Huntington Ingalls Industries (NYSE:HII) reported fourth quarter
2016 revenues of $1.9 billion, up 0.9 percent from the fourth
quarter of 2015. Operating income in the quarter was $268 million
and operating margin was 13.9 percent, compared to $144 million and
7.6 percent, respectively, in the fourth quarter of 2015. Diluted
earnings per share in the quarter was $4.20, compared to $1.06 in
the same period of 2015.
For the full year, revenues of $7.1 billion increased 0.7
percent over 2015. Operating income in 2016 was $858 million and
operating margin was 12.1 percent, compared to $769 million and
11.0 percent, respectively, in 2015. Diluted earnings per share for
the full year was $12.14, compared to $8.36 in 2015. Cash from
operations in 2016 was $822 million and free cash flow1 was $537
million, compared to $861 million and $673 million, respectively,
in 2015.
New contract awards for 2016 were approximately $5.2 billion,
bringing total backlog to $21.0 billion as of Dec. 31, 2016. Major
contract awards in 2016 included the detail design and construction
contract for the amphibious transport dock Fort Lauderdale (LPD
28); a fixed-price incentive contract to build a ninth Legend-class
National Security Cutter (unnamed); the planning, advanced
engineering and procurement of long-lead material contract for the
amphibious assault ship Bougainville (LHA 8); and the continued
advance planning contract for the refueling and complex overhaul
(“RCOH”) of the aircraft carrier USS George Washington (CVN
73).
“Huntington Ingalls Industries’ operational performance in 2016
was solid,” said Mike Petters, HII’s president and CEO.
“Exceptional execution on mature programs at Ingalls lessened the
impact of the ongoing transition between programs at Newport News
and drove the strong financial results for the year.”
Petters continued, “Our 2016 performance, the acquisition of
Camber Corporation and the formation of our Technical Solutions
division established a great foundation to achieve our Path to 2020
strategic commitments.”
1Free cash flow is a non-GAAP measure. See exhibit B for
definition and reconciliation.
Results of
Operations |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Year Ended |
|
|
December 31 |
|
|
December 31 |
|
(in
millions, except per share amounts) |
2016 |
2015 |
% Change |
|
2016 |
2015 |
% Change |
Sales and service
revenues |
$ |
1,922 |
|
$ |
1,905 |
|
0.9% |
|
|
$ |
7,068 |
|
$ |
7,020 |
|
0.7% |
|
|
Operating income |
268 |
|
144 |
|
86.1% |
|
|
858 |
|
769 |
|
11.6% |
|
|
Operating margin % |
13.9% |
|
7.6% |
|
638
bps |
|
|
12.1% |
|
11.0% |
|
118
bps |
|
|
Segment operating
income1 |
225 |
|
124 |
|
81.5% |
|
|
715 |
|
667 |
|
7.2% |
|
|
Segment operating margin %1 |
11.7% |
|
6.5% |
|
520
bps |
|
|
10.1% |
|
9.5% |
|
61
bps |
|
|
Net earnings |
197 |
|
50 |
|
294.0% |
|
|
573 |
|
404 |
|
41.8% |
|
|
Diluted earnings per
share |
$ |
4.20 |
|
$ |
1.06 |
|
296.2% |
|
|
$ |
12.14 |
|
$ |
8.36 |
|
45.2% |
|
|
|
|
|
|
|
|
|
|
Weighted-average
diluted shares outstanding |
46.9 |
|
47.3 |
|
|
|
47.2 |
|
48.3 |
|
|
|
|
|
|
|
|
|
|
Adjusted sales and
service revenues2 |
$ |
1,922 |
|
$ |
1,905 |
|
0.9% |
|
|
$ |
7,068 |
|
$ |
7,033 |
|
0.5% |
|
|
Adjusted operating
income2,3 |
268 |
|
187 |
|
43.3% |
|
|
858 |
|
735 |
|
16.7% |
|
|
Adjusted operating margin %2,3 |
13.9% |
|
9.8% |
|
413
bps |
|
|
12.1% |
|
10.5% |
|
169
bps |
|
|
Adjusted segment
operating income1,2,3 |
225 |
|
167 |
|
34.7% |
|
|
715 |
|
633 |
|
13.0% |
|
|
Adjusted segment operating margin %1,2,3 |
11.7% |
|
8.8% |
|
294
bps |
|
|
10.1% |
|
9.0% |
|
112
bps |
|
|
Adjusted net
earnings4 |
172 |
|
92 |
|
87.0% |
|
|
479 |
|
354 |
|
35.3% |
|
|
Adjusted
diluted earnings per share4 |
$ |
3.67 |
|
$ |
1.95 |
|
88.2% |
|
|
$ |
10.15 |
|
$ |
7.33 |
|
38.5% |
|
|
1 Non-GAAP
measures that exclude non-segment factors affecting operating
income. See Exhibit B for definitions and reconciliations. |
2 Non-GAAP
measures that exclude the impact of an insurance litigation
settlement in the Ingalls segment in second quarter 2015. See
Exhibit B for reconciliations. |
3 Non-GAAP
measures that exclude the impact of goodwill impairment charges in
second and fourth quarters of 2015 and the impact of an intangible
asset impairment charge in the Technical Solutions segment in
fourth quarter 2015. See Exhibit B for reconciliations. |
4 Non-GAAP
measures that exclude the after-tax impacts of: FAS/CAS Adjustment
in 2016 and 2015, an insurance litigation settlement in the Ingalls
segment in second quarter 2015, goodwill impairment charges in
second and fourth quarters of 2015 in the Technical Solutions
segment, an intangible asset impairment charge in the Technical
Solutions segment in fourth quarter 2015 and a loss on the early
extinguishment of debt in the third quarter of 2015. See Exhibit B
for reconciliations. |
Fourth Quarter 2016 Significant EventOn
December 1, 2016, the Company closed on its previously announced
acquisition of Camber Corporation and simultaneously formed a new
reporting segment, Technical Solutions. Technical Solutions is
comprised of AMSEC, Camber Corporation, Continental Maritime of San
Diego, Newport News Industrial, SN3, Undersea Solutions Corporation
and UniversalPegasus International.
