EXHIBIT 2 ---------
EXHIBIT 2
---------
--------------------------------------------------------------------------------
ELBIT SYSTEMS LTD. AND ITS SUBSIDIARIES
--------------------------------------------------------------------------------
CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2003
------------------------
(Unaudited)
(In thousands of U.S. dollars)
--------------------------------------------------------------------------------
ELBIT SYSTEMS LTD. AND ITS SUBSIDIARIES
--------------------------------------------------------------------------------
C O N T E N T S
P a g e
-------
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Consolidated Balance Sheets 2 - 3
Consolidated Statements of Operations 4
Consolidated Statements of Changes in Shareholders' Equity 5 - 6
Consolidated Statements of Cash Flows 7 - 8
Notes to the Consolidated Financial Statements 0 - 00
# # # # # #
XXXXX SYSTEMS LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars)
September 30, December 31,
2003 2002
---------------- -----------------
(Unaudited) (Audited)
CURRENT ASSETS
Cash and cash equivalents $45,947 $76,280
Short-term bank deposits 1,509 1,650
Trade receivables, net of allowance for doubtful
accounts of $3,622 and $3,411 as of September 30,
2003 and December 31, 2002, respectively. 211,818 227,724
Other receivables and prepaid expenses 40,892 34,376
Inventories, net of advances 280,542 220,399
---------------- -----------------
Total current assets 580,708 560,429
---------------- -----------------
INVESTMENTS AND LONG-TERM RECEIVABLES
Investments in affiliated companies and partnership 24,265 21,947
Investments in other companies 11,092 11,104
Long-term receivables 315 20,859
Long-term bank deposits and loan 1,972 3,686
Severance pay fund 7,626 6,641
---------------- -----------------
45,270 64,237
---------------- -----------------
PROPERTY, PLANT AND EQUIPMENT, NET 219,882 202,961
---------------- -----------------
OTHER ASSETS, NET
Goodwill, net 32,559 32,162
Know-how and other intangible assets, net 69,525 73,607
---------------- -----------------
102,084 105,769
---------------- -----------------
$947,944 $933,396
================ =================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE
CONSOLIDATED FINANCIAL STATEMENTS.
ELBIT SYSTEMS LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars except share data)
September 30, December 31,
2003 2002
---------------- -----------------
(Unaudited) (Audited)
CURRENT LIABILITIES
Short-term bank credit and loans $41,049 $30,915
Trade payables 103,244 82,521
Other payables and accrued expenses 156,262 140,981
Customer advances in excess of costs incurred 94,751 108,418
---------------- -----------------
Total current liabilities 395,306 362,835
---------------- -----------------
LONG-TERM LIABILITIES
Long-term loans 66,792 73,173
Advances from customers 1,766 40,411
Deferred income taxes 14,536 16,413
Accrued severance pay 23,113 24,486
---------------- -----------------
106,207 154,483
---------------- -----------------
MINORITY INTEREST 4,296 4,717
---------------- -----------------
SHAREHOLDERS' EQUITY
Share capital
Ordinary shares of NIS 1 par value; Authorized - 80,000,000
shares; Issued- 39,609,547 shares and 39,212,328 shares as
of September 30, 2003 and December 31, 2002, respectively;
Outstanding - 39,200,726 shares and 38,803,507 shares as
of September 30, 2003 and December 31, 2002, respectively 11,242 11,154
Accumulated other comprehensive loss (2,025) (2,882)
Additional paid-in capital 255,706 248,387
Retained earnings 181,533 159,023
Treasury stock- 408,821 shares (4,321) (4,321)
---------------- -----------------
442,135 411,361
---------------- -----------------
$947,944 $933,396
================ =================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
OF THE CONSOLIDATED FINANCIAL STATEMENTS.
