The following discussion and analysis should be read together with our audited consolidated financial statements and notes appearing in Item 18 below. General Critical Accounting Policies and Estimates Our significant accounting policies are described in Item 18. Financial Statements – Note 2. Our results of operations and financial condition are based on our consolidated financial statements, which are presented in conformity with United States generally accepted accounting principles (U.S. GAAP). The preparation of the consolidated financial statements requires management to select accounting policies, and to make estimates, assumptions and judgments that involve the accounting policies described below that affect the amounts reported in the consolidated financial statements. Significant changes in assumptions and/or conditions and changes in our critical accounting policies could materially impact our operating results and financial condition. We believe our most critical accounting policies relate to: •Revenue Recognition; •Impairment of Long-Lived Assets and Goodwill; •Income Taxes; •Post-employment Benefits Liabilities. Revenue Recognition We generate revenues primarily from fixed-price long-term contracts involving the design, development, manufacture and integration of defense systems and products. In addition, to a lesser extent, we provide non-defense systems and products as well as support and services for our systems and products. Revenues from our contracts are principally recognized using the Financial Accounting Standards Board (FASB), Accounting Standards Codification (ASC) 606. We assess contractual arrangements at inception according to the five-step model of ASC 606. We recognize revenues for each of the identified performance obligations when our customer obtains control of the products or services. The assessment of when the customer obtains control involves significant judgments, including, inter alia, whether there is an alternative use for a product, the contract terms, assessment of the enforceable rights for payments, and technical or contractual constraints. As a practical expedient we may occasionally account for group of performance obligations or contracts collectively, as opposed to individually by using the “portfolio approach” or the “series of distinct goods and services” method. Under the “portfolio approach” method, the Company may combine individual performance obligations, if the goods or services of the individual performance obligations have similar characteristics and the Company reasonably expects that the effect on the financial statements of applying this guidance would not defer materially from applying the guidance to the individual contracts or performance obligations within that portfolio. In addition, as a practical expedient, the Company does not assess the existence of a significant financing component when the difference between payment and transfer of control is less than one year. For most of our long-term contracts, where our performance does not create an asset with an alternative use, we recognize revenue over time as we perform because of continuous transfer of control to the customer. This continuous transfer of control to the customer is supported by the governing law or clauses in the contract that typically allow the customer control in the work-in-process as evidenced either by contractual termination clauses or by our rights to payment for work performed to date plus a reasonable profit for products or services that do not have an alternative use to the Company. 42 For these performance obligations that are satisfied over time, we generally recognize revenue using an input method with revenue amounts being recognized proportionately as costs are incurred relative to the total expected costs to satisfy the performance obligation. Revenue for performance obligations that are not recognized over time are recognized at the point in time when control transfers to the customer (which is generally when the customer can direct the use of and obtain substantially all of the remaining benefits from the products, generally when the customer obtains control after delivery). Service revenues include contracts primarily for the provision of supplies and services other than those associated with activities related to design, development or manufacturing or delivery of products. It may be a standalone service contract or a service performance obligation, which are distinct from design, development or products delivery contracts. Our service contracts include contracts in which the customer simultaneously receives and consumes the benefits provided as the contract is performed. Our service contracts primarily include operation-type contracts, outsourcing-type arrangements, “stand ready” type maintenance contracts, training and similar activities. Revenues from service contracts or performance obligations were less than 10% of total revenues in each of the fiscal years 2025, 2024 and 2023. For additional information see Item 18. Financial Statements – Note 2S. Impairment of Long-Lived Assets and Goodwill Our long-lived assets, including identifiable property, plant and equipment and intangible assets, are reviewed for impairment in accordance with ASC 360-10-35, “Property, Plant and Equipment Subsequent Measurement”, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If an asset is determined to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Fair value of non-financial assets is determined based on market participant assumptions. During the years ended December 31, 2023, December 31, 2024 and December 31, 2025, no material impairment of long-lived assets was identified. See Item 18. Financial Statements – Notes 2O and 2P for additional information. Goodwill represents the excess of the cost of acquired businesses over the fair values of the assets acquired net of liabilities assumed. Goodwill is not amortized, but is instead tested for impairment at least annually (or more frequently if impairment indicators arise). We review goodwill for impairment on an annual basis and whenever events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. Such events or circumstances could include significant changes in the business climate of our industry, operating performance indicators, competition or sale or disposal of a portion of a reporting unit. The assessment is performed at the reporting unit level. Our annual testing date for all reporting units is December 31. Performing goodwill impairment testing requires judgment, including how we define reporting units and determine their fair value. We consider a component of our business to be a reporting unit if it constitutes a business for which discrete financial information is available and management regularly reviews the operating results of that component. We estimate the fair value of each reporting unit using a discounted cash flow methodology that requires significant judgment. Forecasts of future cash flows are based on our best estimate of future sales and operating costs, based primarily on existing backlog, expected future contracts, contracts with suppliers, labor agreements and general market conditions. We prepare cash flow projections for each reporting unit using a five-year forecast of cash flows and a terminal value based on the Perpetuity Growth Model. The five-year forecast and related assumptions are derived from the most recent annual financial forecast for which the planning process commences in our fourth quarter. The discount rate applied to our forecasts of future cash flows is based on our estimated weighted average cost of capital and includes factors such as the risk-free rate of return and the return an outside investor would expect to earn based on the overall level of inherent risk. The determination of expected returns includes consideration of the beta (a measure of risk) of traded securities of comparable companies. Changes in these estimates and assumptions could materially affect the determination of fair value and/or goodwill impairment for each reporting unit. We evaluate goodwill for impairment by comparing the estimated fair value of a reporting unit to its carrying value, including goodwill. If the carrying value exceeds the estimated fair value, we measure impairment by comparing the derived fair value of goodwill to its carrying value, and any impairment determined is recorded in the current period. For each of the three years ended December 31, 2025, no material impairment of goodwill was identified. See Item 18. Financial Statements - Note 2P for additional information. 