10-Q

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 March 31, 2020

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-34910

 _____________________________________

HUNTINGTON INGALLS INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

 _____________________________________

Delaware	90-0607005
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

4101 Washington Avenue Newport News, Virginia 23607

(Address of principal executive offices and zip code)

(757) 380-2000

(Registrant’s telephone number, including area code)

_____________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	HII	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. 

Large Accelerated Filer	☒	Accelerated Filer	☐
Non-Accelerated Filer	☐	Smaller Reporting Company	☐
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes ☐ No  ☒

As of May 1, 2020, 40,474,252 shares of the registrant's common stock were outstanding.

TABLE OF CONTENTS

	PART I – FINANCIAL INFORMATION	Page
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Statements of Operations and Comprehensive Income	1
	Condensed Consolidated Statements of Financial Position	2
	Condensed Consolidated Statements of Cash Flows	3
	Condensed Consolidated Statements of Changes in Equity	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	39
Item 4.	Controls and Procedures	39
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 3.	Defaults Upon Senior Securities	41
Item 4.	Mine Safety Disclosures	41
Item 5.	Other Information	41
Item 6.	Exhibits	42
Signatures		43

HUNTINGTON INGALLS INDUSTRIES, INC.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)

	Three Months Ended March 31
(in millions, except per share amounts)	2020		2019
Sales and service revenues
Product sales	$	1,624	$	1,490
Service revenues	639		590
Sales and service revenues	2,263		2,080
Cost of sales and service revenues
Cost of product sales	1,290		1,258
Cost of service revenues	550		494
Income from operating investments, net	6		4
General and administrative expenses	214		171
Operating income	215		161
Other income (expense)
Interest expense	(16)		(16)
Non-operating retirement benefit	30		3
Other, net	(13)		1
Earnings before income taxes	216		149
Federal and foreign income taxes	44		31
Net earnings	$	172	$	118
Basic earnings per share	$	4.23	$	2.85
Weighted-average common shares outstanding	40.7		41.4
Diluted earnings per share	$	4.23	$	2.85
Weighted-average diluted shares outstanding	40.7		41.4
Dividends declared per share	$	1.03	$	0.86
Net earnings from above	$	172	$	118
Other comprehensive income
Change in unamortized benefit plan costs	23		25
Other	(2)		—
Tax expense for items of other comprehensive income	(6)		(6)
Other comprehensive income, net of tax	15		19
Comprehensive income	$	187	$	137

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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HUNTINGTON INGALLS INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)

($ in millions)	March 31, 2020		December 31, 2019
Assets
Current Assets
Cash and cash equivalents	$	28	$	75
Accounts receivable, net of allowance for doubtful accounts of $3 million as of 2020 and 2019	418		318
Contract assets	1,211		989
Inventoried costs, net	154		136
Income taxes receivable	108		148
Assets held for sale	178		95
Prepaid expenses and other current assets	40		24
Total current assets	2,137		1,785
Property, plant, and equipment, net of accumulated depreciation of $1,939 million as of 2020 and $1,961 million as of 2019	2,848		2,832
Operating lease assets	185		201
Goodwill	1,648		1,373
Other intangible assets, net of accumulated amortization of $610 million as of 2020 and $599 million as of 2019	481		492
Deferred tax assets	85		108
Miscellaneous other assets	231		240
Total assets	$	7,615	$	7,031
Liabilities and Stockholders' Equity
Current Liabilities
Trade accounts payable	$	536	$	497
Accrued employees’ compensation	265		265
Short-term debt and current portion of long-term debt	88		—
Current portion of postretirement plan liabilities	130		130
Current portion of workers’ compensation liabilities	229		225
Contract liabilities	387		373
Liabilities held for sale	92		77
Other current liabilities	353		323
Total current liabilities	2,080		1,890
Long-term debt	1,667		1,286
Pension plan liabilities	941		975
Other postretirement plan liabilities	378		380
Workers’ compensation liabilities	462		457
Long-term operating lease liabilities	153		164
Other long-term liabilities	291		291
Total liabilities	5,972		5,443
Commitments and Contingencies (Note 16)
Stockholders’ Equity
Common stock, $0.01 par value; 150 million shares authorized; 53.3 million shares issued and 40.5 million shares outstanding as of March 31, 2020, and 53.2 million shares issued and 40.8 million shares outstanding as of December 31, 2019	1		1
Additional paid-in capital	1,955		1,961
Retained earnings	3,139		3,009
Treasury stock	(2,058)		(1,974)
Accumulated other comprehensive loss	(1,394)		(1,409)
Total stockholders’ equity	1,643		1,588
Total liabilities and stockholders’ equity	$	7,615	$	7,031

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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HUNTINGTON INGALLS INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Three Months Ended March 31
($ in millions)	2020		2019
Operating Activities
Net earnings	$	172	$	118
Adjustments to reconcile to net cash provided by (used in) operating activities
Depreciation	47		41
Amortization of purchased intangibles	11		11
Amortization of debt issuance costs	1		1
Provision for doubtful accounts	—		(2)
Stock-based compensation	7		5
Deferred income taxes	18		16
Loss (gain) on investments in marketable securities	16		(7)
Change in
Accounts receivable	(93)		(112)
Contract assets	(140)		(229)
Inventoried costs	(6)		(2)
Prepaid expenses and other assets	(1)		(3)
Accounts payable and accruals	46		147
Retiree benefits	(13)		25
Other non-cash transactions, net	3		2
Net cash provided by operating activities	68		11
Investing Activities
Capital expenditures
Capital expenditure additions	(71)		(110)
Grant proceeds for capital expenditures	5		36
Acquisitions of businesses, net of cash received	(378)		(195)
Net cash used in investing activities	(444)		(269)
Financing Activities
Proceeds from revolving credit facility borrowings	385		1,179
Repayment of revolving credit facility borrowings	(5)		(967)
Net borrowings on commercial paper	88		—
Dividends paid	(42)		(36)
Repurchases of common stock	(84)		(84)
Employee taxes on certain share-based payment arrangements	(13)		(23)
Net cash provided by financing activities	329		69
Change in cash and cash equivalents	(47)		(189)
Cash and cash equivalents, beginning of period	75		240
Cash and cash equivalents, end of period	$	28	$	51
Supplemental Cash Flow Disclosure
Cash paid for income taxes	$	2	$	—
Cash paid for interest	$	1	$	—
Non-Cash Investing and Financing Activities
Capital expenditures accrued in accounts payable	$	10	$	34

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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HUNTINGTON INGALLS INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED) 

Three Months Ended March 31, 2020 and 2019 ($ in millions)	Common Stock		Additional Paid-in Capital		Retained Earnings (Deficit)		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Total Stockholders' Equity
Balance as of December 31, 2018	$	1	$	1,954	$	2,609	$	(1,760)	$	(1,288)	$	1,516
Net earnings	—		—		118		—		—		118
Dividends declared ($0.86 per share)	—		—		(36)		—		—		(36)
Stock compensation	—		(18)		—		—		—		(18)
Other comprehensive income, net of tax	—		—		—		—		19		19
Treasury stock activity	—		—		—		(36)		—		(36)
Balance as of March 31, 2019	$	1	$	1,936	$	2,691	$	(1,796)	$	(1,269)	$	1,563
Balance as of December 31, 2019	$	1	$	1,961	$	3,009	$	(1,974)	$	(1,409)	$	1,588
Net earnings	—		—		172		—		—		172
Dividends declared ($1.03 per share)	—		—		(42)		—		—		(42)
Stock compensation	—		(6)		—		—		—		(6)
Other comprehensive income, net of tax	—		—		—		—		15		15
Treasury stock activity	—		—		—		(84)		—		(84)
Balance as of March 31, 2020	$	1	$	1,955	$	3,139	$	(2,058)	$	(1,394)	$	1,643

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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HUNTINGTON INGALLS INDUSTRIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. DESCRIPTION OF BUSINESS

Huntington Ingalls Industries, Inc. ("HII" or the "Company") is one of America’s largest military shipbuilding companies and a provider of professional services to partners in government and industry. HII is organized into three reportable segments: Ingalls Shipbuilding ("Ingalls"), Newport News Shipbuilding ("Newport News"), and Technical Solutions. For more than a century, the Company's Ingalls segment in Mississippi and Newport News segment in Virginia have built more ships in more ship classes than any other U.S. naval shipbuilder. The Technical Solutions segment provides a range of services to the governmental, energy, and oil and gas markets.

HII conducts most of its business with the U.S. Government, primarily the Department of Defense ("DoD"). As prime contractor, principal subcontractor, team member, or partner, the Company participates in many high-priority U.S. defense technology programs. Through its Ingalls segment, HII is a builder of amphibious assault and expeditionary ships for the U.S. Navy, the sole builder of National Security Cutters for the U.S. Coast Guard, and one of only two companies that builds the Navy's current fleet of Arleigh Burke class (DDG 51) destroyers. Through its Newport News segment, HII is the nation's sole designer, builder, and refueler of nuclear-powered aircraft carriers, and one of only two companies currently designing and building nuclear-powered submarines for the U.S. Navy. The Technical Solutions segment provides a wide range of professional services, including fleet support, mission driven innovative solutions ("MDIS"), nuclear and environmental, and oil and gas services.

2. BASIS OF PRESENTATION

Principles of Consolidation - The unaudited condensed consolidated financial statements of HII and its subsidiaries have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") and the instructions to Form 10-Q promulgated by the Securities and Exchange Commission ("SEC"). All intercompany transactions and balances are eliminated in consolidation. For classification of current assets and liabilities related to its long-term production contracts, the Company uses the duration of these contracts as its operating cycle, which is generally longer than one year. Additionally, certain prior year amounts have been reclassified to conform to the current year presentation.

These unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature considered necessary by management for a fair presentation of the unaudited condensed consolidated financial position, results of operations, and cash flows and should be read in conjunction with the Company's audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019.

The quarterly information is labeled using a calendar convention; that is, first quarter is consistently labeled as ending on March 31, second quarter as ending on June 30, and third quarter as ending on September 30. It is management's long-standing practice to establish interim closing dates using a "fiscal" calendar, which requires the businesses to close their books on a Friday near these quarter-end dates in order to normalize the potentially disruptive effects of quarterly closings on business processes. The effects of this practice only exist for interim periods within a reporting year.

Accounting Estimates - The preparation of the Company's consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Estimates have been prepared on the basis of the most current and best available information, and actual results could differ materially from those estimates.

Additionally, while the Company cannot reasonably estimate the effects of the global outbreak of coronavirus disease 2019 (“COVID-19”) at this time, it is reasonably possible that COVID-19 could cause changes to estimates with respect to contract costs and revenue recognition, effective income tax rates, and the fair values of the Company’s long-lived assets, financial instruments, intangible assets, and goodwill recorded at our reporting units. There was no material impact included in the Company's estimates as of March 31, 2020, as a result of the COVID-19 pandemic. This position was supported by the assumption that the Company will recover COVID-19 related costs under its U.S. Government contracts based on government relief actions such as the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") and U.S. Department of Defense ("DoD") guidance. There

5

remains uncertainty regarding the process to recover COVID-19 related costs, which may result in reimbursement of less than the full costs incurred by the Company. As a result, the Company is not able to estimate any reasonably possible losses resulting from the impact of COVID-19.

Government Grants - The Company recognizes incentive grants, inclusive of transfers of depreciable assets, from federal, state, and local governments at fair value upon compliance with the conditions of their receipt and reasonable assurance that the grants will be received or the depreciable assets will be transferred. Grants in recognition of specific expenses are recognized in the same period as an offset to those related expenses. Grants related to depreciable assets are recognized over the periods and in the proportions in which depreciation expense on those assets is recognized.

For the three months ended March 31, 2020, the Company recognized cash grant benefits of approximately $5 million in other long-term liabilities in the unaudited condensed consolidated statements of financial position. For the three months ended March 31, 2019, the Company recognized cash grant benefits of approximately $36 million in other long-term liabilities in the unaudited condensed consolidated statements of financial position.

Fair Value of Financial Instruments - Except for the Company's long-term debt, the carrying amounts of the Company's financial instruments recorded at historical cost approximate fair value due to the short-term nature of the instruments and low credit risk associated with the respective counterparties.

The Company maintains multiple grantor trusts to fund certain non-qualified pension plans. These trusts were valued at $137 million and $147 million as of March 31, 2020, and December 31, 2019, respectively, and are presented within miscellaneous other assets within the unaudited condensed consolidated statements of financial position. These trusts consist primarily of investments in marketable securities, which are held at fair value within Level 1 of the fair value hierarchy.

Loan Receivable - The Company holds a loan receivable in connection with a seller financed transaction involving its previously owned Avondale shipyard facility. The receivable is carried at amortized cost in the amount of $40 million, net of a $8 million loan discount, which approximates fair value and is recorded in miscellaneous other assets on the unaudited condensed consolidated statements of financial position. Interest income is recognized on an accrual basis using the effective yield method. The discount is accreted into income using the effective yield method over the estimated life of the loan receivable.

Related Party Transactions - The Company had $84 million outstanding under Industrial Revenue Bonds issued by the Mississippi Business Finance Corporation as of each of March 31, 2020, and December 31, 2019. Prior to the Company's spinoff from Northrop Grumman Corporation, repayment of principal and interest was guaranteed by Northrop Grumman Systems Corporation. The guaranty remains in effect, and the Company has agreed to indemnify Northrop Grumman Systems Corporation for any losses related to the guaranty pursuant to the Separation and Distribution Agreement with Northrop Grumman Corporation.

3. ACCOUNTING STANDARDS UPDATES

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updated ("ASU") 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which changes the current incurred loss model a forward-looking expected credit loss model for most financial assets, such as trade and other receivables, loans and other instruments. The ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. Entities are required to apply the provisions of the standard through a cumulative-effect adjustment to retained earnings as of the effective date. The Company adopted the provisions of ASU 2016-13 on January 1, 2020. The adoption did not result in a material impact to the Company’s financial results or disclosures.

Accounting pronouncements issued but not effective until after December 31, 2020, are not expected to have a material impact on the Company's consolidated financial position, results of operations, or cash flows.

4. ACQUISITIONS

In March 2020, the Company acquired Hydroid, Inc. ("Hydroid"), a leading provider of advanced marine robotics to the defense and maritime markets, for approximately $378 million in cash, net of $2 million of acquired cash. The acquisition expands the Company's capabilities in the strategically important and rapidly growing autonomous and

6

unmanned maritime systems market. In connection with this acquisition, the Company preliminarily recorded $310 million of goodwill and intangible assets, all of which was allocated to the Company's Technical Solutions segment. The Company has not completed the purchase price allocation, because the fair value calculations for certain assets and liabilities have not been finalized. See Note 11: Goodwill and Other Intangible Assets. The assets, liabilities, and results of operations of Hydroid are not material to the Company’s consolidated financial position, results of operations, or cash flows.

In February 2019, the Company acquired Fulcrum IT Services, LLC ("Fulcrum"), an information technology and government consulting company, for approximately $195 million in cash, net of $1 million of acquired cash. The acquisition was consistent with the Company's strategy to optimize and expand its services portfolio. In connection with this acquisition, the Company recorded $133 million of goodwill, which includes the value of Fulcrum's workforce, all of which was allocated to its Technical Solutions segment, as well as $49 million of intangible assets related to existing contract backlog. For the year ended December 31, 2019, the Company recorded a decrease in goodwill of $1 million, primarily driven by the finalization of a net working capital adjustment and the fair value calculations for certain assets and liabilities. See Note 11: Goodwill and Other Intangible Assets. The assets, liabilities, and results of operations of Fulcrum are not material to the Company’s consolidated financial position, results of operations, or cash flows.

In December 2018, the Company acquired G2, Inc. ("G2"), a provider of cybersecurity solutions to the U.S. Government, for approximately $77 million in cash, net of $2 million of acquired cash. The acquisition was consistent with the Company's strategy to optimize and expand its services portfolio. In connection with this acquisition, the Company recorded $46 million of goodwill, which includes the value of G2's workforce, all of which was allocated to its Technical Solutions segment, as well as $20 million of intangible assets related to existing contract backlog. For the year ended December 31, 2019, the Company recorded an increase in goodwill of $7 million, primarily driven by the finalization of a net working capital adjustment and the fair value calculations for certain assets and liabilities. See Note 11: Goodwill and Other Intangible Assets. The assets, liabilities, and results of operations of G2 are not material to the Company’s consolidated financial position, results of operations, or cash flows.

The Company funded each of these acquisitions using cash on hand, issuance of commercial paper, or borrowings on its revolving credit facility. The acquisition costs incurred in connection with these acquisitions were not material. The operating results of these businesses have been included in the Company’s consolidated results as of the respective closing dates of the acquisitions. In allocating the purchase prices of these businesses, the Company considered the estimated fair value of net tangible and intangible assets acquired, with any excess purchase price recorded as goodwill. The total amount of goodwill resulting from these acquisitions is expected to be amortizable for tax purposes. These acquisitions are not material either individually or in the aggregate, and pro forma revenues and results of operations have therefore not been provided.

5. STOCKHOLDERS' EQUITY

Treasury Stock - In November 2019, the Company's board of directors authorized an increase in the Company's stock repurchase program from $2.2 billion to $3.2 billion and an extension of the term of the program to October 31, 2024. Repurchases are made from time to time at management's discretion in accordance with applicable federal securities laws. For the three months ended March 31, 2020, the Company repurchased 390,904 shares at an aggregate cost of $84 million. For the three months ended March 31, 2019, the Company repurchased 183,885 shares at an aggregate cost of $36 million. For the three months ended March 31, 2019, the Company also settled for cash $48 million of shares repurchased in the prior year. The cost of purchased shares is recorded as treasury stock in the unaudited condensed consolidated statements of financial position.

Dividends - The Company declared cash dividends per share of $1.03 and $0.86 for the three months ended March 31, 2020 and 2019, respectively. The Company paid cash dividends totaling $42 million and $36 million for the three months ended March 31, 2020 and 2019, respectively.

Accumulated Other Comprehensive Loss - Other comprehensive income (loss) refers to gains and losses recorded as an element of stockholders' equity but excluded from net earnings. The accumulated other comprehensive loss as of March 31, 2020, was comprised of unamortized benefit plan costs of $1,390 million and other comprehensive loss items of $4 million. The accumulated other comprehensive loss as of December 31, 2019, was comprised of unamortized benefit plan costs of $1,407 million and other comprehensive loss items of $2 million.

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The changes in accumulated other comprehensive income (loss) by component for the three months ended March 31, 2020 and 2019, were as follows:

($ in millions)	Benefit Plans		Other		Total
Balance as of December 31, 2018	$	(1,283)	$	(5)	$	(1,288)
Amounts reclassified from accumulated other comprehensive loss
Amortization of net actuarial loss1	25		—		25
Tax expense for items of other comprehensive income	(6)		—		(6)
Net current period other comprehensive income	19		—		19
Balance as of March 31, 2019	$	(1,264)	$	(5)	$	(1,269)
Balance as of December 31, 2019	(1,407)		(2)		(1,409)
Other comprehensive income (loss) before reclassifications	—		(2)		(2)
Amounts reclassified from accumulated other comprehensive loss
Amortization of prior service credit1	(2)		—		(2)
Amortization of net actuarial loss1	25		—		25
Tax expense for items of other comprehensive income	(6)		—		(6)
Net current period other comprehensive income (loss)	17		(2)		15
Balance as of March 31, 2020	$	(1,390)	$	(4)	$	(1,394)

¹ These accumulated comprehensive loss components are included in the computation of net periodic benefit cost. See Note 17: Employee Pension and Other Postretirement Benefits. The tax benefit associated with amounts reclassified from accumulated other comprehensive loss for each of the three months ended March 31, 2020 and 2019, was $6 million.

6. EARNINGS PER SHARE

Basic and diluted earnings per common share were calculated as follows:

	Three Months Ended March 31
(in millions, except per share amounts)	2020		2019
Net earnings	$	172	$	118
Weighted-average common shares outstanding	40.7		41.4
Net dilutive effect of stock awards	—		—
Dilutive weighted-average common shares outstanding	40.7		41.4
Earnings per share - basic	$	4.23	$	2.85
Earnings per share - diluted	$	4.23	$	2.85

Under the treasury stock method, the Company has excluded from the diluted share amounts presented above the effects of 0.3 million Restricted Performance Stock Rights ("RPSRs") for the three months ended March 31, 2020 and 2019.

7. REVENUE

The following is a description of principal activities from which the Company generates its revenues. For more detailed information regarding reportable segments, see Note 8: Segment Information. For more detailed information regarding the Company's significant accounting policy for revenue, see Note 2: Basis of Presentation.

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U.S. Government Contracts

The Ingalls and Newport News segments generate revenue primarily from performance under multi-year contracts with the U.S. Government, generally the U.S. Navy and U.S. Coast Guard, or prime contractors to contracts with the U.S. Government, relating to the advance planning, design, construction, repair, maintenance, refueling, overhaul, or inactivation of nuclear-powered ships and non-nuclear ships. The period over which the Company performs may extend past five years. The Technical Solutions segment also generates the majority of its revenue from contracts with the U.S. Government, including U.S. Government agencies. The Company generally invoices and receives related payments based upon performance progress no less frequently than monthly.

Shipbuilding - For most of the Company's shipbuilding contracts, the customer contracts with the Company to provide a comprehensive service of designing, procuring long-lead-time materials, manufacturing, and integrating complex equipment and technologies into a single ship or project, often resulting in a single performance obligation. Contract modifications to account for changes in specifications and requirements are recognized when approved by the customer. In the majority of circumstances, modifications do not result in additional performance obligations that are distinct from the existing performance obligations in the contract and the effects of the modifications are recognized as an adjustment to revenue on a cumulative catch-up basis. Alternatively, in instances where the performance obligations in the modifications are deemed distinct, contract modifications are accounted for prospectively.

The Company considers incentive and award fees to be variable consideration and includes in the transaction price at inception the consideration to which the Company expects to be entitled under the terms and conditions of the contract, generally estimated using a most likely amount approach. Transaction price is limited to the extent of funding allotted by the customer and available for performance, and estimated revenues represent those amounts for which the Company believes a significant reversal of revenue is not probable.

The Company recognizes revenues related to shipbuilding contracts as it satisfies the related performance obligations over time using a cost-to-cost input method to measure performance progress, which best reflects the transfer of control to the customer.

Services - The Technical Solutions segment generates revenue primarily under U.S. Government contracts from the provision of fleet support and MDIS services. Contracts generally are structured using either an Indefinite Delivery/Indefinite Quantity ("IDIQ") vehicle, under which orders are issued, or a standalone contract. Contracts may be fixed-price or cost-type, include variable consideration such as incentives and awards, and structured as task orders under an IDIQ contract vehicle or requirements contract vehicle. In either case, the Company generally performs over the course of a short-duration period and may continue to perform upon exercise of related period of performance options that are also short in duration, generally one year. The Company’s performance obligations vary in nature and may be stand-ready, in which case the Company responds to the customer’s needs on the basis of its demand, a recurring service, typically recurring maintenance services, or a single performance obligation that does not comprise a series of distinct services.

In determining transaction price, the Company considers incentives and other contingencies to be variable consideration and includes in the initial transaction price the consideration to which the Company expects to be entitled under the terms and conditions of the contract, generally estimated using a most likely amount approach. Transaction price is limited to the extent of funding allotted by the customer and available for performance, and estimated revenues represent those amounts for which the Company believes a significant reversal of revenue is not probable. Where a series of distinct services has been identified, the Company generally allocates variable consideration to distinct time increments of service.

The Company generally recognizes revenue as it satisfies the related performance obligations over time using a cost-to-cost input method to measure performance progress, because, even where the Company has identified a series of services, its cost incurrence pattern generally is not ratable given the complex nature of the services the Company provides. Invoices are issued and related payments are received, on the basis of performance progress, no less frequently than monthly. In addition, many of the Company's U.S. Government services contracts are time and material arrangements. As a result, the Company often utilizes the practical expedient allowing the recognition of revenue in the amount the Company invoices, which corresponds with the value provided to the customer and to which the Company is entitled to payment for performance to date.

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Non-U.S. Government Contracts

Revenues generated under commercial and state and local government agency contracts are primarily derived from the provision of nuclear and environmental and oil and gas services. Non-U.S. Government contracts typically are one or two years in duration.

In determining transaction price, the Company considers incentives and other contingencies to be variable consideration and includes in the initial transaction price the consideration to which the Company expects to be entitled under the terms and conditions of the contract, generally estimated using a most likely amount approach. In the context of variable consideration, the Company limits the transaction price to amounts for which the Company believes a significant reversal of revenue is not probable. Such amounts may relate to transaction price in excess of funding, a lack of history with the customer, a lack of history with the goods or services being provided, or other items.

Revenue generally is recognized over time given the terms and conditions of the related contracts. The Company generally utilizes a cost-to-cost input method to measure performance progress, which best depicts the transfer of control to the customer. The Company’s non-U.S. Government contract portfolio is comprised of a large number of time and material arrangements. As a result, the Company often utilizes the practical expedient allowing the recognition of revenue in the amount the Company invoices, which corresponds with the value provided to the customer and to which the Company is entitled to payment for performance to date.

Disaggregation of Revenue

The following tables present revenues on a disaggregated basis, in a manner that reconciles with the Company's reportable segment disclosures, for the following categories: product versus service type, customer type, contract type, and major program. Certain prior year amounts have been reclassified. See Note 8: Segment Information. The Company believes that this level of disaggregation provides investors with information to evaluate the Company’s financial performance and provides the Company with information to make capital allocation decisions in the most appropriate manner.

