ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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DELAWARE
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90-0607005
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Large accelerated filer
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¨
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Accelerated filer
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¨
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Non-accelerated filer
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ý
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Smaller reporting company
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¨
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(Do not check if a smaller reporting company)
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PART I – FINANCIAL INFORMATION
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Page
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II – OTHER INFORMATION
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Three Months Ended
March 31
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||||||
(in millions, except per share amounts)
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2012
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2011
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||||
Sales and service revenues
|
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Product sales
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$
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1,353
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$
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1,466
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Service revenues
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215
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218
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Total sales and service revenues
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1,568
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1,684
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Cost of sales and service revenues
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Cost of product sales
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1,152
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1,253
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Cost of service revenues
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186
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197
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General and administrative expenses
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150
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149
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Operating income (loss)
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80
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85
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Other income (expense)
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Interest expense
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(30
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)
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(15
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)
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Earnings (loss) before income taxes
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50
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70
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Federal income taxes
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17
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25
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Net earnings (loss)
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$
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33
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$
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45
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Basic earnings (loss) per share
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$
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0.67
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$
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0.92
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Weighted-average common shares outstanding
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49.0
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48.8
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Diluted earnings (loss) per share
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$
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0.67
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$
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0.92
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Weighted-average diluted shares outstanding
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49.5
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48.8
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Net earnings (loss) from above
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$
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33
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$
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45
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Other comprehensive income (loss)
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Change in unamortized benefit plan costs
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24
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28
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Tax benefit (expense) on change in unamortized benefit plan costs
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(9
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)
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(11
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)
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Other comprehensive income (loss), net of tax
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15
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17
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Comprehensive income (loss)
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$
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48
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$
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62
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($ in millions)
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March 31
2012 |
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December 31
2011 |
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Assets
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Current Assets
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Cash and cash equivalents
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$
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551
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$
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915
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Accounts receivable, net
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954
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711
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Inventoried costs, net
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384
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380
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Deferred income taxes
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235
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232
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Prepaid expenses and other current assets
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32
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30
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Total current assets
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2,156
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2,268
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Property, plant, and equipment, net
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2,005
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2,033
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Other Assets
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Goodwill
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844
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844
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Other purchased intangibles, net of accumulated amortization of $377 in 2012 and $372 in 2011
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562
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567
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Pension plan assets
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64
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64
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Debt issuance costs
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46
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48
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Long-term deferred tax asset
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99
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128
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Miscellaneous other assets
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48
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49
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Total other assets
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1,663
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1,700
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Total assets
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$
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5,824
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$
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6,001
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($ in millions, except per share amounts)
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March 31
2012 |
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December 31
2011 |
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Liabilities and Stockholders' Equity
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Current Liabilities
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Trade accounts payable
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$
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293
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$
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380
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Current portion of long-term debt
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29
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29
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Current portion of workers’ compensation liabilities
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201
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201
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Current portion of postretirement plan liabilities
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172
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172
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Accrued employees’ compensation
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189
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221
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Advance payments and billings in excess of costs incurred
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118
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|
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101
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Provision for contract losses
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12
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19
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Other current liabilities
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238
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249
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Total current liabilities
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1,252
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1,372
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Long-term debt
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1,822
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1,830
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Other postretirement plan liabilities
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586
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581
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Pension plan liabilities
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833
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936
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Workers’ compensation liabilities
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362
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361
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Other long-term liabilities
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51
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49
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Total liabilities
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4,906
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5,129
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Commitments and Contingencies (Note 13)
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—
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—
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Stockholders’ Equity
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Common stock, $0.01 par value; 150,000,000 shares authorized; 49,445,957 issued and outstanding as of March 31, 2012; 48,821,563 issued and outstanding as of December 31, 2011
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—
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—
