|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Large accelerated filer
ý
|
Accelerated filer
o
|
Non-accelerated filer
o
|
U.S. GAAP
ý
|
International Financial Reporting
o
Standards as issued by the International
Accounting Standards Board |
Other
o
|
|
|
Page
|
|
|
|
|
|
|
|
|
|
•
|
the 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 we operate or sell, 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;
|
•
|
the impact on our backlog from export restrictions by the Government of Israel;
|
•
|
inventory write-downs and possible liabilities to customers from program cancellations due to political relations between Israel and countries where our customers may be located; and
|
•
|
the outcome of legal and/or regulatory proceedings.
|
|
|
Years Ended December 31,
|
||||||||||||||||||
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
||||||||||
|
|
(U.S. dollars in millions, except for per share amounts)
|
||||||||||||||||||
Income Statement Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
$
|
2,817.5
|
|
|
$
|
2,888.6
|
|
|
$
|
2,925.2
|
|
|
$
|
2,958.2
|
|
|
$
|
3,107.6
|
|
Cost of revenues
|
|
2,085.5
|
|
|
2,072.7
|
|
|
2,100.3
|
|
|
2,133.2
|
|
|
2,210.5
|
|
|||||
Gross profit
|
|
732.0
|
|
|
815.9
|
|
|
824.9
|
|
|
825.0
|
|
|
897.1
|
|
|||||
Research and development expenses, net
|
|
241.1
|
|
|
233.4
|
|
|
220.5
|
|
|
228.0
|
|
|
243.4
|
|
|||||
Marketing and selling expenses
|
|
235.9
|
|
|
241.9
|
|
|
235.5
|
|
|
216.5
|
|
|
239.4
|
|
|||||
General and administrative expenses
|
|
139.3
|
|
|
137.5
|
|
|
129.5
|
|
|
139.6
|
|
|
145.7
|
|
|||||
Gain from changes in holdings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.0
|
)
|
|
—
|
|
|||||
Total operating expenses
|
|
616.3
|
|
|
612.8
|
|
|
585.5
|
|
|
578.1
|
|
|
628.5
|
|
|||||
Operating income
|
|
115.7
|
|
|
203.1
|
|
|
239.4
|
|
|
246.9
|
|
|
268.6
|
|
|||||
Financial expenses, net
|
|
(13.6
|
)
|
|
(26.1
|
)
|
|
(37.3
|
)
|
|
(47.5
|
)
|
|
(20.2
|
)
|
|||||
Other income, net
|
|
1.9
|
|
|
0.1
|
|
|
0.9
|
|
|
0.1
|
|
|
0.2
|
|
|||||
Income before taxes on income
|
|
104.0
|
|
|
177.1
|
|
|
203.0
|
|
|
199.5
|
|
|
248.6
|
|
|||||
Taxes on income
|
|
13.6
|
|
|
17.1
|
|
|
25.3
|
|
|
25.6
|
|
|
46.2
|
|
|||||
Equity in net earnings of affiliated companies and partnerships
|
|
15.4
|
|
|
11.2
|
|
|
13.0
|
|
|
5.5
|
|
|
4.5
|
|
|||||
Net income from continuing operations, net
|
|
105.8
|
|
|
171.2
|
|
|
190.7
|
|
|
179.4
|
|
|
206.9
|
|
|||||
Income (loss) from discontinued operations, net
|
|
(16.0
|
)
|
|
(0.6
|
)
|
|
0.7
|
|
|
—
|
|
|
—
|
|
|||||
Net income
|
|
89.8
|
|
|
170.6
|
|
|
191.4
|
|
|
179.4
|
|
|
206.9
|
|
|||||
Less: net income (loss) attributable to non-controlling interests
|
|
0.5
|
|
|
(2.6
|
)
|
|
(8.0
|
)
|
|
(8.4
|
)
|
|
(4.4
|
)
|
|||||
Income attributable to Elbit Systems’ shareholders
|
|
$
|
90.3
|
|
|
$
|
168.0
|
|
|
$
|
183.4
|
|
|
$
|
171.0
|
|
|
$
|
202.5
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic net earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
2.33
|
|
|
$
|
3.99
|
|
|
$
|
4.34
|
|
|
$
|
4.01
|
|
|
$
|
4.74
|
|
Discontinued operations
|
|
(0.22
|
)
|
|
(0.01
|
)
|
|
0.01
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
2.11
|
|
|
$
|
3.98
|
|
|
$
|
4.35
|
|
|
$
|
4.01
|
|
|
$
|
4.74
|
|
Diluted net earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
2.31
|
|
|
$
|
3.98
|
|
|
$
|
4.33
|
|
|
$
|
4.01
|
|
|
$
|
4.74
|
|
Discontinued operations
|
|
(0.22
|
)
|
|
(0.01
|
)
|
|
0.01
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
2.09
|
|
|
$
|
3.97
|
|
|
$
|
4.34
|
|
|
$
|
4.01
|
|
|
$
|
4.74
|
|
|
As of December 31,
|
|||||||||||||||||||
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
||||||||||
|
|
(U.S. dollars in millions, except for per share amounts)
|
||||||||||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents, short-term bank deposits and marketable securities
|
|
$
|
224
|
|
|
$
|
265
|
|
|
$
|
265
|
|
|
$
|
306
|
|
|
$
|
332
|
|
Working capital
|
|
236
|
|
|
375
|
|
|
561
|
|
|
626
|
|
|
645
|
|
|||||
Long-term deposits, marketable securities and other receivables
|
|
12
|
|
|
19
|
|
|
53
|
|
|
18
|
|
|
16
|
|
|||||
Long-term trade and unbilled receivables
|
|
163
|
|
|
230
|
|
|
243
|
|
|
213
|
|
|
152
|
|
|||||
Property, plant and equipment, net
|
|
518
|
|
|
501
|
|
|
481
|
|
|
442
|
|
|
450
|
|
|||||
Total assets
|
|
3,721
|
|
|
3,811
|
|
|
3,933
|
|
|
4,021
|
|
|
4,127
|
|
|||||
Long-term debt
|
|
302
|
|
|
174
|
|
|
224
|
|
|
221
|
|
|
166
|
|
|||||
Series A Notes, net of current maturities
|
|
235
|
|
|
409
|
|
|
378
|
|
|
294
|
|
|
227
|
|
|||||
Capital stock
|
|
245
|
|
|
249
|
|
|
268
|
|
|
272
|
|
|
274
|
|
|||||
Elbit Systems shareholders’ equity
|
|
898
|
|
|
1,017
|
|
|
1,177
|
|
|
1,227
|
|
|
1,394
|
|
|||||
Non-controlling interests
|
|
29
|
|
|
34
|
|
|
17
|
|
|
12
|
|
|
8
|
|
|||||
Total equity
|
|
928
|
|
|
1,051
|
|
|
1,194
|
|
|
1,239
|
|
|
1,402
|
|
|||||
Number of outstanding ordinary shares of NIS 1 par value (in thousands)
|
|
42,608
|
|
|
41,882
|
|
|
42,587
|
|
|
42,685
|
|
|
42,730
|
|
|||||
Dividends paid per ordinary share with respect to the applicable year
|
|
$
|
1.44
|
|
|
$
|
1.20
|
|
|
$
|
1.20
|
|
|
$
|
1.28
|
|
|
$
|
1.44
|
|
•
|
structure our business, through joint ventures, teaming agreements and other forms of alliances, to reflect the competitive environment.
|
•
|
intellectual property laws in certain jurisdictions may be relatively ineffective;
|
•
|
detecting infringements and enforcing proprietary rights may divert management’s attention and company resources;
|
•
|
contractual measures such as non-disclosure agreements and confidentiality provisions may afford only limited protection;
|
•
|
our patents may expire, thus providing competitors access to the applicable technology;
|
•
|
competitors may independently develop products that are substantially equivalent or superior to our products or circumvent our intellectual property rights; and
|
•
|
competitors may register patents in technologies relevant to our business areas.
|
•
|
our pre-acquisition due diligence may fail to identify material risks;
|
•
|
acquisitions may result in significant additional unanticipated costs associated with price adjustments or write-downs;
|
•
|
we may not integrate newly-acquired businesses and operations in an efficient and cost-effective manner;
|
•
|
we may fail to achieve the strategic objectives, cost savings and other benefits expected from acquisitions;
|
•
|
the technologies acquired may not prove to be those needed to be successful in our markets or may not have adequate intellectual property rights protection;
|
•
|
we may assume significant liabilities that exceed the enforceability or other limitations of applicable indemnification provisions, if any, or the financial resources of any indemnifying parties, including indemnity for regulatory compliance issues, such as anti-corruption and environmental compliance, that may result in our incurring successor liability;
|
•
|
we may fail to retain key employees of the acquired businesses;
|
•
|
the attention of senior management may be diverted from our existing operations; and
|
•
|
certain of our newly acquired operating subsidiaries in various countries could be subject to more restrictive regulations by the local authorities after our acquisition, including regulations relating to foreign ownership of, and export authorizations for, local companies.
|
|
2013
|
|
2014
|
|
2015
|
||||||
|
(U.S. dollars in millions)
|
||||||||||
|
|
|
|
|
|
||||||
Airborne systems
|
$
|
1,133
|
|
|
$
|
1,198
|
|
|
$
|
1,226
|
|
Land systems
|
309
|
|
|
275
|
|
|
559
|
|
|||
C4ISR systems
|
1,071
|
|
|
1,118
|
|
|
995
|
|
|||
Electro-optic systems
|
314
|
|
|
265
|
|
|
232
|
|
|||
Other (mainly non-defense engineering and production services)
|
97
|
|
|
102
|
|
|
96
|
|
|||
Total
|
$
|
2,925
|
|
|
$
|
2,958
|
|
|
$
|
3,108
|
|
|
Israel
(1)
|
|
U.S.
(2)
|
|
Other Countries
(3)
|
|
|
|
|
|
|
Owned
|
2,163,000 square feet
|
|
714,000 square feet
|
|
891,000 square feet
|
Leased
|
1,972,000 square feet
|
|
640,000 square feet
|
|
308,000 square feet
|
(1)
|
Includes offices, development and engineering facilities, manufacturing facilities, maintenance facilities, hangar facilities and a landing strip in various locations in Israel used by Elbit Systems and our various wholly-owned Israeli subsidiaries.
|
(2)
|
Includes mainly offices, development and engineering facilities, manufacturing facilities and maintenance facilities of Elbit Systems of America, primarily in Texas, New Hampshire, Florida, Alabama and Virginia. Elbit Systems of America’s facilities in Texas, New Hampshire and Alabama are located on a total of approximately 129 acres of land owned by Elbit Systems of America. A portion of the premises leased by Elbit Systems of America are subleased to a third party.
|
(3)
|
Includes offices, design and engineering facilities and manufacturing facilities in Europe, Latin America and Asia-Pacific.
|
|
2013
|
|
2014
|
|
2015
|
||||||
|
(U.S. dollars in millions
)
|
||||||||||
Total Investment
|
$
|
263.3
|
|
|
$
|
267.7
|
|
|
$
|
277.8
|
|
Less Participation*
|
(42.8
|
)
|
|
(39.7
|
)
|
|
(34.4
|
)
|
|||
Net Investment
|
$
|
220.5
|
|
|
$
|
228.0
|
|
|
$
|
243.4
|
|
|
*
|
See above – “Government Rights in Data” and see below – “Conditions in Israel – Office of Chief Scientist (OCS) and Investment Center Funding.”
|
•
|
adequate service of process has been made and the defendant has had a reasonable opportunity to be heard;
|
•
|
the judgment and its enforcement are not contrary to the law, public policy, security or sovereignty of the State of Israel;
|
•
|
the judgment was not obtained by fraud and does not conflict with any other valid judgment in the same matter between the same parties;
|
•
|
an action between the same parties in the same matter is not pending in any Israeli court at the time the lawsuit is instituted in the foreign court; and
|
•
|
the judgment is no longer subject to a right of appeal.
|
|
Year ended December 31,
|
|||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
|
$
|
|
%
|
|
$
|
|
%
|
|
$
|
|
%
|
|||||||||
|
(in thousands of U.S. dollars except per share data
)
|
|||||||||||||||||||
Total revenues
|
$
|
3,107,581
|
|
|
100.0
|
|
|
$
|
2,958,248
|
|
|
100.0
|
|
|
$
|
2,925,151
|
|
|
100.0
|
|
Cost of revenues
|
2,210,528
|
|
|
71.1
|
|
|
2,133,151
|
|
|
72.1
|
|
|
2,100,304
|
|
|
71.8
|
|
|||
Gross profit
|
897,053
|
|
|
28.9
|
|
|
825,097
|
|
|
27.9
|
|
|
824,847
|
|
|
28.2
|
|
|||
Research and development (R&D) expenses
|
277,837
|
|
|
8.9
|
|
|
267,691
|
|
|
9.0
|
|
|
263,314
|
|
|
9.0
|
|
|||
Less – participation
|
(34,421
|
)
|
|
(1.1
|
)
|
|
(39,680
|
)
|
|
(1.3
|
)
|
|
(42,832
|
)
|
|
(1.6
|
)
|
|||
R&D expenses, net
|
243,416
|
|
|
7.8
|
|
|
228,011
|
|
|
7.7
|
|
|
220,482
|
|
|
7.5
|
|
|||
Marketing and selling expenses
|
239,366
|
|
|
7.7
|
|
|
216,537
|
|
|
7.3
|
|
|
235,466
|
|
|
8.0
|
|
|||
General and administrative expenses
|
145,693
|
|
|
4.7
|
|
|
139,634
|
|
|
4.7
|
|
|
129,507
|
|
|
4.4
|
|
|||
Other operating income, net
|
—
|
|
|
—
|
|
|
(5,951
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|||
|
628,475
|
|
|
20.2
|
|
|
578,231
|
|
|
19.5
|
|
|
585,455
|
|
|
20.0
|
|
|||
Operating income
|
268,578
|
|
|
8.6
|
|
|
246,866
|
|
|
8.3
|
|
|
239,392
|
|
|
8.2
|
|
|||
Financial expenses, net
|
(20,240
|
)
|
|
(0.7
|
)
|
|
(47,498
|
)
|
|
(1.6
|
)
|
|
(37,310
|
)
|
|
(1.3
|
)
|
|||
Other income, net
|
216
|
|
|
—
|
|
|
120
|
|
|
—
|
|
|
937
|
|
|
—
|
|
|||
Income before taxes on income
|
248,554
|
|
|
8.0
|
|
|
199,488
|
|
|
6.7
|
|
|
203,019
|
|
|
6.9
|
|
|||
Taxes on income
|
46,235
|
|
|
1.5
|
|
|
25,624
|
|
|
0.9
|
|
|
25,313
|
|
|
0.9
|
|
|||
|
202,319
|
|
|
6.5
|
|
|
173,864
|
|
|
5.9
|
|
|
177,706
|
|
|
6.1
|
|
|||
Equity in net earnings of affiliated companies and partnerships
|
4,542
|
|
|
0.1
|
|
|
5,549
|
|
|
0.2
|
|
|
13,032
|
|
|
0.6
|
|
|||
Income from continuing operations
|
206,861
|
|
|
6.7
|
|
|
179,413
|
|
|
6.1
|
|
|
190,738
|
|
|
6.5
|
|
|||
Income from discontinued operations, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
681
|
|
|
—
|
|
|||
Net income
|
$
|
206,861
|
|
|
6.7
|
|
|
$
|
179,413
|
|
|
6.1
|
|
|
$
|
191,419
|
|
|
6.5
|
|
Less – net loss (income) attributable to non-controlling interests
|
(4,352
|
)
|
|
(0.1
|
)
|
|
(8,433
|
)
|
|
(0.3
|
)
|
|
(8,002
|
)
|
|
(0.3
|
)
|
|||
Net income attributable to the Company’s shareholders
|
$
|
202,509
|
|
|
6.5
|
|
|
$
|
170,980
|
|
|
5.8
|
|
|
$
|
183,417
|
|
|
6.3
|
|
Diluted net earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
$
|
4.74
|
|
|
|
|
|
$
|
4.01
|
|
|
|
|
|
$
|
4.33
|
|
|
|
|
Discontinued operations
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
0.01
|
|
|
|
|
|||
Total
|
$
|
4.74
|
|
|
|
|
|
$
|
4.01
|
|
|
|
|
|
$
|
4.34
|
|
|
|
|
|
Year ended
|
||||||||
|
December 31, 2015
|
|
December 31, 2014
|
||||||
|
$ millions
|
|
%
|
|
$ millions
|
|
%
|
||
Airborne systems
|
1,225.7
|
|
|
39.4
|
|
1,197.9
|
|
|
40.5
|
Land systems
|
558.7
|
|
|
18.0
|
|
274.9
|
|
|
9.3
|
C4ISR systems
|
995.2
|
|
|
32.0
|
|
1,118.5
|
|
|
37.8
|
Electro-optic systems
|
231.9
|
|
|
7.5
|
|
265.1
|
|
|
9.0
|
Other (mainly non-defense engineering and production services)
|
96.1
|
|
|
3.1
|
|
101.8
|
|
|
3.4
|
Total
|
3,107.6
|
|
|
100.0
|
|
2,958.2
|
|
|
100.0
|
|
Year ended
|
|||||||
|
December 31, 2015
|
|
December 31, 2014
|
|||||
|
$ millions
|
|
%
|
|
$ millions
|
|
%
|
|
Israel
|
616.6
|
|
|
19.8
|
|
638.9
|
|
21.6
|
North America
|
838.9
|
|
|
27.0
|
|
826.8
|
|
27.9
|
Europe
|
497.6
|
|
|
16.0
|
|
460.9
|
|
15.6
|
Latin America
|
325.4
|
|
|
10.5
|
|
454.5
|
|
15.4
|
Asia-Pacific
|
800.3
|
|
|
25.8
|
|
528.8
|
|
17.9
|
Other
|
28.8
|
|
|
0.9
|
|
48.4
|
|
1.6
|
Total
|
3,107.6
|
|
|
100.0
|
|
2,958.2
|
|
100.0
|
|
Year ended
|
||||||||
|
December 31, 2014
|
|
December 31, 2013
|
||||||
|
$ millions
|
|
%
|
|
$ millions
|
|
%
|
||
Airborne systems
|
1,197.9
|
|
|
40.5
|
|
1,133.1
|
|
|
38.7
|
Land systems
|
274.9
|
|
|
9.3
|
|
309.3
|
|
|
10.6
|
C4ISR systems
|
1,118.5
|
|
|
37.8
|
|
1,071.4
|
|
|
36.6
|
Electro-optic systems
|
265.1
|
|
|
9.0
|
|
313.9
|
|
|
10.7
|
Other (mainly non-defense engineering and production services)
|
101.8
|
|
|
3.4
|
|
97.5
|
|
|
3.3
|
Total
|
2,958.2
|
|
|
100.0
|
|
2,925.2
|
|
|
100.0
|
|
Year ended
|
|||||||
|
December 31, 2014
|
|
December 31, 2013
|
|||||
|
$ millions
|
|
%
|
|
$ millions
|
|
%
|
|
Israel
|
638.9
|
|
|
21.6
|
|
705.7
|
|
24.1
|
North America
|
826.8
|
|
|
27.9
|
|
860.7
|
|
29.4
|
Europe
|
460.9
|
|
|
15.6
|
|
546.7
|
|
18.7
|
Latin America
|
454.5
|
|
|
15.4
|
|
283.0
|
|
9.7
|
Asia-Pacific
|
528.8
|
|
|
17.9
|
|
448.1
|
|
15.3
|
Other
|
48.4
|
|
|
1.6
|
|
81.0
|
|
1.6
|
Total
|
2,958.2
|
|
|
100.0
|
|
2,925.2
|
|
100.0
|
|
|
Notional
|
|
Unrealized
|
||
Forward
|
|
Amount*
|
|
Gain (Loss)
|
||
|
|
|
|
|
||
Buy US$ and Sell:
|
|
|
|
|
||
Euro
|
|
132.2
|
|
|
8.9
|
|
GBP
|
|
35.5
|
|
|
1.6
|
|
NIS
|
|
697.5
|
|
|
3.0
|
|
Other various currencies
|
|
2.2
|
|
|
—
|
|
|
|
Notional
|
|
Unrealized
|
||
Forward
|
|
Amount*
|
|
Gain (Loss)
|
||
|
|
|
|
|
||
Sell US$ and Buy:
|
|
|
|
|
||
Euro
|
|
46.1
|
|
|
(2.3
|
)
|
GBP
|
|
10.8
|
|
|
(0.5
|
)
|
NIS
|
|
5.5
|
|
|
—
|
|
Other various currencies
|
|
7.4
|
|
|
—
|
|
|
*
|
Notional amount information is based on the foreign exchange rate at year end.
