ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
DELAWARE
|
|
90-0607005
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
Large accelerated filer
|
|
¨
|
|
Accelerated filer
|
|
¨
|
Non-accelerated filer
|
|
ý
|
|
Smaller reporting company
|
|
¨
|
(Do not check if a smaller reporting company)
|
|
|
|
|
|
|
|
|
|
PART I – FINANCIAL INFORMATION
|
Page
|
|
|
|
Item 1.
|
|
|
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
PART II – OTHER INFORMATION
|
|
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
|
|
|
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||
(in millions, except per share amounts)
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Sales and service revenues
|
|
|
|
|
|
|
|
|
||||||||
Product sales
|
|
$
|
1,367
|
|
|
$
|
1,384
|
|
|
$
|
4,224
|
|
|
$
|
4,201
|
|
Service revenues
|
|
229
|
|
|
209
|
|
|
661
|
|
|
639
|
|
||||
Total sales and service revenues
|
|
1,596
|
|
|
1,593
|
|
|
4,885
|
|
|
4,840
|
|
||||
Cost of sales and service revenues
|
|
|
|
|
|
|
|
|
||||||||
Cost of product sales
|
|
1,187
|
|
|
1,166
|
|
|
3,578
|
|
|
3,543
|
|
||||
Cost of service revenues
|
|
186
|
|
|
173
|
|
|
562
|
|
|
557
|
|
||||
Income (loss) from operating investments, net
|
|
7
|
|
|
9
|
|
|
13
|
|
|
17
|
|
||||
General and administrative expenses
|
|
164
|
|
|
153
|
|
|
506
|
|
|
471
|
|
||||
Goodwill impairment
|
|
—
|
|
|
300
|
|
|
—
|
|
|
300
|
|
||||
Operating income (loss)
|
|
66
|
|
|
(190
|
)
|
|
252
|
|
|
(14
|
)
|
||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest expense
|
|
(29
|
)
|
|
(30
|
)
|
|
(88
|
)
|
|
(75
|
)
|
||||
Earnings (loss) before income taxes
|
|
37
|
|
|
(220
|
)
|
|
164
|
|
|
(89
|
)
|
||||
Federal income taxes
|
|
24
|
|
|
28
|
|
|
68
|
|
|
74
|
|
||||
Net earnings (loss)
|
|
$
|
13
|
|
|
$
|
(248
|
)
|
|
$
|
96
|
|
|
$
|
(163
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) per share
|
|
$
|
0.26
|
|
|
$
|
(5.07
|
)
|
|
$
|
1.95
|
|
|
$
|
(3.34
|
)
|
Weighted-average common shares outstanding
|
|
49.6
|
|
|
48.9
|
|
|
49.3
|
|
|
48.8
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings (loss) per share
|
|
$
|
0.26
|
|
|
$
|
(5.07
|
)
|
|
$
|
1.92
|
|
|
$
|
(3.34
|
)
|
Weighted-average diluted shares outstanding
|
|
50.3
|
|
|
48.9
|
|
|
49.9
|
|
|
48.8
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net earnings (loss) from above
|
|
$
|
13
|
|
|
$
|
(248
|
)
|
|
$
|
96
|
|
|
$
|
(163
|
)
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
||||||||
Change in unamortized benefit plan costs
|
|
23
|
|
|
12
|
|
|
68
|
|
|
51
|
|
||||
Tax benefit (expense) on change in unamortized benefit plan costs
|
|
(6
|
)
|
|
(4
|
)
|
|
(23
|
)
|
|
(19
|
)
|
||||
Other comprehensive income (loss), net of tax
|
|
17
|
|
|
8
|
|
|
45
|
|
|
32
|
|
||||
Comprehensive income (loss)
|
|
$
|
30
|
|
|
$
|
(240
|
)
|
|
$
|
141
|
|
|
$
|
(131
|
)
|
($ in millions)
|
|
September 30
2012 |
|
December 31
2011 |
||||
Assets
|
|
|
|
|
||||
Current Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
766
|
|
|
$
|
915
|
|
Accounts receivable, net
|
|
883
|
|
|
711
|
|
||
Inventoried costs, net
|
|
332
|
|
|
380
|
|
||
Deferred income taxes
|
|
214
|
|
|
232
|
|
||
Prepaid expenses and other current assets
|
|
31
|
|
|
30
|
|
||
Total current assets
|
|
2,226
|
|
|
2,268
|
|
||
Property, plant, and equipment, net
|
|
1,988
|
|
|
2,033
|
|
||
Other Assets
|
|
|
|
|
||||
Goodwill
|
|
844
|
|
|
844
|
|
||
Other purchased intangibles, net of accumulated amortization of $387 in 2012 and $372 in 2011
|
|
552
|
|
|
567
|
|
||
Pension plan assets
|
|
64
|
|
|
64
|
|
||
Debt issuance costs
|
|
42
|
|
|
48
|
|
||
Long-term deferred tax asset
|
|
67
|
|
|
128
|
|
||
Miscellaneous other assets
|
|
80
|
|
|
49
|
|
||
Total other assets
|
|
1,649
|
|
|
1,700
|
|
||
Total assets
|
|
$
|
5,863
|
|
|
$
|
6,001
|
|
($ in millions, except share amounts)
|
|
September 30
2012 |
|
December 31
2011 |
||||
Liabilities and Stockholders' Equity
|
|
|
|
|
||||
Current Liabilities
|
|
|
|
|
||||
Trade accounts payable
|
|
$
|
292
|
|
|
$
|
380
|
|
Current portion of long-term debt
|
|
43
|
|
|
29
|
|
||
Current portion of workers’ compensation liabilities
|
|
216
|
|
|
201
|
|
||
Current portion of postretirement plan liabilities
|
|
172
|
|
|
172
|
|
||
Accrued employees’ compensation
|
|
194
|
|
|
221
|
|
||
Advance payments and billings in excess of costs incurred
|
|
112
|
|
|
101
|
|
||
Provision for contract losses
|
|
4
|
|
|
19
|
|
||
Other current liabilities
|
|
206
|
|
|
249
|
|
||
Total current liabilities
|
|
1,239
|
|
|
1,372
|
|
||
Long-term debt
|
|
1,794
|
|
|
1,830
|
|
||
Other postretirement plan liabilities
|
|
594
|
|
|
581
|
|
||
Pension plan liabilities
|
|
762
|
|
|
936
|
|
||
Workers’ compensation liabilities
|
|
383
|
|
|
361
|
|
||
Other long-term liabilities
|
|
53
|
|
|
49
|
|
||
Total liabilities
|
|
4,825
|
|
|
5,129
|
|
||
Commitments and Contingencies (Note 13)
|
|
—
|
|
|
—
|
|
||
Stockholders’ Equity
|
|
|
|
|
||||
Common stock, $0.01 par value; 150,000,000 shares authorized; 49,583,109 issued and outstanding as of September 30, 2012; 48,821,563 issued and outstanding as of December 31, 2011
|
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
|
1,887
|
|
|
1,862
|
|
||
Retained earnings (deficit)
|
|
(45
|
)
|
|
(141
|
)
|
||
Accumulated other comprehensive income (loss)
|
|
(804
|
)
|
|
(849
|
)
|
||
Total stockholders’ equity
|
|
1,038
|
|
|
872
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
5,863
|
|
|
$
|
6,001
|
|
|
|
Nine Months Ended September 30
|
||||||
($ in millions)
|
|
2012
|
|
2011
|
||||
Operating Activities
|
|
|
|
|
||||
Net earnings (loss)
|
|
$
|
96
|
|
|
$
|
(163
|
)
|
Adjustments to reconcile to net cash provided by (used in) operating activities