43 Income Taxes We record income taxes using the asset and liability approach, whereby deferred tax assets and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and of operating losses and credit carry-forwards, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. We record a valuation allowance, if necessary, to reduce deferred tax assets to amounts that are more likely than not to be realized. We have considered future taxable income on a jurisdiction by jurisdiction basis and used prudent and feasible tax planning strategies and other available evidence in determining the need for a valuation allowance. In the event we determine that we will be able to realize these deferred income tax assets in the future, we would adjust the valuation allowance, which would reduce the provision for income taxes. We establish reserves for tax-related uncertainties based on estimates of whether, and to what extent, additional taxes will be due. These reserves are established when we believe that certain positions might be challenged despite our belief that the positions we take in our tax returns are in accordance with applicable tax laws. As part of the determination of our tax liability, management exercises considerable judgment in evaluating tax positions we take in determining our income tax provision and establishing reserves for tax contingencies in accordance with ASC 740 “Income Taxes” guidelines. We adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit, new tax legislation or the change of an estimate based on new information. To the extent that the final tax outcome of these matters is different from the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made. During 2023, 2024 and 2025, certain of our subsidiaries settled certain income tax matters pertaining to multiple years in Israel and Europe. Elbit Systems and certain of our Israeli and European subsidiaries are undergoing tax audits by the Israeli Tax Authority. As of December 31, 2025, the provision for income taxes includes the effect of reserve provisions and changes to reserves that are considered appropriate, as well as the related interest and penalties. Management’s judgment is required in determining our provision for income taxes in each of the jurisdictions in which we operate. The provision for income tax is calculated based on our assumptions as to our entitlement to various benefits under the applicable tax laws in the jurisdictions in which we operate. Entitlement to such benefits depends upon our compliance with the terms and conditions set out in these tax laws. Although we believe that our estimates are reasonable and that we have considered future taxable income and ongoing prudent and feasible tax strategies in estimating our tax outcome, there is no assurance that the final tax outcomes will not be different than those which are reflected in our historical income tax provisions and accruals. Such differences could have a material effect on our income tax provision, net income and cash balances in the period in which such determination is made. See Item 18. Financial Statements - Notes 2V and 18. Post-employment Benefits Liabilities We have several post-employment benefit plans. The plans are funded partly by deposits with insurance companies, financial institutions or funds managed by a trustee. The plans are classified as defined contribution plans or as defined benefit plans. Some current and former employees of the Company's subsidiaries, located mainly in Israel and in the U.S., have defined benefit pension plans maintained by the Company. Generally, according to the terms of the plans, the employees are entitled to receive pension payments based on, among other things, their number of years of service (resulting in certain cases of pensions up to 70% of their last base salary) or computed, in certain cases, based on a fixed salary. In addition, some employees of a subsidiary in Israel are entitled to early retirement if they meet certain conditions, including certain age and seniority levels at the time of retirement. We recognize on a plan-by-plan basis the net funded status of our post-retirement benefit plans under U.S. GAAP as either an asset or a liability on our consolidated balance sheets. The funded status represents the difference between the fair value of each plan’s assets and the benefit obligation of the plan. The benefit obligation represents the present value of the estimated future benefits we currently expect to pay to plan participants based on past service. 44 The plan assets and benefit obligations are measured at the end of each year or more frequently, upon the occurrence of certain events such as a significant plan amendment, settlement or curtailment. The amounts we record are measured using actuarial valuations (based on independent actuarial advice) which are dependent upon key assumptions such as: discount rates, the expected long-term rate of return on plan assets (determined by considering the expected return available on assets underlying the current investment policy), participant longevity, employee turnover, inflation rates, future payroll increases and the health care cost trend rates for our retiree medical plans. The assumptions we make affect both the calculation of the benefit obligations as of the measurement date and the calculation of net periodic benefit cost in subsequent periods. When reassessing these assumptions, we consider past and current market conditions and make judgments about future market trends. We also consider factors such as the timing and amounts of expected contributions to the plans and benefit payments to plan participants. Any changes in these assumptions will impact (either increase or decrease) the carrying amount of our post-employment benefit obligations and plan assets. See Item 18. Financial Statements – Notes 2R and 17. Governmental Policies Governmental policies and regulations applicable to defense contractors, such as cost accounting and audit, export control, procurement solicitation and anti-bribery rules and regulations, could have a material impact on our operations. See Item 3. Key Information – Risk Factors – Risks Related to Legal and Regulatory Requirements and Item 4. Information on the Company – Governmental Regulation. Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, as amended, we are required to include in our annual report on Form 20-F a report of managment on the effectiveness of our internal control over financial reporting as of the end of each fiscal year. See Item 15. Controls and Procedures – Management’s Annual Report on Internal Control Over Financial Reporting. Recent Accounting Pronouncements See Item 18. Financial Statements – Note 2AF. Long-Term Arrangements and Commitments Government Funding of Development. Elbit Systems and certain of our Israeli subsidiaries partially finance our research and development expenditures through programs sponsored by the Israel Innovation Authority (IIA) in the Ministry of Economy (formerly the Office of the Chief Scientist) for the support of research and development activities conducted in Israel. At the time the funds are received, successful development of the funded projects is not assured. In exchange for these funds, Elbit Systems and the subsidiaries agree to pay 2% to 5% of total sales of the products developed under these programs. The obligation to pay these royalties is contingent on actual future sales of the products. Elbit Systems and some of our subsidiaries may also be obligated to pay certain amounts to the IMOD and others entities on certain sales including sales resulting from technologies developed with such respective entity’s funds. See Item 4. Information on the Company – Conditions in Israel – Israel Innovation Authority and