	Three Months Ended March 31, 2020
($ in millions)	Ingalls		Newport News		Technical Solutions		Intersegment Eliminations		Total
Revenue Type
Product sales	$	578	$	1,046	$	—	$	—	$	1,624
Service revenues	50		293		296		—		639
Intersegment	1		2		21		(24)		—
Sales and service revenues	$	629	$	1,341	$	317	$	(24)	$	2,263
Customer Type
Federal	$	628	$	1,339	$	228	$	—	$	2,195
Commercial	—		—		68		—		68
Intersegment	1		2		21		(24)		—
Sales and service revenues	$	629	$	1,341	$	317	$	(24)	$	2,263
Contract Type
Firm fixed-price	$	15	$	2	$	59	$	—	$	76
Fixed-price incentive	523		638		—		—		1,161
Cost-type	90		699		133		—		922
Time and materials	—		—		104		—		104
Intersegment	1		2		21		(24)		—
Sales and service revenues	$	629	$	1,341	$	317	$	(24)	$	2,263

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	Three Months Ended March 31, 2019
($ in millions)	Ingalls		Newport News		Technical Solutions		Intersegment Eliminations		Total
Revenue Type
Product sales	$	538	$	952	$	—	$	—	$	1,490
Service revenues	46		327		217		—		590
Intersegment	—		—		23		(23)		—
Sales and service revenues	$	584	$	1,279	$	240	$	(23)	$	2,080
Customer Type
Federal	$	584	$	1,265	$	165	$	—	$	2,014
Commercial	—		14		52		—		66
Intersegment	—		—		23		(23)		—
Sales and service revenues	$	584	$	1,279	$	240	$	(23)	$	2,080
Contract Type
Firm fixed-price	$	17	$	3	$	35	$	—	$	55
Fixed-price incentive	478		453		—		—		931
Cost-type	89		823		99		—		1,011
Time and materials	—		—		83		—		83
Intersegment	—		—		23		(23)		—
Sales and service revenues	$	584	$	1,279	$	240	$	(23)	$	2,080

	Three Months Ended March 31		Three Months Ended March 31
($ in millions)	2020		2019
Major Programs
Amphibious assault ships	$	347	$	297
Surface combatants and coast guard cutters	279		286
Other	3		1
Total Ingalls	629		584
Aircraft carriers	698		713
Submarines	455		368
Other	188		198
Total Newport News	1,341		1,279
Government and energy services	253		191
Oil and gas services	64		49
Total Technical Solutions	317		240
Intersegment eliminations	(24)		(23)
Sales and service revenues	$	2,263	$	2,080

As of March 31, 2020, the Company had $45.2 billion of remaining performance obligations. The Company expects to recognize approximately 30% of its remaining performance obligations as revenue through 2021, an additional 25% through 2023, and the balance thereafter.

Cumulative Catch-up Adjustments

For the three months ended March 31, 2020, net cumulative catch-up adjustments increased operating income and increased diluted earnings per share by $32 million and $0.62, respectively. For the three months ended March 31, 2019, net cumulative catch-up adjustments decreased operating income and decreased diluted earnings per share

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by $6 million and $0.11, respectively. No individual adjustment was material to the Company's unaudited condensed consolidated statements of operations and comprehensive income for the three months ended March 31, 2020 and 2019.

Contract Balances

Contract balances include accounts receivable, contract assets, and contract liabilities from contracts with customers. Accounts receivable represent an unconditional right to consideration and include amounts billed and currently due from customers. Contract assets primarily relate to the Company's rights to consideration for work completed but not billed as of the reporting date when the right to payment is not just subject to the passage of time. Fixed-price contracts are generally billed to the customer using either progress payments, whereby amounts are billed monthly as costs are incurred or work is completed, or performance based payments, which are based upon the achievement of specific, measurable events or accomplishments defined and valued at contract inception. Cost-type contracts are typically billed to the customer on a monthly or semi-monthly basis. Contract liabilities relate to advance payments, billings in excess of revenues, and deferred revenue amounts.

The Company reports contract balances in a net contract asset or contract liability position on a contract-by-contract basis at the end of each reporting period. The Company’s net contract assets increased $208 million from December 31, 2019, to March 31, 2020, primarily due to an increase in contract assets as a result of revenue on certain U.S. Navy contracts and the acquisition of Hydroid. For the three months ended March 31, 2020, the Company recognized revenue of $274 million related to its contract liabilities as of December 31, 2019. For the three months ended March 31, 2019, the Company recognized revenue of $217 million related to its contract liabilities as of December 31, 2018.

8. SEGMENT INFORMATION

The Company is organized into three reportable segments: Ingalls, Newport News, and Technical Solutions, consistent with how management makes operating decisions and assesses performance.

In January 2020, the Company realigned its segments to optimize its operating structure. As a result of this realignment, the Company's HII Mechanical business was transferred from the Technical Solutions segment to the Newport News segment to better align HII Mechanical's work primarily supporting Newport News. The Company has reflected the 2020 realignment in prior financial reporting periods on an as-if basis, which has resulted in the transfer of revenue, operating income, assets, and liabilities between the Technical Solutions and Newport News segments. This realignment did not impact the Company's previously reported consolidated financial position, results of operations, or cash flows. See Note 7: Revenue.

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The following table presents segment results for the three months ended March 31, 2020 and 2019:

	Three Months Ended March 31
($ in millions)	2020		2019
Sales and Service Revenues
Ingalls	$	629	$	584
Newport News	1,341		1,279
Technical Solutions	317		240
Intersegment eliminations	(24)		(23)
Sales and service revenues	$	2,263	$	2,080
Operating Income
Ingalls	$	68	$	46
Newport News	95		81
Technical Solutions	(7)		2
Segment operating income	156		129
Non-segment factors affecting operating income (loss)
Operating FAS/CAS Adjustment	63		34
Non-current state income taxes	(4)		(2)
Operating income	$	215	$	161

Operating FAS/CAS Adjustment - The Operating FAS/CAS Adjustment represents 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 CAS.

The following table presents the Company's assets by segment:

($ in millions)	March 31, 2020		December 31, 2019
Assets
Ingalls	$	1,704	$	1,618
Newport News	4,038		3,886
Technical Solutions	1,472		1,022
Corporate	401		505
Total assets	$	7,615	$	7,031

9. INVENTORIED COSTS, NET

Inventoried costs were comprised of the following:

($ in millions)	March 31, 2020		December 31, 2019
Production costs of contracts in process1	$	37	$	30
Raw material inventory	117		106
Total inventoried costs, net	$	154	$	136

¹ Includes amounts capitalized pursuant to applicable provisions of the FAR and CAS.

10. ASSETS AND LIABILITIES HELD FOR SALE

As of March 31, 2020, the Company determined that two asset groups within its Technical Solutions segment met the criteria to be classified as held for sale. It is the Company's intention to complete the sale of these assets within 12 months following the initial classification as assets held for sale. As a result, during the fourth quarter of 2019, the

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Company recorded an impairment charge of $6 million within other, net in the consolidated statements of operations and comprehensive income. The following table summarizes the assets and liabilities classified as held for sale:

	March 31, 2020		December 31, 2019
($ in millions)
Current assets	$	94	$	74
Property, plant, and equipment	16		2
Other intangible assets, net	2		2
Goodwill	35		—
Other non-current assets	37		23
Valuation allowance	(6)		(6)
Total assets held for sale	$	178	$	95
Current liabilities	65		62
Long-term liabilities	27		15
Total liabilities held for sale	$	92	$	77

11. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

HII performs impairment tests for goodwill as of November 30 of each year and between annual impairment tests if an event occurs or circumstances change that would more likely than not reduce the fair values of the Company's reporting units below their carrying values.

Accumulated goodwill impairment losses as of each of March 31, 2020, and December 31, 2019, were $2,906 million. The accumulated goodwill impairment losses for Ingalls as of each of March 31, 2020, and December 31, 2019, were $1,568 million. The accumulated goodwill impairment losses for Newport News as of each of March 31, 2020, and December 31, 2019, were $1,187 million. The accumulated goodwill impairment losses for Technical Solutions as of each of March 31, 2020, and December 31, 2019, were $151 million.

For the three months ended March 31, 2020, the carrying amounts of goodwill changed as follows:

($ in millions)	Ingalls		Newport News		Technical Solutions		Total
Balance as of December 31, 2019	$	175	$	721	$	477	$	1,373
Acquisitions	—		—		310		310
Adjustments	—		—		(35)		(35)
Balance as of March 31, 2020	$	175	$	721	$	752	$	1,648

As of March 31, 2020, the Company allocated $35 million of goodwill at its Technical Solutions segment to an asset group that was classified as held for sale.

Other Intangible Assets

The Company's purchased intangible assets are amortized on a straight-line basis or a method based on the pattern of benefits over their estimated useful lives. Net intangible assets consist principally of amounts pertaining to nuclear-powered aircraft carrier and submarine program intangible assets, with an aggregate weighted-average useful life of 40 years based on the long life cycle of the related programs. Aggregate amortization expense was $11 million for the three months ended March 31, 2020 and 2019.

In connection with the Fulcrum purchase in 2019, the Company recorded $49 million of intangible assets pertaining to existing contract backlog and customer relationships, to be amortized using the pattern of benefits method over a weighted-average life of seven years.

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The Company expects amortization expense for purchased intangible assets of approximately $44 million in 2020, $40 million in 2021, $37 million in 2022, $26 million in 2023, and $16 million in 2024.

12. INCOME TAXES

The Company's earnings are primarily domestic, and its effective income tax rates on earnings from operations for the three months ended March 31, 2020 and 2019, were 20.4% and 20.8%, respectively, which did not differ materially from the federal statutory corporate income tax rate of 21%.

On March 27, 2020, the CARES Act was signed into law. The CARES Act includes certain changes to U.S. federal tax law that impact corporations. The Company’s initial analysis of the tax law changes included in the CARES Act indicates that the Act will not have a material impact on the Company’s effective income tax rate.

The Company's unrecognized tax benefits increased by $2 million during the three months ended March 31, 2020. As of March 31, 2020, the estimated amounts of the Company's unrecognized tax benefits, excluding interest and penalties, were liabilities of $38 million. Assuming a sustainment of these tax positions, the reversal of $30 million of the accrued amounts would favorably affect the Company's effective federal income tax rate in future periods.

The Company recognizes interest and penalties related to unrecognized tax benefits as income tax expense. For the three months ended March 31, 2020, interest resulting from the unrecognized tax benefits noted above increased income tax expense less than $1 million.

Non-current state income taxes include 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 unrecognized tax benefits 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.

13. DEBT

Long-term debt consisted of the following:

($ in millions)	March 31, 2020		December 31, 2019
Senior notes due November 15, 2025, 5.000%	600		600
Senior notes due December 1, 2027, 3.483%	600		600
Mississippi economic development revenue bonds due May 1, 2024, 7.81%	84		84
Gulf opportunity zone industrial development revenue bonds due December 1, 2028, 4.55%	21		21
Revolving credit facility borrowings	380		—
Less unamortized debt issuance costs	(18)		(19)
Total long-term debt	$	1,667	$	1,286

Credit Facility - The Company's credit facility with third-party lenders (the "Credit Facility") includes a revolving credit facility of $1,250 million, which may be drawn upon during a period of five years from November 22, 2017. The revolving credit facility includes a letter of credit subfacility of $500 million. 

The Credit Facility contains customary affirmative and negative covenants, as well as a financial covenant based on a maximum total leverage ratio. Each of the Company's existing and future material wholly owned domestic subsidiaries, except those that are specifically designated as unrestricted subsidiaries, are and will be guarantors under the Credit Facility. See Note 19: Subsidiary Guarantors.

As of March 31, 2020, the Company had $380 million of outstanding borrowings, $16 million in issued but undrawn letters of credit, and $854 million unutilized under the Credit Facility. The Company had unamortized debt issuance costs associated with its credit facilities of $6 million and $7 million as of March 31, 2020, and December 31, 2019, respectively.

In the second quarter of 2020, the Company entered into a new 364-day revolving credit agreement (the "364-Day Facility") with third-party lenders. The 364-Day Facility includes a revolving credit facility of $500 million, which may

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be drawn upon during a period of 364 days from April 3, 2020. The revolving credit facility has a variable interest rate on outstanding borrowings based on the London Interbank Offered Rate ("LIBOR") plus a spread based upon the Company's credit rating, which may vary between 2.000% and 2.375%. The revolving credit facility also has a commitment fee rate of 0.50%.

The 364-Day Facility contains customary affirmative and negative covenants, as well as a financial covenant based on a maximum total leverage ratio. Each of the Company's existing and future material wholly owned domestic subsidiaries, except those that are specifically designated as unrestricted subsidiaries, are and will be guarantors under the 364-Day Facility.

In October 2019, the Company established an unsecured commercial paper note program, under which the Company may issue up to $1 billion of unsecured commercial paper notes. As of March 31, 2020, the Company had $88 million of outstanding commercial paper.

Senior Notes - In the second quarter of 2020, the Company issued $500 million aggregate principal amount of unregistered 3.844% senior notes due 2025 and $500 million aggregate principal amount of unregistered 4.200% senior notes due 2030, both with registration rights. The net proceeds are intended to be used for general corporate purposes, which may include debt repayments and working capital. Interest on these senior notes is payable semiannually.

The terms of the senior notes limit the Company’s ability and the ability of certain of its subsidiaries to create liens, enter into sale and leaseback transactions, sell assets, and effect consolidations or mergers.

The Company had unamortized debt issuance costs associated with its senior notes of $12 million as of each of March 31, 2020, and December 31, 2019.

The Company's debt arrangements contain customary affirmative and negative covenants. The Company was in compliance with all debt covenants during the three months ended March 31, 2020.

The estimated fair values of the Company's total long-term debt as of March 31, 2020, and December 31, 2019, were $1,687 million and $1,379 million, respectively. The fair values of the Company's long-term debt were calculated based on recent trades of the Company's debt instruments in inactive markets, which fall within Level 2 under the fair value hierarchy.

As of March 31, 2020, the aggregate amounts of principal payments due on long-term debt within the next five years consisted of $380 million due in 2022 and $84 million due in 2024.

14. INVESTIGATIONS, CLAIMS, AND LITIGATION

The Company is involved in legal proceedings before various courts and administrative agencies, and is periodically subject to government examinations, inquiries and investigations. Pursuant to FASB Accounting Standards Codification 450 Contingencies, the Company has accrued for losses associated with investigations, claims, and litigation when, and to the extent that, loss amounts related to the investigations, claims, and litigation are probable and can be reasonably estimated. The actual losses that might be incurred to resolve such investigations, claims, and litigation may be higher or lower than the amounts accrued. For matters where a material loss is probable or reasonably possible and the amount of loss cannot be reasonably estimated, but the Company is able to reasonably estimate a range of possible losses, the Company will disclose such estimated range in these notes. This estimated range is based on information currently available to the Company and involves elements of judgment and significant uncertainties. Any estimated range of possible loss does not represent the Company's maximum possible loss exposure. For matters as to which the Company is not able to reasonably estimate a possible loss or range of loss, the Company will indicate the reasons why it is unable to estimate the possible loss or range of loss. For matters not specifically described in these notes, the Company does not believe, based on information currently available to it, that it is reasonably possible that the liabilities, if any, arising from such investigations, claims, and litigation will have a material effect on its consolidated financial position, results of operations, or cash flows. The Company has, in certain cases, provided disclosure regarding certain matters for which the Company believes at this time that the likelihood of material loss is remote.

False Claims Act Complaint - In 2016, the Company was made aware that it is a defendant in a qui tam False Claims Act lawsuit pending in the U.S. District Court for the Middle District of Florida related to the Company’s

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purchases of allegedly non-conforming parts from a supplier for use in connection with U.S. Government contracts. In August 2019, the Department of Justice (“DoJ”) declined to intervene in the lawsuit, and the lawsuit was unsealed. Depending on the outcome of the lawsuit, the Company could be subject to civil penalties, damages, and/or suspension or debarment from future U.S. Government contracts, which could have a material adverse effect on its consolidated financial position, results of operations, or cash flows. The Company recently filed a motion to dismiss the complaint and has not had an opportunity to engage in any discovery related to the issues set forth in the complaint. At this early stage, the Company currently is unable to estimate an amount or range of reasonably possible loss or to express an opinion regarding the ultimate outcome.

U.S. Government Investigations and Claims - Departments and agencies of the U.S. Government have the authority to investigate various transactions and operations of the Company, and the results of such investigations may lead to administrative, civil, or criminal proceedings, the ultimate outcome of which could be fines, penalties, repayments or compensatory, treble, or other damages. U.S. Government regulations provide that certain findings against a contractor may also lead to suspension or debarment from future U.S. Government contracts or the loss of export privileges. Any suspension or debarment would have a material effect on the Company because of its reliance on government contracts.

Asbestos Related Claims - HII and its predecessors-in-interest are defendants in a longstanding series of cases that have been and continue to be filed in various jurisdictions around the country, wherein former and current employees and various third parties allege exposure to asbestos containing materials while on or associated with HII premises or while working on vessels constructed or repaired by HII. The cases allege various injuries, including those associated with pleural plaque disease, asbestosis, cancer, mesothelioma, and other alleged asbestos related conditions. In some cases, several of HII's former executive officers are also named as defendants. In some instances, partial or full insurance coverage is available to the Company for its liability and that of its former executive officers. The costs to resolve cases during the three months ended March 31, 2020 and 2019, were immaterial individually and in the aggregate. The Company’s estimate of asbestos-related liabilities is subject to uncertainty because liabilities are influenced by numerous variables that are inherently difficult to predict. Key variables include the number and type of new claims, the litigation process from jurisdiction to jurisdiction and from case to case, reforms made by state and federal courts, and the passage of state or federal tort reform legislation. Although the Company believes the ultimate resolution of current cases will not have a material effect on its consolidated financial position, results of operations, or cash flows, it cannot predict what new or revised claims or litigation might be asserted or what information might come to light and can, therefore, give no assurances regarding the ultimate outcome of asbestos related litigation.

Other Litigation - In March 2019, a new dry dock being transported for delivery to Ingalls by a heavy lift ship struck an Ingalls work barge, which in turn was pushed into Delbert D. Black (DDG 119) causing damage to Delbert D. Black (DDG 119), the work barge, and the new dry dock. At the time of the incident, responsibility for the new dry dock remained with the builder and the transport company. Repair work on Delbert D. Black (DDG 119) was completed at U.S. Navy direction. The Company is working with the U.S. Navy to ascertain whether third parties will pay for the repairs to Delbert D. Black (DDG 119) or whether the repairs will be paid under the builder's risk insurance included in the Delbert D. Black (DDG 119) contract. Claims were tendered to the Company's insurers, and the Company has received all outstanding claim proceeds. In April 2019, the Company filed suit in the U.S. District Court for the Southern District of Mississippi seeking, among other relief, damages from negligent third parties. Based on information currently available, management believes it will collect sufficient funds from one or more third parties to compensate for the resulting direct and consequential damages, but failure to collect sufficient funds or the length of time required to collect such funds could result in a material effect on the Company’s financial position, results of operations, or cash flows.

The Company and its predecessor-in-interest have been in litigation with the Bolivarian Republic of Venezuela (the "Republic") since 2002 over a contract for the repair, refurbishment, and modernization at Ingalls of two foreign-built frigates. The case proceeded towards arbitration, then appeared to settle favorably, but the settlement was overturned in court and the matter returned to litigation. In March 2014, the Company filed an arbitral statement of claim asserting breaches of the contract. In July 2014, the Republic filed a statement of defense in the arbitration denying all the Company’s allegations and a counterclaim alleging late redelivery of the frigates, unfinished work, and breach of warranty. In February 2018, the arbitral tribunal awarded the Company approximately $151 million on its claims and awarded the Republic approximately $22 million on its counterclaims. The Company is seeking to enforce and execute upon the award in multiple jurisdictions. No assurances can be provided regarding the ultimate resolution of this matter.

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The Company is party to various other claims, legal proceedings and investigations that arise in the ordinary course of business, including U.S. Government investigations that could result in administrative, civil, or criminal proceedings involving the Company. The Company is a contractor with the U.S. Government, and such proceedings can therefore include False Claims Act allegations against the Company. Although the Company believes that the resolution of these other claims, legal proceedings and investigations will not have a material effect on its consolidated financial position, results of operations, or cash flows, the Company cannot predict what new or revised claims or litigation might be asserted or what information might come to light and can, therefore, give no assurances regarding the ultimate outcome of these matters.

15. LEASES

The Company leases certain land, warehouses, office space, and production, office, and technology equipment, among other items. Most equipment is leased on a monthly basis. Many land, warehouse, and office space leases include renewal terms that can extend the lease term. The exercise of lease renewal options is at the Company's sole discretion. The depreciable life of assets and leasehold improvements are generally limited by the expected lease term. The Company's lease agreements do not generally contain material residual value guarantees, material restrictive covenants, or purchase options. The Company's lease portfolio consists primarily of operating leases. Amounts after January 1, 2019, are reported under Topic 842 in accordance with ASU 2016-02.

Lease costs and related information were as follows:

	Three Months Ended March 31
($ in millions)	2020			2019
Operating lease costs	$	16		$	11
Short-term operating lease costs	$	4		$	5
Variable operating lease costs	$	1		$	1
Operating cash flows from operating leases	$	(16)		$	(11)
Right-of-use assets obtained in exchange for new operating lease liabilities	$	17		$	13
Weighted-average remaining lease term (years) - operating leases	10 years			11 years
Weighted-average discount rate - operating leases	4.1		%	4.5		%

The undiscounted future non-cancellable lease payments under our operating leases were as follows:

Year:	March 31, 2020		December 31, 2019
2020	$	34	$	45
2021	39		38
2022	31		30
2023	25		24
2024	23		22
Thereafter	121		114
Total lease payments	273		273
Less: imputed interest	57		58
Present value of lease liabilities	$	216	$	215

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Lease liabilities included in the Company's consolidated balance sheet as of March 31, 2020, were as follows:

($ in millions)	March 31, 2020		December 31, 2019
Short-term operating lease liabilities	$	34	$	35
Lease liabilities included in liabilities held for sale	29		16
Long-term operating lease liabilities	153		164
Total operating lease liabilities	$	216	$	215

16. COMMITMENTS AND CONTINGENCIES

Contract Performance Contingencies - Contract profit margins may include estimates of revenues for matters on which the customer and the Company have not reached agreement, such as settlements in the process of negotiation, contract changes, claims, and requests for equitable adjustment for unanticipated contract costs. These estimates are based upon management's best assessment of the underlying causal events and circumstances and are included in contract profit margins to the extent of expected recovery based upon contractual entitlements and the probability of successful negotiation with the customer. As of March 31, 2020, amounts recognized in connection with claims and requests for equitable adjustment were not material individually or in aggregate.

Guarantees of Performance Obligations - From time to time in the ordinary course of business, HII may enter into joint ventures, teaming, and other business arrangements to support the Company's products and services. The Company attempts to limit its exposure under these arrangements to its investment or the extent of obligations under the applicable contract. In some cases, however, HII may be required to guarantee performance of the arrangement's obligations and, in such cases, generally obtains cross-indemnification from the other members of the arrangement.

In the ordinary course of business, the Company may guarantee obligations of its subsidiaries under certain contracts. Generally, the Company is liable under such an arrangement only if its subsidiary is unable to perform its obligations. Historically, the Company has not incurred any substantial liabilities resulting from these guarantees. As of March 31, 2020, the Company was not aware of any existing event of default that would require it to satisfy any of these guarantees.

Environmental Matters - The estimated cost to complete environmental remediation has been accrued when it is probable that the Company will incur such costs in the future to address environmental conditions at currently or formerly owned or leased operating facilities, or at sites where it has been named a Potentially Responsible Party ("PRP") by the Environmental Protection Agency or similarly designated by another environmental agency, and the related costs can be estimated by management. These accruals do not include any litigation costs related to environmental matters, nor do they include amounts recorded as asset retirement obligations. To assess the potential impact on the Company's consolidated financial statements, management estimates the range of reasonably possible remediation costs that could be incurred by the Company, taking into account currently available facts on each site, as well as the current state of technology and prior experience remediating contaminated sites. These estimates are reviewed periodically and adjusted to reflect changes in facts and technical and legal circumstances. Management estimated that as of March 31, 2020, the probable estimable future cost for environmental remediation was immaterial. Factors that could result in changes to the Company's estimates include: modification of planned remedial actions, increases or decreases in the estimated time required to remediate, changes to the determination of legally responsible parties, discovery of more extensive contamination than anticipated, changes in laws and regulations affecting remediation requirements, and improvements in remediation technology. Should other PRPs not pay their allocable share of remediation costs, the Company may incur costs exceeding those already estimated and accrued. In addition, there are certain potential remediation sites where the costs of remediation cannot be reasonably estimated. Although management cannot predict whether new information gained as remediation progresses will materially affect the estimated liability accrued, management does not believe that future remediation expenditures will have a material effect on the Company's consolidated financial position, results of operations, or cash flows.

Financial Arrangements - In the ordinary course of business, HII uses letters of credit issued by commercial banks to support certain leases, insurance policies, and contractual performance obligations, as well as surety bonds issued by insurance companies principally to support the Company's self-insured workers' compensation plans. As

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of March 31, 2020, the Company had $16 million in issued but undrawn letters of credit, as indicated in Note 13: Debt, and $272 million of surety bonds outstanding.

