Huntington Ingalls Industries, Inc. (NYSE:HII) Q4 2023 Earnings Conference Call February 1, 2024 9:00 AM ET Company Participants Christie Thomas - VP of IR Christopher Kastner - President and CEO Thomas Stiehle - EVP and CFO Conference Call Participants Myles Walton - Wolf Research Gautam Khanna - TD Cowen Seth Seifman - JPMorgan Scott Deuschle - Deutsche Bank David Strauss - Barclays Pete Skibitski - Alembic Global Ronald Epstein - Bank of America Noah Poponak - Goldman Sachs George Shapiro - Shapiro Resea ...

Cybersecurity Threats - Company faces significant cyber security threats, including advanced nation-state actors and ransomware, which could disrupt operations and compromise sensitive information[137] - As of the report date, no cybersecurity threats have materially affected the company, but the increasing sophistication of cyber threats poses ongoing risks[194] Contract and Cost Recovery - Company's ability to recover costs and realize profits depends on contract types (firm fixed-price, fixed-price incentive, cost-type, or time and material) with U.S. Government customers[110] - Company's procurement practices may be affected by changes in U.S. Government contract terms, including incentive-based fee arrangements and cost mandates, impacting profitability[95] Workforce and Specialized Skills - Company's reliance on qualified personnel with specialized skills, including engineering and cybersecurity, is critical to operational performance[116] - Company's suppliers and subcontractors face challenges due to COVID-19, including workforce issues, material shortages, and higher prices, impacting timely delivery and costs[134] Shipbuilding and Fleet Size - U.S. Navy fleet size reduced from 566 ships in 1989 to 291 ships as of December 31, 2023, leading to workforce reductions and intense competition for future shipbuilding programs[99] - Company's shipbuilding programs are subject to potential adverse effects if U.S. Government-owned shipyards invest in refueling nuclear-powered aircraft carriers[101] - The company's Pascagoula shipyard facilities are located on approximately 800 acres, with a 99-year lease, and are expected to remain in use for at least 43 more years[196] - The Newport News shipyard, one of the largest in the U.S., spans approximately 550 acres and includes extensive manufacturing and training facilities[198] Financial and Market Risks - Company's goodwill and purchased intangible assets accounted for approximately 23% and 8%, respectively, of total assets as of December 31, 2023[144] - Company's pension risk transfer transactions using group annuity contracts (GACs) may require additional contributions or result in noncash settlement charges[128] - The company is highly susceptible to claims and litigation, which could result in material cash payments or charges against operating income, potentially impacting financial position, results of operations, or cash flows[162] - Market volatility and adverse capital market conditions may affect the company's ability to access cost-effective funding and expose it to risks related to supplier and subcontractor financial viability[175] - The company is exposed to market risks, including interest rates and inflation[339] Intellectual Property and Acquisitions - The company relies on third-party intellectual property licenses, and there is a risk of being unable to secure necessary licenses on commercially reasonable terms in the future[167] - The company faces challenges in completing and integrating acquisitions, which could lead to unanticipated costs, liabilities, and adverse effects on business and results of operations[178] Climate Change and Compliance Costs - Company's operations and compliance costs may increase due to climate change regulations, including greenhouse gas emissions and energy taxes[154] Business Segments and Operations - As of December 31, 2023, the company's major operations are spread across multiple locations in the U.S., supporting various business segments including C5ISR, CEW&S, LVC, Fleet sustainment, Unmanned Systems, and Nuclear and Environmental Services[200]

1 Non-GAAP measure. See appendix for definition and reconciliation. Shipbuilding operating margin is defined as the combined segment operating income of our Newport News Shipbuilding segment and Ingalls Shipbuilding segment as a percentage of shipbuilding revenue. Mission Technologies EBITDA is defined as Mission Technologies segment operating income before interest expense, income taxes, depreciation and amortization. Shipbuilding revenue is defined as the combined sales and service revenues from our Newpo ...

Huntington Ingalls Industries, Inc. (NYSE:HII) Q3 2023 Earnings Call November 2, 2023 9:00 AM ET Company Participants Christie Thomas - Vice President of Investor Relations Christopher D. Kastner - President and Chief Executive Officer Thomas E. Stiehle - Executive Vice President and Chief Financial Officer Conference Call Participants Scott Deuschle - Deutsche Bank Josh Corn - Barclays Doug Harned - Bernstein Jordan Lyonnais - Bank of America George Shapiro - Shapiro Research Seth Seifman - JP Morgan Gauta ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________________________________________ FORM 10-Q ______________________________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ☐ For the transition period from ________ to ________ ...