Investment Center Funding and Item 18. Financial Statements – Note 2U and Note 21A. Lease Commitments. The future minimum lease commitments of the Company under various non-cancelable operating lease agreements for property, motor vehicles and office equipment, excluding imputed interest, as of December 31, 2025 were as follows: $120.7 million for 2026, $89.3 million for 2027, $66.1 million for 2028, $57.3 million for 2029, $54.8 million for 2030 and $339.5 million for 2031 and thereafter. See Item 18. Financial Statements – Note 9. Bank and Notes Covenants. In connection with our Series B, C and D Notes, bank credits and loans, including performance guarantees issued by banks and bank guarantees in order to secure certain advances from customers, Elbit Systems and certain subsidiaries are obligated to meet certain financial covenants. See below “Financial Resources”. Such covenants include, inter alia, requirements for shareholders’ equity, current ratio, operating profit margin, tangible net worth, EBITDA, interest coverage ratio, total leverage, equity and net financial debt. See Item 18. Financial Statements – Note 21E. In respect of each of the 12 month periods ending December 31, 2024 and 2025, the Company was in material compliance with its loan obligations. 45 Commercial Paper. As of December 31, 2025 and 2024, we had series A commercial paper in the amount of approximately $48 million par value issued and outstanding and series A and B commercial paper in the amount of approximately $350 million par value issued and outstanding , respectively. The series A and B commercial paper is for a term of 90 days, which may be extended by additional periods of 90 days each, up to a maximum period of five years, and is also subject to early repayment at the request of an investor or at the Company's discretion. See also Item 18. Financial Statements – Note 12. Bank and Other Financial Institution Guarantees. As of December 31, 2025 and 2024, guarantees in the aggregate amount of approximately $5,245 million and $4,088 million, respectively, were issued by banks and other financial institutions on behalf of several Company entities primarily in order to secure certain advances from customers and performance obligations. Purchase Commitments. As of December 31, 2025 and 2024 we had purchase commitments of approximately $4,601 million and $4,345 million, respectively. These purchase orders and subcontracts are typically in standard formats proposed by us. These subcontracts and purchase orders also reflect provisions from the applicable prime contract that apply to subcontractors and vendors. The terms typically included in these purchase orders and subcontracts are consistent with Uniform Commercial Code provisions in the United States for sales of goods, as well as with specific terms requested by our customers in international contracts. These terms include our right to terminate the purchase order or subcontract in the event of the vendor’s or subcontractor’s default, and frequently also include our right to terminate the order or subcontract for our convenience (or if our prime contractor has so terminated the prime contract). Such purchase orders and subcontracts typically are not subject to variable price provisions. Acquisitions During 2025 See Item 4. Information on the Company – Mergers, Acquisitions and Divestitures and Item 18. Financial Statements – Note 1D. Backlog of Orders Our backlog includes firm commitments received from customers for systems, products, services and projects that have yet to be delivered or completed, as applicable. Our policy is to include orders in our backlog only when specific conditions are met. Examples of these conditions may include, among others, receipt of a binding letter of commitment or contract, program funding, advances, letters of credit, guarantees and/or other commitments from customers. As a result, from time to time we could have unrecorded orders not included in our reported backlog. We reduce backlog when revenues for a specific contract are recognized, such as when delivery or acceptance occurs or when contract milestones or engineering progress under long-term contracts are recognized as achieved, or when revenues are recognized based on costs incurred. In the unusual event of a contract cancellation, we reduce our backlog accordingly. The method of backlog recognition used may differ depending on the particular contract. Orders in currencies other than U.S. dollars are translated periodically into U.S. dollars and recorded accordingly. Our backlog of orders as of December 31, 2025 was $28,131 million, of which 72% was for orders outside Israel. Our backlog of orders as of December 31, 2024 was $22,617 million, of which 65% was for orders outside Israel. Approximately 54% our backlog as of December 31, 2025 is scheduled to be performed during 2026 and 2027. The rest of the 46% is scheduled to be performed in 2028 and thereafter. Backlog information and any comparison of backlog as of different dates may not necessarily represent an indication of future sales. 46 Trends The recent conflicts in the Middle East, as well as the ongoing conflict between Russia and Ukraine, have elevated geopolitical tensions throughout the world. These conflicts have also changed military and homeland security requirements, that which previously focused on low intensity conflicts and defense against terrorism and cyber-attacks. Since these conflicts began, governments around the world, including the IMOD, have announced plans to increase defense spending and procure a range of advanced capabilities to better prepare for high intensity “near peer” conflicts. Specifically, since October 7, 2023, the IMOD's demand for our products and solutions has materially increased. The deployment of large armored formations and the increased tempo and intensity of recent conflicts have shifted in defense procurement priorities and increased demand for capabilities that enable the fielding of large mechanized military formations capable of performing multi-domain operations and at the same time, addressing the risks presented by innovative technological capabilities deployed extensively in modern battlefields, such as remotely piloted aircraft and advanced munitions. This global trend has increased demand in the areas of C4ISR systems, cyber-defense systems, network centric information and operational systems, intelligence gathering systems, border and perimeter security systems, unmanned aircraft systems, unmanned surface vessels, remote controlled systems, precision munitions, tank, artillery and mortar munitions, vehicle survivability and force protection systems, SIGINT and EW systems, space and satellite-based defense capabilities and homeland security solutions. The technological advances in commercial technologies have led to increasing demand for technological solutions that incorporate digital transformation, including AI, big data analytics, robotics, automation and information assurance by military forces. Moreover, there is a continuing demand for cost-effective logistic support and training and simulation services. In response to these developments, numerous European countries have announced plans to significantly increase defense spending and strengthen their armed forces, though full implementation is expected to take time. The U.S. government has also signaled its intent to materially increase defense spending, with proposed budgets reaching $1.5 trillion in fiscal year 2027. These developments have created various opportunities for the Company and its U.S. and European subsidiaries. Both the U.S. and European markets continue to place emphasis on local manufacturing capabilities and supply chains. We continue to actively pursue the development of local capabilities in our major markets, including subsidiaries with significant manufacturing capacity and organic supply chains in the U.S. and Europe, among others. We believe our core technologies and capabilities position us to benefit from these prevailing market trends; however, our participation in certain programs may be restricted by specific eligibility requirements or terms.Furthermore, the ongoing conflicts have contributed to supply chain disruptions, market volatility and global sanctions, each of which present operational challenges (see Item 3. Key Information – Risk Factors – Risks Related to our Operations). The conflict in the Middle East has also affected our operations, human resources and other aspects of our business. For additional information see Item 4. Information on the Company – Conditions in Israel – Impact of recent conflicts in the Middle East on the Company, and Item 3. Key Information – Risk Factors – Risks Related to Our Israeli Operations and Environment – Conditions in Israel and the Middle East may affect our operations. Currently, we cannot assess the full impact on our business of the conflicts in the Middle East or between Russia and Ukraine, and the impacts we have experienced so far may not be indicative of our future operating results or financial conditions. 