The segment provides agile software development and network
engineering, training systems, logistics support, information
technology, fleet maintenance and modernization, unmanned undersea
systems, nuclear engineering and fabrication, and oil and gas
engineering to a wide variety of government and commercial
customers worldwide.
Segment Operating Results
Ingalls
Shipbuilding |
|
|
|
|
|
|
Three Months Ended |
|
|
Year Ended |
|
|
December 31 |
|
|
December 31 |
|
($ in millions) |
2016 |
2015 |
% Change |
|
2016 |
2015 |
% Change |
Revenues |
$ |
641 |
|
$ |
580 |
|
10.5% |
|
|
$ |
2,389 |
|
$ |
2,188 |
|
9.2% |
|
Segment operating
income1 |
85 |
|
59 |
|
44.1% |
|
|
321 |
|
379 |
|
(15.3)% |
|
Segment operating
margin %1 |
13.3% |
|
10.2% |
|
309
bps |
|
|
13.4% |
|
17.3% |
|
(390)
bps |
|
Adjusted revenues2 |
641 |
|
580 |
|
10.5% |
|
|
2,389 |
|
2,201 |
|
8.5% |
|
Adjusted segment
operating income1,2 |
85 |
|
59 |
|
44.1% |
|
|
321 |
|
243 |
|
32.1% |
|
Adjusted
segment operating margin %1,2 |
13.3% |
|
10.2% |
|
309 bps |
|
|
13.4% |
|
11.0% |
|
240 bps |
|
1 Non-GAAP
measures that exclude non-segment factors affecting operating
income. See Exhibit B for reconciliations. |
2 Non-GAAP
measures that exclude the impact of an insurance litigation
settlement in second quarter 2015. See Exhibit B for
reconciliations. |
Ingalls Shipbuilding revenues for the fourth quarter were $641
million, an increase of $61 million, or 10.5 percent, from the same
period in 2015, due to higher revenues in surface combatants and
the Legend-class National Security Cutter (“NSC”) program,
partially offset by lower revenues in amphibious assault ships.
Higher surface combatant revenues were primarily due to increased
volumes on Lenah H. Sutcliffe Higbee (DDG 123) and Frank E.
Petersen Jr. (DDG 121), partially offset by decreased volume on
Delbert D. Black (DDG 119) and the delivery of John Finn (DDG 113)
in the quarter. Higher NSC program revenues were primarily due to
increased volume on Midgett (NSC 8), partially offset by the
delivery of USCGC Munro (NSC 6) in the quarter. Lower amphibious
assault ships revenues were due to the delivery of USS John P.
Murtha (LPD 26) in the second quarter of 2016 and decreased volume
on Portland (LPD 27), partially offset by increased volumes on Fort
Lauderdale and Bougainville.
Ingalls Shipbuilding segment operating income for the fourth
quarter was $85 million, an increase of $26 million from the same
period last year. Segment operating margin in the quarter was 13.3
percent, compared to 10.2 percent in the same period last year.
These increases were primarily due to higher risk retirement and
improved performance on the LPD, DDG and NSC programs.
For the full year, Ingalls Shipbuilding revenues were $2.4
billion, an increase of $201 million, or 9.2 percent, from 2015,
due to higher revenues in surface combatants and amphibious assault
ships, partially offset by lower revenues on the NSC program.
Higher surface combatants revenues were primarily due to increased
volumes on Frank E. Petersen Jr., Lenah H. Sutcliffe Higbee, and
planning yard services, partially offset by the delivery of John
Finn. Higher amphibious assault ships revenues were primarily due
to increased volumes on Fort Lauderdale, Tripoli (LHA 7) and
Bougainville, partially offset by lower volume on Portland and the
delivery of USS John P. Murtha. Lower NSC program revenues were due
to the delivery of USCGC James (NSC 5) in 2015 and the delivery of
Munro in 2016, partially offset by higher volume on Midgett.
For the full year, Ingalls Shipbuilding segment operating income
was $321 million, compared to $379 million in 2015. Segment
operating margin was 13.4 percent for 2016, compared to 17.3
percent in 2015. Segment operating income and margin in 2015
included a $136 million favorable impact from an insurance
litigation settlement. Adjusting for the insurance litigation
settlement, segment operating income in 2016 increased $78 million
over 2015, and segment operating margin increased 240 basis points.
These increases were primarily due to higher risk retirement on the
LPD and DDG programs, partially offset by lower risk retirement on
the America class (LHA 6) program.
Key Ingalls Shipbuilding milestones for the quarter:
- Awarded a $1.15 billion fixed-priced incentive contract for the
detail design and construction of Fort Lauderdale
- Awarded a $486 million fixed-priced incentive contract for the
construction of a ninth NSC
- Delivered Munro to the U.S. Coast Guard
- Delivered John Finn to the U.S. Navy
- Launched Kimball (NSC 7)
- Launched Paul Ignatius (DDG 117)
Newport News
Shipbuilding |
|
|
|
|
|
|
Three Months Ended |
|
|
Year Ended |
|
|
December 31 |
|
|
December 31 |
|
($ in
millions) |
2016 |
2015 |
% Change |
|
2016 |
2015 |
% Change |
Revenues |
$ |
1,119 |
|
$ |
1,194 |
|
(6.3)% |
|
|
$ |
4,089 |
|
$ |
4,298 |
|
(4.9)% |
|
Segment operating
income1 |
139 |
|
116 |
|
19.8% |
|
|
386 |
|
401 |
|
(3.7)% |
|
Segment
operating margin %1 |
12.4% |
|
9.7% |
|
271 bps |
|
|
9.4% |
|
9.3% |
|
11 bps |
|
1 Non-GAAP
measures that exclude non-segment factors affecting operating
income. See Exhibit B for reconciliations. |
Newport News Shipbuilding revenues for the fourth quarter were
$1.1 billion, a decrease of $75 million, or 6.3 percent, from the
same period in 2015, due to lower revenues in aircraft carriers and
submarines. Lower aircraft carriers revenues were primarily due to
decreased volumes on the construction contract for Gerald R. Ford
(CVN 78) and the execution contract for the RCOH of USS Abraham
Lincoln (CVN 72), partially offset by increased volumes on the
advance planning contracts for the RCOH of USS George Washington
and the construction preparation contract for Enterprise (CVN 80).
