Ladies and gentlemen, thank you for standing by. Welcome to Elbit Systems First Quarter 2016 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 turn the call over to Mr. Ehud Helft of GK Investor Relations. Ehud, please begin.

Thank you, operator 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. Butzi’ Machlis, Elbit’s President and CEO, and Mr. Joseph Gaspar, Elbit's Chief Financial Officer. Joseph will begin by providing a discussion of the financial results of the first quarter of 2015, followed by Butzi who will talk about some of the significant events during the quarter 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 now like to hand over the call to Joseph. Joseph, please begin.

Thank you, Ehud. 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 pleased with our performance in the first quarter of 2016, in particular we have continued our growth in backlog and with the continued improvement in our gross margins. I will now highlight and discuss some of the key figures and trends. Our first quarter 2016 revenues were $721.2 million, an increase of 2.1% compared with the $706.6 million reported in the first quarter of 2015. In terms of revenue breakdown across our areas of operation in the quarter, airborne systems was 39%, C4ISR was 31%, land systems 19%, electro-optics was 7%, and the rest was 4%. Compared with the first quarter of last year, the overall revenue mix from the areas of operation was quite similar. In terms of geographic breakdown for the quarter, Asia-Pacific was our largest region at 29% of revenues, North America was 25%, Israel was 20%, Europe 16%, Latin America 9%, and the rest of the world was 1%. Compared with the first quarter last year, we primarily saw increased contribution from Asia Pacific, as well as Europe and a lower contribution from the Americas. For the first quarter, the non-GAAP gross margin was 30.5% versus 29.2% in the first quarter of 2015. Our GAAP gross margin was 29.4% versus 28.5% last year. The improvement in the gross margin was mainly due to the mix of products sold in the quarter and our continued efforts to improve profitability among our various units, while maintaining efficient…

Thank you, Joseph. We are pleased with our first quarter financial results, especially our solid growth of over 8% in backlog which provide us with strong revenue visibility over the long-term. This comes on top of good level of revenues in the past few quarters. Another important aspect of our result is a gradual trend over the past few years of improving gross margins. This is a effort of the ongoing backlog we have taken to operate efficiently, improve in term of processes, while harvesting synergies across our large businesses – business units. I would like to mention that the environment for defense spending has become increasingly positive and we see many opportunities in the market. We are investing more in sales and marketing in order to build and positive growth opportunities and as our recent growth in backlog showed we are being successful which should benefit us for the years to come. We are seeing strength in many of our target markets, particularly Asia Pacific and the resumption or world in defense spending in New York, the order we have won in the past few month’s highlights the diversification in our business and how our target markets are growing across many regions. In the United States which have always been one of our major regions, with over a quarter of revenues, a few weeks ago we received a US Navy contract to perform to modification perform modifications to Naval Test Pilot School's C-26 aircraft. The Naval Test Pilot School trained experienced pilot, naval flight officers and engineers to become qualified test pilots, test flight officer and flight test engineers that support test and evaluation programs. At the end of March, we announced that our Integrated Fixed Towers, IFT border surveillance system that we are building in Arizona were certified…

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

Hi. Thanks for taking my call. My question is on the continued disconnect between the rise or the growth in backlog and the somewhat disappointing growth in revenues, I think we've been seeing that for three quarters now and I think its coming to a peak where revenues are basically stagnating and backlog is growing, I think 8% from last year, so can you just talk about why we are seeing this continued disconnect? Thanks.

Our backlog has grown, as you have mentioned 8% in the last quarter year-over-year I am talking about, and distribution of the backlog varies over the years, the distribution over the future years. Some of the backlog is in more longer term than used to be in the past. So therefore we see that coming through a little bit slower than what we have seen in the past. However, we do seen the need and near term future, the growth - the absolute growth in the backlog maybe not at 8%, but maybe at a lower percentage number that will drive the growth in revenue this year and next year.

That - I mean, is there any way to make the approximate and say that you know, if backlog is growing by 8% than revenues on a year and year out basis should grow by 4% or there are about or maybe there is no way to actually make such an exact connection?

We are releasing in our press release the number that describes the percentage of the backlog to be sold in the coming quarters, in the next seven quarters, that means three quarters of this year and 2017. Probably to take the approximation of that, maybe the most - the best way to make an estimate.

Okay. Okay, thanks.

The next question from [indiscernible] Please go ahead. Q – Unidentified Analyst: Hi. I wanted to ask whether the backlog includes the contract with KBR and if so at a 100% or at 50%?

The backlog does not include the contract that we have with KBR, the MFTS contract at all, same way the revenues in the future will not include these revenues. However, the profit generated by these revenues in the future we will count for 50% of that in our equity line. So the growth of the backlog of over $500 million in the last year does not include the over $700 million of this contract which is above it. Q – Unidentified Analyst: So you are not going to consolidate this operation?

No. Q – Unidentified Analyst: So second question please, what is the total inventory of your Phantom options?

Sorry, I didn’t get that. Q – Unidentified Analyst: What is the total amount of the Phantom options outstanding?

I think, I am not sure that I have the exact number, but if you were looking, our 20-F – in our 20-F release of the end of 2015 we have all the details over there. So - and if you don’t find there give me a call, send me an email and I will inform you. Q – Unidentified Analyst: Thank you.

[Operator Instructions] The next is a follow up from Gilad Alper [Excellence] Please go ahead.

Thanks again. Just another question on the Cyber division of NICE Systems, along both of your quarters ago, if you can just say a few words about development of that business in terms of breakeven, in terms of do they generate revenues as much as you had expected when you bought the company? Thanks.

We are happy where this acquisition remained and business is growing for us, the business is profitable and it meets our expectations and beyond.

Okay. Thanks.

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 this call will also be available at the company’s website, www.elbitsystems.com. Mr. Machlis, would you like to make your concluding statement?

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 first quarter 2016 results conference call. Thank you for your participation. You may go ahead and disconnect.