ELBIT SYSTEMS LTD. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. dollars, except per share data)
NINE MONTHS ENDED THREE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
2003 2002 2003 2002 2002
----------- ----------- ----------- ----------- ------------
(UNAUDITED) (UNAUDITED) (AUDITED)
------------------------- -------------------------- ------------
Revenues $ 635,223 $ 589,143 $ 214,275 $ 210,155 $ 827,456
Cost of revenues (464,882) (424,415) (158,078) (150,738) (595,512)
Chief Scientist ("OCS") - (9,801) - - (9,801)
----------- ----------- ----------- ----------- ------------
Gross profit 170,341 154,927 56,197 59,417 222,143
----------- ----------- ----------- ----------- ------------
Research and development costs, net 43,006 39,710 14,518 14,785 57,010
Marketing and selling expenses 50,696 47,289 15,573 17,346 65,691
General and administrative expenses 33,924 30,741 11,035 10,760 41,651
----------- ----------- ----------- ----------- ------------
127,626 117,740 41,126 42,891 164,352
----------- ----------- ----------- ----------- ------------
Operating income 42,715 37,187 15,071 16,526 57,791
Financial expenses, net (3,467) (690) (161) (595) (3,035)
Other income (expenses), net 332 (524) 241 (115) (462)
----------- ----------- ----------- ----------- ------------
Income before taxes on income 39,580 35,973 15,151 15,816 54,294
Taxes on income 10,502 6,810 3,900 1,565 9,348
----------- ----------- ----------- ----------- ------------
29,078 29,163 11,251 14,251 44,946
Equity in net earnings of affiliated companies
and partnership 3,938 2,554 989 1,114 675
Minority interest 456 269 (234) 139 (508)
----------- ----------- ----------- ----------- ------------
Net income $ 33,472 $ 31,986 $ 12,006 $ 15,504 $ 45,113
=========== =========== =========== =========== ============
Earnings per share
Basic earnings per share $ 0.86 $ 0.83 $ 0.31 $ 0.40 $ 1.17
=========== =========== =========== =========== ============
Weighted average number of shares used in
computation (in thousands) 38,994 38,459 39,168 38,515 38,489
=========== =========== =========== =========== ============
Diluted earnings per share $ 0.83 $ 0.80 $ 0.30 $ 0.39 $ 1.13
=========== =========== =========== =========== ============
Weighted average number of shares used
in computation (in thousands) 40,198 39,896 40,406 39,772 39,863
=========== =========== =========== =========== ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE
CONSOLIDATED FINANCIAL STATEMENTS.
ELBIT SYSTEMS LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(In thousands of U.S. dollars)
Accumulated
Additional other Total
Number of Share paid-in comprehensive Retained Treasury comprehensive
Shares capital capital loss earnings stock Total income
------ ------- ------- ---- -------- ----- ----- ------
UNAUDITED
Balance as of January 1, 2003 38,803,507 $11,154 $248,387 $(2,882) $159,023 $(4,321) $411,361
Exercise of options 397,219 88 3,808 - - - 3,896
Tax benefit in respect of options exercised 477 - - - 477
Amortization of deferred stock compensation - - 3,034 - - - 3,034
Dividend paid - - - - (10,962) - (10,962)
Net income - - - - 33,472 - 33,472 $33,472
Unrealized gains on derivative instruments - - - 857 - - 857 857
---------- ------- -------- ------- -------- ------- -------- -------
BALANCE AS OF SEPTEMBER 30, 2003 39,200,726 $11,242 $255,706 $(2,025) $181,533 $(4,321) $442,135 $34,329
========== ======= ======== ======= ======== ======= ======== =======
Balance as of January 1, 2002 38,330,272 $11,054 $244,625 - $126,627 $(4,321) $377,985
Exercise of options 205,093 45 1,866 - - - 1,911
Tax benefit in respect of options exercised - - 390 - - - 390
Amortization of deferred stock compensation - - (1,216) - - - (1,216)
Dividend paid - - - - (9,249) - (9,249)
Net income - - - - 31,986 - 31,986 $31,986
---------- ------- -------- ------- -------- ------- -------- -------
BALANCE AS OF SEPTEMBER 30, 2002 38,535,365 $11,099 $245,665 - $149,364 $(4,321) $401,807 $31,986
========== ======= ======== ======= ======== ======= ======== =======
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE
CONSOLIDATED FINANCIAL STATEMENTS.