U.S. Government Claims - From time to time, the U.S. Government communicates to the Company potential claims, disallowed costs, and penalties concerning prior costs incurred by the Company with which the U.S. Government disagrees. When such preliminary findings are presented, the Company and U.S. Government representatives engage in discussions, from which HII evaluates the merits of the claims and assesses the amounts being questioned. Although the Company believes that the resolution of any of these matters will not have a material effect on its consolidated financial position, results of operations, or cash flows, it cannot predict the ultimate outcome of these matters.

Collective Bargaining Agreements - Of the Company's approximately 42,000 employees, approximately 50% are covered by a total of nine collective bargaining agreements and two site stabilization agreements. Newport News has four collective bargaining agreements covering represented employees, which expire in November 2020, November 2021, December 2022, and April 2024. The collective bargaining agreement that expires in November 2021 covers approximately 50% of Newport News employees. Newport News craft workers employed at the Kesselring Site near Saratoga Springs, New York are represented under an indefinite Department of Energy ("DoE") site agreement. Ingalls has five collective bargaining agreements covering represented employees, all of which expire in March 2022. Approximately 50 Technical Solutions employees at various locations are represented by unions and perform work under collective bargaining agreements. The Company believes its relationship with its employees is satisfactory.

Collective bargaining agreements generally expire after three years to five years and are subject to renegotiation at that time. The Company does not expect the results of these negotiations, either individually or in the aggregate, to have a material effect on the Company's consolidated results of operations.

17. EMPLOYEE PENSION AND OTHER POSTRETIREMENT BENEFITS

The Company provides eligible employees defined benefit pension plans, postretirement benefit plans, and defined contribution pension plans.

The costs of the Company's defined benefit pension plans and other postretirement benefit plans for the three months ended March 31, 2020 and 2019, were as follows:

	Three Months Ended March 31
	Pension Benefits				Other Benefits
($ in millions)	2020		2019		2020		2019
Components of Net Periodic Benefit Cost
Service cost	$	45	$	36	$	2	$	2
Interest cost	64		69		4		5
Expected return on plan assets	(121)		(102)		—		—
Amortization of prior service cost (credit)	3		5		(5)		(5)
Amortization of net actuarial loss (gain)	27		28		(2)		(3)
Net periodic benefit cost	$	18	$	36	$	(1)	$	(1)

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The Company made the following contributions to its defined benefit pension plans and other postretirement benefit plans for the three months ended March 31, 2020 and 2019:

	Three Months Ended March 31
($ in millions)	2020		2019
Pension plans
Qualified minimum	$	—	$	—
Discretionary
Qualified	20		1
Non-qualified	2		2
Other benefit plans	8		7
Total contributions	$	30	$	10

For the year ending December 31, 2020, the Company expects cash contributions to its qualified defined benefit pension plans to be $205 million, all of which will be discretionary.

18. STOCK COMPENSATION PLANS

During the three months ended March 31, 2020 and 2019, the Company issued new stock awards as follows:

Restricted Performance Stock Rights - For the three months ended March 31, 2020, the Company granted approximately 0.1 million RPSRs at a weighted average share price of $229.42. These rights are subject to cliff vesting on December 31, 2022. For the three months ended March 31, 2019, the Company granted approximately 0.1 million RPSRs at a weighted average share price of $210.24. These rights are subject to cliff vesting on December 31, 2021. All of the RPSRs are subject to the achievement of performance-based targets at the end of the respective vesting periods and will ultimately vest between 0% and 200% of grant date value.

For the three months ended March 31, 2020 and 2019, 0.1 million and 0.3 million of stock awards vested, respectively, of which approximately 0.1 million each year were transferred to the Company from employees in satisfaction of minimum tax withholding obligations.

The following table summarizes the status of the Company's outstanding stock awards as of March 31, 2020:

	Stock Awards (in thousands)	Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Contractual Term (in years)
Total stock awards	391	$	205.78	1.5

Compensation Expense

The Company recorded stock-based compensation for the value of awards granted to Company employees and non-employee members of the board of directors for the three months ended March 31, 2020 and 2019, of $7 million and $5 million, respectively.

The Company recorded tax benefits related to stock awards of $1 million for the three months ended March 31, 2020 and 2019. The Company recognized tax benefits associated with the issuance of stock in settlement of stock awards for the three months ended March 31, 2020 and 2019, of $2 million and $5 million, respectively.

Unrecognized Compensation Expense

As of March 31, 2020, the Company had less than $1 million of unrecognized compensation expense associated with Restricted Stock Rights granted in 2019 and 2018, which will be recognized over a weighted average period of 1.2 years, and $48 million of unrecognized compensation expense associated with RPSRs granted in 2020, 2019, and 2018, which will be recognized over a weighted average period of 1.8 years.

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19. SUBSIDIARY GUARANTORS

As described in Note 13: Debt, the Company issued senior notes through the consolidating parent company, HII.  Performance of the Company's obligations under its senior notes outstanding as of March 31, 2020, and December 31, 2019, including any repurchase obligations resulting from a change of control, is fully and unconditionally guaranteed, jointly and severally, on an unsecured basis, by each of HII's existing and future material domestic subsidiaries ("Subsidiary Guarantors"). The Subsidiary Guarantors are 100% owned by HII. Under SEC Regulation S-X Rule 3-10, each HII subsidiary that did not provide a guarantee ("Non-Guarantors") is minor and HII, as the parent company issuer, did not have independent assets or operations. There are no significant restrictions on the ability of the parent company and the Subsidiary Guarantors to obtain funds from their respective subsidiaries by dividend or loan, except those imposed by applicable law.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

OVERVIEW

Our Business

Huntington Ingalls Industries, Inc. ("HII", "we", "us", or "our") is America’s largest military shipbuilding company and a provider of professional services to partners in government and industry. For more than a century, our Ingalls segment in Mississippi and Newport News segment in Virginia have built more ships in more ship classes than any other U.S. naval shipbuilder. We also provide a range of services to the governmental, energy, and oil and gas markets through our Technical Solutions segment. Headquartered in Newport News, Virginia, HII employs approximately 42,000 people domestically and internationally.

We conduct most of our business with the U.S. Government, primarily the DoD. As prime contractor, principal subcontractor, team member, or partner, we participate in many high-priority U.S. defense programs. Ingalls includes our non-nuclear ship design, construction, repair, and maintenance businesses. Newport News includes all of our nuclear ship design, construction, overhaul, refueling, and repair and maintenance businesses. Our Technical Solutions segment provides a wide range of professional services, including fleet support, MDIS, nuclear and environmental, and oil and gas services.

The following discussion should be read along with the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the year ended December 31, 2019.

Business Environment

COVID-19 Pandemic - The COVID-19 global pandemic has had wide ranging effects on the global health environment and disrupted the global and U.S. economies and financial markets, including impacts to our employees, customers, suppliers, and communities. COVID-19 did not materially impact our first quarter 2020 financial position, results of operations or cash flows, but the impact on our fiscal year 2020 financial results and beyond is uncertain. We believe that the most significant elements of uncertainty are the intensity and duration of the impact on our employees’ ability to work effectively, disruption in our supply chain, disruption of the U.S. Government's and our other customers' abilities to perform their obligations, and impact on pension assets and other investment performance.

We are aggressively managing our response to the uncertainties regarding the COVID-19 pandemic. Our primary focus has been to minimize the risk to our employees by implementing liberal leave policies and increased telecommuting, and making benefits changes to provide employees maximum flexibility. We have also adjusted policies and workspaces to align with Centers for Disease Control and Prevention (“CDC”) guidelines and to support social distancing, including changes to shift schedules to reduce concurrent headcount, increased sanitation efforts, working to procure personal protective equipment for employees, and suspension of all non-essential work travel. As a result, we have incurred and expect to continue incurring costs related to our COVID-19 response, including paid leave, quarantining employees and recurring facility cleaning. While our shipyards and other facilities remain open and productive, we have experienced a decrease in workforce attendance. Continued lower staffing levels and lower employee productivity could impact our ability to achieve anticipated milestones and affect our 2020 financial results.

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We are also focused on actively supporting our customers, suppliers and communities. We have been proactive in engaging with our U.S. Government customers regarding the possibility of future contract adjustments if conditions warrant such actions. While there has been no change in contract terms or substantial degradation in timely payments from customers, we are unable to predict how our customers will allocate resources as they react to the evolving demands of the COVID-19 response. We have accelerated payments to small business suppliers in an effort to minimize supply chain disruption. To complement these efforts, we took actions to enhance liquidity and strengthen our balance sheet by issuing $1 billion in new senior notes and entering into an incremental $500 million revolving credit facility. We have also decided to temporarily halt stock repurchases and will continue to reassess when to initiate repurchases.

While there remains substantial uncertainty regarding the impact of COVID-19 going forward, our crisis management team meets regularly to assess the COVID-19 environment and prioritizes our flexibility to respond to new developments. Our employees, suppliers, customers, and communities are facing significant challenges, and we cannot predict how the COVID-19 environment will evolve or the impact it will have. For further information on the potential impact of COVID-19 to the company, see Part 2, Item 1A “Risk Factors”.

U.S. Government Contracts - Long-term uncertainty exists with respect to overall levels of defense spending across the future years' defense plan, and it is likely that U.S. Government discretionary spending levels will continue to be subject to significant pressure.

The National Defense Authorization Act, as well as appropriations measures that funded the DoD, DoE, and all other federal agencies, was enacted in December 2019 for fiscal year 2020. While these measures largely supported our individual programs, we cannot predict the potential impact should fiscal year 2020 appropriations be reprioritized or reprogrammed for other purposes by the executive branch. Long-term funding for certain programs in which we participate may be reduced, delayed, or canceled. In addition, spending cuts and/or reprioritization of defense investment could adversely affect the viability of our suppliers, subcontractors, and employee base. Our contracts or subcontracts under programs in which we participate may be terminated or adjusted by the U.S. Government or the prime contractor as a result of lack of government funding or reductions or delays in government funding. Significant reductions in the number of ships procured by the U.S. Navy or significant delays in funding our ship programs would have a material effect on our financial position, results of operations, or cash flows.

The budget environment remains a significant long-term risk. Considerable uncertainty exists regarding how future budget and program decisions will develop and what challenges budget changes will present for the defense industry. We believe continued budget pressures will have serious implications for defense discretionary spending, the defense industrial base, including us, and the customers, employees, suppliers, subcontractors, investors, and communities that rely on companies in the defense industrial base. Although it is difficult to determine specific impacts, we expect that over the longer term, the budget environment may result in fewer contract awards and lower revenues, profits, and cash flows from our U.S. Government contracts. It is likely budget and program decisions made in this environment will have long-term impacts on us and the entire defense industry.

Critical Accounting Policies, Estimates, and Judgments

As discussed in our Annual Report on Form 10-K for the year ended December 31, 2019, we consider our policies relating to the following matters to be critical accounting policies:

•Revenue recognition;

•Purchase accounting, goodwill, and intangible assets;

•Litigation, commitments, and contingencies;

•Retirement related benefit plans; and

•Workers' compensation.

As of March 31, 2020, there had been no material changes to the foregoing critical accounting policies, estimates, and judgments since December 31, 2019.

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While there has been no material impact to date, it is reasonably possible that the COVID-19 pandemic could cause changes to estimates with respect to contract costs and revenue recognition, effective income tax rates, and the fair values of our long-lived assets, financial instruments, intangible assets, and goodwill. See Note 2: Basis of Presentation.

Contracts

We generate most of our revenues from long-term U.S. Government contracts for design, production, and support activities. Government contracts typically include the following cost elements: direct material, labor and subcontracting costs, and certain indirect costs, including allowable general and administrative expenses. Unless otherwise specified in a contract, costs billed to contracts with the U.S. Government are treated as allowable and allocable costs under the Federal Acquisition Regulation ("FAR") and the U.S. Cost Accounting Standards ("CAS") regulations. Examples of costs incurred by us that are not allowable under the FAR and CAS regulations include certain legal costs, lobbying costs, charitable donations, interest expense, and advertising costs.

We monitor our policies and procedures with respect to our contracts on a regular basis to ensure consistent application under similar terms and conditions, as well as compliance with all applicable government regulations. In addition, the Defense Contract Audit Agency routinely audits the costs we incur that are allocated to contracts with the U.S. Government.

Our contracts typically fall into one of four categories: firm fixed-price, fixed-price incentive, cost-type, and time and materials. See Note 8: Revenue.

•Firm Fixed-Price Contracts - A firm fixed-price contract is a contract in which the specified scope of work is agreed to for a price that is predetermined by bid or negotiation and not generally subject to adjustment regardless of costs incurred by the contractor.

•Fixed-Price Incentive Contracts - Fixed-price incentive contracts provide for reimbursement of the contractor's allowable costs, but are subject to a cost-share limit that affects profitability. Fixed-price incentive contracts effectively become firm fixed-price contracts once the cost-share limit is reached.

•Cost-Type Contracts - Cost-type contracts provide for reimbursement of the contractor's allowable costs plus a fee that represents profit. Cost-type contracts generally require that the contractor use its reasonable efforts to accomplish the scope of the work within some specified time and some stated dollar limitation.

•Time and Materials - Time and materials contracts specify a fixed hourly billing rate for each direct labor hour expended and reimbursement for allowable material costs and expenses.

Contract Fees - Negotiated contract fee structures include: fixed fee amounts, cost sharing arrangements to reward or penalize contractors for under or over cost target performance, respectively, positive award fees, and negative penalty arrangements. Profit margins may vary materially depending on the negotiated contract fee arrangements, percentage-of-completion of the contract, the achievement of performance objectives, and the stage of performance at which the right to receive fees, particularly under incentive and award fee contracts, is finally determined.

Award Fees - Certain contracts contain award fees based on performance criteria such as cost, schedule, quality, and technical performance. Award fees are determined and earned based on an evaluation by the customer of our performance against such negotiated criteria. We consider award fees to be variable consideration and generally include these fees in the transaction price using a most likely amount approach. Award fees are limited to the extent of funding allotted by the customer and available for performance and those amounts for which a significant reversal of revenue is not probable.

Program Descriptions

For convenience, a brief description of certain programs discussed in this Quarterly Report on Form 10-Q is included in the "Glossary of Programs" in this section.

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CONSOLIDATED OPERATING RESULTS

The following table presents selected financial highlights:

	Three Months Ended March 31
					2020 over 2019
($ in millions)	2020		2019		Dollars		Percent
Sales and service revenues	$	2,263	$	2,080	$	183	9	%
Cost of product sales and service revenues	1,840		1,752		88		5	%
Income from operating investments, net	6		4		2		50	%
General and administrative expenses	214		171		43		25	%
Operating income	215		161		54		34	%
Other income (expense)
Interest expense	(16)		(16)		—		—	%
Non-operating retirement benefit	30		3		27		900	%
Other, net	(13)		1		(14)		(1,400)	%
Federal and foreign income taxes	44		31		13		42	%
Net earnings	$	172	$	118	$	54	46	%

Operating Performance Assessment and Reporting

We manage and assess the performance of our business based on our performance on individual contracts and programs using the financial measures referred to below, with consideration given to the Critical Accounting Policies, Estimates, and Judgments referred to in this section. Our portfolio of long-term contracts is largely flexibly-priced. Therefore, sales tend to fluctuate in concert with costs across our large portfolio of active contracts, with operating income being a critical measure of operating performance. Under FAR rules that govern our business with the U.S. Government, most types of costs are allowable, and we do not focus on individual cost groupings, such as cost of sales or general and administrative expenses, as much as we do on total contract costs, which are a key factor in determining contract operating income. As a result, in evaluating our operating performance, we look primarily at changes in sales and service revenues, as well as operating income, including the effects of significant changes in operating income as a result of changes in contract estimates and the use of the cumulative catch-up method of accounting in accordance with GAAP. This approach is consistent with the long-term life cycle of our contracts, as management assesses the bidding of each contract by focusing on net sales and operating profit and monitors performance in a similar manner through contract completion. Consequently, our discussion of business segment performance focuses on net sales and operating profit, consistent with our approach for managing our business.

Cost of sales for both product sales and service revenues consists of materials, labor, and subcontracting costs, as well as an allocation of indirect costs for overhead. We manage the type and amount of costs at the contract level, which is the basis for estimating our total costs at completion of our contracts. Unusual fluctuations in operating performance driven by changes in a specific cost element across multiple contracts are described in our analysis.

Sales and Service Revenues

Sales and service revenues were comprised as follows:

	Three Months Ended March 31
					2020 over 2019
($ in millions)	2020		2019		Dollars		Percent
Product sales	$	1,624	$	1,490	$	134	9	%
Service revenues	639		590		49		8	%
Sales and service revenues	$	2,263	$	2,080	$	183	9	%

Product sales for the three months ended March 31, 2020, increased $134 million, or 9%, compared with the same period in 2019. Ingalls product sales increased $40 million for the three months ended March 31, 2020, primarily as

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a result of higher volumes in amphibious assault ships and surface combatants, partially offset by lower volume in the Legend class NSC program. Newport News product sales increased $94 million for the three months ended March 31, 2020, primarily as a result of higher volumes in submarines and aircraft carriers.

Service revenues for the three months ended March 31, 2020, increased $49 million, or 8%, compared with the same period in 2019. Ingalls service revenues increased $4 million for the three months ended March 31, 2020, as a result of higher volumes in surface combatant services. Newport News service revenues decreased $33 million for the three months ended March 31, 2020, primarily as a result of lower volumes in aircraft carrier services, partially offset by naval nuclear support services. Technical Solutions service revenues increased $78 million for the three months ended March 31, 2020, primarily as a result of the acquisition of Fulcrum in 2019, as well as higher volumes in fleet support, oil and gas, and other MDIS services.

Cost of Sales and Service Revenues

Cost of product sales, cost of service revenues, income from operating investments, net, and general and administrative expenses were as follows:

	Three Months Ended March 31
							2020 over 2019
($ in millions)	2020			2019			Dollars		Percent
Cost of product sales	$	1,290		$	1,258		$	32	3	%
% of product sales	79.4		%	84.4		%
Cost of service revenues	550			494			56		11	%
% of service revenues	86.1		%	83.7		%
Income from operating investments, net	6			4			2		50	%
General and administrative expenses	214			171			43		25	%
% of sales and service revenues	9.5		%	8.2		%
Cost of sales and service revenues	$	2,048		$	1,919		$	129	7	%

Cost of Product Sales

Cost of product sales for the three months ended March 31, 2020, increased $32 million, or 3%, compared with the same period in 2019. Ingalls cost of product sales increased $14 million for the three months ended March 31, 2020, primarily as a result of the volume changes described above, partially offset by higher risk retirement on Richard M. McCool Jr. (LPD 29) and surface combatants. Newport News cost of product sales increased $42 million for the three months ended March 31, 2020, primarily as a result of the volume increases described above, partially offset by higher risk retirement on the Virginia class (SSN 774) submarine program and the RCOH of USS George Washington (CVN 73). Cost of product sales related to the Operating FAS/CAS Adjustment decreased $24 million for the three months ended March 31, 2020, as described below.

Cost of product sales as a percentage of product sales decreased from 84.4% for the three months ended March 31, 2019, to 79.4% for the three months ended March 31, 2020, primarily due to a favorable change in the Operating FAS/CAS Adjustment, higher risk retirement on the Virginia class (SSN 774) submarine program, Richard M. McCool Jr. (LPD 29), surface combatants, and the RCOH of USS George Washington (CVN 73), as well as year-to-year variances in contract mix.

Cost of Service Revenues

Cost of service revenues for the three months ended March 31, 2020, increased $56 million, or 11%, compared with the same period in 2019. Ingalls cost of service revenues increased $7 million for the three months ended March 31, 2020, primarily as a result of the volume changes described above and lower risk retirement on surface combatants. Newport News cost of service revenues decreased $21 million for the three months ended March 31, 2020, primarily as a result of the volume changes described above. Technical Solutions cost of service revenues increased $75 million for the three months ended March 31, 2020, primarily as a result of the higher volume described above. Cost of service revenues related to the Operating FAS/CAS Adjustment decreased $5 million for the three months ended March 31, 2020, as described below.

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Cost of service revenues as a percentage of service revenues increased from 83.7% for the three months ended March 31, 2019, to 86.1% for the three months ended March 31, 2020, primarily driven by lower risk retirement on naval nuclear support and surface combatant services, as well as year-to-year variances in contract mix, partially offset by a favorable change in the Operating FAS/CAS Adjustment.

Income (Loss) from Operating Investments, Net

The activities of our operating investments are closely aligned with the operations of the segments holding the investments. We therefore record income related to earnings from equity method investments in our operating income.

Income from operating investments, net for the three months ended March 31, 2020, decreased $2 million from the same period in 2019, primarily due to lower equity income from our nuclear and environmental joint ventures.

General and Administrative Expenses

In accordance with industry practice and the regulations that govern the cost accounting requirements for government contracts, most general and administrative expenses are considered allowable and allocable costs on government contracts. These costs are allocated to contracts in progress on a systematic basis, and contract performance factors include this cost component as an element of cost.

General and administrative expenses for the three months ended March 31, 2020, increased $43 million from the same period in 2019, primarily driven by higher overhead costs and unfavorable changes in current state income tax expense.

Operating Income

We consider operating income to be an important measure for evaluating our operating performance, and, as is typical in the industry, we define operating income as revenues less the related cost of producing the revenues and general and administrative expenses.

We internally manage our operations by reference to "segment operating income," which is defined as operating income before the Operating FAS/CAS Adjustment and non-current state income taxes, neither of which affects segment performance. Segment operating income is not a recognized measure under GAAP.  When analyzing our operating performance, investors should use segment operating income in addition to, and not as an alternative for, operating income or any other performance measure presented in accordance with GAAP. It is a measure we use to evaluate our core operating performance.  We believe segment operating income reflects an additional way of viewing aspects of our operations that, when viewed with our GAAP results, provides a more complete understanding of factors and trends affecting our business. We believe the measure is used by investors and is a useful indicator to measure our performance. Because not all companies use identical calculations, our presentation of segment operating income may not be comparable to similarly titled measures of other companies.

The following table reconciles operating income to segment operating income: 

	Three Months Ended March 31
					2020 over 2019
($ in millions)	2020		2019		Dollars		Percent
Operating income	$	215	$	161	$	54	34	%
Operating FAS/CAS Adjustment	(63)		(34)		(29)		(85)	%
Non-current state income taxes	4		2		2		100	%
Segment operating income	$	156	$	129	$	27	21	%

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Segment Operating Income

Segment operating income for the three months ended March 31, 2020, was $156 million, an increase of $27 million from the same period in 2019. The increase was primarily driven by higher risk retirement on the Virginia class (SSN 774) submarine program, Richard M. McCool Jr. (LPD 29), the RCOH of USS George Washington (CVN 73), and surface combatants.

Activity within each segment is discussed in Segment Operating Results below.

FAS/CAS Adjustment and Operating FAS/CAS Adjustment

The FAS/CAS Adjustment reflects 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"). The Operating FAS/CAS Adjustment excludes the following components of net periodic benefit costs: interest cost, expected return on plan assets, amortization of prior service cost (credit) and actuarial loss (gain), and settlement and curtailment effects.

The components of the Operating FAS/CAS Adjustment were as follows:

	Three Months Ended March 31
					2020 over 2019
($ in millions)	2020		2019		Dollars		Percent
FAS expense	$	(17)	$	(35)	$	18	51	%
CAS cost	110		72		38		53	%
FAS/CAS Adjustment	93		37		56		151	%
Non-operating retirement benefit	(30)		(3)		(27)		(900)	%
Operating FAS/CAS Adjustment	$	63	$	34	$	29	85	%

The Operating FAS/CAS Adjustment was a net benefit of $63 million and $34 million for the three months ended March 31, 2020 and 2019, respectively. The $29 million favorable change in the Operating FAS/CAS Adjustment was primarily driven by the more immediate recognition of lower interest rates under CAS.

Non-current State Income Taxes

Non-current state income taxes include 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 unrecognized tax benefits 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.

Non-current state income tax expense for the three months ended March 31, 2020, was $4 million, compared to a non-current state income tax expense of $2 million for the same period in 2019. The increase in non-current state income tax expense was driven by increases in deferred state income tax expense and state uncertain tax positions. The increase in deferred state income tax expense was primarily attributable to changes in the timing of tax depreciation.

Interest Expense

There was no significant change in our interest expense for the three months ended March 31, 2020, compared with the same period in 2019.

Non-Operating Retirement Benefit

The non-operating retirement benefit includes the following components of net periodic benefit costs: interest cost, expected return on plan assets, amortization of prior service cost (credit) and actuarial loss (gain), and settlement and curtailment effects. For the three months ended March 31, 2020, the favorable change in the non-operating retirement benefit of $27 million was primarily driven by higher 2019 returns on plan assets.

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Other, Net

Other, net expense increased $14 million for the three months ended March 31, 2020, compared with the same period in 2019, primarily driven by losses on investments in marketable securities.

Federal and Foreign Income Taxes

Our effective income tax rates on earnings from operations for the three months ended March 31, 2020 and 2019, were 20.4% and 20.8%, respectively, which did not differ materially from the federal statutory corporate income tax rate of 21%. See Note 12: Income Taxes.

SEGMENT OPERATING RESULTS

Basis of Presentation

We are organized into three reportable segments: Ingalls, Newport News, and Technical Solutions.