|
|
Up to
1 year
|
|
2-3 years
|
|
4-5 years
|
|
More than
5 years
|
||||
|
(U.S. dollars in millions
)
|
||||||||||
1. Long-Term Debt Obligations
(1)
|
48
|
|
|
213
|
|
|
1
|
|
|
—
|
|
2. Series A Notes
(1)
|
56
|
|
|
112
|
|
|
112
|
|
|
—
|
|
3. Interest payment
(2)
|
10
|
|
|
11
|
|
|
3
|
|
|
—
|
|
4. Operating Lease Obligations
(3)
|
52
|
|
|
67
|
|
|
33
|
|
|
73
|
|
5. Purchase Obligations
(3)
|
921
|
|
|
202
|
|
|
46
|
|
|
123
|
|
6. Other Long-Term Liabilities Reflected on the Company’s Balance Sheet under U.S. GAAP
(4)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
7. Other Long-Term Liabilities
(5)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
1,087
|
|
|
605
|
|
|
195
|
|
|
196
|
|
|
(1)
|
The above includes derivative instruments defined as hedge accounting - see Item 18. Financial Statements - Note 2(Y).
|
(2)
|
All our long-term debt borrowings and Series A Notes bear interest at variable rates, which are indexed to LIBOR (plus a fixed spread). For long-term fixed rate borrowings (mainly Series A Notes) we use variable interest rate swaps, effectively converting our long-term fixed rate borrowings to long-term variable rate borrowings indexed to LIBOR. (See also Item 18. Financial Statements - Notes 15 and 16.) To estimate the scheduled interest payments related to Series A Notes, we applied the future expected interest rates that were used for calculating the fair value of our interest rate swap at the balance sheet date. To estimate the scheduled interest payments related to our other long-term debt obligations we used the LIBOR (plus a fixed spread) interest rates that were effective at the balance sheet date. The majority of our long-term debt obligations are scheduled to be repaid within a period of two - three years.
|
(3)
|
For further description of the Purchase Obligations see above “Long-Term Arrangements and Commitments – Purchase Commitments” and see Item 18. Financial Statements – Notes 20(D) and 20(G).
|
(4)
|
The obligation amount does not include an amount of $382 million of pension and employee termination liabilities. See Item 18. Financial Statements – Notes 2(R) and 17. The obligation amount also does not include an amount of $50 million of tax reserve related to uncertain tax positions. See Item 18. Financial Statements – Note 18.
|
(5)
|
See below “Off-Balance Sheet Transactions.”
|
|
Years Ended December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
|
|
|
|
|
|
|||
GAAP gross profit
|
897.1
|
|
|
825.1
|
|
|
824.8
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
29.9
|
|
|
21.6
|
|
|
22.2
|
|
Impairment of long-lived assets
|
—
|
|
|
—
|
|
|
0.9
|
|
Non-GAAP gross profit
|
927.0
|
|
|
846.7
|
|
|
847.9
|
|
Percent of revenues
|
29.8
|
%
|
|
28.6
|
%
|
|
29.0
|
%
|
|
|
|
|
|
|
|||
GAAP operating income
|
268.6
|
|
|
246.9
|
|
|
239.4
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
48.1
|
|
|
43.1
|
|
|
45.9
|
|
Gain from change in holdings
|
—
|
|
|
(6.0
|
)
|
|
—
|
|
Legal settlement
|
—
|
|
|
—
|
|
|
(7.6
|
)
|
Impairment of long-lived assets
(1)
|
—
|
|
|
—
|
|
|
0.9
|
|
Non-GAAP operating income
|
316.7
|
|
|
284.0
|
|
|
278.6
|
|
Percent of revenues
|
10.2
|
%
|
|
9.6
|
%
|
|
9.5
|
%
|
|
|
|
|
|
|
|||
GAAP net income attributable to Elbit Systems’ shareholders
|
202.5
|
|
|
171.0
|
|
|
183.4
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
48.1
|
|
|
43.1
|
|
|
45.9
|
|
Impairment of long-lived assets
(1)
|
—
|
|
|
—
|
|
|
0.9
|
|
Legal settlement
|
—
|
|
|
—
|
|
|
(7.6
|
)
|
Gain from changes in holdings
(2)
|
—
|
|
|
(6.0
|
)
|
|
(0.9
|
)
|
Adjustment of loss (gain) from discontinued operations, net
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
Related tax benefits
|
(8.2
|
)
|
|
(6.9
|
)
|
|
(10.1
|
)
|
Non-GAAP net income attributable to Elbit Systems’ shareholders
|
242.4
|
|
|
201.2
|
|
|
210.8
|
|
Percent of revenues
|
7.8
|
%
|
|
6.8
|
%
|
|
7.2
|
%
|
|
|
|
|
|
|
|||
GAAP diluted net EPS
|
4.74
|
|
|
4.01
|
|
|
4.34
|
|
Adjustments, net
|
0.93
|
|
|
0.70
|
|
|
0.65
|
|
Non-GAAP diluted net EPS
|
5.67
|
|
|
4.71
|
|
|
4.99
|
|
(1)
|
Impairment of investments in 2013 was due to impairment in intangible assets.
|
(2)
|
Adjustment of gain from changes in holdings includes a sale of activities of $0.9 million in 2013 and gain of $6.0 million in 2014 relating to an increase in shareholdings in an Israeli subsidiary.
|
Name
|
|
Age
|
|
Director
Since
|
|
Michael Federmann (Chair)
|
|
72
|
|
2000
|
|
Rina Baum
|
|
70
|
|
2001
|
|
Yoram Ben-Zeev
|
|
71
|
|
2014
|
|
David Federmann (Vice Chair)
|
|
41
|
|
2007
|
|
Yehoshua Gleitman (External Director)
|
|
66
|
|
2010
|
|
Yigal Ne'eman
|
|
74
|
|
2004
|
|
Dov Ninveh
|
|
68
|
|
2000*
|
|
Dalia Rabin (External Director)
|
|
65
|
|
2010
|
|
Professor Yuli Tamir
|
|
62
|
|
2015
|
|
Name
|
|
Age
|
|
Position
|
Bezhalel Machlis
|
|
53
|
|
President and Chief Executive Officer
|
Elad Aharonson
|
|
42
|
|
Executive Vice President and General Manager – ISTAR Division
|
Jonathan Ariel
|
|
59
|
|
Executive Vice President and Chief Legal Officer
|
David Block Temin
|
|
60
|
|
Executive Vice President, Chief Compliance Officer and Senior Counsel
|
Adi Dar
|
|
44
|
|
Executive Vice President and General Manager – CYBERBIT
|
Itzhak Dvir
|
|
68
|
|
Executive Vice President - Special Matters
|
Jacob Gadot
|
|
68
|
|
Executive Vice President – Corporate Projects
|
Joseph Gaspar
|
|
67
|
|
Executive Vice President and Chief Financial Officer
|
Zeev Gofer
|
|
63
|
|
Executive Vice President – Strategic and Business Development - North America
|
Shelly Gordon
|
|
55
|
|
Executive Vice President – Human Resources
|
Ran Kril
|
|
45
|
|
Executive Vice President - International Marketing and Business Development
|
Edgar Maimon
|
|
60
|
|
Executive Vice President and General Manager – EW and SIGINT Elisra Division
|
Avi Mizrachi
|
|
58
|
|
Executive Vice President - Business Development - Southeast Asia
|
Ilan Pacholder
|
|
61
|
|
Executive Vice President – Mergers and Acquisitions and Financing
|
Yuval Ramon
|
|
50
|
|
Executive Vice President and Chief Operating Officer
|
Gideon Sheffer
|
|
67
|
|
Executive Vice President – Strategic Planning and Business Development – Israel
|
Yoram Shmuely
|
|
55
|
|
Executive Vice President and General Manager – Aerospace Division
|
Udi Vered
|
|
58
|
|
Executive Vice President and General Manager – Land and C4I Division
|
Yehoshua Yehuda
|
|
48
|
|
Executive Vice President - Chief Technology Officer
|
|
Salaries, Directors’ Fees Commissions and Bonuses
|
|
Pension, Retirement and Similar Benefits
|
||||
|
(U.S. dollars in thousands
)
|
||||||
All directors (consisting of 10 persons)
|
$
|
401
|
|
(1)
|
$
|
—
|
|
All executive officers (consisting of 20 persons)
|
$
|
23,130
|
|
(2)(3)
|
$
|
1,441
|
|
|
(1)
|
Directors Fees
|
(2)
|
Stock Option Plan
|
(3)
|
Phantom Bonus Retention Plan
|
(i)
|
In 2012, our Board approved a “Phantom” Bonus Retention Plan for Senior Officers (the Phantom Plan). The purpose of the Phantom Plan is to provide an incentive to retain applicable senior officers of Elbit Systems and certain of our subsidiaries by strengthening the alignment of the Phantom Plan recipients’ financial interests with those of the Company and our shareholders. Under the Phantom Plan, phantom bonus units were granted to executive officers, as approved by the Company's authorized bodies, within the framework of three consecutive yearly tranches, each such tranche comprised of an equal number of units which entitle the recipient the right to receive the financial benefit (Unit Benefits) deriving from increases in the value of the Company’s shares during the applicable periods, subject to certain restrictions. Unit Benefits are calculated separately for each tranche. The Unit Benefits accrual period for each tranche is three years from the respective grant date of the applicable bonus units.
|
(iv)
|
Except as otherwise provided in the Phantom Plan, entitlement to receipt of benefits is conditioned on the recipient remaining an employee of the Company. The benefits received under the Phantom Plan are subject to tax at the regular personal income tax rates.
|
(v)
|
We recorded amounts of approximately
$7.0 million
and $14.7 million in 2014 and 2015, respectively, as compensation costs related to the tranches of phantom bonus units granted to our executive officers under the Phantom Plan. See Item 18. Financial Statements – Note 21(G).
|
(1)
|
Bezhalel Machlis - President and CEO
. Compensation costs recorded for Mr. Machlis in 2015 included: $763 in Salary Costs, $560 in Bonus Costs, $1,761 in Phantom Bonus Costs and $4 in Stock Option Costs.
|
(2)
|
Joseph Gaspar - Executive Vice President and Chief Financial Officer
. Compensation costs recorded for Mr. Gaspar in 2015 included: $600 in Salary Costs, $133 in Bonus Costs, $1,185 in Phantom Bonus Costs and $7 in Stock Option Costs.
|
(3)
|
Yoram Shmuely - Executive Vice President and General Manager - Aerospace Division
. Compensation costs recorded for Mr. Shmuely in 2015 included: $556 in Salary Costs, $120 in Bonus Costs, $1,185 in Phantom Bonus Costs and $11 in Stock Option Costs.
|
(4)
|
Itzhak Dvir - Executive Vice President and Chief Operating Officer
. Compensation costs recorded for Mr. Dvir in 2015 included: $523 in Salary Costs, $106 in Bonus Costs and $1,185 in Phantom Bonus Costs.
|
(5)
|
Gideon Sheffer - Executive Vice President - Strategic Planning and Business Development - Israel.