ELBIT SYSTEMS LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (CONT.)
(In thousands of U.S. dollars)
Accumulated
Additional other Total
Number of Share paid-in comprehensive Retained Treasury comprehensive
Shares capital capital loss earnings stock Total income
------ ------- ------- ---- -------- ----- ----- ------
UNAUDITED BALANCE AS OF JULY 1, 2003 39,152,148 $11,231 $258,580 $(738) $173,438 $(4,321) $438,190
Exercise of options 48,578 11 470 - - - 481
Tax benefit in respect of options exercised - - 43 - - - 43
Amortization of deferred stock compensation - - (3,387) - - - (3,387)
Dividend paid - - - - (3,911) - (3,911)
Net income - - - - 12,006 - 12,006 12,006
Unrealized losses on derivative instruments - - - (1,287) - - (1,287) (1,287)
---------- ------- -------- ------- -------- ------- -------- -------
BALANCE AS OF SEPTEMBER 30, 2003 39,200,726 $11,242 $255,706 $(2,025) $181,533 $(4,321) $442,135 $10,719
========== ======= ======== ======= ======== ======= ======== =======
BALANCE AS OF JULY 1, 2002 38,905,182 $11,090 $245,902 - $136,940 $(4,321) $389,611
Exercise of options 39,004 9 312 - - - 321
Tax benefit in respect of options exercised - - 54 - - - 54
Amortization of deferred stock compensation - - (603) - - - (603)
Dividend paid - - - - (3,080) - (3,080)
Net income - - - - 15,504 - 15,504 $15,504
---------- ------- -------- ------- -------- ------- -------- -------
BALANCE AS OF SEPTEMBER 30, 2002 38,944,186 $11,099 $245,665 - $149,364 $(4,321) $401,807 $15,504
========== ======= ======== ======= ======== ======= ======== =======
AUDITED BALANCE AS OF JANUARY 1, 2002 38,330,272 $11,054 $244,625 - $126,627 $(4,321) $377,985
Exercise of options 473,235 100 4,040 - - - 4,140
Tax benefit in respect of options exercised - - 648 - - - 648
Amortization of deferred stock compensation - - (926) - - - (926)
Dividend paid - - - - (12,717) - (12,717)
Net income - - - - 45,113 - 45,113 $45,113
Minimum pension liability - - - (2,882) - - (2,882) (2,882)
---------- ------- -------- ------- -------- ------- -------- -------
BALANCE AS OF DECEMBER 31, 2002 38,803,507 $11,154 $248,387 $(2,882) $159,023 $(4,321) $411,361 $42,231
========== ======= ======== ======= ======== ======= ======== =======
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE
CONSOLIDATED FINANCIAL STATEMENTS.