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Additional paid-in capital
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1,860
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1,862
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Retained earnings (deficit)
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(108
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)
|
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(141
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)
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Accumulated other comprehensive income (loss)
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(834
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)
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(849
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)
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Total stockholders’ equity
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918
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872
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Total liabilities and stockholders’ equity
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$
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5,824
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$
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6,001
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Three Months Ended
March 31
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||||||
($ in millions)
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2012
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2011
|
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Operating Activities
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Net earnings (loss)
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$
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33
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$
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45
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Adjustments to reconcile to net cash provided by (used in) operating activities
|
|
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Depreciation
|
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42
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|
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40
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|
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Amortization of purchased intangibles
|
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5
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5
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Amortization of debt issuance costs
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2
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—
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Stock-based compensation
|
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8
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4
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Change in
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|
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||||
Accounts receivable
|
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(243
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)
|
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(168
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)
|
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Inventoried costs
|
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5
|
|
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(110
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)
|
||
Prepaid expenses and other assets
|
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2
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(38
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)
|
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Accounts payable and accruals
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(125
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)
|
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(131
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)
|
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Deferred income taxes
|
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17
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|
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(33
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)
|
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Retiree benefits
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(75
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)
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31
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|
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Other non-cash transactions, net
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—
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(9
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)
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Net cash provided by (used in) operating activities
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(329
|
)
|
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(364
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)
|
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Investing Activities
|
|
|
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|
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Additions to property, plant, and equipment
|
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(27
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)
|
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(63
|
)
|
||
Net cash provided by (used in) investing activities
|
|
(27
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)
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(63
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)
|
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Financing Activities
|
|
|
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|
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Proceeds from issuance of long-term debt
|
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—
|
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1,775
|
|
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Repayment of long-term debt
|
|
(8
|
)
|
|
—
|
|
||
Debt issuance costs
|
|
—
|
|
|
(50
|
)
|
||
Repayment of notes payable to former parent and accrued interest
|
|
—
|
|
|
(954
|
)
|
||
Dividend to former parent in connection with spin-off
|
|
—
|
|
|
(1,429
|
)
|
||
Net transfers from (to) former parent
|
|
—
|
|
|
1,310
|
|
||
Net cash provided by (used in) financing activities
|
|
(8
|
)
|
|
652
|
|
||
Change in cash and cash equivalents
|
|
(364
|
)
|
|
225
|
|
||
Cash and cash equivalents, beginning of period
|
|
915
|
|
|
—
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
551
|
|
|
$
|
225
|
|
Supplemental Cash Flow Disclosure
|
|
|
|
|
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Cash paid for income taxes
|
|
$
|
4
|
|
|
$
|
—
|
|
Cash paid for interest
|
|
$
|
47
|
|
|
$
|
—
|
|
Three months ended March 31, 2012 and 2011
($ in millions)
|
|
Former Parent's Equity in Unit
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings (Deficit)
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total Stockholders' Equity
|
||||||||||||
Balance at December 31, 2010
|
|
$
|
1,933
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(515
|
)
|
|
$
|
1,418
|
|
Net earnings (loss)
|
|
47
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
45
|
|
||||||
Dividend to former parent
|
|
(1,429
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,429
|
)
|
||||||
Contributed surplus
|
|
(1,861
|
)
|
|
—
|
|
|
1,861
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net transfers from (to) former parent
|
|
1,310
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,310
|
|
||||||
Additional paid-in capital
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Other comprehensive income (loss), net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
17
|
|
||||||
Balance at March 31, 2011
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,862
|
|
|
$
|
(2
|
)
|
|
$
|
(498
|
)
|
|
$
|
1,362
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at December 31, 2011
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,862
|
|
|
$
|
(141
|
)
|
|
$
|
(849
|
)
|
|
$
|
872
|
|
Net earnings (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33
|
|
|
—
|
|
|
33
|
|
||||||
Additional paid-in capital
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||||
Other comprehensive income (loss), net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
15
|
|
||||||
Balance at March 31, 2012
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,860
|
|
|
$
|
(108
|
)
|
|
$
|
(834
|
)
|
|
$
|
918
|
|
($ in millions)
|
|
Compensation
|
|
Other Accruals
|
|
Total
|
||||||
Balance at December 31, 2010
|
|
$
|
27
|
|
|
$
|
39
|
|
|
$
|
66
|
|
Accrual established
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Payments
|
|
(4
|
)
|
|
(36
|
)
|
|
(40
|
)
|
|||
Adjustments
|
|
8
|
|
|
(3
|
)
|
|
5
|
|
|||
Balance at March 31, 2011
|
|
$
|
31
|
|
|
$
|
—
|
|
|
$
|
31
|
|
|
|
|
|
|
|
|
||||||
Balance at December 31, 2011
|
|
$
|
50
|
|
|
$
|
—
|
|
|
$
|
50
|
|
Accrual established
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Payments
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||
Adjustments
|
|
9
|
|
|
—
|
|
|
9
|
|
|||
Balance at March 31, 2012
|
|
$
|
55
|
|
|
$
|
—
|
|
|
$
|
55
|
|
|
|
Three Months Ended
March 31
|
||||||
(in millions, except per share amounts)
|
|
2012
|
|
2011
|
||||
Net earnings (loss)
|
|
$
|
33
|
|
|
$
|
45
|
|
|
|
|
|
|
||||
Weighted-average common shares outstanding
|
|
49.0
|
|
|
48.8
|
|
||
Net effect of dilutive stock options
|
|
0.2
|
|
|
—
|
|
||
Net effect of dilutive restricted stock rights
|
|
0.1
|
|
|
—
|
|
||
Net effect of dilutive restricted performance stock rights
|
|
0.2
|
|
|
—
|
|
||
Dilutive weighted-average common shares outstanding
|
|
49.5
|
|
|
48.8
|
|
||
|
|
|
|
|
||||
Earnings (loss) per share - basic
|
|
$
|
0.67
|
|
|
$
|
0.92
|
|
Earnings (loss) per share - diluted
|
|
$
|
0.67
|
|
|
$
|
0.92
|
|
|
|
Three Months Ended
March 31
|
||||||
($ in millions)
|
|
2012
|
|
2011
|
||||
Sales and Service Revenues
|
|
|
|
|
||||
Ingalls
|
|
$
|
692
|
|
|
$
|
761
|
|
Newport News
|
|
895
|
|
|
940
|
|
||
Intersegment eliminations
|
|
(19
|
)
|
|
(17
|
)
|
||
Total sales and service revenues
|
|
$
|
1,568
|
|
|
$
|
1,684
|
|
Operating Income (Loss)
|
|
|
|
|
||||
Ingalls
|
|
$
|
20
|
|
|
$
|
17
|
|
Newport News
|
|
81
|
|
|
67
|
|
||
Total Segment Operating Income (Loss)
|
|
101
|
|
|
84
|
|
||
Non-segment factors affecting operating income (loss)
|
|
|
|
|
||||
FAS/CAS Adjustment
|
|
(17
|
)
|
|
(4
|
)
|
||
Deferred state income taxes
|
|
(4
|
)
|
|
5
|
|
||
Total operating income (loss)
|
|
$
|
80
|
|
|
$
|
85
|
|
($ in millions)
|
|
March 31,
2012 |
|
December 31,
2011 |
||||
Production costs of contracts in process
|
|
$
|
363
|
|
|
$
|
402
|
|
General and administrative expenses
|
|
14
|
|
|
15
|
|
||
|
|
377
|
|
|
417
|
|
||
Progress payments received
|
|
(76
|
)
|
|
(118
|
)
|
||
|
|
301
|
|
|
299
|
|
||
Raw material inventory
|
|
83
|
|
|
81
|
|
||
Total inventoried costs, net
|
|
$
|
384
|
|
|
$
|
380
|
|
($ in millions)
|
|
March 31
2012 |
|
December 31
2011 |
||||
Gross carrying amount
|
|
$
|
939
|
|
|
$
|
939
|
|
Accumulated amortization
|
|
(377
|
)
|
|
(372
|
)
|
||
Net carrying amount
|
|
$
|
562
|
|
|
$
|
567
|
|
($ in millions)
|
|
March 31
2012 |
|
December 31
2011 |
||||
Net current deferred tax assets
|
|
$
|
235
|
|
|
$
|
232
|
|
Net non-current deferred tax assets
|
|
99
|
|
|
128
|
|
||
Total net deferred tax assets
|
|
$
|
334
|
|
|
$
|
360
|
|
($ in millions)
|
|
March 31
2012 |
|
December 31
2011 |
||||
Term loan due March 30, 2016
|
|
$
|
546
|
|
|
$
|
554
|
|
Senior notes due March 15, 2018, 6.875%
|
|
600
|
|
|
600
|
|
||
Senior notes due March 15, 2021, 7.125%
|
|
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
|
|
||
Total long-term debt
|
|
1,851
|
|
|
1,859
|
|
||
Less current portion
|
|
29
|
|
|
29
|
|
||
Long-term debt, net of current portion
|
|
$
|
1,822
|
|
|
$
|
1,830
|
|
|
|
Three Months Ended
March 31
|
||||||
($ in millions)
|
|
2012
|
|
2011
|
||||
Sales and services revenues
|
|
$
|
321
|
|
|
$
|
402
|
|
Operating income
|
|
8
|
|
|
14
|
|
||
Net earnings
|
|
8
|
|
|
14
|
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
|
Three Months Ended March 31
|
|
Three Months Ended March 31
|
||||||||||||
($ in millions)
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Components of Net Periodic Benefit Cost
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
|
$
|
33
|
|
|
$
|
31
|
|
|
$
|
4
|
|
|
$
|
4
|
|
Interest cost
|
|
53
|
|
|
50
|
|
|
9
|
|
|
10
|
|
||||
Expected return on plan assets
|
|
(67
|
)
|
|
(66
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service cost (credit)
|
|
3
|
|
|
3
|
|
|
(2
|
)
|
|
(2
|
)
|
||||
Amortization of net actuarial loss (gain)
|
|
20
|
|
|
8
|
|
|
2
|
|
|
2
|
|
||||
Net periodic benefit cost
|
|
$
|
42
|
|
|
$
|
26
|
|
|
$
|
13
|
|
|
$
|
14
|
|
|
|
Three Months Ended
March 31
|
||||||
($ in millions)
|
|
2012
|
|
2011
|
||||
Pension plans
|
|
|
|
|
||||
Minimum (a)
|
|
$
|
80
|
|
|
$
|
—
|
|
Discretionary
|
|
|
|
|
||||
Qualified
|
|
41
|
|
|
—
|
|
||
Non-qualified
|
|
1
|
|
|
1
|
|
||
Other benefit plans
|
|
5
|
|
|
9
|
|
||
Total contributions
|
|
$
|
127
|
|
|
$
|
10
|
|
|
|
Shares Under
Option
(in thousands)
|
|
Weighted-
Average
Exercise Price
|
|
Weighted- Average
Remaining
Contractual Term
(in years)
|
|
Aggregate
Intrinsic
Value
($ in millions)
|
|||||
Outstanding at March 31, 2012
|
|
1,490
|
|
|
$
|
34.19
|
|
|
2.8
|
|
|
10
|
|
Exercisable at March 31, 2012
|
|
1,354
|
|
|
$
|
34.37
|
|
|
2.6
|
|
|
10
|
|
|
|
Stock Awards
(in thousands)
|
|
Weighted-Average
Grant Date Fair
Value
|
|
Weighted-Average Remaining Contractual Term
(in years)
|
|||
Total stock awards
|
|
2,636
|
|
|
$
|
38.93
|
|
|
1.9
|
|
|
Three Months Ended March 31, 2012
|
||||||||||||||||||
($ in millions)
|
|
Huntington Ingalls Industries, Inc.