|
|
|
|
|
||||
Depreciation
|
|
122
|
|
|
123
|
|
||
Amortization of purchased intangibles
|
|
15
|
|
|
15
|
|
||
Amortization of debt issuance costs
|
|
6
|
|
|
4
|
|
||
Stock-based compensation
|
|
25
|
|
|
22
|
|
||
Deferred income taxes
|
|
44
|
|
|
—
|
|
||
Goodwill impairment
|
|
—
|
|
|
300
|
|
||
Change in
|
|
|
|
|
||||
Accounts receivable
|
|
(172
|
)
|
|
(53
|
)
|
||
Inventoried costs
|
|
57
|
|
|
(173
|
)
|
||
Prepaid expenses and other assets
|
|
(8
|
)
|
|
(36
|
)
|
||
Accounts payable and accruals
|
|
(134
|
)
|
|
(74
|
)
|
||
Retiree benefits
|
|
(93
|
)
|
|
89
|
|
||
Other non-cash transactions, net
|
|
1
|
|
|
—
|
|
||
Net cash provided by (used in) operating activities
|
|
(41
|
)
|
|
54
|
|
||
Investing Activities
|
|
|
|
|
||||
Additions to property, plant, and equipment
|
|
(92
|
)
|
|
(119
|
)
|
||
Net cash provided by (used in) investing activities
|
|
(92
|
)
|
|
(119
|
)
|
||
Financing Activities
|
|
|
|
|
||||
Proceeds from issuance of long-term debt
|
|
—
|
|
|
1,775
|
|
||
Repayment of long-term debt
|
|
(22
|
)
|
|
(14
|
)
|
||
Debt issuance costs
|
|
—
|
|
|
(54
|
)
|
||
Repayment of notes payable to former parent and accrued interest
|
|
—
|
|
|
(954
|
)
|
||
Dividend to former parent in connection with spin-off
|
|
—
|
|
|
(1,429
|
)
|
||
Proceeds from stock option exercises
|
|
6
|
|
|
1
|
|
||
Net transfers from (to) former parent
|
|
—
|
|
|
1,276
|
|
||
Net cash provided by (used in) financing activities
|
|
(16
|
)
|
|
601
|
|
||
Change in cash and cash equivalents
|
|
(149
|
)
|
|
536
|
|
||
Cash and cash equivalents, beginning of period
|
|
915
|
|
|
—
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
766
|
|
|
$
|
536
|
|
Supplemental Cash Flow Disclosure
|
|
|
|
|
||||
Cash paid for income taxes
|
|
$
|
28
|
|
|
$
|
34
|
|
Cash paid for interest
|
|
$
|
102
|
|
|
$
|
55
|
|
Non-Cash Investing and Financing Activities
|
|
|
|
|
||||
Capital expenditures accrued in accounts payable
|
|
$
|
2
|
|
|
$
|
3
|
|
Nine Months Ended September 30, 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
|
|
|
—
|
|
|
—
|
|
|
(210
|
)
|
|
—
|
|
|
(163
|
)
|
||||||
Dividend to former parent
|
|
(1,429
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,429
|
)
|
||||||
Contributed surplus
|
|
(1,827
|
)
|
|
—
|
|
|
1,827
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net transfers from (to) former parent
|
|
1,276
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,276
|
|
||||||
Additional paid-in capital
|
|
—
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
21
|
|
||||||
Other comprehensive income (loss), net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|
32
|
|
||||||
Balance at September 30, 2011
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,848
|
|
|
$
|
(210
|
)
|
|
$
|
(483
|
)
|
|
$
|
1,155
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at December 31, 2011
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,862
|
|
|
$
|
(141
|
)
|
|
$
|
(849
|
)
|
|
$
|
872
|
|
Net earnings (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
96
|
|
|
—
|
|
|
96
|
|
||||||
Additional paid-in capital
|
|
—
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
25
|
|
||||||
Other comprehensive income (loss), net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|
45
|
|
||||||
Balance at September 30, 2012
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,887
|
|
|
$
|
(45
|
)
|
|
$
|
(804
|
)
|
|
$
|
1,038
|
|
($ in millions)
|
|
Compensation
|
|
Other Accruals
|
|
Total
|
||||||
Balance at December 31, 2010
|
|
$
|
27
|
|
|
$
|
39
|
|
|
$
|
66
|
|
Payments
|
|
(7
|
)
|
|
(36
|
)
|
|
(43
|
)
|
|||
Adjustments
|
|
36
|
|
|
(3
|
)
|
|
33
|
|
|||
Balance at September 30, 2011
|
|
$
|
56
|
|
|
$
|
—
|
|
|
$
|
56
|
|
|
|
|
|
|
|
|
||||||
Balance at December 31, 2011
|
|
$
|
50
|
|
|
$
|
—
|
|
|
$
|
50
|
|
Payments
|
|
(29
|
)
|
|
—
|
|
|
(29
|
)
|
|||
Adjustments
|
|
9
|
|
|
—
|
|
|
9
|
|
|||
Balance at September 30, 2012
|
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
30
|
|
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||
(in millions, except per share amounts)
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Net earnings (loss)
|
|
$
|
13
|
|
|
$
|
(248
|
)
|
|
$
|
96
|
|
|
$
|
(163
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding
|
|
49.6
|
|
|
48.9
|
|
|
49.3
|
|
|
48.8
|
|
||||
Net effect of dilutive stock options
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
||||
Net effect of dilutive restricted stock rights
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
||||
Net effect of dilutive restricted performance stock rights
|
|
0.3
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
||||
Dilutive weighted-average common shares outstanding
|
|
50.3
|
|
|
48.9
|
|
|
49.9
|
|
|
48.8
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share - basic
|
|
$
|
0.26
|
|
|
$
|
(5.07
|
)
|
|
$
|
1.95
|
|
|
$
|
(3.34
|
)
|
Earnings (loss) per share - diluted
|
|
$
|
0.26
|
|
|
$
|
(5.07
|
)
|
|
$
|
1.92
|
|
|
$
|
(3.34
|
)
|
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||
($ in millions)
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Sales and Service Revenues
|
|
|
|
|
|
|
|
|
||||||||
Ingalls
|
|
$
|
670
|
|
|
$
|
740
|
|
|
$
|
2,118
|
|
|
$
|
2,209
|
|
Newport News
|
|
944
|
|
|
876
|
|
|
2,818
|
|
|
2,688
|
|
||||
Intersegment eliminations
|
|
(18
|
)
|
|
(23
|
)
|
|
(51
|
)
|
|
(57
|
)
|
||||
Total sales and service revenues
|
|
$
|
1,596
|
|
|
$
|
1,593
|
|
|
$
|
4,885
|
|
|
$
|
4,840
|
|
Operating Income (Loss)
|
|
|
|
|
|
|
|
|
||||||||
Ingalls
|
|
$
|
1
|
|
|
$
|
(281
|
)
|
|
$
|
59
|
|
|
$
|
(245
|
)
|
Newport News
|
|
88
|
|
|
94
|
|
|
258
|
|
|
240
|
|
||||
Total segment operating income (loss)
|
|
89
|
|
|
(187
|
)
|