Compensation costs recorded for Mr. Sheffer in 2015 included: $467 in Salary Costs, $126 in Bonus Costs and $1,185 in Phantom Bonus Costs.
|
(A)
|
if that person is not a relative of the controlling shareholder of that company, or if that person (and each of that person’s relatives, partners and employers), or any person to whom he or she is subordinated (directly or indirectly), or any entity controlled by that person, did not have, at any time during the two years preceding that person’s appointment as an External Director, any affiliation (as defined in the Companies Law) with any of:
|
(B)
|
if and so long as:
|
(C)
|
if and so long as:
|
(D)
|
if that person serves also as a member of the board of directors of another company, none of the external directors of that other company serves at the same time as a member of the board of directors of the respective company; and
|
(E)
|
that person is not an employee of the [Israeli] Securities Authorities or an employee of a stock exchange in Israel.
|
(1)
|
the audit committee and the board both determine that based upon the expertise and the unique contribution of the External Director to the work of the board and its committees, his or her re-election for an additional term is for the benefit of the company;
|
(2)
|
his or her re-election is recommended by the board or by one or more shareholders holding at least 1% of all voting rights of the relevant company, or if such External Director offered to continue to serve as such for an additional term;
|
(3)
|
his or her re-election is approved at a general shareholders meeting by the special majority required for nomination of External Directors under the Companies Law; and
|
(4)
|
his or her terms of service as an External Director and the considerations of the audit committee and the board regarding his or her re-election were presented to the general meeting of shareholders prior to the vote on such approval.
|
(1)
|
to recommend to the board of directors the compensation policy for the company's Office Holders to be adopted by the company and to recommend to the board of directors, once every three years, regarding any extension or modifications of the current compensation policy that had been approved for a period of more than three years;
|
(2)
|
from time to time to recommend to the board of directors any updates required to the compensation policy and examine the implementation thereof;
|
(3)
|
to determine, with respect to the company's Office Holders, whether to approve their Employment Terms; and
|
(4)
|
in certain situations described in the Companies Law, to determine whether to exempt the approval of Employment Terms of a candidate for the position of CEO of the company from the requirement to obtain shareholder approval.
|
Audit Committee:
|
|
Financial Statements
Review Committee:
|
|
Corporate Governance and Nominating Committee:
|
|
Compensation Committee:
|
|
|
|
|
|
|
|
Yehoshua Gleitman
|
|
Yehoshua Gleitman
|
|
Yoram Ben Zeev
|
|
Dalia Rabin
|
(Chair)
|
|
(Chair)
|
|
(Chair)
|
|
(Chair)
|
Yoram Ben-Zeev
|
|
Yoram Ben-Zeev
|
|
Yehoshua Gleitman
|
|
Yoram Ben Zeev
|
Yigal Ne’eman
|
|
Yigal Ne’eman
|
|
Yigal Ne’eman
|
|
Yehoshua Gleitman
|
Dalia Rabin
|
|
Dalia Rabin
|
|
Dalia Rabin
|
|
|
Yuli Tamir
|
|
Yuli Tamir
|
|
|
|
|
|
Total
Employee
s
|
|
U.S.
Employees
|
||
|
|
|
|
||
2015
|
12,134
|
|
|
1,426
|
|
2014
|
11,851
|
|
|
1,505
|
|
2013
|
11,674
|
|
|
1,620
|
|
•
|
beneficial ownership of more than 5% of our outstanding ordinary shares; and
|
•
|
the number of ordinary shares beneficially owned by all of our executive officers and directors as a group.
|
Name of Beneficial Owner
|
|
Amount Owned
|
|
Percent of Ordinary Shares
|
||
|
|
|
|
|
||
Federmann Enterprises Ltd.
99 Hayarkon Street
Tel-Aviv, Israel
(2)
|
|
19,580,342
|
|
|
45.82
|
%
|
Heris Aktiengesellschaft
c/o 99 Hayarkon Street Tel-Aviv, Israel |
|
3,836,458
|
|
(3)
|
8.98
|
%
|
All executive officers and directors as a group (28 persons)
|
|
25,131
|
|
(4)
|
0.05
|
%
|
|
(1)
|
The total number of ordinary shares excludes 1,408,921 ordinary shares held by us as treasury shares.
|
(2)
|
Federmann Enterprises Ltd. (FEL) owns our ordinary shares directly and indirectly through Heris Aktiengesellschaft (Heris) which is controlled by FEL. FEL is controlled by Beit Federmann Ltd. (BFL). BFL is controlled by Beit Bella Ltd. (BBL) and Beit Yekutiel Ltd. (BYL). Michael Federmann is the controlling shareholder of BBL and BYL. He is also the chair of Elbit Systems’ Board and the chair of the board and the chief executive officer of FEL. Therefore, Mr. Federmann controls, directly and indirectly, the vote of ordinary shares owned by Heris and FEL.
|
(3)
|
The amount of ordinary shares owned by Heris is included in the amount of shares held by FEL as set forth above.
|
(4)
|
This amount does not include any ordinary shares that may be deemed to be beneficially owned by Michael Federmann as described in footnote (2) above.
|
|
March 15, 2016
|
February 28, 2015
|
February 28, 2014
|
February 28, 2013
|
|
|
|||||
|
Shares Owned
|
% of Shares Owned
|
Shares Owned
|
% of Shares Owned
|
Shares Owned
|
% of Shares Owned
|
Shares Owned
|
|
% of Shares Owned
|
|
|
FEL
|
19,580,342
|
45.82%
|
19,580,342
|
45.87%
|
19,580,342
|
45.94%
|
19,580,342*
|
|
46.72%
|
|
|
|
(*)
|
Reflects incidental purchases by FEL of shares in open market transactions during March 2012 – February 2013.
|
2013
|
$
|
1.20 per share
|
2014
|
$
|
1.26 per share
|
2015
|
$
|
1.44 per share
|
|
Nasdaq
|
|
TASE
(*
)
|
||||||||||||
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
2011
|
$
|
56.75
|
|
|
$
|
35.35
|
|
|
$
|
55.36
|
|
|
$
|
34.29
|
|
2012
|
$
|
42.09
|
|
|
$
|
29.59
|
|
|
$
|
39.87
|
|
|
$
|
29.02
|
|
2013
|
$
|
61.08
|
|
|
$
|
37.08
|
|
|
$
|
61.20
|
|
|
$
|
37.06
|
|
2014
|
$
|
64.66
|
|
|
$
|
54.36
|
|
|
$
|
64.26
|
|
|
$
|
53.19
|
|
2015
|
$
|
89.87
|
|
|
$
|
58.63
|
|
|
$
|
90.22
|
|
|
$
|
59.04
|
|
|
Nasdaq
|
|
TASE
(*
)
|
||||||||||||
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||
2014
|
|
|
|
|
|
|
|
||||||||
First Quarter
|
$
|
61.69
|
|
|
$
|
54.36
|
|
|
$
|
60.59
|
|
|
$
|
53.19
|
|
Second Quarter
|
$
|
64.65
|
|
|
$
|
58.00
|
|
|
$
|
64.26
|
|
|
$
|
57.71
|
|
Third Quarter
|
$
|
64.66
|
|
|
$
|
57.70
|
|
|
$
|
63.60
|
|
|
$
|
57.49
|
|
Fourth Quarter
|
$
|
63.66
|
|
|
$
|
56.14
|
|
|
$
|
64.09
|
|
|
$
|
56.26
|
|
2015
|
|
|
|
|
|
|
|
||||||||
First Quarter
|
$
|
71.91
|
|
|
$
|
58.63
|
|
|
$
|
71.55
|
|
|
$
|
59.04
|
|
Second Quarter
|
$
|
81.90
|
|
|
$
|
71.69
|
|
|
$
|
81.38
|
|
|
$
|
72.08
|
|
Third Quarter
|
$
|
84.68
|
|
|
$
|
71.87
|
|
|
$
|
84.96
|
|
|
$
|
72.39
|
|
Fourth Quarter
|
$
|
89.87
|
|
|
$
|
73.83
|
|
|
$
|
90.22
|
|
|
$
|
74.44
|
|
2016
|
|
|
|
|
|
|
|
||||||||
First Quarter (through March 15, 2016)
|
$
|
87.21
|
|
|
$
|
80.24
|
|
|
$
|
89.85
|
|
|
$
|
80.24
|
|
|
Nasdaq
|
|
TASE
(*
)
|
||||||||||||
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||
|
|
|
|
|
|
|
|
||||||||
September 2015
|
$
|
79.38
|
|
|
$
|
71.87
|
|
|
$
|
79.36
|
|
|
$
|
72.39
|
|
October 2015
|
$
|
81.65
|
|
|
$
|
73.83
|
|
|
$
|
81.18
|
|
|
$
|
74.44
|
|
November 2015
|
$
|
89.87
|
|
|
$
|
79.17
|
|
|
$
|
90.22
|
|
|
$
|
79.00
|
|
December 2015
|
$
|
89.07
|
|
|
$
|
82.85
|
|
|
$
|
89.31
|
|
|
$
|
83.16
|
|
January 2016
|
$
|
87.21
|
|
|
$
|
81.67
|
|
|
$
|
89.85
|
|
|
$
|
81.31
|
|
February 2016
|
$
|
85.39
|
|
|
$
|
80.24
|
|
|
$
|
85.20
|
|
|
$
|
80.24
|
|
|
(1)
|
of the board of directors - a transaction with an Office Holder, other than arrangements in connection with Employment Terms, or a transaction in which an Office Holder has a Personal Interest, where the audit committee has determined that such transaction is not an extraordinary transaction, unless the company's articles of association provide otherwise;
|
(2)
|
of both the audit committee and the board of directors -
|
(i)
|
a transaction with an Office Holder, other than arrangements in connection with Employment Terms, or a transaction in which an Office Holder has a Personal Interest, where the audit committee has determined such transaction to be an extraordinary transaction;
|
(ii)
|
for material actions or arrangements that may otherwise be considered a breach of fiduciary duty of an Office Holder; or
|
(iii)
|
for extraordinary transactions of a public company with its controlling shareholder or with another person in which the controlling shareholder has a Personal Interest, including a private offering in which the controlling shareholder has a Personal Interest, as well as an agreement of a public company with its controlling shareholder or his or her relatives, directly or indirectly, including through a company controlled by him or her, regarding the grant of services to the applicable company or regarding the terms of service and/or employment of the controlling shareholder or his or her relatives, as the case may be; or
|
(3)
|
of both the compensation committee and the board of directors, with respect to arrangements regarding Employment Terms of an Office Holder or of a controlling shareholder or his or her relatives as Office Holders or employees of the company.
|
(1)
|
such majority includes a majority of the total votes of shareholders who are not controlling shareholders, who have no Personal Interest in the approval of the transaction and who participate in the voting, in person, by proxy or by written ballot, at the meeting (abstentions not taken into account); or
|
(2)
|
the total number of votes of shareholders mentioned above (i.e., shareholders who are not controlling shareholders and do not have a Personal Interest in the approval of the relevant arrangement and who participate in the voting) that are voted against the transaction does not represent more than 2% of the total voting rights in the company.
|
(1)
|
both the compensation committee and the board of directors re-discussed the relevant Employment Terms and decided to approve them despite the shareholders' objection, based on detailed reasons; and
|
(2)
|
the company is not a "Public Pyramid Held Company". For this purpose, a "Public Pyramid Held Company" is a public company that is controlled by another public company (including by a company that only issued debentures to the public), which is also controlled by another public company (including a company that only issued debentures to the public) that has a controlling shareholder.
|
(1)
|
a breach of fiduciary duty, except indemnification or insurance that provides coverage for a breach of a fiduciary duty to the company while acting in good faith and having reasonable cause to assume that such act would not prejudice the interests of the company;
|
(2)
|
a willful breach of the duty of care or reckless disregard for the circumstances or to the consequences of a breach of the duty of care other than mere negligence;
|
(3)
|
an act done with the intent to unlawfully realize a personal gain;
|
(4)
|
a fine or monetary penalty imposed upon such Office Holder; or
|
(5)
|
certain monetary liabilities that are set forth in the Securities Law.
|
(1)
|
a breach of his or her duty of care to Elbit Systems or to another person;
|
(2)
|
a breach of his or her fiduciary duty to Elbit Systems, provided that the director or officer acted in good faith and had reasonable cause to assume that his or her act would not harm the interests of Elbit Systems;
|
(3)
|
a financial obligation imposed on him or her in favor of another person;
|
(4)
|
a payment that he or she is obligated to pay to an injured party as set forth in the relevant sections of the Securities Law;
|
(5)
|
expenses incurred by him or her in connection with certain administrative proceedings specified in the Securities Law, including reasonable litigation expenses (including attorneys' fees); or
|
(6)
|
any other event for which insurance of a director or officer is or may be permitted.
|
(1)
|
a monetary liability imposed on the director or officer or paid by him or her in favor of a third party under a judgment, including a judgment by way of compromise or a judgment of an arbitrator approved by a court; provided however, that in case such undertaking is granted in advance it will be limited to events which, in the Board’s opinion, are foreseeable in light of the Elbit Systems’ actual activities at the time of granting the obligation to indemnify, and to a sum or under criteria as the Board deems reasonable under the circumstances, and the undertaking to indemnify will specify the aforementioned events and sum or criteria;
|
(2)
|
a payment imposed on him or her in favor of an injured party in the circumstances specified in the Securities Law;
|
(3)
|
reasonable litigation expenses (including attorneys' fees), incurred by a director or officer as a result of an investigation or proceeding conducted against him or her by an authority authorized to conduct such investigation or procedure, provided that such investigation or procedure: (i) concludes without the filing of an indictment against the director or officer and without imposition of monetary payment in lieu of criminal proceedings; or (ii) concludes with imposing on the director or officer monetary payment in lieu of criminal proceedings, provided that the alleged criminal offense in question does not require proof of criminal intent or was incurred by the director or officer in connection with a monetary sanction imposed by the Companies Law or the Securities Law;
|
(4)
|
expenses incurred by a director or a officer in connection with certain administrative proceedings set forth in the Securities Law, including reasonable litigation expenses (including attorneys' fees);
|
(5)
|
reasonable litigation expenses (including attorneys' fees), expended by the director or officer or imposed on him or her by the court for:
|
(i)
|
proceedings issued against him or her by or on Elbit Systems’ behalf or by a third party;
|
(ii)
|
criminal proceedings from which the director or officer was acquitted; or
|
(iii)
|
criminal proceedings in which he or she was convicted of an offense that does not require proof of criminal intent; or
|
(6)
|
any other liability or expense for which it is or may be permissible to indemnify a director or an officer.
|
•
|
such majority includes a majority of the total votes of shareholders who are not controlling shareholders and have no Personal Interest in the approval of the transaction and who participate in the voting, in person, by proxy or by written ballot, at the meeting (abstentions not taken into account); or
|
•
|
the total number of votes of shareholders mentioned above (i.e., shareholders who are not controlling shareholders and do not have a Personal Interest in the approval of the relevant arrangement and who participate in the voting) that are voted against the transaction does not represent more than 2% of the total voting rights in the company.
|
(1)
|
a citizen or individual resident of the United States for U.S. federal income tax purposes;
|
(2)
|
a corporation (or an entity taxable as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States or any political subdivision thereof (including the District of Columbia);
|
(3)
|
an estate whose income is subject to U.S. federal income taxation regardless of its source; or
|
(4)
|
a trust if (A) a U.S. court is able to exercise primary supervision over the trust’s administration and (B) one or more U.S. persons have the authority to control all of the trust’s substantial decisions or if it has a valid election in place to be treated as a U.S. person.
|
(1)
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of assets;
|
(2)
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made in accordance with authorizations of our management and directors; and
|
(3)
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
|
Page
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting
|
F-3
|
Consolidated Balance Sheets
|
F-4
|
Consolidated Statements of Income
|
F-6
|
Consolidated Statements of Changes in Equity
|
F-8
|
Consolidated Statements of Cash Flows
|
F-11
|
Notes to Consolidated Financial Statements
|
F-13
|
Schedule II – Valuation and Qualifying Accounts
|
S-1
|
1.1
|
Elbit Systems’ Memorandum of Association
(1)
|
|
|
1.2
|
Elbit Systems’ Restated Articles of Association
(2)
|
|
|
4.1
|
Elbit Systems 2007 Stock Option Plan, as amended
(3)
|
|
|
4.2
|
Item 1 of Elbit Systems Proxy Statement dated February 2, 2016 Regarding Approval of the Terms of Office and Employment of the Company's President and Chief Executive Officer
|
8
|
Significant Operating Subsidiaries of Elbit Systems
|
|
|
12.1
|
Certification of Chief Executive Officer of the Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
12.2
|
Certification of Chief Financial Officer of the Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
13.1
|
Certification of Chief Executive Officer of the Registrant pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
13.2
|
Certification of Chief Financial Officer of the Registrant pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
15.1
|
Consent of Kost Forer Gabbay & Kasierer
|
|
(1)
|
Filed as an exhibit to Elbit Systems’ Annual Report on Form 20-F (File No. 0-28998) for the year ended December 31, 2000, which was filed with the SEC on April 5, 2001, and incorporated herein by reference.
|
(2)
|
Filed as Exhibit 2 to Elbit Systems’ Report on Form 6-K filed by Elbit Systems with the SEC on March 26, 2008, and incorporated herein by reference; as amended by that certain amendment filed as Annex A to Exhibit 1 to Elbit Systems' Report on Form 6-K filed by Elbit Systems with the SEC on October 25, 2011, and incorporated herein by reference.