ELBIT SYSTEMS LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
2003 2002 2002
(UNAUDITED) (AUDITED)
------------------------ -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 33,472 $ 31,986 $ 45,113
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 27,966 25,598 32,937
Amortization of deferred stock compensation 3,034 (1,216) (926)
Deferred income taxes (199) 382 (5,620)
Severance pay fund (985) 915 (113)
Accrued severance pay (1,553) 1,007 6,373
Loss (gain) on disposal of property, plant and equipment (870) 372 743
Tax benefit in respect of options exercised 477 390 648
Minority interests (456) (269) 508
Equity in net earnings of affiliated companies and partnership,
net of dividend received (*) (2,773) (2,554) (675)
Other adjustments 472 (369) 683
Changes in operating assets and liabilities:
Decrease in trade and other receivables and prepaid expenses 35,339 40,572 58,554
Increase in inventories (52,909) (54,826) (55,106)
Increase (decrease) in trade and other payables and accrued expenses 27,740 (30,867) (19,321)
Increase (decrease) in advances received from customers (55,607) 41,755 42,999
Liabilities to Chief Scientist (447) 9,935 9,197
------------ ---------- -------------
Net cash provided by operating activities 12,701 62,811 115,994
------------ ---------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment and other assets (43,494) (30,353) (46,003)
Investment grants received for property, plant and equipment - - 119
Acquisition of businesses and subsidiaries (Schedule A) (2,458) (5,280) (5,280)
Investments in affiliated companies and subsidiaries - (1,784) (1,681)
Proceeds from sale of property, plant and equipment and investments 4,831 805 956
Long-term loan granted - - (714)
Long-term loan repaid 2,400 - -
Short-term loan repaid (granted) (350) - 1,371
Long-term bank deposits made (1,064) (555) (1,228)
Long-term bank deposits redeemed 1,820 818 1,689
Short-term bank deposits, net 955 180 (204)
------------ ---------- -------------
Net cash used in investing activities (37,360) (36,169) (50,975)
------------ ---------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of options 3,896 1,911 4,140
Repayment of long-term bank loans (23,212) (1,634) (3,249)
Proceeds from long-term bank loans 10,000 2,241 2,233
Dividends paid (10,962) (9,249) (12,717)
Change in short-term bank credit and loans, net 14,604 (15,092) (19,729)
------------ ---------- -------------
Net cash used in financing activities (5,674) (21,823) (29,322)
------------ ---------- -------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (30,333) 4,819 35,697
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 76,280 40,583 40,583
------------ ---------- -------------
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD $ 45,947 $ 45,402 $ 76,280
============ ========== =============
(*) Dividend received $ 1,165 $ - $ -
============ ========== =============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE
CONSOLIDATED FINANCIAL STATEMENTS.
ELBIT SYSTEMS LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT.)
(In thousands of U.S. dollars)
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
2003 2002 2002
------------ ------------ -------------
(UNAUDITED) (AUDITED)
SUPPLEMENTARY CASH FLOWS ACTIVITIES:
Cash paid during the period for:
Income taxes $11,144 $17,878 $21,730
============ =========== ==============
Interest $2,645 $2,778 $2,947
============ =========== ==============
SCHEDULE A:
Acquisition of businesses and subsidiaries
Estimated net fair value of assets acquired and liabilities
assumed at the date of acquisition:
Working capital deficiency (except cash and cash equivalents) $632 $ - $ -
Property, plant and equipment (249) (275) (275)
Know-how and other intangible assets (1,309) (5,078) (5,078)
Deferred income taxes (1,765) - -
Long-term liabilities 198 - -
Minority interest 35 - -
------------ ------------ ------------
(2,458) (5,353) (5,353)
------------ ------------ ------------
Less- short- term debt incurred on acquisition - 73 73
------------ ------------ ------------
$(2,458) $(5,280) $(5,280)
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE
CONSOLIDATED FINANCIAL STATEMENTS.
ELBIT SYSTEMS LTD.
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
NOTE 1 - GENERAL
The accompanying financial statements have been prepared in a condensed
format as of September 30, 2003, and for the nine months and three
months then ended in accordance with generally accepted accounting
principles in the United States (U.S. GAAP) relating to the preparation
of financial statements for interim periods. See Note 6 for the
reconciliation from US GAAP to accounting principles generally accepted
in Israel (Israeli GAAP).
THESE FINANCIAL STATEMENTS SHOULD BE READ IN CONJUNCTION WITH THE
COMPANY'S ANNUAL FINANCIAL STATEMENTS AND ACCOMPANYING NOTES AS OF
DECEMBER 31, 2002.
The interim financial statements reflect all adjustments which are, in
the opinion of management, necessary for a fair presentation. All such
adjustments were of a normal recurring nature. Reclassifications have
been made to comparative data in the balance sheet as of December 31,
2002, in order to conform with the current year's presentation.