Lower submarines revenues related to the Virginia class (SSN 774)
submarine (“VCS”) program were due to decreased volumes on Block
III boats, partially offset by increased volumes on Block IV
boats.
Newport News Shipbuilding segment operating income for the
fourth quarter was $139 million, an increase of $23 million from
the same period last year. Segment operating margin was 12.4
percent for the quarter, compared to 9.7 percent in the same period
last year. These increases were primarily due to favorable changes
in overhead costs and the receipt of a $15 million local government
incentive grant, partially offset by lower risk retirement on the
VCS program.
For the full year, Newport News Shipbuilding revenues were $4.1
billion, a decrease of $209 million, or 4.9 percent, from 2015, due
to lower revenues in aircraft carriers. Lower aircraft carrier
revenues were primarily due to decreased volumes on the
construction contract for Gerald R. Ford and the execution contract
for the RCOH of USS Abraham Lincoln, partially offset by increased
volumes on the construction contract for John F. Kennedy (CVN 79)
and the advance planning contract for the RCOH of USS George
Washington. Submarines revenues related to the VCS program were
relatively flat in 2016 compared to 2015. Increased volumes on
Block IV boats and USS John Warner (SSN 785) post-shakedown
availability services were offset by decreased volumes on Block III
boats.
For the full year, Newport News Shipbuilding segment operating
income was $386 million, a decrease of $15 million from 2015. The
decrease was primarily due to lower risk retirement on the VCS
program, lower volume and lower risk retirement on the execution
contract for the RCOH of USS Abraham Lincoln and lower volume on
Gerald R. Ford, partially offset by higher volumes on John F.
Kennedy (CVN 79) and the RCOH of USS George Washington (CVN 73),
favorable changes in overhead costs, and the receipt of a $15
million local government incentive grant. Segment operating margin
for 2016 was 9.4 percent, compared to 9.3 percent in 2015.
Technical
Solutions |
|
|
|
|
|
|
Three Months Ended |
|
|
Year Ended |
|
|
December 31 |
|
|
December 31 |
|
($ in
millions) |
2016 |
2015 |
% Change |
|
2016 |
2015 |
% Change |
Revenues |
$ |
186 |
|
$ |
154 |
|
20.8% |
|
|
$ |
691 |
|
$ |
616 |
|
12.2% |
|
Segment operating
income (loss)1 |
1 |
|
(51) |
|
102.0% |
|
|
8 |
|
(113) |
|
107.1% |
|
Segment operating
margin %1 |
0.5% |
|
(33.1)% |
|
NM3 |
|
|
1.2% |
|
(18.3)% |
|
NM3 |
|
Adjusted segment
operating income (loss)1,2 |
1 |
|
(8) |
|
112.5% |
|
|
8 |
|
(11) |
|
172.7% |
|
Adjusted
segment operating margin %1,2 |
0.5% |
|
(5.2)% |
|
573 bps |
|
|
1.2% |
|
(1.8)% |
|
294 bps |
|
1 Non-GAAP
measures that exclude non-segment factors affecting operating
income. See Exhibit B for reconciliations. |
2 Non-GAAP
measures that exclude the impact of goodwill impairment charges in
second and fourth quarters of 2015 and an intangible asset
impairment charge in fourth quarter 2015. See Exhibit B for
reconciliation. |
3 NM means
the % change is “not meaningful”. |
Technical Solutions revenues for the fourth
quarter were $186 million, an increase of $32 million, or 20.8
percent, from the same period in 2015, primarily due to the
acquisition of Camber and higher revenues in oil and gas and
nuclear and environmental services, partially offset by lower
revenues in fleet support. Higher oil and gas revenues were
primarily due to increased volume in field services, partially
offset by decreased volume in engineering services. Higher nuclear
and environmental revenues were primarily due to increased volumes
in commercial fabrication services, partially offset by decreased
volumes in environmental remediation programs.
Technical Solutions segment operating income for the fourth
quarter was $1 million, compared to segment operating loss of $51
million in fourth quarter 2015. Segment operating loss in the
fourth quarter of 2015 included a $27 million intangible asset
impairment charge and a $16 million goodwill impairment charge.
Adjusting for these items, segment operating income in the fourth
quarter of 2016 increased $9 million from the same period in 2015.
The increase was primarily due to improved performance in oil and
gas and fleet support.
For the full year, Technical Solutions revenues were $691
million, an increase of $75 million, or 12.2 percent, from 2015,
primarily due to increased volumes in nuclear and environmental and
fleet support as well as the acquisition of Camber, partially
offset by lower volume in oil and gas.
For the full year, Technical Solutions segment operating income
was $8 million, compared to a segment operating loss of $113
million in 2015. Segment operating loss in 2015 included $75
million of goodwill impairment charges and a $27 million intangible
asset impairment charge. Adjusting for these items, segment
operating income in 2016 increased $19 million over 2015. The
increase was primarily due to improved performance in oil and gas,
fleet support and nuclear and environmental.
About Huntington Ingalls Industries
Huntington Ingalls Industries is America’s largest military
shipbuilding company and a provider of professional services to
partners in government and industry. For more than a century, HII’s
Newport News and Ingalls shipbuilding divisions in Virginia and
Mississippi have built more ships in more ship classes than any
other U.S. naval shipbuilder. HII’s Technical Solutions division
provides a wide range of professional services through its Fleet
Support, Integrated Missions Solutions, Nuclear and Environmental,
and Oil and Gas operations. Headquartered in Newport News,
Virginia, HII employs nearly 37,000 people operating both
domestically and internationally. For more information, please
visit www.huntingtoningalls.com.
Conference Call Information
Huntington Ingalls Industries will webcast its earnings
conference call at 9 a.m. ET today. A live audio broadcast of the
conference call and supplemental presentation will be available on
the investor relations page of the company’s website:
www.huntingtoningalls.com. A telephone replay of the conference
call will be available from 12 noon today through Thursday, Feb. 23
by calling toll-free (855) 859-2056 or (404) 537-3406 and using
conference ID 53546409.