The following table presents segment operating results:

	Three Months Ended March 31
					2020 over 2019
($ in millions)	2020		2019		Dollars		Percent
Sales and Service Revenues
Ingalls	$	629	$	584	$	45	8	%
Newport News	1,341		1,279		62		5	%
Technical Solutions	317		240		77		32	%
Intersegment eliminations	(24)		(23)		(1)		(4)	%
Sales and service revenues	$	2,263	$	2,080	$	183	9	%
Operating Income
Ingalls	$	68	$	46	$	22	48	%
Newport News	95		81		14		17	%
Technical Solutions	(7)		2		(9)		(450)	%
Segment operating income	156		129		27		21	%
Non-segment factors affecting operating income (loss)
Operating FAS/CAS Adjustment	63		34		29		85	%
Non-current state income taxes	(4)		(2)		(2)		(100)	%
Operating income	$	215	$	161	$	54	34	%

KEY SEGMENT FINANCIAL MEASURES

Sales and Service Revenues

Period-to-period revenues reflect performance under new and ongoing contracts. Changes in sales and service revenues are typically expressed in terms of volume. Unless otherwise described, volume generally refers to increases (or decreases) in reported revenues due to varying production activity levels, delivery rates, or service levels on individual contracts. Volume changes will typically carry a corresponding income change based on the margin rate for a particular contract.

Segment Operating Income

Segment operating income reflects the aggregate performance results of contracts within a segment. Excluded from this measure are certain costs not directly associated with contract performance, such as the Operating FAS/CAS Adjustment and non-current state income taxes. Changes in segment operating income are typically expressed in

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terms of volume, as discussed above, or performance. Performance refers to changes in contract margin rates. These changes typically relate to profit recognition associated with revisions to estimated costs at completion ("EAC") that reflect improved or deteriorated operating performance on that contract. Operating income changes are accounted for on a cumulative to date basis at the time an EAC change is recorded. Segment operating income may also be affected by, among other things, contract performance, the effects of workforce stoppages, the effects of natural disasters such as hurricanes, resolution of disputed items with the customer, recovery of insurance proceeds, and other discrete events. At the completion of a long-term contract, any originally estimated costs not incurred or reserves not fully utilized, such as warranty reserves, could also impact contract earnings. Where such items have occurred and the effects are material, a separate description is provided.

Cumulative Adjustments

For the three months ended March 31, 2020 and 2019, favorable and unfavorable cumulative catch-up adjustments were as follows:

	Three Months Ended March 31
($ in millions)	2020		2019
Gross favorable adjustments	$	61	$	31
Gross unfavorable adjustments	(29)		(37)
Net adjustments	$	32	$	(6)

For the three months ended March 31, 2020, favorable cumulative catch-up adjustments were related to risk retirement on the Virginia class (SSN 774) submarine program, the RCOH of USS George Washington (CVN 73), the San Antonio class (LPD 17) program, and other individually insignificant adjustments. During the same period, none of the unfavorable cumulative catch-up adjustments were individually significant.

For the three months ended March 31, 2019, favorable cumulative catch-up adjustments were related to risk retirement on naval nuclear support services and other individually insignificant adjustments. During the same period, none of the unfavorable cumulative catch-up adjustments were individually significant.

Ingalls

	Three Months Ended March 31
							2020 over 2019
($ in millions)	2020			2019			Dollars		Percent
Sales and service revenues	$	629		$	584		$	45	8	%
Segment operating income	68			46			22		48	%
As a percentage of segment sales	10.8		%	7.9		%

Sales and Service Revenues

Ingalls revenues for the three months ended March 31, 2020, increased $45 million, or 8%, from the same period in 2019, primarily driven by higher revenues in amphibious assault ships and surface combatants, partially offset by lower revenues in the Legend class NSC program. Amphibious assault ship revenues increased as a result of higher volumes on Harrisburg (LPD 30) and Richard M. McCool Jr. (LPD 29), partially offset by lower volume on Tripoli (LHA 7). Surface combatant revenues increased due to higher volumes on Jeremiah Denton (DDG 129), Delbert D. Black (DDG 119), and Ted Stevens (DDG 128), partially offset by lower volume on Paul Ignatius (DDG 117). Revenues on the Legend class NSC program decreased due to lower volume on Midgett (NSC 8), partially offset by higher volume on Calhoun (NSC 10).

Segment Operating Income

Ingalls segment operating income for the three months ended March 31, 2020, was $68 million, compared with $46 million for the same period in 2019. The increase was primarily driven by higher risk retirement on Richard M. McCool Jr. (LPD 29) and surface combatants.

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Newport News

	Three Months Ended March 31
							2020 over 2019
($ in millions)	2020			2019			Dollars		Percent
Sales and service revenues	$	1,341		$	1,279		$	62	5	%
Segment operating income	95			81			14		17	%
As a percentage of segment sales	7.1		%	6.3		%

Sales and Service Revenues

Newport News revenues for the three months ended March 31, 2020, increased $62 million, or 5%, from the same period in 2019, primarily driven by higher revenues in submarines, partially offset by lower revenues in aircraft carriers. Submarine revenues increased primarily as a result of higher volumes on the Virginia class (SSN 774) and Columbia class submarine programs. The higher volume on the Virginia class (SSN 774) submarine program was due to higher volumes on Block V boats, partially offset by lower volumes on Block III boats. Aircraft carrier revenues decreased primarily as a result of lower volumes on the RCOH of USS George Washington (CVN 73) and USS Gerald R. Ford (CVN 78), partially offset by higher volumes on Enterprise (CVN 80) and the advance planning contract for the RCOH of USS John C. Stennis (CVN 74).

Segment Operating Income

Newport News segment operating income for the three months ended March 31, 2020, was $95 million, compared with $81 million for the same period in 2019. The increase was primarily driven by higher risk retirement on the Virginia class (SSN 774) submarine program and the RCOH of USS George Washington (CVN 73).

Technical Solutions

	Three Months Ended
	March 31, 2020						2020 over 2019
($ in millions)	2020			2019			Dollars		Percent
Sales and service revenues	$	317		$	240		$	77	32	%
Segment operating income (loss)	(7)			2			(9)		(450)	%
As a percentage of segment sales	(2.2)		%	0.8		%

Sales and Service Revenues

Technical Solutions revenues for the three months ended March 31, 2020, increased $77 million, or 32%, from the same period in 2019, due to higher MDIS revenues primarily attributable to the acquisition of Fulcrum in 2019 and higher volume on other MDIS services, as well as higher oil and gas and fleet support revenues.

Segment Operating Income

Technical Solutions segment operating loss for the three months ended March 31, 2020, was $7 million, compared with operating income of $2 million for the same period in 2019. The decrease was primarily driven by lower performance on fleet support, oil and gas, and nuclear and environmental services.

BACKLOG

Total backlog as of March 31, 2020, and December 31, 2019, was approximately $45.2 billion and $46.5 billion, respectively. Total backlog includes both funded backlog (firm orders for which funding is contractually obligated by the customer) and unfunded backlog (firm orders for which funding is not currently contractually obligated by the customer). Backlog excludes unexercised contract options and unfunded IDIQ orders. For contracts having no stated contract values, backlog includes only the amounts committed by the customer.

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The following table presents funded and unfunded backlog by segment as of March 31, 2020, and December 31, 2019: 

	March 31, 2020						December 31, 2019
					Total						Total
($ in millions)	Funded		Unfunded		Backlog		Funded		Unfunded		Backlog
Ingalls	$	9,457	$	1,510	$	10,967	$	9,062	$	1,693	$	10,755
Newport News	10,537		22,407		32,944		8,414		26,352		34,766
Technical Solutions	763		483		1,246		435		538		973
Total backlog	$	20,757	$	24,400	$	45,157	$	17,911	$	28,583	$	46,494

Approximately 17% of the $46.5 billion total backlog as of December 31, 2019, is expected to be converted into sales in 2020. U.S. Government orders comprised substantially all of the total backlog as of March 31, 2020, and December 31, 2019.

Awards

The value of new contract awards during the three months ended March 31, 2020, was approximately $0.9 billion, primarily driven by a construction contract for Sam Nunn (DDG 133).

LIQUIDITY AND CAPITAL RESOURCES

We seek to efficiently convert operating results into cash for deployment in operating our businesses, implementing our business strategy, and maximizing stockholder value. We use various financial measures to assist in capital deployment decision making, including net cash provided by operating activities and free cash flow. We believe these measures are useful to investors in assessing our financial performance.

The following table summarizes key components of cash flow provided by operating activities: 

	Three Months Ended March 31				2020 over
					2019
($ in millions)	2020		2019		Dollars
Net earnings	$	172	$	118	$	54
Depreciation and amortization	59		53		6
Provision for doubtful accounts	—		(2)		2
Stock-based compensation	7		5		2
Deferred income taxes	18		16		2
Loss (gain) on investments in marketable securities	16		(7)		23
Retiree benefit funding less than (in excess of) expense	(13)		25		(38)
Trade working capital decrease (increase)	(191)		(197)		6
Net cash provided by operating activities	$	68	$	11	$	57

Cash Flows

We discuss below our major operating, investing, and financing activities for the three months ended March 31, 2020 and 2019, as classified on our unaudited condensed consolidated statements of cash flows.

Operating Activities

Cash provided by operating activities for the three months ended March 31, 2020, was $68 million, compared with $11 million provided by operating activities for the same period in 2019. The favorable change in operating cash flow was primarily due to higher net income and changes in trade working capital, partially offset by higher contributions to retiree benefit plans. The change in trade working capital was primarily driven by the timing of receipts of accounts receivable and payments of accounts payable.

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For the three months ended March 31, 2020, we made discretionary contributions to our qualified defined benefit pension plans totaling $20 million, compared with $1 million of discretionary contributions for the same period in 2019. For the year ending December 31, 2020, we expect cash contributions to our qualified defined benefit pension plans to be $205 million, all of which will be discretionary.

We expect cash generated from operations in combination with our current cash and cash equivalents, as well as existing credit facilities, to be more than sufficient to service debt, meet contractual obligations, and finance capital expenditures for at least the next 12 months.

Investing Activities

Cash used in investing activities for the three months ended March 31, 2020, was $444 million, compared with $269 million used in investing activities for the same period in 2019. The change in investing cash used was driven by the acquisition of Hydroid in 2020, partially offset by the acquisition of Fulcrum in 2019 and lower capital expenditures in 2020. For March 31, 2020, we expect our capital expenditures for maintenance and sustainment to be approximately 1.0% of annual revenues and our discretionary capital expenditures to be approximately 3.0% to 4.0% of annual revenues.

Financing Activities

Cash provided by financing activities for the three months ended March 31, 2020, was $329 million, compared with $69 million provided by financing activities for the same period in 2019. The change in financing cash was primarily due to an increase of $168 million of net proceeds from revolving credit facility borrowings, $88 million of net proceeds from issuances of commercial paper, and a decrease of $10 million in employee taxes on certain share-based payment arrangements, partially offset by a $6 million increase in cash dividend payments.

Free Cash Flow

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

The following table reconciles net cash provided by operating activities to free cash flow:

	Three Months Ended March 31				2020 over
					2019
($ in millions)	2020		2019		Dollars
Net cash provided by operating activities	$	68	$	11	$	57
Less capital expenditures:
Capital expenditure additions	(71)		(110)		39
Grant proceeds for capital expenditures	5		36		(31)
Free cash flow	$	2	$	(63)	$	65

Free cash flow for the three months ended March 31, 2020, increased $65 million from the same period in 2019, primarily due to higher net income, changes in trade working capital, and lower capital expenditures, partially offset by higher contributions to retiree benefit plans.

Governmental Regulation and Supervision

The U.S. Government has the ability, pursuant to regulations relating to contractor business systems, to decrease or withhold contract payments if it determines significant deficiencies exist in one or more such systems. As of March

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31, 2020 and 2019, the cumulative amounts of payments withheld by the U.S. Government under our contracts subject to these regulations were not material to our liquidity or cash flows.

Other Sources and Uses of Capital

Additional Capital - In the second quarter of 2020, we issued $500 million aggregate principal amount of unregistered 3.844% senior notes due 2025 and $500 million aggregate principal amount of unregistered 4.200% senior notes due 2030, both with registration rights. The net proceeds are intended to be used for general corporate purposes, which may include debt repayments and working capital. Interest on these senior notes is payable semiannually.

In the second quarter of 2020, we also entered into the 364-Day Facility. The 364-Day Facility includes a revolving credit facility of $500 million, which may be drawn upon during a period of 364 days from April 3, 2020. The revolving credit facility has a variable interest rate on outstanding borrowings based on the LIBOR plus a spread based upon our credit rating, which may vary between 2.000% and 2.375%. The revolving credit facility also has a commitment fee rate of 0.50%.

The 364-Day Facility contains customary affirmative and negative covenants, as well as a financial covenant based on a maximum total leverage ratio. Each of our existing and future material wholly owned domestic subsidiaries, except those that are specifically designated as unrestricted subsidiaries, are and will be guarantors under the 364-Day Facility.

The 364-Day Facility and the issuance of new senior notes provide us with substantial additional liquidity and flexibility given the unpredictable impact of the COVID-19 pandemic.

Off-Balance Sheet Arrangements

In the ordinary course of business, we use standby letters of credit issued by commercial banks and surety bonds issued by insurance companies principally to support our self-insured workers' compensation plans. As of March 31, 2020, we had $16 million in issued but undrawn letters of credit and $272 million of surety bonds outstanding.

ACCOUNTING STANDARDS UPDATES

See Note 3: Accounting Standards Updates in Part I, Item 1 for information related to accounting standards updates.

FORWARD-LOOKING STATEMENTS AND PROJECTIONS

Statements in this Quarterly Report on Form 10-Q and in our other filings with the Securities and Exchange Commission ("SEC"), as well as other statements we may make from time to time, 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;

•Health epidemics, pandemics and similar outbreaks, including the COVID-19 pandemic;

•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 herein and in our other filings with the SEC.

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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 or revise any forward-looking statements. You should not place undue reliance on any forward looking statements that we may make.

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GLOSSARY OF PROGRAMS

Included below are brief descriptions of some of the programs discussed in this Quarterly Report on Form 10-Q.

Program Name	Program Description
America class (LHA 6) amphibious assault ships	Design and build large deck amphibious assault ships that provide forward presence and power projection as an integral part of joint, interagency and multinational maritime expeditionary forces. The America class (LHA 6) ships, together with the Wasp class (LHD 1) ships, are the successors to the decommissioned Tarawa class (LHA 1) ships. The America class (LHA 6) ships optimize aviation operations and support capabilities. We delivered USS America (LHA 6) in April 2014 and Tripoli (LHA 7) in February 2020, and we are currently constructing Bougainville (LHA 8).
Arleigh Burke class (DDG 51) destroyers	Build guided missile destroyers designed for conducting anti-air, anti-submarine, anti-surface, and strike operations. The Aegis-equipped Arleigh Burke class (DDG 51) destroyers are the U.S. Navy's primary surface combatant, and have been constructed in variants, allowing technological advances during construction. In 2016 we delivered USS John Finn (DDG 113), in 2017 we delivered Ralph Johnson (DDG 114), in 2019 we delivered Paul Ignatius (DDG 117), and in 2020 we delivered Delbert D. Black (DDG119). We have contracts to construct the following Arleigh Burke class (DDG 51) destroyers: Frank E. Petersen Jr. (DDG 121), Lenah H. Sutcliffe Higbee (DDG 123), Jack H. Lucas (DDG 125), Ted Stevens (DDG 128), Jeremiah Denton (DDG 129), George M. Neal (DDG 131), Sam Nunn (DDG 133), DDG 135 (unnamed), and DDG 137 (unnamed).
Carrier RCOH	Perform refueling and complex overhaul ("RCOH") of nuclear-powered aircraft carriers, which is required at the mid-point of their 50-year life cycle. USS Abraham Lincoln (CVN 72) was redelivered to the U.S. Navy in the second quarter of 2017 and USS George Washington (CVN 73) arrived at Newport News for the start of its RCOH in August 2017.
Columbia class (SSBN 826) submarines	Newport News is participating in designing the Columbia class submarine as a replacement for the current aging Ohio class nuclear ballistic missile submarines, which were first introduced into service in 1981. The Ohio class SSBN includes 14 nuclear ballistic missile submarines and four nuclear cruise missile submarines. The Columbia class program plan of record is to construct 12 new ballistic missile submarines. The U.S. Navy has initiated the design process for the new class of submarines, and, in early 2017, the DoD signed the acquisition decision memorandum approving the Columbia class program’s Milestone B, which formally authorizes the program’s entry into the engineering and manufacturing development phase. We perform design work as a subcontractor to Electric Boat, and we have entered into a teaming agreement with Electric Boat to build modules for the entire Columbia (SSBN 826) class submarine program that leverages our Virginia class (SSN 774) experience. We have been awarded contracts from Electric Boat to begin integrated product and process development and provide long-lead-time material and advance construction for the Columbia class (SSBN 826) program. Construction of the first Columbia class (SSBN 826) submarine is expected to begin in 2021.

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Fleet support services	Provide comprehensive life-cycle sustainment services to the U.S. Navy fleet and other DoD and commercial maritime customers. We provide services including maintenance, modernization, and repair on all ship classes; naval architecture, marine engineering, and design; integrated logistics support; technical documentation development; warehousing, asset management, and material readiness; operational and maintenance training development and delivery; software design and development; IT infrastructure support and data delivery and management; and cyber security and information assurance. We provide undersea vehicle and specialized craft development and prototyping services.
USS Gerald R. Ford class (CVN 78) aircraft carriers	Design and construction for the Ford class program, which is the aircraft carrier replacement program for the decommissioned Enterprise (CVN 65) and Nimitz class (CVN 68) aircraft carriers. USS Gerald R. Ford (CVN 78), the first ship of the Ford class, was delivered to the U.S. Navy in the second quarter of 2017. In June 2015, we were awarded a contract for the detail design and construction of John F. Kennedy (CVN 79), following several years of engineering, advance construction, and purchase of long-lead time components and material. In addition, we have received awards for detail design and construction of Enterprise (CVN 80) and Doris Miller (CVN 81). This category also includes the class' non-recurring engineering. The class is expected to bring improved warfighting capability, quality of life improvements for sailors, and reduced life cycle costs.
Legend class National Security Cutter	Design and build the U.S. Coast Guard's National Security Cutters ("NSCs"), the largest and most technically advanced class of cutter in the U.S. Coast Guard. The NSC is equipped to carry out maritime homeland security, maritime safety, protection of natural resources, maritime mobility, and national defense missions. The plan is for a total of 11 ships, of which the first eight ships have been delivered. Stone (NSC 9), Calhoun (NSC 10), and NSC 11 (unnamed) are currently under construction.
MDIS services	Provide services to DoD, intelligence, and federal civilian customers. Services are performed in six major portfolio areas: modeling, simulation and training, information technology and software application, artificial intelligence and data analytics, mission engineering and operations support, logistics and life cycle management, and cyber space operations.
Naval nuclear support services	Provide services to and in support of the U.S. Navy, ranging from services supporting the Navy's carrier and submarine fleets to maintenance services at U.S. Navy training facilities. Naval nuclear support services include design, construction, maintenance, and disposal activities for in service U.S. Navy nuclear ships worldwide through mobile and in-house capabilities. Services include maintenance services on nuclear reactor prototypes.
Nuclear and environmental services	Provide services in nuclear management and operations, and nuclear and non-nuclear fabrication and repair. We provide site management, nuclear and industrial facilities operations and maintenance, decontamination and decommissioning, and radiological and hazardous waste management services. We provide services, including fabrication, equipment repair, and technical engineering services. We participate in several joint ventures, including N3B, MSTS, and SRNS. N3B was awarded the Los Alamos Legacy Cleanup Contract at the DoE/National Nuclear Security Administration’s Los Alamos National Laboratory. MSTS was awarded a contract for site management and operations at the Nevada National Security Site. SRNS provides site management and operations at the DoE's Savannah River Site near Aiken, South Carolina.

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Oil and gas services	Deliver engineering, procurement, and construction management services to the oil and gas industry for major pipeline, production, and treatment facilities. These services include full life-cycle services for domestic and international projects, from concept identification through detail design, execution and construction, and decommissioning. Related field services include survey, inspection, commissioning and start-up, operations and maintenance, and optimization and debottlenecking.
San Antonio class (LPD 17) amphibious transport dock ships	Design and build amphibious transport dock ships, which are warships that embark, transport, and land elements of a landing force for a variety of expeditionary warfare missions, and also serve as the secondary aviation platform for Amphibious Readiness Groups. The San Antonio class (LPD 17) is the newest addition to the U.S. Navy's 21st century amphibious assault force, and these ships are a key element of the U.S. Navy's seabase transformation. In 2013, we delivered USS Somerset (LPD 25), in 2016, we delivered USS John P. Murtha (LPD 26), and, in 2017, we delivered USS Portland (LPD 27). We are currently constructing Fort Lauderdale (LPD 28), Richard M. McCool Jr. (LPD 29), and Harrisburg (LPD 30).
The decommissioned Enterprise (CVN 65)	Defuel and inactivate the world's first nuclear-powered aircraft carrier, which began in 2013. The inactivation was completed in the second quarter of 2018.
Virginia class (SSN 774) fast attack submarines	Construct attack submarines as the principal subcontractor to Electric Boat. The Virginia class (SSN 774) is a post-Cold War design tailored to excel in a wide range of warfighting missions, including anti-submarine and surface ship warfare; special operation forces; strike; intelligence, surveillance, and reconnaissance; carrier and expeditionary strike group support; and mine warfare.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risk, primarily related to interest rates and foreign currency exchange rates.

Interest Rates - Our financial instruments subject to interest rate risk include issuances of commercial paper and floating rate borrowings under our credit facilities. As of March 31, 2020, we had $380 million of floating rate debt outstanding under our $1,250 million revolving credit facility and $88 million of outstanding commercial paper. Based on the amounts of outstanding variable rate debt as of March 31, 2020, an increase of 1% in interest rates would increase the interest expense on our debt by approximately $5 million on an annual basis.

Foreign Currency - We currently have, and in the future may enter into, foreign currency forward contracts to manage foreign currency exchange rate risk related to payments to suppliers denominated in foreign currencies. As of March 31, 2020, the fair values of our outstanding foreign currency forward contracts were not significant.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

The Company's management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of March 31, 2020. Based on that evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2020, the Company's disclosure controls and procedures were effective to ensure that information required to be disclosed in reports the Company files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) accumulated and communicated to management to allow their timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

During the three months ended March 31, 2020, no change occurred in our internal control over financial reporting that materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

While the COVID-19 pandemic has not materially impacted internal control over financial reporting, management continues to monitor our operations, the operations of our customers and corporate partners, and government recommendations, including implementing liberal leave and work from home policies to protect our employees. Management will continue to monitor and modify internal control over financial reporting as appropriate under these circumstances.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We have provided information about legal proceedings in which we are involved in the unaudited condensed consolidated financial statements in Part I, Item 1, which is incorporated herein by reference. In addition to the matters disclosed in Part I, Item 1, we are a party to various investigations, lawsuits, claims, and other legal proceedings that arise in the ordinary course of our business. Based on information available to us, we do not believe at this time that any of such other matters will individually, or in the aggregate, have a material adverse effect on our financial condition, results of operations, or cash flows. For further information on the risks we face from existing and future investigations, lawsuits, claims, and other legal proceedings, please see "Risk Factors" in Item 1A below.

Item 1A. Risk Factors

In addition to the other information set forth in this Quarterly Report on Form 10–Q, you should carefully consider the factors discussed in Part I, Item 1A Risk Factors in the 2019 Form 10–K, which could materially affect our business, financial condition,or future results. The COVID-19 pandemic has heightened, and in some cases manifested, certain of the risks we normally face in operating our business, including those disclosed in the 2019

Form 10-K, and the risk factor disclosure in the Form 10-K is qualified by the information relating to COVID-19

included in this Quarterly Report on Form 10-Q, including the new risk factor set forth below. There have been no other material changes from the risk factors previously disclosed in the 2019 Form 10-K.

We face various risks related to health epidemics, pandemics and similar outbreaks, which may have material adverse effects on our business, financial position, results of operations and/or cash flows.

We face various risks related to health epidemics, pandemics and similar outbreaks, including the global outbreak of coronavirus disease 2019 (“COVID-19”). Such risks include disruptions or restrictions on our employees’ ability to work effectively, as well as temporary closures of our facilities or the facilities of our customers or suppliers. We have recently experienced higher employee absentee rates due to the COVID-19 pandemic, but we are unable at this time to determine the impacts on our operations or financial results. Higher absentee rates attributable to the COVID-19 pandemic, including because of illness, quarantines, government actions, facility closures or other restrictions in connection with the COVID-19 pandemic, will likely impact performance on our contracts and increase our costs. These cost increases may not be fully recoverable under our contracts or adequately covered by insurance, which could impact our profitability.

It is possible that the continued spread of COVID-19 could also further cause disruption in our supply chain; cause delay, or limit the ability of, the U.S. Government and other customers to perform, including in making timely payments to us; impact investment performance; and cause other unpredictable events. In addition, the continued spread of COVID-19 has led to disruption and volatility in the global capital markets, which increases the cost of capital and adversely impacts access to capital.

We continue to work with our stakeholders (including customers, employees, suppliers and local communities) to address responsibly this global pandemic. We continue to monitor the situation, to assess further possible implications to our business, supply chain and customers, and to take actions in an effort to mitigate adverse consequences.

