Form 20-F Elbit Systems
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FORM 20-F ELBIT SYSTEMS LTD - ESLT Filed: May 28, 2008 (period: December 31, 2007) Registration of securities of foreign private issuers pursuant to section 12(b) or (g) Table of Contents 20-F PART I Item 17 o Item 18 x Item 1. Identity of Directors, Senior Management and Advisors Item 2. Offer Statistics and Expected Timetable Item 3. Key Information Item 4. Information on the Company Item 4A. Unresolved Staff Comments Item 5. Operating Financial Review and Prospects Item 6. Directors, Senior Management and Employees Item 7. Major Shareholders and Related Party Transactions Item 8. Financial Information. Item 9. Offer and Listing. Item 10. Additional Information. Item 11. Quantitative and Qualitative Disclosure of Market Risk. Item 12. Description of Securities Other than Equity Securities. Item 13. Defaults, Dividend Arrearages and Delinquencies. Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds. Item 15. Controls and Procedures Item 16. A Audit Committee Financial Expert Item 17. Financial Statements. Item 18. Financial Statements. Item 19. Exhibits. SIGNATURES EX-8 (EXHIBIT 8.3) EX-10 (EXHIBIT 10.1) EX-10 (EXHIBIT 10.2) EX-10 (EXHIBIT 10.3) EX-10 (EXHIBIT 10.4) EX-10 (EXHIBIT 10.5) EX-10 (EXHIBIT 10.6) EX-10 (EXHIBIT 10.7) EX-12 (EXHIBIT 12.1; CERTIFICATION OF CEO) EX-12 (EXHIBIT 12.2; CERTIFICATION OF CFO) EX-13 (EXHIBIT 13.1; CERTIFICATION OF CEO) EX-13 (EXHIBIT 13.2; CERTIFICATION OF CFO) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________ FORM 20-F ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 2007 Commission File No. 0-28998 ______________ ELBIT SYSTEMS LTD. (Exact Name of Registrant as Specified in its Charter and Translation of Registrant’s Name into English) Israel (Jurisdiction of incorporation or organization) Advanced Technology Center, Haifa 31053, Israel (Address of principal executive offices) ______________ Securities registered or to be registered pursuant to Section 12(b) of the Act: Ordinary Shares, nominal value 1.0 New Israeli Shekels per share (Title of Class) Securities registered or to be registered pursuant to Section 12(g) of the Act: Not Applicable Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: Not Applicable Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: 42,059,752 ordinary shares Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ⌧ No � Source: ELBIT SYSTEMS LTD, 20-F, May 28, 2008 If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes � No ⌧ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No � Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. Large accelerated filer ⌧ Accelerated filer � Non-accelerated filer � Indicate by check mark which financial statement item the registrant has elected to follow. Item 17 � Item 18 ⌧ If this is an annual report, indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes � No ⌧ Source: ELBIT SYSTEMS LTD, 20-F, May 28, 2008 Table of Contents Page International Disclosures Standards 1 Item 1. Identity of Directors, Senior Management and Advisors 1 Item 2. Offer Statistics and Expected Timetable 1 Item 3. Key Information 1 Item 4. Information on the Company 13 Item 4A. Unresolved Staff Comments 79 Item 5. Operating Financial Review and Prospects - Management’s Discussion and Analysis 80 Item 6. Directors, Senior Management and Employees. 108 Item 7. Major Shareholders and Related Party Transactions. 119 Item 8. Financial Information. 121 Item 9. Offer and Listing. 123 Item 10. Additional Information. 125 Item 11. Quantitative and Qualitative Disclosure of Market Risk. 137 Item 12. Description of Securities Other than Equity Securities. 137 Item 13. Defaults, Dividend Arrearages and Delinquencies. 137 Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds. 137 Item 15. Controls and Procedures 138 Item 16. [Reserved] 139 Item 16A. Audit Committee Financial Expert 139 Item 16B. Code of Ethics 139 Item 16C. Principal Accountant Fees and Services 139 Item 16D. Exemptions from the Listing Standards for Audit Committees 140 Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers 140 Item 17. Financial Statements. 