Huntington Ingalls Industries, Inc. · NYSE:HII
Huntington Ingalls Industries — Q4 2018 Earnings Presentation
16 slides from Huntington Ingalls Industries's earnings presentation, Feb 14, 2019
Slide 1: Q4 2018 Earnings Presentation
Exhibit 99.2 Q4 2018 Earnings Presentation February 14, 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 Exhibit 99.2 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 cou
Slide 3: HII's Q4 & FY 2018 Highlights
3 HII’s Q4 & FY 2018 Highlights Exhibit 99.2 Revenues were ~$2.2 billion in the quarter; ~$8.2 billion in 2018 Diluted EPS was $4.94 in the quarter; $19.09 in 2018 Strong cash flow generation in the quarter and for the year o Cash from operations was $648 million in the quarter; $914 million i
Slide 4: HII's Q4 2018 Consolidated Results
4 HII’s Q4 2018 Consolidated Results Exhibit 99.2 *Non-GAAP measure. See appendix for definition and reconciliation.
Slide 5: HII's FY 2018 Consolidated Results
5 HII’s FY 2018 Consolidated Results Exhibit 99.2 *Non-GAAP measure. See appendix for definition and reconciliation.
Slide 6: HII's Q4 and 2018 Capital Deployment
6 HII’s Q4 and 2018 Capital Deployment Exhibit 99.2 Cash Flow Generation Shareholder Distributions Total $1,000 $914 $1,000 $920 $648 $750 $506 $512 $500 $402 $500 $788** Total (in millions) $313 (in millions) $142 $250 $276** $132 $0 $0 $37 Q4 2018 2018 Q4 2018 2018 Cash from Operations CAPEX Free
Slide 7: 2019-2020 Pension Outlook
7 2019-2020 Pension Outlook Exhibit 99.2 3 3 ($ in millions) 2018 (Actual) 2019 2020 Pension Discount Rate 3.82% 4.34% 4.34% Expected Long-Term Return on Assets 7.25% 7.25% 7.25% CAS Recoveries over/(under) Cash ($91) $237 $103 Contributions1,2 FAS Expense1 ($91) ($139) ($115) CAS Expense1 $455 $298
Slide 8: 2019 Considerations
8 2019 Considerations Exhibit 99.2 1 ($ in millions) 2018 (Actual) 2019 $2 $9 - $13 Non-Current State Income Taxes expense expense Effective Tax Rate 13.9% ~21% Interest Expense $58 ~$60 Capital Expenditures 4.9% of sales 5 - 6% of sales Depreciation & Amortization $207 ~$210 Projected capital exp
Slide 9: Appendix
9 Exhibit 99.2 Appendix
Slide 10: Non-GAAP Measures Definitions
10 Non-GAAP Measures Definitions Exhibit 99.2 We make reference to “segment operating income,” “segment operating margin,” “adjusted net earnings,” “adjusted diluted earnings per share,” and “free cash flow.” We internally manage our operations by reference to “segment operating income” and “segment
Slide 11: Non-GAAP Measures Definitions Cont'd
11 Non-GAAP Measures Definitions Cont’d Exhibit 99.2 Segment operating income is defined as operating income for the relevant segment(s) before the Operating FAS/CAS Adjustment and non-current state income taxes. Segment operating margin is defined as segment operating income as a percentage of sale
Slide 12: Non-GAAP Reconciliations – Segment Operating Income & Segment Operating Margin
12 Non-GAAP Reconciliations – Segment Operating Exhibit 99.2 Income & Segment Operating Margin Three Months Ended Year Ended December 31 December 31 ($ in millions) 2018 2017 2018 2017 Ingalls revenues $ 699 $ 638 $ 2,607 $ 2,420 Newport News revenues 1,278 1,139 4,722 4,164 Technical Solutions reve
Slide 13: Non-GAAP Reconciliations – Adjusted Net Earnings & Adjusted Diluted EPS
13 Non-GAAP Reconciliations – Adjusted Net EarningsExhibit &99.2 Adjusted Diluted EPS Three Months Ended Year Ended December 31 December 31 ($ in millions, except per share amounts) 2018 2017 2018 2017 Net earnings $ 212 $ 64 $ 836 $ 479 After-tax adjustment for loss on early extinguishment of debt1
Slide 14: Non-GAAP Reconciliations – Footnotes to Adjusted Net Earnings and EPS
14 Non-GAAP Reconciliations – Footnotes to the Reconciliation of Exhibit 99.2 Adjusted Net Earnings and Adjusted Diluted Earnings per Share Three Months Ended Year Ended December 31 December 31 ($ in millions, except per share amounts) 2018 2017 2018 2017 (1) Loss on early extinguishment of debt $ —
Slide 15: Non-GAAP Reconciliation – Free Cash Flow
15 Non-GAAP Reconciliation – Free Cash Flow Exhibit 99.2 Three Months Ended Year Ended December 31 December 31 ($ in millions) 2018 2017 2018 2017 Net cash provided by (used in) operating activities 648 434 914 814 Less capital expenditures: Capital expenditure additions (170) (154) (463) (382) Gran
Slide 16: Huntington Ingalls Industries
Exhibit 99.2 Huntington Ingalls Industries Hard Stuff Done Right ™
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