47 Summary of Operating Results The following table sets forth our consolidated statements of operations for each of the three years ended December 31, 2025. (in thousands of U.S. dollars except per share data) Year ended December 31, 2025 % Year ended December 31, 2024 % Year ended December 31, 2023 % Revenues $ 7,938,627 100.0 $ 6,827,871 100.0 $ 5,974,744 100.0 Cost of revenues 6,003,374 75.6 5,186,051 76.0 4,491,790 75.2 Gross profit 1,935,253 24.4 1,641,820 24.0 1,482,954 24.8 Research and development (R&D) expenses 599,567 7.5 544,140 8.0 502,654 8.4 Less – participation (82,425) (1.0) (77,738) (1.2) (78,234) (1.3) R&D expenses, net 517,142 6.5 466,402 6.8 424,420 7.1 Marketing and selling expenses 399,437 5.0 375,358 5.5 359,141 6.0 General and administrative expenses 347,250 4.4 311,007 4.6 330,285 5.5 1,263,829 15.9 1,152,767 16.9 1,113,846 18.6 Operating income 671,424 8.5 489,053 7.2 369,108 6.2 Financial expenses, net (138,618) (1.8) (151,125) 2.3 (137,827) (2.3) Other income (expenses), net 29,109 0.4 3,818 0.1 (4,787) (0.1) Income before taxes on income 561,915 7.1 341,746 5.0 226,494 3.8 Taxes on income (55,539) (0.7) (39,058) (0.6) (22,913) (0.4) 506,376 6.4 302,688 4.4 203,581 3.4 Equity in net earnings of affiliated companies and partnerships 29,243 0.3 19,176 0.3 12,275 0.2 Net income $ 535,619 6.7 $ 321,864 4.7 $ 215,856 3.6 Less – net income attributable to non-controlling interests (1,280) — (726) — (725) — Net income attributable to the Company’s shareholders $ 534,339 6.7 $ 321,138 4.7 $ 215,131 3.6 Diluted net earnings per share: $ 11.39 $ 7.18 $ 4.82 48 2025 Compared to 2024 The following is an overview for 2025 compared to 2024. A discussion of our results of operations for 2024 compared to 2023 may be found on pages 46-51 of our annual report on Form 20-F filed March 28, 2025 on the EDGAR database of the U.S. Securities and Exchange Commission. Revenues Our sales are primarily to governmental entities and prime contractors under government defense and homeland security programs. Accordingly, the level of our revenues is subject to governmental budgetary constraints. Our consolidated revenues in 2025 increased by 16.3% to $7,938.6 million from $6,827.9 million in 2024. C4I and Cyber revenues increased by 16% year-over-year mainly due to sales of radio systems and command and control systems in Europe and Israel. ISTAR and EW revenues increased by 16% mainly due to increased sales of Maritime systems, Electro-Optic systems which include Space systems, as well as a variety of Electronic Warfare systems including C-UAS. Land revenues increased by 38% mainly due to the increase in sales of ammunition and munitions in Israel and Europe. ESA revenues increased by 7% mainly due to the increase in sales of night-vision systems and Maritime systems, partially offset by the decrease in medical devices sales. Aerospace revenues increased by 2% in 2025 as compared to 2024, mainly due to increased sales of Precision Guided Munition (PGM) sales in Asia pacific and Israel, partially offset by lower training and simulation sales in Europe. The following table sets forth our distribution of revenues by geographical regions ($ millions): Year ended December 31, 2025 % Year ended December 31, 2024 % Israel $ 2,556.4 32.2 $ 1,988.0 29.1 North America 1,659.3 20.9 1,520.3 22.3 Europe 2,139.5 27.0 1,820.9 26.7 Asia-Pacific 1,243.7 15.7 1,132.7 16.6 Latin America 99.0 1.2 150.0 2.2 Other 240.7 3.0 216.0 3.1 Total revenues $ 7,938.6 100.0 $ 6,827.9 100.0 49 Cost of Revenues and Gross Profit Cost of revenues in 2025 was $6,003.4 million (75.6% of revenues), as compared to $5,186.1 million (76% of revenues) in 2024. Our major components of cost of revenues are (i) wages and related benefits costs, (ii) subcontractors and material consumed and (iii) manufacturing and other expenses. The amounts and percentages of those components in 2025 and 2024 were as follows: Wages and related benefits costs in 2025 constituted approximately 32% of cost of revenues, as compared to approximately 36% in 2024. The total cost of wages and related benefits in 2025 was approximately $1,968.0 million, as compared to $1,908 million in 2024. . Subcontractors and material consumed costs in 2025 constituted approximately 55% of cost of revenues, as compered to approximately 52% in 2024. The total amount of subcontractors and material consumed costs in 2025 was approximately $3,417 million, as compared to approximately $2,787 million in 2024. . The total cost of manufacturing and other expenses in 2025 was approximately $601 million, as compared to approximately $472 million in 2024. The high level of manufacturing and other expenses in 2025 resulted from increased activity. In 2025, our cost of revenues included an increase in inventories of approximately $217 million in work-in-progress and finished goods inventories, as compared to an increase of approximately $120 million in work-in-progress and finished goods inventories in 2024. Changes from 2024 to 2025 in our cost of revenues and cost of revenues components, were not material. We did not identify any developing trends in cost of revenues that we believe are likely to have a material impact on our future operations other than the continued changes in the NIS against the U.S. dollar, which could have an impact mainly on our labor costs, the impact of conflicts in the Middle East , including disrupted transportation networks and global supply chains, increased costs and extension of lead times. Gross profit for the year ended December 31, 2025 was $1,935.3 million (24.4% of revenues), as compared to $1,641.8 million (24.0% of revenues) in the year ended December 31, 2024. Research and Development (R&D) Expenses We continually invest in R&D in order to maintain and further advance our technologies, in accordance with our long-term plans, based on our estimate of future market needs. Our R&D costs, net of participation grants, include costs incurred for independent research and development and bid and proposal efforts and are expensed as incurred. Gross R&D expenses in 2025 totaled $599.6 million (7.5% of revenues), as compared to $544.1 million (8.0% of revenues) in 2024. Net R&D expenses (after deduction of third party participation) in 2025 totaled $517.1 million (6.5% of revenues), as compared to $466.4 million (6.8% of revenues) in 2024. Marketing and Selling Expenses We are active in developing new markets and pursue at any given time various business opportunities according to our plans. Marketing and selling expenses in 2025 were $399.4 million (5.0% of revenues), as compared to $375.4 million (5.5% of revenues) in 2024. General and Administration (G&A) Expenses G&A expenses in 2025 were $347.3 million (4.4% of revenues), as compared to $311.0 million (4.6% of revenues) in 2024. 