|
|
Subsidiary Guarantors
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Sales and service revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Product sales
|
|
$
|
—
|
|
|
$
|
1,353
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,353
|
|
Service revenues
|
|
—
|
|
|
215
|
|
|
1
|
|
|
(1
|
)
|
|
215
|
|
|||||
Total sales and service revenues
|
|
—
|
|
|
1,568
|
|
|
1
|
|
|
(1
|
)
|
|
1,568
|
|
|||||
Cost of sales and service revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of product sales
|
|
—
|
|
|
1,152
|
|
|
—
|
|
|
—
|
|
|
1,152
|
|
|||||
Cost of service revenues
|
|
—
|
|
|
186
|
|
|
1
|
|
|
(1
|
)
|
|
186
|
|
|||||
General and administrative expenses
|
|
—
|
|
|
150
|
|
|
—
|
|
|
—
|
|
|
150
|
|
|||||
Operating income (loss)
|
|
—
|
|
|
80
|
|
|
—
|
|
|
—
|
|
|
80
|
|
|||||
Interest expense
|
|
(28
|
)
|
|
(2
|
)
|
|
—
|
|
|
|
|
(30
|
)
|
||||||
Equity in earnings (loss) of subsidiaries
|
|
51
|
|
|
—
|
|
|
—
|
|
|
(51
|
)
|
|
—
|
|
|||||
Earnings (loss) before income taxes
|
|
23
|
|
|
78
|
|
|
—
|
|
|
(51
|
)
|
|
50
|
|
|||||
Federal income taxes
|
|
(10
|
)
|
|
27
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|||||
Net earnings (loss)
|
|
$
|
33
|
|
|
$
|
51
|
|
|
$
|
—
|
|
|
$
|
(51
|
)
|
|
$
|
33
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net earnings (loss) from above
|
|
$
|
33
|
|
|
$
|
51
|
|
|
$
|
—
|
|
|
$
|
(51
|
)
|
|
$
|
33
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Change in unamortized benefit plan costs
|
|
—
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|||||
Tax benefit (expense) on change in unamortized benefit plan costs
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|||||
Other comprehensive income (loss), net of tax
|
|
—
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|||||
Comprehensive income (loss)
|
|
$
|
33
|
|
|
$
|
66
|
|
|
$
|
—
|
|
|
$
|
(51
|
)
|
|
$
|
48
|
|
|
|
Three Months Ended March 31, 2011
|
||||||||||||||||||
($ in millions)
|
|
Huntington Ingalls Industries, Inc.
|
|
Subsidiary Guarantors
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Sales and service revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Product sales
|
|
$
|
—
|
|
|
$
|
1,466
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,466
|
|
Service revenues
|
|
—
|
|
|
218
|
|
|
—
|
|
|
—
|
|
|
218
|
|
|||||
Total sales and service revenues
|
|
—
|
|
|
1,684
|
|
|
—
|
|
|
—
|
|
|
1,684
|
|
|||||
Cost of sales and service revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of product sales
|
|
—
|
|
|
1,253
|
|
|
—
|
|
|
—
|
|
|
1,253
|
|
|||||
Cost of service revenues
|
|
—
|
|
|
197
|
|
|
—
|
|
|
—
|
|
|
197
|
|
|||||
General and administrative expenses
|
|
—
|
|
|
149
|
|
|
—
|
|
|
—
|
|
|
149
|
|
|||||
Operating income (loss)
|
|
—
|
|
|
85
|
|
|
—
|
|
|
—
|
|
|
85
|
|
|||||
Interest expense
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
|
|
(15
|
)
|
||||||
Equity in earnings (loss) of subsidiaries
|
|
45
|
|
|
—
|
|
|
—
|
|
|
(45
|
)
|
|
—
|
|
|||||
Earnings (loss) before income taxes
|
|
45
|
|
|
70
|
|
|
—
|
|
|
(45
|
)
|
|
70
|
|
|||||
Federal income taxes
|
|
—
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|||||
Net earnings (loss)
|
|
$
|
45
|
|
|
$
|
45
|
|
|
$
|
—
|
|
|
$
|
(45
|
)
|
|
$
|
45
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net earnings (loss) from above
|
|
$
|
45
|
|
|
$
|
45
|
|
|
$
|
—
|
|
|
$
|
(45
|
)
|
|
$
|
45
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Change in unamortized benefit plan costs
|
|
—
|
|
|
28
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|||||
Tax benefit (expense) on change in unamortized benefit plan costs
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|||||
Other comprehensive income (loss), net of tax
|
|
—
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|||||
Comprehensive income (loss)
|
|
$
|
45
|
|
|
$
|
62
|
|
|
$
|
—
|
|
|
$
|
(45
|
)
|
|
$
|
62
|
|
|
|
March 31, 2012
|
||||||||||||||||||
($ in millions, except per share amounts)
|
|
Huntington Ingalls Industries, Inc.