Forward-Looking Statements
Statements in this release, 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 actual results to differ materially from those
expressed in these statements. Factors that may cause such
differences include: changes in government and customer priorities
and requirements (including government budgetary constraints,
shifts in defense spending, and changes in customer short-range and
long-range plans); our ability to estimate our future contract
costs and perform our contracts effectively; changes in procurement
processes and government regulations and our ability to comply with
such requirements; our ability to deliver our products and services
at an affordable life cycle cost and compete within our markets;
natural and environmental disasters and political instability;
adverse economic conditions in the United States and globally;
changes in key estimates and assumptions regarding our pension and
retiree health care costs; security threats, including cyber
security threats, and related disruptions; and other risk factors
discussed in our filings with the U.S. Securities and Exchange
Commission. There may be other risks and uncertainties that we are
unable to predict at this time or that we currently do not expect
to have a material adverse effect on our business, and we undertake
no obligation to update any forward-looking statements. You should
not place undue reliance on any forward-looking statements that we
may make. This release also contains non-GAAP financial measures
and includes a GAAP reconciliation of these financial measures.
Non-GAAP financial measures should not be construed as being more
important than comparable GAAP measures.
Exhibit A: Financial Statements
HUNTINGTON INGALLS INDUSTRIES, INC. |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME (LOSS) |
|
|
|
|
|
Year Ended December 31 |
(in
millions, except per share amounts) |
|
2016 |
|
2015 |
|
2014 |
Sales and service
revenues |
|
|
|
|
|
|
Product
sales |
|
$ |
5,631 |
|
|
$ |
5,665 |
|
|
$ |
5,712 |
|
Service
revenues |
|
1,437 |
|
|
1,355 |
|
|
1,245 |
|
Sales and
service revenues |
|
7,068 |
|
|
7,020 |
|
|
6,957 |
|
Cost of sales and
service revenues |
|
|
|
|
|
|
Cost of
product sales |
|
4,380 |
|
|
4,319 |
|
|
4,489 |
|
Cost of
service revenues |
|
1,228 |
|
|
1,198 |
|
|
1,051 |
|
Income
(loss) from operating investments, net |
|
6 |
|
|
10 |
|
|
11 |
|
Other
income and gains |
|
15 |
|
|
— |
|
|
— |
|
General
and administrative expenses |
|
623 |
|
|
669 |
|
|
726 |
|
Goodwill
impairment |
|
— |
|
|
75 |
|
|
47 |
|
Operating
income (loss) |
|
858 |
|
|
769 |
|
|
655 |
|
Other income
(expense) |
|
|
|
|
|
|
Interest
expense |
|
(74 |
) |
|
(137 |
) |
|
(149 |
) |
Other,
net |
|
— |
|
|
— |
|
|
1 |
|
Earnings (loss) before
income taxes |
|
784 |
|
|
632 |
|
|
507 |
|
Federal and foreign
income taxes |
|
211 |
|
|
228 |
|
|
169 |
|
Net
earnings (loss) |
|
$ |
573 |
|
|
$ |
404 |
|
|
$ |
338 |
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share |
|
$ |
12.24 |
|
|
$ |
8.43 |
|
|
$ |
6.93 |
|
Weighted-average common
shares outstanding |
|
46.8 |
|
|
47.9 |
|
|
48.8 |
|
|
|
|
|
|
|
|
Diluted earnings (loss)
per share |
|
$ |
12.14 |
|
|
$ |
8.36 |
|
|
$ |
6.86 |
|
Weighted-average
diluted shares outstanding |
|
47.2 |
|
|
48.3 |
|
|
49.3 |
|
|
|
|
|
|
|
|
Net earnings (loss)
from above |
|
$ |
573 |
|
|
$ |
404 |
|
|
$ |
338 |
|
Other comprehensive
income (loss) |
|
|
|
|
|
|
Change in unamortized
benefit plan costs |
|
(172 |
) |
|
34 |
|
|
(558 |
) |
Other |
|
(1 |
) |
|
(5 |
) |
|
— |
|
Tax benefit (expense)
for items of other comprehensive income |
|
67 |
|
|
(12 |
) |
|
217 |
|
Other
comprehensive income (loss), net of tax |
|
(106 |
) |
|
17 |
|
|
(341 |
) |
Comprehensive income (loss) |
|
$ |
467 |
|
|
$ |
421 |
|
|
$ |
(3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
HUNTINGTON INGALLS INDUSTRIES, INC. |
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION |
|
|
|
|
|
December 31 |
($ in
millions) |
|
2016 |
|
2015 |
Assets |
|
|
|
|
Current
Assets |
|
|
|
|
Cash and cash
equivalents |
|
$ |
720 |
|
|
$ |
894 |
|
Accounts receivable,
net |
|
1,164 |
|
|
1,074 |
|
Inventoried costs,
net |
|
210 |
|
|
285 |
|
Prepaid expenses and
other current assets |
|
48 |
|
|
31 |
|
Total
current assets |
|
2,142 |
|
|
2,284 |
|
Property, plant, and
equipment, net of accumulated depreciation of $1,627 million as of
2016 and $1,489 million as of 2015 |
|
1,986 |
|
|
1,827 |
|
Other
Assets |
|
|
|
|
Goodwill |
|
1,234 |
|
|
956 |
|
Other intangible
assets, net of accumulated amortization of $488 million as of 2016
and $465 million as of 2015 |
|
548 |
|
|
495 |
|
Long-term deferred tax
assets |
|
314 |
|
|
336 |
|
Miscellaneous other
assets |
|
128 |
|
|
126 |
|
Total
other assets |
|
2,224 |
|
|
1,913 |
|
Total assets |
|
$ |
6,352 |
|
|
$ |
6,024 |
|
Liabilities and
Stockholders' Equity |
|
|
|
|
Current
Liabilities |
|
|
|
|
Trade accounts
payable |
|
$ |
316 |
|
|
$ |
317 |
|
Accrued employees’
compensation |
|
241 |
|
|
215 |
|
Current portion of
postretirement plan liabilities |
|
147 |
|
|
143 |
|
Current portion of
workers’ compensation liabilities |
|
217 |
|
|
227 |
|
Advance payments and
billings in excess of revenues |
|
166 |
|
|
125 |
|
Other current
liabilities |
|
256 |
|
|
247 |
|
Total
current liabilities |
|
1,343 |