50 Operating Income Our operating income in 2025 was $671.4 million (8.5% of revenues), as compared to $489.1 million (7.2% of revenues) in 2024. C4I and Cyber operating income in 2025 was $55.9 million and 6.0% of C4I and Cyber segment revenues, compared to $62.0 million and 7.8% of segment revenues in 2024. The $6.1 million decrease in operating income was mainly due to a decrease of project mix. ISTAR and EW operating income in 2025 was $129.1 million and 8.5% of ISTAR and EW segment revenues, compared to $96.1 million and 7.3% of segment revenues in 2024. The $33.0 million increase in operating income was mainly due to increased revenue and project mix. Land operating income in 2025 was $263.7 million and 11.4% of Land segment revenues, compared to $150.7 million and 9.0% of segment revenues in 2024. The $113.0 million increase in operating income was mainly due to increased revenues in munition and ammunition in Israel and Europe. ESA operating income in 2025 was $122.8 million and 7.2% of ESA segment revenues, compared to an operating income of $56.2 million and 3.5% of segment revenues in 2024. The $66.6 million increase in operating income was mainly due to new contracts signed for Night-Vision systems and Maritime systems, as well as positive program mix. Aerospace operating income in 2025 was $151.9 million and 7.4% of Aerospace segment revenues, compared to 149.1 million and 7.3% of segment revenues in 2024. Financial Expense, Net Net financing expenses in 2025 were $138.6 million, as compared to $151.1 million in 2024. TThe decrease in financial expenses, net in 2025, was mainly due to lower interest expenses and lower level of debt. Other Income (Expenses), Net Other income, net was $29.1 million in 2025, as compared to other expenses, net of $3.8 million in 2024. The higher level of expenses in 2024, resulted mainly from revaluation of holdings in affiliated companies, and expenses related to non-service costs of pension plans. Taxes on Income Our effective tax rate represents a weighted average of the tax rates to which our various entities are subject. Taxes on income in 2025 were $55.5 million (effective tax rate of 9.9%), as compared to $39.1 million (effective tax rate of 11.4%) in 2024.The decrease in the tax rate in 2025 was as a result of the valuation allowance releases and adjustments to deferred taxes related to prior years following tax settlements in some of the Company's subsidiaries in Israel. Company’s Share in Earnings of Affiliated Entities The entities, in which we hold 50% or less in shares or voting rights (affiliates) and are therefore not consolidated in our financial statements, operate in complementary areas to our core business activities, including electro-optics and airborne systems. In 2025, we had income of $29.2 million from our share in earnings of affiliates, as compared to $19.2 million in 2024. Net Income Attributable to Non-Controlling Interests Net income attributable to non-controlling interests in 2025 was $1.3 million, as compared to $0.7 million in 2024. 51 Net Income and Earnings Per Share (EPS) As a result of the above, net income in 2025 was $534.3 million (6.7% of revenues), as compared to net income of $321.1 million (4.7% of revenues) in 2024. The diluted EPS was $11.39 in 2025, as compared to $7.18 in 2024. The number of shares used for computation of diluted EPS in the years ended December 31, 2025 and 2024 were 46,918,000 and 44,709,000 shares, respectively. Segment Reporting Revenues The Company has five reportable segments: Aerospace, C4I and Cyber, ISTAR and EW, Land and ESA (see Item 4. Information on the Company – Business Overview – Segments above, “Segment Reporting” below and Item 18. Financial Statements - Notes 1, 2AC and 23). The following table presents information about the Company’s reported segments revenues for the periods indicated: Year ended December 31, 2025 % Year ended December 31, 2024 % Year ended December 31, 2023 % Aerospace External customers $ 1,820.9 22.9 1,780.5 26.1 $ 1,613.2 27.0 Intersegment revenue 246.1 255.8 260.1 2,067.0 24.2 2,036.3 27.4 1,873.3 28.6 C4I and Cyber External customers 866.2 10.9 750.6 11.0 668.4 11.2 Intersegment revenue 64.7 49.2 52.7 930.9 10.9 799.8 10.8 721.1 11.0 ISTAR and EW External customers 1,323.5 16.7 1,118.6 16.4 996.9 16.7 Intersegment revenue 202.3 199.4 182.5 1,525.8 17.9 1,318.0 17.8 1,179.4 18.0 Land External customers 2,250.3 28.3 1,605.1 23.5 1,241.0 20.8 Intersegment revenue 68.4 74.3 65.2 2,318.7 27.2 1,679.4 22.6 1,306.2 20.0 ESA External customers 1,677.7 21.1 1,573.1 23.0 1,455.2 24.4 Intersegment revenue 16.4 12.6 9.7 1,694.1 19.8 1,585.7 21.4 1,464.9 22.4 Revenues Total revenues (external customers and intersegment) for reportable segments $ 8,536.5 $ 7,419.2 $ 6,544.9 Less - Intersegment revenue (597.9) (591.3) (570.2) Total $ 7,938.6 100.0 $ 6,827.9 100.0 $ 5,974.7 100.0 52 Our sales are primarily to governmental entities and prime contractors under government defense and homeland security programs. Accordingly, the level of our revenues is subject to governmental budgetary constraints. Operating Income The following tables present information about the operating income of each of the Company’s reported segments for the periods indicated: Year ended December 31, 2025 Year ended December 31, 2024 Year ended December 31, 2023 Aerospace $ 151.9 $ 149.1 $ 125.4 C4I and Cyber 55.9 62.0 50.7 ISTAR and EW 129.1 96.1 134.9 Land 263.7 150.7 80.6 ESA 122.8 56.2 (4.7) Segment operating income 723.4 514.1 386.9 Unallocated corporate expense, net (52.0) (25.0) (17.8) Operating income $ 671.4 $ 489.1 $ 369.1 Cash Flow Our operating cash flow is affected by the cumulative cash flow generated from our various projects in the reported periods. Project cash flows are affected by the timing of the receipt of advances and the collection of accounts receivable from customers, as well as the timing of payments made by us in connection with the performance of the project. The receipt of payments usually relates to specific events during the project, while expenses are ongoing. As a result, our cash flow may vary from one period to another. Our policy is to invest our cash surplus mainly in interest bearing deposits, in accordance with our projected needs. In general, subsidiaries are able to transfer cash dividends, loans or advances to Elbit Systems and among themselves, subject to corporate policy and tax considerations in their applicable jurisdiction and subject to management commitment not to distribute tax exempt earnings. Such tax considerations have not had in the past, and are not anticipated to have, a material impact on our ability to meet our obligations. Our net cash flow provided by operating activities in 2025 was approximately $778 million, resulting mainly from an increase in advances received from customers of approximately $651 million, and the increase in non-cash operating items of $172 million, offset by the increase in inventories of approximately $358 million and an increase in trade receivables and contract assets of approximately $660 million. Net cash flow used in investing activities in 2025 was approximately $391 million, which was used mainly for the purchase of property, plant and equipment in the amount of $226 million offset by proceeds from sales of a subsidiary and an investment of approximately $15 million. Net cash flow used in financing activities in 2025 was approximately $18 million, the proceed from issuance of shares amounted to $573 million, which was used mainly for repayment of commercial papers in the amount of $302 millions and repayment of long and short-term credit and loans in the amount of $110 million, payment of dividends in the amount of $112 million, and repayment of Series B, C and D Notes in the amount of $67 million. Financial Resources The financial resources available to us include profits, collection of accounts receivable, proceeds from the issuance of external indebtedness, advances from customers and the government of Israel and other third parties’ programs such as the Israel Innovation Authority and development grants. In addition, we have access to bank credit lines and financing in Israel and abroad based on our capital, assets and activities. 