EX-99.1 2 hii2019q3earningsrelease.htm EXHIBIT 99.1 Exhibit
image0a16.jpg
 
 Exhibit 99.1

News Release



Contacts:
 
Jerri Fuller Dickseski (Media)
jerri.dickseski@hii-co.com
757-380-2341
 
Dwayne Blake (Investors)
dwayne.blake@hii-co.com
757-380-2104
Huntington Ingalls Industries Reports Third Quarter 2019 Results

•
Revenues were $2.2 billion in the quarter
•
Operating margin was 9.6%
•
Diluted earnings per share was $3.74
•
Cash from operations was $363 million; free cash flow was $250 million1 

NEWPORT NEWS, Va. (Nov. 7, 2019) - Huntington Ingalls Industries (NYSE:HII) reported third quarter 2019 revenues of $2.2 billion, up 6.5% from the third quarter of 2018. The increase was driven primarily by growth at HII’s Technical Solutions division from recent acquisitions and higher volume at HII’s Newport News Shipbuilding division.
Operating income in the quarter was $214 million and operating margin was 9.6%, compared to $290
million and 13.9%, respectively, in the third quarter of 2018. The decreases in operating income and operating margin were mainly the result of a lower operating FAS/CAS adjustment, as well as lower segment operating income, compared to the prior year.

Diluted earnings per share in the quarter was $3.74, compared to $5.29 in the same period of 2018. The decrease was predominantly due to lower operating income and a lower non-operating retirement benefit compared to the prior year.

Third quarter cash from operations was $363 million and free cash flow1 was $250 million, compared to negative $93 million and negative $195 million, respectively, in the third quarter of 2018.

New contract awards in the quarter were approximately $2.1 billion, bringing total backlog to approximately $39.2 billion as of Sept. 30.

“We are very pleased with shipbuilding program execution in the quarter, most notably completing the undocking of USS George Washington (CVN 73),” said Mike Petters, HII’s president and CEO. “We remain confident that execution of critical shipbuilding program milestones in the fourth quarter will create the momentum to achieve shipbuilding margins of 9 to 10 percent in 2020.”




1 Non-GAAP measure. See Exhibit B for definition and reconciliation.

Huntington Ingalls Industries
4101 Washington Ave. • Newport News, VA 23607
www.huntingtoningalls.com

Page 1 of 10







Results of Operations
 
Three Months Ended
 
 
 
Nine Months Ended
 
 
 
September 30
 
 
 
September 30
 
 
(in millions, except per share amounts)
2019
2018
$ Change
% Change
 
2019
2018
$ Change
% Change
Sales and service revenues
$
2,219

$
2,083

$
136

6.5
 %
 
$
6,487

$
5,977

$
510

8.5
 %
Operating income
214

290

(76
)
(26.2
)%
 
550

738

(188
)
(25.5
)%
  Operating margin %
9.6
%
13.9
%
 
(428) bps
 
8.5
%
12.3
%
 
(387) bps
Segment operating income1
191

217

(26
)
(12.0
)%
 
458

515

(57
)
(11.1
)%
  Segment operating margin %1
8.6
%
10.4
%
 
(181) bps
 
7.1
%
8.6
%
 
(156) bps
Net earnings
154

229

(75
)
(32.8
)%
 
400

624

(224
)
(35.9
)%
Diluted earnings per share
$
3.74

$
5.29

$
(1.55
)
(29.3
)%
 
$
9.66

$
14.15

$
(4.49
)
(31.7
)%
 
 
 
 
 
 
 
 
 
 
Weighted-average diluted shares outstanding
41.2

43.3

 
 
 
41.4

44.1

 
 
 
 
 
 
 
 
 
 
 
 
1 Non-GAAP measures that exclude non-segment factors affecting operating income. See Exhibit B for definitions and reconciliations.
 
 
 
 
 
 

Segment Operating Results
Ingalls Shipbuilding
 
Three Months Ended
 
 
 
Nine Months Ended
 
 
 
September 30
 
 
 
September 30
 
 
($ in millions)
2019
2018
$ Change
% Change
 
2019
2018
$ Change
% Change
Revenues
$
647

$
694

$
(47
)
(6.8
)%
 
$
1,853

$
1,908

$
(55
)
(2.9
)%
Segment operating income1
61

82

(21
)
(25.6
)%
 
176

229

(53
)
(23.1
)%
Segment operating margin %1
9.4
%
11.8
%
 
(239) bps
 
9.5
%
12.0
%
 
(250) bps
1 Non-GAAP measures. See Exhibit B for definitions and reconciliations.