|
|
Subsidiary Guarantors
|
|
Other Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
526
|
|
|
$
|
1
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
551
|
|
Accounts receivable, net
|
|
—
|
|
|
954
|
|
|
—
|
|
|
—
|
|
|
954
|
|
|||||
Inventoried costs, net
|
|
—
|
|
|
384
|
|
|
—
|
|
|
—
|
|
|
384
|
|
|||||
Deferred income taxes
|
|
—
|
|
|
235
|
|
|
—
|
|
|
—
|
|
|
235
|
|
|||||
Prepaid expenses and other current assets
|
|
—
|
|
|
32
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|||||
Total current assets
|
|
526
|
|
|
1,606
|
|
|
24
|
|
|
—
|
|
|
2,156
|
|
|||||
Property, plant, and equipment, net
|
|
—
|
|
|
2,005
|
|
|
—
|
|
|
—
|
|
|
2,005
|
|
|||||
Other Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Goodwill
|
|
—
|
|
|
844
|
|
|
—
|
|
|
—
|
|
|
844
|
|
|||||
Other purchased intangibles, net of accumulated amortization of $377 in 2012
|
|
—
|
|
|
562
|
|
|
—
|
|
|
—
|
|
|
562
|
|
|||||
Pension plan asset
|
|
—
|
|
|
64
|
|
|
—
|
|
|
—
|
|
|
64
|
|
|||||
Debt issuance costs
|
|
46
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|||||
Miscellaneous other assets
|
|
—
|
|
|
147
|
|
|
—
|
|
|
—
|
|
|
147
|
|
|||||
Investment in subsidiaries
|
|
2,423
|
|
|
—
|
|
|
—
|
|
|
(2,423
|
)
|
|
—
|
|
|||||
Intercompany receivables
|
|
—
|
|
|
355
|
|
|
—
|
|
|
(355
|
)
|
|
—
|
|
|||||
Total other assets
|
|
2,469
|
|
|
1,972
|
|
|
—
|
|
|
(2,778
|
)
|
|
1,663
|
|
|||||
Total assets
|
|
$
|
2,995
|
|
|
$
|
5,583
|
|
|
$
|
24
|
|
|
$
|
(2,778
|
)
|
|
$
|
5,824
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Trade accounts payable
|
|
$
|
—
|
|
|
$
|
269
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
293
|
|
Current portion of long-term debt
|
|
29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|||||
Current portion of workers’ compensation liabilities
|
|
—
|
|
|
201
|
|
|
—
|
|
|
—
|
|
|
201
|
|
|||||
Current portion of postretirement plan liabilities
|
|
—
|
|
|
172
|
|
|
—
|
|
|
—
|
|
|
172
|
|
|||||
Accrued employees’ compensation
|
|
—
|
|
|
189
|
|
|
—
|
|
|
—
|
|
|
189
|
|
|||||
Advance payments and billings in excess of costs incurred
|
|
—
|
|
|
118
|
|
|
—
|
|
|
—
|
|
|
118
|
|
|||||
Provision for contract losses
|
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|||||
Other current liabilities
|
|
5
|
|
|
233
|
|
|
—
|
|
|
—
|
|
|
238
|
|
|||||
Total current liabilities
|
|
34
|
|
|
1,194
|
|
|
24
|
|
|
—
|
|
|
1,252
|
|
|||||
Long-term debt
|
|
1,717
|
|
|
105
|
|
|
—
|
|
|
—
|
|
|
1,822
|
|
|||||
Other postretirement plan liabilities
|
|
—
|
|
|
586
|
|
|
—
|
|
|
—
|
|
|
586
|
|
|||||
Pension plan liabilities
|
|
—
|
|
|
833
|
|
|
—
|
|
|
—
|
|
|
833
|
|
|||||
Workers’ compensation liabilities
|
|
—
|
|
|
362
|
|
|
—
|
|
|
—
|
|
|
362
|
|
|||||
Other long-term liabilities
|
|
—
|
|
|
51
|
|
|
—
|
|
|
—
|
|
|
51
|
|
|||||
Intercompany liabilities
|
|
326
|
|
|
29
|
|
|
—
|
|
|
(355
|
)
|
|
—
|
|
|||||
Total liabilities
|
|
2,077
|
|
|
3,160
|
|
|
24
|
|
|
(355
|
)
|
|
4,906
|
|
|||||
Commitments and Contingencies (Note 13)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock, $0.01 par value; 150,000,000 shares authorized; 49,445,957 issued and outstanding as of March 31, 2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Additional paid-in capital
|
|
949
|
|
|
3,283
|
|
|
—
|
|
|
(2,372
|
)
|
|
1,860
|
|
|||||
Retained earnings (deficit)
|
|
(31
|
)
|
|
(26
|
)
|
|
—
|
|
|
(51
|
)
|
|
(108
|
)
|
|||||
Accumulated other comprehensive income (loss)
|
|
—
|
|
|
(834
|
)
|
|
—
|
|
|
—
|
|
|
(834
|
)
|
|||||
Total stockholders’ equity
|
|
918
|
|
|
2,423
|
|
|
—
|
|
|
(2,423
|
)
|
|
918
|
|
|||||
Total liabilities and stockholders’ equity
|
|
$
|
2,995
|
|
|
$
|
5,583
|
|
|
$
|
24
|
|
|
$
|
(2,778
|
)
|
|
$
|
5,824
|
|
|
|
December 31, 2011
|
||||||||||||||||||
($ in millions, except per share amounts)
|
|
Huntington Ingalls Industries, Inc.
|
|
Subsidiary Guarantors
|
|
Other Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
915
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
915
|
|
Accounts receivable, net
|
|
—
|
|
|
711
|
|
|
—
|
|
|
—
|
|
|
711
|
|
|||||
Inventoried costs, net
|
|
—
|
|
|
380
|
|
|
—
|
|
|
—
|
|
|
380
|
|
|||||
Deferred income taxes
|
|
—
|
|
|
232
|
|
|
—
|
|
|
—
|
|
|
232
|
|
|||||
Prepaid expenses and other current assets
|
|
—
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|||||
Total current assets
|
|
915
|
|
|
1,353
|
|
|
—
|
|
|
—
|
|
|
2,268
|
|
|||||
Property, plant, and equipment, net
|
|
—
|
|
|
2,033
|
|
|
—
|
|
|
—
|
|
|
2,033
|
|
|||||
Other Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Goodwill
|
|
—
|
|
|
844
|
|
|
—
|
|
|
—
|
|
|
844
|
|
|||||
Other purchased intangibles, net of accumulated amortization of $377 in 2012
|
|
—
|
|
|
567
|
|
|
—
|
|
|
—
|
|
|
567
|
|
|||||
Pension plan asset
|
|
—
|
|
|
64
|
|
|
—
|
|
|
—
|
|
|
64
|
|
|||||
Debt issuance costs
|
|
48
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48
|
|
|||||
Miscellaneous other assets
|
|
—
|
|
|
177
|
|
|
—
|
|
|
—
|
|
|
177
|
|
|||||
Investment in subsidiaries
|
|
2,358
|
|
|
—
|
|
|
—
|
|
|
(2,358
|
)
|
|
—
|
|
|||||
Intercompany receivables
|
|
—
|
|
|
692
|
|
|
—
|
|
|
(692
|
)
|
|
—
|
|
|||||
Total other assets
|
|
2,406
|
|
|
2,344
|
|
|
—
|
|
|
(3,050
|
)
|
|
1,700
|
|
|||||
Total assets
|
|
$
|
3,321
|
|
|
$
|
5,730
|
|
|
$
|
—
|
|
|
$
|
(3,050
|
)
|
|
$
|
6,001
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Trade accounts payable
|
|
$
|
—
|
|
|
$
|
380
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
380
|
|
Current portion of long-term debt
|
|
29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|||||
Current portion of workers’ compensation liabilities
|
|
—
|
|
|
201
|
|
|
—
|
|
|
—
|
|
|
201
|
|
|||||
Current portion of postretirement plan liabilities
|
|
—
|
|
|
172
|
|
|
—
|
|
|
—
|
|
|
172
|
|
|||||
Accrued employees’ compensation
|
|
—
|
|
|
221
|
|
|
—
|
|
|
—
|
|
|
221
|
|
|||||
Advance payments and billings in excess of costs incurred
|
|
—
|
|
|
101
|
|
|
—
|
|
|
—
|
|
|
101
|
|
|||||
Provision for contract losses
|
|
—
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|||||
Other current liabilities
|
|
26
|
|
|
223
|
|
|
—
|
|
|
—
|
|
|
249
|
|
|||||
Total current liabilities
|
|
55
|
|
|
1,317
|
|
|
—
|
|
|
—
|
|
|
1,372
|
|
|||||
Long-term debt
|
|
1,725
|
|
|
105
|
|
|
—
|
|
|
—
|
|
|
1,830
|
|
|||||
Other postretirement plan liabilities
|
|
—
|
|
|
581
|
|
|
—
|
|
|
—
|
|
|
581
|
|
|||||
Pension plan liabilities
|
|
—
|
|
|
936
|
|
|
—
|
|
|
—
|
|
|
936
|
|
|||||
Workers’ compensation liabilities
|
|
—
|
|
|
361
|
|
|
—
|
|
|
—
|
|
|
361
|
|
|||||
Other long-term liabilities
|
|
—
|
|
|
49
|
|
|
—
|
|
|
—
|
|
|
49
|
|
|||||
Intercompany liabilities
|
|
669
|
|
|
23
|
|
|
—
|
|
|
(692
|
)
|
|
—
|
|
|||||
Total liabilities
|
|
2,449
|
|
|
3,372
|
|
|
—
|
|
|
(692
|
)
|
|
5,129
|
|
|||||
Commitments and Contingencies (Note 13)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock, $0.01 par value; 150,000,000 shares authorized; 49,445,957 issued and outstanding as of March 31, 2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Additional paid-in capital
|
|
972
|
|
|
3,284
|
|
|
—
|
|
|
(2,394
|
)
|
|
1,862
|
|
|||||
Retained earnings (deficit)
|
|
(100
|
)
|
|
(77
|
)
|
|
—
|
|
|
36
|
|
|
(141
|
)
|
|||||
Accumulated other comprehensive income (loss)
|
|
—
|
|
|
(849
|
)
|
|
—
|
|
|
—
|
|
|
(849
|
)
|
|||||
Total stockholders’ equity
|
|
872
|
|
|
2,358
|
|
|
—
|
|
|
(2,358
|
)
|
|
872
|
|
|||||
Total liabilities and stockholders’ equity
|
|
$
|
3,321
|
|
|
$
|
5,730
|
|
|
$
|
—
|
|
|
$
|
(3,050
|
)
|
|
$
|
6,001
|
|
|
|
Three Months Ended March 31, 2012
|
||||||||||||||||||
($ in millions)
|
|
Huntington Ingalls Industries, Inc.