53 Elbit Systems and some subsidiaries are obligated to meet various financial covenants set forth in our respective loans, Series B, C and D Notes and credit agreements. Such covenants include inter alia, requirements for shareholders’ equity, current ratio, operating profit margin, tangible net worth, EBITDA, interest coverage ratio, total leverage, equity and net financial debt. In respect of each of the 12 month periods ending December 31, 2024 and 2025, the Company was in material compliance with its loan obligations. On December 31, 2025, we had total borrowings from banks in an amount of approximately $81 million in short and long-term loans, and outstanding commercial paper in an amount of approximately $48 million. Additionally we had approximately $308 million of outstanding debt of Series B, C and D Notes, intended for general corporate purposes. On December 31, 2025, we also had $5,245 million in guarantees issued on our behalf by banks and other financial institutions, mainly in respect of advance payment and performance guarantees provided in the regular course of business. On December 31, 2025, we had a cash balance amounting to $635 million and short-term bank deposits of approximately $181 million. . In September 2023, we filed a shelf prospectus with the Israeli Security Authority and the TASE (the Shelf Prospectus). The Shelf Prospectus provides a framework for us to raise funds from time to time in Israel through the offering and sale of various debt and equity securities. In September 2025, the shelf prospectus was extended for an additional year with the consent of the Israeli Securities Authority. On May 21, 2025, Elbit Systems filed a Registration Statement on Form F-3 with the SEC, which became automatically effective. On May 23, 2025, the Company closed an offering of 1,570,267 ordinary shares at a price to the public of $375 per ordinary share, for total gross proceeds to the Company of approximately $588 million. All ordinary shares sold in the offering were offered by the Company and listed for trading on the Nasdaq Global Select Market. The proceeds of the offering are intended for general corporate purposes. As of December 31, 2025, we had working capital of $1,758 million and a current ratio of 1.29. For further information on the level, maturity and terms of our borrowings, see Item 18. Financial Statements – Notes 12, 15 and 16. We believe our cash balance, amounts available under lines of credits, cash flows from operating activities and our ability to access external capital resources is sufficient to satisfy existing short-term and long-term commitments and plans as well as provide adequate financial flexibility to take advantage of potential strategic business opportunities should they arise within the next year. See Item 3. Key Information – Risk Factors – Financial-Related Risks. Pensions and Other Post-Retirement Benefits. We account for pensions and other post-employment arrangements in accordance with ASC 715 “Compensation – Retirement Benefits”. Accounting for pensions and other post-retirement benefits involves judgment about uncertain events, including estimated retirement dates, salary levels at retirement, mortality rates, rates of return on plan assets, determination of discount rates for measuring plan obligations, healthcare cost trend rates and rates of utilization of healthcare services by retirees. These assumptions are based on the economic environment in each country. For our pension and other post-retirement benefit assumptions at December 31, 2025 and 2024, see Item 18. Financial Statements – Note 17. On December 31, 2025, our employee benefit liabilities were $488 million, of which we had severance funds of $223 million set aside to satisfy potential obligations. Material Commitments for Capital Expenditures. We believe that we have adequate sources of funds to meet our material commitments for capital expenditures for the fiscal year ending December 31, 2025 and the subsequent fiscal year (see above “Financial Resources”). Our anticipated capital expenditures (which include mainly construction and the purchase of equipment, buildings and enhancements to our ERP system) as of December 31, 2025 are somewhat higher than those as of December 31, 2024, due to an anticipated increase in expenditures for buildings and certain other expenses. We plan to pay for such anticipated capital expenditures using cash from operations. See also Item 18. Financial Statements – Consolidated Statements of Cash Flows and Note 10. Israeli Series B, C and D Notes In July 2021, Elbit Systems completed a public notes offering on the TASE of NIS 1.9 billion (equal to approximately $575 million at the time of the offering) Series B, C and D Notes. The Notes were offered and sold pursuant to the Shelf Prospectus filed in 2020 with the Israeli Securities Authority. Details of the Notes are as follows: 54 Tranche Face Value (NIS) Maturity Annual Interest Rate (%) Adjustments Series B 1,500,000,000 June 30, 2029 1.08 None Series C 200,000,000 June 30, 2029 2.12 Changes in the New Israeli Shekel / U.S. dollar exchange rate Series D 200,000,000 June 30, 2035 2.67 Changes in the New Israeli Shekel / U.S. dollar exchange rate The Series B, C and D Notes are unsecured and non-convertible. The offering was made exclusively in Israel to residents of Israel only. The proceeds of the offering are intended for general corporate purposes, which may include, among others, financing of the Company’s operating and investment activities, mergers and acquisitions and payments of outstanding debt under its credit facilities. Following the completion of the Notes offering, we entered into cross-currency interest rate swap transactions in order to effectively hedge the effect of interest and exchange rate differences resulting from the Series B Notes that are not adjusted in accordance with changes in the NIS/U.S dollar exchange rate. Under the cross-currency interest rate swaps, the Series B Notes were adjusted to the changes of the NIS to the U.S. dollar and paid a fixed U.S. dollar interest rate of 1.92% per annum. During 2025 and 2024 the company paid installments of Notes B, C and D in the amount of approximately $67 million per year. Israeli Commercial Paper In 2023, Elbit Systems issued in Israel a U.S. dollar denominated commercial paper series A in an amount of approximately $314 million par value, bearing an annual interest of the three-months SOFR interest rate and an additional 1% (Series A commercial paper). During 2024, the Company issued additional Series A commercial paper and repaid certain portions of the Series A commercial paper. The Series A commercial paper is for a term of 90 days, which may be extended by additional periods of 90 days each, up to a maximum period of five years. The Series A commercial paper is also subject to early repayment at the request of an investor or at the Company's discretion - See also Item 18. Financial Statements – Note 12. In September 2024, Elbit Systems completed an issuance in Israel of a U.S. dollar denominated commercial paper in an amount of $110 million par value bearing an annual interest of the three-months SOFR plus an additional 1.25% (Series B commercial paper). During 2025, the Company fully repaid the Series B commercial paper. As of December 31, 2025 we had approximately $48 million par value issued and outstanding Series A commercial paper. During February 2026, the Company fully repaid the Series A commercial paper. Our commercial paper is not listed on any stock exchange. Impact of Inflation and Exchange Rates Functional Currency. Our reporting currency is the U.S. dollar, which is also the functional currency for most of our consolidated operations. A majority of our sales are made outside of Israel in non-Israeli currency, mainly U.S. dollars, as well as a majority of our purchases of materials and components. A significant portion of our expenses, mainly labor costs, are in NIS. Some of our subsidiaries have functional currencies in Euro, GBP, Brazilian reals, Australian dollars and other currencies. Transactions and balances originally denominated in U.S. dollars are presented in their original amounts. Transactions and balances in currencies other than the U.S. dollar are remeasured in U.S. dollars according to the principles set forth in ASC 830 “Foreign Currency Matters”. Exchange gains and losses arising from remeasurement are reflected in financial expenses, net, in the consolidated statements of income. 