Huntington Ingalls Industries, Inc. · NYSE:HII

Huntington Ingalls Industries — Q1 2022 Earnings Presentation

15 slides from Huntington Ingalls Industries's earnings presentation, May 5, 2022

  1. Slide 1: HII Q1 2022 Earnings

    HII Q1 2022 Earnings May 5, 2022 Chris Kastner President and Chief Executive Officer Tom Stiehle Executive Vice President and Chief Financial Officer

  2. Slide 2: Cautionary Statement Regarding Forward-looking Statements

    Cautionary Statement Regarding Forward-looking Statements Statements in this presentation, other than statements of historical fact, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. You can generally identify forward-looking statemen

  3. Slide 3: HII Q1 2022 Highlights

    HII Q1 2022 Highlights • Revenues were ~$2.6 billion in the quarter • Diluted EPS was $3.50 in the quarter • Total backlog of ~$48 billion • Company reaffirms FY22 revenue, margin and free cash flow1 guidance Ingalls Shipbuilding • Delivered amphibious transport dock Fort Lauderdale (LPD 28) • Launc

  4. Slide 4: HII Q1 2022 Consolidated Results

    HII Q1 2022 Consolidated Results CONSOLIDATED REVENUE ($M) OPERATING INCOME ($M) & MARGIN $3,000 $160 $147 $2,576 $138 $140 $2,500 $2,278 6.5% $120 5.4% $2,000 $100 $1,500 $80 $60 $1,000 $40 $500 $20 $0 $0 Q1 21 Q1 22 Q1 21 Q1 22 • Revenues improved YoY due • Operating income declined primarily to g

  5. Slide 5: HII Q1 2022 Capital Deployment

    HII Q1 2022 Capital Deployment CASH FLOW GENERATION ($M) SHAREHOLDER DISTRIBUTIONS ($M) TOTAL $60 $43 $100 $95 $40 $20 $80 $0 $49 TOTAL ($20) $60 $57 ($16) ($40) $10 ($60) ($43) $40 ($59) ($80) ($100) ($83) $20 $46 $47 ($120) ($140) ($126) $0 Q1 21 Q1 22 Q1 21 Q1 22 1 Cash from Ops. CAPEX Free Cash

  6. Slide 6: HII Q1 2022 Segment Results YoY

    HII Q1 2022 Segment Results YoY Ingalls Shipbuilding SEGMENT OPERATING INCOME ($M) & REVENUE ($M) MARGIN1 Revenue $91 - DDG $800 $649 $631 $100 $86 + LHA & LPD $600 $80 $60 14.0% 13.6% $400 $40 Operating Income $200 $20 - LHA & DDG risk retirement $0 $0 + LPD risk retirement Q1 21 Q1 22 Q1 21 Q1 22

  7. Slide 7: Outlook

    FY22 OUTLOOK1 Outlook Shipbuilding Revenue2 Prior Outlook $8.2B - $8.5B Current Outlook $8.2B - $8.5B • Reaffirming revenue, margin and free cash flow2,3 Shipbuilding Operating Margin2 8.0% - 8.1% 8.0% - 8.1% guidance Mission Technologies Revenue ~$2.6B ~$2.6B • Updated FY22 pension expectations fol

  8. Slide 8: Free Cash Flow & Capital Allocation

    Free Cash Flow1,2 & Capital Allocation FREE CASH FLOW1 WALK FY22-24 • Committed to investment grade rating; ~$50M $800M- $900M Targeting ≤2x Debt/EBITDA1 by year-end 2024 ~$200M ~($30M) $750M- $800M • Continued dividend growth at low single digit growth rate Taxes, Other • Balanced share repurchases

  9. Slide 9: Appendix

    Appendix 9

  10. Slide 10: Non-GAAP Information

    Non-GAAP Information We make reference to “segment operating income,” “segment operating margin,” “shipbuilding revenue,” “shipbuilding operating margin,” “Mission Technologies EBITDA margin,” “Debt/EBITDA,” and “free cash flow.” We internally manage our operations by reference to segment operating

  11. Slide 11: Non-GAAP Measures Definitions

    Non-GAAP Measures Definitions Debt/EBITDA is defined as gross debt divided by net earnings before interest expense, income taxes, depreciation, and amortization. Segment operating income is defined as operating income for the relevant segment(s) before the Operating FAS/CAS Adjustment and non-curren

  12. Slide 12: Non-GAAP Reconciliations Segment Operating Income & Segment Operating Margin

    Non-GAAP Reconciliations Segment Operating Income & Segment Operating Margin Three Months Ended March 31 ($ in millions) 2022 2021 Ingalls revenues 631 649 Newport News revenues 1,390 1,407 Mission Technologies revenues 590 259 Intersegment eliminations (35) (37) Sales and Service Revenues 2,576 2,2

  13. Slide 13: Non-GAAP Reconciliations Shipbuilding Revenues & Operating Margin

    Non-GAAP Reconciliations Shipbuilding Revenues & Operating Margin Three Months Ended March 31 ($ in millions) 2022 2021 Sales and service revenues 2,576 2,278 Mission Technologies (590) (259) Intersegment eliminations 35 37 Shipbuilding Revenues 2,021 2,056 Operating Income 138 147 Operating FAS/CAS

  14. Slide 14: Non-GAAP Reconciliations Free Cash Flow

    NON-GAAP Reconciliations Free Cash Flow Three Months Ended March 31 ($ in millions) 2022 2021 Net cash provided by (used in) operating activities (83) 43 Less capital expenditures: Capital expenditure additions (43) (60) Grant proceeds for capital expenditures - 1 Free cash flow (126) (16) 14

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