The extent to which COVID-19 will impact our business, results of operations and financial condition is highly uncertain and will depend upon future developments. As a result, we cannot at this time predict the impact of the COVID-19 pandemic, but it could have a material adverse effect on our business, financial position, results of operations and/or cash flows.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In November 2019, the Company's board of directors authorized an increase in the Company's stock repurchase program from $2.2 billion to $3.2 billion and an extension of the term of the program to October 31, 2024. Repurchases are made from time to time at management's discretion in accordance with applicable federal securities laws. All repurchases of HII common stock have been recorded as treasury stock. The following table summarizes information relating to purchases made by or on behalf of the Company of shares of the Company's common stock during the quarter ended March 31, 2020.

Period	Total Number of Shares Purchased1	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in millions)2
January 1, 2020 to January 31, 2020	20,531	$	268.58	20,531	$	1,220.4
February 1, 2020 to February 29, 2020	91,150	229.22		91,150	1,199.5
March 1, 2020 to March 31, 2020	335,595	210.02		279,223	1,142.3
Total	447,276	$	216.63	390,904	$	1,142.3

¹ We purchased an aggregate of 390,904 shares of our common stock in the open market pursuant to our repurchase program and 56,372 shares were transferred to us from employees in satisfaction of minimum tax withholding obligations associated with the vesting of restricted performance stock rights during the period.

² From the stock repurchase program's inception through March 31, 2020, we purchased 12,850,860 shares at an average price of $160.12 per share for a total of $2.1 billion.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

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Item 6. Exhibits

3.1	Restated Certificate of Incorporation of Huntington Ingalls Industries, Inc., filed March 30, 2011 (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on April 4, 2011).
3.2	Certificate of Amendment to the Restated Certificate of Incorporation of Huntington Ingalls Industries, Inc., dated May 28, 2014 (incorporated by reference to Exhibit 3.2 to the Company's Quarterly Report on Form 10-Q filed on August 7, 2014).
3.3	Certificate of Amendment to the Restated Certificate of Incorporation of Huntington Ingalls Industries, Inc., dated May 21, 2015 (incorporated by reference to Exhibit 3.3 to the Company's Quarterly Report on Form 10-Q filed on August 6, 2015).
3.4	Restated Bylaws of Huntington Ingalls Industries, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on February 1, 2016).
4.1	Indenture by and among Huntington Ingalls Industries, Inc., the guarantors party thereto, and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on March 30, 2020).
31.1	Certification of the Chief Executive Officer Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certificate of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certificate of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following financial information for the Company, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Operations and Comprehensive Income, (ii) the Condensed Consolidated Statements of Financial Position, (iii) the Condensed Consolidated Statements of Cash Flows, (iv) the Condensed Consolidated Statements of Changes in Equity, and (v) the Notes to Condensed Consolidated Financial Statements.
104	The cover page from the Company’s Quarterly Report on Form 10-Q, formatted in Inline XBRL and contained in Exhibit 101.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date:	May 7, 2020	Huntington Ingalls Industries, Inc.
		(Registrant)
		By:	/s/ Nicolas Schuck
			Nicolas Schuck
			Corporate Vice President, Controller and Chief Accounting Officer
			(Duly Authorized Officer and Principal Accounting Officer)

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EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

EXCHANGE ACT RULE 13A-14(A)/15D-14(A)

AS ADOPTED PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, C. Michael Petters, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Huntington Ingalls Industries, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 7, 2020

/s/ C. Michael Petters

C. Michael Petters

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

EXCHANGE ACT RULE 13A-14(A)/15D-14(A)

AS ADOPTED PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Christopher D. Kastner, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Huntington Ingalls Industries, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 7, 2020

/s/ Christopher D. Kastner

Christopher D. Kastner

Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Huntington Ingalls Industries, Inc. (the “company”) on Form 10-Q for the period ended March 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, C. Michael Petters, the President and Chief Executive Officer of the company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the company.

Date:  May 7, 2020

/s/ C. Michael Petters

C. Michael Petters

President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Huntington Ingalls Industries, Inc. (the “company”) on Form 10-Q for the period ended March 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Christopher D. Kastner, Corporate Vice President, Business Management and Chief Financial Officer of the company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the company.

Date: May 7, 2020  

/s/ Christopher D. Kastner

Christopher D. Kastner

Executive Vice President and Chief Financial Officer

XML

Description of Business (Narrative) (Details)	3 Months Ended
	Mar. 31, 2020 segments
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of reportable segments	3

XML

Segment Information (Tables)

3 Months Ended

Mar. 31, 2020

Segment Reporting [Abstract]

Segment operating results

The following table presents segment results for the three months ended March 31, 2020 and 2019:

	Three Months Ended March 31
($ in millions)	2020		2019
Sales and Service Revenues
Ingalls	$	629	$	584
Newport News	1,341		1,279
Technical Solutions	317		240
Intersegment eliminations	(24)		(23)
Sales and service revenues	$	2,263	$	2,080
Operating Income
Ingalls	$	68	$	46
Newport News	95		81
Technical Solutions	(7)		2
Segment operating income	156		129
Non-segment factors affecting operating income (loss)
Operating FAS/CAS Adjustment	63		34
Non-current state income taxes	(4)		(2)
Operating income	$	215	$	161

Segment assets

The following table presents the Company's assets by segment:

($ in millions)	March 31, 2020		December 31, 2019
Assets
Ingalls	$	1,704	$	1,618
Newport News	4,038		3,886
Technical Solutions	1,472		1,022
Corporate	401		505
Total assets	$	7,615	$	7,031

XML

Debt (Tables)

3 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

Schedule of Long-term Debt

Long-term debt consisted of the following:

($ in millions)	March 31, 2020		December 31, 2019
Senior notes due November 15, 2025, 5.000%	600		600
Senior notes due December 1, 2027, 3.483%	600		600
Mississippi economic development revenue bonds due May 1, 2024, 7.81%	84		84
Gulf opportunity zone industrial development revenue bonds due December 1, 2028, 4.55%	21		21
Revolving credit facility borrowings	380		—
Less unamortized debt issuance costs	(18)		(19)
Total long-term debt	$	1,667	$	1,286

XML

Inventoried Costs, Net

3 Months Ended

Mar. 31, 2020

Inventory Disclosure [Abstract]

Inventoried Costs, Net

INVENTORIED COSTS, NET

Inventoried costs were comprised of the following:

($ in millions)	March 31, 2020		December 31, 2019
Production costs of contracts in process1	$	37	$	30
Raw material inventory	117		106
Total inventoried costs, net	$	154	$	136

¹ Includes amounts capitalized pursuant to applicable provisions of the FAR and CAS.

XML

Stockholders' Equity

3 Months Ended

Mar. 31, 2020

Stockholders' Equity Note [Abstract]

Stockholders' Equity [Text Block]

STOCKHOLDERS' EQUITY

Treasury Stock - In November 2019, the Company's board of directors authorized an increase in the Company's stock repurchase program from $2.2 billion to $3.2 billion and an extension of the term of the program to October 31, 2024. Repurchases are made from time to time at management's discretion in accordance with applicable federal securities laws. For the three months ended March 31, 2020, the Company repurchased 390,904 shares at an aggregate cost of $84 million. For the three months ended March 31, 2019, the Company repurchased 183,885 shares at an aggregate cost of $36 million. For the three months ended March 31, 2019, the Company also settled for cash $48 million of shares repurchased in the prior year. The cost of purchased shares is recorded as treasury stock in the unaudited condensed consolidated statements of financial position.

Dividends - The Company declared cash dividends per share of $1.03 and $0.86 for the three months ended March 31, 2020 and 2019, respectively. The Company paid cash dividends totaling $42 million and $36 million for the three months ended March 31, 2020 and 2019, respectively.

Accumulated Other Comprehensive Loss - Other comprehensive income (loss) refers to gains and losses recorded as an element of stockholders' equity but excluded from net earnings. The accumulated other comprehensive loss as of March 31, 2020, was comprised of unamortized benefit plan costs of $1,390 million and other comprehensive loss items of $4 million. The accumulated other comprehensive loss as of December 31, 2019, was comprised of unamortized benefit plan costs of $1,407 million and other comprehensive loss items of $2 million.

The changes in accumulated other comprehensive income (loss) by component for the three months ended March 31, 2020 and 2019, were as follows:

($ in millions)	Benefit Plans		Other		Total
Balance as of December 31, 2018	$	(1,283)	$	(5)	$	(1,288)
Amounts reclassified from accumulated other comprehensive loss
Amortization of net actuarial loss1	25		—		25
Tax expense for items of other comprehensive income	(6)		—		(6)
Net current period other comprehensive income	19		—		19
Balance as of March 31, 2019	$	(1,264)	$	(5)	$	(1,269)
Balance as of December 31, 2019	(1,407)		(2)		(1,409)
Other comprehensive income (loss) before reclassifications	—		(2)		(2)
Amounts reclassified from accumulated other comprehensive loss
Amortization of prior service credit1	(2)		—		(2)
Amortization of net actuarial loss1	25		—		25
Tax expense for items of other comprehensive income	(6)		—		(6)
Net current period other comprehensive income (loss)	17		(2)		15
Balance as of March 31, 2020	$	(1,390)	$	(4)	$	(1,394)

¹ These accumulated comprehensive loss components are included in the computation of net periodic benefit cost. See Note 17: Employee Pension and Other Postretirement Benefits. The tax benefit associated with amounts reclassified from accumulated other comprehensive loss for each of the three months ended March 31, 2020 and 2019, was $6 million.

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Stock Compensation Plans Compensation and Unrecognized Compensation Expense (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Compensation Expense [Abstract]
Share-based Payment Arrangement, Expense	$ 7.0	$ 5.0
Tax benefits for stock-based compensation	1.0	1.0
Stock Awards [Member]
Compensation Expense [Abstract]
Employee Service Share-Based Compensation, Tax Benefit Realized From Issuance Of Instruments Other Than Options	$ 2.0	$ 5.0
Restricted Stock [Member]
Unrecognized Compensation Expense [Abstract]
Unrecognized compensation expense, period for recognition	1 year 2 months 12 days
Restricted performance stock rights
Unrecognized Compensation Expense [Abstract]
Unrecognized compensation expense	$ 48.0
Unrecognized compensation expense, period for recognition	1 year 9 months 18 days
Maximum | Restricted Stock [Member]
Unrecognized Compensation Expense [Abstract]
Unrecognized compensation expense	$ 1.0

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Goodwill (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Goodwill
Accumulated goodwill impairment losses	$ 2,906	$ 2,906
Ingalls
Goodwill
Accumulated goodwill impairment losses	1,568	1,568
Newport News
Goodwill
Accumulated goodwill impairment losses	1,187	1,187
Technical Solutions
Goodwill
Accumulated goodwill impairment losses	151	$ 151
Goodwill, Translation and Purchase Accounting Adjustments	$ 35

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Segment Assets (Table) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Segment Reporting Information
Assets	$ 7,615	$ 7,031
Ingalls
Segment Reporting Information
Assets	1,704	1,618
Newport News
Segment Reporting Information
Assets	4,038	3,886
Technical Solutions
Segment Reporting Information
Assets	1,472	1,022
Corporate
Segment Reporting Information
Assets	$ 401	$ 505

XML

Schedule of Long-term debt (Table) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Long-term debt	$ 1,667	$ 1,286
Less unamortized debt issuance costs	(18)	(19)
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Long-term debt	380
Less unamortized debt issuance costs	(6)	(7)
Senior Notes
Debt Instrument [Line Items]
Less unamortized debt issuance costs	(12)	(12)
Senior Notes | Senior Notes Due November 15, 2025, 5.000%
Debt Instrument [Line Items]
Long-term debt	$ 600	$ 600
Debt Instrument, Interest Rate, Stated Percentage	5.00%	5.00%
Senior Notes | Senior notes due December 1, 2027, 3.483% [Member]
Debt Instrument [Line Items]
Long-term debt	$ 600	$ 600
Debt Instrument, Interest Rate, Stated Percentage	3.483%	3.483%
Bonds | Mississippi Economic Development Revenue Bonds Due May 1, 2024, 7.81%
Debt Instrument [Line Items]
Long-term debt	$ 84	$ 84
Debt Instrument, Interest Rate, Stated Percentage	7.81%	7.81%
Bonds | Gulf Opportunity Zone Industrial Development Revenue Bonds Due December 1, 2028, 4.55%
Debt Instrument [Line Items]
Long-term debt	$ 21	$ 21
Debt Instrument, Interest Rate, Stated Percentage	4.55%	4.55%

XML

Leases Reconciliation of Operating Lease Liability Recognized in Statement of Financial Position (Table) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Leases [Abstract]
Short-term operating lease liabilities	$ 34	$ 35
Lease liabilities included in liabilities held for sale	29	16
Long-term operating lease liabilities	153	164
Total operating lease liabilities	$ 216	$ 215

XML

Debt (Narrative) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Fair value of long term debt	$ 1,687	$ 1,379
Long-term Debt, Maturities, Repayments of Principal in Year Three	380
Long-term Debt, Maturities, Repayments of Principal in Year Five	$ 84

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Condensed Consolidated Statements Of Cash Flows (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Operating Activities
Net earnings (loss)	$ 172	$ 118
Adjustments to reconcile to net cash provided by (used in) operating activities
Depreciation	47	41
Amortization of purchased intangibles	11	11
Amortization of debt issuance costs	1	1
Provision for doubtful accounts		(2)
Stock-based compensation	7	5
Deferred income taxes	18	16
Loss (gain) on investments in marketable securities	16	(7)
Change in
Accounts Receivable	(93)	(112)
Contract assets	(140)	(229)
Inventoried costs	(6)	(2)
Prepaid expenses and other assets	(1)	(3)
Accounts payable and accruals	46	147
Retiree benefits	(13)	25
Other non-cash transactions, net	3	2
Net cash provided by (used in) operating activities	68	11
Investing Activities
Capital expenditure additions	(71)	(110)
Grant proceeds for capital expenditures	5	36
Acquisitions of businesses, net of cash received	(378)	(195)
Net cash provided by (used in) investing activities	(444)	(269)
Financing Activities
Proceeds from revolving credit facility borrowings	385	1,179
Repayment of revolving credit facility borrowings	(5)	(967)
Net borrowings on commercial paper	88
Dividends paid	(42)	(36)
Repurchases of common stock	(84)	(84)
Employee taxes on certain share-based payment arrangements	(13)	(23)
Net cash provided by (used in) financing activities	329	69
Change in cash and cash equivalents	(47)	(189)
Cash and cash equivalents, beginning of period	75	240
Cash and cash equivalents, end of period	28	51
Supplemental Cash Flow Disclosure
Cash paid for income taxes	2
Cash paid for interest	1
Non-Cash Investing and Financing Activities
Capital expenditures accrued in accounts payable	$ 10	$ 34

XML

Segment Operating Results (Table) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Sales and Service Revenues
Sales and service revenue	$ 2,263	$ 2,080
Operating Income (Loss)
Operating income (loss)	215	161
Operating Segments
Operating Income (Loss)
Operating income (loss)	156	129
Ingalls
Sales and Service Revenues
Sales and service revenue	629	584
Operating Income (Loss)
Operating income (loss)	68	46
Newport News
Sales and Service Revenues
Sales and service revenue	1,341	1,279
Operating Income (Loss)
Operating income (loss)	95	81
Technical Solutions
Sales and Service Revenues
Sales and service revenue	317	240
Operating Income (Loss)
Operating income (loss)	(7)	2
Intersegment Elimination
Sales and Service Revenues
Sales and service revenue	(24)	(23)
Non-segment factors affecting operating income (loss)
Non-segment factors affecting operating income (loss)
Operating FAS/CAS Adjustment	63	34
Non-current state income taxes	$ (4)	$ (2)

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2020	May 01, 2020
Document And Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2020
Document Transition Report	false
Entity File Number	001-34910
Entity Registrant Name	HUNTINGTON INGALLS INDUSTRIES, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	90-0607005
Entity Address, Address Line One	4101 Washington Avenue
Entity Address, City or Town	Newport News
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	23607
City Area Code	757
Local Phone Number	380-2000
Title of 12(b) Security	Common Stock
Trading Symbol	HII
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		40,474,252
Amendment Flag	false
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2020
Entity Central Index Key	0001501585
Current Fiscal Year End Date	--12-31

XML

Basis of Presentation

3 Months Ended

Mar. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

BASIS OF PRESENTATION

Principles of Consolidation - The unaudited condensed consolidated financial statements of HII and its subsidiaries have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") and the instructions to Form 10-Q promulgated by the Securities and Exchange Commission ("SEC"). All intercompany transactions and balances are eliminated in consolidation. For classification of current assets and liabilities related to its long-term production contracts, the Company uses the duration of these contracts as its operating cycle, which is generally longer than one year. Additionally, certain prior year amounts have been reclassified to conform to the current year presentation.

These unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature considered necessary by management for a fair presentation of the unaudited condensed consolidated financial position, results of operations, and cash flows and should be read in conjunction with the Company's audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019.

The quarterly information is labeled using a calendar convention; that is, first quarter is consistently labeled as ending on March 31, second quarter as ending on June 30, and third quarter as ending on September 30. It is management's long-standing practice to establish interim closing dates using a "fiscal" calendar, which requires the businesses to close their books on a Friday near these quarter-end dates in order to normalize the potentially disruptive effects of quarterly closings on business processes. The effects of this practice only exist for interim periods within a reporting year.

Accounting Estimates - The preparation of the Company's consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Estimates have been prepared on the basis of the most current and best available information, and actual results could differ materially from those estimates.

Additionally, while the Company cannot reasonably estimate the effects of the global outbreak of coronavirus disease 2019 (“COVID-19”) at this time, it is reasonably possible that COVID-19 could cause changes to estimates with respect to contract costs and revenue recognition, effective income tax rates, and the fair values of the Company’s long-lived assets, financial instruments, intangible assets, and goodwill recorded at our reporting units. There was no material impact included in the Company's estimates as of March 31, 2020, as a result of the COVID-19 pandemic. This position was supported by the assumption that the Company will recover COVID-19 related costs under its U.S. Government contracts based on government relief actions such as the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") and U.S. Department of Defense ("DoD") guidance. There

remains uncertainty regarding the process to recover COVID-19 related costs, which may result in reimbursement of less than the full costs incurred by the Company. As a result, the Company is not able to estimate any reasonably possible losses resulting from the impact of COVID-19.

Government Grants - The Company recognizes incentive grants, inclusive of transfers of depreciable assets, from federal, state, and local governments at fair value upon compliance with the conditions of their receipt and reasonable assurance that the grants will be received or the depreciable assets will be transferred. Grants in recognition of specific expenses are recognized in the same period as an offset to those related expenses. Grants related to depreciable assets are recognized over the periods and in the proportions in which depreciation expense on those assets is recognized.

For the three months ended March 31, 2020, the Company recognized cash grant benefits of approximately $5 million in other long-term liabilities in the unaudited condensed consolidated statements of financial position. For the three months ended March 31, 2019, the Company recognized cash grant benefits of approximately $36 million in other long-term liabilities in the unaudited condensed consolidated statements of financial position.

Fair Value of Financial Instruments - Except for the Company's long-term debt, the carrying amounts of the Company's financial instruments recorded at historical cost approximate fair value due to the short-term nature of the instruments and low credit risk associated with the respective counterparties.

The Company maintains multiple grantor trusts to fund certain non-qualified pension plans. These trusts were valued at $137 million and $147 million as of March 31, 2020, and December 31, 2019, respectively, and are presented within miscellaneous other assets within the unaudited condensed consolidated statements of financial position. These trusts consist primarily of investments in marketable securities, which are held at fair value within Level 1 of the fair value hierarchy.

Loan Receivable - The Company holds a loan receivable in connection with a seller financed transaction involving its previously owned Avondale shipyard facility. The receivable is carried at amortized cost in the amount of $40 million, net of a $8 million loan discount, which approximates fair value and is recorded in miscellaneous other assets on the unaudited condensed consolidated statements of financial position. Interest income is recognized on an accrual basis using the effective yield method. The discount is accreted into income using the effective yield method over the estimated life of the loan receivable.

Related Party Transactions - The Company had $84 million outstanding under Industrial Revenue Bonds issued by the Mississippi Business Finance Corporation as of each of March 31, 2020, and December 31, 2019. Prior to the Company's spinoff from Northrop Grumman Corporation, repayment of principal and interest was guaranteed by Northrop Grumman Systems Corporation. The guaranty remains in effect, and the Company has agreed to indemnify Northrop Grumman Systems Corporation for any losses related to the guaranty pursuant to the Separation and Distribution Agreement with Northrop Grumman Corporation.

XML

Acquisitions (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018
Business Acquisition [Line Items]
Payments to Acquire Businesses, Net of Cash Acquired	$ 378	$ 195
Goodwill arising from acquisitions	310
Goodwill, adjustments	(35)
Hydroid, Inc. [Member]
Business Acquisition [Line Items]
Payments to Acquire Businesses, Net of Cash Acquired	378
Cash acquired	2
Preliminary intangible assets and goodwill acquired	$ 310
Fulcrum IT Services, LLC
Business Acquisition [Line Items]
Payments to Acquire Businesses, Net of Cash Acquired			$ 195
Cash acquired			1
Goodwill arising from acquisitions			133
Intangible Assets			49
Goodwill, adjustments			1
G2, Inc.
Business Acquisition [Line Items]
Payments to Acquire Businesses, Net of Cash Acquired				$ 77
Cash acquired				2
Goodwill arising from acquisitions				46
Intangible Assets				$ 20
Goodwill, adjustments			$ 7

XML

Earnings Per Share (Narrative) (Details) - shares shares in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Restricted performance stock rights
Antidilutive Securities Excluded from Computation of Earnings Per Share
Number of shares from stock awards excluded from computation of earnings per share	0.3	0.3

XML

Employee Pension And Other Postretirement Benefits

3 Months Ended

Mar. 31, 2020

Retirement Benefits [Abstract]

Employee Pension and Other Postretirement Benefits

EMPLOYEE PENSION AND OTHER POSTRETIREMENT BENEFITS

The Company provides eligible employees defined benefit pension plans, postretirement benefit plans, and defined contribution pension plans.

The costs of the Company's defined benefit pension plans and other postretirement benefit plans for the three months ended March 31, 2020 and 2019, were as follows:

	Three Months Ended March 31
	Pension Benefits				Other Benefits
($ in millions)	2020		2019		2020		2019
Components of Net Periodic Benefit Cost
Service cost	$	45	$	36	$	2	$	2
Interest cost	64		69		4		5
Expected return on plan assets	(121)		(102)		—		—
Amortization of prior service cost (credit)	3		5		(5)		(5)
Amortization of net actuarial loss (gain)	27		28		(2)		(3)
Net periodic benefit cost	$	18	$	36	$	(1)	$	(1)

The Company made the following contributions to its defined benefit pension plans and other postretirement benefit plans for the three months ended March 31, 2020 and 2019:

	Three Months Ended March 31
($ in millions)	2020		2019
Pension plans
Qualified minimum	$	—	$	—
Discretionary
Qualified	20		1
Non-qualified	2		2
Other benefit plans	8		7
Total contributions	$	30	$	10

For the year ending December 31, 2020, the Company expects cash contributions to its qualified defined benefit pension plans to be $205 million, all of which will be discretionary.

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Debt

3 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

Debt

DEBT

Long-term debt consisted of the following:

($ in millions)	March 31, 2020		December 31, 2019
Senior notes due November 15, 2025, 5.000%	600		600
Senior notes due December 1, 2027, 3.483%	600		600
Mississippi economic development revenue bonds due May 1, 2024, 7.81%	84		84
Gulf opportunity zone industrial development revenue bonds due December 1, 2028, 4.55%	21		21
Revolving credit facility borrowings	380		—
Less unamortized debt issuance costs	(18)		(19)
Total long-term debt	$	1,667	$	1,286

Credit Facility - The Company's credit facility with third-party lenders (the "Credit Facility") includes a revolving credit facility of $1,250 million, which may be drawn upon during a period of five years from November 22, 2017. The revolving credit facility includes a letter of credit subfacility of $500 million. 

The Credit Facility contains customary affirmative and negative covenants, as well as a financial covenant based on a maximum total leverage ratio. Each of the Company's existing and future material wholly owned domestic subsidiaries, except those that are specifically designated as unrestricted subsidiaries, are and will be guarantors under the Credit Facility. See Note 19: Subsidiary Guarantors.

As of March 31, 2020, the Company had $380 million of outstanding borrowings, $16 million in issued but undrawn letters of credit, and $854 million unutilized under the Credit Facility. The Company had unamortized debt issuance costs associated with its credit facilities of $6 million and $7 million as of March 31, 2020, and December 31, 2019, respectively.

In the second quarter of 2020, the Company entered into a new 364-day revolving credit agreement (the "364-Day Facility") with third-party lenders. The 364-Day Facility includes a revolving credit facility of $500 million, which may

be drawn upon during a period of 364 days from April 3, 2020. The revolving credit facility has a variable interest rate on outstanding borrowings based on the London Interbank Offered Rate ("LIBOR") plus a spread based upon the Company's credit rating, which may vary between 2.000% and 2.375%. The revolving credit facility also has a commitment fee rate of 0.50%.

The 364-Day Facility contains customary affirmative and negative covenants, as well as a financial covenant based on a maximum total leverage ratio. Each of the Company's existing and future material wholly owned domestic subsidiaries, except those that are specifically designated as unrestricted subsidiaries, are and will be guarantors under the 364-Day Facility.

In October 2019, the Company established an unsecured commercial paper note program, under which the Company may issue up to $1 billion of unsecured commercial paper notes. As of March 31, 2020, the Company had $88 million of outstanding commercial paper.