|
(3)
|
Filed as exhibit 4.3 to Elbit Systems’ post-effective amendment No. 1 to registration statement on Form S-8 (File No. 333-139512), which was filed by Elbit Systems with the SEC on December 1, 2011, and incorporated herein by reference.
|
|
ELBIT SYSTEMS LTD.
|
|
|
|
|
|
By:
|
/s/ BEZHALEL MACHLIS
|
|
Name:
|
Bezhalel Machlis
|
|
Title:
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
Kost Forer Gabbay & Kasierer
3 Aminadav St. Tel-Aviv 6706703, Israel |
|
Tel: +972-3-6232525
Fax: +972-3-5622555 ey.com |
|
|
Kost Forer Gabbay & Kasierer
A member of Ernst & Young Global
|
|
Kost Forer Gabbay & Kasierer
3 Aminadav St. Tel-Aviv 6706703, Israel |
|
Tel: +972-3-6232525
Fax: +972-3-5622555 ey.com |
|
|
Kost Forer Gabbay & Kasierer
A member of Ernst & Young Global
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
|
|
December 31,
|
||||||
|
Note
|
|
2015
|
|
2014
|
||||
|
|
|
|
|
|
||||
CURRENT ASSETS:
|
|
|
|
|
|
||||
Cash and cash equivalents
|
|
|
$
|
299,322
|
|
|
$
|
200,407
|
|
Short-term bank deposits
|
|
|
20,266
|
|
|
79,369
|
|
||
Available-for-sale marketable securities
|
(9)
|
|
12,836
|
|
|
26,150
|
|
||
Trade and unbilled receivables, net
|
(3)
|
|
941,913
|
|
|
928,757
|
|
||
Other receivables and prepaid expenses
|
(4)
|
|
171,359
|
|
|
145,562
|
|
||
Inventories, net of customer advances
|
(5)
|
|
837,111
|
|
|
868,799
|
|
||
Total current assets
|
|
|
2,282,807
|
|
|
2,249,044
|
|
||
|
|
|
|
|
|
||||
LONG-TERM INVESTMENTS AND RECEIVABLES:
|
|
|
|
|
|
|
|||
Investments in affiliated companies, partnerships and other companies
|
(6)
|
|
132,718
|
|
|
125,433
|
|
||
Long-term trade and unbilled receivables
|
(7)
|
|
152,463
|
|
|
212,725
|
|
||
Long-term bank deposits and other receivables
|
(8)
|
|
15,765
|
|
|
18,081
|
|
||
Deferred income taxes, net
|
(18F)
|
|
52,619
|
|
|
60,224
|
|
||
Severance pay fund
|
(2R)
|
|
270,151
|
|
|
276,707
|
|
||
|
|
|
623,716
|
|
|
693,170
|
|
||
|
|
|
|
|
|
||||
PROPERTY, PLANT AND EQUIPMENT, NET
|
(10)
|
|
449,759
|
|
|
441,535
|
|
||
|
|
|
|
|
|
||||
GOODWILL
|
(11)
|
|
622,654
|
|
|
504,611
|
|
||
|
|
|
|
|
|
||||
OTHER INTANGIBLE ASSETS, NET
|
(11)
|
|
147,622
|
|
|
132,921
|
|
||
|
|
|
|
|
|
||||
Total assets
|
|
|
$
|
4,126,558
|
|
|
$
|
4,021,281
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
|
|
December 31,
|
||||||
|
Note
|
|
2015
|
|
2014
|
||||
|
|
|
|
|
|
||||
CURRENT LIABILITIES:
|
|
|
|
|
|
||||
Short-term bank credit and loans
|
(12)
|
|
$
|
—
|
|
|
$
|
557
|
|
Current maturities of long-term loans and Series A Notes
|
|
|
113,359
|
|
|
81,958
|
|
||
Trade payables
|
|
|
347,366
|
|
|
369,659
|
|
||
Other payables and accrued expenses
|
(13)
|
|
739,867
|
|
|
758,760
|
|
||
Customer advances in excess of costs incurred on contracts in progress
|
(14)
|
|
437,202
|
|
|
413,223
|
|
||
Total current liabilities
|
|
|
1,637,794
|
|
|
1,624,157
|
|
||
|
|
|
|
|
|
||||
LONG-TERM LIABILITIES:
|
|
|
|
|
|
|
|||
Long-term loans, net of current maturities
|
(15)
|
|
165,971
|
|
|
220,716
|
|
||
Series A Notes, net of current maturities
|
(16)
|
|
226,758
|
|
|
293,923
|
|
||
Employee benefit liabilities
|
(2R)
|
|
381,641
|
|
|
396,639
|
|
||
Deferred income taxes and tax liabilities, net
|
(18F)
|
|
44,738
|
|
|
68,435
|
|
||
Customer advances in excess of costs incurred on contracts in progress
|
(14)
|
|
167,601
|
|
|
120,299
|
|
||
Other long-term liabilities
|
|
|
99,668
|
|
|
58,217
|
|
||
Total long-term liabilities
|
|
|
1,086,377
|
|
|
1,158,229
|
|
||
|
|
|
|
|
|
||||
COMMITMENTS AND CONTINGENT LIABILITIES
|
(20)
|
|
|
|
|
||||
|
|
|
|
|
|
||||
EQUITY:
|
(21)
|
|
|
|
|
|
|
||
Elbit Systems Ltd. equity:
|
|
|
|
|
|
|
|
||
Share capital:
|
|
|
|
|
|
|
|
||
Ordinary shares of 1 New Israeli Shekels (“NIS”) par value each; Authorized – 80,000,000 shares as of December 31, 2015 and 2014; Issued 44,138,989 and 44,094,416 shares as of December 31, 2015 and 2014, respectively; Outstanding 42,730,068 and 42,685,495 shares as of December 31, 2015 and 2014, respectively
|
|
|
12,341
|
|
|
12,330
|
|
||
Additional paid-in capital
|
|
|
261,421
|
|
|
259,677
|
|
||
Treasury shares – 1,408,921 as of December 31, 2015 and 2014.
|
|
|
(40,428
|
)
|
|
(40,428
|
)
|
||
Accumulated other comprehensive loss
|
|
|
(71,610
|
)
|
|
(96,583
|
)
|
||
Retained earnings
|
|
|
1,232,610
|
|
|
1,091,671
|
|
||
Total Elbit Systems Ltd. equity
|
|
|
1,394,334
|
|
|
1,226,667
|
|
||
Non-controlling interests
|
|
|
8,053
|
|
|
12,228
|
|
||
Total equity
|
|
|
1,402,387
|
|
|
1,238,895
|
|
||
|
|
|
|
|
|
||||
Total liabilities and equity
|
|
|
$
|
4,126,558
|
|
|
$
|
4,021,281
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
CONSOLIDATED STATEMENTS OF INCOME
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
|
|
Year ended December 31,
|
||||||||||
|
Note
|
|
2015
|
|
2014
|
|
2013
|
||||||
Revenues
|
(22)
|
|
$
|
3,107,581
|
|
|
$
|
2,958,248
|
|
|
$
|
2,925,151
|
|
Cost of revenues
|
|
|
2,210,528
|
|
|
2,133,151
|
|
|
2,100,304
|
|
|||
Gross profit
|
|
|
897,053
|
|
|
825,097
|
|
|
824,847
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|||
Research and development, net
|
(23)
|
|
243,416
|
|
|
228,011
|
|
|
220,482
|
|
|||
Marketing and selling, net
|
|
|
239,366
|
|
|
216,537
|
|
|
235,466
|
|
|||
General and administrative, net
|
|
|
145,693
|
|
|
139,634
|
|
|
129,507
|
|
|||
Other operating income, net
|
(1D)
|
|
—
|
|
|
(5,951
|
)
|
|
—
|
|
|||
Total operating expenses
|
|
|
628,475
|
|
|
578,231
|
|
|
585,455
|
|
|||
|
|
|
|
|
|
|
|
||||||
Operating income
|
|
|
268,578
|
|
|
246,866
|
|
|
239,392
|
|
|||
Financial expenses, net
|
(24)
|
|
(20,240
|
)
|
|
(47,498
|
)
|
|
(37,310
|
)
|
|||
Other income, net
|
(25)
|
|
216
|
|
|
120
|
|
|
937
|
|
|||
Income before income taxes
|
|
|
248,554
|
|
|
199,488
|
|
|
203,019
|
|
|||
Income taxes
|
(18D)
|
|
46,235
|
|
|
25,624
|
|
|
25,313
|
|
|||
|
|
|
202,319
|
|
|
173,864
|
|
|
177,706
|
|
|||
|
|
|
|
|
|
|
|
||||||
Equity in net earnings of affiliated companies and partnerships
|
(6B)
|
|
4,542
|
|
|
5,549
|
|
|
13,032
|
|
|||
Income from continuing operations
|
|
|
206,861
|
|
|
179,413
|
|
|
190,738
|
|
|||
Income from discontinued operations, net
|
(1C)
|
|
—
|
|
|
—
|
|
|
681
|
|
|||
Net income
|
|
|
$
|
206,861
|
|
|
$
|
179,413
|
|
|
$
|
191,419
|
|
Less: net income attributable to non-controlling interests
|
|
|
(4,352
|
)
|
|
(8,433
|
)
|
|
(8,002
|
)
|
|||
Net income attributable to Elbit Systems Ltd.’s shareholders
|
|
|
$
|
202,509
|
|
|
$
|
170,980
|
|
|
$
|
183,417
|
|
|
|
|
|
|
|
|
|
||||||
Earnings per share attributable to Elbit Systems Ltd.’s shareholders:
|
(21)
|
|
|
|
|
|
|
|
|
|
|||
Basic net earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
|
|
$
|
4.74
|
|
|
$
|
4.01
|
|
|
$
|
4.34
|
|
Discontinued operations
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
|||
Total basic net earnings per share attributable to Elbit Systems Ltd.’s shareholders
|
|
|
$
|
4.74
|
|
|
$
|
4.01
|
|
|
$
|
4.35
|
|
|
|
|
|
|
|
|
|
||||||
Diluted net earnings per share:
|
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
|
$
|
4.74
|
|
|
$
|
4.01
|
|
|
$
|
4.33
|
|
Discontinued operations
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
|||
Total diluted net earnings per share attributable to Elbit Systems Ltd.’s shareholders
|
|
|
$
|
4.74
|
|
|
$
|
4.01
|
|
|
$
|
4.34
|
|
|
|
|
|
|
|
|
|
||||||
Weighted average number of shares used in computation of basic net earnings per share
|
|
|
42,711
|
|
|
42,654
|
|
|
42,139
|
|
|||
Weighted average number of shares used in computation of diluted net earnings per share
|
|
|
42,733
|
|
|
42,677
|
|
|
42,295
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
Year ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net income
|
$
|
206,861
|
|
|
$
|
179,413
|
|
|
$
|
191,419
|
|
Other comprehensive income (loss), net of tax (benefits) expenses in the amounts of $9,209 , $20,471 and $11,241 for the years 2015, 2014 and 2013 respectively:
|
|
|
|
|
|
||||||
Foreign currency translation differences
|
(13,917
|
)
|
|
(22,155
|
)
|
|
7,190
|
|
|||
Unrealized gains (losses) on derivative instruments, net of tax
|
30,632
|
|
|
(20,582
|
)
|
|
(16,301
|
)
|
|||
Pension and post-retirement benefit plans, net of tax
|
7,892
|
|
|
(29,210
|
)
|
|
16,921
|
|
|||
Unrealized gains (losses) on available-for-sale marketable securities, net of tax
|
(59
|
)
|
|
(200
|
)
|
|
1,059
|
|
|||
|
24,548
|
|
|
(72,147
|
)
|
|
8,869
|
|
|||
Total comprehensive income
|
231,409
|
|
|
107,266
|
|
|
200,288
|
|
|||
Less: comprehensive income attributable to non-controlling interest
|
(3,927
|
)
|
|
(7,650
|
)
|
|
(8,546
|
)
|
|||
Comprehensive income attributable to Elbit Systems Ltd.'s shareholders
|
$
|
227,482
|
|
|
$
|
99,616
|
|
|
$
|
191,742
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
STATEMENTS OF CHANGES IN EQUITY
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
Number of
outstanding
shares
|
|
Share
capital
|
|
Additional
paid–in
capital
|
|
Accumulated
other
comprehensive
income (loss)
|
|
Retained
earnings
|
|
Treasury
shares
|
|
Non–
controlling
interest
|
|
Total
equity
|
|||||||||||||||
Balance as of January 1, 2013
|
41,881,745
|
|
|
$
|
12,105
|
|
|
$
|
237,234
|
|
|
$
|
(33,544
|
)
|
|
$
|
841,748
|
|
|
$
|
(40,428
|
)
|
|
$
|
33,511
|
|
|
$
|
1,050,626
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Exercise of options
|
705,754
|
|
|
197
|
|
|
18,167
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,364
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
440
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
440
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Dividends paid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50,649
|
)
|
|
—
|
|
|
(24,900
|
)
|
|
(75,549
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Other comprehensive income, net of tax expense of $11,241
|
—
|
|
|
—
|
|
|
—
|
|
|
8,325
|
|
|
—
|
|
|
—
|
|
|
544
|
|
|
8,869
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income attributable to non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,002
|
|
|
8,002
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income attributable to Elbit Systems Ltd.'s shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
183,417
|
|
|
—
|
|
|
—
|
|
|
183,417
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance as of December 31, 2013
|
42,587,499
|
|
|
$
|
12,302
|
|
|
$
|
255,841
|
|
|
$
|
(25,219
|
)
|
|
$
|
974,516
|
|
|
$
|
(40,428
|
)
|
|
$
|
17,157
|
|
|
$
|
1,194,169
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
STATEMENTS OF CHANGES IN EQUITY
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
Number of
outstanding
shares
|
|
Share
capital
|
|
Additional
paid–in
capital
|
|
Accumulated
other
comprehensive
income (loss)
|
|
Retained
earnings
|
|
Treasury
shares
|
|
Non–
controlling
interest
|
|
Total
equity
|
|||||||||||||||
Balance as of January 1, 2014
|
42,587,499
|
|
|
$
|
12,302
|
|
|
$
|
255,841
|
|
|
$
|
(25,219
|
)
|
|
$
|
974,516
|
|
|
$
|
(40,428
|
)
|
|
$
|
17,157
|
|
|
$
|
1,194,169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Exercise of options
|
97,996
|
|
|
28
|
|
|
3,514
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,542
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
322
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
322
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Purchase of subsidiaries shares from non-controlling interest, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,873
|
|
|
1,873
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Dividends paid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(53,825
|
)
|
|
—
|
|
|
(14,452
|
)
|
|
(68,277
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Other comprehensive income, net of tax benefit of $20,471
|
—
|
|
|
—
|
|
|
—
|
|
|
(71,364
|
)
|
|
—
|
|
|
—
|
|
|
(783
|
)
|
|
(72,147
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income attributable to non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,433
|
|
|
8,433
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income attributable to Elbit Systems Ltd.'s shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
170,980
|
|
|
—
|
|
|
—
|
|
|
170,980
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance as of December 31, 2014
|
42,685,495
|
|
|
$
|
12,330
|
|
|
$
|
259,677
|
|
|
$
|
(96,583
|
)
|
|
$
|
1,091,671
|
|
|
$
|
(40,428
|
)
|
|
$
|
12,228
|
|
|
$
|
1,238,895
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
STATEMENTS OF CHANGES IN EQUITY
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
Number of
outstanding
shares
|
|
Share
capital
|
|
Additional
paid–in
capital
|
|
Accumulated
other
comprehensive
income (loss)
|
|
Retained
earnings
|
|
Treasury
shares
|
|
Non–
controlling
interest
|
|
Total
equity
|
|||||||||||||||
Balance as of January 1, 2015
|
42,685,495
|
|
|
$
|
12,330
|
|
|
$
|
259,677
|
|
|
$
|
(96,583
|
)
|
|
$
|
1,091,671
|
|
|
$
|
(40,428
|
)
|
|
$
|
12,228
|
|
|
$
|
1,238,895
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Exercise of options
|
44,573
|
|
|
11
|
|
|
1,605
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,616
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
139
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
139
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Dividends paid
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(61,570
|
)
|
|
—
|
|
|
(8,222