|
317
|
|
|
(5
|
)
|
||||
Non-segment factors affecting operating income (loss)
|
|
|
|
|
|
|
|
|
||||||||
FAS/CAS Adjustment
|
|
(19
|
)
|
|
(1
|
)
|
|
(55
|
)
|
|
(9
|
)
|
||||
Deferred state income taxes
|
|
(4
|
)
|
|
(2
|
)
|
|
(10
|
)
|
|
—
|
|
||||
Total operating income (loss)
|
|
$
|
66
|
|
|
$
|
(190
|
)
|
|
$
|
252
|
|
|
$
|
(14
|
)
|
($ in millions)
|
|
September 30
2012 |
|
December 31
2011 |
||||
Production costs of contracts in process
|
|
$
|
250
|
|
|
$
|
402
|
|
General and administrative expenses
|
|
6
|
|
|
15
|
|
||
|
|
256
|
|
|
417
|
|
||
Progress payments received
|
|
(14
|
)
|
|
(118
|
)
|
||
|
|
242
|
|
|
299
|
|
||
Raw material inventory
|
|
90
|
|
|
81
|
|
||
Total inventoried costs, net
|
|
$
|
332
|
|
|
$
|
380
|
|
($ in millions)
|
|
September 30
2012 |
|
December 31
2011 |
||||
Gross carrying amount
|
|
$
|
939
|
|
|
$
|
939
|
|
Accumulated amortization
|
|
(387
|
)
|
|
(372
|
)
|
||
Net carrying amount
|
|
$
|
552
|
|
|
$
|
567
|
|
($ in millions)
|
|
September 30
2012 |
|
December 31
2011 |
||||
Net current deferred tax assets
|
|
$
|
214
|
|
|
$
|
232
|
|
Net non-current deferred tax assets
|
|
67
|
|
|
128
|
|
||
Total net deferred tax assets
|
|
$
|
281
|
|
|
$
|
360
|
|
($ in millions)
|
|
September 30
2012 |
|
December 31
2011 |
||||
Term loan due March 30, 2016
|
|
$
|
532
|
|
|
$
|
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
|
|
1,837
|
|
|
1,859
|
|
||
Less current portion
|
|
43
|
|
|
29
|
|
||
Long-term debt, net of current portion
|
|
$
|
1,794
|
|
|
$
|
1,830
|
|
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||
($ in millions)
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Sales and services revenues
|
|
$
|
359
|
|
|
$
|
376
|
|
|
$
|
1,024
|
|
|
$
|
1,187
|
|
Operating income
|
|
20
|
|
|
26
|
|
|
37
|
|
|
53
|
|
||||
Net earnings
|
|
20
|
|
|
26
|
|
|
37
|
|
|
53
|
|
|
|
Three Months Ended September 30
|
|
Nine Months Ended September 30
|
||||||||||||||||||||||||||||
|
|
Pension Benefits
|
|
Other Benefits
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||||||||||||||
($ in millions)
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||||||||||
Components of Net Periodic Benefit Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Service cost
|
|
$
|
33
|
|
|
$
|
31
|
|
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
99
|
|
|
$
|
93
|
|
|
$
|
12
|
|
|
$
|
11
|
|
Interest cost
|
|
53
|
|
|
50
|
|
|
9
|
|
|
9
|
|
|
159
|
|
|
150
|
|
|
27
|
|
|
29
|
|
||||||||
Expected return on plan assets
|
|
(67
|
)
|
|
(67
|
)
|
|
—
|
|
|
—
|
|
|
(200
|
)
|
|
(200
|
)
|
|
—
|
|
|
—
|
|
||||||||
Amortization of prior service cost (credit)
|
|
3
|
|
|
3
|
|
|
(2
|
)
|
|
(2
|
)
|
|
9
|
|
|
9
|
|
|
(7
|
)
|
|
(6
|
)
|
||||||||
Amortization of net actuarial loss (gain)
|
|
19
|
|
|
8
|
|
|
3
|
|
|
2
|
|
|
58
|
|
|
25
|
|
|
8
|
|
|
6
|
|
||||||||
Net periodic benefit cost
|
|
$
|
41
|
|
|
$
|
25
|
|
|
$
|
14
|
|
|
$
|
13
|
|
|
$
|
125
|
|
|
$
|
77
|
|
|
$
|
40
|
|
|
$
|
40
|
|
|
|
Nine Months Ended September 30
|
||||||
($ in millions)
|
|
2012
|
|
2011
|
||||
Pension plans
|
|
|
|
|
||||
Minimum
(a)
|
|
$
|
143
|
|
|
$
|
—
|
|
Discretionary
|
|
|
|
|
||||
Qualified
|
|
87
|
|
|
—
|
|
||
Non-qualified
|
|
3
|
|
|
1
|
|
||
Other benefit plans
|
|
25
|
|
|
28
|
|
||
Total contributions
|
|
$
|
258
|
|
|
$
|
29
|
|
|
|
Shares Under
Option
(in thousands)
|
|
Weighted-
Average
Exercise Price
|
|
Weighted- Average
Remaining
Contractual Term
(in years)
|
|
Aggregate
Intrinsic
Value
($ in millions)
|
|||||
Outstanding at September 30, 2012
|
|
1,214
|
|
|
$
|
34.53
|
|
|
2.8
|
|
$
|
11
|
|
Exercisable at September 30, 2012
|
|
1,147
|
|
|
$
|
34.43
|
|
|
2.7
|
|
$
|
10
|
|
|
|
Stock Awards
(in thousands)
|
|
Weighted-Average
Grant Date Fair
Value
|
|
Weighted-Average Remaining Contractual Term
(in years)
|
|||
Total stock awards
|
|
2,615
|
|
|
$
|
38.92
|
|
|
1.3
|
|
|
Three Months Ended September 30, 2012
|
||||||||||||||||||
($ in millions)
|
|
Huntington Ingalls Industries, Inc.
|
|
Subsidiary Guarantors
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Sales and service revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Product sales
|
|
$
|
—
|
|
|
$
|
1,367
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,367
|
|
Service revenues
|
|
—
|
|
|
229
|
|
|
6
|
|
|
(6
|
)
|
|
229
|
|
|||||
Total sales and service revenues
|
|
—
|
|
|
1,596
|
|
|
6
|
|
|
(6
|
)
|
|
1,596
|
|
|||||
Cost of sales and service revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of product sales
|
|
—
|
|
|
1,187
|
|
|
—
|
|
|
—
|
|
|
1,187
|
|
|||||
Cost of service revenues
|
|
—
|
|
|
186
|
|
|
6
|
|
|
(6
|
)
|
|
186
|
|
|||||
Income (loss) from operating investments, net
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||
General and administrative expenses
|
|
—
|
|
|
164
|
|
|
—
|
|
|
—
|
|
|
164
|
|
|||||
Operating income (loss)
|
|
—
|
|
|
66
|
|
|
—
|
|
|
—
|
|
|
66
|
|
|||||
Interest expense
|
|
(28
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(29
|
)
|
|||||
Equity in earnings (loss) of subsidiaries
|
|
31
|
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
|||||
Earnings (loss) before income taxes
|
|
3
|
|
|
65
|
|
|
—
|
|
|
(31
|
)
|
|
37
|
|
|||||
Federal income taxes
|
|
(10
|
)
|
|
34
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|||||
Net earnings (loss)
|
|
$
|
13
|
|
|
$
|
31
|
|
|
$
|
—
|
|
|
$
|
(31
|
)
|
|
$
|
13
|
|
Other comprehensive income (loss), net of tax
|
|
17
|
|
|
17
|
|
|
—
|
|
|
(17
|
)
|
|
17
|
|
|||||
Comprehensive income (loss)
|
|
$
|
30
|
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
(48
|
)
|
|
$
|
30
|
|
|
|
Three Months Ended September 30, 2011
|
||||||||||||||||||
($ in millions)
|
|
Huntington Ingalls Industries, Inc.
