Ladies and gentlemen, thank you for standing by. Welcome to Elbit Systems Fourth Quarter and Full Year 2015 Results conference call. All participants are at present in listen-only mode. Following management’s formal presentation, instructions will be given for the question and answer session. As a reminder, this conference is being recorded. You should have all received by now the company’s press release. If you have not received it, please contact Elbit’s investor relations team at GK Investor Relations or view it in the News section of the company’s website, www.elbitsystems.com. I would now like to hand over the call to Mr. Kenny Green of GK Investor Relations. Kenny, please go ahead.

Thank you and good day to everybody. On behalf of all the investors, I would like to thank Elbit Systems management for hosting this call. Joining us on the call today are Mr. Bezhalel ‘Butzi’ Machlis, Elbit’s President and CEO, and Mr. Joseph Gaspar, Elbit Systems’ Chief Financial Officer. Joseph will begin by providing a discussion of the financial results of the fourth quarter and the full year of 2015, followed by Butzi who will talk about some of the significant events during the 2015 and beyond. We will then turn over the call to the question and answer session. Before we begin, I’d like to point out that the Safe Harbor statement in the company’s press release issued earlier today also refers to the contents of this conference call. With that, I would like now to turn over the call to Joseph. Joseph, please go ahead.

Thank you, Kenny. Hello everyone and thank you for joining us today. As we do every quarter, we will provide you with both our regular GAAP financial data as well as certain supplemental non-GAAP information. You can find all of the detailed GAAP financial data as well as the non-GAAP information and a reconciliation in today’s press release. Overall, we are very pleased with our performance in 2015 as well as in the final quarter, in particular with the growth in revenues, margin improvements, and the strong cash flow as well as the continuous growth in backlog. I will now highlight and discuss some of the key figures and trends. Our fourth quarter 2015 revenues were $886.6 million, an increase of 4.3% compared with the $850.3 million reported in the fourth quarter of 2014. I note that our fourth quarter revenues, like last year, were the strongest of the year. In 2015 as a whole, our revenues were $3.11 billion versus $2.96 billion last year, representing growth of 5%. In terms of revenue breakdown across our areas of operation in the quarter, airborne systems was 38%, C4ISR was 36%, land systems was 14%, electro-optics 9%, and the rest was 3%. Compared with the fourth quarter of last year, the overall revenue mix from the areas of operation was similar. In terms of geographic breakdown for the quarter, Israel was 20% of revenues, North America 25%, Europe 21% and Asia-Pacific was 22%, Latin America was 11%, and the rest of the world 1%. Compared with the fourth quarter last year, we primarily saw an increased contribution from Europe and Israel and a lower contribution from Latin America. Looking at 2015 as a whole, we saw a major increase in armored vehicle systems where revenues more than doubled compared with last year.…

Thank you, Joseph. Our 2015 results demonstrate a strong and growing business. Our top line grew by 5% driven by our ongoing growth and backlog, which have continued to expand over the past two years. At the end of 2015, our backlog is 5% ahead of the backlog at the end of 2014 despite the high levels of deliveries and revenues throughout the year. Looking ahead, this sets us up well for the potential continued future growth into 2016 and beyond. We are also proud of the improved profitability of 2015 compared with last year, a growth of approximately 20% of the bottom line. Just to highlight some events in 2015, in April we established a new division called ISTAR, focused on providing our customers with a comprehensive range of advanced intelligence solutions. This division combines our electro-optics and UAS operations. We have already begun to realize some of the sales synergies and cost savings of having electro-optics and UAS under one roof. We also established a new subsidiary called Cyberbit, consolidating and spearheading our activities in the cyber area. In the middle of the year, we acquired the cyber and intelligence division of NICE Systems, which we successfully integrated into Cyberbit. We are also currently working to consolidate our various companies in the United Kingdom under one country manager which we believe will lead to strong synergies and better position us in this important market. These types of efforts are a part of the underlying reason for the ongoing trends of improving performance at Elbit Systems. I would like to focus on two regions, Europe and Asia-Pacific in which we are very active, that have helped drive our growth in 2015. First, Europe. This region represented 60% of our revenues in 2015 and in the fourth quarter crossed the…

[Operator instructions] The first question is from Gilad Alper of Excellence. Please go ahead.

Hi, thanks for taking my question. I actually have a couple, firstly on Asia. It’s been growing very nicely for you over the last year or couple of years. In 2015, if I’m not mistaken, it grew by 50%, so obviously I’m guessing that’s not going to continue at this pace, but if you can tell us what you think about the future growth of Asia, is it going to be maybe low double digits, maybe just as strong single digits. The second question is on the IMI acquisition. I know that’s--you know, it’s not clear if it’s even going to happen, but assuming it does, can you just say a few words about what IMI actually brings to Elbit, what do they do, what are the main synergies between IMI and Elbit? Thank you.

