and prepaid expenses
141,111

 
128,946

Inventories, net
1,074,318

 
902,954

Total current assets
2,833,097

 
2,611,034

 
 
 
 
Investments in affiliated companies and partnerships
220,477

 
172,338

Long-term trade and unbilled receivables
326,493

 
295,396

Long-term bank deposits and other receivables
28,499

 
38,082

Deferred income taxes, net
47,323

 
51,358

Severance pay fund
280,229

 
298,590

 
903,021

 
855,764

 
 
 
 
Property, plant and equipment, net
519,151

 
495,716

Goodwill and other intangible assets, net
814,345

 
752,403

Total assets
$
5,069,614

 
$
4,714,917

 
 
 
 
 
 
 
 
Liabilities and Equity
 
 
 
Short-term bank credit and loans
$
12,755

 
$
133,750

Current maturities of long-term loans and Series A Notes
120,137

 
67,556

Trade payables
569,587

 
633,689

Other payables and accrued expenses
836,968

 
835,394

Customer advances
548,404

 
418,560

 
2,087,851

 
2,088,949

 
 
 
 
Long-term loans, net of current maturities
459,798

 
119,514

Series A Notes, net of current maturities
59,108

 
124,865

Employee benefit liabilities
394,339

 
413,117

Deferred income taxes and tax liabilities, net
65,329

 
68,159

Customer advances
137,965

 
133,649

Other long-term liabilities
45,889

 
48,692

 
1,162,428

 
907,996

 
 
 
 
Elbit Systems Ltd.'s equity
1,809,609

 
1,708,310

Non-controlling interests
9,726

 
9,662

Total equity
1,819,335

 
1,717,972

Total liabilities and equity
$
5,069,614

 
$
4,714,917


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ELBIT SYSTEMS LTD.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands of US Dollars, except for share and per share amount)
   
Six Months Ended
June 30,
 
Three Months Ended 
 June 30,
 
Year Ended
December 31,
 
2018
 
2017
 
2018
 
2017
 
2017
 
Unaudited
 
Unaudited
 
Audited
Revenues
$
1,710,694

 
$
1,567,487

 
$
892,166

 
$
818,299

 
$
3,377,825

Cost of revenues
1,225,283

 
1,104,009

 
642,180

 
575,971

 
2,379,905

Gross profit
485,411

 
463,478

 
249,986

 
242,328

 
997,920

 
 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
 
Research and development, net
144,740

 
125,506

 
76,555

 
67,069

 
265,060

Marketing and selling, net
138,119

 
132,068

 
69,949

 
66,291

 
280,246

General and administrative, net
72,784

 
72,369

 
37,045

 
33,645

 
133,314

Other operating income, net
(45,367
)
 
—

 
(45,367
)
 
—

 
—

Total operating expenses
310,276

 
329,943

 
138,182

 
167,005

 
678,620

Operating income
175,135

 
133,535

 
111,804

 
75,323

 
319,300

 
 
 
 
 
 
 
 
 
 
Financial expenses, net
(20,994
)
 
(15,478
)
 
(10,745
)
 
(6,833
)
 
(34,502
)
Other (expenses) income, net
(5,088
)
 
37

 
(5,110
)
 
5

 
48

Income before income taxes
149,053

 
118,094

 
95,949

 
68,495

 
284,846

 
 
 
 
 
 
 
 
 
 
Taxes on income
(13,639
)
 
(15,572
)
 
(7,277
)
 
(10,321
)
 
(55,585
)
 
135,414

 
102,522

 
88,672

 
58,174

 
229,261

 
 
 
 
 
 
 
 
 
 
Equity in net earnings of affiliated companies and partnerships
6,445

 
6,418

 
3,311

 
4,822

 
11,361

Net income
$
141,859

 
$
108,940

 
$
91,983

 
$
62,996

 
$
240,622

Less: net income attributable to non-controlling interests
(299
)
 
(716
)
 
(53
)
 
(412
)
 
(1,513
)
Net income attributable to Elbit Systems Ltd.'s shareholders
$
141,560

 
$
108,224

 
$
91,930

 
$
62,584

 
$
239,109

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per share attributable to Elbit Systems Ltd.'s shareholders:
 
 
 
 
Basic net earnings per share
$
3.31

 
$
2.53

 
$
2.15

 
$
1.46

 
$
5.59

Diluted net earnings per share
$
3.31

 
$
2.53

 
$
2.15

 
$
1.46

 
$
5.59

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average number of shares (in thousands)
 
 
 
 
 
 
 
 
Shares used in computation of basic earnings per share
42,752

 
42,749

 
42,753

 
42,749

 
42,750

Shares used in computation of diluted earnings per share
42,754

 
42,753

 
42,755

 
42,755

 
42,753


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ELBIT SYSTEMS LTD.
CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands of US dollars)
 
Six Months Ended 
 June 30,
 
Year Ended
December 31,
 
2018
 
2017
 
2017
 
Unaudited
 
Audited
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
Net income
$
141,859

 
$
108,940

 
$
240,622

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
Depreciation and amortization
56,413

 
56,360

 
114,017

Adjustment to fair value investment
5,114

 
—

 
—

Stock-based compensation
—

 
13

 
13

Amortization of Series A Notes premium and related issuance costs, net
(46
)
 
(46
)
 