Ingalls Shipbuilding revenues for the third quarter were $647 million, a decrease of $47 million from the same period in 2018, primarily driven by lower revenues in the Legend-class National Security Cutter (NSC) program and amphibious assault ships. Revenues on the NSC program decreased due to lower volumes on USCGC Kimball (NSC 7), USCGC Midgett (NSC 8) and Stone (NSC 9), partially offset by higher volumes on NSC 11 (unnamed). Amphibious assault ship revenues decreased as a result of lower volumes on Tripoli (LHA 7) and Fort Lauderdale (LPD 28), partially offset by higher volumes on Harrisburg (LPD 30) and Bougainville (LHA 8). Surface combatant revenues were consistent with the prior year due to higher volumes on Ted Stevens (DDG 128), USS Fitzgerald (DDG 62) repair and restoration, Jeremiah Denton (DDG 129) and Jack H. Lucas (DDG 125), offset by lower volumes on Delbert D. Black (DDG 119), Paul Ignatius (DDG 117), Frank E. Petersen Jr. (DDG 121) and Lenah H. Sutcliffe Higbee (DDG 123).

Ingalls Shipbuilding segment operating income for the third quarter was $61 million, a decrease of $21 million from the same period last year. Segment operating margin in the quarter was 9.4%, compared to 11.8% in the same period last year. The decreases were primarily due to lower risk retirement on the NSC program.


Huntington Ingalls Industries
4101 Washington Ave. • Newport News, VA 23607
www.huntingtoningalls.com

Page 2 of 10






Key Ingalls Shipbuilding milestones for the quarter:
•
Completed builder’s trials for Tripoli (LHA 7)
•
Completed external structural work on Stone (NSC 9)


Newport News Shipbuilding
 
Three Months Ended
 
 
 
Nine Months Ended
 
 
 
September 30
 
 
 
September 30
 
 
($ in millions)
2019
2018
$ Change
% Change
 
2019
2018
$ Change
% Change
Revenues
$
1,264

$
1,179

$
85

7.2
 %
 
$
3,796

$
3,444

$
352

10.2
 %
Segment operating income1
109

119

(10
)
(8.4
)%
 
257

261

(4
)
(1.5
)%
Segment operating margin %1
8.6
%
10.1
%
 
(147) bps
 
6.8
%
7.6
%
 
(81) bps
1 Non-GAAP measures. See Exhibit B for definitions and reconciliations.
Newport News Shipbuilding revenues for the third quarter were $1.3 billion, an increase of $85 million, or 7.2%, from the same period in 2018, primarily driven by higher revenues in aircraft carriers and submarines. Aircraft carrier revenues increased primarily as a result of higher volumes on the advance planning contract for Enterprise (CVN 80) and the advance planning contract for the refueling and complex overhaul (RCOH) of USS John C. Stennis (CVN 74), partially offset by lower volume on the RCOH of USS George Washington (CVN 73). Submarine revenues increased due to higher volumes on Columbia-class and Virginia-class (VCS) submarines. VCS program volumes increased due to higher volumes on Block V boats, partially offset by lower volumes on Block III boats.

Newport News Shipbuilding segment operating income for the third quarter was $109 million, a decrease of $10
million from the same period last year. Segment operating margin was 8.6% for the quarter, compared to 10.1% in the same period last year. These decreases were primarily due to a workers’ compensation benefit of $43 million in the same period last year, partially offset by contract changes in the current period for submarine support services related to work on Los Angeles-class submarines.

Key Newport News Shipbuilding milestones for the quarter:
•
Achieved approximately 96% structural completion on the aircraft carrier John F. Kennedy (CVN 79)
•
Completed the undocking of USS George Washington (CVN 73) and achieved approximately 64% completion on the RCOH



Technical Solutions
 
Three Months Ended
 
 
 
Nine Months Ended
 
 
 
September 30
 
 
 
September 30
 
 
($ in millions)
2019
2018
$ Change
% Change
 
2019
2018
$ Change
% Change
Revenues
$
347

$
245

$
102

41.6
%
 
$
940

$
721

219

30.4
%
Segment operating income1
21

16

$
5

31.3
%
 
25

25

—

—
%
Segment operating margin %1
6.1
%
6.5
%
 
(48) bps

 
2.7
%
3.5
%
 
(81) bps

1 Non-GAAP measures. See Exhibit B for definitions and reconciliations.
 
 
 
 
 


Technical Solutions revenues for the third quarter were $347 million, an increase of $102 million, or 41.6%, from the same period in 2018, driven by the acquisitions of G2, Inc. and Fulcrum IT Services, as well as organic growth in fleet support and oil and gas services revenues.



