exhibit_1.htm

Exhibit 1

Earning Release

ELBIT SYSTEMS REPORTS

THIRD QUARTER 2013 RESULTS

Backlog of orders at $5.7 billion;

Revenues at $731 million; Net income at $49.6 million;

Diluted net earnings per share at $1.17

Haifa, Israel, November 14, 2013 – Elbit Systems Ltd. (the “Company”) (NASDAQ: ESLT, TASE: ESLT), the international defense electronics company, reported today its consolidated financial results for the third quarter ended September 30, 2013.

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

Management Comment:

Bezhalel (Butzi) Machlis, President and CEO of Elbit Systems, commented: “The solid third quarter results reflect the year-over-year trend of improvements in revenue and profitability resulting from our ongoing focus on efficiency and on realizing the business-wide synergies of our global organization. In line with our decision to further enhance the effectiveness of our technological capabilities, we are placing increased efforts in R&D as well as in sales and marketing, in order to capitalize on the opportunities we are seeing.”

Machlis added: “We are encouraged by the global markets' recognition of our innovative solutions, and we believe that, together with our efficiency measures, will maintain future growth.”

Third quarter 2013 results:

Revenues were $730.6 million in the third quarter of 2013, as compared to $677.5 million in the third quarter of 2012. The main contributors to the Company's revenues were the Airborne and the C4ISR systems areas of operations.

Gross profit was $207.4 million (28.4% of revenues) in the third quarter of 2013, as compared to $191.5 million (28.3% of revenues) in the third quarter of 2012. The non-GAAP gross profit in the third quarter of 2013 was $212.9 million (29.1% of revenues), compared to $196.6 million (29.0% of revenues) in the third quarter of 2012.

Research and development expenses, net were $54.0 million (7.4% of revenues) in the third quarter of 2013, as compared to $50.7 million (7.5% of revenues) in the third quarter of 2012.

Marketing and selling expenses were $61.9 million (8.5% of revenues) in the third quarter of 2013, as compared to $59.0 million (8.7% of revenues) in the third quarter of 2012.

General and administrative expenses, net were $30.5 million (4.2% of revenues) in the third quarter of 2013, as compared to $32.7 million (4.8% of revenues) in the third quarter of 2012.

Operating income was $61.1 million (8.4% of revenues), as compared to $49.0 million (7.2% of revenues) in the third quarter of 2012. The non-GAAP operating income in the third quarter of 2013 was $72.3 million (9.9% of revenues), as compared to $61.0 million (9.0% of revenues) in the third quarter of 2012. The increase in the operating income was mainly due to cost savings and improved efficiency measures taken by the Company.

Earning Release

Financial expenses, net were $6.6 million in the third quarter of 2013, as compared to $5.5 million in the third quarter of 2012.

Taxes on income were $7.5 million (effective tax rate of 13.6%) in the third quarter of 2013, as compared to taxes on income of $4.9 million (effective tax rate of 11.2%) in the third quarter of 2012.

Equity in net earnings of affiliated companies and partnerships was $3.4 million (0.5% of revenues) in the third quarter of 2013, as compared to $1.0 million (0.2% of revenues) in the third quarter of 2012.

Net income attributable to non-controlling interests was $1.6 million in the third quarter of 2013, as compared to a net income of $0.4 million in the third quarter of 2012.

Net income attributable to the Company's ordinary shareholders was $49.6 million (6.8% of revenues) in the third quarter of 2013, as compared to $39.5 million (5.8% of revenues) in the third quarter of 2012. The non-GAAP net income in the third quarter of 2013 was $55.8 million (7.7% of revenues), as compared to $49.4 million (7.3% of revenues) in the third quarter of 2012.

Diluted net earnings per share attributable to the Company's ordinary shareholders were $1.17 for the third quarter of 2013, as compared with $0.95 for the third quarter of 2012. The non-GAAP diluted net earnings per share in the third quarter of 2013 were $1.32, as compared to $1.18 in the third quarter of 2012.

The Company’s backlog of orders as of September 30, 2013 was $5,697 million, as compared with $5,804 million as of June 30, 2013 and $5,683 million as of December 31, 2012. Approximately 68% of the backlog relates to orders outside of Israel. Approximately 49% of the Company's backlog as of September 30, 2013 is scheduled to be performed during the fourth quarter of 2013 and in 2014.

Operating cash flow was $24.1 million during the first nine months of 2013, as compared to $61.0 million in the first nine months of 2012.

Non-GAAP financial data:

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

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

In the Company's non-GAAP presentation, the Company made certain adjustments, as indicated in the table below.