|
|
Subsidiary Guarantors
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Sales and service revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Product sales
|
|
$
|
—
|
|
|
$
|
1,384
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,384
|
|
Service revenues
|
|
—
|
|
|
209
|
|
|
—
|
|
|
—
|
|
|
209
|
|
|||||
Total sales and service revenues
|
|
—
|
|
|
1,593
|
|
|
—
|
|
|
—
|
|
|
1,593
|
|
|||||
Cost of sales and service revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of product sales
|
|
—
|
|
|
1,166
|
|
|
—
|
|
|
—
|
|
|
1,166
|
|
|||||
Cost of service revenues
|
|
—
|
|
|
173
|
|
|
—
|
|
|
—
|
|
|
173
|
|
|||||
Income (loss) from operating investments, net
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|||||
General and administrative expenses
|
|
—
|
|
|
153
|
|
|
—
|
|
|
—
|
|
|
153
|
|
|||||
Goodwill impairment
|
|
—
|
|
|
300
|
|
|
—
|
|
|
—
|
|
|
300
|
|
|||||
Operating income (loss)
|
|
—
|
|
|
(190
|
)
|
|
—
|
|
|
—
|
|
|
(190
|
)
|
|||||
Interest expense
|
|
(29
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
|||||
Equity in earnings (loss) of subsidiaries
|
|
(230
|
)
|
|
—
|
|
|
—
|
|
|
230
|
|
|
—
|
|
|||||
Earnings (loss) before income taxes
|
|
(259
|
)
|
|
(191
|
)
|
|
—
|
|
|
230
|
|
|
(220
|
)
|
|||||
Federal income taxes
|
|
(11
|
)
|
|
39
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|||||
Net earnings (loss)
|
|
$
|
(248
|
)
|
|
$
|
(230
|
)
|
|
$
|
—
|
|
|
$
|
230
|
|
|
$
|
(248
|
)
|
Other comprehensive income (loss), net of tax
|
|
8
|
|
|
8
|
|
|
—
|
|
|
(8
|
)
|
|
8
|
|
|||||
Comprehensive income (loss)
|
|
$
|
(240
|
)
|
|
$
|
(222
|
)
|
|
$
|
—
|
|
|
$
|
222
|
|
|
$
|
(240
|
)
|
|
|
Nine Months Ended September 30, 2012
|
||||||||||||||||||
($ in millions)
|
|
Huntington Ingalls Industries, Inc.
|
|
Subsidiary Guarantors
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Sales and service revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Product sales
|
|
$
|
—
|
|
|
$
|
4,224
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,224
|
|
Service revenues
|
|
—
|
|
|
661
|
|
|
13
|
|
|
(13
|
)
|
|
661
|
|
|||||
Total sales and service revenues
|
|
—
|
|
|
4,885
|
|
|
13
|
|
|
(13
|
)
|
|
4,885
|
|
|||||
Cost of sales and service revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of product sales
|
|
—
|
|
|
3,578
|
|
|
—
|
|
|
—
|
|
|
3,578
|
|
|||||
Cost of service revenues
|
|
—
|
|
|
562
|
|
|
13
|
|
|
(13
|
)
|
|
562
|
|
|||||
Income (loss) from operating investments, net
|
|
—
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|||||
General and administrative expenses
|
|
—
|
|
|
506
|
|
|
—
|
|
|
—
|
|
|
506
|
|
|||||
Operating income (loss)
|
|
—
|
|
|
252
|
|
|
—
|
|
|
—
|
|
|
252
|
|
|||||
Interest expense
|
|
(83
|
)
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(88
|
)
|
|||||
Equity in earnings (loss) of subsidiaries
|
|
149
|
|
|
—
|
|
|
—
|
|
|
(149
|
)
|
|
—
|
|
|||||
Earnings (loss) before income taxes
|
|
66
|
|
|
247
|
|
|
—
|
|
|
(149
|
)
|
|
164
|
|
|||||
Federal income taxes
|
|
(30
|
)
|
|
98
|
|
|
—
|
|
|
—
|
|
|
68
|
|
|||||
Net earnings (loss)
|
|
96
|
|
|
149
|
|
|
—
|
|
|
(149
|
)
|
|
96
|
|
|||||
Other comprehensive income (loss), net of tax
|
|
45
|
|
|
45
|
|
|
—
|
|
|
(45
|
)
|
|
45
|
|
|||||
Comprehensive income (loss)
|
|
$
|
141
|
|
|
$
|
194
|
|
|
$
|
—
|
|
|
$
|
(194
|
)
|
|
$
|
141
|
|
|
|
Nine Months Ended September 30, 2011
|
||||||||||||||||||
($ in millions)
|
|
Huntington Ingalls Industries, Inc.
|
|
Subsidiary Guarantors
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Sales and service revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Product sales
|
|
$
|
—
|
|
|
$
|
4,201
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,201
|
|
Service revenues
|
|
—
|
|
|
639
|
|
|
—
|
|
|
—
|
|
|
639
|
|
|||||
Total sales and service revenues
|
|
—
|
|
|
4,840
|
|
|
—
|
|
|
—
|
|
|
4,840
|
|
|||||
Cost of sales and service revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of product sales
|
|
—
|
|
|
3,543
|
|
|
—
|
|
|
—
|
|
|
3,543
|
|
|||||
Cost of service revenues
|
|
—
|
|
|
557
|
|
|
—
|
|
|
—
|
|
|
557
|
|
|||||
Income (loss) from operating investments, net
|
|
—
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|||||
General and administrative expenses
|
|
—
|
|
|
471
|
|
|
—
|
|
|
—
|
|
|
471
|
|
|||||
Goodwill impairment
|
|
—
|
|
|
300
|
|
|
—
|
|
|
—
|
|
|
300
|
|
|||||
Operating income (loss)
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|||||
Interest expense
|
|
(62
|
)
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
(75
|
)
|
|||||
Equity in earnings (loss) of subsidiaries
|
|
(124
|
)
|
|
—
|
|
|
—
|
|
|
124
|
|
|
—
|
|
|||||
Earnings (loss) before income taxes
|
|
(186
|
)
|
|
(27
|
)
|
|
—
|
|
|
124
|
|
|
(89
|
)
|
|||||
Federal income taxes
|
|
(23
|
)
|
|
97
|
|
|
—
|
|
|
—
|
|
|
74
|
|
|||||
Net earnings (loss)
|
|
(163
|
)
|
|
(124
|
)
|
|
—
|
|
|
124
|
|
|
(163
|
)
|
|||||
Other comprehensive income (loss), net of tax
|
|
32
|
|
|
32
|
|
|
—
|
|
|
(32
|
)
|
|
32
|
|
|||||
Comprehensive income (loss)
|
|
$
|
(131
|
)
|
|
$
|
(92
|
)
|
|
$
|
—
|
|
|
$
|
92
|
|
|
$
|
(131
|
)
|
|
|
September 30, 2012
|
||||||||||||||||||
($ in millions)
|
|
Huntington Ingalls Industries, Inc.