|
)
|
|
(69,792
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Purchase of subsidiaries shares, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
120
|
|
|
120
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Other comprehensive income, net of tax expenses of $9,209
|
—
|
|
|
—
|
|
|
—
|
|
|
24,973
|
|
|
—
|
|
|
—
|
|
|
(425
|
)
|
|
24,548
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income attributable to non- controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,352
|
|
|
4,352
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income attributable to Elbit Systems Ltd.'s shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
202,509
|
|
|
—
|
|
|
—
|
|
|
202,509
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance as of December 31, 2015
|
42,730,068
|
|
|
$
|
12,341
|
|
|
$
|
261,421
|
|
|
$
|
(71,610
|
)
|
|
$
|
1,232,610
|
|
|
$
|
(40,428
|
)
|
|
$
|
8,053
|
|
|
$
|
1,402,387
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
U.S. dollars (In thousands, except per share data )
|
|
Year ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
Net income
|
$
|
206,861
|
|
|
$
|
179,413
|
|
|
$
|
191,419
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
122,354
|
|
|
122,408
|
|
|
129,348
|
|
|||
Write-off impairment and discontinued operations, net
|
—
|
|
|
—
|
|
|
254
|
|
|||
Stock-based compensation
|
139
|
|
|
322
|
|
|
440
|
|
|||
Amortization of Series A Notes discount (premium) and related issuance costs, net
|
(92
|
)
|
|
(91
|
)
|
|
(92
|
)
|
|||
Deferred income taxes and reserve, net
|
15,928
|
|
|
(47,456
|
)
|
|
221
|
|
|||
Loss (gain) on sale of property, plant and equipment
|
1,742
|
|
|
(3,266
|
)
|
|
(147
|
)
|
|||
Loss (gain) on sale of investments
|
33
|
|
|
(4,957
|
)
|
|
873
|
|
|||
Equity in net earnings of affiliated companies and partnerships, net of dividend received
(*)
|
19,999
|
|
|
7,449
|
|
|
468
|
|
|||
Changes in operating assets and liabilities, net of amounts acquired:
|
|
|
|
|
|
|
|
|
|||
Decrease (increase) in short and long-term trade receivables, and prepaid expenses
|
31,860
|
|
|
(67,177
|
)
|
|
(108,337
|
)
|
|||
Decrease (increase) in inventories, net
|
39,801
|
|
|
(112,747
|
)
|
|
(4,785
|
)
|
|||
Increase (decrease) in trade payables, other payables and accrued expenses
|
(74,280
|
)
|
|
81,687
|
|
|
55,935
|
|
|||
Severance, pension and termination indemnities, net
|
(799
|
)
|
|
6,282
|
|
|
(3,595
|
)
|
|||
Increase (decrease) in advances received from customers
|
71,282
|
|
|
15,970
|
|
|
(95,027
|
)
|
|||
Net cash provided by operating activities
|
434,828
|
|
|
177,837
|
|
|
166,975
|
|
|||
|
|
|
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|||
Purchase of property, plant and equipment
|
(99,175
|
)
|
|
(71,211
|
)
|
|
(63,019
|
)
|
|||
Acquisitions of subsidiaries and business operations (Schedule A)
|
(141,436
|
)
|
|
787
|
|
|
—
|
|
|||
Investments in affiliated companies and other companies
|
(23,852
|
)
|
|
(4,620
|
)
|
|
(6,222
|
)
|
|||
Proceeds from sale of property, plant and equipment
|
11,563
|
|
|
24,969
|
|
|
3,755
|
|
|||
Proceeds from sale of investments
|
—
|
|
|
110
|
|
|
3,550
|
|
|||
Investment in long-term deposits
|
(396
|
)
|
|
(796
|
)
|
|
(2,076
|
)
|
|||
Proceeds from sale of long-term deposits
|
721
|
|
|
790
|
|
|
795
|
|
|||
Investment in short-term deposits and available-for-sale marketable securities
|
(57,175
|
)
|
|
(89,521
|
)
|
|
(52,975
|
)
|
|||
Proceeds from sale of short-term deposits and available-for-sale marketable securities
|
128,187
|
|
|
59,374
|
|
|
42,899
|
|
|||
Net cash used in investing activities
|
(181,563
|
)
|
|
(80,118
|
)
|
|
(73,293
|
)
|
|||
|
|
|
|
|
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|||
Proceeds from exercise of options
|
1,616
|
|
|
3,542
|
|
|
18,364
|
|
|||
Repayment of long-term loans
|
(226,635
|
)
|
|
(345,839
|
)
|
|
(230,532
|
)
|
|||
Proceeds from long-term loans
|
196,550
|
|
|
376,500
|
|
|
242,247
|
|
|||
Repayment of Series A Notes
|
(55,532
|
)
|
|
(55,532
|
)
|
|
(55,535
|
)
|
|||
Dividends paid
(**)
|
(69,792
|
)
|
|
(68,277
|
)
|
|
(75,549
|
)
|
|||
Change in short-term bank credit and loans, net
|
(557
|
)
|
|
557
|
|
|
(181
|
)
|
|||
Net cash used in financing activities
|
(154,350
|
)
|
|
(89,049
|
)
|
|
(101,186
|
)
|
|||
|
|
|
|
|
|
||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
98,915
|
|
|
8,670
|
|
|
(7,504
|
)
|
|||
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR
|
$
|
200,407
|
|
|
$
|
191,737
|
|
|
$
|
199,241
|
|
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
|
$
|
299,322
|
|
|
$
|
200,407
|
|
|
$
|
191,737
|
|
|
|
|
|
|
|
||||||
(*)
Dividend received from affiliated companies and partnerships
|
$
|
24,541
|
|
|
$
|
12,998
|
|
|
$
|
13,500
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
U.S. dollars (In thousands, except per share data )
|
SUPPLEMENTAL CASH FLOW ACTIVITIES:
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Cash paid during the year for:
|
|
|
|
|
|
||||||
Income taxes, net
|
$
|
37,410
|
|
|
$
|
17,347
|
|
|
$
|
33,223
|
|
|
|
|
|
|
|
||||||
Interest
|
$
|
3,631
|
|
|
$
|
5,078
|
|
|
$
|
6,046
|
|
|
Year ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
|
|
|
|
||||||
Schedule A
:
Acquisitions of subsidiaries and business operations
|
|
|
|
|
|
|
|
||||
Estimated net fair value of assets acquired and liabilities assumed at the date of acquisition was as follows:
|
|
|
|
|
|
|
|
||||
Working capital, net (excluding cash and cash equivalents)
|
$
|
(7,210
|
)
|
|
$
|
(1,143
|
)
|
|
$
|
—
|
|
Property, plant and equipment
|
3,368
|
|
|
213
|
|
|
—
|
|
|||
Other long-term assets
|
(250
|
)
|
|
(9,791
|
)
|
|
—
|
|
|||
Goodwill and other intangible assets
|
183,718
|
|
|
12,422
|
|
|
—
|
|
|||
Deferred income taxes
|
2,606
|
|
|
(1,001
|
)
|
|
—
|
|
|||
Long-term liabilities
|
(40,796
|
)
|
|
—
|
|
|
—
|
|
|||
Non-controlling interest
|
—
|
|
|
(1,487
|
)
|
|
—
|
|
|||
|
$
|
141,436
|
|
|
$
|
(787
|
)
|
|
$
|
—
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
E.
|
ACQUISITIONS AND INVESTMENTS
|
|
Fair value
|
|
Expected useful lives
|
||
Net tangible assets and liabilities assumed (current and non-current)
|
$
|
(10,287
|
)
|
|
|
Technology
|
31,997
|
|
|
7.5 years
|
|
IPR&D
|
714
|
|
|
2.5 years
|
|
Customer relationships
|
9,127
|
|
|
8.5 years
|
|
Backlog
|
11,689
|
|
|
5.5 years
|
|
Goodwill
|
111,142
|
|
|
|
|
|
$
|
154,382
|
|
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
|
Unrealized gains (losses) on derivative instruments
|
|
Unrealized gains (losses) on available-for-sale marketable securities
|
|
Pension and post-retirement benefit plans
|
|
Foreign currency translation differences
|
|
Total
|
||||||||||
Balance as of December 31, 2014
|
|
$
|
(22,112
|
)
|
|
$
|
87
|
|
|
$
|
(54,643
|
)
|
|
$
|
(19,915
|
)
|
|
$
|
(96,583
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
7,309
|
|
|
2
|
|
|
4,063
|
|
|
(13,492
|
)
|
|
(2,118
|
)
|
|||||
Amount reclassified from accumulated other comprehensive income (loss)
|
|
23,323
|
|
|
(61
|
)
|
|
3,829
|
|
|
—
|
|
|
27,091
|
|
|||||
Net current-period other comprehensive loss
|
|
30,632
|
|
|
(59
|
)
|
|
7,892
|
|
|
(13,492
|
)
|
|
24,973
|
|
|||||
Balance as of December 31, 2015
|
|
$
|
8,520
|
|
|
$
|
28
|
|
|
$
|
(46,751
|
)
|
|
$
|
(33,407
|
)
|
|
$
|
(71,610
|
)
|
|
|
Unrealized gains (losses) on derivative instruments
|
|
Unrealized gains (losses) on available-for-sale marketable securities
|
|
Pension and post-retirement benefit plans
|
|
Foreign currency translation differences
|
|
Total
|
||||||||||
Balance as of December 31, 2013
|
|
$
|
(1,530
|
)
|
|
$
|
287
|
|
|
$
|
(25,433
|
)
|
|
$
|
1,457
|
|
|
$
|
(25,219
|
)
|
Other comprehensive income before reclassifications
|
|
(25,079
|
)
|
|
70
|
|
|
(30,439
|
)
|
|
(21,372
|
)
|
|
(76,820
|
)
|
|||||
Amount reclassified from accumulated other comprehensive income (loss)
|
|
4,497
|
|
|
(270
|
)
|
|
1,229
|
|
|
—
|
|
|
5,456
|
|
|||||
Net current-period other comprehensive loss
|
|
(20,582
|
)
|
|
(200
|
)
|
|
(29,210
|
)
|
|
(21,372
|
)
|
|
(71,364
|
)
|
|||||
Balance as of December 31, 2014
|
|
$
|
(22,112
|
)
|
|
$
|
87
|
|
|
$
|
(54,643
|
)
|
|
$
|
(19,915
|
)
|
|
$
|
(96,583
|
)
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
•
|
Raw materials using the average or FIFO cost method.
|
•
|
Work in progress:
|
•
|
Costs incurred on long-term contracts in progress include direct labor, material, subcontractors, other direct costs and an allocation of overheads, which represent recoverable costs incurred for production, allocable operating overhead cost and, where appropriate, research and development costs (See Note 2(V)).
|
•
|
Labor overhead is generally included on the basis of updated hourly rates and is allocated to each project according to the amount of hours expended. Material overhead is generally allocated to each project based on the value of direct material that is charged to the project.
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
(*)
|
Prepayments for operating leases and leasehold improvements are amortized generally over the term of the lease or the useful life of the assets, whichever is shorter.
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
2015
|
|
2014
|
||||
Balance, at January 1
|
$
|
197,463
|
|
|
$
|
179,077
|
|
Warranties issued during the year
|
78,344
|
|
|
88,244
|
|
||
Reduction due to warranties forfeited or claimed during the year
|
(90,531
|
)
|
|
(69,858
|
)
|
||
Additions resulting from acquisitions
|
6,672
|
|
|
—
|
|
||
Balance, at December 31
|
$
|
191,948
|
|
|
$
|
197,463
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
V.
|
RESEARCH AND DEVELOPMENT COSTS
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
Y.
|
DERIVATIVE FINANCIAL INSTRUMENTS
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
2015
(*)
|
|
2014
(*)
|
|
2013
|
|||
Dividend yield
|
—
|
|
|
—
|
|
|
2.56
|
%
|
Expected volatility
|
—
|
|
|
—
|
|
|
34.29
|
%
|
Risk-free interest rate
|
—
|
|
|
—
|
|
|
0.87
|
%
|
Expected life
|
—
|
|
|
—
|
|
|
4 years
|
|
Forfeiture rate
|
—
|
|
|
—
|
|
|
0.56
|
%
|
Suboptimal factor
|
—
|
|
|
—
|
|
|
1.75
|
|
|
|
|
|
|
|
|||
(*) During 2015 and 2014 there were no grants.
|
|
|
|
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
Fair value measurement at
|
||||||||||
|
December 31, 2015 using
|
||||||||||
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||
Description of Assets
|
|
|
|
|
|
||||||
Available-for-sale marketable securities:
|
|
|
|
|
|
||||||
Government bonds
|
$
|
880
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate bonds
|
—
|
|
|
11,956
|
|
|
—
|
|
|||
Foreign currency derivatives and option contracts
|
—
|
|
|
16,679
|
|
|
—
|
|
|||
Cross-currency interest rate swap
|
—
|
|
|
10,858
|
|
|
—
|
|
|||
Liabilities
|
|
|
|
|
|
|
|
|
|||
Foreign currency derivative and option contracts
|
—
|
|
|
(8,289
|
)
|
|
—
|
|
|||
Cross-currency interest rate swap
|
—
|
|
|
(2,266
|
)
|
|
—
|
|
|||
Total
|
$
|
880
|
|
|
$
|
28,938
|
|
|
$
|
—
|
|
|
Fair value measurement at
|
||||||||||
|
December 31, 2014 using
|
||||||||||
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||
Description of Assets
|
|
|
|
|
|
||||||
Available-for-sale marketable securities:
|
|
|
|
|
|
||||||
Government bonds
|
$
|
1,465
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate bonds
|
—
|
|
|
24,685
|
|
|
—
|
|
|||
Foreign currency derivatives and option contracts
|
—
|
|
|
13,558
|
|
|
—
|
|
|||
Cross-currency interest rate swap
|
—
|
|
|
12,730
|
|
|
—
|
|
|||
Liabilities
|
|
|
|
|
|
|
|
|
|||
Foreign currency derivative and option contracts
|
—
|
|
|
(40,313
|
)
|
|
—
|
|
|||
Cross-currency interest rate swap
|
—
|
|
|
(4,529
|
)
|
|
—
|
|
|||
Total
|
$
|
1,465
|
|
|
$
|
6,131
|
|
|
$
|
—
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Receivables
(1)
|
$
|
562,616
|
|
|
$
|
556,950
|
|
Unbilled receivables
|
386,035
|
|
|
379,252
|
|
||
Less – allowance for doubtful accounts
|
(6,738
|
)
|
|
(7,445
|
)
|
||
|
$
|
941,913
|
|
|
$
|
928,757
|
|
|
|
|
|
||||
(1) Includes receivables due from affiliated companies
|
$
|
76,598
|
|
|
$
|
80,290
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Deferred income taxes, net
|
$
|
36,561
|
|
|
$
|
40,332
|
|
Prepaid expenses
|
41,216
|
|
|
40,826
|
|
||
Government institutions
|
54,562
|
|
|
29,806
|
|
||
Derivative instruments
|
16,679
|
|
|
13,558
|
|
||
Cross-currency interest rate swap
|
3,234
|
|
|
5,746
|
|
||
Other
|
19,107
|
|
|
15,294
|
|
||
|
$
|
171,359
|
|
|
$
|
145,562
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Cost incurred on long-term contracts in progress
|
$
|
901,775
|
|
|
$
|
939,599
|
|
Raw materials
|
124,475
|
|
|
105,908
|
|
||
Advances to suppliers and subcontractors
|
40,207
|
|
|
48,223
|
|
||
|
1,066,457
|
|
|
1,093,730
|
|
||
Less -
|
|
|
|
|
|
||
Cost incurred on contracts in progress deducted from customer advances
|
78,623
|
|
|
80,331
|
|
||
Advances received from customers (*)
|
70,282
|
|
|
72,555
|
|
||
Provision for losses on long-term contracts
|
80,441
|
|
|
72,045
|
|
||
|
$
|
837,111
|
|
|
$
|
868,799
|
|
(*)
|
The Company has transferred legal title of inventories to certain customers as collateral for advances received. Advances are allocated to the relevant inventories on a per-project basis. In cases where advances are in excess of the inventories, the net amount is presented in customer advances (see Note 14).
