Huntington Ingalls Industries, Inc. · NYSE:HII
Huntington Ingalls Industries — Q3 2019 Earnings Presentation
15 slides from Huntington Ingalls Industries's earnings presentation, Nov 7, 2019
Slide 1: Q3 2019 Earnings Presentation
Q3 2019 Earnings Presentation November 7, 2019 Mike Petters President and Chief Executive Officer Chris Kastner Executive Vice President, Business Management and Chief Financial Officer
Slide 2: Forward-Looking Statements
2 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
Slide 3: HII Q3 2019 Highlights
3 HII Q3 2019 Highlights Revenues were $2.2 billion in the quarter Diluted EPS was $3.74 in the quarter Total backlog at the end of the quarter was $39.2 billion Total Backlog Operating cash flow was $363 million in the quarter; free cash flow was $250 million1 $50 Increased quarterly divi
Slide 4: HII Q3 2019 Consolidated Results
4 HII Q3 2019 Consolidated Results Revenues HII’s revenues up 6.5% YOY due to growth at Technical $2,500 $2,219 Solutions driven by recent acquisitions and higher $2,083 volume at Newport News Shipbuilding $2,000 (in millions) $1,500 HII’s operating income and margin declined YOY due to a lower
Slide 5: HII Q3 2019 Capital Deployment
5 HII Q3 2019 Capital Deployment Cash Flow Generation Shareholder Distributions $400 $363 $160 Total $140 $130 $300 $250 Total $120 $103 $200 (in millions) (in millions) $100 $100 $80 $99 $0 $68 $60 ($100) ($93) ($102) $40 ($113) ($200) $20 ($195) $31 $35 ($300) $0 Q3 2018 Q3 2019 Q3 2018 Q3 2019 Ca
Slide 6: Ingalls Shipbuilding Q3 2019 Results
6 Ingalls Shipbuilding Q3 2019 Results Revenues Ingalls revenues down YOY due to lower volumes $800 $694 on the NSC and LHA programs $647 $600 Ingalls segment operating income and margin (in millions) down YOY due to lower risk retirement on the $400 NSC program $200 $0 Q3 2018 Q3 2019 Segment O
Slide 7: Newport News Shipbuilding Q3 2019 Results
7 Newport News Shipbuilding Q3 2019 Results Revenues Newport News revenues up 7.2% YOY due to $1,500 higher volumes in aircraft carriers and submarines $1,264 $1,179 Newport News segment operating income and (in millions) $1,000 margin down YOY due to a workers’ compensation benefit of $43 milli
Slide 8: Technical Solutions Q3 2019 Results
8 Technical Solutions Q3 2019 Results Revenues Technical Solutions revenues up 41.6% YOY due $400 $347 to higher mission driven innovative solutions $350 revenues following the acquisitions of G2, Inc. and $300 Fulcrum, as well as higher fleet support and oil $245 (in millions) $250 and gas servic
Slide 9: 2019-2020 Pension Outlook
9 2019-2020 Pension Outlook ($ in millions) 2018 (Actual) 20193 20203,4 Pension Discount Rate 3.82% 4.34% 3.23% Change from prior N/A Change from prior (111)bps 7.25% 7.25% 7.25% Expected Long-Term Return on Assets N/A N/A CAS Recoveries over/(under) Cash ($91) $217 $193 Contributions1,2 ($20) $90 F
Slide 10: Appendix
10 Appendix
Slide 11: Non-GAAP Measures Definitions
11 Non-GAAP Measures Definitions We make reference to “segment operating income,” “segment operating margin” and “free cash flow.” We internally manage our operations by reference to “segment operating income” and “segment operating margin,” which are not recognized measures under GAAP. When analyzi
Slide 12: Non-GAAP Measures Definitions Cont'd
12 Non-GAAP Measures Definitions Cont’d Segment operating income is defined as operating income for the relevant segment(s) before the Operating FAS/CAS Adjustment and non- current state income taxes. Segment operating margin is defined as segment operating income as a percentage of sales and servic
Slide 13: Non-GAAP Reconciliations – Segment Operating Income & Segment Operating Margin
13 Non-GAAP Reconciliations – Segment Operating Income & Segment Operating Margin Three Months Ended Nine Months Ended September 30 September 30 ($ in millions) 2019 2018 2019 2018 Ingalls revenues 647 694 1,853 1,908 Newport News revenues 1,264 1,179 3,796 3,444 Technical Solutions revenues 347 245
Slide 14: Non-GAAP Reconciliations – Free Cash Flow
14 Non-GAAP Reconciliations – Free Cash Flow Three Months Ended Nine Months Ended September 30 September 30 ($ in millions) 2019 2018 2019 2018 Net cash provided by (used in) operating activities 363 (93) 330 266 Less capital expenditures: Capital expenditure additions (115) (116) (349) (293) Grant
Slide 15: Huntington Ingalls Industries
Huntington Ingalls Industries Hard Stuff Done Right ™
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