|
|
Subsidiary Guarantors
|
|
Other Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided by (used in) operating activities
|
|
$
|
(43
|
)
|
|
$
|
(310
|
)
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
(329
|
)
|
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Additions to property, plant, and equipment
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
|||||
Net cash provided by (used in) investing activities
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
|||||
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Repayment of long-term debt
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|||||
Cash sweep/funding by parent
|
|
(338
|
)
|
|
338
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
|
(346
|
)
|
|
338
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|||||
Change in cash and cash equivalents
|
|
(389
|
)
|
|
1
|
|
|
24
|
|
|
—
|
|
|
(364
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
|
915
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
915
|
|
|||||
Cash and cash equivalents, end of period
|
|
$
|
526
|
|
|
$
|
1
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
551
|
|
|
|
Three Months Ended March 31, 2011
|
||||||||||||||||||
($ in millions)
|
|
Huntington Ingalls Industries, Inc.
|
|
Subsidiary Guarantors
|
|
Other Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided by (used in) operating activities
|
|
$
|
3
|
|
|
$
|
(367
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(364
|
)
|
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Additions to property, plant, and equipment
|
|
—
|
|
|
(63
|
)
|
|
—
|
|
|
—
|
|
|
(63
|
)
|
|||||
Net cash provided by (used in) investing activities
|
|
—
|
|
|
(63
|
)
|
|
—
|
|
|
—
|
|
|
(63
|
)
|
|||||
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of long-term debt
|
|
1,775
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,775
|
|
|||||
Debt issuance costs
|
|
(50
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|||||
Repayment of notes payable to former parent and accrued interest
|
|
—
|
|
|
(954
|
)
|
|
—
|
|
|
—
|
|
|
(954
|
)
|
|||||
Dividend to former parent in connection with spin-off
|
|
(1,429
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,429
|
)
|
|||||
Net transfers from (to) former parent
|
|
—
|
|
|
1,310
|
|
|
—
|
|
|
—
|
|
|
1,310
|
|
|||||
Cash sweep/funding by parent
|
|
(74
|
)
|
|
74
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
|
222
|
|
|
430
|
|
|
—
|
|
|
—
|
|
|
652
|
|
|||||
Change in cash and cash equivalents
|
|
225
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
225
|
|
|||||
Cash and cash equivalents, beginning of period
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Cash and cash equivalents, end of period
|
|
$
|
225
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
225
|
|
•
|
Revenue recognition;
|
•
|
Purchase accounting and goodwill;
|
•
|
Litigation, commitments and contingencies;
|
•
|
Retirement related plans; and
|
•
|
Workers' compensation.
|
|
|
Three Months Ended
March 31
|
|
|||||
($ in millions)
|
|
2012
|
|
2011
|
||||
Sales and service revenues
|
|
$
|
1,568
|
|
|
$
|
1,684
|
|
Cost of sales and service revenues
|
|
1,338
|
|
|
1,450
|
|
||
General and administrative expenses
|
|
150
|
|
|
149
|
|
||
Operating income (loss)
|
|
80
|
|
|
85
|
|
||
Interest expense
|
|
30
|
|
|
15
|
|
||
Federal and foreign income taxes
|
|
17
|
|
|
25
|
|
||
Net earnings (loss)
|
|
$
|
33
|
|
|
$
|
45
|
|
|
|
Three Months Ended
March 31
|
|
|||||
($ in millions)
|
|
2012
|
|
2011
|
||||
Product sales
|
|
$
|
1,353
|
|
|
$
|
1,466
|
|
Service revenues
|
|
215
|
|
|
218
|
|
||
Sales and service revenues
|
|
$
|
1,568
|
|
|
$
|
1,684
|
|
|
|
Three Months Ended
March 31
|
|
|||||
($ in millions)
|
|
2012
|
|
2011
|
||||
Cost of product sales
|
|
$
|
1,152
|
|
|
$
|
1,253
|
|
Cost of service revenues
|
|
186
|
|
|
197
|
|
||
Cost of product sales and service revenues
|
|
1,338
|
|
|
1,450
|
|
||
% of total sales and service revenues
|
|
85.3
|
%
|
|
86.1
|
%
|
||
General and administrative expenses
|
|
150
|
|
|
149
|
|
||
% of total sales and service revenues
|
|
9.6
|
%
|
|
8.8
|
%
|
||
Cost of sales and service revenues
|
|
$
|
1,488
|
|
|
$
|
1,599
|
|
|
|
Three Months Ended
March 31
|
|
|||||
($ in millions)
|
|
2012
|
|
2011
|
||||
Segment operating income (loss)
|
|
$
|
101
|
|
|
$
|
84
|
|
FAS/CAS Adjustment
|
|
(17
|
)
|
|
(4
|
)
|
||
Deferred state income taxes
|
|
(4
|
)
|
|
5
|
|
||
Total operating income (loss)
|
|
$
|
80
|
|
|
$
|
85
|
|
|
|
Three Months Ended
March 31
|
||||||
($ in millions)
|
|
2012
|
|
2011
|
||||
FAS expense
|
|
$
|
(55
|
)
|
|
$
|
(39
|
)
|
CAS expense
|
|
38
|
|
|
35
|
|
||
FAS/CAS Adjustment
|
|
$
|
(17
|
)
|
|
$
|
(4
|
)
|
|
|
Three Months Ended
March 31
|
|
|||||
($ in millions)
|
|
2012
|
|
2011
|
||||
Sales and Service Revenues
|
|
|
|
|
||||
Ingalls
|
|
$
|
692
|
|
|
$
|
761
|
|
Newport News
|
|
895
|
|
|
940
|
|
||
Intersegment eliminations
|
|
(19
|
)
|
|
(17
|
)
|
||
Total sales and service revenues
|
|
$
|
1,568
|
|
|
$
|
1,684
|
|
Operating Income (Loss)
|
|
|
|
|
||||
Ingalls
|
|
$
|
20
|
|
|
$
|
17
|
|
Newport News
|
|
81
|
|
|
67
|
|
||
Total Segment Operating Income (Loss)
|
|
101
|
|
|
84
|
|
||
Non-segment factors affecting operating income (loss)
|
|
|
|
|
||||
FAS/CAS Adjustment
|
|
(17
|
)
|
|
(4
|
)
|
||
Deferred state income taxes
|
|
(4
|
)
|
|
5
|
|
||
Total operating income (loss)
|
|
$
|
80
|
|
|
$
|
85
|
|
|
|
Three Months Ended
March 31
|
|
|||||
($ millions)
|
|
2012
|
|
2011
|
||||
Sales and service revenues
|
|
$
|
692
|
|
|
$
|
761
|
|
Segment operating income (loss)
|
|
20
|
|
|
17
|
|
||
As a percentage of segment sales
|
|
2.9
|
%
|
|
2.2
|