Senior Notes - In the second quarter of 2020, the Company issued $500 million aggregate principal amount of unregistered 3.844% senior notes due 2025 and $500 million aggregate principal amount of unregistered 4.200% senior notes due 2030, both with registration rights. The net proceeds are intended to be used for general corporate purposes, which may include debt repayments and working capital. Interest on these senior notes is payable semiannually.

The terms of the senior notes limit the Company’s ability and the ability of certain of its subsidiaries to create liens, enter into sale and leaseback transactions, sell assets, and effect consolidations or mergers.

The Company had unamortized debt issuance costs associated with its senior notes of $12 million as of each of March 31, 2020, and December 31, 2019.

The Company's debt arrangements contain customary affirmative and negative covenants. The Company was in compliance with all debt covenants during the three months ended March 31, 2020.

The estimated fair values of the Company's total long-term debt as of March 31, 2020, and December 31, 2019, were $1,687 million and $1,379 million, respectively. The fair values of the Company's long-term debt were calculated based on recent trades of the Company's debt instruments in inactive markets, which fall within Level 2 under the fair value hierarchy.

As of March 31, 2020, the aggregate amounts of principal payments due on long-term debt within the next five years consisted of $380 million due in 2022 and $84 million due in 2024.

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Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2020

Stockholders' Equity Note [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The changes in accumulated other comprehensive income (loss) by component for the three months ended March 31, 2020 and 2019, were as follows:

($ in millions)	Benefit Plans		Other		Total
Balance as of December 31, 2018	$	(1,283)	$	(5)	$	(1,288)
Amounts reclassified from accumulated other comprehensive loss
Amortization of net actuarial loss1	25		—		25
Tax expense for items of other comprehensive income	(6)		—		(6)
Net current period other comprehensive income	19		—		19
Balance as of March 31, 2019	$	(1,264)	$	(5)	$	(1,269)
Balance as of December 31, 2019	(1,407)		(2)		(1,409)
Other comprehensive income (loss) before reclassifications	—		(2)		(2)
Amounts reclassified from accumulated other comprehensive loss
Amortization of prior service credit1	(2)		—		(2)
Amortization of net actuarial loss1	25		—		25
Tax expense for items of other comprehensive income	(6)		—		(6)
Net current period other comprehensive income (loss)	17		(2)		15
Balance as of March 31, 2020	$	(1,390)	$	(4)	$	(1,394)

¹ These accumulated comprehensive loss components are included in the computation of net periodic benefit cost. See Note 17: Employee Pension and Other Postretirement Benefits. The tax benefit associated with amounts reclassified from accumulated other comprehensive loss for each of the three months ended March 31, 2020 and 2019, was $6 million.

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Commitments and Contingencies (Narrative) (Details) $ in Millions	3 Months Ended
	Mar. 31, 2020 USD ($)
Commitments and Contingencies
Entity Number of Employees	42,000
Percentage of workforce subject to Collective Bargaining Arrangements	50.00%
Number of Collective Bargaining Agreements	9
Surety Bonds Outstanding
Commitments and Contingencies
Surety bonds outstanding	$ 272
Revolving Credit Facility [Member]
Commitments and Contingencies
Letters of credit issued but undrawn	$ 16
Minimum
Commitments and Contingencies
Period Covered by Collective Bargaining Agreements	3 years
Maximum
Commitments and Contingencies
Period Covered by Collective Bargaining Agreements	5 years
Newport News
Commitments and Contingencies
Number of Collective Bargaining Agreements	4
Ingalls
Commitments and Contingencies
Number of Collective Bargaining Agreements	5
Technical Solutions
Commitments and Contingencies
Entity Number of Employees	50
United Steelworkers [Member] | Newport News
Commitments and Contingencies
Percentage of workforce subject to Collective Bargaining Arrangements	50.00%

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Investigations, Claims, and Litigation (Narrative) (Details) - Bolivarian Republic of Venezuela $ in Millions	3 Months Ended
	Mar. 31, 2020 USD ($) frigates
Loss Contingencies
Number of Foreign Built Frigates | frigates	2
Arbitral statement claim	$ 151
Litigation counter claim [Member]
Loss Contingencies
Arbitral statement claim	$ 22

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Description of Business

3 Months Ended

Mar. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business

DESCRIPTION OF BUSINESS

Huntington Ingalls Industries, Inc. ("HII" or the "Company") is one of America’s largest military shipbuilding companies and a provider of professional services to partners in government and industry. HII is organized into three reportable segments: Ingalls Shipbuilding ("Ingalls"), Newport News Shipbuilding ("Newport News"), and Technical Solutions. For more than a century, the Company's Ingalls segment in Mississippi and Newport News segment in Virginia have built more ships in more ship classes than any other U.S. naval shipbuilder. The Technical Solutions segment provides a range of services to the governmental, energy, and oil and gas markets.

HII conducts most of its business with the U.S. Government, primarily the Department of Defense ("DoD"). As prime contractor, principal subcontractor, team member, or partner, the Company participates in many high-priority U.S. defense technology programs. Through its Ingalls segment, HII is a builder of amphibious assault and expeditionary ships for the U.S. Navy, the sole builder of National Security Cutters for the U.S. Coast Guard, and one of only two companies that builds the Navy's current fleet of Arleigh Burke class (DDG 51) destroyers. Through its Newport News segment, HII is the nation's sole designer, builder, and refueler of nuclear-powered aircraft carriers, and one of only two companies currently designing and building nuclear-powered submarines for the U.S. Navy. The Technical Solutions segment provides a wide range of professional services, including fleet support, mission driven innovative solutions ("MDIS"), nuclear and environmental, and oil and gas services.

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Basis of Presentation (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Deferred gain on receipt of property	$ 5	$ 36
Assets held in rabbi trusts	137		$ 147
Financing Receivable, after Allowance for Credit Loss	40
Receivable with Imputed Interest, Discount	8
Related Party Transaction [Line Items]
Long-term Debt	1,667		1,286
Mississippi Economic Development Revenue Bonds Due May 1, 2024, 7.81% | Bonds
Related Party Transaction [Line Items]
Long-term Debt	$ 84		$ 84

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Basic and Diluted Earnings Per Share (Table) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Earnings Per Share, Basic and Diluted [Abstract]
Net earnings (loss)	$ 172	$ 118
Weighted-average common shares outstanding (in shares)	40.7	41.4
Dilutive weighted-average common shares outstanding (in shares)	40.7	41.4
Earnings (loss) per share - basic (in dollars per share)	$ 4.23	$ 2.85
Earnings (loss) per share - diluted (in dollars per share)	$ 4.23	$ 2.85

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Condensed Consolidated Statements Of Financial Position (Unaudited) (Parenthetical) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Accounts Receivable, Allowance for Credit Loss, Current	$ 3	$ 3
Accumulated depreciation	1,939	1,961
Accumulated amortization	$ 610	$ 599
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	150,000,000	150,000,000
Common stock, shares issued (in shares)	53,300,000	53,200,000
Common stock, shares outstanding (in shares)	40,500,000	40,800,000

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Segment Information (Narrative) (Details)	3 Months Ended
	Mar. 31, 2020 segments
Segment Reporting [Abstract]
Number of reportable segments	3

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2020

Earnings Per Share [Abstract]

Calculation of Basic and Diluted Earnings Per Share

Basic and diluted earnings per common share were calculated as follows:

	Three Months Ended March 31
(in millions, except per share amounts)	2020		2019
Net earnings	$	172	$	118
Weighted-average common shares outstanding	40.7		41.4
Net dilutive effect of stock awards	—		—
Dilutive weighted-average common shares outstanding	40.7		41.4
Earnings per share - basic	$	4.23	$	2.85
Earnings per share - diluted	$	4.23	$	2.85

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Stock Compensation Plans

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

Stock Compensation Plans

STOCK COMPENSATION PLANS

During the three months ended March 31, 2020 and 2019, the Company issued new stock awards as follows:

Restricted Performance Stock Rights - For the three months ended March 31, 2020, the Company granted approximately 0.1 million RPSRs at a weighted average share price of $229.42. These rights are subject to cliff vesting on December 31, 2022. For the three months ended March 31, 2019, the Company granted approximately 0.1 million RPSRs at a weighted average share price of $210.24. These rights are subject to cliff vesting on December 31, 2021. All of the RPSRs are subject to the achievement of performance-based targets at the end of the respective vesting periods and will ultimately vest between 0% and 200% of grant date value.

For the three months ended March 31, 2020 and 2019, 0.1 million and 0.3 million of stock awards vested, respectively, of which approximately 0.1 million each year were transferred to the Company from employees in satisfaction of minimum tax withholding obligations.

The following table summarizes the status of the Company's outstanding stock awards as of March 31, 2020:

	Stock Awards (in thousands)	Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Contractual Term (in years)
Total stock awards	391	$	205.78	1.5

Compensation Expense

The Company recorded stock-based compensation for the value of awards granted to Company employees and non-employee members of the board of directors for the three months ended March 31, 2020 and 2019, of $7 million and $5 million, respectively.

The Company recorded tax benefits related to stock awards of $1 million for the three months ended March 31, 2020 and 2019. The Company recognized tax benefits associated with the issuance of stock in settlement of stock awards for the three months ended March 31, 2020 and 2019, of $2 million and $5 million, respectively.

Unrecognized Compensation Expense

As of March 31, 2020, the Company had less than $1 million of unrecognized compensation expense associated with Restricted Stock Rights granted in 2019 and 2018, which will be recognized over a weighted average period of 1.2 years, and $48 million of unrecognized compensation expense associated with RPSRs granted in 2020, 2019, and 2018, which will be recognized over a weighted average period of 1.8 years.

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Investigations, Claims, and Litigation

3 Months Ended

Mar. 31, 2020

Investigations, Claims, And Litigation [Abstract]

Investigations, Claims, And Litigation

INVESTIGATIONS, CLAIMS, AND LITIGATION

The Company is involved in legal proceedings before various courts and administrative agencies, and is periodically subject to government examinations, inquiries and investigations. Pursuant to FASB Accounting Standards Codification 450 Contingencies, the Company has accrued for losses associated with investigations, claims, and litigation when, and to the extent that, loss amounts related to the investigations, claims, and litigation are probable and can be reasonably estimated. The actual losses that might be incurred to resolve such investigations, claims, and litigation may be higher or lower than the amounts accrued. For matters where a material loss is probable or reasonably possible and the amount of loss cannot be reasonably estimated, but the Company is able to reasonably estimate a range of possible losses, the Company will disclose such estimated range in these notes. This estimated range is based on information currently available to the Company and involves elements of judgment and significant uncertainties. Any estimated range of possible loss does not represent the Company's maximum possible loss exposure. For matters as to which the Company is not able to reasonably estimate a possible loss or range of loss, the Company will indicate the reasons why it is unable to estimate the possible loss or range of loss. For matters not specifically described in these notes, the Company does not believe, based on information currently available to it, that it is reasonably possible that the liabilities, if any, arising from such investigations, claims, and litigation will have a material effect on its consolidated financial position, results of operations, or cash flows. The Company has, in certain cases, provided disclosure regarding certain matters for which the Company believes at this time that the likelihood of material loss is remote.

False Claims Act Complaint - In 2016, the Company was made aware that it is a defendant in a qui tam False Claims Act lawsuit pending in the U.S. District Court for the Middle District of Florida related to the Company’s

purchases of allegedly non-conforming parts from a supplier for use in connection with U.S. Government contracts. In August 2019, the Department of Justice (“DoJ”) declined to intervene in the lawsuit, and the lawsuit was unsealed. Depending on the outcome of the lawsuit, the Company could be subject to civil penalties, damages, and/or suspension or debarment from future U.S. Government contracts, which could have a material adverse effect on its consolidated financial position, results of operations, or cash flows. The Company recently filed a motion to dismiss the complaint and has not had an opportunity to engage in any discovery related to the issues set forth in the complaint. At this early stage, the Company currently is unable to estimate an amount or range of reasonably possible loss or to express an opinion regarding the ultimate outcome.

U.S. Government Investigations and Claims - Departments and agencies of the U.S. Government have the authority to investigate various transactions and operations of the Company, and the results of such investigations may lead to administrative, civil, or criminal proceedings, the ultimate outcome of which could be fines, penalties, repayments or compensatory, treble, or other damages. U.S. Government regulations provide that certain findings against a contractor may also lead to suspension or debarment from future U.S. Government contracts or the loss of export privileges. Any suspension or debarment would have a material effect on the Company because of its reliance on government contracts.

Asbestos Related Claims - HII and its predecessors-in-interest are defendants in a longstanding series of cases that have been and continue to be filed in various jurisdictions around the country, wherein former and current employees and various third parties allege exposure to asbestos containing materials while on or associated with HII premises or while working on vessels constructed or repaired by HII. The cases allege various injuries, including those associated with pleural plaque disease, asbestosis, cancer, mesothelioma, and other alleged asbestos related conditions. In some cases, several of HII's former executive officers are also named as defendants. In some instances, partial or full insurance coverage is available to the Company for its liability and that of its former executive officers. The costs to resolve cases during the three months ended March 31, 2020 and 2019, were immaterial individually and in the aggregate. The Company’s estimate of asbestos-related liabilities is subject to uncertainty because liabilities are influenced by numerous variables that are inherently difficult to predict. Key variables include the number and type of new claims, the litigation process from jurisdiction to jurisdiction and from case to case, reforms made by state and federal courts, and the passage of state or federal tort reform legislation. Although the Company believes the ultimate resolution of current cases will not have a material effect on its consolidated financial position, results of operations, or cash flows, it cannot predict what new or revised claims or litigation might be asserted or what information might come to light and can, therefore, give no assurances regarding the ultimate outcome of asbestos related litigation.

Other Litigation - In March 2019, a new dry dock being transported for delivery to Ingalls by a heavy lift ship struck an Ingalls work barge, which in turn was pushed into Delbert D. Black (DDG 119) causing damage to Delbert D. Black (DDG 119), the work barge, and the new dry dock. At the time of the incident, responsibility for the new dry dock remained with the builder and the transport company. Repair work on Delbert D. Black (DDG 119) was completed at U.S. Navy direction. The Company is working with the U.S. Navy to ascertain whether third parties will pay for the repairs to Delbert D. Black (DDG 119) or whether the repairs will be paid under the builder's risk insurance included in the Delbert D. Black (DDG 119) contract. Claims were tendered to the Company's insurers, and the Company has received all outstanding claim proceeds. In April 2019, the Company filed suit in the U.S. District Court for the Southern District of Mississippi seeking, among other relief, damages from negligent third parties. Based on information currently available, management believes it will collect sufficient funds from one or more third parties to compensate for the resulting direct and consequential damages, but failure to collect sufficient funds or the length of time required to collect such funds could result in a material effect on the Company’s financial position, results of operations, or cash flows.

The Company and its predecessor-in-interest have been in litigation with the Bolivarian Republic of Venezuela (the "Republic") since 2002 over a contract for the repair, refurbishment, and modernization at Ingalls of two foreign-built frigates. The case proceeded towards arbitration, then appeared to settle favorably, but the settlement was overturned in court and the matter returned to litigation. In March 2014, the Company filed an arbitral statement of claim asserting breaches of the contract. In July 2014, the Republic filed a statement of defense in the arbitration denying all the Company’s allegations and a counterclaim alleging late redelivery of the frigates, unfinished work, and breach of warranty. In February 2018, the arbitral tribunal awarded the Company approximately $151 million on its claims and awarded the Republic approximately $22 million on its counterclaims. The Company is seeking to enforce and execute upon the award in multiple jurisdictions. No assurances can be provided regarding the ultimate resolution of this matter.

The Company is party to various other claims, legal proceedings and investigations that arise in the ordinary course of business, including U.S. Government investigations that could result in administrative, civil, or criminal proceedings involving the Company. The Company is a contractor with the U.S. Government, and such proceedings can therefore include False Claims Act allegations against the Company. Although the Company believes that the resolution of these other claims, legal proceedings and investigations will not have a material effect on its consolidated financial position, results of operations, or cash flows, the Company cannot predict what new or revised claims or litigation might be asserted or what information might come to light and can, therefore, give no assurances regarding the ultimate outcome of these matters.

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Revenue (Tables)

3 Months Ended

Mar. 31, 2020

Disaggregation of Revenue [Abstract]

Disaggregation of Revenue [Table Text Block]

The following tables present revenues on a disaggregated basis, in a manner that reconciles with the Company's reportable segment disclosures, for the following categories: product versus service type, customer type, contract type, and major program. Certain prior year amounts have been reclassified. See Note 8: Segment Information. The Company believes that this level of disaggregation provides investors with information to evaluate the Company’s financial performance and provides the Company with information to make capital allocation decisions in the most appropriate manner.

	Three Months Ended March 31, 2020
($ in millions)	Ingalls		Newport News		Technical Solutions		Intersegment Eliminations		Total
Revenue Type
Product sales	$	578	$	1,046	$	—	$	—	$	1,624
Service revenues	50		293		296		—		639
Intersegment	1		2		21		(24)		—
Sales and service revenues	$	629	$	1,341	$	317	$	(24)	$	2,263
Customer Type
Federal	$	628	$	1,339	$	228	$	—	$	2,195
Commercial	—		—		68		—		68
Intersegment	1		2		21		(24)		—
Sales and service revenues	$	629	$	1,341	$	317	$	(24)	$	2,263
Contract Type
Firm fixed-price	$	15	$	2	$	59	$	—	$	76
Fixed-price incentive	523		638		—		—		1,161
Cost-type	90		699		133		—		922
Time and materials	—		—		104		—		104
Intersegment	1		2		21		(24)		—
Sales and service revenues	$	629	$	1,341	$	317	$	(24)	$	2,263

	Three Months Ended March 31, 2019
($ in millions)	Ingalls		Newport News		Technical Solutions		Intersegment Eliminations		Total
Revenue Type
Product sales	$	538	$	952	$	—	$	—	$	1,490
Service revenues	46		327		217		—		590
Intersegment	—		—		23		(23)		—
Sales and service revenues	$	584	$	1,279	$	240	$	(23)	$	2,080
Customer Type
Federal	$	584	$	1,265	$	165	$	—	$	2,014
Commercial	—		14		52		—		66
Intersegment	—		—		23		(23)		—
Sales and service revenues	$	584	$	1,279	$	240	$	(23)	$	2,080
Contract Type
Firm fixed-price	$	17	$	3	$	35	$	—	$	55
Fixed-price incentive	478		453		—		—		931
Cost-type	89		823		99		—		1,011
Time and materials	—		—		83		—		83
Intersegment	—		—		23		(23)		—
Sales and service revenues	$	584	$	1,279	$	240	$	(23)	$	2,080

	Three Months Ended March 31		Three Months Ended March 31
($ in millions)	2020		2019
Major Programs
Amphibious assault ships	$	347	$	297
Surface combatants and coast guard cutters	279		286
Other	3		1
Total Ingalls	629		584
Aircraft carriers	698		713
Submarines	455		368
Other	188		198
Total Newport News	1,341		1,279
Government and energy services	253		191
Oil and gas services	64		49
Total Technical Solutions	317		240
Intersegment eliminations	(24)		(23)
Sales and service revenues	$	2,263	$	2,080

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Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill [Table Text Block]

For the three months ended March 31, 2020, the carrying amounts of goodwill changed as follows:

($ in millions)	Ingalls		Newport News		Technical Solutions		Total
Balance as of December 31, 2019	$	175	$	721	$	477	$	1,373
Acquisitions	—		—		310		310
Adjustments	—		—		(35)		(35)
Balance as of March 31, 2020	$	175	$	721	$	752	$	1,648

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Stock Compensation Plans (Tables)

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

Schedule of Status of Stock Awards

The following table summarizes the status of the Company's outstanding stock awards as of March 31, 2020:

	Stock Awards (in thousands)	Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Contractual Term (in years)
Total stock awards	391	$	205.78	1.5

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Assets and Liabilities Held for Sale

3 Months Ended

Mar. 31, 2020

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure

ASSETS AND LIABILITIES HELD FOR SALEAs of March 31, 2020, the Company determined that two asset groups within its Technical Solutions segment met the criteria to be classified as held for sale. It is the Company's intention to complete the sale of these assets within 12 months following the initial classification as assets held for sale. As a result, during the fourth quarter of 2019, the

Company recorded an impairment charge of $6 million within other, net in the consolidated statements of operations and comprehensive income. The following table summarizes the assets and liabilities classified as held for sale:

	March 31, 2020		December 31, 2019
($ in millions)
Current assets	$	94	$	74
Property, plant, and equipment	16		2
Other intangible assets, net	2		2
Goodwill	35		—
Other non-current assets	37		23
Valuation allowance	(6)		(6)
Total assets held for sale	$	178	$	95
Current liabilities	65		62
Long-term liabilities	27		15
Total liabilities held for sale	$	92	$	77

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Earnings Per Share

3 Months Ended

Mar. 31, 2020

Earnings Per Share [Abstract]

Earnings Per Share

EARNINGS PER SHARE

Basic and diluted earnings per common share were calculated as follows:

	Three Months Ended March 31
(in millions, except per share amounts)	2020		2019
Net earnings	$	172	$	118
Weighted-average common shares outstanding	40.7		41.4
Net dilutive effect of stock awards	—		—
Dilutive weighted-average common shares outstanding	40.7		41.4
Earnings per share - basic	$	4.23	$	2.85
Earnings per share - diluted	$	4.23	$	2.85

Under the treasury stock method, the Company has excluded from the diluted share amounts presented above the effects of 0.3 million Restricted Performance Stock Rights ("RPSRs") for the three months ended March 31, 2020 and 2019.

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Schedule of Status of Stock Awards (Table) (Details) shares in Thousands	3 Months Ended
	Mar. 31, 2020 $ / shares shares
Stock awards
Stock awards, outstanding | shares	391
Stock awards, weighted-average grant date fair value | $ / shares	$ 205.78
Stock awards, weighted-average remaining contractual term	1 year 6 months

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Credit Facility (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Credit Facility
Long-term Debt	$ 1,667	$ 1,286
Unamortized Debt Issuance Expense	18	19
Revolving Credit Facility
Credit Facility
Credit facility revolver	$ 1,250
Debt Instrument, Contractual Term	5 years
Long-term Debt	$ 380
Letters of credit issued but undrawn	16
Line of Credit Facility, Remaining Borrowing Capacity	854
Unamortized Debt Issuance Expense	6	$ 7
Revolving Credit Facility | Letter of Credit
Credit Facility
Credit facility revolver	$ 500
364-Day Credit Facility [Member]
Credit Facility
Debt Instrument, Description of Variable Rate Basis	LIBOR
364-Day Credit Facility [Member] | Subsequent Event [Member]
Credit Facility
Credit facility revolver	$ 500
Commitment fee, based on unused capacity	0.50%
364-Day Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum | Subsequent Event [Member]
Credit Facility
Spread on variable rate	2.00%
364-Day Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum | Subsequent Event [Member]
Credit Facility
Spread on variable rate	2.375%

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Change in Carrying Amount of Goodwill (Table) (Details) $ in Millions	3 Months Ended
	Mar. 31, 2020 USD ($)
Goodwill [Roll Forward]
Goodwill beginning balance	$ 1,373
Goodwill, acquisitions	310
Goodwill, adjustments	(35)
Goodwill ending balance	1,648
Ingalls
Goodwill [Roll Forward]
Goodwill beginning balance	175
Goodwill ending balance	175
Newport News
Goodwill [Roll Forward]
Goodwill beginning balance	721
Goodwill ending balance	721
Technical Solutions
Goodwill [Roll Forward]
Goodwill beginning balance	477
Goodwill, acquisitions	310
Goodwill, adjustments	(35)
Goodwill ending balance	$ 752

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Inventoried Costs, Net (Table) (Details) - USD ($) $ in Millions		Mar. 31, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Inventoried costs	[1]	$ 37	$ 30
Raw material inventory		117	106
Total inventoried costs, net		$ 154	$ 136

[1] Includes amounts capitalized pursuant to applicable provisions of the FAR and CAS.