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Companies accounted for under the equity method
|
$
|
126,059
|
|
|
$
|
119,890
|
|
Companies accounted for on a cost basis
|
6,659
|
|
|
5,543
|
|
||
|
$
|
132,718
|
|
|
$
|
125,433
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Subsidiary F (1)
|
$
|
61,577
|
|
|
$
|
75,765
|
|
Subsidiary G / Subsidiary H (2)
|
1,084
|
|
|
4,072
|
|
||
Subsidiary I (3)
|
18,847
|
|
|
16,434
|
|
||
Subsidiary J (4)
|
14,398
|
|
|
13,297
|
|
||
Subsidiary K (5)
|
20,000
|
|
|
—
|
|
||
Other
|
10,153
|
|
|
10,322
|
|
||
|
$
|
126,059
|
|
|
$
|
119,890
|
|
(1)
|
Subsidiary F is an Israeli partnership, held
50%
by the Company and
50%
by Rafael Advanced Defense Systems Ltd. (“Rafael”). Subsidiary F is engaged in the development and production of various thermal detectors and laser diodes. Subsidiary F is jointly controlled and therefore is not consolidated in the Company’s financial statements. During 2015, the Company received a dividend in the amount of
$20,000
from Subsidiary F.
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
B.
|
INVESTMENT IN COMPANIES ACCOUNTED FOR UNDER THE EQUITY METHOD (Cont.):
|
(2)
|
Subsidiary G and Subsidiary H are U.S. limited liability companies, each held
50%
by ESA and
50%
by a subsidiary of Rockwell Collins Inc. Subsidiary G and Subsidiary H operate in the area of helmet mounted display systems for fixed-wing military aircraft. Subsidiary G and Subsidiary H are jointly controlled and therefore are not consolidated in the Company’s financial statements.
|
(3)
|
Subsidiary I is an Israeli company owned
50.000001%
by the Company and
49.99999%
by Rafael. Subsidiary I focuses mainly on commercial applications of thermal imaging and electro-optic technologies. The Company jointly controls Subsidiary I with Rafael, and therefore Subsidiary I is not consolidated in the Company’s financial statements.
|
(4)
|
Subsidiary J is a Romanian company held
40%
by the Company. Subsidiary J is engaged in the construction of fiber optic-telecommunication networks in Romania.
|
(5)
|
Subsidiary K is a European company held
33%
by the Company. During 2015, the Company, through a wholly-owned Israeli subsidiary, invested in Subsidiary K
$20,000
, which is engaged in the area of composite aero structure parts manufacturing for commercial aircraft.
|
(6)
|
Equity in net earnings of affiliated companies and partnerships is as follows:
|
|
Year ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Subsidiary F
|
$
|
3,948
|
|
|
$
|
2,758
|
|
|
$
|
5,439
|
|
Subsidiary G / Subsidiary H
|
577
|
|
|
2,140
|
|
|
5,664
|
|
|||
Other
|
17
|
|
|
651
|
|
|
1,929
|
|
|||
|
$
|
4,542
|
|
|
$
|
5,549
|
|
|
$
|
13,032
|
|
(7)
|
The summarized aggregate financial information of companies accounted for under the equity method is as follows:
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Current assets
|
$
|
312,585
|
|
|
$
|
261,182
|
|
Non-current assets
|
91,958
|
|
|
112,739
|
|
||
Total assets
|
$
|
404,543
|
|
|
$
|
373,921
|
|
|
|
|
|
||||
Current liabilities
|
$
|
142,662
|
|
|
$
|
128,842
|
|
Non-current liabilities
|
15,049
|
|
|
36,942
|
|
||
Shareholders' equity
|
246,832
|
|
|
208,137
|
|
||
Total liabilities and equity
|
$
|
404,543
|
|
|
$
|
373,921
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
B.
|
INVESTMENT IN COMPANIES ACCOUNTED FOR UNDER THE EQUITY METHOD (Cont.)
|
|
Year ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Revenues
|
$
|
250,499
|
|
|
$
|
260,025
|
|
|
$
|
351,183
|
|
Gross profit
|
$
|
67,747
|
|
|
$
|
72,631
|
|
|
$
|
88,440
|
|
Net income
|
$
|
13,920
|
|
|
$
|
17,452
|
|
|
$
|
27,151
|
|
(8)
|
See Note 20(E) for guarantees.
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Receivables
|
$
|
96
|
|
|
$
|
459
|
|
Unbilled receivables
|
152,367
|
|
|
212,266
|
|
||
|
$
|
152,463
|
|
|
$
|
212,725
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Restricted deposits with banks
(1)
|
$
|
652
|
|
|
$
|
984
|
|
Cross-currency interest rate swap
|
7,624
|
|
|
6,984
|
|
||
Deposits with banks and other long-term receivables
(2)
|
7,489
|
|
|
10,113
|
|
||
|
$
|
15,765
|
|
|
$
|
18,081
|
|
(1)
|
Restricted deposits in respect of an issued bank guarantee
|
(2)
|
Includes long-term balances of a non-qualified deferred compensation plan structured under Section 409A of the U.S. Internal Revenue Code in the amount of
$6,790
and
$7,054
as of
December 31, 2015
and
2014
, respectively (see Note 17)
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
December 31, 2015
|
||||||||||||
|
Amortized cost
|
|
Gross unrealized gains
|
|
Gross unrealized losses
|
|
Fair value
|
||||||
Government debentures - fixed and floating interest rate
|
$
|
887
|
|
|
—
|
|
|
(7
|
)
|
|
$
|
880
|
|
Corporate debentures - fixed and floating interest rate
|
11,921
|
|
|
99
|
|
|
(64
|
)
|
|
11,956
|
|
||
|
$
|
12,808
|
|
|
99
|
|
|
(71
|
)
|
|
$
|
12,836
|
|
|
December 31, 2014
|
||||||||||||
|
Amortized cost
|
|
Gross unrealized gains
|
|
Gross unrealized losses
|
|
Fair value
|
||||||
Government debentures - fixed and floating interest rate
|
$
|
1,443
|
|
|
22
|
|
|
—
|
|
|
$
|
1,465
|
|
Corporate debentures - fixed and floating interest rate
|
24,620
|
|
|
131
|
|
|
(66
|
)
|
|
24,685
|
|
||
|
$
|
26,063
|
|
|
153
|
|
|
(66
|
)
|
|
$
|
26,150
|
|
|
December 31,
2015 |
||
2016
|
$
|
—
|
|
2017
|
2,974
|
|
|
2018
|
1,893
|
|
|
2019
|
5,179
|
|
|
2020 and after
|
2,002
|
|
|
|
$
|
12,048
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Cost
(1)
:
|
|
|
|
||||
Land, buildings and leasehold improvements
(2)
|
$
|
434,763
|
|
|
$
|
400,769
|
|
Instruments, machinery and equipment
(3)
|
734,731
|
|
|
709,601
|
|
||
Office furniture and other
|
81,684
|
|
|
80,554
|
|
||
Motor vehicles and airplanes
|
63,669
|
|
|
77,622
|
|
||
|
1,314,847
|
|
|
1,268,546
|
|
||
Accumulated depreciation
|
(865,088
|
)
|
|
(827,011
|
)
|
||
Depreciated cost
|
$
|
449,759
|
|
|
$
|
441,535
|
|
(1)
|
Net of investment grants received (mainly for instruments, machinery and equipment) in the amounts of
$17,591
as of
December 31, 2015
and
2014
, respectively.
|
(2)
|
Set forth below is additional information regarding the real estate owned or leased by the Company:
|
|
Israel
(a)
|
|
U.S.
(b)
|
|
Other Countries
(c)
|
Owned
|
2,163,000 square feet
|
|
714,000 square feet
|
|
891,000 square feet
|
Leased
|
1,972,000 square feet
|
|
640,000 square feet
|
|
308,000 square feet
|
(a)
|
Includes offices, development and engineering facilities, manufacturing facilities, maintenance facilities, hangar facilities and a landing strip in various locations in Israel used by Elbit Systems’ Israeli subsidiaries.
|
(b)
|
Includes offices, development and engineering facilities, manufacturing facilities and maintenance facilities of ESA primarily in Texas, New Hampshire, Florida, Alabama and Virginia.
|
(c)
|
Includes offices, design and engineering facilities and manufacturing facilities, mainly in Europe, Latin America, Australia and Asia.
|
(3)
|
Includes equipment produced by the Company for its own use in the aggregate amount of
$111,393
and
$108,642
as of
December 31, 2015
and
2014
, respectively.
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
Weighted average
|
|
|
|
|
||||
|
useful lives
|
|
December 31,
|
||||||
|
|
|
2015
|
|
2014
|
||||
Original cost:
|
|
|
|
|
|
||||
Technology
|
12
|
|
$
|
234,805
|
|
|
$
|
198,240
|
|
Customer relations
|
12
|
|
170,692
|
|
|
160,331
|
|
||
Trademarks and other
|
11
|
|
158,666
|
|
|
143,094
|
|
||
|
|
|
564,163
|
|
|
501,665
|
|
||
Accumulated amortization:
|
|
|
|
|
|
|
|||
Technology
|
|
|
150,516
|
|
|
131,384
|
|
||
Customer relations
|
|
|
151,421
|
|
|
137,026
|
|
||
Trademarks and other
|
|
|
114,604
|
|
|
100,334
|
|
||
|
|
|
416,541
|
|
|
368,744
|
|
||
Amortized cost
|
|
|
$
|
147,622
|
|
|
$
|
132,921
|
|
B.
|
AMORTIZATION EXPENSES
|
C.
|
AMORTIZATION EXPENSES FOR FIVE SUCCEEDING YEARS
|
2016
|
|
$
|
37,561
|
|
2017
|
|
27,213
|
|
|
2018
|
|
21,206
|
|
|
2019
|
|
20,117
|
|
|
2020
|
|
13,760
|
|
|
2021
|
and thereafter
|
27,765
|
|
|
|
|
147,622
|
|
|
2015
|
||
Balance, at January 1, 2015
|
$
|
504,611
|
|
Additions
|
120,618
|
|
|
Net translation differences
(1)
|
(2,575
|
)
|
|
Balance, at December 31, 2015
|
$
|
622,654
|
|
(1)
|
Foreign currency translation differences resulting from goodwill allocated to reporting units, whose functional currency has been determined to be other than the U.S. dollar.
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
|
|
December 31,
|
||||||
|
Interest %
|
|
2015
|
|
2014
|
||||
Short-term bank credit
|
1.85%
|
|
$
|
—
|
|
|
$
|
557
|
|
|
|
|
$
|
—
|
|
|
$
|
557
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Payroll and related expenses
|
$
|
160,413
|
|
|
$
|
153,496
|
|
Provision for vacation pay
(1)
|
44,477
|
|
|
48,314
|
|
||
Provision for income tax, net of advances
|
27,842
|
|
|
34,190
|
|
||
Other income tax liabilities
|
31,435
|
|
|
3,100
|
|
||
Value added tax (“VAT”) payable
|
13,651
|
|
|
18,333
|
|
||
Provision for royalties
|
36,105
|
|
|
34,467
|
|
||
Provision for warranty
|
199,449
|
|
|
205,020
|
|
||
Derivative instruments
|
8,289
|
|
|
40,313
|
|
||
Deferred income tax, net
|
545
|
|
|
3,237
|
|
||
Provision for losses on long-term contracts
(2)
|
36,511
|
|
|
50,203
|
|
||
Other
(3)
|
181,150
|
|
|
168,087
|
|
||
|
$
|
739,867
|
|
|
$
|
758,760
|
|
(1)
|
Long-term provision for vacation pay as of December 31, 2015 and 2014 was
$26,166
and
$24,661
, respectively, included in other long-term liabilities
|
(2)
|
Includes a provision of
$4,949
as of
December 31, 2015
and
2014
, related to the cessation of a program with a foreign customer
|
(3)
|
Includes provisions for estimated future costs in respect of (1) penalties and the probable loss from claims (legal or unasserted) in the ordinary course of business (e.g., damages caused by the items sold and claims as to the specific products ordered), and (2) unbilled services of service providers
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Advances received
|
$
|
753,708
|
|
|
$
|
686,408
|
|
Less -
|
|
|
|
|
|||
Advances presented under long-term liabilities
|
167,601
|
|
|
120,299
|
|
||
Advances deducted from inventories
|
70,282
|
|
|
72,555
|
|
||
|
515,825
|
|
|
493,554
|
|
||
Less -
|
|
|
|
|
|||
Costs incurred on contracts in progress (See Note 5)
|
78,623
|
|
|
80,331
|
|
||
|
$
|
437,202
|
|
|
$
|
413,223
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
|
|
|
|
|
December 31,
|
||||||
|
Currency
|
|
Interest %
|
|
Years of maturity
|
2015
|
|
2014
|
||||
Long-term loans (*)
|
USD
|
|
Libor + 1.15%
|
|
2
|
$
|
118,550
|
|
|
$
|
126,000
|
|
|
NIS (**)
|
|
0.8% - 4.62%
|
|
mainly 1-2
|
94,790
|
|
|
117,451
|
|
||
|
Other
|
|
Libor+1.5% - Libor+3.28%
|
|
mainly 1-4
|
709
|
|
|
712
|
|
||
|
|
|
|
|
|
214,049
|
|
|
244,163
|
|
||
Less: current maturities
|
|
|
|
|
|
48,078
|
|
|
23,447
|
|
||
|
|
|
|
|
|
$
|
165,971
|
|
|
$
|
220,716
|
|
2016 - current maturities
|
$
|
48,078
|
|
2017
|
164,793
|
|
|
2018
|
664
|
|
|
2019 and after
|
514
|
|
|
|
$
|
214,049
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Series A Notes
|
$
|
269,037
|
|
|
$
|
323,991
|
|
Less – Current maturities
|
(65,281
|
)
|
|
(58,511
|
)
|
||
Carrying amount adjustments on Series A Notes (*)
|
22,589
|
|
|
27,938
|
|
||
Premium on Series A Notes, net
|
413
|
|
|
505
|
|
||
|
$
|
226,758
|
|
|
$
|
293,923
|
|
(*)
|
As a result of fair value hedge accounting, described below and in Notes 2(Y) and 2(AA). The carrying value of the Series A Notes is adjusted for changes in the interest rates.
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
|
December 31, 2015
|
||
2016
|
current maturities
|
$
|
55,533
|
|
2017
|
|
55,533
|
|
|
2018
|
|
55,533
|
|
|
2019
|
|
55,533
|
|
|
2020
|
|
55,533
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
a)
|
ESA has three defined benefit pension plans (the “Plans”) which cover the employees of ESA’s two largest subsidiaries. Monthly benefits are based on years of benefit service and annual compensation. Annual contributions to the Plans are determined using the unit credit actuarial cost method and are equal to or exceed the minimum required by law. Pension fund assets of the Plans are invested primarily in stocks, bonds and cash through a financial institution, as the investment manager of the Plans’ assets. Pension expense is allocated between cost of sales and general and administrative expenses, depending on the responsibilities of the employee. The measurement date for ESA subsidiaries' benefit obligation is December 31.
|
b)
|
The German Subsidiary, which is wholly-owned by the Company, has mainly one defined benefit pension plan (the “P3-plan”) which covers all employees. The P3-plan provides for yearly cash balance credits equal to a percentage of a participant’s compensation, which accumulate together with the respective interest credits on the employee’s cash balance accounts. In case of an insured event (retirement, death or disability) the benefits can be paid as a lump sum, in installments or as a life-long annuity. The P3-plan is an unfunded plan.
|
c)
|
The Belgian Subsidiary, which is wholly-owned by the Company, has a defined benefit pension plan, which is divided into two categories:
|
1)
|
Normal retirement benefit plan, with eligibility at age
65
. The lump sum is based on employee contributions of
2%
of the final pensionable salary up to a certain breakpoint, plus
6%
exceeding the breakpoint at a maximum of
5%
of pensionable salary, and the employer contributions, with a maximum of
40
years. The vested benefit is equal to the retirement benefit calculated with the pensionable salary and pensionable service observed at the date of leaving service.
|
2)
|
Pre-retirement death benefit to employees.