Huntington Ingalls Industries
4101 Washington Ave. • Newport News, VA 23607
www.huntingtoningalls.com

Page 3 of 10






Technical Solutions segment operating income for the third quarter was $21 million, an increase of $5 million from the same period last year. Segment operating margin was 6.1% for the quarter, compared to 6.5% in the same period last year. The increase in segment operating income was primarily due to improved performance on nuclear and environmental contracts.

Key Technical Solutions milestones for the quarter:
•
Captured a multiple award contract to continue providing U.S. Navy installation and support services for command, control, communications, computer, intelligence, surveillance and reconnaissance (C4ISR) and supporting systems to the Naval Information Warfare Systems Command (NAVWAR)
•
Captured a multiple award contract by the Defense Intelligence Agency to provide a wide range of analytic and operational support services


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, Mission Driven Innovative Solutions, Nuclear & Environmental, and Oil & Gas groups. Headquartered in Newport News, Virginia, HII employs more than 41,000 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 noon today through Wednesday, Nov. 13 by calling toll-free (855) 859-2056 or (404) 537-3406 and using conference ID 7276908.
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; our ability to execute our strategic plan, including with respect to share repurchases, dividends, capital expenditures and strategic acquisitions; 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.

Huntington Ingalls Industries
4101 Washington Ave. • Newport News, VA 23607
www.huntingtoningalls.com

Page 4 of 10






Exhibit A: Financial Statements

HUNTINGTON INGALLS INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
 
 
Three Months Ended
September 30
 
Nine Months Ended
September 30
(in millions, except per share amounts)
 
2019
 
2018
 
2019
 
2018
Sales and service revenues
 
 
 
 
 


 

Product sales
 
$
1,545

 
$
1,547

 
$
4,555

 
$
4,416

Service revenues
 
674

 
536

 
1,932

 
1,561

Sales and service revenues
 
2,219

 
2,083

 
6,487

 
5,977

Cost of sales and service revenues
 
 
 
 
 
 
 
 
Cost of product sales
 
1,246

 
1,159

 
3,754

 
3,369

Cost of service revenues
 
556

 
434

 
1,634

 
1,287

Income from operating investments, net
 
6

 
8

 
15

 
12

Other income and gains
 
—

 
—

 
—

 
14

General and administrative expenses
 
209

 
208

 
564

 
609

Operating income
 
214

 
290

 
550

 
738

Other income (expense)
 
 
 
 
 
 
 
 
Interest expense
 
(18
)
 
(14
)
 
(52
)
 
(44
)
Non-operating retirement benefit
 
3

 
19

 
8

 
56

Other, net
 
(1
)
 
—

 
5

 
2

Earnings before income taxes
 
198

 
295

 
511

 
752

Federal and foreign income taxes
 
44

 
66

 
111

 
128

Net earnings
 
$
154

 
$
229

 
$
400

 
$
624

 
 
 
 
 
 


 


Basic earnings per share
 
$
3.74

 
$
5.29

 
$
9.66

 
$
14.15

Weighted-average common shares outstanding
 
41.2

 
43.3

 
41.4

 
44.1

 
 
 
 
 
 


 


Diluted earnings per share
 
$
3.74

 
$
5.29

 
$
9.66

 
$
14.15

Weighted-average diluted shares outstanding
 
41.2

 
43.3

 
41.4

 
44.1

 
 
 
 
 
 


 


Dividends declared per share
 
$
0.86

 
$
0.72

 
$
2.58

 
$
2.16

 
 
 
 
 
 


 


Net earnings from above
 
$
154

 
$
229

 
$
400

 
$
624

Other comprehensive income
 
 
 
 
 

 

Change in unamortized benefit plan costs
 
25

 
20

 
74

 
61

Other
 
1

 
—

 
1

 
(2
)
Tax expense for items of other comprehensive income
 
(7
)
 
(5
)
 
(19
)
 
(16
)
Other comprehensive income, net of tax
 
19

 
15

 
56

 
43

Comprehensive income
 
$
173

 
$
244

 
$
456

 
$
667



Huntington Ingalls Industries
4101 Washington Ave. • Newport News, VA 23607
www.huntingtoningalls.com