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Stockholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Nov. 05, 2019	Dec. 31, 2018	Nov. 07, 2017
Stockholders' Equity [Line Items]
Amount authorized for stock repurchase program				$ 3,200		$ 2,200
Repurchased shares of treasury stock	390,904	183,885
Treasury stock activity	$ 84	$ 36
Treasury Stock Value Previously Acquired, settled for cash		$ 48
Dividends declared per share	$ 1.03	$ 0.86
Dividends paid	$ 42	$ 36
Accumulated other comprehensive income (loss)	(1,394)	(1,269)	$ (1,409)		$ (1,288)
Benefit Plans
Stockholders' Equity [Line Items]
Accumulated other comprehensive income (loss)	(1,390)	(1,264)	(1,407)		(1,283)
Other
Stockholders' Equity [Line Items]
Accumulated other comprehensive income (loss)	$ (4)	$ (5)	$ (2)		$ (5)

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Revenue (Table) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Disaggregation of Revenue [Line Items]
Sales and service revenues	$ 2,263	$ 2,080
Firm fixed-price
Disaggregation of Revenue [Line Items]
Sales and service revenues	76	55
Fixed-price incentive
Disaggregation of Revenue [Line Items]
Sales and service revenues	1,161	931
Cost-type
Disaggregation of Revenue [Line Items]
Sales and service revenues	922	1,011
Time-and-materials
Disaggregation of Revenue [Line Items]
Sales and service revenues	104	83
Federal
Disaggregation of Revenue [Line Items]
Sales and service revenues	2,195	2,014
Commercial
Disaggregation of Revenue [Line Items]
Sales and service revenues	68	66
Product [Member]
Disaggregation of Revenue [Line Items]
Sales and service revenues	1,624	1,490
Service [Member]
Disaggregation of Revenue [Line Items]
Sales and service revenues	639	590
Ingalls
Disaggregation of Revenue [Line Items]
Sales and service revenues	629	584
Intersegment	1
Ingalls | Amphibious assault ships
Disaggregation of Revenue [Line Items]
Sales and service revenues	347	297
Ingalls | Surface combatants and coast guard cutters
Disaggregation of Revenue [Line Items]
Sales and service revenues	279	286
Ingalls | Other programs
Disaggregation of Revenue [Line Items]
Sales and service revenues	3	1
Ingalls | Firm fixed-price
Disaggregation of Revenue [Line Items]
Sales and service revenues	15	17
Ingalls | Fixed-price incentive
Disaggregation of Revenue [Line Items]
Sales and service revenues	523	478
Ingalls | Cost-type
Disaggregation of Revenue [Line Items]
Sales and service revenues	90	89
Ingalls | Intersegment
Disaggregation of Revenue [Line Items]
Sales and service revenues	1
Ingalls | Federal
Disaggregation of Revenue [Line Items]
Sales and service revenues	628	584
Ingalls | Intersegment
Disaggregation of Revenue [Line Items]
Sales and service revenues	1
Ingalls | Product [Member]
Disaggregation of Revenue [Line Items]
Sales and service revenues	578	538
Ingalls | Service [Member]
Disaggregation of Revenue [Line Items]
Sales and service revenues	50	46
Newport News
Disaggregation of Revenue [Line Items]
Sales and service revenues	1,341	1,279
Intersegment	2
Newport News | Aircraft carriers
Disaggregation of Revenue [Line Items]
Sales and service revenues	698	713
Newport News | Submarines
Disaggregation of Revenue [Line Items]
Sales and service revenues	455	368
Newport News | Other programs
Disaggregation of Revenue [Line Items]
Sales and service revenues	188	198
Newport News | Firm fixed-price
Disaggregation of Revenue [Line Items]
Sales and service revenues	2	3
Newport News | Fixed-price incentive
Disaggregation of Revenue [Line Items]
Sales and service revenues	638	453
Newport News | Cost-type
Disaggregation of Revenue [Line Items]
Sales and service revenues	699	823
Newport News | Intersegment
Disaggregation of Revenue [Line Items]
Sales and service revenues	2
Newport News | Federal
Disaggregation of Revenue [Line Items]
Sales and service revenues	1,339	1,265
Newport News | Commercial
Disaggregation of Revenue [Line Items]
Sales and service revenues		14
Newport News | Intersegment
Disaggregation of Revenue [Line Items]
Sales and service revenues	2
Newport News | Product [Member]
Disaggregation of Revenue [Line Items]
Sales and service revenues	1,046	952
Newport News | Service [Member]
Disaggregation of Revenue [Line Items]
Sales and service revenues	293	327
Technical Solutions
Disaggregation of Revenue [Line Items]
Sales and service revenues	317	240
Intersegment	21	23
Technical Solutions | Government and energy services
Disaggregation of Revenue [Line Items]
Sales and service revenues	253	191
Technical Solutions | Oil and gas services
Disaggregation of Revenue [Line Items]
Sales and service revenues	64	49
Technical Solutions | Firm fixed-price
Disaggregation of Revenue [Line Items]
Sales and service revenues	59	35
Technical Solutions | Cost-type
Disaggregation of Revenue [Line Items]
Sales and service revenues	133	99
Technical Solutions | Time-and-materials
Disaggregation of Revenue [Line Items]
Sales and service revenues	104	83
Technical Solutions | Intersegment
Disaggregation of Revenue [Line Items]
Sales and service revenues	21	23
Technical Solutions | Federal
Disaggregation of Revenue [Line Items]
Sales and service revenues	228	165
Technical Solutions | Commercial
Disaggregation of Revenue [Line Items]
Sales and service revenues	68	52
Technical Solutions | Intersegment
Disaggregation of Revenue [Line Items]
Sales and service revenues	21	23
Technical Solutions | Service [Member]
Disaggregation of Revenue [Line Items]
Sales and service revenues	296	217
Intersegment Elimination
Disaggregation of Revenue [Line Items]
Sales and service revenues	(24)	(23)
Intersegment	(24)	(23)
Intersegment Elimination | Intersegment
Disaggregation of Revenue [Line Items]
Sales and service revenues	(24)	(23)
Intersegment Elimination | Intersegment
Disaggregation of Revenue [Line Items]
Sales and service revenues	$ (24)	$ (23)

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Condensed Consolidated Statements Of Changes In Equity (Unaudited) - USD ($) $ in Millions	Total	Common Stock	Additional Paid-in Capital	Retained Earnings (Deficit)	Treasury Stock	Accumulated Other Comprehensive Income (Loss)
Balance at Dec. 31, 2018	$ 1,516	$ 1	$ 1,954	$ 2,609	$ (1,760)	$ (1,288)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings (loss)	118			118
Dividends declared	(36)			(36)
Stock compensation	(18)		(18)
Other comprehensive income (loss), net of tax	19					19
Treasury stock activity	(36)				(36)
Balance at Mar. 31, 2019	1,563	1	1,936	2,691	(1,796)	(1,269)
Balance at Dec. 31, 2019	1,588	1	1,961	3,009	(1,974)	(1,409)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings (loss)	172			172
Dividends declared	(42)			(42)
Stock compensation	(6)		(6)
Other comprehensive income (loss), net of tax	15					15
Treasury stock activity	(84)				(84)
Balance at Mar. 31, 2020	$ 1,643	$ 1	$ 1,955	$ 3,139	$ (2,058)	$ (1,394)

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Condensed Consolidated Statements Of Operations and Comprehensive Income (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Sales and service revenues
Sales and service revenues	$ 2,263	$ 2,080
Cost of sales and service revenues
Income (loss) from operating investments, net	6	4
General and administrative expenses	214	171
Operating income (loss)	215	161
Other income (expense)
Interest expense	(16)	(16)
Non-operating retirement benefit (expense)	30	3
Other, net	(13)	1
Earnings (loss) before income taxes	216	149
Federal and foreign income taxes	44	31
Net earnings (loss)	$ 172	$ 118
Basic earnings (loss) per share (in dollars per share)	$ 4.23	$ 2.85
Weighted-average common shares outstanding (in shares)	40.7	41.4
Diluted earnings (loss) per share	$ 4.23	$ 2.85
Weighted-average diluted shares outstanding (in shares)	40.7	41.4
Dividends declared per share	$ 1.03	$ 0.86
Other comprehensive income (loss)
Change in unamortized benefit plan costs	$ 23	$ 25
Other	(2)
Tax benefit (expense) for items of other comprehensive income	(6)	(6)
Other comprehensive income (loss), net of tax	15	19
Comprehensive income (loss)	187	137
Product [Member]
Sales and service revenues
Sales and service revenues	1,624	1,490
Cost of sales and service revenues
Cost of sales and service revenues	1,290	1,258
Service [Member]
Sales and service revenues
Sales and service revenues	639	590
Cost of sales and service revenues
Cost of sales and service revenues	$ 550	$ 494

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Future Minimim Operating Lease Payments (Table) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Leases [Abstract]
2020	$ 34	$ 45
2021	39	38
2022	31	30
2023	25	24
2024	23	22
Thereafter	121	114
Total lease payments	273	273
Less: imputed interest	57	58
Present value of lease liabilities	$ 216	$ 215

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Debt Senior Note (Narrative) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Long-term Debt	$ 1,667	$ 1,286
Unamortized Debt Issuance Expense	18	19
Senior Notes
Debt Instrument [Line Items]
Unamortized Debt Issuance Expense	12	$ 12
Senior Notes | Senior Notes Due 2025, 3.844% [Member] | Subsequent Event [Member]
Debt Instrument [Line Items]
Long-term Debt	$ 500
Debt Instrument, Interest Rate, Stated Percentage	3.844%
Senior Notes | Senior Notes Due 2030, 4.200% [Member] | Subsequent Event [Member]
Debt Instrument [Line Items]
Long-term Debt	$ 500
Debt Instrument, Interest Rate, Stated Percentage	4.20%

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Employee Pension and Other Postretirement Benefits Cash Contributions (Table) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Defined Benefit Plan Disclosure
Other benefit plans	$ 8	$ 7
Total contributions	30	10
Discretionary Contribution | Qualified
Defined Benefit Plan Disclosure
Pension contributions	20	1
Discretionary Contribution | Non-qualified
Defined Benefit Plan Disclosure
Pension contributions	$ 2	$ 2

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Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Principles of Consolidation

Principles of Consolidation - The unaudited condensed consolidated financial statements of HII and its subsidiaries have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") and the instructions to Form 10-Q promulgated by the Securities and Exchange Commission ("SEC"). All intercompany transactions and balances are eliminated in consolidation. For classification of current assets and liabilities related to its long-term production contracts, the Company uses the duration of these contracts as its operating cycle, which is generally longer than one year. Additionally, certain prior year amounts have been reclassified to conform to the current year presentation.

These unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature considered necessary by management for a fair presentation of the unaudited condensed consolidated financial position, results of operations, and cash flows and should be read in conjunction with the Company's audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019.

Fiscal Period Policy

The quarterly information is labeled using a calendar convention; that is, first quarter is consistently labeled as ending on March 31, second quarter as ending on June 30, and third quarter as ending on September 30. It is management's long-standing practice to establish interim closing dates using a "fiscal" calendar, which requires the businesses to close their books on a Friday near these quarter-end dates in order to normalize the potentially disruptive effects of quarterly closings on business processes. The effects of this practice only exist for interim periods within a reporting year.

Accounting Estimates

Accounting Estimates - The preparation of the Company's consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Estimates have been prepared on the basis of the most current and best available information, and actual results could differ materially from those estimates.

Additionally, while the Company cannot reasonably estimate the effects of the global outbreak of coronavirus disease 2019 (“COVID-19”) at this time, it is reasonably possible that COVID-19 could cause changes to estimates with respect to contract costs and revenue recognition, effective income tax rates, and the fair values of the Company’s long-lived assets, financial instruments, intangible assets, and goodwill recorded at our reporting units. There was no material impact included in the Company's estimates as of March 31, 2020, as a result of the COVID-19 pandemic. This position was supported by the assumption that the Company will recover COVID-19 related costs under its U.S. Government contracts based on government relief actions such as the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") and U.S. Department of Defense ("DoD") guidance. There

remains uncertainty regarding the process to recover COVID-19 related costs, which may result in reimbursement of less than the full costs incurred by the Company. As a result, the Company is not able to estimate any reasonably possible losses resulting from the impact of COVID-19.

Government Grants

Government Grants - The Company recognizes incentive grants, inclusive of transfers of depreciable assets, from federal, state, and local governments at fair value upon compliance with the conditions of their receipt and reasonable assurance that the grants will be received or the depreciable assets will be transferred. Grants in recognition of specific expenses are recognized in the same period as an offset to those related expenses. Grants related to depreciable assets are recognized over the periods and in the proportions in which depreciation expense on those assets is recognized.

For the three months ended March 31, 2020, the Company recognized cash grant benefits of approximately $5 million in other long-term liabilities in the unaudited condensed consolidated statements of financial position. For the three months ended March 31, 2019, the Company recognized cash grant benefits of approximately $36 million in other long-term liabilities in the unaudited condensed consolidated statements of financial position.

Fair Value of Financial Instruments

Fair Value of Financial Instruments - Except for the Company's long-term debt, the carrying amounts of the Company's financial instruments recorded at historical cost approximate fair value due to the short-term nature of the instruments and low credit risk associated with the respective counterparties. The Company maintains multiple grantor trusts to fund certain non-qualified pension plans. These trusts were valued at $137 million and $147 million as of March 31, 2020, and December 31, 2019, respectively, and are presented within miscellaneous other assets within the unaudited condensed consolidated statements of financial position. These trusts consist primarily of investments in marketable securities, which are held at fair value within Level 1 of the fair value hierarchy.

Loan Receivable

Loan Receivable - The Company holds a loan receivable in connection with a seller financed transaction involving its previously owned Avondale shipyard facility. The receivable is carried at amortized cost in the amount of $40 million, net of a $8 million loan discount, which approximates fair value and is recorded in miscellaneous other assets on the unaudited condensed consolidated statements of financial position. Interest income is recognized on an accrual basis using the effective yield method. The discount is accreted into income using the effective yield method over the estimated life of the loan receivable.

Related Party Transactions

Related Party Transactions - The Company had $84 million outstanding under Industrial Revenue Bonds issued by the Mississippi Business Finance Corporation as of each of March 31, 2020, and December 31, 2019. Prior to the Company's spinoff from Northrop Grumman Corporation, repayment of principal and interest was guaranteed by Northrop Grumman Systems Corporation. The guaranty remains in effect, and the Company has agreed to indemnify Northrop Grumman Systems Corporation for any losses related to the guaranty pursuant to the Separation and Distribution Agreement with Northrop Grumman Corporation.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

COMMITMENTS AND CONTINGENCIES

Contract Performance Contingencies - Contract profit margins may include estimates of revenues for matters on which the customer and the Company have not reached agreement, such as settlements in the process of negotiation, contract changes, claims, and requests for equitable adjustment for unanticipated contract costs. These estimates are based upon management's best assessment of the underlying causal events and circumstances and are included in contract profit margins to the extent of expected recovery based upon contractual entitlements and the probability of successful negotiation with the customer. As of March 31, 2020, amounts recognized in connection with claims and requests for equitable adjustment were not material individually or in aggregate.

Guarantees of Performance Obligations - From time to time in the ordinary course of business, HII may enter into joint ventures, teaming, and other business arrangements to support the Company's products and services. The Company attempts to limit its exposure under these arrangements to its investment or the extent of obligations under the applicable contract. In some cases, however, HII may be required to guarantee performance of the arrangement's obligations and, in such cases, generally obtains cross-indemnification from the other members of the arrangement.

In the ordinary course of business, the Company may guarantee obligations of its subsidiaries under certain contracts. Generally, the Company is liable under such an arrangement only if its subsidiary is unable to perform its obligations. Historically, the Company has not incurred any substantial liabilities resulting from these guarantees. As of March 31, 2020, the Company was not aware of any existing event of default that would require it to satisfy any of these guarantees.

Environmental Matters - The estimated cost to complete environmental remediation has been accrued when it is probable that the Company will incur such costs in the future to address environmental conditions at currently or formerly owned or leased operating facilities, or at sites where it has been named a Potentially Responsible Party ("PRP") by the Environmental Protection Agency or similarly designated by another environmental agency, and the related costs can be estimated by management. These accruals do not include any litigation costs related to environmental matters, nor do they include amounts recorded as asset retirement obligations. To assess the potential impact on the Company's consolidated financial statements, management estimates the range of reasonably possible remediation costs that could be incurred by the Company, taking into account currently available facts on each site, as well as the current state of technology and prior experience remediating contaminated sites. These estimates are reviewed periodically and adjusted to reflect changes in facts and technical and legal circumstances. Management estimated that as of March 31, 2020, the probable estimable future cost for environmental remediation was immaterial. Factors that could result in changes to the Company's estimates include: modification of planned remedial actions, increases or decreases in the estimated time required to remediate, changes to the determination of legally responsible parties, discovery of more extensive contamination than anticipated, changes in laws and regulations affecting remediation requirements, and improvements in remediation technology. Should other PRPs not pay their allocable share of remediation costs, the Company may incur costs exceeding those already estimated and accrued. In addition, there are certain potential remediation sites where the costs of remediation cannot be reasonably estimated. Although management cannot predict whether new information gained as remediation progresses will materially affect the estimated liability accrued, management does not believe that future remediation expenditures will have a material effect on the Company's consolidated financial position, results of operations, or cash flows.

Financial Arrangements - In the ordinary course of business, HII uses letters of credit issued by commercial banks to support certain leases, insurance policies, and contractual performance obligations, as well as surety bonds issued by insurance companies principally to support the Company's self-insured workers' compensation plans. As

of March 31, 2020, the Company had $16 million in issued but undrawn letters of credit, as indicated in Note 13: Debt, and $272 million of surety bonds outstanding.

U.S. Government Claims - From time to time, the U.S. Government communicates to the Company potential claims, disallowed costs, and penalties concerning prior costs incurred by the Company with which the U.S. Government disagrees. When such preliminary findings are presented, the Company and U.S. Government representatives engage in discussions, from which HII evaluates the merits of the claims and assesses the amounts being questioned. Although the Company believes that the resolution of any of these matters will not have a material effect on its consolidated financial position, results of operations, or cash flows, it cannot predict the ultimate outcome of these matters.

Collective Bargaining Agreements - Of the Company's approximately 42,000 employees, approximately 50% are covered by a total of nine collective bargaining agreements and two site stabilization agreements. Newport News has four collective bargaining agreements covering represented employees, which expire in November 2020, November 2021, December 2022, and April 2024. The collective bargaining agreement that expires in November 2021 covers approximately 50% of Newport News employees. Newport News craft workers employed at the Kesselring Site near Saratoga Springs, New York are represented under an indefinite Department of Energy ("DoE") site agreement. Ingalls has five collective bargaining agreements covering represented employees, all of which expire in March 2022. Approximately 50 Technical Solutions employees at various locations are represented by unions and perform work under collective bargaining agreements. The Company believes its relationship with its employees is satisfactory.

Collective bargaining agreements generally expire after three years to five years and are subject to renegotiation at that time. The Company does not expect the results of these negotiations, either individually or in the aggregate, to have a material effect on the Company's consolidated results of operations.

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Segment Information

3 Months Ended

Mar. 31, 2020

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION

The Company is organized into three reportable segments: Ingalls, Newport News, and Technical Solutions, consistent with how management makes operating decisions and assesses performance.

In January 2020, the Company realigned its segments to optimize its operating structure. As a result of this realignment, the Company's HII Mechanical business was transferred from the Technical Solutions segment to the Newport News segment to better align HII Mechanical's work primarily supporting Newport News. The Company has reflected the 2020 realignment in prior financial reporting periods on an as-if basis, which has resulted in the transfer of revenue, operating income, assets, and liabilities between the Technical Solutions and Newport News segments. This realignment did not impact the Company's previously reported consolidated financial position, results of operations, or cash flows. See Note 7: Revenue.

The following table presents segment results for the three months ended March 31, 2020 and 2019:

	Three Months Ended March 31
($ in millions)	2020		2019
Sales and Service Revenues
Ingalls	$	629	$	584
Newport News	1,341		1,279
Technical Solutions	317		240
Intersegment eliminations	(24)		(23)
Sales and service revenues	$	2,263	$	2,080
Operating Income
Ingalls	$	68	$	46
Newport News	95		81
Technical Solutions	(7)		2
Segment operating income	156		129
Non-segment factors affecting operating income (loss)
Operating FAS/CAS Adjustment	63		34
Non-current state income taxes	(4)		(2)
Operating income	$	215	$	161

Operating FAS/CAS Adjustment - The Operating FAS/CAS Adjustment represents 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 CAS.

The following table presents the Company's assets by segment:

($ in millions)	March 31, 2020		December 31, 2019
Assets
Ingalls	$	1,704	$	1,618
Newport News	4,038		3,886
Technical Solutions	1,472		1,022
Corporate	401		505
Total assets	$	7,615	$	7,031

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Acquisitions

3 Months Ended

Mar. 31, 2020

Acquisitions [Abstract]

Business Acquisition, Integration, Restructuring and Other Related Costs [Text Block]

ACQUISITIONSIn March 2020, the Company acquired Hydroid, Inc. ("Hydroid"), a leading provider of advanced marine robotics to the defense and maritime markets, for approximately $378 million in cash, net of $2 million of acquired cash. The acquisition expands the Company's capabilities in the strategically important and rapidly growing autonomous and

unmanned maritime systems market. In connection with this acquisition, the Company preliminarily recorded $310 million of goodwill and intangible assets, all of which was allocated to the Company's Technical Solutions segment. The Company has not completed the purchase price allocation, because the fair value calculations for certain assets and liabilities have not been finalized. See Note 11: Goodwill and Other Intangible Assets. The assets, liabilities, and results of operations of Hydroid are not material to the Company’s consolidated financial position, results of operations, or cash flows.

In February 2019, the Company acquired Fulcrum IT Services, LLC ("Fulcrum"), an information technology and government consulting company, for approximately $195 million in cash, net of $1 million of acquired cash. The acquisition was consistent with the Company's strategy to optimize and expand its services portfolio. In connection with this acquisition, the Company recorded $133 million of goodwill, which includes the value of Fulcrum's workforce, all of which was allocated to its Technical Solutions segment, as well as $49 million of intangible assets related to existing contract backlog. For the year ended December 31, 2019, the Company recorded a decrease in goodwill of $1 million, primarily driven by the finalization of a net working capital adjustment and the fair value calculations for certain assets and liabilities. See Note 11: Goodwill and Other Intangible Assets. The assets, liabilities, and results of operations of Fulcrum are not material to the Company’s consolidated financial position, results of operations, or cash flows.

In December 2018, the Company acquired G2, Inc. ("G2"), a provider of cybersecurity solutions to the U.S. Government, for approximately $77 million in cash, net of $2 million of acquired cash. The acquisition was consistent with the Company's strategy to optimize and expand its services portfolio. In connection with this acquisition, the Company recorded $46 million of goodwill, which includes the value of G2's workforce, all of which was allocated to its Technical Solutions segment, as well as $20 million of intangible assets related to existing contract backlog. For the year ended December 31, 2019, the Company recorded an increase in goodwill of $7 million, primarily driven by the finalization of a net working capital adjustment and the fair value calculations for certain assets and liabilities. See Note 11: Goodwill and Other Intangible Assets. The assets, liabilities, and results of operations of G2 are not material to the Company’s consolidated financial position, results of operations, or cash flows.

The Company funded each of these acquisitions using cash on hand, issuance of commercial paper, or borrowings on its revolving credit facility. The acquisition costs incurred in connection with these acquisitions were not material. The operating results of these businesses have been included in the Company’s consolidated results as of the respective closing dates of the acquisitions. In allocating the purchase prices of these businesses, the Company considered the estimated fair value of net tangible and intangible assets acquired, with any excess purchase price recorded as goodwill. The total amount of goodwill resulting from these acquisitions is expected to be amortizable for tax purposes. These acquisitions are not material either individually or in the aggregate, and pro forma revenues and results of operations have therefore not been provided.

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Income Taxes

3 Months Ended

Mar. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The Company's earnings are primarily domestic, and its effective income tax rates on earnings from operations for the three months ended March 31, 2020 and 2019, were 20.4% and 20.8%, respectively, which did not differ materially from the federal statutory corporate income tax rate of 21%.

On March 27, 2020, the CARES Act was signed into law. The CARES Act includes certain changes to U.S. federal tax law that impact corporations. The Company’s initial analysis of the tax law changes included in the CARES Act indicates that the Act will not have a material impact on the Company’s effective income tax rate.

The Company's unrecognized tax benefits increased by $2 million during the three months ended March 31, 2020. As of March 31, 2020, the estimated amounts of the Company's unrecognized tax benefits, excluding interest and penalties, were liabilities of $38 million. Assuming a sustainment of these tax positions, the reversal of $30 million of the accrued amounts would favorably affect the Company's effective federal income tax rate in future periods.

The Company recognizes interest and penalties related to unrecognized tax benefits as income tax expense. For the three months ended March 31, 2020, interest resulting from the unrecognized tax benefits noted above increased income tax expense less than $1 million.

Non-current state income taxes include 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 unrecognized tax benefits 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.

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Inventoried Costs, Net (Tables)

3 Months Ended

Mar. 31, 2020

Inventory Disclosure [Abstract]

Inventoried costs, net

Inventoried costs were comprised of the following:

($ in millions)	March 31, 2020		December 31, 2019
Production costs of contracts in process1	$	37	$	30
Raw material inventory	117		106
Total inventoried costs, net	$	154	$	136

¹ Includes amounts capitalized pursuant to applicable provisions of the FAR and CAS.