140 Item 18. Financial Statements. 140 Item 19. Exhibits. 210 (i) Source: ELBIT SYSTEMS LTD, 20-F, May 28, 2008 PART I International Disclosures Standards Elbit Systems Ltd.’s (Elbit Systems) consolidated financial statements are prepared in accordance with United States Generally Accepted Accounting Principles (U.S. GAAP). Unless otherwise indicated, all financial information contained in this Annual Report on Form 20-F is presented in U.S. dollars. References in this Form 20-F to the Company” are to Elbit Systems and our subsidiaries. Item 1. Identity of Directors, Senior Management and Advisors Information not required in Annual Report on Form 20-F. Item 2. Offer Statistics and Expected Timetable Information not required in Annual Report on Form 20-F. Item 3. Key Information Selected Financial Data The following selected consolidated financial data of Elbit Systems as of and for the years ended December 31, 2003, 2004, 2005, 2006 and 2007 are derived from our audited consolidated financial statements of which the financial statements as of December 31, 2006 and 2007, and for each of the years ended December 31, 2005, 2006 and 2007, appear later in this Annual Report on Form 20-F. The audited financial statements have been prepared in accordance with U.S. GAAP. You should read the information presented below in conjunction with this statement. 1 Source: ELBIT SYSTEMS LTD, 20-F, May 28, 2008 Years Ended December 31 2003 2004 2005 2006 2007 (U.S. dollars in millions except for share and per share amounts) Income Statement Data: Revenues $ 898 $ 940 $ 1,070 $ 1,523 $ 1,982 Cost of revenues 673 690 787 1,150 1,455 Restructuring expenses - - 3 - 10 Gross profit 225 250 280 373 516 Research and development expenses, net 55 67 72 92 127 Marketing, selling, general and administrative expenses 116 118 133 189 264 In-process research and development write-off - - 8 - 17 Operating income 54 65 67 92 108 Financial expenses, net (5) (6) (11) (21) (19) Other income (expenses), net - 1 (5) 2 - Income before taxes on income 49 60 51 72 89 Taxes on income 11 15 16 21 14 Equity in net earnings (losses) of affiliated companies and partnership 7 7 (2)* 15 15 Minority interest in losses (earnings) of subsidiaries 1 - - 6 (13) Net income $ 46 $ 52 $ 33 $ 72 $ 77 Earnings per share: Basic net income per share $ 1.18 $ 1.30 $ 0.80 $ 1.75 $ 1.82 Weighted average number of shares used in computation of basic net income per share (in thousands) 39,061 39,952 40,750 41,340 42,041 Diluted net income per share $ 1.14 $ 1.26 $ 0.78 $ 1.72 $ 1.81 Weighted average number of shares used in computation of diluted net income per share (in thousands) 40,230 41,041 41,623 41,880 42,342 _______________________ * Includes acquired in-process research and development write-off of $8.5 in 2005. 2 Source: ELBIT SYSTEMS LTD, 20-F, May 28, 2008 December 31 2003 2004 2005 2006 2007 (U.S. dollars in millions except for share and per share amounts) Balance Sheet Data: Cash, cash equivalents and short-term investments $ 77 $ 35 $ 97 $ 88 $ 377 Long-term deposits, trade receivables, and marketable securities 2 2 2 6 34 Working capital 199 173 227 112 157 Short-term debt 15 10 38 28 29 Long-term debt 62 86 225 125 431 Share capital 11.3 11.5 11.6 11.9 11.9 Shareholders’ equity 452 432 451 494 537 Total assets $ 1,024 $ 1,034 $ 1,622 $ 1,773 $ 2,781 Outstanding ordinary shares of NIS 1 par value (in thousands) 39,337 40,561 40,967 42,017 42,060 Dividends paid per ordinary share with respect to the applicable year $ 0.40 $ 2.17*$ 0.54 $ 0.61 $ 0.67 _____________________ * Including an extraordinary dividend of $1.80 declared in the second quarter of 2004. 3 Source: ELBIT SYSTEMS LTD, 20-F, May 28, 2008 Forward-Looking Statements This Annual Report on Form 20-F 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 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 forward-looking statements generally are identified by the words believe,” project,” expect,” will likely result,” and strategy,” plan,” may,” should,” will,” would,” will be,” will continue,” will likely result” and similar expressions.