Huntington Ingalls Industries, Inc 8-K, filed May 7, 2020

Huntington Ingalls Industries, Inc. (HII)

8-K 2020-05-07 For: 2020-05-07

Added on April 08, 2026

About this 8-K

Huntington Ingalls Industries, Inc filed this 8-K on May 7, 2020.


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


Item 9.01.			Financial Statements and Exhibits.
(d)			Exhibits.


Exhibit No.						Description
99.1						Press Release dated May 7, 2020.
99.2						Earnings Presentation dated May 7, 2020.
104						Cover Page Interactive Data File (embedded within Inline XBRL document)


	Three Months Ended
	March 31
(in millions, except per share amounts)	2020			2019			$ Change		% Change
Sales and service revenues	$	2,263		$	2,080		$	183	8.8	%
Operating income	215			161			54		33.5	%
Operating margin %	9.5		%	7.7		%			176 bps
Segment operating income¹	156			129			27		20.9	%
Segment operating margin %¹	6.9		%	6.2		%			69 bps
Net earnings	172			118			54		45.8	%
Diluted earnings per share	$	4.23		$	2.85		$	1.38	48.4	%

Adjusted Figures





Net earnings²	99			89			10		11.2	%
Diluted earnings per share²	$	2.43		$	2.14		$	0.29	13.6	%
¹Non-GAAP measures that exclude non-segment factors affecting operating income. See Exhibit B for definitions and reconciliations.
²Non-GAAP measures that exclude the impacts of the FAS/CAS adjustment. See Exhibit B for reconciliation.


	Three Months Ended
	March 31
($ in millions)	2020			2019			$ Change		% Change
Revenues	$	629		$	584		$	45	7.7	%
Segment operating income¹	68			46			22		47.8	%
Segment operating margin %¹	10.8		%	7.9		%			293 bps



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


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


	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 benefit (expense) for items of other comprehensive income	(6)		(6)
Other comprehensive income (loss), net of tax	15		19
Comprehensive income	$	187	$	137


($ 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
Other Assets
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


Item 2.02.			Results of Operations and Financial Condition.


($ in millions)	March 31, 2020		December 31, 2019
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
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


	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)


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