Cautionary Statement Regarding 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. You can generally identify forward-looking statements by words such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue," and similar words or phrases or the negative of these words ...

HII Q2 2023 Earnings August 3, 2023 Tom Stiehle Executive Vice President and Chief Financial Officer 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. You can generally identify forward-looking statements by words such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue," and similar word ...

Huntington Ingalls Industries, Inc. (NYSE:HII) Q2 2023 Earnings Conference Call August 3, 2023 9:00 AM ET Company Participants Christie Thomas - VP, IR Chris Kastner - President and CEO Tom Stiehle - EVP and CFO Conference Call Participants Doug Harned - Bernstein Rob Spingarn - Melius Research Pete Skibitski - Alembic Global Seth Seifman - JP Morgan Myles Walton - Wolfe Research David Strauss - Barclays Gautam Khanna - Cowen George Shapiro - Shapiro Research Ronald Epstein - Bank of America Merrill Lynch N ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________________________________________ FORM 10-Q ______________________________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Address of principal executive offices and zip code) ☐ (75 ...

Financial Data and Key Metrics - Net earnings for Q1 2023 were $129 million, down from $140 million in Q1 2022 [3] - Diluted earnings per share (EPS) for Q1 2023 was $3.23, compared to $3.50 in Q1 2022 [3] - Revenue grew 3.8% YoY to a record $2.7 billion in Q1 2023 [14] - Backlog at the end of Q1 2023 was approximately $47 billion, with $26 billion currently funded [14] - Free cash flow in Q1 2023 was negative $49 million, an improvement from negative $126 million in Q1 2022 [51][57] Business Segment Performance Shipbuilding - Newport News Shipbuilding revenue increased 8.3% YoY to $1.5 billion, driven by growth in aircraft carrier and submarine revenues [24] - Ingalls Shipbuilding revenue decreased 8.6% YoY to $577 million, primarily due to lower revenues on LPD, LHA, and NSC programs [22] - Shipbuilding operating margin was 6.7% in Q1 2023, slightly below the 7% outlook [25] Mission Technologies - Mission Technologies revenue grew 5.8% YoY to $624 million, driven by higher volumes in mission-based solutions and fleet sustainment [40] - Operating income for Mission Technologies was $17 million, up from $9 million in Q1 2022 [41] - EBITDA margin for Mission Technologies was 8% in Q1 2023, compared to 7.3% in Q1 2022 [41] Market and Strategic Developments - The company secured new contract awards of approximately $2.6 billion in Q1 2023, including a $1.3 billion contract for LPD 32 and a $567 million contract for Columbia-class submarines [15] - The fiscal year 2024 budget request includes continued investment in shipbuilding programs, such as Columbia-class submarines, Virginia-class attack submarines, and Arleigh Burke-class destroyers [17] - The company is working with the Navy to optimize the CVN 79 schedule, which is expected to be margin- and cash-neutral [10][66] Management Commentary on Operating Environment and Future Outlook - The company remains focused on executing its $47 billion backlog and growing its Mission Technologies business [11] - Supply chain lead times have stabilized but remain above pre-COVID levels, requiring adjustments in future contracting activities [20] - The company reaffirmed its full-year 2023 guidance, with milestones expected to drive performance in the second half of the year [34] Other Important Information - The company successfully hired over 1,500 craftsmen and women in Q1 2023, representing 30% of its full-year hiring plan [46] - The company paid dividends of $1.24 per share, totaling $49 million, and repurchased approximately 39,000 shares at an aggregate cost of $9 million in Q1 2023 [29] Q&A Session Summary Question: Growth trajectory at Newport News Shipbuilding - Management expects Newport News to provide the majority of shipbuilding growth, with potential for growth above 3% as Columbia-class and aircraft carrier programs ramp up [26][27] Question: Margin trajectory and milestones - Management expects margin improvement in the second half of 2023, driven by milestones and production efficiency [53][54] - The company anticipates incremental margin expansion in 2024, supported by labor and program plans [87] Question: CVN 79 schedule optimization - The optimization of CVN 79 is expected to be margin- and cash-neutral, with no material impact on financial results [66][67] Question: Labor and attrition trends - Hiring and attrition trends are positive, with over 1,500 new hires in Q1 2023 and attrition showing improvement in key disciplines [46][72] Question: Free cash flow outlook - Free cash flow is expected to improve significantly in 2024, driven by revenue growth, margin expansion, and working capital improvements [120][121] Question: Supply chain issues - Supply chain lead times have stabilized but remain above pre-COVID levels, with costs incorporated into EACs [130][131] Question: Long-term margin potential - Management remains confident in achieving 9%+ shipbuilding margins over the long term, supported by labor stability and production efficiency [114][132]