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Leases (Tables)

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

Components of Lease Expense

Lease costs and related information were as follows:

	Three Months Ended March 31
($ in millions)	2020			2019
Operating lease costs	$	16		$	11
Short-term operating lease costs	$	4		$	5
Variable operating lease costs	$	1		$	1
Operating cash flows from operating leases	$	(16)		$	(11)
Right-of-use assets obtained in exchange for new operating lease liabilities	$	17		$	13
Weighted-average remaining lease term (years) - operating leases	10 years			11 years
Weighted-average discount rate - operating leases	4.1		%	4.5		%

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

The undiscounted future non-cancellable lease payments under our operating leases were as follows:

Year:	March 31, 2020		December 31, 2019
2020	$	34	$	45
2021	39		38
2022	31		30
2023	25		24
2024	23		22
Thereafter	121		114
Total lease payments	273		273
Less: imputed interest	57		58
Present value of lease liabilities	$	216	$	215

Reconciliation of Operating Lease Liability Recognized in Statement of Financial Position [Table Text Block]

Lease liabilities included in the Company's consolidated balance sheet as of March 31, 2020, were as follows:

($ in millions)	March 31, 2020		December 31, 2019
Short-term operating lease liabilities	$	34	$	35
Lease liabilities included in liabilities held for sale	29		16
Long-term operating lease liabilities	153		164
Total operating lease liabilities	$	216	$	215

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Income Taxes (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Income Tax Contingency [Line Items]
Effective income tax rate	20.40%	20.80%
Federal Statutory Income Tax Rate, Percent	21.00%
Unrecognized Tax Benefits, Period Increase (Decrease)	$ 2
Unrecognized Tax Benefits	38
Unrecognized Tax Benefits that Would Impact Effective Tax Rate	30
Maximum
Income Tax Contingency [Line Items]
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense	$ 1

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Assets and Liabilities Held for Sale (Table) (Details) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Assets and Liabilities Held for Sale [Line Items]
Total assets held for sale	$ 178	$ 95
Total liabilities held for sale	92	77
Technical Solutions
Assets and Liabilities Held for Sale [Line Items]
Current assets	94	74
Property, plant, and equipment	16	2
Other intangible assets, net	2	2
Goodwill	35
Other non-current assets	37	23
Valuation allowance	(6)	(6)
Total assets held for sale	178	95
Current liabilities	65	62
Long-term liabilities	27	15
Total liabilities held for sale	$ 92	$ 77

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Employee Pension and Other Postretirement Benefits (Narrative) (Details) $ in Millions	Mar. 31, 2020 USD ($)
Pension Benefits
Defined Benefit Plan Disclosure
Defined Benefit Plan, Expected Future Employer Contributions, Current Fiscal Year	$ 205

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Subsidiary Guarantors Narrative (Details)	3 Months Ended
	Mar. 31, 2020
Subsidiary Guarantors [Abstract]
Parent ownership percentage of subsidiary guarantors	100.00%

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Goodwill and Other Intangible Assets

3 Months Ended

Mar. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

HII performs impairment tests for goodwill as of November 30 of each year and between annual impairment tests if an event occurs or circumstances change that would more likely than not reduce the fair values of the Company's reporting units below their carrying values.

Accumulated goodwill impairment losses as of each of March 31, 2020, and December 31, 2019, were $2,906 million. The accumulated goodwill impairment losses for Ingalls as of each of March 31, 2020, and December 31, 2019, were $1,568 million. The accumulated goodwill impairment losses for Newport News as of each of March 31, 2020, and December 31, 2019, were $1,187 million. The accumulated goodwill impairment losses for Technical Solutions as of each of March 31, 2020, and December 31, 2019, were $151 million.

For the three months ended March 31, 2020, the carrying amounts of goodwill changed as follows:

($ in millions)	Ingalls		Newport News		Technical Solutions		Total
Balance as of December 31, 2019	$	175	$	721	$	477	$	1,373
Acquisitions	—		—		310		310
Adjustments	—		—		(35)		(35)
Balance as of March 31, 2020	$	175	$	721	$	752	$	1,648

As of March 31, 2020, the Company allocated $35 million of goodwill at its Technical Solutions segment to an asset group that was classified as held for sale.

Other Intangible Assets

The Company's purchased intangible assets are amortized on a straight-line basis or a method based on the pattern of benefits over their estimated useful lives. Net intangible assets consist principally of amounts pertaining to nuclear-powered aircraft carrier and submarine program intangible assets, with an aggregate weighted-average useful life of 40 years based on the long life cycle of the related programs. Aggregate amortization expense was $11 million for the three months ended March 31, 2020 and 2019.

In connection with the Fulcrum purchase in 2019, the Company recorded $49 million of intangible assets pertaining to existing contract backlog and customer relationships, to be amortized using the pattern of benefits method over a weighted-average life of seven years.

The Company expects amortization expense for purchased intangible assets of approximately $44 million in 2020, $40 million in 2021, $37 million in 2022, $26 million in 2023, and $16 million in 2024.

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Revenue

3 Months Ended

Mar. 31, 2020

Disaggregation of Revenue [Abstract]

Revenue from Contract with Customer

REVENUEThe following is a description of principal activities from which the Company generates its revenues. For more detailed information regarding reportable segments, see Note 8: Segment Information. For more detailed information regarding the Company's significant accounting policy for revenue, see Note 2: Basis of Presentation.

U.S. Government Contracts

The Ingalls and Newport News segments generate revenue primarily from performance under multi-year contracts with the U.S. Government, generally the U.S. Navy and U.S. Coast Guard, or prime contractors to contracts with the U.S. Government, relating to the advance planning, design, construction, repair, maintenance, refueling, overhaul, or inactivation of nuclear-powered ships and non-nuclear ships. The period over which the Company performs may extend past five years. The Technical Solutions segment also generates the majority of its revenue from contracts with the U.S. Government, including U.S. Government agencies. The Company generally invoices and receives related payments based upon performance progress no less frequently than monthly.

Shipbuilding - For most of the Company's shipbuilding contracts, the customer contracts with the Company to provide a comprehensive service of designing, procuring long-lead-time materials, manufacturing, and integrating complex equipment and technologies into a single ship or project, often resulting in a single performance obligation. Contract modifications to account for changes in specifications and requirements are recognized when approved by the customer. In the majority of circumstances, modifications do not result in additional performance obligations that are distinct from the existing performance obligations in the contract and the effects of the modifications are recognized as an adjustment to revenue on a cumulative catch-up basis. Alternatively, in instances where the performance obligations in the modifications are deemed distinct, contract modifications are accounted for prospectively.

The Company considers incentive and award fees to be variable consideration and includes in the transaction price at inception the consideration to which the Company expects to be entitled under the terms and conditions of the contract, generally estimated using a most likely amount approach. Transaction price is limited to the extent of funding allotted by the customer and available for performance, and estimated revenues represent those amounts for which the Company believes a significant reversal of revenue is not probable.

The Company recognizes revenues related to shipbuilding contracts as it satisfies the related performance obligations over time using a cost-to-cost input method to measure performance progress, which best reflects the transfer of control to the customer.

Services - The Technical Solutions segment generates revenue primarily under U.S. Government contracts from the provision of fleet support and MDIS services. Contracts generally are structured using either an Indefinite Delivery/Indefinite Quantity ("IDIQ") vehicle, under which orders are issued, or a standalone contract. Contracts may be fixed-price or cost-type, include variable consideration such as incentives and awards, and structured as task orders under an IDIQ contract vehicle or requirements contract vehicle. In either case, the Company generally performs over the course of a short-duration period and may continue to perform upon exercise of related period of performance options that are also short in duration, generally one year. The Company’s performance obligations vary in nature and may be stand-ready, in which case the Company responds to the customer’s needs on the basis of its demand, a recurring service, typically recurring maintenance services, or a single performance obligation that does not comprise a series of distinct services.

In determining transaction price, the Company considers incentives and other contingencies to be variable consideration and includes in the initial transaction price the consideration to which the Company expects to be entitled under the terms and conditions of the contract, generally estimated using a most likely amount approach. Transaction price is limited to the extent of funding allotted by the customer and available for performance, and estimated revenues represent those amounts for which the Company believes a significant reversal of revenue is not probable. Where a series of distinct services has been identified, the Company generally allocates variable consideration to distinct time increments of service.

The Company generally recognizes revenue as it satisfies the related performance obligations over time using a cost-to-cost input method to measure performance progress, because, even where the Company has identified a series of services, its cost incurrence pattern generally is not ratable given the complex nature of the services the Company provides. Invoices are issued and related payments are received, on the basis of performance progress, no less frequently than monthly. In addition, many of the Company's U.S. Government services contracts are time and material arrangements. As a result, the Company often utilizes the practical expedient allowing the recognition of revenue in the amount the Company invoices, which corresponds with the value provided to the customer and to which the Company is entitled to payment for performance to date.

Non-U.S. Government Contracts

Revenues generated under commercial and state and local government agency contracts are primarily derived from the provision of nuclear and environmental and oil and gas services. Non-U.S. Government contracts typically are one or two years in duration.

In determining transaction price, the Company considers incentives and other contingencies to be variable consideration and includes in the initial transaction price the consideration to which the Company expects to be entitled under the terms and conditions of the contract, generally estimated using a most likely amount approach. In the context of variable consideration, the Company limits the transaction price to amounts for which the Company believes a significant reversal of revenue is not probable. Such amounts may relate to transaction price in excess of funding, a lack of history with the customer, a lack of history with the goods or services being provided, or other items.

Revenue generally is recognized over time given the terms and conditions of the related contracts. The Company generally utilizes a cost-to-cost input method to measure performance progress, which best depicts the transfer of control to the customer. The Company’s non-U.S. Government contract portfolio is comprised of a large number of time and material arrangements. As a result, the Company often utilizes the practical expedient allowing the recognition of revenue in the amount the Company invoices, which corresponds with the value provided to the customer and to which the Company is entitled to payment for performance to date.

Disaggregation of Revenue

The following tables present revenues on a disaggregated basis, in a manner that reconciles with the Company's reportable segment disclosures, for the following categories: product versus service type, customer type, contract type, and major program. Certain prior year amounts have been reclassified. See Note 8: Segment Information. The Company believes that this level of disaggregation provides investors with information to evaluate the Company’s financial performance and provides the Company with information to make capital allocation decisions in the most appropriate manner.

	Three Months Ended March 31, 2020
($ in millions)	Ingalls		Newport News		Technical Solutions		Intersegment Eliminations		Total
Revenue Type
Product sales	$	578	$	1,046	$	—	$	—	$	1,624
Service revenues	50		293		296		—		639
Intersegment	1		2		21		(24)		—
Sales and service revenues	$	629	$	1,341	$	317	$	(24)	$	2,263
Customer Type
Federal	$	628	$	1,339	$	228	$	—	$	2,195
Commercial	—		—		68		—		68
Intersegment	1		2		21		(24)		—
Sales and service revenues	$	629	$	1,341	$	317	$	(24)	$	2,263
Contract Type
Firm fixed-price	$	15	$	2	$	59	$	—	$	76
Fixed-price incentive	523		638		—		—		1,161
Cost-type	90		699		133		—		922
Time and materials	—		—		104		—		104
Intersegment	1		2		21		(24)		—
Sales and service revenues	$	629	$	1,341	$	317	$	(24)	$	2,263

	Three Months Ended March 31, 2019
($ in millions)	Ingalls		Newport News		Technical Solutions		Intersegment Eliminations		Total
Revenue Type
Product sales	$	538	$	952	$	—	$	—	$	1,490
Service revenues	46		327		217		—		590
Intersegment	—		—		23		(23)		—
Sales and service revenues	$	584	$	1,279	$	240	$	(23)	$	2,080
Customer Type
Federal	$	584	$	1,265	$	165	$	—	$	2,014
Commercial	—		14		52		—		66
Intersegment	—		—		23		(23)		—
Sales and service revenues	$	584	$	1,279	$	240	$	(23)	$	2,080
Contract Type
Firm fixed-price	$	17	$	3	$	35	$	—	$	55
Fixed-price incentive	478		453		—		—		931
Cost-type	89		823		99		—		1,011
Time and materials	—		—		83		—		83
Intersegment	—		—		23		(23)		—
Sales and service revenues	$	584	$	1,279	$	240	$	(23)	$	2,080

	Three Months Ended March 31		Three Months Ended March 31
($ in millions)	2020		2019
Major Programs
Amphibious assault ships	$	347	$	297
Surface combatants and coast guard cutters	279		286
Other	3		1
Total Ingalls	629		584
Aircraft carriers	698		713
Submarines	455		368
Other	188		198
Total Newport News	1,341		1,279
Government and energy services	253		191
Oil and gas services	64		49
Total Technical Solutions	317		240
Intersegment eliminations	(24)		(23)
Sales and service revenues	$	2,263	$	2,080

As of March 31, 2020, the Company had $45.2 billion of remaining performance obligations. The Company expects to recognize approximately 30% of its remaining performance obligations as revenue through 2021, an additional 25% through 2023, and the balance thereafter.

Cumulative Catch-up Adjustments

For the three months ended March 31, 2020, net cumulative catch-up adjustments increased operating income and increased diluted earnings per share by $32 million and $0.62, respectively. For the three months ended March 31, 2019, net cumulative catch-up adjustments decreased operating income and decreased diluted earnings per share

by $6 million and $0.11, respectively. No individual adjustment was material to the Company's unaudited condensed consolidated statements of operations and comprehensive income for the three months ended March 31, 2020 and 2019.

Contract Balances

Contract balances include accounts receivable, contract assets, and contract liabilities from contracts with customers. Accounts receivable represent an unconditional right to consideration and include amounts billed and currently due from customers. Contract assets primarily relate to the Company's rights to consideration for work completed but not billed as of the reporting date when the right to payment is not just subject to the passage of time. Fixed-price contracts are generally billed to the customer using either progress payments, whereby amounts are billed monthly as costs are incurred or work is completed, or performance based payments, which are based upon the achievement of specific, measurable events or accomplishments defined and valued at contract inception. Cost-type contracts are typically billed to the customer on a monthly or semi-monthly basis. Contract liabilities relate to advance payments, billings in excess of revenues, and deferred revenue amounts.

The Company reports contract balances in a net contract asset or contract liability position on a contract-by-contract basis at the end of each reporting period. The Company’s net contract assets increased $208 million from December 31, 2019, to March 31, 2020, primarily due to an increase in contract assets as a result of revenue on certain U.S. Navy contracts and the acquisition of Hydroid. For the three months ended March 31, 2020, the Company recognized revenue of $274 million related to its contract liabilities as of December 31, 2019. For the three months ended March 31, 2019, the Company recognized revenue of $217 million related to its contract liabilities as of December 31, 2018.

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Accounting Standards Updates	3 Months Ended
	Mar. 31, 2020
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
Accounting Standards Updates	ACCOUNTING STANDARDS UPDATESIn June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updated ("ASU") 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which changes the current incurred loss model a forward-looking expected credit loss model for most financial assets, such as trade and other receivables, loans and other instruments. The ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. Entities are required to apply the provisions of the standard through a cumulative-effect adjustment to retained earnings as of the effective date. The Company adopted the provisions of ASU 2016-13 on January 1, 2020. The adoption did not result in a material impact to the Company’s financial results or disclosures.Accounting pronouncements issued but not effective until after December 31, 2020, are not expected to have a material impact on the Company's consolidated financial position, results of operations, or cash flows.

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Assets and Liabilities Held for Sale (Tables)

3 Months Ended

Mar. 31, 2020

Discontinued Operations and Disposal Groups [Abstract]

Assets and Liabilities Held for Sale

The following table summarizes the assets and liabilities classified as held for sale:

	March 31, 2020		December 31, 2019
($ in millions)
Current assets	$	94	$	74
Property, plant, and equipment	16		2
Other intangible assets, net	2		2
Goodwill	35		—
Other non-current assets	37		23
Valuation allowance	(6)		(6)
Total assets held for sale	$	178	$	95
Current liabilities	65		62
Long-term liabilities	27		15
Total liabilities held for sale	$	92	$	77

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Employee Pension and Other Postretirement Benefits (Tables)

3 Months Ended

Mar. 31, 2020

Retirement Benefits [Abstract]

Schedule of Net Benefit Costs

The costs of the Company's defined benefit pension plans and other postretirement benefit plans for the three months ended March 31, 2020 and 2019, were as follows:

	Three Months Ended March 31
	Pension Benefits				Other Benefits
($ in millions)	2020		2019		2020		2019
Components of Net Periodic Benefit Cost
Service cost	$	45	$	36	$	2	$	2
Interest cost	64		69		4		5
Expected return on plan assets	(121)		(102)		—		—
Amortization of prior service cost (credit)	3		5		(5)		(5)
Amortization of net actuarial loss (gain)	27		28		(2)		(3)
Net periodic benefit cost	$	18	$	36	$	(1)	$	(1)

Schedule of Defined Benefit Plans Disclosures, Cash Contributions

The Company made the following contributions to its defined benefit pension plans and other postretirement benefit plans for the three months ended March 31, 2020 and 2019:

	Three Months Ended March 31
($ in millions)	2020		2019
Pension plans
Qualified minimum	$	—	$	—
Discretionary
Qualified	20		1
Non-qualified	2		2
Other benefit plans	8		7
Total contributions	$	30	$	10

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Other Intangible Assets (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Aggregate weighted-average amortization period	40 years
Amortization of purchased intangibles	$ 11	$ 11
Expected amortization for purchased intangible assets:
Expected amortization, 2020	44
Expected amortization, 2021	40
Expected amortization, 2022	37
Expected amortization, 2023	26
Expected amortization, 2024	$ 16
Fulcrum IT Services, LLC
Finite-Lived Intangible Assets [Line Items]
Aggregate weighted-average amortization period			7 years
Identifiable intangible assets acquired			$ 49
G2, Inc.
Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets acquired				$ 20

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Assets and Liabilities Held for Sale (Narrative) (Details) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($)
Technical Solutions
Assets and Liabilities Held for Sale [Line Items]
Impairment charge	$ 6

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Stock Compensation Plans (Narrative) (Details) - $ / shares shares in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Stock awards
Stock rights, weighted-average grant date fair value	$ 205.78
Stock awards, vested in the period	0.1	0.3
Stock awards, transferred for employee withholding taxes	0.1	0.1
Restricted performance stock rights
Stock awards
Stock rights, granted	0.1	0.1
Stock rights, weighted-average grant date fair value	$ 229.42	$ 210.24
Restricted performance stock rights | Minimum
Stock awards
Restricted performance stock rights ultimate vesting percentage	0.00%
Restricted performance stock rights | Maximum
Stock awards
Restricted performance stock rights ultimate vesting percentage	200.00%

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Condensed Consolidated Statements of Changes in Equity (Unaudited) (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Statement of Stockholders' Equity [Abstract]
Dividends declared per share	$ 1.03	$ 0.86

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Condensed Consolidated Statements Of Financial Position (Unaudited) - USD ($) $ in Millions	Mar. 31, 2020	Dec. 31, 2019
Current Assets
Cash and cash equivalents	$ 28	$ 75
Accounts receivable, net	418	318
Contract assets	1,211	989
Inventoried costs, net	154	136
Income taxes receivable	108	148
Assets held for sale	178	95
Prepaid expenses and other current assets	40	24
Total current assets	2,137	1,785
Property, plant, and equipment, net	2,848	2,832
Operating lease assets	185	201
Goodwill	1,648	1,373
Other intangible assets, net	481	492
Deferred tax assets	85	108
Miscellaneous other assets	231	240
Total assets	7,615	7,031
Current Liabilities
Trade accounts payable	536	497
Accrued employees' compensation	265	265
Short-term debt and current portion of long-term debt	88
Current portion of postretirement plan liabilities	130	130
Current portion of workers' compensation liabilities	229	225
Contract liabilities	387	373
Liabilities held for sale	92	77
Other current liabilities	353	323
Total current liabilities	2,080	1,890
Long-term debt	1,667	1,286
Pension plan liabilities	941	975
Other postretirement plan liabilities	378	380
Workers' compensation liabilities	462	457
Long-term operating lease liabilities	153	164
Other long-term liabilities	291	291
Total liabilities	5,972	5,443
Commitments and Contingencies (Note 16)
Stockholders' Equity
Common stock	1	1
Additional paid-in capital	1,955	1,961
Retained earnings (deficit)	3,139	3,009
Treasury stock	(2,058)	(1,974)
Accumulated other comprehensive income (loss)	(1,394)	(1,409)
Total stockholders' equity	1,643	1,588
Total liabilities and stockholders' equity	$ 7,615	$ 7,031

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Stockholders' Equity Accumulated Other Comprehensive Income (Loss) (Table) (Details) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2020	Mar. 31, 2019
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance, beginning		$ (1,409)	$ (1,288)
Other comprehensive income (loss) before reclassifications		(2)
Amortization of prior service cost (credit)	[1]	(2)
Amortization of net actuarial loss (gain)	[1]	25	25
Tax benefit (expense) for items of other comprehensive income		(6)	(6)
Other comprehensive income (loss), net of tax		15	19
Balance, ending		(1,394)	(1,269)
Income tax expense (benefit)		44	31
Benefit Plans
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance, beginning		(1,407)	(1,283)
Amortization of prior service cost (credit)	[1]	(2)
Amortization of net actuarial loss (gain)	[1]	25	25
Tax benefit (expense) for items of other comprehensive income		(6)	(6)
Other comprehensive income (loss), net of tax		17	19
Balance, ending		(1,390)	(1,264)
Other
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance, beginning		(2)	(5)
Other comprehensive income (loss) before reclassifications		(2)
Other comprehensive income (loss), net of tax		(2)
Balance, ending		(4)	(5)
Reclassification out of AOCI
Accumulated Other Comprehensive Income (Loss) [Line Items]
Income tax expense (benefit)		$ 6	$ 6

[1] These accumulated comprehensive loss components are included in the computation of net periodic benefit cost. See Note 17: Employee Pension and Other Postretirement Benefits. The tax benefit associated with amounts reclassified from accumulated other comprehensive loss for each of the three months ended March 31, 2020 and 2019, was $6 million.

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Revenue (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Disaggregation of Revenue [Abstract]
Revenue, Remaining Performance Obligation, Amount	$ 45,200
Revenue, performance obligation, recognition percentage, year two	30.00%
Revenue, performance obligation, recognition percentage, year four	25.00%
Increase (Decrease) in Net Contract Assets	$ 208
Contract with Customer, Liability, Revenue Recognized	274	$ 217
Contracts Accounted for under Percentage of Completion
Change in Accounting Estimate
Increase (decrease) in operating income due to net cumulative catch-up adjustments	$ 32	$ (6)
Increase (decrease) in diluted earnings per share due to net cumulative catch-up adjustments	$ 0.62	$ (0.11)

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Employee Pension and Other Postretirement Benefits Net Benefit Costs (Table) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Pension Benefits
Defined Benefit Plan Disclosure
Service cost	$ 45	$ 36
Interest cost	64	69
Expected return on plan assets	(121)	(102)
Amortization of prior service cost (credit)	3	5
Amortization of net actuarial loss (gain)	27	28
Net periodic benefit cost	18	36
Other Benefits
Defined Benefit Plan Disclosure
Service cost	2	2
Interest cost	4	5
Amortization of prior service cost (credit)	(5)	(5)
Amortization of net actuarial loss (gain)	(2)	(3)
Net periodic benefit cost	$ (1)	$ (1)

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Components of Lease Expense (Table) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Leases [Abstract]
Operating lease cost	$ 16	$ 11
Short-term lease cost	4	5
Variable operating lease cost	1	1
Operating cash flows from operating leases	(16)	(11)
Right-of-Use asset obtained in exchange for new operating lease liability	$ 17	$ 13
Weighted-average remaining lease term (years) - operating leases	10 years	11 years
Weighted-average discount rate - operating leases	4.10%	4.50%

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Debt Commercial Paper (Narrative) (Details) $ in Millions	Mar. 31, 2020 USD ($)
Short-term Debt [Line Items]
Commercial Paper	$ 88
Maximum
Short-term Debt [Line Items]
Commercial Paper	$ 1,000

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Subsidiary Guarantors	3 Months Ended
	Mar. 31, 2020
Subsidiary Guarantors [Abstract]
Subsidiary Guarantors	SUBSIDIARY GUARANTORSAs described in Note 13: Debt, the Company issued senior notes through the consolidating parent company, HII.  Performance of the Company's obligations under its senior notes outstanding as of March 31, 2020, and December 31, 2019, including any repurchase obligations resulting from a change of control, is fully and unconditionally guaranteed, jointly and severally, on an unsecured basis, by each of HII's existing and future material domestic subsidiaries ("Subsidiary Guarantors"). The Subsidiary Guarantors are 100% owned by HII. Under SEC Regulation S-X Rule 3-10, each HII subsidiary that did not provide a guarantee ("Non-Guarantors") is minor and HII, as the parent company issuer, did not have independent assets or operations. There are no significant restrictions on the ability of the parent company and the Subsidiary Guarantors to obtain funds from their respective subsidiaries by dividend or loan, except those imposed by applicable law.

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Leases

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

Leases of Lessee Disclosure [Text Block]

LEASES

The Company leases certain land, warehouses, office space, and production, office, and technology equipment, among other items. Most equipment is leased on a monthly basis. Many land, warehouse, and office space leases include renewal terms that can extend the lease term. The exercise of lease renewal options is at the Company's sole discretion. The depreciable life of assets and leasehold improvements are generally limited by the expected lease term. The Company's lease agreements do not generally contain material residual value guarantees, material restrictive covenants, or purchase options. The Company's lease portfolio consists primarily of operating leases. Amounts after January 1, 2019, are reported under Topic 842 in accordance with ASU 2016-02.

Lease costs and related information were as follows:

	Three Months Ended March 31
($ in millions)	2020			2019
Operating lease costs	$	16		$	11
Short-term operating lease costs	$	4		$	5
Variable operating lease costs	$	1		$	1
Operating cash flows from operating leases	$	(16)		$	(11)
Right-of-use assets obtained in exchange for new operating lease liabilities	$	17		$	13
Weighted-average remaining lease term (years) - operating leases	10 years			11 years
Weighted-average discount rate - operating leases	4.1		%	4.5		%

The undiscounted future non-cancellable lease payments under our operating leases were as follows:

Year:	March 31, 2020		December 31, 2019
2020	$	34	$	45
2021	39		38
2022	31		30
2023	25		24
2024	23		22
Thereafter	121		114
Total lease payments	273		273
Less: imputed interest	57		58
Present value of lease liabilities	$	216	$	215

Lease liabilities included in the Company's consolidated balance sheet as of March 31, 2020, were as follows:

($ in millions)	March 31, 2020		December 31, 2019
Short-term operating lease liabilities	$	34	$	35
Lease liabilities included in liabilities held for sale	29		16
Long-term operating lease liabilities	153		164
Total operating lease liabilities	$	216	$	215