|
|
1,274 |
|
Long-term debt |
|
1,278 |
|
|
1,273 |
|
Pension plan
liabilities |
|
1,116 |
|
|
1,001 |
|
Other postretirement
plan liabilities |
|
431 |
|
|
423 |
|
Workers’ compensation
liabilities |
|
441 |
|
|
460 |
|
Other long-term
liabilities |
|
90 |
|
|
103 |
|
Total
liabilities |
|
4,699 |
|
|
4,534 |
|
Commitments and
Contingencies |
|
|
|
|
Stockholders’
Equity |
|
|
|
|
Common stock, $0.01 par
value; 150 million shares authorized; 52.6 million shares issued
and 46.2 million shares outstanding as of December 31, 2016, and
52.0 million shares issued and 46.9 million shares outstanding as
of December 31, 2015 |
|
1 |
|
|
1 |
|
Additional paid-in
capital |
|
1,964 |
|
|
1,978 |
|
Retained earnings
(deficit) |
|
1,323 |
|
|
848 |
|
Treasury stock |
|
(684 |
) |
|
(492 |
) |
Accumulated other
comprehensive income (loss) |
|
(951 |
) |
|
(845 |
) |
Total
stockholders’ equity |
|
1,653 |
|
|
1,490 |
|
Total liabilities and stockholders’ equity |
|
$ |
6,352 |
|
|
$ |
6,024 |
|
|
|
|
|
|
|
|
|
|
HUNTINGTON INGALLS INDUSTRIES, INC. |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
|
|
|
|
Year Ended December 31 |
($ in
millions) |
|
2016 |
|
2015 |
|
2014 |
Operating
Activities |
|
|
|
|
|
|
Net earnings
(loss) |
|
$ |
573 |
|
|
$ |
404 |
|
|
$ |
338 |
|
Adjustments to
reconcile to net cash provided by (used in) operating
activities |
|
|
|
|
|
|
Depreciation |
|
163 |
|
|
154 |
|
|
166 |
|
Amortization of purchased intangibles |
|
23 |
|
|
26 |
|
|
28 |
|
Amortization of debt issuance costs |
|
5 |
|
|
8 |
|
|
11 |
|
Stock-based compensation |
|
36 |
|
|
43 |
|
|
34 |
|
Deferred
income taxes |
|
85 |
|
|
(15 |
) |
|
(22 |
) |
Proceeds
from insurance settlement related to investing activities |
|
— |
|
|
(21 |
) |
|
— |
|
Impairment of goodwill and intangible assets |
|
— |
|
|
102 |
|
|
47 |
|
Loss on
early extinguishment of debt |
|
— |
|
|
44 |
|
|
37 |
|
Change
in |
|
|
|
|
|
|
Accounts
receivable |
|
(22 |
) |
|
(41 |
) |
|
140 |
|
Inventoried costs |
|
75 |
|
|
54 |
|
|
53 |
|
Prepaid
expenses and other assets |
|
(17 |
) |
|
(31 |
) |
|
7 |
|
Accounts
payable and accruals |
|
(41 |
) |
|
97 |
|
|
(86 |
) |
Retiree
benefits |
|
(44 |
) |
|
32 |
|
|
(4 |
) |
Other
non-cash transactions, net |
|
(14 |
) |
|
5 |
|
|
6 |
|
Net cash
provided by (used in) operating activities |
|
822 |
|
|
861 |
|
|
755 |
|
Investing
Activities |
|
|
|
|
|
|
Additions
to property, plant, and equipment |
|
(285 |
) |
|
(188 |
) |
|
(165 |
) |
Proceeds
from disposition of assets |
|
4 |
|
|
32 |
|
|
— |
|
Acquisitions of businesses, net of cash received |
|
(372 |
) |
|
(6 |
) |
|
(272 |
) |
Proceeds
from insurance settlement related to investing activities |
|
— |
|
|
21 |
|
|
— |
|
Net cash
provided by (used in) investing activities |
|
(653 |
) |
|
(141 |
) |
|
(437 |
) |
Financing
Activities |
|
|
|
|
|
|
Proceeds
from issuance of long-term debt |
|
— |
|
|
600 |
|
|
600 |
|
Repayment
of long-term debt |
|
— |
|
|
(995 |
) |
|
(679 |
) |
Debt
issuance costs |
|
— |
|
|
(21 |
) |
|
(12 |
) |
Tender
premiums and fees related to early extinguishment of debt |
|
— |
|
|
(33 |
) |
|
(31 |
) |
Dividends
paid |
|
(98 |
) |
|
(81 |
) |
|
(49 |
) |
Repurchases of common stock |
|
(194 |
) |
|
(232 |
) |
|
(138 |
) |
Employee
taxes on certain share-based payment arrangements |
|
(51 |
) |
|
(54 |
) |
|
(64 |
) |
Proceeds
from stock option exercises |
|
— |
|
|
— |
|
|
2 |
|
Net cash
provided by (used in) financing activities |
|
(343 |
) |
|
(816 |
) |
|
(371 |
) |
Change in
cash and cash equivalents |
|
(174 |
) |
|
(96 |
) |
|
(53 |
) |
Cash and cash
equivalents, beginning of period |
|
894 |
|
|
990 |
|
|
1,043 |
|
Cash and cash
equivalents, end of period |
|
$ |
720 |
|
|
$ |
894 |
|
|
$ |
990 |
|
Supplemental
Cash Flow Disclosure |
|
|
|
|
|
|
Cash paid for income
taxes |
|
$ |
229 |
|
|
$ |
242 |
|
|
$ |
161 |
|
Cash paid for
interest |
|
$ |
71 |
|
|
$ |
96 |
|
|
$ |
113 |
|
Non-Cash
Investing and Financing Activities |
|
|
|
|
|
|
Capital expenditures
accrued in accounts payable |
|
$ |
24 |
|
|
$ |
17 |
|
|
$ |
9 |
|
Capital assets received
from government grants |
|
$ |
30 |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit B: Non-GAAP Measures Definitions &
Reconciliations
We make reference to “segment operating income (loss),” “segment
operating margin,” “adjusted sales and service revenues,” “adjusted
segment operating income (loss),” “adjusted segment operating
margin,” “adjusted operating income,” “adjusted 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 (loss)” and “segment operating margin,” which are
not recognized measures under GAAP. When analyzing our operating
performance, investors should use segment operating income (loss)
and segment operating margin in addition to, and not as
alternatives for, operating income and operating margin or any
other performance measure presented in accordance with GAAP. They
are measures that we use to evaluate our core operating
performance. We believe that segment operating income (loss) and
segment operating margin reflect an additional way of viewing
aspects of our operations that, when viewed with our GAAP results,
provide a more complete understanding of factors and trends
affecting our business. We believe these measures are used by
investors and are a useful indicator to measure our performance.