Operating results for the nine months ended September 30, 2003, are not
necessarily indicative of the results that may be expected for the year
ending December 31, 2003.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
A. The significant accounting policies followed in the
preparation of these statements are identical to those applied
in preparation of the latest annual financial statements.
The accompanying financial statements have been prepared in
U.S. dollars since the functional currency of the primary
economic environment in which the operations of the Group
(which includes Elbit Systems Ltd. and its subsidiaries) are
conducted is the U.S. dollar.
B. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In January 2003, the Financial Accounting Standards Board
issued Interpretation No. 46, Consolidation of Variable
Interest Entities, an interpretation of Accounting Research
Xxxxxxxx Xx. 00 ("xxx xxxxxxxxxxxxxx"). In general, a variable
interest entity (VIE) is an entity that has (1) insufficient
amount of equity for the entity to carry on its principal
operations, without additional subordinated financial support
from other parties, (2) a group of equity investors that do
not have the ability through voting or similar rights to make
decisions about the entity's activities, or (3) a group of
equity investors that do not have the obligation to absorb the
entity's losses or have the right to receive the benefits of
the entity. The
ELBIT SYSTEMS LTD.
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS - UNAUDITED (CONT.)
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONT.)
B. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (Cont.)
interpretation requires the consolidation of a VIE by the
primary beneficiary. The primary beneficiary is the entity
that absorbs a majority of the entity's expected losses,
receives a majority of the entity's expected residual returns,
or both, as a result of ownership, contractual or other
financial interests in the entity.
Presently, entities are generally consolidated by an
enterprise that has a controlling financial interest through
ownership of a majority voting interest in the entity.
Pursuant to FASB Staff Position Fin 46-6, the Company has
decided to apply the provisions of this interpretation as of
December 31, 2003, in respect of variable interests in VIEs
created before February 1, 2003. The provisions of this
interpretation apply immediately to variable interests in VIEs
created after January 31, 2003. Since the Company has no such
interests in VIEs created after January 31, 2003, the
application of this interpretation had no impact on the
Company's consolidated results of operations or consolidated
balance sheet to date.
The Company has investments in and loans to various companies
that are engaged primarily in the fields of high technology.
Most of these companies are in their early stages of
development and will require substantial third party
investments until they can finance their activities without
additional support from other parties. These companies are
currently primarily funded with financing from venture capital
funds, other holding companies and private investors. The
investments in these companies are consolidated or accounted
for by the equity or cost method by the Company.
The Company is currently evaluating the effects of this
interpretation in respect of its investments. It is possible
that some of its unconsolidated investees may be considered a
VIE in accordance with the interpretation. Accordingly, if it
is determined that the Company is the primary beneficiary of a
VIE, the Company will be required to consolidate the financial
statements of such a VIE with its own financial statements as
of December 31, 2003.
ELBIT SYSTEMS LTD.
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS - UNAUDITED (CONT.)
NOTE 3 - INVENTORIES, NET OF ADVANCES
DECEMBER 31, SEPTEMBER 30,
2003 2002
(UNAUDITED) (AUDITED)
---------------- -----------------
Cost of long-term contracts in progress $268,535 $210,418
Raw materials 80,890 75,579
Advances to suppliers and subcontractors 19,337 25,047
-------- --------
368,762 311,044
Less-
Cost of contracts in progress deducted
from customer advances 15,354 10,658
-------- --------
353,408 300,386
Less -
Advances received from customers 59,650 67,624
Provision for losses 13,216 12,363
-------- --------
$280,542 $220,399
======== ========
NOTE 4 - ACQUISITION OF COMPANY
On June 30, 2003, the Company (through El-Op) acquired all of the
outstanding ordinary shares of Optronics Instruments & Products N.V.
(O.I.P.), a company registered in Belgium, in consideration for Euro
1.6 million ($1,846) in cash. The acquisition was accounted for by the
purchase method of accounting.
O.I.P. develops, manufactures and supports electro-optical products,
mainly for the defense and space markets.