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

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Earning Release

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

(U.S. Dollars in millions)

	Nine Months Ended September 30						Three Months Ended September 30						Year Ended December 31
	2013			2012			2013			2012			2012

GAAP gross profit		603.3			576.8			207.4			191.4			815.9
Adjustments:
Amortization of intangible assets		16.4			15.6			5.5			5.2			24.2
Non-GAAP gross profit		619.7			592.4			212.9			196.6			840.1
Percent of revenues		29.3	%		29.0	%		29.1	%		29.0	%		29.1	%

GAAP operating income		181.5			132.8			61.1			49.0			203.1
Adjustments:
Amortization of intangible assets		34.2			36.2			11.2			12.0			49.2
Legal settlement, net		(7.6	)		-			-			-			-
Non-GAAP operating income		208.1			169.0			72.3			61.0			252.3
Percent of revenues		9.8	%		8.3	%		9.9	%		9.0	%		8.7	%

GAAP net income attributable to Elbit Systems’ shareholders		140.6			110.7			49.6			39.5			167.9
Adjustments:
Amortization of intangible assets		34.2			36.2			11.2			12.0			49.2
Legal settlement, net		(7.6	)		-			-			-			-
Gain from changes in holdings		(0.9	)		(2.3	)		(0.9	)		-			(2.3	)
Adjustment of loss (gain) from discontinued operations, net		(0.8	)		0.3			-			0.1			0.4
Related tax benefits		(8.1	)		(6.5	)		(4.1	)		(2.2	)		(8.9	)
Non-GAAP net income attributable to Elbit Systems’ shareholders		157.4			138.4			55.8			49.4			206.3

Percent of revenues		7.4	%		6.8	%		7.7	%		7.3	%		7.1	%

Non-GAAP diluted net EPS		3.73			3.26			1.32			1.18			4.88

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Earning Release

Recent Events:

On September 25, 2013 the Company announced that its subsidiary in the U.S., Elbit Systems of America, LLC. was awarded a $44.8 million Indefinite Delivery/Indefinite Quantity contract to be performed over the next five years for the ongoing depot level service and support of the AH-1W Super Cobra helicopter’s Night Targeting System (NTS).

On October 6, 2013 the Company announced that its wholly-owned subsidiary, Elbit Systems Electro-optics - Elop Ltd., was awarded a follow-on contract to supply its advanced Digital CoMPASS® electro-optical payload systems to an Asia-Pacific air force to be installed onboard helicopters. The contract will be performed over a three-year period.

On October 16, 2013 the Company announced that it was awarded a follow-on contract to supply advanced Helmet Mounted Display (HMD) systems for the Republic of Korea Army’s SURION helicopter. The contract will be performed over a four-year period.

Dividend:

The Board of Directors declared a dividend of $0.30 per share for the third quarter of 2013. The dividend’s record date is November 26, 2013, and the dividend will be paid on December 9, 2013. The dividend will be distributed from preferred enterprise profits (as defined in the Israeli tax law) net of taxes and levies of 15%.

Conference Call:

The Company will also be hosting a conference call later today, November 14, 2013 at 9:00am Eastern Time. On the call, management will review and discuss the results and will be available to answer questions.

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

US Dial-in Numbers: 1 888 668 9141

UK Dial-in Number: 0 800 917 5108

ISRAEL Dial-in Number: 03 918 0609

INTERNATIONAL Dial-in Number: +972 3 918 0609

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

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

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

1 888 782 4291 (US) or +972 3 925 5921 (Israel and International).

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Earning Release

About Elbit Systems:

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

For additional information, visit: www.elbitsystems.com.

Attachments:

Consolidated balance sheets

Consolidated statements of income

Consolidated statements of cash flow

Consolidated revenue distribution by areas of operations and by geographical regions

Company Contact:

Joseph Gaspar, Executive VP & CFO

Tel: +972-4-8316663

j.gaspar@elbitsystems.com

Dalia Rosen, VP, Head of Corporate Communications

Tel: +972-4-8316784

dalia.rosen@elbitsystems.com

Elbit Systems Ltd.

IR Contact:

Ehud Helft

Kenny Green

CCG Investor Relations

Tel: 1-646-201-9246

elbitsystems@ccgisrael.com

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

(FINANCIAL TABLES TO FOLLOW)

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Earning Release

ELBIT SYSTEMS LTD.

CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. Dollars)

	September 30,		December 31,
	2013		2012
	Unaudited		Audited
Assets

Current assets:
Cash and cash equivalents		148,333		199,241
Short-term bank deposits		17,266		15,444
Available-for-sale marketable securities		49,971		50,111
Trade and unbilled receivables, net		873,644		688,129
Other receivables and prepaid expenses		172,574		180,103
Inventories, net of customers advances		782,038		751,247
Total current assets		2,043,826		1,884,275

Investments in affiliated companies, partnerships and other companies		135,227		126,482
Long-term trade and unbilled receivables		250,755		229,687
Long-term bank deposits and other receivables		43,932		19,269
Deferred income taxes, net		31,446		31,465
Severance pay fund		317,327		302,680
		778,687		709,583

Property, plant and equipment, net		488,958		501,286
Goodwill and other intangible assets, net		681,154		715,561
Total assets		3,992,625		3,810,705

Liabilities and Equity

Short-term bank credits and loans		121		181
Current maturities of long-term loans and Series A Notes		61,684		90,056
Trade payables		304,822		260,975
Other payables and accrued expenses		700,602		704,450
Customer advances in excess of costs incurred on contracts in progress		401,780		453,382
		1,469,009		1,509,044

Long-term loans, net of current maturities		283,275		173,745
Series A Notes, net of current maturities		369,285		408,610
Employee benefit liabilities		423,513		407,661
Deferred income taxes and tax liabilities, net		57,723		48,787
Customer advances in excess of costs incurred on contracts in progress		180,980		156,497
Other long-term liabilities		57,716		55,735
		1,372,492		1,251,035

Elbit Systems Ltd.'s equity		1,121,172		1,017,115
Non-controlling interests		29,952		33,511
Total equity		1,151,124		1,050,626
Total liabilities and equity		3,992,625		3,810,705

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Earning Release

ELBIT SYSTEMS LTD.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands of U.S. Dollars, except for share and per share amounts)

	Nine Months Ended September 30						Three Months Ended September 30						Year Ended December 31
	2013			2012			2013			2012			2012
	Unaudited												Audited
Revenues		2,113,694			2,044,690			730,631			677,470			2,888,607
Cost of revenues		1,510,393			1,467,863			523,187			486,023			2,072,742
Gross profit		603,301			576,827			207,444			191,447			815,865

Operating expenses:
Research and development, net		156,555			165,114			54,012			50,703			233,387
Marketing and selling		174,755			180,325			61,906			59,044			241,911
General and administrative, net		90,449			98,580			30,468			32,677			137,517
		421,759			444,019			146,386			142,424			612,815

Operating income		181,542			132,808			61,058			49,023			203,050

Financial expenses, net		(27,274	)		(15,524	)		(6,634	)		(5,456	)		(26,086	)
Other income, net		925			76			881			260			78
Income before income taxes		155,193			117,360			55,305			43,827			177,042
Taxes on income		17,199			14,203			7,532			4,890			17,099
		137,994			103,157			47,773			38,937			159,943

Equity in net earnings of affiliated companies and partnerships		7,567			8,866			3,393			1,049			11,160
Income from continuing operations		145,561			112,023			51,166			39,986			171,103
Income (loss) from discontinued operations, net		681			(519	)		-			(93	)		(616	)
Net income		146,242			111,504			51,166			39,893			170,487

Less: net income attributable to non-controlling interests		(5,690	)		(835	)		(1,577	)		(369	)		(2,608	)
Net income attributable to Elbit Systems Ltd.'s shareholders		140,552			110,669			49,589			39,524			167,879

Earnings per share attributable to Elbit Systems Ltd.'s shareholders:
Basic net earnings per share
Continuing operations		3.32			2.63			1.18			0.95			3.99
Discontinued operations		0.02			(0.01	)		-			(0.00	)		(0.01	)
Total		3.34			2.62			1.18			0.95			3.98
Diluted net earnings per share
Continuing operations		3.31			2.62			1.17			0.95			3.98
Discontinued operations		0.02			(0.01	)		-			(0.00	)		(0.01	)
Total		3.33			2.61			1.17			0.95			3.97
Weighted average number of shares used in computation of basic earnings per share		42,044			42,296			42,178			41,693			42,190
Weighted average number of shares used in computation of diluted earnings per share		42,213			42,374			42,348			41,693			42,277

Amounts attributable to Elbit Systems Ltd.'s shareholders
Income from continuing operations, net of income tax		139,733			110,977			49,589			39,579			168,245
Discontinued operations, net of income tax		819			(308	)		-			(55	)		(366	)
Net income attributable to Elbit Systems Ltd.'s shareholders		140,552			110,669			49,589			39,524			167,879

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Earning Release

ELBIT SYSTEMS LTD.

