Huntington Ingalls Industries, Inc. · NYSE:HII
Huntington Ingalls Industries — Q3 2021 Earnings Presentation
18 slides from Huntington Ingalls Industries's earnings presentation, Nov 4, 2021
Slide 1: Q3 2021 Earnings Presentation
Q3 2021 Earnings Presentation November 4, 2021 Mike Petters President and Chief Executive Officer Chris Kastner Executive Vice President and Chief Operating Officer Tom Stiehle Executive Vice President and Chief Financial Officer
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
Slide 3: HII Q3 2021 Highlights
Backlog HII Q3 2021 Highlights ($B) $60 Revenues were ~$2.3 billion in the quarter $50.1 $50 $45.3 Diluted EPS was $3.65 in the quarter; Pension adjusted diluted EPS 1 was $3.58 The acquisition of Alion Science and Technology ("Alion") closed on Aug. 19, 2021; $40 quarterly results included ap
Slide 4: HII Q3 2021 Consolidated Results
HII Q3 2021 Consolidated Results Consolidated Revenue Operating Income ($M) ($M) $2,500 $2,314 $2,338 $250 $222 $2,000 $200 $1,500 $150 $118 $1,000 $100 $500 $50 $0 $0 Q3 2020 Q3 2021 Q3 2020 Q3 2021 Operating Margin Revenues improved YoY due primarily to revenues 12.0% attributable to the acquisi
Slide 5: Capital Deployment
Capital Deployment Cash Flow Generation Shareholder Distributions ($M) ($M) $400 Total $350 $70 $63 $350 $300 $277 $60 Total $17 $250 $222 $50 $42 $200 $160 $40 $150 $100 $30 $20 $42 $46 $50 $0 $10 -$50 $0 -$100 ($62) ($73) Q3 2020 Q3 2021 Q3 2020 Q3 2021 1 Dividends Share Repurchases (at cost) Cash
Slide 6: Ingalls Shipbuilding Q3 2021 Results
Ingalls Shipbuilding Q3 2021 Results Revenues Segment Operating Income1 ($M) ($M) $800 $80 $675 $628 $62 $62 $600 $60 $400 $40 $200 $20 $0 $0 Q3 2020 Q3 2021 Q3 2020 Q3 2021 Segment Operating Margin1 Revenues declined YoY due primarily to lower 12.0% volumes on the NSC, DDG and LHA programs 10.0%
Slide 7: Newport News Shipbuilding Q3 2021 Results
Newport News Shipbuilding Q3 2021 Results Revenues Segment Operating Income1 ($M) ($M) $100 $1,500 $1,358 $1,354 $88 $79 $80 $1,000 $60 $40 $500 $20 $0 $0 Q3 2020 Q3 2021 Q3 2020 Q3 2021 Segment Operating Margin1 Revenues were in line with results in the prior year 8.0% period with lower revenue Y
Slide 8: Technical Solutions Q3 2021 Results
Technical Solutions Q3 2021 Results Revenues Segment Operating Income1 ($M) ($M) $500 $25 $21 $394 $400 $20 $320 $300 $15 $13 $200 $10 $100 $5 $0 $0 Q3 2020 Q3 2021 Q3 2020 Q3 2021 Segment Operating Margin1 Revenues improved YoY due primarily to revenue attributable to the acquisition of Alion in
Slide 9: Pension Outlook
Pension Outlook ($ in millions) 2020 (Actual) 20213 20223 Pension Discount Rate 3.39% 2.80% 2.89% Change from prior est. N/A Change from prior est. 9bps Expected Long-Term Return on Assets 7.25% 7.25% 7.25% N/A N/A CAS Recoveries Over/(Under) Cash Contributions1,2 $191 ($54) $3 $1 $1 FAS Benefit/(Ex
Slide 10: FY21 Outlook
FY21 Outlook 2021 Outlook1 Prior Current Timing of material delivery impacting near-term Outlook3 Outlook4 Shipbuilding Revenue2 $8.2B - $8.4B ~$8.2B Shipbuilding revenue2 Shipbuilding Operating Margin2 7.5% - 8.0% 7.5% - 8.0% Technical Solutions Revenue ~$1.0B ~$1.4B Shipbuilding operating marg
Slide 11: Appendix
Appendix HUNTINGTON INGALLS INDUSTRIES PROPRIETARY
Slide 12: Non-GAAP Measures Definitions
Non-GAAP Measures Definitions We make reference to “segment operating income,” “segment operating margin,” “pension adjusted diluted earnings per share,” “shipbuilding revenue,” “shipbuilding operating margin,” “Technical Solutions EBITDA margin” and “free cash flow.” We internally manage our operat
Slide 13: Non-GAAP Measures Definitions Cont’d
Non-GAAP Measures Definitions Cont’d Segment operating income is defined as operating income for the relevant segment(s) before the Operating FAS/CAS Adjustment and non-current state income taxes. Segment operating margin is defined as segment operating income as a percentage of sales and service re
Slide 14: Non-GAAP Reconciliations – Segment Operating Income & Segment Operating Margin
Non-GAAP Reconciliations – Segment Operating Income & Segment Operating Margin Three Months Ended Nine Months Ended September 30 September 30 ($ in millions) 2021 2020 2021 2020 Ingalls revenues 628 675 1,947 1,926 Newport News revenues 1,354 1,358 4,124 3,821 Technical Solutions revenues 394 320 89
Slide 15: 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) 2021 2020 2021 2020 Sales and service revenues 2,338 2,314 6,847 6,604 Technical Solutions (394) (320) (890) (957) Intersegment eliminations 38 39 114 10
Slide 16: Non-GAAP Reconciliations – Adjusted Diluted Earnings per Share
Non-GAAP Reconciliations – Adjusted Diluted Earnings per Share Three Months Ended Nine Months Ended September 30 September 30 (in millions, except per share amounts) 2021 2020 2021 2020 Net earnings 147 222 424 447 (1) After-tax FAS/CAS Adjustment (3) (70) (13) (217) Pension Adjusted Net Earnings 14
Slide 17: Non-GAAP Reconciliations – Free Cash Flow
Non-GAAP Reconciliations – Free Cash Flow Three Months Ended Nine Months Ended September 30 September 30 ($ in millions) 2021 2020 2021 2020 Net cash provided by operating activities 350 222 489 491 Less capital expenditures: Capital expenditure additions (82) (70) (216) (220) Grant proceeds for cap
Slide 18: Huntington Ingalls Industries Hard Stuff Done Right
18 HUNTINGTON INGALLS INDUSTRIES HARD STUFF DONE RIGHT
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