%
|
|
|
Three Months Ended
March 31
|
|
|||||
($ millions)
|
|
2012
|
|
2011
|
||||
Sales and service revenues
|
|
$
|
895
|
|
|
$
|
940
|
|
Segment operating income (loss)
|
|
81
|
|
|
67
|
|
||
As a percentage of segment sales
|
|
9.1
|
%
|
|
7.1
|
%
|
|
|
March 31, 2012
|
|
December 31, 2011
|
||||||||||||||||||||
|
|
|
|
|
|
Total
|
|
|
|
|
|
Total
|
||||||||||||
($ in millions)
|
|
Funded
|
|
Unfunded
|
|
Backlog
|
|
Funded
|
|
Unfunded
|
|
Backlog
|
||||||||||||
Ingalls
|
|
$
|
5,045
|
|
|
$
|
308
|
|
|
$
|
5,353
|
|
|
$
|
5,454
|
|
|
$
|
242
|
|
|
$
|
5,696
|
|
Newport News
|
|
6,743
|
|
|
3,361
|
|
|
10,104
|
|
|
5,387
|
|
|
5,185
|
|
|
10,572
|
|
||||||
Total backlog
|
|
$
|
11,788
|
|
|
$
|
3,669
|
|
|
$
|
15,457
|
|
|
$
|
10,841
|
|
|
$
|
5,427
|
|
|
$
|
16,268
|
|
|
|
Three Months Ended
March 31
|
||||||
($ in millions)
|
|
2012
|
|
2011
|
||||
Net earnings (loss)
|
|
$
|
33
|
|
|
$
|
45
|
|
Deferred income taxes
|
|
17
|
|
|
(33
|
)
|
||
Depreciation and amortization
|
|
49
|
|
|
45
|
|
||
Stock-based compensation
|
|
8
|
|
|
4
|
|
||
Retiree benefit funding less than (in excess of) expense
|
|
(75
|
)
|
|
31
|
|
||
Trade working capital decrease (increase)
|
|
(361
|
)
|
|
(456
|
)
|
||
Net cash provided by (used in) operating activities
|
|
$
|
(329
|
)
|
|
$
|
(364
|
)
|
|
|
Three Months Ended
March 31
|
||||||
($ in millions)
|
|
2012
|
|
2011
|
||||
Net cash provided by operating activities
|
|
$
|
(329
|
)
|
|
$
|
(364
|
)
|
Less:
|
|
|
|
|
||||
Capital expenditures
|
|
(27
|
)
|
|
(63
|
)
|
||
Free cash flow (used in) provided by operations
|
|
$
|
(356
|
)
|
|
$
|
(427
|
)
|
•
|
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 obtain new contracts, estimate our costs and perform effectively;
|
•
|
risks related to our spin-off from Northrop Grumman (including our increased costs and leverage);
|
•
|
our ability to realize the expected benefits from consolidation of our Ingalls facilities;
|
•
|
natural disasters;
|
•
|
adverse economic conditions in the United States and globally; and
|
•
|
other risk factors discussed herein and in our filings with the
Securities and Exchange Commission (“SEC”)
.
|
Program Name
|
|
Program Description
|
|
|
|
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. CVN-71 USS
Theodore Roosevelt
is currently undergoing RCOH, marking the fifth carrier to undergo RCOH in history, and CVN-72 USS
Abraham Lincoln
advance planning has begun.
|
|
|
|
CVN-78
Gerald R. Ford
-class aircraft carriers
|
|
Design and construction for the
Ford
-class program, which is the future aircraft carrier replacement program for CVN-65 USS
Enterprise
and CVN-68
Nimitz
-class aircraft carriers. CVN-78
Gerald R. Ford
, the first ship of the
Ford
-class, is currently under construction and is scheduled to be delivered in 2015. CVN-79
John F. Kennedy
is under contract for engineering, advance construction, and purchase of long-lead-time components and material. This category also includes the class' non-recurring engineering. The class brings improved warfighting capability, quality of life improvements for sailors, and reduced acquisition and life cycle costs.
|
|
|
|
DDG-51
Arleigh Burke
-class destroyers
|
|
Build guided missile destroyers designed for conducting anti-air, anti-submarine, anti-surface and strike operations. The Aegis-equipped DDG-51
Arleigh Burke
-class destroyers are the U.S. Navy's primary surface combatant, and have been constructed in variants, allowing technological advances during construction. We delivered the USS
Gravely
in July 2010 and the USS
William P. Lawrence
in February 2011. We are currently preparing for the construction of DDG-113
John Finn
scheduled for delivery in 2016, and were recently awarded the construction contract for DDG-114
Ralph Johnson
scheduled for delivery in 2017.
|
|
|
|
LHA-6
America-
class amphibious assault ships
|
|
Design and build amphibious assault ships that provide forward presence and power projection as an integral part of joint, interagency and multinational maritime expeditionary forces. The LHA-6
America
-class ships, together with the LHD-1
Wasp
-class ships, are the successors to the aging LHA-1
Tarawa-
class ships. Three of the original five
Tarawa
-class ships have been recently decommissioned, and the remainder of the class is scheduled to be decommissioned by 2015. The first LHA replacement (“LHA(R)”) ship, LHA-6
America
, was placed under contract with us in June 2007, and is scheduled for delivery in 2013. The LHA-6
America
-class ships optimize aviation operations and support capabilities.
|
|
|
|
LPD-17
San Antonio-
class
|
|
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 LPD-17
San Antonio
-class 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. We are currently constructing LPD-23 through LPD-26. The LPD-17 class currently includes a total of 11 ships.
|
|
|
|
NSC-1
Legend
-class
National Security Cutter
|
|
Design and build the U.S. Coast Guard's National Security Cutters, 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 eight ships, of which the first three ships, NSC-1 USCGC
Bertholf
, NSC-2 USCGC
Waesche
and NSC-3 USCGC
Stratton
, have been delivered; NSC-4
Hamilton
is under construction; and the construction contract for NSC-5 was awarded to Ingalls in September 2011.
|
|
|
Savannah River Nuclear Solutions, LLC
|
|
Participate, as a minority member in a joint venture, in the management and operation of U.S. Department of Energy's ("DoE") nuclear sites, currently at the Savannah River Site near Aiken, South Carolina, and potentially at other DoE sites. Our joint venture partners include Fluor Corporation and Honeywell International Inc. at the Savannah River Site.