CONSOLIDATED STATEMENTS OF CASH FLOW

(In thousands of U.S. Dollars)

	Nine Months Ended						Year Ended
	September 30,						December 31,
	2013			2012			2012
	Unaudited						Audited
CASH FLOWS FROM OPERATING ACTIVITIES
Net income		146,242			111,504			170,487
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		96,571			103,300			138,796
Discontinued operations, net		(681	)		519			616
Stock-based compensation		1,096			494			3,326
Amortization of Series A Notes discount (premium) and related issuance costs, net		(69	)		1,215			153
Deferred income taxes and reserve, net		1,545			5,485			6,579
Loss (gain) on sale of property, plant and equipment		(133	)		(556	)		1,197
Gain on sale of investment		(425	)		(994	)		(829	)
Equity in net earnings of affiliated companies and partnerships, net of dividend received(*)		(2,067	)		(2,454	)		(1,602	)
Changes in operating assets and liabilities, net of amounts acquired:
Increase in short and long-term trade receivables and prepaid expenses		(195,656	)		(17,442	)		(91,988	)
Decrease (increase) in inventories, net		(30,791	)		(21,716	)		10,022
Increase (decrease) in trade payables, other payables and accrued expenses		32,407			(105,834	)		(75,724	)
Severance, pension and termination indemnities, net		3,184			(12,176	)		(10,612	)
Increase (decrease) in advances received from customers		(27,118	)		(296	)		47,962
Net cash provided by operating activities		24,105			61,049			198,383

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment		(54,987	)		(59,753	)		(81,637	)
Investments in affiliated companies and other companies		(5,046	)		(507	)		(4,241	)
Proceeds from sale of property, plant and equipment		4,264			6,106			7,335
Proceeds from sale of investments		2,000			705			705
Investment in long-term deposits		(1,171	)		(318	)		(779	)
Proceeds from sale of long-term deposits		246			502			2,849
Investment in short-term deposits and available-for-sale securities		(33,050	)		(336,360	)		(340,899	)
Proceeds from sale of short-term deposits and available-for-sale securities		30,543			287,352			299,029
Net cash used in investing activities		(57,201	)		(102,273	)		(117,638	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of options		11,159			739			1,352
Repayment of long-term loans		(143,547	)		(195,624	)		(319,601	)
Proceeds from long-term loans		217,100			53,038			122,038
Proceeds from issuance of Series A Notes		-			246,000			246,973
Series A Notes issuance costs		-			-			(2,035	)
Purchase of treasury shares		-			(26,006	)		(26,006	)
Repayment of Series A Notes		(55,535	)		(53,530	)		(53,530	)
Dividends paid (**)		(46,928	)		(38,043	)		(50,616	)
Tax benefit in respect of options exercised		-			-			161
Change in short-term bank credit and loan, net		(61	)		(2,998	)		(2,817	)
Net cash used in financing activities		(17,811	)		(16,424	)		(84,081	)

NET DECREASE IN CASH AND CASH EQUIVALENTS		(50,908	)		(57,648	)		(3,336	)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD		199,241			202,577			202,577
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD		148,333			144,929			199,241
* Dividend received from affiliated companies and partnerships		5,500			6,412			9,558

**Dividends paid to the Company’s shareholders and a minority shareholder of a subsidiary.

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Earning Release

ELBIT SYSTEMS LTD.

DISTRIBUTION OF REVENUES

CONSOLIDATED REVENUES BY AREAS OF OPERATION:

	Nine Months Ended								Three Months Ended
	September 30								September 30
	2013				2012				2013				2012
	$ millions		%		$ millions		%		$ millions		%		$ millions		%
Airborne systems		849.3		40.2		793.5		38.8		287.2		39.3		267.9		39.5
Land vehicles systems		195.4		9.2		264.3		12.9		75.5		10.3		105.5		15.6
C4ISR systems		771.8		36.5		676.7		33.1		273.4		37.4		197.8		29.2
Electro-optic systems		227.4		10.8		211.5		10.4		67.9		9.3		66.8		9.9
Other (mainly non-defense engineering and production services)		69.8		3.3		98.7		4.8		26.6		3.7		39.5		5.8
Total		2,113.7		100		2,044.7		100		730.6		100		677.5		100

CONSOLIDATED REVENUES BY GEOGRAPHICAL REGIONS:

	Nine Months Ended								Three Months Ended
	September 30								September 30
	2013				2012				2013				2012
	$ millions		%		$ millions		%		$ millions		%		$ millions		%
Israel		470.6		22.3		355.9		17.4		181.7		24.9		104.1		15.4
North America		630.9		29.8		663.5		32.5		217.0		29.7		236.0		34.8
Europe		397.9		18.8		368.1		18.0		127.3		17.4		127.7		18.9
Asia Pacific		357.5		16.9		423.4		20.7		97.0		13.3		133.3		19.7
Latin America		210.9		10.0		175.9		8.6		78.3		10.7		55.5		8.2
Other countries		45.9		2.2		57.9		2.8		29.3		4.0		20.9		3.0
Total		2,113.7		100		2,044.7		100		730.6		100		677.5		100

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