|
|
Subsidiary Guarantors
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
765
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
766
|
|
Accounts receivable, net
|
|
—
|
|
|
883
|
|
|
—
|
|
|
—
|
|
|
883
|
|
|||||
Inventoried costs, net
|
|
—
|
|
|
332
|
|
|
—
|
|
|
—
|
|
|
332
|
|
|||||
Deferred income taxes
|
|
—
|
|
|
214
|
|
|
—
|
|
|
—
|
|
|
214
|
|
|||||
Prepaid expenses and other current assets
|
|
—
|
|
|
32
|
|
|
11
|
|
|
(12
|
)
|
|
31
|
|
|||||
Total current assets
|
|
765
|
|
|
1,461
|
|
|
12
|
|
|
(12
|
)
|
|
2,226
|
|
|||||
Property, plant, and equipment, net
|
|
—
|
|
|
1,988
|
|
|
—
|
|
|
—
|
|
|
1,988
|
|
|||||
Other Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Goodwill
|
|
—
|
|
|
844
|
|
|
—
|
|
|
—
|
|
|
844
|
|
|||||
Other purchased intangibles
|
|
—
|
|
|
552
|
|
|
—
|
|
|
—
|
|
|
552
|
|
|||||
Pension plan asset
|
|
—
|
|
|
64
|
|
|
—
|
|
|
—
|
|
|
64
|
|
|||||
Debt issuance costs
|
|
42
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42
|
|
|||||
Miscellaneous other assets
|
|
—
|
|
|
147
|
|
|
—
|
|
|
—
|
|
|
147
|
|
|||||
Investment in subsidiaries
|
|
2,637
|
|
|
—
|
|
|
—
|
|
|
(2,637
|
)
|
|
—
|
|
|||||
Intercompany receivables
|
|
—
|
|
|
670
|
|
|
—
|
|
|
(670
|
)
|
|
—
|
|
|||||
Total other assets
|
|
2,679
|
|
|
2,277
|
|
|
—
|
|
|
(3,307
|
)
|
|
1,649
|
|
|||||
Total assets
|
|
$
|
3,444
|
|
|
$
|
5,726
|
|
|
$
|
12
|
|
|
$
|
(3,319
|
)
|
|
$
|
5,863
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Trade accounts payable
|
|
$
|
—
|
|
|
$
|
292
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
292
|
|
Current portion of long-term debt
|
|
43
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43
|
|
|||||
Current portion of workers’ compensation liabilities
|
|
—
|
|
|
216
|
|
|
—
|
|
|
—
|
|
|
216
|
|
|||||
Current portion of postretirement plan liabilities
|
|
—
|
|
|
172
|
|
|
—
|
|
|
—
|
|
|
172
|
|
|||||
Accrued employees’ compensation
|
|
—
|
|
|
194
|
|
|
—
|
|
|
—
|
|
|
194
|
|
|||||
Advance payments and billings in excess of costs incurred
|
|
—
|
|
|
112
|
|
|
—
|
|
|
—
|
|
|
112
|
|
|||||
Provision for contract losses
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||
Other current liabilities
|
|
4
|
|
|
202
|
|
|
12
|
|
|
(12
|
)
|
|
206
|
|
|||||
Total current liabilities
|
|
47
|
|
|
1,192
|
|
|
12
|
|
|
(12
|
)
|
|
1,239
|
|
|||||
Long-term debt
|
|
1,689
|
|
|
105
|
|
|
—
|
|
|
—
|
|
|
1,794
|
|
|||||
Other postretirement plan liabilities
|
|
—
|
|
|
594
|
|
|
—
|
|
|
—
|
|
|
594
|
|
|||||
Pension plan liabilities
|
|
—
|
|
|
762
|
|
|
—
|
|
|
—
|
|
|
762
|
|
|||||
Workers’ compensation liabilities
|
|
—
|
|
|
383
|
|
|
—
|
|
|
—
|
|
|
383
|
|
|||||
Other long-term liabilities
|
|
—
|
|
|
53
|
|
|
—
|
|
|
—
|
|
|
53
|
|
|||||
Intercompany liabilities
|
|
670
|
|
|
—
|
|
|
—
|
|
|
(670
|
)
|
|
—
|
|
|||||
Total liabilities
|
|
2,406
|
|
|
3,089
|
|
|
12
|
|
|
(682
|
)
|
|
4,825
|
|
|||||
Stockholders’ equity
|
|
1,038
|
|
|
2,637
|
|
|
—
|
|
|
(2,637
|
)
|
|
1,038
|
|
|||||
Total liabilities and stockholders’ equity
|
|
$
|
3,444
|
|
|
$
|
5,726
|
|
|
$
|
12
|
|
|
$
|
(3,319
|
)
|
|
$
|
5,863
|
|
|
|
December 31, 2011
|
||||||||||||||||||
($ in millions)
|
|
Huntington Ingalls Industries, Inc.
|
|
Subsidiary Guarantors
|
|
Non-Guarantor 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
|
|
—
|
|
|
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
|
|
|||||
Stockholders’ equity
|
|
872
|
|
|
2,358
|
|
|
—
|
|
|
(2,358
|
)
|
|
872
|
|
|||||
Total liabilities and stockholders’ equity
|
|
$
|
3,321
|
|
|
$
|
5,730
|
|
|
$
|
—
|
|
|
$
|
(3,050
|
)
|
|
$
|
6,001
|
|
|
|
Nine Months Ended September 30, 2012
|
||||||||||||||||||
($ in millions)
|
|
Huntington Ingalls Industries, Inc.
|
|
Subsidiary Guarantors
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided by (used in) operating activities
|
|
$
|
(76
|
)
|
|
$
|
34
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
(41
|
)
|
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Additions to property, plant, and equipment
|
|
—
|
|
|
(92
|
)
|
|
—
|
|
|
—
|
|
|
(92
|
)
|
|||||
Net cash provided by (used in) investing activities
|
|
—
|
|
|
(92
|
)
|
|
—
|
|
|
—
|
|
|
(92
|
)
|
|||||
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of long-term debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Repayment of long-term debt
|
|
(22
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
|||||
Debt issuance costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Repayment of notes payable to former parent and accrued interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Dividend to former parent in connection with spin-off
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Proceeds from stock option exercises
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||
Net transfers from (to) former parent
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Cash sweep/funding by parent
|
|
(58
|
)
|
|
58
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
|
(74
|
)
|
|
58
|
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|||||
Change in cash and cash equivalents
|
|
(150
|
)
|
|
—
|
|
|
1
|
|
|
—
|
|
|
(149
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
|
915
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
915
|
|
|||||
Cash and cash equivalents, end of period
|
|
$
|
765
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
766
|
|
|
|
Nine Months Ended September 30, 2011
|
||||||||||||||||||
($ in millions)
|
|
Huntington Ingalls Industries, Inc.
|
|
Subsidiary Guarantors
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided by (used in) operating activities
|
|
$
|
(29
|
)
|
|
$
|
83
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
54
|
|
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Additions to property, plant, and equipment
|
|
—
|
|
|
(119
|
)
|
|
—
|
|
|
—
|
|
|
(119
|
)
|
|||||
Net cash provided by (used in) investing activities
|
|
—
|
|
|
(119
|
)
|
|
—
|
|
|
—
|
|
|
(119
|
)
|
|||||
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of long-term debt
|
|
1,775
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,775
|
|
|||||
Repayment of long-term debt
|
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|||||
Debt issuance costs
|
|
(54
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(54
|
)
|
|||||
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
|
)
|
|||||
Proceeds from stock option exercises
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Net transfers from (to) former parent
|
|
—
|
|
|
1,276
|
|
|
—
|
|
|
—
|
|
|
1,276
|
|
|||||
Cash sweep/funding by parent
|
|
286
|
|
|
(286
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
|
565
|
|
|
36
|
|
|
—
|
|
|
—
|
|
|
601
|
|
|||||
Change in cash and cash equivalents
|
|
536
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
536
|
|
|||||
Cash and cash equivalents, beginning of period
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Cash and cash equivalents, end of period
|
|
$
|
536
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
536
|
|
•
|
Revenue recognition;
|
•
|
Purchase accounting and goodwill;
|
•
|
Litigation, commitments and contingencies;
|
•
|
Retirement related plans; and
|
•
|
Workers' compensation.
