Huntington Ingalls Industries, Inc. · NYSE:HII

Huntington Ingalls Industries — Q3 2018 Earnings Presentation

15 slides from Huntington Ingalls Industries's earnings presentation, Nov 8, 2018

  1. Slide 1: Q3 2018 Earnings Presentation

    Exhibit 99.2 Q3 2018 Earnings Presentation November 8, 2018 Mike Petters President and Chief Executive Officer Chris Kastner Executive Vice President, Business Management and Chief Financial Officer

  2. Slide 2: Forward-Looking Statements

    2 Forward-Looking Statements Statements in this presentation, other than statements of historical fact, may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties that could cause

  3. Slide 3: HII's Q3 2018 Highlights

    3 HII’s Q3 2018 Highlights  Revenues were $2.1 billion in the quarter  Diluted EPS was $5.29 in the quarter  Total backlog at the end of the quarter was ~$22 billion; new contract awards in the quarter totaled $2.8 billion  Ingalls Shipbuilding o Awarded $5.1 billion multiyear contract for six A

  4. Slide 4: HII's Q3 2018 Consolidated Results

    4 HII’s Q3 2018 Consolidated Results Revenues  HII’s revenues up 12% YOY due to increased $2,200 $2,083 volume at the shipbuilding segments $2,000 $1,863  $1,800 HII’s operating income and margin up YOY due to higher segment operating income and favorable $1,600 change in Operating FAS/CAS Adjustm

  5. Slide 5: HII's Q3 2018 Capital Deployment

    5 HII’s Q3 2018 Capital Deployment Cash Flow Generation Shareholder Distributions Total $266 $260 $650 $607 $250 $600 $550 $500 $150 $102 $450 $400 $50 $6 $350 $512 ** $300 $250 (in (in millions) $(50) (in millions) Total $200 $130 $(93) $150 $(150) $100 $99** $50 $95 $(250) $(195) $— $31 Q3 2018 Q3

  6. Slide 6: Ingalls Shipbuilding Q3 2018 Results

    6 Ingalls Shipbuilding Q3 2018 Results Revenues  Ingalls revenues up 17% YOY due to increased $800 volumes on amphibious assault ships and the $694 $700 NSC program, partially offset by decreased $593 $600 surface combatant volume $500  $400 Ingalls segment operating income up YOY mainly $300 due

  7. Slide 7: Newport News Shipbuilding Q3 2018 Results

    7 Newport News Shipbuilding Q3 2018 Results Revenues  Newport News revenues up 12% YOY due to $1,300 higher volume in aircraft carriers and naval nuclear $1,179 support services $1,100 $1,053  Newport News segment operating income and $900 margin up YOY primarily due to favorable changes in worker

  8. Slide 8: Technical Solutions Q3 2018 Results

    8 Technical Solutions Q3 2018 Results Revenues  Technical Solutions revenues up 1.7% YOY due to $300 higher oil and gas and mission driven innovative $241 $245 solutions revenues, partially offset by lower fleet $250 support and nuclear and environmental revenues $200  $150 Technical Solutions seg

  9. Slide 9: 2018-2019 Pension Outlook

    9 2018-2019 Pension Outlook 3 3,4 ($ in millions) 2017 (Actual) 2018 2019 Pension Discount Rate 4.47% 3.82% 4.36% Expected Long-Term Return on Assets 7.25% 7.25% 7.25% CAS Recoveries over/(under) Cash $26 ($89) $247 Contributions1,2 FAS Expense1 ($172) ($91) ($73) CAS1 $361 $460 $307 FAS/CAS Adjustm

  10. Slide 10: Appendix

    10 Appendix

  11. Slide 11: Non-GAAP Measures Definitions

    11 Non-GAAP Measures Definitions We make reference to “segment operating income (loss),” “segment operating margin,” and “free cash flow.” We internally manage our operations by reference to “segment operating income (loss)” and “segment operating margin,” which are not recognized measures under GAA

  12. Slide 12: Non-GAAP Measures Definitions Cont'd

    12 Non-GAAP Measures Definitions Cont’d Segment operating income (loss) is defined as operating income (loss) 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 (loss) as a percentage

  13. Slide 13: Non-GAAP Reconciliations – Segment Operating Income & Margin

    13 Non-GAAP Reconciliations – Segment Operating Income (Loss) & Segment Operating Margin Three Months Ended Nine Months Ended September 30 September 30 ($ in millions) 2018 2017 2018 2017 Ingalls revenues $ 694 $ 593 $ 1,908 $ 1,782 Newport News revenues 1,179 1,053 3,444 3,025 Technical Solutions r

  14. Slide 14: Non-GAAP Reconciliation – Free Cash Flow

    14 Non-GAAP Reconciliation – Free Cash Flow Three Months Ended Nine Months Ended September 30 September 30 ($ in millions) 2018 2017 2018 2017 Net cash provided by (used in) operating activities (93) 96 266 380 Less capital expenditures: Capital expenditure additions (116) (91) (293) (228) Grant pro

  15. Slide 15: Huntington Ingalls Industries

    Huntington Ingalls Industries Hard Stuff Done Right ™

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