Because not all companies use identical calculations, our
presentation of segment operating income (loss) and segment
operating margin may not be comparable to similarly titled measures
of other companies.
Adjusted sales and service revenues, adjusted operating income,
adjusted operating margin, adjusted segment operating income
(loss), adjusted segment operating margin, adjusted net earnings
and adjusted diluted earnings per share are not measures recognized
under GAAP. They should be considered supplemental to and not a
substitute for financial information prepared in accordance with
GAAP. We believe these measures are useful to investors because
they exclude items that do not reflect our core operating
performance. They may not be comparable to similarly titled
measures of other companies.
Free cash flow is not a measure recognized under GAAP. Free cash
flow has limitations as an analytical tool and should not be
considered in isolation from, or as a substitute for, analysis of
our results as reported under GAAP. We believe free cash flow is an
important measure for our investors because it provides them
insight into our current and period-to-period performance and our
ability to generate cash from continuing operations. We also use
free cash flow as a key operating metric in assessing the
performance of our business and as a key performance measure in
evaluating management performance and determining incentive
compensation. Free cash flow may not be comparable to similarly
titled measures of other companies.
Segment operating income (loss) is defined as
operating income (loss) for the relevant segment(s) before the
FAS/CAS Adjustment and non-current state income taxes.
Segment operating margin is defined as segment
operating income (loss) as a percentage of sales and service
revenues.
Adjusted sales and service revenues is defined
as sales and service revenues adjusted for the impact of the
insurance litigation settlement in the Ingalls segment in second
quarter 2015.
Adjusted segment operating income (loss) is
defined as segment operating income (loss) adjusted for the
impacts, as applicable to the relevant segment, of: the insurance
litigation settlement in the Ingalls segment in second quarter
2015, the goodwill impairment charges in the Technical Solutions
segment in the second and fourth quarters of 2015 and the
intangible asset impairment charge in the Technical Solutions
segment in fourth quarter 2015.
Adjusted segment operating margin is defined as
adjusted segment operating income (loss) as applicable to each
segment, as a percentage of adjusted sales and service revenues as
applicable to each segment.
Adjusted operating income is defined as
operating income adjusted for the impacts of: the insurance
litigation settlement in second quarter 2015, the goodwill
impairment charges in the second and fourth quarters of 2015 and
the intangible asset impairment charge in fourth quarter 2015.
Adjusted operating margin is defined as
adjusted operating income as a percentage of adjusted sales and
service revenues.
Adjusted net earnings is defined as net
earnings adjusted for the after-tax impacts of: the insurance
litigation settlement in the second quarter 2015, the goodwill
impairment charges in the second and fourth quarters of 2015, the
intangible asset impairment charge in fourth quarter 2015, the loss
on early extinguishment of debt in third quarter 2015 and the
FAS/CAS Adjustment.
Adjusted diluted earnings per share is defined
as adjusted net earnings divided by the weighted-average diluted
common shares outstanding.
Free cash flow is defined as net cash provided
by (used in) operating activities less capital expenditures.
FAS/CAS Adjustment is defined as the difference
between our pension and postretirement plan expense under GAAP
Financial Accounting Standards and the same expense under U.S. Cost
Accounting Standards (CAS). Our pension and postretirement plan
expense is charged to our contracts under CAS.
Non-current state income taxes are defined as
deferred state income taxes, which reflect the change in deferred
state tax assets and liabilities, and the tax expense or benefit
associated with changes in state uncertain tax positions in the
relevant period. These amounts are recorded within operating
income. Current period state income tax expense is charged to
contract costs and included in cost of sales and service revenues
in segment operating income.
We present financial measures adjusted for the FAS/CAS
Adjustment and non-current state income tax to reflect the
company’s performance based upon the pension costs and state tax
expense charged to our contracts under CAS. We use these adjusted
measures as internal measures of operating performance and for
performance-based compensation decisions.