|
|
|
Three Months Ended
|
|
|
|
Nine Months Ended
|
|
|
||||||||||||||||||||||
|
|
September 30
|
|
2012 over 2011
|
|
September 30
|
|
2012 over 2011
|
||||||||||||||||||||||
($ in millions)
|
|
2012
|
|
2011
|
|
Dollars
|
|
Percent
|
|
2012
|
|
2011
|
|
Dollars
|
|
Percent
|
||||||||||||||
Sales and service revenues
|
|
$
|
1,596
|
|
|
$
|
1,593
|
|
|
$
|
3
|
|
|
—
|
%
|
|
$
|
4,885
|
|
|
$
|
4,840
|
|
|
$
|
45
|
|
|
1
|
%
|
Cost of product sales and service revenues
|
|
1,373
|
|
|
1,339
|
|
|
34
|
|
|
3
|
%
|
|
4,140
|
|
|
4,100
|
|
|
40
|
|
|
1
|
%
|
||||||
Income (loss) from operating investments, net
|
|
7
|
|
|
9
|
|
|
(2
|
)
|
|
(22
|
)%
|
|
13
|
|
|
17
|
|
|
(4
|
)
|
|
(24
|
)%
|
||||||
General and administrative expenses
|
|
164
|
|
|
153
|
|
|
11
|
|
|
7
|
%
|
|
506
|
|
|
471
|
|
|
35
|
|
|
7
|
%
|
||||||
Goodwill impairment
|
|
—
|
|
|
300
|
|
|
(300
|
)
|
|
(100
|
)%
|
|
—
|
|
|
300
|
|
|
(300
|
)
|
|
(100
|
)%
|
||||||
Operating income (loss)
|
|
66
|
|
|
(190
|
)
|
|
256
|
|
|
135
|
%
|
|
252
|
|
|
(14
|
)
|
|
266
|
|
|
1,900
|
%
|
||||||
Interest expense
|
|
29
|
|
|
30
|
|
|
(1
|
)
|
|
(3
|
)%
|
|
88
|
|
|
75
|
|
|
13
|
|
|
17
|
%
|
||||||
Federal and foreign income taxes
|
|
24
|
|
|
28
|
|
|
(4
|
)
|
|
(14
|
)%
|
|
68
|
|
|
74
|
|
|
(6
|
)
|
|
(8
|
)%
|
||||||
Net earnings (loss)
|
|
$
|
13
|
|
|
$
|
(248
|
)
|
|
$
|
261
|
|
|
105
|
%
|
|
$
|
96
|
|
|
$
|
(163
|
)
|
|
$
|
259
|
|
|
159
|
%
|
|
|
Three Months Ended
|
|
|
|
Nine Months Ended
|
|
|
||||||||||||||||||||||
|
|
September 30
|
|
2012 over 2011
|
|
September 30
|
|
2012 over 2011
|
||||||||||||||||||||||
($ in millions)
|
|
2012
|
|
2011
|
|
Dollars
|
|
Percent
|
|
2012
|
|
2011
|
|
Dollars
|
|
Percent
|
||||||||||||||
Product sales
|
|
$
|
1,367
|
|
|
$
|
1,384
|
|
|
$
|
(17
|
)
|
|
(1
|
)%
|
|
$
|
4,224
|
|
|
$
|
4,201
|
|
|
$
|
23
|
|
|
1
|
%
|
Service revenues
|
|
229
|
|
|
209
|
|
|
20
|
|
|
10
|
%
|
|
661
|
|
|
639
|
|
|
22
|
|
|
3
|
%
|
||||||
Sales and service revenues
|
|
$
|
1,596
|
|
|
$
|
1,593
|
|
|
$
|
3
|
|
|
—
|
%
|
|
$
|
4,885
|
|
|
$
|
4,840
|
|
|
$
|
45
|
|
|
1
|
%
|
|
|
Three Months Ended
|
|
|
|
Nine Months Ended
|
|
|
||||||||||||||||||||||
|
|
September 30
|
|
2012 over 2011
|
|
September 30
|
|
2012 over 2011
|
||||||||||||||||||||||
($ in millions)
|
|
2012
|
|
2011
|
|
Dollars
|
|
Percent
|
|
2012
|
|
2011
|
|
Dollars
|
|
Percent
|
||||||||||||||
Cost of product sales
|
|
$
|
1,187
|
|
|
$
|
1,166
|
|
|
$
|
21
|
|
|
2
|
%
|
|
$
|
3,578
|
|
|
$
|
3,543
|
|
|
$
|
35
|
|
|
1
|
%
|
% of product sales
|
|
86.8
|
%
|
|
84.2
|
%
|
|
—
|
|
|
2.6
|
%
|
|
84.7
|
%
|
|
84.3
|
%
|
|
—
|
|
|
0.4
|
%
|
||||||
Cost of service revenues
|
|
186
|
|
|
173
|
|
|
13
|
|
|
8
|
%
|
|
562
|
|
|
557
|
|
|
5
|
|
|
1
|
%
|
||||||
% of service revenues
|
|
81.2
|
%
|
|
82.8
|
%
|
|
—
|
|
|
(1.6
|
)%
|
|
85.0
|
%
|
|
87.2
|
%
|
|
—
|
|
|
(2.2
|
)%
|
||||||
Income (loss) from operating investments, net
|
|
7
|
|
|
9
|
|
|
(2
|
)
|
|
(22
|
)%
|
|
13
|
|
|
17
|
|
|
(4
|
)
|
|
(24
|
)%
|
||||||
General and administrative expenses
|
|
164
|
|
|
153
|
|
|
11
|
|
|
7
|
%
|
|
506
|
|
|
471
|
|
|
35
|
|
|
7
|
%
|
||||||
% of total sales and service revenues
|
|
10.3
|
%
|
|
9.6
|
%
|
|
—
|
|
|
0.7
|
%
|
|
10.4
|
%
|
|
9.7
|
%
|
|
—
|
|
|
0.7
|
%
|
||||||
Goodwill impairment
|
|
—
|
|
|
300
|
|
|
(300
|
)
|
|
(100
|
)%
|
|
—
|
|
|
300
|
|
|
(300
|
)
|
|
(100
|
)%
|
||||||
Cost of sales and service revenues
|
|
$
|
1,530
|
|
|
$
|
1,783
|
|
|
$
|
(253
|
)
|
|
(14
|
)%
|
|
$
|
4,633
|
|
|
$
|
4,854
|
|
|
$
|
(221
|
)
|
|
(5
|
)%
|
|
|
Three Months Ended
|
|
|
|
Nine Months Ended
|
|
|
||||||||||||||||||||||
|
|
September 30
|
|
2012 over 2011
|
|
September 30
|
|
2012 over 2011
|
||||||||||||||||||||||
($ in millions)
|
|
2012
|
|
2011
|
|
Dollars
|
|
Percent
|
|
2012
|
|
2011
|
|
Dollars
|
|
Percent
|
||||||||||||||
Segment operating income (loss)
|
|
$
|
89
|
|
|
$
|
(187
|
)
|
|
$
|
276
|
|
|
148
|
%
|
|
$
|
317
|
|
|
$
|
(5
|
)
|
|
$
|
322
|
|
|
6,440
|
%
|
FAS/CAS Adjustment
|
|
(19
|
)
|
|
(1
|
)
|
|
(18
|
)
|
|
(1,800
|
)%
|
|
(55
|
)
|
|
(9
|
)
|
|
(46
|
)
|
|
(511
|
)%
|
||||||
Deferred state income taxes
|
|
(4
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
(100
|
)%
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
|
—
|
%
|
||||||
Total operating income (loss)
|
|
66
|
|
|
(190
|
)
|
|
256
|
|
|
(135
|
)%
|
|
252
|
|
|
(14
|
)
|
|
266
|
|
|
(1,900
|
)%
|
|
|
Three Months Ended
|
|
|
|
Nine Months Ended
|
|
|
||||||||||||||||||||||
|
|
September 30
|
|
2012 over 2011
|
|
September 30
|
|
2012 over 2011
|
||||||||||||||||||||||
($ in millions)
|
|
2012
|
|
2011
|
|
Dollars
|
|
Percent
|
|
2012
|
|
2011
|
|
Dollars
|
|
Percent
|
||||||||||||||
FAS expense
|
|
$
|
(55
|
)
|
|
$
|
(39
|
)
|
|
$
|
(16
|
)
|
|
(41
|
)%
|
|
$
|
(165
|
)
|
|
$
|
(117
|
)
|
|
$
|
(48
|
)
|
|
(41
|
)%
|
CAS expense
|
|
36
|
|
|
38
|
|
|
(2
|
)
|
|
(5
|
)%
|
|
110
|
|
|
108
|
|
|
2
|
|
|
2
|
%
|
||||||
FAS/CAS Adjustment
|
|
$
|
(19
|
)
|
|
(1
|
)
|
|
(18
|
)
|
|
1,800
|
%
|
|
$
|
(55
|
)
|
|
(9
|
)
|
|
(46
|
)
|
|
511
|
%
|
|
|
Three Months Ended
|