(92
)
Deferred income taxes and reserve, net
1,305

 
1,960

 
28,774

Gain on sale of property, plant and equipment
(89
)
 
(1,970
)
 
(2,440
)
Loss (gain) on sale and revaluation of investments
(43,201
)
 
204

 
1,358

Equity in net earnings of affiliated companies and partnerships, net of dividend received (*)
(4,093
)
 
(4,303
)
 
(1,987
)
Changes in operating assets and liabilities, net of amounts acquired:
 
 
 
 
 
Decrease (increase) in short and long-term trade receivables and prepaid expenses
18,077

 
(157,407
)
 
(315,236
)
Increase in inventories, net
(136,949
)
 
(50,203
)
 
(59,699
)
Increase (decrease) in trade payables, other payables and accrued expenses
(91,660
)
 
(17,381
)
 
63,274

Severance, pension and termination indemnities, net
439

 
12,850

 
2,003

Increase in advances received from customers
51,689

 
53,654

 
30,286

Net cash provided by (used in) operating activities
(1,142
)
 
2,671

 
100,893

CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
Purchase of property, plant and equipment and other assets
(48,374
)
 
(55,416
)
 
(107,880
)
Acquisition of subsidiaries and business operations
(127,569
)
 
(25,440
)
 
(25,440
)
Investments in affiliated companies and other companies
(3,748
)
 
(678
)
 
(4,964
)
Deconsolidation of subsidiary
(2,873
)
 
—

 
—

Proceeds from sale of property, plant and equipment
1,106

 
3,597

 
6,270

Proceeds from sale of investments
—

 
12,067

 
12,067

Investment in long-term deposits
(180
)
 
(499
)
 
(1,396
)
Proceeds from sale of long-term deposits
67

 
172

 
176

Investment in short-term deposits and marketable securities
(5,072
)
 
(26,858
)
 
(40,893
)
Proceeds from sale of short-term deposits and marketable securities
18,104

 
27,159

 
46,491

Net cash used in investing activities
(168,539
)
 
(65,896
)
 
(115,569
)
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
Proceeds from exercise of options
48

 
63

 
119

Repayment of long-term loans
(28
)
 
(140,782
)
 
(167,425
)
Proceeds from long-term loans
340,386

 
118,550

 
118,623

Repayment of Series A Notes
—

 
(55,532
)
 
(55,532
)
Dividends paid
(18,827
)
 
(37,649
)
 
(75,300
)
Change in short-term bank credit and loans, net
(120,995
)
 
105,248

 
127,455

Net cash (used in) provided by financing activities
200,584

 
(10,102
)
 
(52,060
)
Net increase (decrease) in cash and cash equivalents
30,903

 
(73,327
)
 
(66,736
)
Cash and cash equivalents at the beginning of the year
156,074

 
222,810

 
222,810

Cash and cash equivalents at the end of the period
186,977

 
149,483

 
156,074

 
 
 
 
 
 
* Dividend received from affiliated companies and partnerships
$
2,352

 
$
2,115

 
$
9,374


11

elbitsystemslogoa02a10.jpg
 Earning Release
 
 

ELBIT SYSTEMS LTD.
DISTRIBUTION OF REVENUES



Consolidated Revenues by Areas of Operation:

 
Six Months Ended June 30,
 
Three Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
 
$ millions
 
%
 
$ millions
 
%
 
$ millions
 
%
 
$ millions
 
%
Airborne systems
678.3

 
39.7
 
592.8

 
37.8
 
367.3

 
41.2
 
302.6

 
37.0
C4ISR systems
563.1

 
32.9
 
545.4

 
34.9
 
287.9

 
32.3
 
266.3

 
32.6
Land systems
256.5

 
15.0
 
210.7

 
13.4
 
142.1

 
15.9
 
131.8

 
16.1
Electro-optic systems
154.8

 
9.1
 
169.6

 
10.8
 
66.8

 
7.5
 
93.2

 
11.4
Other (mainly non-defense engineering and production services)
58.0

 
3.3
 
49.0

 
3.1
 
28.1

 
3.1
 
24.4

 
2.9
Total
1,710.7

 
100.0
 
1,567.5

 
100.0
 
892.2

 
100.0
 
818.3

 
100.0
                                                                             


Consolidated Revenues by Geographical Regions:

 
Six Months Ended June 30,
 
Three Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
 
$ millions
 
%
 
$ millions
 
%
 
$ millions
 
%
 
$ millions
 
%
Israel
351.9

 
20.6
 
335.0

 
21.4
 
166.3

 
18.6
 
167.6

 
20.5
North America
461.2

 
27.0
 
401.8

 
25.6
 
252.5

 
28.3
 
208.8

 
25.5
Europe
315.7

 
18.5
 
364.9

 
23.3
 
162.9

 
18.3
 
203.1

 
24.8
Asia-Pacific
364.0

 
21.3
 
328.9

 
21.0
 
190.4

 
21.3
 
162.7

 
19.9
Latin America
91.0

 
5.3
 
93.0

 
5.9
 
50.8

 
5.7
 
58.6

 
7.2
Other countries
126.9

 
7.3
 
43.9

 
2.8
 
69.3

 
7.8
 
17.5

 
2.1
Total
1,710.7

 
100.0
 
1,567.5

 
100.0
 
892.2

 
100.0
 
818.3

 
100.0

                                                                                                                            


12