|
|
|
|
SSN-774
Virginia
-class fast attack submarines
|
|
Construct the newest attack submarines as the principal subcontractor to Electric Boat. The SSN-774
Virginia
-class 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.
|
3.1
|
|
|
Restated Certificate of Incorporation of Huntington Ingalls Industries, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on April 4, 2011).
|
|
|
|
|
3.2
|
|
|
Bylaws of Huntington Ingalls Industries, Inc. (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed on April 4, 2011).
|
|
|
|
|
10.18*
|
|
|
Severance Plan for Elected and Appointed Officers of Huntington Ingalls Industries.
|
|
|
|
|
10.32*
|
|
|
Huntington Ingalls Industries, Inc. 2012 Long-Term Incentive Stock Plan (incorporated by reference to Annex A to the Proxy Statement filed on April 3, 2012).
|
|
|
|
|
10.33*
|
|
|
Performance-based Compensation Policy of Huntington Ingalls Industries, Inc (incorporated by reference to Annex B to the Proxy Statement filed on April 3, 2012).
|
|
|
|
|
11
|
|
|
Computation of Per Share Earnings (provided in Note 5 of the Notes to Condensed Consolidated Financial Statements under the caption “Earnings Per Share”).
|
|
|
|
|
12.1
|
|
|
Ratio of Earnings to Fixed Charges.
|
|
|
|
|
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, (ii) the Condensed Consolidated Statements of Financial Position, (iii) the Condensed Consolidated Statements of Cash Flows, (iv) the Condensed Consolidated Statements of Changes in Shareholders’ Equity, and (v) the Notes to Condensed Consolidated Financial Statements, tagged as blocks of text.
|
Date: May 9, 2012
|
Huntington Ingalls Industries, Inc.
|
|
|
(Registrant)
|
|
|
||
|
By:
|
/s/ Douglass L. Fontaine
|
|
|
Douglass L. Fontaine
|
|
|
Corporate Vice President, Controller and Chief Accounting Officer
|
|
|
(Principal Accounting Officer)
|
(a)
|
“Administrative Committee”
means the Huntington Ingalls Industries, Inc. Administrative Committee established by the Board of Directors of the Company or any successor to the Administrative Committee.
|
(b)
|
“Committee”
means the Compensation Committee of the Board of Directors of the Company or any successor to the Committee.
|
(c)
|
“Code”
means the Internal Revenue Code of 1986, as amended.
|
(d)
|
“Company”
means Huntington Ingalls Industries, Inc.
|
(e)
|
“Disability”
means any disability of an Officer recognized as a disability for purposes of the Company’s long-term disability plan, or similar plan later adopted by the Company in place of such plan.
|
(f)
|
“Key Employee”
means an employee treated as a “specified employee” as of his Separation from Service under Code section 409A(a)(2)(B)(i) of the Company or its affiliate (i.e., a key employee (as defined in Code section 416(i) without regard to paragraph (5) thereof)) if the Company’s stock is publicly traded on an established securities market or otherwise. The Company shall determine in accordance with a uniform Company policy which Officers are Key Employees as of each December 31 in accordance with IRS regulations or other guidance under Code section 409A, provided that in determining the compensation of individuals for this purpose, the definition of compensation in Treas. Reg. § 1.415(c)-2(d)(3) shall be used. Such determination shall be effective for the twelve (12) month period commencing on April 1 of the following year. Notwithstanding the foregoing, Key Employees of the Company will be determined in accordance with the special rules for spin-offs under Treas. Reg. §1.409A-1(i)(6)(iii), or any successor thereto, for the period indicated in such regulation.
|
(g)
|
“Officer”
means an elected or appointed officer of Huntington Ingalls Industries, Inc. who resides and works in the United States.
|
(h)
|
“Plan”
means this Severance Plan for Elected and Appointed Officers of Huntington Ingalls Industries, as it may be amended from time to time.
|
(i)
|
“Qualifying Termination”
means any one of the following (i) an Officer’s involuntary termination of employment with the Company, other than Termination for Cause or mandatory retirement, or (ii) an Officer’s election to terminate employment with the Company in lieu of accepting a downgrade to a non-Officer position or status. “Qualifying Termination” does not include any change in the Officer’s employment status due to any transfer within the Company or to an affiliate, or to a purchaser of assets or a portion of the business of the Company or an affiliate in connection with the purchase, Disability, voluntary termination or normal retirement.
|
(j)
|
“Release”
means the Company’s Confidential Separation Agreement and General Release as in effect at the time of the Officer’s termination of employment.
|
(k)
|
“Separation from Service”
or
“Separate from Service”
means a “separation from service” within the meaning of Code section 409A, applying the default terms thereof.
|
(l)
|
“Termination for Cause”
means an Officer’s termination of employment with the Company because of:
|
(i)
|
The failure by the Officer to perform his duties in a satisfactory manner (other than a failure caused by the Officer’s medically documented incapacity due to physical or mental illness) after written demand for improved performance has been delivered to the Officer by the Company that specifically identifies how the Officer has not performed his duties in a satisfactory manner;
|
(ii)
|
The engaging by Officer in misconduct that is injurious to the Company, monetarily or otherwise, or that reflects adversely on the Officer’s fitness for continued employment with the Company; or
|
(iii)
|
The Officer’s conviction for committing an act of fraud, embezzlement, theft, or other act constituting a felony, regardless of whether the actual conviction is for a felony or misdemeanor, or the Officer’s pretrial incarceration pending the disposition of such a charge.
|
(a)
|
An Officer will be notified of potential eligibility for benefits under the Plan through a written notice from a Vice President of Human Resources or their designee. No other Company employee is authorized to provide such notice.
|
(b)
|
To receive benefits under the Plan, an Officer must meet the following conditions:
|
(i)
|
The Officer must experience a Qualifying Termination that results in termination of employment. If, before termination of employment occurs due to the Qualifying Termination event, the Officer voluntarily quits, retires, or experiences a Termination for Cause, the Officer will not receive benefits under this Plan.
|
(ii)
|
The Officer must sign a Confidential Separation Agreement and General Release provided by the Company.
|
(a)
|
Lump-sum Cash Severance Payment
. The designated Appendix describes the lump sum severance benefit available to the Officer.
|
(b)
|
Extension of Medical and Dental Benefits
. The Company will continue to pay its portion of the Officer’s medical and dental benefits for the period of time following the Officer’s termination date that is specified in the designated Appendix. Such continuation coverage shall run concurrently with COBRA continuation coverage (or similar state law). The Officer must continue to pay his portion of the cost of this coverage with after-tax dollars. If rates for active employees increase during this continuation period, the contribution amount will increase proportionately. Also, if medical and dental benefits are modified, terminated or changed in any way for active employees during this continuation period, the Officer will also be subject to such modification, termination or change. Following the continuation period specified in the designated Appendix, the Officer will be eligible to receive COBRA benefits for any remaining portion of the applicable COBRA period (typically 18 months) at normal COBRA rates. The unreimbursed COBRA period (
e.g.