55 Market Risks and Variable Interest Rates Market risks relating to our operations result mainly from changes in interest rates and exchange rates. We use derivative instruments to limit exposure to changes in exchange rates in certain cases. We also typically enter into forward contracts in connection with transactions where long-term contracts have been signed and that are denominated in currencies other than U.S. dollars or NIS. We also enter from time to time into forward contracts and other hedging instruments related to NIS based on market conditions. We use financial instruments and derivatives in order to limit our exposure to risks arising from changes in exchange rates and to mitigate our exposure to effects of changes in foreign currency rates and interest rates. The use of such instruments does not expose us to additional exchange rate risks since the derivatives are held against an asset (for example, excess assets in Euros). Our policy in utilizing these financial instruments is to protect the dollar value of our cash and cash equivalent assets rather than to serve as a source of income. In the context of our overall treasury policy, specific objectives apply to the management of financial risks. These objectives are disclosed under the headings below “NIS/U.S. Dollar Exchange Rates”, “Inflation and Currency Exchange Rates” and “Foreign Currency, Derivatives and Hedging”. On December 31, 2025, our liquid assets were comprised of bank deposits and short and long-term investments. Our deposits and investments earn interest based on variable interest rates, and their value as of December 31, 2025 was therefore exposed to changes in interest rates. Should interest rates either increase or decrease, such change may affect our results of operations due to changes in the cost of the liabilities and the return on the assets that are based on variable rates. NIS/U.S. Dollar Exchange Rates. We attempt to manage our financial activities in order to reduce material financial losses in U.S. dollars resulting from the impact of inflation and exchange rate fluctuations on our non-U.S. dollar assets and liabilities. Our income and expenses in NIS are translated into U.S. dollars at the prevailing exchange rates as of the date of the transaction. Consequently, we are affected by changes in the NIS/U.S. dollar exchange rates. We entered into other derivative instruments to limit our exposure to exchange rate fluctuations, related mainly to payroll expenses incurred in NIS. See Item 11. Quantitative and Qualitative Disclosure About Market Risk. The amount of our exposure to the changes in the NIS/U.S. dollar exchange rate may vary from time to time. See Item 3. Key Information – Risk Factors – Financial-Related Risks. Inflation and Currency Exchange Rates The U.S. dollar cost of our operations in Israel is influenced by any increase in the rate of inflation in Israel that is not fully offset by the devaluation of the NIS in relation to the U.S. dollar. Unless inflation in Israel is offset by a devaluation of the NIS, such inflation may have a negative effect on the profitability of contracts where Elbit Systems or any of our Israeli subsidiaries receives payment in U.S. dollars, NIS linked to U.S. dollars or other foreign currencies, but incurs expenses in NIS linked to the CPI. Inflation in Israel and currency fluctuations may also have a negative effect on the profitability of fixed-price contracts where we receive payments in NIS. In the past, our profitability was negatively affected when inflation in Israel (measured by the change in the CPI from the beginning to the end of the calendar year) exceeded the devaluation of the NIS against the U.S. dollar and at the same time we experienced corresponding increases in the U.S. dollar cost of our operations in Israel. In 2025, the inflation rate was approximately a positive 2.6%, and the NIS strengthened against the U.S. dollar by approximately 12.5%. In 2024, the inflation rate was approximately a positive 3.2%, and the NIS weakened against the U.S. dollar by approximately 3.1%. There can be no assurance that we will not be materially adversely affected in the future if inflation in Israel exceeds the devaluation of the NIS against the U.S. dollar or if the timing of such devaluation lags behind increases in inflation in Israel. A devaluation of the NIS in relation to the U.S. dollar also has the effect of decreasing the dollar value of any of our assets that consist of NIS or accounts receivable denominated in NIS, unless such assets or accounts receivable are linked to the U.S. dollar. Such a devaluation also has the effect of reducing the U.S. dollar amount of any of our liabilities that are payable in NIS, unless such payables are linked to the U.S. dollar. On the other hand, any increase in the value of the NIS in relation to the U.S. dollar will have the effect of increasing the U.S. dollar value of any unlinked NIS assets as well as the U.S. dollar amount of any unlinked NIS liabilities and expenses. 56 Foreign Currency, Derivatives and Hedging While our functional currency is the U.S. dollar, we also have some non-U.S. dollar or non-U.S. dollar linked exposure to currencies other than NIS. These are mainly non-U.S. dollar customer debts, payments to suppliers and subcontractors as well as obligations in other currencies, assets or undertakings. Some subcontractors are paid in local currency under prime contracts where we are paid in U.S. dollars. The exposure on these transactions has not been in amounts that are material to us. However, when we view it economically advantageous, due to anticipated uncertainty in the applicable foreign exchange rates, we seek to minimize our foreign currency exposure by entering into hedging arrangements, obtaining periodic payments upon the completion of milestones, obtaining guarantees and security from customers and sharing currency risks with subcontractors. A significant part of our future cash flows that will be denominated in currencies other than the NIS and the U.S. dollar were covered as of December 31, 2025 by forward contracts. On December 31, 2025, we had forward contracts for the sale and purchase of Euro, GBP and various other currencies totaling approximately $5,629 million ($4,838 million in Euro, $256 million in GBP and $536 million in other currencies). See also Item 18. Financial Statements – Note 19. As of December 31, 2025, an unrealized net income of approximately $(239) million was included in accumulated other comprehensive income. As of December 31, 2025, all of the forward contracts are expected to mature during the years 2025 – 2034. The table below presents the balance of the derivative instruments held in order to limit the exposure to exchange rate fluctuations as of December 31, 2024 and is presented in millions of U.S. dollar equivalent terms: Forward Notional Amount* Unrealized Gain (Loss) Buy US$ and Sell: Euro 4,520.5 (76.5) GBP 166.1 0.1 Other various currencies 406.7 (3.5) Forward Notional Amount* Unrealized Gain (Loss) Sell US$ and Buy: Euro 317.1 5.6 GBP 89.5 1.1 NIS 411.7 67.2 Other various currencies 129.0 1.2 *Notional amount information is based on the foreign exchange rate at year end. Off-Balance Sheet Transactions Offset / Industrial Participation In connection with projects in certain countries, Elbit Systems and some of our subsidiaries have entered and may enter in the future into “Industrial Participation” or “offset” agreements, required by an increasing number of our customers as a condition to our obtaining orders for our products and services, or as an important consideration for award. These agreements are customary in our industry and are designed to facilitate independence and economic flow back (buy-back) and/or technology transfer to businesses or government agencies in the applicable country. As a result of the conflict between Russia and Ukraine and other geopolitical events, a number of countries are increasing such activities in order to enhance local industry involvement and independence in defense procurement and to have a positive impact on the local economy. 