Huntington Ingalls Industries, Inc. · NYSE:HII

Huntington Ingalls Industries — Q4 2019 Earnings Presentation

16 slides from Huntington Ingalls Industries's earnings presentation, Feb 13, 2020

  1. Slide 1: Q4 2019 Earnings Presentation

    Q4 2019 Earnings Presentation February 13, 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: HII's Q4 & FY 2019 Highlights

    Consolidated Revenues HII’s Q4 & FY 2019 Highlights ($M)  Revenues were ~$2.4 billion in the quarter; ~$8.9 billion in 2019 $10,000 $8,899 $8,176  Diluted EPS was $3.61 in the quarter; $13.26 in 2019 $8,000 $7,441 $7,068  Adjusted diluted EPS1 was $4.36 in the quarter; $14.01 in 2019 $6,000  Cas

  4. Slide 4: HII's Q4 2019 Consolidated Results

    HII’s Q4 2019 Consolidated Results Consolidated Revenues Operating Income ($M) ($M) $3,000 $250 $213 $215 $2,412 $2,500 $2,199 $200 $186 $2,000 $150 $1,500 $100 $1,000 $500 $50 $0 $0 Q4 2018 Q4 2019 Q4 2018 Q4 2019 GAAP Adjusted1 Operating Margin Diluted EPS 12% $6 9.7% $4.94 10% 8.9% $5 $4.36 7.7%

  5. Slide 5: HII's FY 2019 Consolidated Results

    HII’s FY 2019 Consolidated Results Consolidated Revenues Operating Income ($M) ($M) $10,000 $1,000 $951 $8,899 $8,176 $8,000 $800 $736 $765 $6,000 $600 $4,000 $400 $2,000 $200 $0 $0 2018 2019 2018 2019 GAAP Adjusted1 Operating Margin Diluted EPS 14% $19.09 11.6% $20 12% 10% 8.6% $15 $13.26 $14.01 8.

  6. Slide 6: HII's Q4 and 2019 Capital Deployment

    HII’s Q4 and 2019 Capital Deployment Cash Flow Generation Shareholder Distributions ($M) ($M) $1,000 $896 $400 $363 $800 $350 $566 $600 $460 $300 $408 $400 $250 $214 $200 $200 $0 $150 $100 -$200 $100 ($158) $58 $149 -$400 $50 -$600 ($436) $42 $0 Q4 2019 2019 Q4 2019 2019 1 2 Cash from Operations CAP

  7. Slide 7: 2020-2024 Pension Outlook

    2020-2024 Pension Outlook 2019 ($ in millions) (Actual) 20203 20213 20223 20233 20243 Pension Discount Rate 4.34% 3.39% 3.39% 3.39% 3.39% 3.39% Expected Long-Term Return on Assets 7.25% 7.25% 7.25% 7.25% 7.25% 7.25% CAS Recoveries over/(under) Cash $216 $173 ($40) $25 $41 $12 Contributions1,2 FAS Ex

  8. Slide 8: 2020 Financial Considerations

    2020 Financial Considerations1  2020 Revenue o Shipbuilding growth of 3-5% 2019 ($M) (Actual) 20202 o Refined Technical Solutions portfolio to generate $19 ~$1B in revenue Non-Current State Income Taxes NM expense  Excludes results from oil and gas business and Effective Tax Rate 19.6% ~21% San Di

  9. Slide 9: Upcoming Program Milestones

    Upcoming Program Milestones1  2020  2021 o Ingalls o Ingalls  Re-deliver DDG 62 (USS Fitzgerald)  Launch DDG 125 (Jack H. Lucas)  Deliver DDG 119 (Delbert D. Black)  Lay keel of DDG 128 (Ted Stevens)  Deliver LHA 7 (Tripoli)  Complete sea trials for LPD 28 (Fort Lauderdale)  Deliver NSC 9 (

  10. Slide 10: Appendix

    Appendix HUNTINGTON INGALLS INDUSTRIES PROPRIETARY

  11. Slide 11: Non-GAAP Measures Definitions

    Non-GAAP Measures Definitions We make reference to "adjusted operating income," "adjusted operating margin," "adjusted net earnings," "adjusted diluted earnings per share" and “free cash flow.” Adjusted operating income, adjusted operating margin, adjusted net earnings and adjusted diluted earnings

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

    Non-GAAP Measures Definitions Cont’d Adjusted operating income is defined as operating income adjusted for the impact of the goodwill impairment in the fourth quarter of 2019. Adjusted operating margin is defined as adjusted operating income as a percentage of sales and service revenues. Adjusted ne

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

    Technical Solutions segment operating income (loss) (19) 7.0 6 32 Adjustment for impairments of goodwill 29 - 29 - Non-GAAP Reconciliations –operating Adjusted Technical Solutions segment Adjusted Income (loss) Operating 10Income 7& Adjusted 35 32 Operating Margin As a percentage of Technical Soluti

  14. Slide 14: Non-GAAP Reconciliations – Adjusted Net Earnings & Adjusted Diluted EPS

    Non-GAAP Reconciliations – Adjusted Net Earnings & Adjusted Diluted EPS Three Months Ended Year Ended December 31 December 31 (in millions, except per share amounts) 2019 2018 2019 2018 Adjusted Net Earnings Net earnings $ 149 $ 212 $ 549 $ 836 After-tax adjustment for goodwill and long-tived asset

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

    Non-GAAP Reconciliations – Free Cash Flow Three Months Ended Year Ended December 31 December 31 ($ in millions) 2019 2018 2019 2018 Net cash provided by (used in) operating activities 566 648 896 914 Less capital expenditures: Capital expenditure additions (181) (170) (530) (463) Grant proceeds for

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

    16 HUNTINGTON INGALLS INDUSTRIES HARD STUFF DONE RIGHT

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