|
|
|
Nine Months Ended
|
|
|
||||||||||||||||||||||
|
|
September 30
|
|
2012 over 2011
|
|
September 30
|
|
2012 over 2011
|
||||||||||||||||||||||
($ in millions)
|
|
2012
|
|
2011
|
|
Dollars
|
|
Percent
|
|
2012
|
|
2011
|
|
Dollars
|
|
Percent
|
||||||||||||||
Sales and Service Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ingalls
|
|
$
|
670
|
|
|
$
|
740
|
|
|
$
|
(70
|
)
|
|
(9
|
)%
|
|
$
|
2,118
|
|
|
$
|
2,209
|
|
|
$
|
(91
|
)
|
|
(4
|
)%
|
Newport News
|
|
944
|
|
|
876
|
|
|
68
|
|
|
8
|
%
|
|
2,818
|
|
|
2,688
|
|
|
130
|
|
|
5
|
%
|
||||||
Intersegment eliminations
|
|
(18
|
)
|
|
(23
|
)
|
|
5
|
|
|
22
|
%
|
|
(51
|
)
|
|
(57
|
)
|
|
6
|
|
|
11
|
%
|
||||||
Total sales and service revenues
|
|
$
|
1,596
|
|
|
$
|
1,593
|
|
|
$
|
3
|
|
|
—
|
%
|
|
$
|
4,885
|
|
|
$
|
4,840
|
|
|
$
|
45
|
|
|
1
|
%
|
Operating Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Ingalls
|
|
$
|
1
|
|
|
$
|
(281
|
)
|
|
$
|
282
|
|
|
100
|
%
|
|
$
|
59
|
|
|
$
|
(245
|
)
|
|
$
|
304
|
|
|
124
|
%
|
Newport News
|
|
88
|
|
|
94
|
|
|
(6
|
)
|
|
(6
|
)%
|
|
258
|
|
|
240
|
|
|
18
|
|
|
8
|
%
|
||||||
Total Segment Operating Income (Loss)
|
|
89
|
|
|
(187
|
)
|
|
276
|
|
|
(148
|
)%
|
|
317
|
|
|
(5
|
)
|
|
322
|
|
|
(6,440
|
)%
|
||||||
Non-segment factors affecting operating income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
FAS/CAS Adjustment
|
|
(19
|
)
|
|
(1
|
)
|
|
(18
|
)
|
|
(1,800
|
)%
|
|
(55
|
)
|
|
(9
|
)
|
|
(46
|
)
|
|
(511
|
)%
|
||||||
Deferred state income taxes
|
|
(4
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
(100
|
)%
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
|
—
|
%
|
||||||
Total operating income (loss)
|
|
$
|
66
|
|
|
$
|
(190
|
)
|
|
$
|
256
|
|
|
(135
|
)%
|
|
$
|
252
|
|
|
$
|
(14
|
)
|
|
$
|
266
|
|
|
(1,900
|
)%
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 30
|
|
September 30
|
||||||||||||
($ in millions)
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Gross favorable adjustments
|
|
$
|
46
|
|
|
$
|
61
|
|
|
$
|
137
|
|
|
$
|
148
|
|
Gross unfavorable adjustments
|
|
(55
|
)
|
|
(42
|
)
|
|
(98
|
)
|
|
(129
|
)
|
||||
Net Adjustments
|
|
$
|
(9
|
)
|
|
$
|
19
|
|
|
$
|
39
|
|
|
$
|
19
|
|
|
|
Three Months Ended
|
|
|
|
Nine Months Ended
|
|
|
||||||||||||||||||||||
|
|
September 30
|
|
2012 over 2011
|
|
September 30
|
|
2012 over 2011
|
||||||||||||||||||||||
($ in millions)
|
|
2012
|
|
2011
|
|
Dollars
|
|
Percent
|
|
2012
|
|
2011
|
|
Dollars
|
|
Percent
|
||||||||||||||
Sales and service revenues
|
|
$
|
670
|
|
|
$
|
740
|
|
|
$
|
(70
|
)
|
|
(9
|
)%
|
|
$
|
2,118
|
|
|
$
|
2,209
|
|
|
$
|
(91
|
)
|
|
(4
|
)%
|
Segment operating income (loss)
|
|
1
|
|
|
(281
|
)
|
|
282
|
|
|
100
|
%
|
|
59
|
|
|
(245
|
)
|
|
304
|
|
|
124
|
%
|
||||||
As a percentage of segment sales
|
|
0.1
|
%
|
|
(38.0
|
)%
|
|
—
|
|
|
38.1
|
%
|
|
2.8
|
%
|
|
(11.1
|
)%
|
|
—
|
|
|
13.9
|
%
|
|
|
Three Months Ended
|
|
|
|
Nine Months Ended
|
|
|
||||||||||||||||||||||
|
|
September 30
|
|
2012 over 2011
|
|
September 30
|
|
2012 over 2011
|
||||||||||||||||||||||
($ in millions)
|
|
2012
|
|
2011
|
|
Dollars
|
|
Percent
|
|
2012
|
|
2011
|
|
Dollars
|
|
Percent
|
||||||||||||||
Sales and service revenues
|
|
$
|
944
|
|
|
$
|
876
|
|
|
$
|
68
|
|
|
8
|
%
|
|
$
|
2,818
|
|
|
$
|
2,688
|
|
|
$
|
130
|
|
|
5
|
%
|
Segment operating income (loss)
|
|
88
|
|
|
94
|
|
|
(6
|
)
|
|
(6
|
)%
|
|
258
|
|
|
240
|
|
|
18
|
|
|
8
|
%
|
||||||
As a percentage of segment sales
|
|
9.3
|
%
|
|
10.7
|
%
|
|
—
|
|
|
(1.4
|
)%
|
|
9.2
|
%
|
|
8.9
|
%
|
|
—
|
|
|
0.3
|
%
|
|
|
September 30, 2012
|
|
December 31, 2011
|
||||||||||||||||||||
|
|
|
|
|
|
Total
|
|
|
|
|
|
Total
|
||||||||||||
($ in millions)
|
|
Funded
|
|
Unfunded
|
|
Backlog
|
|
Funded
|
|
Unfunded
|
|
Backlog
|
||||||||||||
Ingalls
|
|
$
|
7,524
|
|
|
$
|
82
|
|
|
$
|
7,606
|
|
|
$
|
5,454
|
|
|
$
|
242
|
|
|
$
|
5,696
|
|
Newport News
|
|
5,392
|
|
|
3,382
|
|
|
8,774
|
|
|
5,387
|
|
|
5,185
|
|
|
10,572
|
|
||||||
Total backlog
|
|
$
|
12,916
|
|
|
$
|
3,464
|
|
|
$
|
16,380
|
|
|
$
|
10,841
|
|
|
$
|
5,427
|
|
|
$
|
16,268
|
|
|
|
Nine Months Ended
|
|
|
|
|
|||||||||
|
|
September 30
|
|
2012 over 2011
|
|||||||||||
($ in millions)
|
|
2012
|
|
2011
|
|
Dollars
|
|
Percent
|
|||||||
Net earnings (loss)
|
|
$
|
96
|
|
|
$
|
(163
|
)
|
|
$
|
259
|
|
|
159
|
%
|
Depreciation and amortization
|
|
143
|
|
|
142
|
|
|
1
|
|
|
1
|
%
|
|||
Stock-based compensation
|
|
25
|
|
|
22
|
|
|
3
|
|
|
14
|
%
|
|||
Deferred income taxes
|
|
44
|
|
|
—
|
|
|
44
|
|
|
—
|
%
|
|||
Goodwill impairment
|
|
—
|
|
|
300
|
|
|
(300
|
)
|
|
(100
|
)%
|
|||
Retiree benefit funding less than (in excess of) expense
|
|
(93
|
)
|
|
89
|
|
|
(182
|
)
|
|
(204
|
)%
|
|||
Trade working capital decrease (increase)
|
|
(256
|
)
|
|
(336
|
)
|
|
80
|
|
|
24
|
%
|
|||
Net cash provided by (used in) operating activities
|
|
$
|
(41
|
)
|
|
$
|
54
|
|
|
$
|
(95
|
)
|
|
(176
|
)%
|
|
|
Nine Months Ended
|
|
|
|
|
|||||||||
|
|
September 30
|
|
2012 over 2011
|
|||||||||||
($ in millions)
|
|
2012
|
|
2011
|
|
Dollars
|
|
Percent
|
|||||||