Reconciliation of Segment Operating Income (Loss) and
Segment Operating Margin |
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31 |
|
December 31 |
($ in
millions) |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Ingalls revenues |
|
$ |
641 |
|
|
$ |
580 |
|
|
$ |
2,389 |
|
|
$ |
2,188 |
|
Newport News
revenues |
|
1,119 |
|
|
1,194 |
|
|
4,089 |
|
|
4,298 |
|
Technical Solutions
revenues |
|
186 |
|
|
154 |
|
|
691 |
|
|
616 |
|
Intersegment
eliminations |
|
(24 |
) |
|
(23 |
) |
|
(101 |
) |
|
(82 |
) |
Sales and
Service Revenues |
|
1,922 |
|
|
1,905 |
|
|
7,068 |
|
|
7,020 |
|
Segment
Operating Income (Loss) |
|
|
|
|
|
|
|
|
Ingalls |
|
85 |
|
|
59 |
|
|
321 |
|
|
379 |
|
As
a percentage of Ingalls revenues |
|
13.3 |
% |
|
10.2 |
% |
|
13.4 |
% |
|
17.3 |
% |
Newport News |
|
139 |
|
|
116 |
|
|
386 |
|
|
401 |
|
As
a percentage of Newport News revenues |
|
12.4 |
% |
|
9.7 |
% |
|
9.4 |
% |
|
9.3 |
% |
Technical
Solutions |
|
1 |
|
|
(51 |
) |
|
8 |
|
|
(113 |
) |
As
a percentage of Technical Solutions revenues |
|
0.5 |
% |
|
(33.1 |
)% |
|
1.2 |
% |
|
(18.3 |
)% |
Segment
Operating Income |
|
225 |
|
|
124 |
|
|
715 |
|
|
667 |
|
As a percentage of
sales and service revenues |
|
11.7 |
% |
|
6.5 |
% |
|
10.1 |
% |
|
9.5 |
% |
Non-segment factors
affecting operating income: |
|
|
|
|
|
|
|
|
FAS/CAS
Adjustment |
|
38 |
|
|
22 |
|
|
145 |
|
|
104 |
|
Non-current state income taxes |
|
5 |
|
|
(2 |
) |
|
(2 |
) |
|
(2 |
) |
Operating
Income |
|
268 |
|
|
144 |
|
|
858 |
|
|
769 |
|
Interest expense |
|
(18 |
) |
|
(64 |
) |
|
(74 |
) |
|
(137 |
) |
Other, net |
|
1 |
|
|
— |
|
|
— |
|
|
— |
|
Federal and foreign
income taxes |
|
(54 |
) |
|
(30 |
) |
|
(211 |
) |
|
(228 |
) |
Net
Earnings |
|
$ |
197 |
|
|
$ |
50 |
|
|
$ |
573 |
|
|
$ |
404 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted Sales and Service Revenues,
Adjusted Segment Operating Income, Adjusted Segment Operating
Margin, Adjusted Operating Income and Adjusted Operating
Margin |
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31 |
|
December 31 |
($ in
millions) |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Ingalls revenues |
|
$ |
641 |
|
|
$ |
580 |
|
|
$ |
2,389 |
|
|
$ |
2,188 |
|
Adjustment for insurance litigation settlement |
|
— |
|
|
— |
|
|
— |
|
|
13 |
|
Adjusted Ingalls
revenues |
|
641 |
|
|
580 |
|
|
2,389 |
|
|
2,201 |
|
Newport News
revenues |
|
1,119 |
|
|
1,194 |
|
|
4,089 |
|
|
4,298 |
|
Technical Solutions
revenues |
|
186 |
|
|
154 |
|
|
691 |
|
|
616 |
|
Intersegment
eliminations |
|
(24 |
) |
|
(23 |
) |
|
(101 |
) |
|
(82 |
) |
Adjusted Sales and Service Revenues |
|
$ |
1,922 |
|
|
$ |
1,905 |
|
|
$ |
7,068 |
|
|
$ |
7,033 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
268 |
|
|
$ |
144 |
|
|
$ |
858 |
|
|
$ |
769 |
|
As a percentage of
sales and service revenues |
|
13.9 |
% |
|
7.6 |
% |
|
12.1 |
% |
|
11.0 |
% |
Non-segment factors affecting operating income: |
|
|
|
|
|
|
|
|
FAS/CAS
Adjustment |
|
(38 |
) |
|
(22 |
) |
|
(145 |
) |
|
(104 |
) |
Non-current state income taxes |
|
(5 |
) |
|
2 |
|
|
2 |
|
|
2 |
|
Unadjusted
Segment Operating Income |
|
$ |
225 |
|
|
$ |
124 |
|
|
$ |
715 |
|
|
$ |
667 |
|
As a percentage of
sales and service revenues |
|
11.7 |
% |
|
6.5 |
% |
|
10.1 |
% |
|
9.5 |
% |
|
|
|
|
|
|
|
|
|
Adjustments affecting
segment operating income (loss): |
|
|
|
|
|
|
|
|
Ingalls segment
operating income |
|
$ |
85 |
|
|
$ |
59 |
|
|
$ |
321 |
|
|
$ |
379 |
|
Adjustment for insurance litigation settlement |
|
— |
|
|
— |
|
|
— |
|
|
(136 |
) |
Adjusted Ingalls
segment operating income |
|
85 |
|
|
59 |
|
|
321 |
|
|
243 |
|
As a
percentage of Ingalls adjusted revenues |
|
13.3 |
% |
|
10.2 |
% |
|
13.4 |
% |
|
11.0 |
% |
Newport News segment
operating income |
|
139 |
|
|
116 |
|
|
386 |
|
|
401 |
|
As a
percentage of Newport News revenues |
|
12.4 |
% |
|
9.7 |
% |
|
9.4 |
% |
|
9.3 |
% |
Technical Solutions
segment operating (loss) |
|
1 |
|
|
(51 |
) |
|
8 |
|
|
(113 |
) |
Adjustment for impairments of goodwill |
|
— |
|
|
16 |
|
|
— |
|
|
75 |
|
Adjustment for impairment of intangible assets |
|
— |
|
|
27 |
|
|
— |
|
|
27 |
|
Adjusted Technical
Solutions segment operating (loss) |
|
1 |
|
|
(8 |
) |
|
8 |
|
|
(11 |
) |
As a percentage of Technical Solutions revenues |
|
0.5 |
% |
|
(5.2 |
)% |
|
1.2 |
% |
|
(1.8 |
)% |
Adjusted
Segment Operating Income |
|
$ |
225 |
|
|
$ |
167 |
|
|
$ |
715 |
|
|
$ |
633 |
|
As a
percentage of adjusted sales and service revenues |
|
11.7 |
% |
|
8.8 |
% |
|
10.1 |
% |
|
9.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
268 |
|
|
$ |
144 |
|
|
$ |
858 |
|
|
$ |
769 |
|
As a percentage of
sales and service revenues |
|
13.9 |
% |
|
7.6 |
% |
|
12.1 |
% |
|
11.0 |
% |
Adjustment for insurance litigation settlement |
|
— |
|
|
— |
|
|
— |
|
|
(136 |
) |
Adjustment for impairments of goodwill |
|
— |
|
|
16 |
|
|