Page 5 of 10






HUNTINGTON INGALLS INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
($ in millions)
 
September 30
2019
 
December 31
2018
Assets
 
 
 
 
Current Assets
 
 
 
 
Cash and cash equivalents
 
$
32

 
$
240

Accounts receivable, net of allowance for doubtful accounts of $4 million as of 2019 and $9 million as of 2018
 
489

 
252

Contract assets
 
1,218

 
1,003

Inventoried costs, net
 
139

 
128

Prepaid expenses and other current assets
 
147

 
122

Total current assets
 
2,025

 
1,745

Property, plant, and equipment, net of accumulated depreciation of $1,935 million as of 2019 and $1,829 million as of 2018
 
2,700

 
2,517

Operating lease assets
 
208

 
—

Goodwill
 
1,402

 
1,263

Other intangible assets, net of accumulated amortization of $599 million as of 2019 and $564 million as of 2018
 
506

 
492

Deferred tax assets
 
102

 
163

Miscellaneous other assets
 
241

 
203

Total assets
 
$
7,184

 
$
6,383

Liabilities and Stockholders' Equity
 
 
 
 
Current Liabilities
 
 
 
 
Trade accounts payable
 
$
616

 
$
562

Accrued employees’ compensation
 
299

 
248

Current portion of postretirement plan liabilities
 
131

 
131

Current portion of workers’ compensation liabilities
 
228

 
225

Contract liabilities
 
344

 
331

Other current liabilities
 
332

 
332

Total current liabilities
 
1,950

 
1,829

Long-term debt
 
1,549

 
1,283

Pension plan liabilities
 
749

 
764

Other postretirement plan liabilities
 
345

 
348

Workers’ compensation liabilities
 
455

 
454

Long-term operating lease liabilities
 
172

 
—

Other long-term liabilities
 
259

 
189

Total liabilities
 
5,479

 
4,867

Commitments and Contingencies
 
 
 
 
Stockholders’ Equity
 
 
 
 
Common stock, $0.01 par value; 150 million shares authorized; 53.2 million shares issued and 41.0 million shares outstanding as of September 30, 2019, and 53.1 million shares issued and 41.9 million shares outstanding as of December 31, 2018
 
1

 
1

Additional paid-in capital
 
1,950

 
1,954

Retained earnings
 
2,902

 
2,609

Treasury stock
 
(1,916
)
 
(1,760
)
Accumulated other comprehensive loss
 
(1,232
)
 
(1,288
)
Total stockholders’ equity
 
1,705

 
1,516

Total liabilities and stockholders’ equity
 
$
7,184

 
$
6,383


Huntington Ingalls Industries
4101 Washington Ave. • Newport News, VA 23607
www.huntingtoningalls.com

Page 6 of 10






HUNTINGTON INGALLS INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 
Nine Months Ended
September 30
($ in millions)
 
2019
 
2018
Operating Activities
 

 

Net earnings
 
$
400

 
$
624

Adjustments to reconcile to net cash provided by (used in) operating activities
 
 
 
 
Depreciation
 
126

 
129

Amortization of purchased intangibles
 
35

 
28

Amortization of debt issuance costs
 
2

 
3

Provision for doubtful accounts
 
(5
)
 
(4
)
Stock-based compensation
 
19

 
27

Deferred income taxes
 
42

 
(1
)
Change in
 
 
 
 
Accounts receivable
 
(223
)
 
(33
)
Contract assets
 
(197
)
 
(280
)
Inventoried costs
 
(14
)
 
3

Prepaid expenses and other assets
 
(62
)
 
5

Accounts payable and accruals
 
147

 
230

Retiree benefits
 
56

 
(468
)
Other non-cash transactions, net
 
4

 
3

Net cash provided by operating activities
 
330

 
266

Investing Activities
 
 
 
 
Capital expenditures
 
 
 
 
Capital expenditure additions
 
(349
)
 
(293
)
Grant proceeds for capital expenditures
 
71

 
33

Acquisitions of businesses, net of cash received
 
(195
)
 
—

Investment in affiliates
 
—

 
(10
)
Proceeds from disposition of assets
 
—

 
3

Other investing activities, net
 
3

 
—

Net cash used in investing activities
 
(470
)
 
(267
)
Financing Activities
 
 
 
 
Proceeds from revolving credit facility borrowings
 
5,048

 
—

Repayment of revolving credit facility borrowings
 
(4,784
)
 
—

Dividends paid
 
(107
)
 