Net cash provided by (used in) operating activities
|
|
$
|
(41
|
)
|
|
$
|
54
|
|
|
$
|
(95
|
)
|
|
(176
|
)%
|
Less:
|
|
|
|
|
|
|
|
|
|||||||
Capital expenditures
|
|
(92
|
)
|
|
(119
|
)
|
|
27
|
|
|
23
|
%
|
|||
Free cash flow provided by (used in) operations
|
|
$
|
(133
|
)
|
|
$
|
(65
|
)
|
|
$
|
(68
|
)
|
|
(105
|
)%
|
•
|
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-65 USS
Enterprise
|
|
Maintain and support the world's first nuclear-powered aircraft carrier, the inactivation of which is expected to start in 2013.
|
|
|
|
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.
|
|
|
|
Energy services
|
|
Leverage our core competencies in nuclear operations, program management and heavy manufacturing for U.S. Department of Energy ("DoE") and commercial nuclear programs. We also provide a range of services to the energy and petrochemical industries as well as government customers.
|
|
|
|
Fleet Support services
|
|
Fleet Support provides comprehensive life cycle services, including depot maintenance, modernization, repairs, logistics and technical support and planning yard services for naval and commercial vessels. We have ship repair facilities in Newport News, Virginia, and San Diego, California, which are near the U.S. Navy's largest homeports of Norfolk, Virginia and San Diego, respectively. We also perform emergent repair for the U.S. Navy on all classes of ships.
|
|
|
|
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. LHA-7
Tripoli
was placed under contract with us in 2012.
|
|
|
LPD-17
San Antonio-
class 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 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-24 through LPD-27. 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
and NSC-5
Joshua James
are under construction; an advance procurement contract for NSC-6 (unnamed) was awarded to us in March 2012.
|
|
|
|
Savannah River Nuclear Solutions, LLC
|
|
Participate, as a minority member in a joint venture, in the management and operation of 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.
|
|
|
|
|
10.1
|
|
|
Form of Indemnification Agreement and Schedule of directors and officers who have entered into such agreement.
|
|
|
|
|
10.2**
|
|
|
First Amendment to Severance Plan for Elected and Appointed Officers of Huntington Ingalls Industries As Amended and Restated (effective March 31, 2012).
|
|
|
|
|
11
|
|
|
Computation of Per Share Earnings (provided in Note 5 "Earnings Per Share" of the Notes to the Unaudited Condensed Consolidated Financial Statements included in this Report.
|
|
|
|
|
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:
|
November 8, 2012
|
Huntington Ingalls Industries, Inc.
|
|
|
|
(Registrant)
|
|
|
|
||
|
|
By:
|
/s/ Douglass L. Fontaine II
|
|
|
|
Douglass L. Fontaine II
|
|
|
|
Corporate Vice President, Controller and Chief Accounting Officer
|
|
|
|
(Principal Accounting Officer)
|
Director/Officer
|
Date Executed
|
Robert F. Bruner
|
March 31, 2011
|
Artur G. Davis
|
March 31, 2011
|
Jerri F. Dickseski
|
March 31, 2011
|
Irwin F. Edenzon
|
March 31, 2011
|
William R. Ermatinger
|
March 31, 2011
|
Thomas B. Fargo
|
March 31, 2011
|
Douglass L. Fontaine II
|
March 31, 2011
|
Victoria D. Harker
|
August 10, 2012
|
Bruce N. Hawthorne
|
March 31, 2011
|
Anastasia D. Kelly
|
March 31, 2011
|
Paul D. Miller
|
March 31, 2011
|
Matthew J. Mulherin
|
March 31, 2011
|
Barbara A. Niland
|
March 31, 2011
|
C. Michael Petters
|
March 31, 2011
|
Thomas C. Schievelbein
|
March 31, 2011
|
George M. Simmerman Jr.
|
March 31, 2011
|
Karl M. von der Heyden
|
March 31, 2011
|
Mitchell B. Waldman
|
March 31, 2011
|
D. R. Wyatt
|
March 31, 2011
|
(a)
|
Are appointed officers or elected officers who do not report to the Chief Executive Officer,
|
|
|
Nine Months
Ended September 30
|
|
Year Ended December 31
|
||||||||||||||||||||
($ in millions)
|
|
2012
|
|
2011
(2)
|
|
2010
|
|
2009
|
|
2008
(1)
|
|
2007
|
||||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings from continuing operations before income taxes
|
|
$
|
164
|
|
|
$
|
6
|
|
|
$
|
206
|
|
|
$
|
176
|
|
|
$
|
(2,394
|
)
|
|
$
|
411
|
|
Amortization of Capitalized Interest
|
|
2
|
|
|
3
|
|
|
4
|
|
|
3
|
|
|
3
|
|
|
3
|
|
||||||
Interest Capitalized
|
|
(2
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|
(8
|
)
|
|
(4
|
)
|
|
(3
|
)
|
||||||
Net adjustment for earnings from affiliates
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Fixed Charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expensed and capitalized, including amortization of debt issuance
|
|
90
|
|
|
106
|
|
|
43
|
|
|
44
|
|
|
44
|
|
|
45
|
|
||||||
Portion of rental expenses on operating leases deemed to be representative of the interest factor
(3)
|
|
10
|
|
|
15
|
|
|
15
|
|
|
16
|
|
|
14
|
|
|
13
|
|
||||||
Total Earnings
|
|
$
|
260
|
|
|
$
|
128
|
|
|
$
|
265
|
|
|
$
|
231
|
|
|
$
|
(2,337
|
)
|
|
$
|
469
|
|
Fixed Charges:
|
|
$
|
100
|
|
|
$
|
121
|
|
|
$
|
58
|
|
|
$
|
60
|
|
|
$
|
58
|
|
|
$
|
58
|
|
Ratio of earnings to fixed charges
|
|
2.6
|
|
|
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
|