With regard to the first question about Asia-Pacific, we see growing budgets in this region, and it’s very relevant to us. Our technologies are very relevant to the requirement in this area. I can also--and you know that we are very active in Australia, in India, as well as in other countries. I can tell you that during this year, we had new customers in this region and just a few months ago, we publicized a deal, a contract in the Philippines, but that’s not the only new customer we have in this region. We see a lot of potential for us for the different business lines in Elbit. So I foresee continued growth for Elbit in this very important market. With regard to the IMI acquisition, there are synergies between Elbit and IMI, mainly in various land systems. In general, I believe that it’s a good acquisition for Elbit. Not only that, we have proved in the past that we know how to acquire companies, how to combine them with Elbit, and how to create value for the acquired companies and for their employees as well for the defense of Israel and for the economy of Israel. So I’m sure that such a deal will make good to IMI employees, to Israel, as well as to the Israel economy. But as you know, 80% of our revenues is for export. Of course, we have our limit as well, and such a deal needs to support our objectives as well and our shareholders’ objectives. There is a dialog between the Minister of Finance and Elbit, and I hope that together the process will converge. It’s difficult for me to predict how long will it take. Once again with regard to synergies, there are some synergies mainly in the area of land systems, upgrading both manned battled tanks, fire support solutions, [indiscernible] and such type of activities.

Okay, just to clarify, there is obviously some issues with personnel, with the cost of the work force at IMI. If you acquire the company, IMI, do all of those issues with the union, with workers and such, do they all need to be resolved before you make the acquisition or do you also have to continue negotiating with the trade unions, with the national trade union [indiscernible] after you make the acquisition, or do you need to get everything already packed and ready from the state?

From what we know, there is full support from the union to this acquisition, and as we have proved already, we know how to deal with unions and I’m sure that this acquisition, as I already mentioned, will be good for the employees as well.

Okay, thanks.

The next question is from Yoav Burgan of Poalim Sahar. Please go ahead.

Hi, I have just two short questions on the Q4 P&L. One, first one is on the financial expenses, which this quarter seemed to be low, even very low not only in comparison to last year but also in comparison to the previous quarters of 2015. What was the main reason or main reasons for this, Joseph?

Hi Yoav. First of all, we had very strong cash flow, as you all realize, so that helped a lot. Second in our hedging activities, we had income in this quarter and that is offset--it did offset some of the costs. These are the reasons for the specific low numbers in this quarter.

Okay, good. The next question is on the equity in the net earnings of affiliated companies. I see there were $3.3 million in Q4. This seems to be a pretty high number. I don’t remember seeing such a high number, I think since 2013. Could you elaborate on this please a bit?

Yes. Some of our partnerships that their results are reflected in this line, they have seasonality, and specifically in this year they had a strong fourth quarter, and that was more related to specific programs that were delivered and profit was realized on that. So this is a little bit on the high side.

Okay, so this is not necessarily going forward as well, right?

I think going forward, you should look at the overall year performance and take it from there.

Okay, good. Thank you very much.

The next question is from Tasha Keeney of ARK Invest. Please go ahead.

Hi, yes. I was wondering what opportunities do you see in the commercial drone space, aside from military?

We have already some commercial activities in our portfolio, such as commercial avionics. That’s a growing activity in the company, and on top of that, we deal also with medical solutions mainly in the U.S. We also deal with energy. We have unique technologies mainly in the area of super capacitors, and there are more commercial activities in Elbit which are derivatives of defense applications technology, which we have some of them are organic growth engines of the company and some of them probably will be divested at a later stage.

Okay. As you see regulations opening up for more commercial opportunities in the drone space, say with delivery drones or surveillance and oil and gas, do you see that market growing for you?

We certainly see some opportunities for us in the area of commercial UAS’. Actually, our Hermes 450 is flying these days in the U.S. in the commercial air space for commercial applications. We explore this market and we have certainly a lot to offer there.

Okay, thank you.

If there are any additional questions, please press star, one. If you wish to cancel your request, please press star, two. Please stand by while we poll for more questions. There are no further questions at this time. Before I ask Mr. Machlis to go ahead with his closing statement, I would like to remind participants that a replay of this call will be available two hours after the conference ends. In the U.S., please call 1-888-326-9310; in Israel, please call 03-925-5900, and internationally please call 972-3-925-5900. A replay of the call will also be available at the company’s website, www.elbitsystems.com. Mr. Machlis, would you like to make your concluding statement?

Thank you. I would like to thank all our employees for their continued hard work. To everyone on the call, thank you for joining us today and for your continued support and interest in our company. Have a good day, and good bye.

Thank you. This concludes the Elbit Systems Limited Fourth Quarter 2015 Results conference call. Thank you for your participation. You may go ahead and disconnect.