— |
|
|
75 |
|
Adjustment for impairment of intangible assets |
|
— |
|
|
27 |
|
|
— |
|
|
27 |
|
Adjusted
Operating Income |
|
$ |
268 |
|
|
$ |
187 |
|
|
$ |
858 |
|
|
$ |
735 |
|
As a
percentage of adjusted sales and service revenues |
|
13.9 |
% |
|
9.8 |
% |
|
12.1 |
% |
|
10.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted Net Earnings |
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31 |
|
December 31 |
($ in
millions) |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Net Earnings |
|
$ |
197 |
|
|
$ |
50 |
|
|
$ |
573 |
|
|
$ |
404 |
|
After-tax adjustment
for insurance litigation settlement (1) |
|
— |
|
|
— |
|
|
— |
|
|
(88 |
) |
After-tax adjustment
for impairments of goodwill (2) |
|
— |
|
|
12 |
|
|
— |
|
|
59 |
|
After-tax adjustment
for impairment of intangible assets (3) |
|
— |
|
|
18 |
|
|
— |
|
|
18 |
|
After-tax adjustment
for loss on early extinguishment of debt (4) |
|
— |
|
|
26 |
|
|
— |
|
|
29 |
|
After-tax adjustment
for FAS/CAS Adjustment (5) |
|
(25 |
) |
|
(14 |
) |
|
(94 |
) |
|
(68 |
) |
Adjusted Net Earnings |
|
$ |
172 |
|
|
$ |
92 |
|
|
$ |
479 |
|
|
$ |
354 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of Adjusted Diluted Earnings per Share |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31 |
|
December 31 |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Diluted earnings per
share |
|
$ |
4.20 |
|
|
$ |
1.06 |
|
|
$ |
12.14 |
|
|
$ |
8.36 |
|
After-tax insurance
litigation settlement per share (1) |
|
— |
|
|
— |
|
|
— |
|
|
(1.82 |
) |
After-tax impairments
of goodwill per share (2) |
|
— |
|
|
0.25 |
|
|
— |
|
|
1.22 |
|
After-tax impairment of
intangible assets per share (3) |
|
— |
|
|
0.38 |
|
|
— |
|
|
0.37 |
|
After-tax loss on early
extinguishment of debt per share (4) |
|
— |
|
|
0.55 |
|
|
— |
|
|
0.60 |
|
After-tax
FAS/CAS Adjustment per share (5) |
|
(0.53 |
) |
|
(0.29 |
) |
|
(1.99 |
) |
|
(1.40 |
) |
Adjusted
Diluted EPS |
|
$ |
3.67 |
|
|
$ |
1.95 |
|
|
$ |
10.15 |
|
|
$ |
7.33 |
|
Footnotes to the Reconciliation of Adjusted Net Earnings
and Adjusted Diluted Earnings per Share |
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31 |
|
December 31 |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
(1) Insurance
litigation settlement |
|
— |
|
|
— |
|
|
— |
|
|
(136 |
) |
Tax effect at 35%
statutory rate* |
|
— |
|
|
— |
|
|
— |
|
|
48 |
|
After-tax effect |
|
— |
|
|
— |
|
|
— |
|
|
(88 |
) |
Weighted-Average
Diluted Shares Outstanding |
|
46.9 |
|
|
47.3 |
|
|
47.2 |
|
|
48.3 |
|
Per share impact** |
|
— |
|
|
— |
|
|
— |
|
|
(1.82 |
) |
|
|
|
|
|
|
|
|
|
(2) Impairments
of goodwill |
|
— |
|
|
16 |
|
|
— |
|
|
75 |
|
Discrete federal tax
impact* |
|
— |
|
|
(4 |
) |
|
— |
|
|
(16 |
) |
After-tax effect |
|
— |
|
|
12 |
|
|
— |
|
|
59 |
|
Weighted-Average
Diluted Shares Outstanding |
|
46.9 |
|
|
47.3 |
|
|
47.2 |
|
|
48.3 |
|
Per share impact** |
|
— |
|
|
0.25 |
|
|
— |
|
|
1.22 |
|
|
|
|
|
|
|
|
|
|
(3) Impairment
of intangible assets |
|
— |
|
|
27 |
|
|
— |
|
|
27 |
|
Discrete federal tax
impact* |
|
— |
|
|
(9 |
) |
|
— |
|
|
(9 |
) |
After-tax effect |
|
— |
|
|
18 |
|
|
— |
|
|
18 |
|
Weighted-Average
Diluted Shares Outstanding |
|
46.9 |
|
|
47.3 |
|
|
47.2 |
|
|
48.3 |
|
Per share impact** |
|
— |
|
|
0.38 |
|
|
— |
|
|
0.37 |
|
|
|
|
|
|
|
|
|
|
(4) Loss on
early extinguishment of debt |
|
— |
|
|
40 |
|
|
— |
|
|
44 |
|
Tax effect at 35%
statutory rate* |
|
— |
|
|
(14 |
) |
|
— |
|
|
(15 |
) |
After-tax effect |
|
— |
|
|
26 |
|
|
— |
|
|
29 |
|
Weighted-Average
Diluted Shares Outstanding |
|
46.9 |
|
|
47.3 |
|
|
47.2 |
|
|
48.3 |
|
Per share impact** |
|
— |
|
|
0.55 |
|
|
— |
|
|
0.60 |
|
|
|
|
|
|
|
|
|
|
(5) FAS/CAS
Adjustment |
|
(38 |
) |
|
(22 |
) |
|
(145 |
) |
|
(104 |
) |
Tax effect at 35%
statutory rate* |
|
13 |
|
|
8 |
|
|
51 |
|
|
36 |
|
After-tax effect |
|
(25 |
) |
|
(14 |
) |
|
(94 |
) |
|
(68 |
) |
Weighted-Average
Diluted Shares Outstanding |
|
46.9 |
|
|
47.3 |
|
|
47.2 |
|
|
48.3 |
|
Per share
impact** |
|
(0.53 |
) |
|
(0.29 |
) |
|
(1.99 |
) |
|
(1.40 |
) |
*The
income tax impact is calculated using the tax rate in effect for
the relevant non-GAAP adjustment. |
**Amounts
may not recalculate exactly due to rounding. |
Reconciliation of Free Cash Flow |
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31 |
|
December 31 |
($ in
millions) |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Net cash provided by
(used in) operating activities |
|
345 |
|
|
433 |
|
|
822 |
|
|
861 |
|
Less: |
|
|
|
|
|
|
|
|
Capital
expenditures |
|
(140 |
) |
|
(102 |
) |
|
(285 |
) |
|
(188 |
) |
Free cash flow |
|
205 |
|
|
331 |
|
|
537 |
|
|
673 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contacts:
Jerri Fuller Dickseski (Media)
jerri.dickseski@hii-co.com
757-380-2341
Dwayne Blake (Investors)
dwayne.blake@hii-co.com
757-380-2104
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