The following table summarizes the estimated fair values of the assets
acquired and liabilities assumed at the date of acquisition.
Current assets $6,896
Property and equipment 168
Deferred tax assets 1,700
------
Total assets acquired 8,764
Current liabilities (6,918)
------
Net assets acquired $1,846
======
ELBIT SYSTEMS LTD.
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS - UNAUDITED (CONT.)
NOTE 5 - STOCK-BASED COMPENSATION
The Company has elected to follow Accounting Principles Board Opinion
No. 25, ("APB 25") "Accounting for Stock Issued to Employees" and the
FASB Interpretation No. 44, "Accounting for Certain Transactions
Involving Stock Compensation" in accounting for its employee stock
option plans. According to APB 25, compensation expense is measured
under the intrinsic value method, whereby compensation expense is equal
to the excess, if any, of the quoted market price of the stock at the
grant date of the award or other measurement date over the exercise
price.
The following pro forma information presents the effect on the
Company's consolidated stock-based employee compensation expense, net
income and earnings per share as if the fair value based method
provided under FASB Statement No. 123 ("SFAS 123") had been applied to
all outstanding awards in each period.
Under SFAS 123, the fair value of each option grant was estimated on
the date of grant using the Black-Scholes option-pricing model.
NINE MONTHS ENDED THREE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
----------------------------- --------------------------- -----------
2003 2002 2003 2002 2002
------------- ---------- ----------- ---------- -----------
(UNAUDITED) (UNAUDITED) (AUDITED)
472 5
Net income as reported $ 33,472 $ 31,986 $ 12,006 $ 15,504 $ 45,113
Stock- based compensation expense
(income), net of related tax effects as
reported 2,710 (687 (2,427) (209) (767)
Stock- based compensation expense under fair
value based method of SFAS 123,
net of related tax effects (2,217) (2,161 (739) (720) (3,059)
------------- ---------- ----------- ---------- ----------
Pro forma net income $ 33,965 $ 29,138 $ 8,840 $ 14,575 $ 41,287
============= ========== =========== ========== ==========
Basic earnings per share as reported $ 0.86 $ 0.83 $ 0.31 $ 0.40 $ 1.17
============= ========== =========== ========== ==========
Pro forma basic earnings per share $ 0.87 $ 0.76 $ 0.23 $ 0.38 $ 1.07
============= ========== =========== ========== ==========
Diluted earnings per share as reported $ 0.83 $ 0.80 $ 0.30 $ 0.39 $ 1.13
============= ========== =========== ========== ==========
Pro forma diluted earnings per share $ 0.84 $ 0.70 $ 0.22 $ 0.37 $ 1.04
============= ========== =========== ========== ==========
ELBIT SYSTEMS LTD.
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS - UNAUDITED (CONT.)
NOTE 6 - RECONCILIATION TO ISRAELI GAAP
As described in Note 1, the Company prepares its financial statements
in accordance with U.S. GAAP. See Note 26 to the 2002 annual financial
statements for a description of the differences between US GAAP and
Israeli GAAP in respect of the Company. The effects of the differences
between US GAAP and Israeli GAAP on the Company's financial statements
are detailed below.
1. Effect on net income and earnings per share
Nine months ended Year ended
September 30, December 31,
2003 2002 2002
(Unaudited) (Audited)
Net income as reported according to U.S. GAAP $33,472 $31,986 $45,113
Adjustments to Israeli GAAP 847 (3,163) (4,227)
------- ------- -------
Net income according to Israeli GAAP $34,319 $28,823 $40,886
======= ======= =======
2. Effect on shareholders' equity
As per
As reported Adjustments Israeli GAAP
----------- ----------- ------------
As of September 30, 2003 (Unaudited)
Shareholders' equity $442,135 $(10,706) $431,429
======== ======== ========
As of December 31, 2002 (Audited)
Shareholders' equity $411,361 $(11,076) $400,285
======== xxxxxxxx xxxxxxxx
# # # # # # #
