Huntington Ingalls Industries, Inc. · NYSE:HII
Huntington Ingalls Industries — Q4 2021 Earnings Presentation
18 slides from Huntington Ingalls Industries's earnings presentation, Feb 10, 2022
Slide 1: Q4 2021 Earnings Presentation
Q4 2021 Earnings Presentation February 10, 2022 Mike Petters President and Chief Executive Officer Chris Kastner Executive Vice President and Chief Operating Officer Tom Stiehle Executive Vice President and Chief Financial Officer
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. Forward-looking statements involve important risks
Slide 3: HII Q4 & FY 2021 Highlights
Backlog HII Q4 & FY 2021 Highlights ($B) $48.5 $50 $46.5 $46.0 Revenues were $2.7 billion in the quarter; $9.5 billion in 2021 Diluted EPS was $2.99 in the quarter; $13.50 in 2021 $40 Pension adjusted diluted EPS1 was $2.84 in the quarter; $13.03 in 2021 Total backlog at the end of 2021 was
Slide 4: Upcoming Shipbuilding Program Milestones
Upcoming Shipbuilding Program Milestones1 2022 2023 o Ingalls o Ingalls Complete sea trials and deliver DDG 123 Deliver DDG 125 (Jack H. Lucas) (Lenah H. Sutcliffe Higbee) Launch LHA 8 (Bougainville) Complete sea trials and deliver LPD 28 Complete sea trials and deliver LPD 29 (Fort Lauder
Slide 5: HII Q4 2021 Consolidated Results
HII Q4 2021 Consolidated Results Consolidated Revenues Operating Income ($M) ($M) $3,000 $2,757 $350 $2,677 $305 $2,500 $300 $250 $2,000 $200 $1,500 $150 $120 $1,000 $100 $500 $50 $0 $0 Q4 2020 Q4 2021 Q4 2020 Q4 2021 Operating Margin Revenues declined YoY due primarily to lower volumes 12.0% 11.1
Slide 6: HII FY 2021 Consolidated Results
HII FY 2021 Consolidated Results Consolidated Revenues Operating Income ($M) ($M) $9,361 $9,524 $1,000 $10,000 $799 $800 $8,000 $600 $513 $6,000 $400 $4,000 $200 $2,000 $0 $0 2020 2021 2020 2021 Operating Margin 9.0% 8.5% Revenues improved YoY due to the acquisition of Alion 8.0% in 2021, as well
Slide 7: Capital Deployment
Capital Deployment Cash Flow Generation Shareholder Distributions ($M) ($M) $1,000 $350 Total $760 $800 $300 $287 $600 $449 $250 $101 $400 $271 $200 $165 $200 $150 Total $0 $100 $62 $186 $14 -$200 ($106) $50 $48 -$400 ($311) $0 Q4 2021 2021 Q4 2021 2021 1 Dividends Share Repurchases (at cost) Cash f
Slide 8: 2022-2026 Pension Outlook
2022-2026 Pension Outlook1 2021 ($ in millions) (Actual) 2022 2023 2024 2025 2026 Pension Discount Rate 2.80% 3.00% 3.00% 3.00% 3.00% 3.00% Change from prior est. 11bps Change from prior est. 20bps Change from prior est. 20bps Change from prior est. 20bps 7.25% 7.25% 7.25% 7.25% 7.25% 7.25% Expected
Slide 9: FY22 Outlook
FY22 Outlook 2022 Outlook1 Outlook Anticipate continued, steady shipbuilding margin2 expansion Shipbuilding Revenue2 $8.2B - $8.5B Shipbuilding Operating Margin2 8.0% - 8.1% Anticipate strong organic revenue growth at Technical Solutions Technical Solutions Revenue ~$2.6B Technical Solutions Seg
Slide 10: Free Cash Flow Walk – FY22 to FY24
Free Cash Flow1 Walk – FY22 to FY242 ~$50M $800M- $900M ~$200M $750M- $800M ~($30M) ~$230M $300M- $350M FY22 Adv. Progress & Shipbuilding TS Growth & Cash Taxes, FY23 FY24 FICA Repayment Growth & Working Margin Expansion Other in FY22 Capital Reaffirm ~$3.2B FY20-FY24 Cumulative Free Cash Flow1 Targ
Slide 11: Appendix
Appendix HUNTINGTON INGALLS INDUSTRIES PROPRIETARY
Slide 12: Non-GAAP Information
Non-GAAP Information We make reference to “segment operating income,” “segment operating margin,” “pension adjusted net earnings,” “pension adjusted diluted earnings per share,” “shipbuilding revenue,” “shipbuilding operating margin,” “Technical Solutions EBITDA margin” and “free cash flow.” We inte
Slide 13: Non-GAAP Measures Definitions
Non-GAAP Measures Definitions Segment operating income is defined as operating income for the relevant segment(s) before the Operating FAS/CAS Adjustment and non-current state income taxes. Segment operating margin is defined as segment operating income as a percentage of sales and service revenues.
Slide 14: Non-GAAP Reconciliations – Segment Operating Income & Segment Operating Margin
Non-GAAP Reconciliations – Segment Operating Income & Segment Operating Margin Three Months Ended Year Ended December 31 December 31 ($ in millions) 2021 2020 2021 2020 Ingalls revenues 581 752 2,528 2,678 Newport News revenues 1,539 1,750 5,663 5,571 Technical Solutions revenues 586 311 1,476 1,268
Slide 15: Non-GAAP Reconciliations – Shipbuilding Revenues & Operating Margin
Non-GAAP Reconciliations – Shipbuilding Revenues & Operating Margin Three Months Ended Year Ended December 31 December 31 ($ in millions) 2021 2020 2021 2020 Sales and service revenues 2,677 2,757 9,524 9,361 Technical Solutions (586) (311) (1,476) (1,268) Intersegment eliminations 29 56 143 156 Shi
Slide 16: Non-GAAP Reconciliations – Adjusted Diluted Earnings per Share
Non-GAAP Reconciliations – Adjusted Diluted Earnings per Share Three Months Ended Year Ended December 31 December 31 (in millions, except per share amounts) 2021 2020 2021 2020 Net earnings 120 249 544 696 (1) After-tax FAS/CAS adjustment (6) (73) (19) (290) Pension Adjusted Net Earnings 114 176 525
Slide 17: Non-GAAP Reconciliations – Free Cash Flow
Non-GAAP Reconciliations – Free Cash Flow Three Months Ended Year Ended December 31 December 31 ($ in millions) 2021 2020 2021 2020 Net cash provided by operating activities 271 602 760 1,093 Less capital expenditures: Capital expenditure additions (115) (133) (331) (353) Grant proceeds for capital
Slide 18: HUNTINGTON INGALLS INDUSTRIES HARD STUFF DONE RIGHT
18 HUNTINGTON INGALLS INDUSTRIES HARD STUFF DONE RIGHT
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