13 May 14. Elbit Systems Ltd. (the “Company”) (NASDAQ and TASE: ESLT), the international defense electronics company, reported its consolidated results for the quarter ended March 31, 2014. Revenues in the first quarter of 2014 were $682.6m, as compared to $680.2m in the first quarter of 2013. Gross profit amounted to $193.2m (28.3% of revenues) in the first quarter of 2014, as compared to $192.7m (28.3% of revenues) in the first quarter of 2013. The non-GAAP gross profit in the first quarter of 2014 was $198.6m (29.1% of revenues), as compared to $198.3m (29.2% of revenues) in the first quarter of 2013. Research and development expenses, net were $48.9m (7.2% of revenues) in the first quarter of 2014, as compared to $51.0m (7.5% of revenues) in the first quarter of 2013. The lower net expenses in the quarter is a result primarily of higher research and development income from the Office of the Chief Scientist and the Israeli Ministry of Defense. Marketing and selling expenses were $55.0m (8.1% of revenues) in the first quarter of 2014, as compared to $55.8m (8.2% of revenues) in the first quarter of 2013. General and administrative expenses were $35.3m (5.2% of revenues) in the first quarter of 2014, as compared to $32.2m (4.7% of revenues) in the first quarter of 2013. The increase in general and administrative expenses in the first quarter of 2014 was mainly a result of higher expenses related to the Company’s phantom option retention plan. Other income, net in the first quarter of 2014 amounted to $6.0m. The amount reflects a net gain related to the revaluation of the previously held investment in Pearls of Wisdom Ltd.’s shares at the acquisition date due to its accounting treatment as a business combination achieved in stages. As a result of this acquisition the Company increased its holdings in Pearls of Wisdom from 49% to 90%. Operating income was $59.9m (8.8% of revenues) in the first quarter of 2014, as compared to operating income of $53.7m (7.9% of revenues) in the first quarter of 2013. The non-GAAP operating income in the first quarter of 2014 was $65.0m (9.5% of revenues), as compared to $65.3m (9.6% of revenues) in the first quarter of 2013. Financial expenses, net were $4.7m in the first quarter of 2014, as compared to $7.9m in the first quarter of 2013. The higher level of financial expenses in the first quarter of 2013 was mainly related to exchange rate differences. Taxes on income were $6.2m (effective tax rate of 11.2%) in the first quarter of 2014, as compared to $4.6m (effective tax rate of 10.1%) in the first quarter of 2013. Equity in net earnings of affiliated companies and partnerships was $1.1m (0.2% of revenues) in the first quarter of 2014, as compared to $1.7m (0.2% of revenues) in the first quarter of 2013. Net income attributable to non-controlling interests was $2.0m in the first quarter of 2014, as compared to $1.1m in the first quarter of 2013. Net income attributable to the Company’s shareholders in the first quarter of 2014 was $48.2m (7.1% of revenues), as compared to $41.4m (6.1% of revenues) in the first quarter of 2013. The non-GAAP net income in the first quarter of 2014 was $51.9m (7.6% of revenues), as compared to $51.1m (7.5% of revenues) in the first quarter of 2013. Diluted net earnings per share attributable to the Company’s shareholders were $1.13 for the first quarter of 2014, as compared with diluted net earnings per share of $0.98 for the first quarter of 2013. The non-GAAP diluted earnings per share in the first quarter of 2014 were $1.22, same as for the first quarter of 2013. The Company’s backlog of orders for the quarter ended March 31, 2014 totalled $6,064m, as compared to $5,777m as of March 31, 2013. Approximately 72% of the current backlog is attributable to orders from outside Israel. Approximately 66% of the current backlog is scheduled to be performed during 2014 and 2015. Operating cash flow for the quarter ended March 31, 2014 was $80.8m, as compared to $13