Huntington Ingalls Industries, Inc. · NYSE:HII

Huntington Ingalls Industries — Q2 2020 Earnings Presentation

16 slides from Huntington Ingalls Industries's earnings presentation, Aug 6, 2020

  1. Slide 1: Q2 2020 Earnings Presentation

    Q2 2020 Earnings Presentation August 6, 2020 Mike Petters President and Chief Executive Officer Chris Kastner Executive Vice President and Chief Financial Officer

  2. Slide 2: Forward-Looking Statements

    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 risks and uncertainties that could cause our ac

  3. Slide 3: COVID-19 Update

    COVID-19 Update  Protecting significant, multi-year human capital investment in hiring, training and certification of workforce is a critical priority o Instituted liberal leave and other policy changes to provide workforce flexibility and security as they navigated pandemic o Implemented processes

  4. Slide 4: Virginia-class Submarine Program Status

    Virginia-class Submarine Program Status  Updated cost and schedule assumptions incorporated into VCS Block IV estimate at completion (EAC), resulting in a $111M charge in the quarter o Driven by cost and schedule performance and updates to assumptions for future program performance and efficiencies

  5. Slide 5: HII Q2 2020 Highlights

    HII Q2 2020 Highlights  Revenues were ~$2.0 billion in the quarter  Diluted EPS was $1.30 in the quarter Backlog  Total backlog at the end of the quarter was $46.1 billion ($B) $50  Ingalls Shipbuilding $46.1 o Delivered guided missile destroyer Delbert D. Black (DDG 119) to the U.S. Navy $39.4

  6. Slide 6: HII Q2 2020 Consolidated Results

    HII Q2 2020 Consolidated Results Consolidated Revenues Operating Income ($M) ($M) $2,500 $200 $2,188 $175 $2,027 $2,000 $150 $1,500 $100 $1,000 $57 $50 $500 $0 $0 Q2 2019 Q2 2020 Q2 2019 Q2 2020 Operating Margin 10.0%  Revenues, operating income and margin declined YoY 8.0% due to impacts primarily

  7. Slide 7: Capital Deployment

    Capital Deployment Cash Flow Generation Shareholder Distributions ($M) ($M) $250 $100 $201 $88 $200 $150 $126 $80 $100 $60 $52 $50 $42 $0 $40 ($50) ($44) ($100) ($75) $20 $42 ($91) $36 ($150) ($135) ($200) $0 Q2 2019 Q2 2020 Q2 2019 Q2 2020 Cash from Operations CAPEX Free Cash Flow 1 Dividends Share

  8. Slide 8: Upcoming Program Milestones

    Upcoming Program Milestones1  Second Half of 2020  2021 o Ingalls o Ingalls  Deliver NSC 9 (Stone)  Launch DDG 125 (Jack H. Lucas) o Newport News  Lay keel of DDG 128 (Ted Stevens)  Pier-side system testing on CVN 73 (USS  Complete sea trials for LPD 28 (Fort Lauderdale) George Washington) 

  9. Slide 9: Financial Outlook

    2020 Outlook1 Financial Outlook Prior Outlook (May 2020) Revised Outlook (Aug. 2020) 2020 Outlook Lower end of  Assumes an orderly recovery to normalized attendance levels at both Shipbuilding Revenue2 3% to 5% YoY $7.6B - $7.9B shipyards Growth  Shipbuilding assumptions updated to reflect a singl

  10. Slide 10: Appendix

    Appendix HUNTINGTON INGALLS INDUSTRIES PROPRIETARY

  11. Slide 11: Non-GAAP Measures Definitions

    Non-GAAP Measures Definitions We make reference to “segment operating income,” “shipbuilding revenue,” “shipbuilding operating margin,” “Technical Solutions EBITDA margin,” and “free cash flow.” We internally manage our operations by reference to segment operating income, which is not a recognized m

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

    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. Shipbuilding revenue is defined as the combined sales and service revenues from our Newpo

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

    Non-GAAP Reconciliations – Segment Operating Income Three Months Ended Six Months Ended June 30 June 30 ($ in millions) 2020 2019 2020 2019 Ingalls revenues 622 622 1,251 1,206 Newport News revenues 1,122 1,279 2,463 2,558 Technical Solutions revenues 320 321 637 561 Intersegment eliminations (37) (

  14. Slide 14: Non-GAAP Reconciliations – Shipbuilding Revenues & Operating Margin

    Non-GAAP Reconciliations – Shipbuilding Revenues & Operating Margin Three Months Ended Six Months Ended June 30 June 30 ($ in millions) 2020 2019 2020 2019 Sales and service revenues 2,027 2,188 4,290 4,268 Technical Solutions (320) (321) (637) (561) Intersegment eliminations 37 34 61 57 Shipbuildin

  15. Slide 15: Non-GAAP Reconciliations – Free Cash Flow

    Non-GAAP Reconciliations – Free Cash Flow Three Months Ended Six Months Ended June 30 June 30 ($ in millions) 2020 2019 2020 2019 Net cash provided by (used in) operating activities 201 (44) 269 (33) Less capital expenditures: Capital expenditure additions (79) (124) (150) (234) Grant proceeds for c

  16. Slide 16: HUNTINGTON INGALLS INDUSTRIES HARD STUFF DONE RIGHT

    16 HUNTINGTON INGALLS INDUSTRIES HARD STUFF DONE RIGHT

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