Huntington Ingalls Industries, Inc. · NYSE:HII

Huntington Ingalls Industries — Q3 2020 Earnings Presentation

15 slides from Huntington Ingalls Industries's earnings presentation, Nov 5, 2020

  1. Slide 1: Q3 2020 Earnings Presentation

    Q3 2020 Earnings Presentation November 5, 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  Rate of new cases has stabilized in our shipyards and we are maintaining a sustainable and manageable level of attendance o Rapid testing is enabling us to prudently move employees out of quarantine and back to work  Continue to adjust and refine policies and procedures to protect

  4. Slide 4: HII Q3 2020 Highlights

    Shipbuilding Revenue1 HII Q3 2020 Highlights ($M)  Revenues were ~$2.3 billion in the quarter $2,500  Diluted EPS was $5.45 in the quarter +5.8% $2,033 $1,921 $2,000  Total backlog at the end of the quarter was $45.3 billion  Ingalls Shipbuilding $1,500 o Completed sea trials for Legend-class Na

  5. Slide 5: HII Q3 2020 Consolidated Results

    HII Q3 2020 Consolidated Results Consolidated Revenues Operating Income ($M) ($M) $2,500 $2,314 $250 $2,219 $222 $214 $2,000 $200 $1,500 $150 $1,000 $100 $500 $50 $0 $0 Q3 2019 Q3 2020 Q3 2019 Q3 2020 Operating Margin 10.0% 9.6% 9.6%  Revenues improved YoY due to growth at Newport 8.0% News and Ing

  6. Slide 6: Capital Deployment

    Capital Deployment Cash Flow Generation Shareholder Distributions ($M) ($M) $400 $363 $120 Total $103 $300 $250 $100 $222 $200 $160 $80 $68 $100 $60 Total $42 $0 $40 ($100) ($62) $20 $35 $42 ($113) ($200) $0 Q3 2019 Q3 2020 Q3 2019 Q3 2020 Cash from Operations CAPEX Free Cash Flow 1 Dividends Share

  7. Slide 7: 2020-2021 Pension Outlook Table

    2020-2021 Pension Outlook Table ($ in millions) 2019 (Actual) 20203 20213 Pension Discount Rate 4.34% 3.39% 2.93% Change from prior est. N/A Change from prior est. (46)bps 7.25% 7.25% Expected Long-Term Return on Assets 7.25% N/A N/A CAS Recoveries over/(under) Cash $189 ($54) $216 Contributions1,2

  8. Slide 8: Financial Outlook

    2020 Outlook1 Financial Outlook Prior Outlook (Aug. 2020) Updated Outlook (Nov. 2020) 2020 Outlook Shipbuilding Revenue2 $7.6B - $7.9B ~$7.9B  Assumes an orderly recovery to normalized attendance levels at both shipyards Shipbuilding Operating Margin2 5.5% - 6.5% 5.5% - 6.5%  Q4 2020 shipbuilding

  9. Slide 9: Appendix

    Appendix HUNTINGTON INGALLS INDUSTRIES PROPRIETARY

  10. Slide 10: Non-GAAP Measures Definitions

    Non-GAAP Measures Definitions We make reference to “segment operating income,” “segment operating margin,” “shipbuilding revenue,” “shipbuilding operating margin,” “Technical Solutions EBITDA margin,” and “free cash flow.” We internally manage our operations by reference to segment operating income

  11. Slide 11: 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. Segment operating margin is defined as segment operating income (loss) as a percentage of

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

    Non-GAAP Reconciliations – Segment Operating Income & Segment Operating Margin Three Months Ended Nine Months Ended September 30 September 30 ($ in millions) 2020 2019 2020 2019 Ingalls revenues 675 $ 647 1,926 $ 1,853 Newport News revenues 1,358 1,274 3,821 3,832 Technical Solutions revenues 320 32

  13. Slide 13: Non-GAAP Reconciliations – Shipbuilding Revenues & Operating Margin

    Non-GAAP Reconciliations – Shipbuilding Revenues & Operating Margin Three Months Ended Nine Months Ended September 30 September 30 ($ in millions) 2020 2019 2020 2019 Sales and service revenues 2,314 2,219 6,604 6,487 Technical Solutions (320) (326) (957) (887) Intersegment eliminations 39 28 100 85

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

    Non-GAAP Reconciliations – Free Cash Flow Three Months Ended Nine Months Ended September 30 September 30 ($ in millions) 2020 2019 2020 2019 Net cash provided by operating activities 222 363 491 330 Less capital expenditures: Capital expenditure additions (70) (115) (220) (349) Grant proceeds for ca

  15. Slide 15: HUNTINGTON INGALLS INDUSTRIES HARD STUFF DONE RIGHT

    15 HUNTINGTON INGALLS INDUSTRIES HARD STUFF DONE RIGHT

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