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Changes in benefit obligation:
|
|
|
|
||||
Benefit obligation at beginning of year
|
$
|
225,668
|
|
|
$
|
172,381
|
|
Service cost
|
8,921
|
|
|
7,762
|
|
||
Interest cost
|
8,372
|
|
|
7,833
|
|
||
Exchange rate differences
|
(2,847
|
)
|
|
(2,276
|
)
|
||
Actuarial losses (gain)
|
(15,612
|
)
|
|
43,901
|
|
||
Benefits paid
|
(5,142
|
)
|
|
(3,933
|
)
|
||
Benefit obligation at end of year
|
$
|
219,360
|
|
|
$
|
225,668
|
|
Changes in the Plans’ assets:
|
|
|
|
|
|||
Fair value of Plans’ assets at beginning of year
|
126,489
|
|
|
115,242
|
|
||
Actual return on Plans’ assets (net of expenses)
|
(2,225
|
)
|
|
4,570
|
|
||
Employer contribution
|
8,333
|
|
|
10,610
|
|
||
Benefits paid
|
(5,142
|
)
|
|
(3,933
|
)
|
||
Fair value of Plans’ assets at end of year
|
$
|
127,455
|
|
|
$
|
126,489
|
|
Accrued benefit cost, end of year:
|
|
|
|
|
|||
Funded status
|
(91,905
|
)
|
|
(99,180
|
)
|
||
Unrecognized net actuarial loss
|
72,411
|
|
|
84,116
|
|
||
Unrecognized prior service cost
|
(271
|
)
|
|
305
|
|
||
|
$
|
(19,765
|
)
|
|
$
|
(14,759
|
)
|
Amount recognized in the statement of financial position:
|
|
|
|
|
|||
Accrued benefit liability, current
|
(725
|
)
|
|
(806
|
)
|
||
Accrued benefit liability, non-current
|
(91,179
|
)
|
|
(98,374
|
)
|
||
Accumulated other comprehensive income, pre-tax
|
72,139
|
|
|
84,421
|
|
||
Net amount recognized
|
$
|
(19,765
|
)
|
|
$
|
(14,759
|
)
|
|
Year ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Components of the Plans’ net periodic pension cost:
|
|
|
|
|
|
||||||
Service cost
|
$
|
8,921
|
|
|
$
|
7,762
|
|
|
$
|
9,368
|
|
Interest cost
|
8,372
|
|
|
7,833
|
|
|
6,830
|
|
|||
Expected return on Plans’ assets
|
(8,970
|
)
|
|
(8,221
|
)
|
|
(7,319
|
)
|
|||
Amortization of prior service cost
|
(62
|
)
|
|
(125
|
)
|
|
—
|
|
|||
Amortization of transition amount
|
46
|
|
|
121
|
|
|
91
|
|
|||
Amortization of net actuarial loss
|
6,295
|
|
|
2,108
|
|
|
4,483
|
|
|||
Total net periodic benefit cost
|
$
|
14,602
|
|
|
$
|
9,478
|
|
|
$
|
13,453
|
|
Additional information
|
|
|
|
|
|
|
|
|
|||
Accumulated benefit obligation
|
$
|
213,675
|
|
|
$
|
215,276
|
|
|
$
|
164,696
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
December 31,
|
||||
|
2015
|
|
2014
|
||
Weighted average assumptions:
|
|
|
|
|
|
Discount rate as of December 31
|
4.3
|
%
|
|
3.9
|
%
|
Expected long-term rate of return on Plans’ assets
|
7.3
|
%
|
|
7.3
|
%
|
Rate of compensation increase
|
2.4
|
%
|
|
2.4
|
%
|
|
2015
|
|
2014
|
||
Asset Category:
|
|
|
|
||
Equity Securities
|
66.0
|
%
|
|
67.0
|
%
|
Debt Securities
|
34.0
|
%
|
|
32.5
|
%
|
Other
|
—
|
%
|
|
0.5
|
%
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
2015
|
|
2014
|
||
Asset Category:
|
|
|
|
||
Equity Securities
|
50.0
|
%
|
|
50.0
|
%
|
Debt Securities
|
40.0
|
%
|
|
40.0
|
%
|
Other
|
10.0
|
%
|
|
10.0
|
%
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
Quoted Prices in Active Markets for Identical Assets
|
|
Significant Observable Inputs
|
|
Significant Unobservable Inputs
|
||||||||
Asset Category
|
Total
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Cash
|
$
|
48
|
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cash Equivalents:
|
|
|
|
|
|
|
|
|
|
||||||
Money Market Funds (a)
|
337
|
|
|
337
|
|
|
—
|
|
|
—
|
|
||||
Fixed Income Securities:
|
|
|
|
|
|
|
|
||||||||
Mutual Funds (b)
|
42,614
|
|
|
42,614
|
|
|
—
|
|
|
—
|
|
||||
Equity Securities:
|
|
|
|
|
|
|
|
|
|||||||
International Companies (c)
|
3,427
|
|
|
3,427
|
|
|
—
|
|
|
—
|
|
||||
Mutual Funds (d)
|
81,029
|
|
|
81,029
|
|
|
—
|
|
|
—
|
|
||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
127,455
|
|
|
$
|
127,455
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
(a)
|
This category includes highly liquid daily traded cash-like vehicles.
|
(b)
|
This category invests in highly liquid mutual funds representing a diverse offering of debt issuance.
|
(c)
|
This category represents common stocks of companies domiciled outside of the U.S.; they can be represented by ordinary shares or ADRs.
|
(d)
|
This category represents highly liquid diverse equity mutual funds of varying asset classes and styles.
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Change in Benefit Obligation:
|
|
|
|
||||
Benefit obligation at beginning of period
|
$
|
1,953
|
|
|
$
|
2,445
|
|
Service cost
|
102
|
|
|
150
|
|
||
Interest cost
|
63
|
|
|
96
|
|
||
Actuarial (gain) loss
|
(237
|
)
|
|
(692
|
)
|
||
Employee contribution
|
27
|
|
|
13
|
|
||
Benefits paid
|
(117
|
)
|
|
(59
|
)
|
||
Benefit obligation at end of period
|
$
|
1,791
|
|
|
$
|
1,953
|
|
Change in Plan Assets:
|
|
|
|
|
|||
Employer contribution
|
$
|
90
|
|
|
$
|
46
|
|
Employee contribution
|
27
|
|
|
13
|
|
||
Benefits paid
|
(117
|
)
|
|
(59
|
)
|
||
Fair value of Plan assets at end of period
|
$
|
—
|
|
|
$
|
—
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
Year ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Accrued benefit cost, end of period:
|
|
|
|
||||
Funded status
|
$
|
(1,791
|
)
|
|
$
|
(1,953
|
)
|
Unrecognized net actuarial (gain) loss
|
(1,522
|
)
|
|
(1,428
|
)
|
||
Accrued benefit cost, end of period
|
$
|
(3,313
|
)
|
|
$
|
(3,381
|
)
|
Amounts recognized in the statement of financial position:
|
|
|
|
|
|
||
Accrued benefit liability, current
|
$
|
(153
|
)
|
|
$
|
(111
|
)
|
Accrued benefit liability, non-current
|
(1,638
|
)
|
|
(1,842
|
)
|
||
Accumulated other comprehensive gain, pretax
|
(1,522
|
)
|
|
(1,428
|
)
|
||
Net amount recognized
|
$
|
(3,313
|
)
|
|
$
|
(3,381
|
)
|
Assumptions as of end of period:
|
|
|
|
||
Discount rate
|
3.50
|
%
|
|
3.32
|
%
|
Health care cost trend rate assumed for next year
|
6.50
|
%
|
|
7.00
|
%
|
Ultimate health care cost trend rate
|
3.84
|
%
|
|
5.00
|
%
|
|
1% increase
|
|
1% decrease
|
||||
Net periodic benefit cost
|
$
|
19
|
|
|
$
|
(16
|
)
|
Benefit obligation
|
$
|
123
|
|
|
$
|
(111
|
)
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
(1)
|
Israeli Corporate Income Tax Rates
|
(2)
|
Tax benefits under Israel’s Law for the Encouragement of Industry (Taxes), 1969:
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
(3)
|
Tax benefits under Israel’s Law for the Encouragement of Capital Investments, 1959:
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
Year ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Income before taxes on income:
|
|
|
|
|
|
||||||
Domestic
|
$
|
189,228
|
|
|
$
|
141,532
|
|
|
$
|
156,328
|
|
Foreign
|
59,326
|
|
|
57,956
|
|
|
46,691
|
|
|||
|
$
|
248,554
|
|
|
$
|
199,488
|
|
|
$
|
203,019
|
|
|
Year ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Current taxes:
|
|
|
|
|
|
||||||
Domestic
|
$
|
34,693
|
|
|
$
|
24,348
|
|
|
$
|
30,775
|
|
Foreign
|
10,246
|
|
|
13,254
|
|
|
16,137
|
|
|||
|
44,939
|
|
|
37,602
|
|
|
46,912
|
|
|||
Adjustment for previous years:
|
|
|
|
|
|
|
|
||||
Domestic
|
(903
|
)
|
|
(5,753
|
)
|
|
(1,823
|
)
|
|||
Foreign
|
(455
|
)
|
|
(1,905
|
)
|
|
(123
|
)
|
|||
|
(1,358
|
)
|
|
(7,658
|
)
|
|
(1,946
|
)
|
|||
Deferred income taxes:
|
|
|
|
|
|
|
|
||||
Domestic
|
1,842
|
|
|
(3,831
|
)
|
|
(14,664
|
)
|
|||
Foreign
|
812
|
|
|
(489
|
)
|
|
(4,989
|
)
|
|||
|
2,654
|
|
|
(4,320
|
)
|
|
(19,653
|
)
|
|||
Total taxes on income from continuing operations
|
$
|
46,235
|
|
|
$
|
25,624
|
|
|
$
|
25,313
|
|
|
|
|
|
|
|
||||||
Total:
|
|
|
|
|
|
||||||
Domestic
|
$
|
35,632
|
|
|
$
|
14,764
|
|
|
$
|
14,288
|
|
Foreign
|
10,603
|
|
|
10,860
|
|
|
11,025
|
|
|||
Total taxes on income from continuing operations
|
$
|
46,235
|
|
|
$
|
25,624
|
|
|
$
|
25,313
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
2015
|
|
2014
|
||||
Balance at the beginning of the year
|
$
|
46,158
|
|
|
$
|
62,852
|
|
Reductions related to interest and currency translation
|
(111
|
)
|
|
(4,432
|
)
|
||
Additions based on tax positions taken during a prior period
|
373
|
|
|
9,792
|
|
||
Reductions related to tax positions taken during a prior period
|
(1,925
|
)
|
|
(358
|
)
|
||
Reductions related to settlement of tax matters
|
(1,128
|
)
|
|
(21,453
|
)
|
||
Additions based on tax positions taken during the current period
|
8,920
|
|
|
1,441
|
|
||
Reductions related to a lapse of applicable statute of limitation
|
(2,473
|
)
|
|
(1,684
|
)
|
||
Balance at the end of the year
|
$
|
49,813
|
|
|
$
|
46,158
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
|
|
Deferred
Tax Asset (Liability)
|
||||||||
|
Total
|
|
Current
|
|
Non-current
|
||||||
As of December 31, 2015
|
|
|
|
|
|
||||||
Deferred tax assets:
|
|
|
|
|
|
||||||
Reserves and allowances
|
$
|
50,716
|
|
|
$
|
14,070
|
|
|
$
|
36,646
|
|
Inventory allowances
|
3,267
|
|
|
3,267
|
|
|
—
|
|
|||
Property, plant and equipment
|
(6,859
|
)
|
|
158
|
|
|
(7,017
|
)
|
|||
Other
|
32,704
|
|
|
16,012
|
|
|
16,692
|
|
|||
Net operating loss carry-forwards
|
15,892
|
|
|
3,950
|
|
|
11,942
|
|
|||
|
95,720
|
|
|
37,457
|
|
|
58,263
|
|
|||
Valuation allowance
|
(6,540
|
)
|
|
(896
|
)
|
|
(5,644
|
)
|
|||
Net deferred tax assets
|
89,180
|
|
|
36,561
|
|
|
52,619
|
|
|||
Deferred tax liabilities:
|
|
|
|
|
|
|
|
|
|||
Intangible assets
|
(5,753
|
)
|
|
—
|
|
|
(5,753
|
)
|
|||
Property, plant and equipment
|
(14,577
|
)
|
|
(6
|
)
|
|
(14,571
|
)
|
|||
Reserves and allowances
|
(6,575
|
)
|
|
(539
|
)
|
|
(6,036
|
)
|
|||
|
(26,905
|
)
|
|
(545
|
)
|
|
(26,360
|
)
|
|||
Net deferred tax assets
|
$
|
62,275
|
|
|
$
|
36,016
|
|
|
$
|
26,259
|
|
|
|
|
|
|
|
||||||
As of December 31, 2014
|
|
|
|
|
|
|
|
|
|||
Deferred tax assets:
|
|
|
|
|
|
|
|
|
|||
Reserves and allowances
|
$
|
52,110
|
|
|
$
|
14,545
|
|
|
$
|
37,565
|
|
Inventory allowances
|
3,805
|
|
|
3,805
|
|
|
—
|
|
|||
Property, plant and equipment
|
(4,326
|
)
|
|
93
|
|
|
(4,419
|
)
|
|||
Other
|
35,764
|
|
|
19,327
|
|
|
16,437
|
|
|||
Net operating loss carry-forwards
|
18,627
|
|
|
3,138
|
|
|
15,489
|
|
|||
|
105,980
|
|
|
40,908
|
|
|
65,072
|
|
|||
Valuation allowance
|
(5,424
|
)
|
|
(576
|
)
|
|
(4,848
|
)
|
|||
Net deferred tax assets
|
100,556
|
|
|
40,332
|
|
|
60,224
|
|
|||
Deferred tax liabilities:
|
|
|
|
|
|
|
|
|
|||
Intangible assets
|
(6,305
|
)
|
|
—
|
|
|
(6,305
|
)
|
|||
Property, plant and equipment
|
(13,183
|
)
|
|
(9
|
)
|
|
(13,174
|
)
|
|||
Reserves and allowances
|
(9,126
|
)
|
|
(3,228
|
)
|
|
(5,898
|
)
|
|||
|
(28,614
|
)
|
|
(3,237
|
)
|
|
(25,377
|
)
|
|||
Net deferred tax assets
|
$
|
71,942
|
|
|
$
|
37,095
|
|
|
$
|
34,847
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Current deferred income tax assets (Note 4)
|
$
|
36,561
|
|
|
$
|
40,332
|
|
Current deferred income tax liabilities (Note 13)
|
$
|
545
|
|
|
$
|
3,237
|
|
Non-current deferred income tax assets
|
$
|
52,619
|
|
|
$
|
60,224
|
|
Non-current deferred income tax liabilities
|
$
|
26,360
|
|
|
$
|
25,377
|
|
G.
|
CARRY-FORWARD TAX LOSSES
|
H.
|
RECONCILIATION
|
|
Year ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Income before taxes as reported in the consolidated statements of income
|
$
|
248,554
|
|
|
$
|
199,488
|
|
|
$
|
203,019
|
|
Statutory tax rate
|
26.5
|
%
|
|
26.5
|
%
|
|
25.0
|
%
|
|||
Theoretical tax expense
|
$
|
65,867
|
|
|
$
|
52,864
|
|
|
$
|
50,755
|
|
Tax benefit arising from reduced rate as an “Approved, Privileged and Preferred Enterprise” and other tax benefits (*)
|
(20,818
|
)
|
|
(21,781
|
)
|
|
(27,151
|
)
|
|||
Tax adjustment in respect of different tax rates for foreign subsidiaries
|
2,433
|
|
|
1,563
|
|
|
1,716
|
|
|||
Changes in carry-forward losses and valuation allowances
|
3,851
|
|
|
1,779
|
|
|
4,986
|
|
|||
Taxes resulting from non-deductible expenses
|
776
|
|
|
2,244
|
|
|
112
|
|
|||
Difference in basis of measurement for financial reporting and tax return purposes
|
(849
|
)
|
|
(310
|
)
|
|
(431
|
)
|
|||
Taxes in respect of prior years
|
(1,358
|
)
|
|
(7,658
|
)
|
|
(1,946
|
)
|
|||
Other differences, net
|
(3,667
|
)
|
|
(3,077
|
)
|
|
(2,728
|
)
|
|||
Actual tax expenses
|
$
|
46,235
|
|
|
$
|
25,624
|
|
|
$
|
25,313
|
|
Effective tax rate
|
18.60
|
%
|
|
12.84
|
%
|
|
12.47
|
%
|
|||
|
|
|
|
|
|
||||||
(*) Net earnings per share – amounts of the benefit resulting from the Approved, Privileged and preferred Enterprises
|
|||||||||||
Basic
|
$
|
0.49
|
|
|
$
|
0.51
|
|
|
$
|
0.64
|
|
Diluted
|
$
|
0.49
|
|
|
$
|
0.51
|
|
|
$
|
0.64
|
|
I.
