Huntington Ingalls Industries, Inc. · NYSE:HII

Huntington Ingalls Industries — Q2 2018 Earnings Presentation

14 slides from Huntington Ingalls Industries's earnings presentation, Aug 2, 2018

  1. Slide 1: Q2 2018 Earnings Presentation

    Exhibit 99.2 Q2 2018 Earnings Presentation August 2, 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 Q2 2018 Highlights

    3 HII’s Q2 2018 Highlights  Revenues were $2.0 billion in the quarter  Diluted EPS was $5.40 in the quarter  Total backlog at the end of the quarter was ~$21 billion; new contract awards in the quarter totaled $1.1 billion  Ingalls Shipbuilding o Started fabrication of the Arleigh Burke-class de

  4. Slide 4: HII's Q2 2018 Consolidated Results

    4 HII’s Q2 2018 Consolidated Results Revenues  HII’s revenues up 8.7% YOY due to increased $2,200 volume at the Newport News Shipbuilding $2,020 $2,000 segment $1,858 $1,800  HII’s operating income YOY increase due to a $1,600 favorable Operating FAS/CAS Adjustment in the (in (in millions) $1,400

  5. Slide 5: HII's Q2 2018 Capital Deployment

    5 HII’s Q2 2018 Capital Deployment Cash Flow Generation Shareholder Distributions Total $300 $300 $279 $239 $250 $250 $200 $186 $200 Total $154 $165 $150 $150 $247 ** $107 ($ millions) in $85 ($ millions) in $100 $79 $100 $138 ** $50 $50 $27 $32 $— $— Q2 2017 Q2 2018 Q2 2017 Q2 2018 Cash from Operat

  6. Slide 6: Ingalls Shipbuilding Q2 2018 Results

    6 Ingalls Shipbuilding Q2 2018 Results Revenues  Ingalls revenues down 1.6% YOY due to $700 $639 $629 decreased volumes on the NSC program and $600 surface combatants, partially offset by increased $500 volume on the LPD program $400  Ingalls segment operating income and margin $300 down YOY due t

  7. Slide 7: Newport News Shipbuilding Q2 2018 Results

    7 Newport News Shipbuilding Q2 2018 Results Revenues  Newport News revenues up 18.2% YOY due to $1,183 $1,200 higher volume in aircraft carriers and naval nuclear $1,001 support services $1,000  Newport News segment operating income up YOY $800 mainly due to higher revenues ($ millions) in $600 $4

  8. Slide 8: Technical Solutions Q2 2018 Results

    8 Technical Solutions Q2 2018 Results Revenues  Technical Solutions revenues relatively flat YOY $300 $244 $243  Technical Solutions segment operating income $250 and margin down YOY primarily due to lower $200 performance in fleet support services $150 ($ millions) in $100 $50 $— Q2 2017 Q2 2018

  9. Slide 9: Appendix

    9 Appendix

  10. Slide 10: Non-GAAP Measures Definitions

    10 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

  11. Slide 11: Non-GAAP Measures Definitions Cont'd

    11 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

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

    12 Non-GAAP Reconciliations – Segment Operating Income (Loss) & Segment Operating Margin Three Months Ended Six Months Ended June 30 June 30 ($ in millions) 2018 2017 2018 2017 Ingalls revenues $ 629 $ 639 $ 1,214 $ 1,189 Newport News revenues 1,183 1,001 2,265 1,972 Technical Solutions revenues 243

  13. Slide 13: Non-GAAP Reconciliation – Free Cash Flow

    13 Non-GAAP Reconciliation – Free Cash Flow Three Months Ended Six Months Ended June 30 June 30 ($ in millions) 2018 2017 2018 2017 Net cash provided by (used in) operating activities 239 186 359 284 Less capital expenditures: Capital expenditure additions (102) (79) (177) (137) Grant proceeds for c

  14. Slide 14: Huntington Ingalls Industries

    Huntington Ingalls Industries Hard Stuff Done Right™

Huntington Ingalls Industries — Q2 2018 Earnings Presentation on 6ix