, the period when the Officer must pay full COBRA rates in order to receive COBRA benefits) starts the first day of the month following the end of the continuation period specified in the designated Appendix.
|
(i)
|
The Officer’s eligibility for benefits in one year will not affect the Officer’s eligibility for benefits in any other year;
|
(ii)
|
Any reimbursement of eligible expenses will be made on or before the last day of the year following the year in which the expense was incurred; and
|
(iii)
|
The Officer’s right to benefits is not subject to liquidation or exchange for another benefit.
|
(c)
|
Company Performance-Related Payment
. The Officer will be eligible for a severance payment equal to a pro-rata portion of the bonus he or she would have received under the Company annual incentive plan in which he or she was a participant for the year in which the Qualifying Termination occurred, in addition to the lump-sum cash severance payment described in section 4(a). For this purpose, the pro-rated bonus (if any) will be based on the applicable annual incentive plan payout formula, with any applicable individual performance factor set at 1.00, prorated from the beginning of the performance period (January 1st) to the Officer’s date of termination. The severance payment contemplated by this Section 4(c) will be paid when the annual bonuses are paid to active employees between February 15 and March 15 of the year following termination. Notwithstanding anything to the contrary in this section 4(c), if the Officer’s bonus opportunity for the fiscal year in which his or her termination occurs is covered by the Company’s Incentive Compensation Plan (or similar successor bonus program designed to comply with the performance-based compensation exception under Code section 162(m)), then the Officer’s severance payment pursuant to this section 4(c) shall not exceed the maximum bonus the Officer would have been entitled to receive under the Company’s Incentive Compensation Plan for that fiscal year, assuming the Officer had been employed through the date bonuses are paid under such plan for that year, and otherwise calculated under the terms of such plan based on actual performance for that fiscal year (but without giving effect to any discretion of the plan administrator to reduce the bonus amount from the maximum otherwise determined in accordance with such plan).
|
(d)
|
Other Benefits
. All reimbursements will be within the limits established in the Executive Perquisite Program. These perquisites will cease as of the date of termination except for the following:
|
(i)
|
Financial Planning
. If an Officer is eligible for financial planning reimbursement at the time of termination, the Officer will be reimbursed for any financial planning fees as specified in the designated Appendix. For these purposes, “financial planning reimbursement” includes any income tax preparation fee reimbursement the Officer may be entitled to under the financial planning reimbursement terms and conditions applicable to the Officer at the time of termination. The financial planning (including income tax preparation fee) reimbursements contemplated by the Appendices are subject to any other applicable limitations that may apply under the financial planning reimbursement terms and conditions applicable to the Officer at the time of termination (for example, and without limitation, annual caps on amounts that may be used in connection with income tax preparation). To the extent any such reimbursements are, or ever become, subject to Code section 409A, any such reimbursements pursuant to this section 4(d)(i) shall be administered consistent with the following additional requirements as set forth in Treas. Reg. § 1.409A-3(i)(1)(iv): (1) Officer’s eligibility for benefits in one year will not affect Officer’s eligibility for benefits in any other year; (2) any reimbursement of eligible expenses will be made on or before the last day of the year following the year in which the expense was incurred; and (3) Officer’s right to benefits is not subject to liquidation or exchange for another benefit. In addition, no reimbursements shall be made to an Officer who is a Key Employee for six months following the Officer’s Separation from Service.
|
(ii)
|
Outplacement Service
. The Officer will be reimbursed for the cost of reasonable outplacement services provided by the Company’s outplacement service provider for services provided within one year after the Officer’s date of termination; provided, however, that the total reimbursement shall be limited to an amount equal to fifteen percent (15%) of the Officer’s base salary as of the date of termination. All services will be subject to the current contract with the provider, and all such expenses shall be reimbursed as soon as practicable, but in no event later than the end of the year following the year the Officer Separates from Service.
|
(e)
|
Time and Form of Payment
. The severance benefits under section 4(a) will be paid to the eligible Officer in a lump sum as soon as practicable following the Officer’s Separation from Service, but in no event beyond thirty (30) days from such date, provided the Officer signs the Release within twenty-one (21) days following the Officer’s Separation from Service, provided further, that if the Officer’s Separation from Service date occurs within twenty one (21) days before the end of a calendar year, then, to the extent the lump-sum payment is or becomes subject to Code section 409A, the lump-sum payment shall not be paid before the later of (i) the date on which the Officer signs the Release and any revocation period with respect to the Release has elapsed; and (ii) January 1 of the calendar year immediately following the calendar year in which the Officer’s Separation from Service occurred. Notwithstanding the foregoing, if the Officer is a Key Employee at the time of Separation from Service, and to the extent the lump-sum payment is or becomes subject to Code section 409A, the lump sum payment shall be made on or within thirty (30) days after the first day of the seventh month following the Officer’s Separation from Service (or, if earlier, the first day of the month after the Officer’s death), provided the Officer signs the Release within twenty-one (21) days following the Officer’s Separation from Service. This amount will be paid after all regular taxes and withholdings have been deducted. No payment made pursuant to the Plan is eligible compensation under any of the Company’s benefit plans, including without limitation, pension, savings, or deferred compensation plans.
|
|
|
Three Months
Ended March 31
|
|
Year Ended December 31
|
||||||||||||||||||||||||
($ in millions)
|
|
2012
|
|
2011
|
|
2011
(2)
|
|
2010
|
|
2009
|
|
2008
(1)
|
|
2007
|
||||||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Earnings from continuing operations before income taxes
|
|
$
|
50
|
|
|
$
|
70
|
|
|
$
|
6
|
|
|
$
|
206
|
|
|
$
|
176
|
|
|
$
|
(2,394
|
)
|
|
$
|
411
|
|
Amortization of Capitalized Interest
|
|
—
|
|
|
1
|
|
|
3
|
|
|
4
|
|
|
3
|
|
|
3
|
|
|
3
|
|
|||||||
Interest Capitalized
|
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
|
(3
|
)
|
|
(8
|
)
|
|
(4
|
)
|
|
(3
|
)
|
|||||||
Fixed Charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest expensed and capitalized, including amortization of debt issuance
|
|
31
|
|
|
15
|
|
|
106
|
|
|
43
|
|
|
44
|
|
|
44
|
|
|
45
|
|
|||||||
Portion of rental expenses on operating leases deemed to be representative of the interest factor
(3)
|
|
3
|
|
|
3
|
|
|
15
|
|
|
15
|
|
|
16
|
|
|
14
|
|
|
13
|
|
|||||||
Total Earnings
|
|
$83
|
|
$89
|
|
$
|
128
|
|
|
$
|
265
|
|
|
$
|
231
|
|
|
$
|
(2,337
|
)
|
|
$
|
469
|
|
||||
Fixed Charges:
|
|
$34
|
|
$18
|
|
$
|
121
|
|
|
$
|
58
|
|
|
$
|
60
|
|
|
$
|
58
|
|
|
$
|
58
|
|
||||
Ratio of earnings to fixed charges
|
|
2.4
|
|
4.9
|
|
1.1
|
|
|
4.6
|
|
|
3.9
|
|
|
—
|
|
|
8.1
|
|
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)) 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)
|
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
|
c)
|
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.
|
|
/s/ C. Michael Petters
|
|
C. Michael Petters
|
|
President and Chief Executive Officer
|
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)) 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)
|
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
|
c)
|
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.
|
|
/s/ Barbara A. Niland
|
|
Barbara A. Niland
|
|
Corporate Vice President, Business Management and Chief Financial Officer
|
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.
|
|
/s/ C. Michael Petters
|
|
C. Michael Petters
|
|
President and Chief Executive Officer
|
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.
|
|
/s/ Barbara A. Niland
|
|
Barbara A. Niland
|
|
Corporate Vice President, Business Management and Chief Financial Officer
|