|
FINAL TAX ASSESSMENTS
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
Asset Derivatives (*)
|
|
Liability Derivatives (**)
|
||||||||||||
|
December 31,
2015 |
|
December 31,
2014 |
|
December 31,
2015 |
|
December 31,
2014 |
||||||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
16,475
|
|
|
12,528
|
|
|
7,802
|
|
|
39,813
|
|
||||
Cross-currency interest rate swaps
|
10,858
|
|
|
12,730
|
|
|
2,266
|
|
|
4,529
|
|
||||
|
$
|
27,333
|
|
|
$
|
25,258
|
|
|
$
|
10,068
|
|
|
$
|
44,342
|
|
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|||||||
Foreign exchange contracts
|
204
|
|
|
1,030
|
|
|
487
|
|
|
500
|
|
||||
|
$
|
204
|
|
|
$
|
1,030
|
|
|
$
|
487
|
|
|
$
|
500
|
|
|
Gain (Loss) Recognized
in Other Comprehensive
Income on Effective-
Portion of Derivative, net
|
|
Gain (loss) on Effective Portion
of Derivative Reclassified
from Accumulated Other
Comprehensive Income (*)
|
|
Ineffective Portion of Gain (loss) of Derivative and Amount Excluded from Effectiveness Testing Recognized in Income (**)
|
||||||||||||||||||
|
December 31,
2015 |
|
December 31,
2014 |
|
December 31,
2015 |
|
December 31,
2014 |
|
December 31,
2015 |
|
December 31,
2014 |
||||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange contracts
|
$
|
8,487
|
|
|
$
|
(28,845
|
)
|
|
$
|
28,177
|
|
|
$
|
(5,081
|
)
|
|
$
|
1,522
|
|
|
$
|
1,039
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Foreign exchange contracts and other derivatives instruments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,186
|
|
|
$
|
(13,314
|
)
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
Forward contracts
|
||||||||||||||
|
Buy
|
|
Sell
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Euro
|
$
|
46,094
|
|
|
$
|
53,154
|
|
|
$
|
132,220
|
|
|
$
|
157,077
|
|
GBP
|
10,820
|
|
|
7,398
|
|
|
35,460
|
|
|
23,614
|
|
||||
NIS
|
5,500
|
|
|
629,912
|
|
|
697,467
|
|
|
—
|
|
||||
Other
|
7,417
|
|
|
19,794
|
|
|
2,245
|
|
|
22,832
|
|
||||
|
$
|
69,831
|
|
|
$
|
710,258
|
|
|
$
|
867,392
|
|
|
$
|
203,523
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
2016
|
$
|
51,969
|
|
2017
|
40,383
|
|
|
2018
|
26,071
|
|
|
2019
|
20,306
|
|
|
2020
|
13,188
|
|
|
2021 and thereafter (*)
|
72,982
|
|
|
|
$
|
224,899
|
|
(*)
|
During 2012, the Company entered into a lease agreement for a new complex with Ogen Yielding Real Estate Ltd. The lease period of the new complex is
15 years
that will begin after the conclusion of the construction during 2016. The expected lease fee will be approximately
$3,000
per annum.
|
(1)
|
As of
December 31, 2015
, guarantees in the amount of approximately
$1,211,400
were issued by banks and other financial institutions on behalf of the Company and certain of its subsidiaries mainly in order to secure certain advances from customers and performance bonds.
|
(2)
|
Elbit Systems has provided, on a basis proportional to its ownership interest, guarantees for two of its investees in respect of credit lines granted to them by banks in the aggregate amount of
$6,274
as of December 31, 2015 (2014 -
$6,780
). The guarantees will exist as long as the credit lines are in effect. Elbit Systems would be liable under the guarantee for any debt for which the investees would be in default under the terms of the credit lines. The fair value of such guarantees, as of December 31, 2015 and 2014, were not material.
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
I.
|
LIEN ON APPROVED ENTERPRISES
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
|
Number
of
options
|
|
Weighted
average
exercise
price
|
|
Number
of
options
|
|
Weighted
average
exercise
price
|
|
Number
of
options
|
|
Weighted
average
exercise
price
|
|||||||||
Outstanding – beginning of the year
|
104,126
|
|
|
$
|
46.81
|
|
|
267,600
|
|
|
$
|
48.09
|
|
|
1,385,492
|
|
|
$
|
36.95
|
|
Granted
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,000
|
|
|
39.60
|
|
|||
Exercised
|
(66,050
|
)
|
|
48.68
|
|
|
(148,974
|
)
|
|
48.27
|
|
|
(1,094,592
|
)
|
|
33.61
|
|
|||
Forfeited
|
(1,500
|
)
|
|
38.12
|
|
|
(14,500
|
)
|
|
55.42
|
|
|
(44,300
|
)
|
|
53.47
|
|
|||
Outstanding – end of the year
|
36,576
|
|
|
$
|
43.77
|
|
|
104,126
|
|
|
$
|
46.81
|
|
|
267,600
|
|
|
$
|
48.09
|
|
Options exercisable at the end of the year
|
23,700
|
|
|
$
|
46.93
|
|
|
61,220
|
|
|
$
|
50.04
|
|
|
190,300
|
|
|
$
|
50.04
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
|
Options outstanding
|
|
Options exercisable
|
||||||||||||
Exercise price
|
|
Number
of
options
|
|
Weighted average
remaining contractual
life (years)
|
|
Weighted average
exercise price per share
|
|
Number
of
options
|
|
Weighted average
exercise price
per share
|
||||||
$32.99 - $50.74
|
|
36,576
|
|
|
1.15
|
|
$
|
43.77
|
|
|
23,700
|
|
|
$
|
46.93
|
|
|
Year ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Cost of revenues
|
$
|
82
|
|
|
$
|
190
|
|
|
$
|
259
|
|
R&D and marketing expenses
|
20
|
|
|
45
|
|
|
62
|
|
|||
General and administration expenses
|
37
|
|
|
87
|
|
|
119
|
|
|||
|
$
|
139
|
|
|
$
|
322
|
|
|
$
|
440
|
|
|
Less than market price
Year ended December 31,
|
||||||||||
|
2015 (*)
|
|
2014 (*)
|
|
2013
|
||||||
Weighted average exercise price per share
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
39.60
|
|
Weighted average fair value per share on grant date
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9.74
|
|
|
|
|
|
|
|
||||||
(*) During 2015 and 2014 there were no grants.
|
|
|
|
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
Year ended December 31, 2015
|
|
Year ended December 31, 2014
|
|
Year ended December 31, 2013
|
|||||||||||||||||||||||||||
|
Net income
to shareholders
of ordinary
shares
|
|
Weighted
average
number
of
shares (*)
|
|
Per
Share
amount
|
|
Net income
to shareholders
of ordinary
shares
|
|
Weighted
average
number of
shares (*)
|
|
Per
Share
amount
|
|
Net income
to shareholders
of ordinary
shares
|
|
Weighted
average
number
of
shares (*)
|
|
Per
Share
amount
|
|||||||||||||||
Basic net earnings
|
$
|
202,509
|
|
|
42,711
|
|
|
$
|
4.74
|
|
|
$
|
170,980
|
|
|
42,654
|
|
|
$
|
4.01
|
|
|
$
|
183,417
|
|
|
42,139
|
|
|
$
|
4.35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Employee stock options
|
—
|
|
|
22
|
|
|
|
|
—
|
|
|
23
|
|
|
|
|
|
—
|
|
|
156
|
|
|
|
|
|||||||
Diluted net earnings
|
$
|
202,509
|
|
|
42,733
|
|
|
$
|
4.74
|
|
|
$
|
170,980
|
|
|
42,677
|
|
|
$
|
4.01
|
|
|
$
|
183,417
|
|
|
42,295
|
|
|
$
|
4.34
|
|
G.
|
2012 PHANTOM BONUS RETENTION PLAN
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
A.
|
REVENUES ARE ATTRIBUTED TO GEOGRAPHIC AREAS BASED ON LOCATION OF THE END CUSTOMERS AS FOLLOWS:
|
|
Year ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Europe
|
$
|
497,559
|
|
|
$
|
460,884
|
|
|
$
|
546,699
|
|
North America
|
838,893
|
|
|
826,815
|
|
|
860,653
|
|
|||
Israel
|
616,611
|
|
|
638,858
|
|
|
705,683
|
|
|||
Latin America
|
325,371
|
|
|
454,502
|
|
|
282,957
|
|
|||
Asia Pacific
|
800,333
|
|
|
528,802
|
|
|
448,133
|
|
|||
Other
|
28,814
|
|
|
48,387
|
|
|
81,026
|
|
|||
|
$
|
3,107,581
|
|
|
$
|
2,958,248
|
|
|
$
|
2,925,151
|
|
|
Year ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Airborne systems
|
$
|
1,225,678
|
|
|
$
|
1,197,942
|
|
|
$
|
1,133,101
|
|
Land systems
|
558,658
|
|
|
274,896
|
|
|
309,287
|
|
|||
C4ISR systems
|
995,200
|
|
|
1,118,487
|
|
|
1,071,370
|
|
|||
Electro-optic systems
|
231,939
|
|
|
265,143
|
|
|
313,904
|
|
|||
Other (*)
|
96,106
|
|
|
101,780
|
|
|
97,489
|
|
|||
|
$
|
3,107,581
|
|
|
$
|
2,958,248
|
|
|
$
|
2,925,151
|
|
|
Year ended December 31,
|
||||
|
2015
|
|
2014
|
|
2013
|
IMOD
|
17%
|
|
18%
|
|
22%
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
|
Year ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Total expenses
|
$
|
277,837
|
|
|
$
|
267,691
|
|
|
$
|
263,314
|
|
Less - grants and participations
|
(34,421
|
)
|
|
(39,680
|
)
|
|
(42,832
|
)
|
|||
|
$
|
243,416
|
|
|
$
|
228,011
|
|
|
$
|
220,482
|
|
|
Year ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Expenses:
|
|
|
|
|
|
||||||
Interest on long-term bank debt
|
$
|
(2,365
|
)
|
|
$
|
(2,828
|
)
|
|
$
|
(4,825
|
)
|
Interest on Series A Notes, net
|
(6,812
|
)
|
|
(7,954
|
)
|
|
(9,715
|
)
|
|||
Interest on short-term bank credit and loans
|
(2,604
|
)
|
|
(2,787
|
)
|
|
(2,444
|
)
|
|||
Gain (loss) from exchange rate differences, net
|
(6,341
|
)
|
|
(12,516
|
)
|
|
(12,307
|
)
|
|||
Other
|
(4,144
|
)
|
|
(24,098
|
)
|
|
(11,145
|
)
|
|||
|
(22,266
|
)
|
|
(50,183
|
)
|
|
(40,436
|
)
|
|||
Income:
|
|
|
|
|
|
|
|
||||
Interest on cash, cash equivalents and bank deposits
|
850
|
|
|
1,404
|
|
|
1,035
|
|
|||
Other
|
1,176
|
|
|
1,281
|
|
|
2,091
|
|
|||
|
2,026
|
|
|
2,685
|
|
|
3,126
|
|
|||
|
$
|
(20,240
|
)
|
|
$
|
(47,498
|
)
|
|
$
|
(37,310
|
)
|
|
Year ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Capital gain
|
$
|
133
|
|
|
$
|
—
|
|
|
$
|
855
|
|
Other
|
83
|
|
|
120
|
|
|
82
|
|
|||
|
$
|
216
|
|
|
$
|
120
|
|
|
$
|
937
|
|
|
ELBIT SYSTEMS LTD. AND SUBSIDIARIES
|
|
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
U.S. dollars (In thousands, except per share data)
|
Transactions:
|
Year ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Income -
|
|
|
|
|
|
||||||
Sales to related parties companies
(*)
|
$
|
150,999
|
|
|
$
|
138,380
|
|
|
$
|
116,805
|
|
Participation in expenses
|
$
|
2,257
|
|
|
$
|
1,911
|
|
|
$
|
2,330
|
|
Cost and expenses -
|
|
|
|
|
|
|
|
||||
Supplies from related parties
(**)
|
$
|
14,890
|
|
|
$
|
15,184
|
|
|
$
|
19,180
|
|
Balances:
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Trade receivables and other receivables (*)
|
$
|
79,988
|
|
|
$
|
84,656
|
|
Trade payables and advances (**)
|
$
|
15,582
|
|
|
$
|
17,906
|
|
(*)
|
The significant sales and balances include sales of helmet mounted cueing systems purchased from the Company by 50%-owned subsidiaries of ESA.
|
(**)
|
Includes mainly electro-optics components and sensors, purchased by the Company from a 50%-owned Israeli partnership, and electro-optics products purchased by the Company from another 50%-owned Israeli subsidiary.
|
|
|
Column A
|
|
Column B
|
|
Column C
|
|
Column D
|
|
Column E
|
|||||
Description
|
|
Balance at
Beginning
of Period
|
|
Additions (Charged to Costs and Expenses)
|
|
Deductions (Write-Offs and Actual Losses Incurred)
|
|
Additions
Resulting
from
Acquisitions
|
|
Balance at
End of Period
|
|||||
Year ended December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|||||
Provisions for Losses on Long-Term Contracts
(*)
|
|
135,548
|
|
|
20,588
|
|
|
31,961
|
|
|
6,099
|
|
|
130,274
|
|
Provisions for Claims and Potential Contractual Penalties and Others
|
|
7,557
|
|
|
1,860
|
|
|
1,916
|
|
|
—
|
|
|
7,501
|
|
Allowance for Doubtful Accounts
|
|
7,445
|
|
|
1,330
|
|
|
2,037
|
|
|
—
|
|
|
6,738
|
|
Valuation Allowance on Deferred Taxes
|
|
5,424
|
|
|
3,770
|
|
|
2,654
|
|
|
—
|
|
|
6,540
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Year ended December 31, 2014:
|
|
|
|
|
|
|
|
|
|
|
|||||
Provisions for Losses on Long-Term Contracts
(*)
|
|
140,259
|
|
|
37,124
|
|
|
41,835
|
|
|
—
|
|
|
135,548
|
|
Provisions for Claims and Potential Contractual Penalties and Others
|
|
9,208
|
|
|
820
|
|
|
2,471
|
|
|
—
|
|
|
7,557
|
|
Allowance for Doubtful Accounts
|
|
7,117
|
|
|
1,125
|
|
|
797
|
|
|
—
|
|
|
7,445
|
|
Valuation Allowance on Deferred Taxes
|
|
9,358
|
|
|
675
|
|
|
4,609
|
|
|
—
|
|
|
5,424
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Year ended December 31, 2013:
|
|
|
|
|
|
|
|
|
|
|
|||||
Provisions for Losses on Long-Term Contracts
(*)
|
|
129,215
|
|
|
38,928
|
|
|
27,884
|
|
|
—
|
|
|
140,259
|
|
Provisions for Claims and Potential Contractual Penalties and Others
|
|
6,846
|
|
|
2,561
|
|
|
199
|
|
|
—
|
|
|
9,208
|
|
Allowance for Doubtful Accounts
|
|
9,128
|
|
|
—
|
|
|
2,011
|
|
|
—
|
|
|
7,117
|
|
Valuation Allowance on Deferred Taxes
|
|
4,372
|
|
|
6,162
|
|
|
1,176
|
|
|
—
|
|
|
9,358
|
|
(*)
|
An amount of
$76,017
,
$72,045
and
$80,464
as of
December 31, 2013
,
2014
and
2015
, respectively, is presented as a deduction from inventories, and an amount of
$64,242
,
$63,503
and
$49,810
as of
December 31, 2013
,
2014
and
2015
, respectively, is presented as part of other payables and accrued expenses.
|
1.
|
I have reviewed this annual report on Form 20-F of Elbit Systems Ltd.
|
2.
|
Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report.
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report.
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1.
|
I have reviewed this annual report on Form 20-F of Elbit Systems Ltd.
|
2.
|
Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report.
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report.
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by this annual report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
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March 22, 2016
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By:
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/S / BEZHALEL MACHLIS
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Bezhalel Machlis
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Chief Executive Officer
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(Principal Executive Officer)
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
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By:
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/s/ Kost Forer Gabbay & Kasierer
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Kost Forer Gabbay & Kasierer
A member of Ernst & Young Global
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