(95
)
Repurchases of common stock
 
(202
)
 
(512
)
Employee taxes on certain share-based payment arrangements
 
(23
)
 
(25
)
Net cash used in financing activities
 
(68
)
 
(632
)
Change in cash and cash equivalents
 
(208
)
 
(633
)
Cash and cash equivalents, beginning of period
 
240

 
701

Cash and cash equivalents, end of period
 
$
32

 
$
68

Supplemental Cash Flow Disclosure
 
 
 
 
Cash paid for income taxes
 
$
124

 
$
77

Cash paid for interest
 
$
40

 
$
32

Non-Cash Investing and Financing Activities
 
 
 
 
Capital expenditures accrued in accounts payable
 
$
12

 
$
7

Accrued repurchases of common stock
 
$
2

 
$
2


Huntington Ingalls Industries
4101 Washington Ave. • Newport News, VA 23607
www.huntingtoningalls.com

Page 7 of 10






Exhibit B: Non-GAAP Measures Definitions & Reconciliations

We make reference to “segment operating income,” “segment operating margin” and “free cash flow.”

We internally manage our operations by reference to “segment operating income” and “segment operating margin,” which are not recognized measures under GAAP. When analyzing our operating performance, investors should use segment operating income 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 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 and segment operating margin 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 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 percent of sales and service revenues.

Free cash flow is defined as net cash provided by (used in) operating activities less capital expenditures net of related grant proceeds.

FAS/CAS Adjustment is defined as the difference between expenses for pension and other postretirement benefits determined in accordance with GAAP (FAS) and the expenses determined in accordance with U.S. Cost Accounting Standards (CAS).

Operating FAS/CAS Adjustment is defined as the difference between the service cost component of our pension and other postretirement expense determined in accordance with GAAP (FAS) and our pension and other postretirement expense under U.S. Cost Accounting Standards (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 Operating FAS/CAS Adjustment and non-current state income taxes 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.



Huntington Ingalls Industries
4101 Washington Ave. • Newport News, VA 23607
www.huntingtoningalls.com

Page 8 of 10






Reconciliation of Segment Operating Income and Segment Operating Margin

 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30
 
September 30
($ in millions)
 
2019
 
2018
 
2019
 
2018
Ingalls revenues
 
$
647

 
$
694

 
$
1,853

 
$
1,908

Newport News revenues
 
1,264

 
1,179

 
3,796

 
3,444

Technical Solutions revenues
 
347

 
245

 
940

 
721

Intersegment eliminations
 
(39
)
 
(35
)
 
(102
)
 
(96
)
Sales and Service Revenues
 
2,219

 
2,083

 
6,487

 
5,977

 
 
 
 
 
 
 
 
 
Operating Income
 
214

 
290

 
550

 
738

Operating FAS/CAS Adjustment
 
(23
)
 
(73
)
 
(94
)
 
(218
)
Non-current state income taxes
 
—

 
—

 
2

 
(5
)
Segment Operating Income
 
191

 
217

 
458

 
515

  As a percentage of sales and service revenues
 
8.6
%
 
10.4
%
 
7.1
%
 
8.6
%
Ingalls operating income
 
61

 
82

 
176

 
229

  As a percentage of Ingalls revenues
 
9.4
%
 
11.8
%
 
9.5
%
 
12.0
%
Newport News operating income
 
109

 
119

 
257

 
261

  As a percentage of Newport News revenues
 
8.6
%
 
10.1
%
 
6.8
%
 
7.6
%
Technical Solutions operating income
 
21

 
16

 
25

 
25

  As a percentage of Technical Solutions revenues
 
6.1
%
 
6.5
%
 
2.7
%
 
3.5
%















Huntington Ingalls Industries
4101 Washington Ave. • Newport News, VA 23607
www.huntingtoningalls.com

Page 9 of 10






Reconciliation of Free Cash Flow
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30
 
September 30
($ in millions)
 
2019
 
2018
 
2019
 
2018
Net cash provided by (used in) operating activities
 
363

 
(93
)
 
330

 
266

Less capital expenditures:
 
 
 
 
 
 
 
 
Capital expenditure additions
 
(115
)
 
(116
)
 
(349
)
 
(293
)
Grant proceeds for capital expenditures
 
2

 
14

 
71

 
33

Free cash flow
 
250

 
(195
)
 
52

 
6



Huntington Ingalls Industries
4101 Washington Ave. • Newport News, VA 23607
www.huntingtoningalls.com

Page 10 of 10