57 These commitments may be satisfied by our placement of direct work or vendor orders for supplies and/or services, transfer of technology, investments or other forms of assistance in the applicable country in accordance with applicable local laws and regulations. We attempt to leverage economies of scale by managing our Industrial Participation activities from an overall corporate perspective. The Industrial Participation rules and regulations, as well as the underlying contracts, may differ from one country to another. The ability to fulfill the Industrial Participation obligations may depend, among other things, on the availability of local suppliers with sufficient capability to meet our requirements and which are competitive in cost, quality and schedule. In certain cases, our commitments may also be satisfied through transactions conducted by other parties, including but not limited to our suppliers, or through “swap” transaction among various countries’ Industrial Participation authorities. Our Industrial Participation activities are conducted in accordance with our anti-bribery and corruption compliance policies. We do not commit to Industrial Participation agreements until orders for our products or services are definitive, but in some cases the orders for our products or services may become effective only after our corresponding Industrial Participation commitments become effective. Industrial Participation programs generally extend at least over the relevant commercial contract period and may provide for penalties in the event we fail to perform in accordance with Industrial Participation requirements. In some cases we provide guarantees in connection with the performance of our Industrial Participation obligations. We have developed dedicated Industrial Participation management tools and procedures within our ERP system and work to continuously improve our infrastructure in order to efficiently meet our obligations. Furthermore, we manage our Industrial Participation obligations at the corporate level, which helps to increase visibility, facilitate allocations within the Company and reduce risk. However, should we be unable to meet such obligations we may be subject to contractual penalties, our guarantees may be drawn upon and our chances of receiving additional business from the applicable customers could be reduced or, in certain cases, eliminated. See Item 3. Key Information – Risk Factors – Financial-Related Risks. As of December 31, 2025, we had outstanding Industrial Participation obligations totaling approximately $2.502 billion that extend through 2038. See Item 18. - Financial Statements - Note 21B. Non-GAAP Financial Data The following non-GAAP financial data, including adjusted gross profit, adjusted operating income, adjusted net income, and adjusted diluted earnings per share, is presented to enable investors to have additional information on our business performance as well as a further basis for periodical comparisons and trends relating to our financial results. We believe such data provides useful information to investors and analysts by facilitating more meaningful comparisons of our financial results over time. The non-GAAP adjustments exclude amortization expenses of intangible assets related to acquisitions that occurred mainly in prior periods, capital gains related primarily to the sale of investments, restructuring activities, Non-indemnified costs in respect to special circumstances, non-cash stock based compensation expenses, re-evaluations of investments in affiliated companies, non-operating foreign exchange gains or losses, one-time tax expenses, and the effect of tax on each of these items. We present these non-GAAP financial measures because management believes they supplement and/or enhance management’s, analysts’ and investors’ overall understanding of the Company’s underlying financial performance and trends and facilitate comparisons among current, past, and future periods. Once the special circumstances in Israel ends, the company will discontinue the reconciliation of non‑indemnified costs. For the years ended December 31, 2025 and 2024, we have included adjustments related to uncompensated labor costs relating to the “Swords of Iron” war. Uncompensated labor costs are certain employment-related expenses incurred by the Company, in respect of its employees that were mobilized for reserve duty in “Swords of Iron” war, which were above the statutory ceiling for refund. Specifically, management uses adjusted gross profit, adjusted operating income, and adjusted net income attributable to the Company’s shareholders to measure the ongoing gross profit, operating profit and net income performance of the Company, because these measures adjust for more significant non-recurring items, amortization expenses of intangible assets relating to prior acquisitions, and non-cash expense which can fluctuate year to year. We believe that adjusted gross profit, adjusted operating income, and Adjusted net income attributable to the Company’s shareholders are useful to existing shareholders, potential shareholders and other users of our financial information because they provide measures of the Company’s ongoing performance that enable these users to perform trend analysis using comparable data. 58 Management uses adjusted diluted earnings per share to evaluate further adjusted net income attributable to the Company’s shareholders while considering changes in the number of diluted shares over comparable periods. We believe that adjusted diluted earnings per share is useful to existing shareholders, potential shareholders and other users of our financial information because it also enables these users to evaluate adjusted net income attributable to Company’s shareholders on a per-share basis. The non-GAAP measures used by the Company are not based on any comprehensive set of accounting rules or principles. We believe that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations, as determined in accordance with GAAP, and that these measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures. Investors are cautioned that, unlike financial measures prepared in accordance with GAAP, non-GAAP measures may not be comparable with the calculation of similar measures for other companies. They should consider non-GAAP financial measures in addition to, and not as replacements for or superior to, measures of financial performance prepared in accordance with GAAP. 59 Reconciliation of GAAP (Audited) to Non-GAAP (Unaudited) Supplemental Financial Data (U.S. dollars in millions, except for per share amounts) Year ended December 31, 2025 Year ended December 31, 2024 Year ended December 31, 2023 GAAP gross profit $ 1,935.3 $ 1,641.8 $ 1,483.0 Adjustments: Amortization of purchased intangible assets (*) 16.2 18.9 27.3 Restructuring of a subsidiary's activities — — 17.5 Non-indemnified costs in respect to special circumstances 6.3 7.9 4.3 Stock-based compensation 4.0 2.4 1.8 Non-GAAP gross profit $ 1,961.8 $ 1,671.0 $ 1,533.9 Percent of revenues 24.7 % 24.5 % 25.7 % GAAP operating income $ 671.4 $ 489.1 $ 369.1 Adjustments: Amortization of purchased intangible assets (*) 31.0 34.2 43.9 Restructuring of a subsidiary's activities — — 17.5 Stock-based compensation 26.4 15.8 12.1 Non-indemnified costs in respect to special circumstances 9.0 11.3 6.1 Non-GAAP operating income $ 737.8 $ 550.4 $ 448.7 Percent of revenues 9.3 % 8.1 % 7.5 % GAAP net income attributable to Elbit Systems’ shareholders $ 534.3 $ 321.1 $ 215.1 Adjustments: Amortization of purchased intangible assets (*) 31.0 34.2 43.9 Restructuring of a subsidiary's activities — — 17.5 Stock-based compensation 26.4 15.8 12.1 Capital gain (13.7) (2.0) — Revaluation of investments measured under fair value method (4.5) 19.4 3.0 Non-operating foreign exchange (gains) losses 18.5 (0.6) 12.0 Non-indemnified costs in respect to special circumstances 9.0 11.3 6.1 Tax effect and other tax items, net (3.0) (7.7) (10.9) Non-GAAP net income attributable to Elbit Systems’ shareholders $ 598.0 $ 391.5 $ 298.8 Percent of revenues 7.5 % 5.7 % 5.0 % GAAP diluted net EPS $ 11.39 $ 7.18 $ 4.82 Adjustments, net 1.36 1.58 1.88 Non-GAAP diluted net EPS $ 12.75 $ 8.76 $ 6.70 (*) While amortization of acquired intangible assets is excluded from the measures, the revenue of the acquired companies is reflected in the measures and the acquired assets contribute to revenue generation. 60