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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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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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
June 30 |
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Six Months Ended
June 30 |
||||||||||||
(in millions, except per share amounts)
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2014
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2013
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2014
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2013
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||||||||
Sales and service revenues
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||||||||
Product sales
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$
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1,433
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$
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1,423
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$
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2,765
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$
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2,744
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Service revenues
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286
|
|
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260
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548
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501
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||||
Total sales and service revenues
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1,719
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1,683
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3,313
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3,245
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Cost of sales and service revenues
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Cost of product sales
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1,131
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1,157
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2,191
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2,243
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||||
Cost of service revenues
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238
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|
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227
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|
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465
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|
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440
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||||
Income (loss) from operating investments, net
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1
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|
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2
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|
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3
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|
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4
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|
||||
General and administrative expenses
|
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170
|
|
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185
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|
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320
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|
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355
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||||
Operating income (loss)
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181
|
|
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116
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|
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340
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|
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211
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|
||||
Other income (expense)
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|
|
|
|
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||||||
Interest expense
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(29
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)
|
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(29
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)
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(56
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)
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(59
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)
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||||
Earnings (loss) before income taxes
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152
|
|
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87
|
|
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284
|
|
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152
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||||
Federal income taxes
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52
|
|
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30
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|
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94
|
|
|
51
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||||
Net earnings (loss)
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$
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100
|
|
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$
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57
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$
|
190
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$
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101
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||||||||
Basic earnings (loss) per share
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$
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2.05
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$
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1.14
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$
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3.88
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$
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2.02
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Weighted-average common shares outstanding
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48.8
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50.2
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49.0
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50.0
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Diluted earnings (loss) per share
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$
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2.04
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$
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1.12
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$
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3.84
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$
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2.00
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Weighted-average diluted shares outstanding
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49.1
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50.7
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49.5
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50.5
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||||||||
Dividends declared per share
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$
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0.20
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$
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0.10
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$
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0.40
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$
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0.20
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|
|
|
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||||||||
Net earnings (loss) from above
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$
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100
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$
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57
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$
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190
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$
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101
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Other comprehensive income (loss)
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|
|
|
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||||||||
Change in unamortized benefit plan costs
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8
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210
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16
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215
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Other
|
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1
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(1
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)
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2
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1
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Tax benefit (expense) for items of other comprehensive income
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(3
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)
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(81
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)
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(6
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)
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(86
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)
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Other comprehensive income (loss), net of tax
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6
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128
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12
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130
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Comprehensive income (loss)
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$
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106
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$
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185
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$
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202
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$
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231
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($ in millions)
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June 30
2014 |
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December 31
2013 |
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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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592
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$
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1,043
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Accounts receivable, net
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1,216
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1,123
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Inventoried costs, net
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294
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311
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Deferred income taxes
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179
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170
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Prepaid expenses and other current assets
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46
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29
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Total current assets
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2,327
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2,676
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Property, plant, and equipment, net of accumulated depreciation of $1,492 million as of 2014 and $1,404 million as of 2013
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1,850
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1,897
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Goodwill
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1,089
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881
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Other purchased intangibles, net
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557
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528
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Pension plan assets
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127
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124
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Miscellaneous other assets
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130
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119
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Total assets
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$
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6,080
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$
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6,225
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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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297
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$
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337
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Accrued employees’ compensation
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210
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|
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230
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Current portion of long-term debt
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86
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79
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Current portion of postretirement plan liabilities
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139
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139
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Current portion of workers’ compensation liabilities
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233
|
|
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230
|
|
||
Advance payments and billings in excess of revenues
|
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58
|
|
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115
|
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||
Other current liabilities
|
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244
|
|
|
262
|
|
||
Total current liabilities
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1,267
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1,392
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Long-term debt
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1,679
|
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|
1,700
|
|
||
Pension plan liabilities
|
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437
|
|
|
529
|
|
||
Other postretirement plan liabilities
|
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482
|
|
|
477
|
|
||
Workers’ compensation liabilities
|
|
424
|
|
|
419
|
|
||
Deferred tax liabilities
|
|
112
|
|
|
83
|
|
||
Other long-term liabilities
|
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110
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|
|
104
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|
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Total liabilities
|
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4,511
|
|
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4,704
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|
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Commitments and Contingencies (Note 15)
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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 million shares authorized; 51.4 million issued and 48.6 million outstanding as of June 30, 2014, and 50.5 million issued and 48.7 million outstanding as of December 31, 2013
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1
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|
|
1
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|
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Additional paid-in capital
|
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1,896
|
|
|
1,925
|
|
||
Retained earnings (deficit)
|
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406
|
|
|
236
|
|
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Treasury stock
|
|
(225
|
)
|
|
(120
|
)
|
||
Accumulated other comprehensive income (loss)
|
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(509
|
)
|
|
(521
|
)
|
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Total stockholders’ equity
|
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1,569
|
|
|
1,521
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
6,080
|
|
|
$
|
6,225
|
|
|
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Six Months Ended
June 30 |
||||||
($ in millions)
|
|
2014
|
|
2013
|
||||
Operating Activities
|
|
|
|
|
||||
Net earnings (loss)
|
|
$
|
190
|
|
|
$
|
101
|
|
Adjustments to reconcile to net cash provided by (used in) operating activities
|
|
|
|
|
||||
Depreciation
|
|
97
|
|
|
82
|
|
||
Amortization of purchased intangibles
|
|
12
|
|
|
11
|
|
||
Amortization of debt issuance costs
|
|
5
|
|
|
4
|
|
||
Stock-based compensation
|
|
11
|
|
|
19
|
|
||
Excess tax benefit related to stock-based compensation
|
|
(15
|
)
|
|
(3
|
)
|
||
Deferred income taxes
|
|
(4
|
)
|
|
28
|
|
||
Change in
|
|
|
|
|
||||
Accounts receivable
|
|
(38
|
)
|
|
(196
|
)
|
||
Inventoried costs
|
|
18
|
|
|
(25
|
)
|
||
Prepaid expenses and other assets
|
|
(14
|
)
|
|
(28
|
)
|
||
Accounts payable and accruals
|
|
(131
|
)
|
|
(146
|
)
|
||
Retiree benefits
|
|
(73
|
)
|
|
(184
|
)
|
||
Net cash provided by (used in) operating activities
|
|
58
|
|
|
(337
|
)
|
||
Investing Activities
|
|
|
|
|
||||
Additions to property, plant, and equipment
|
|
(51
|
)
|
|
(55
|
)
|
||
Acquisitions of businesses, net of cash received
|
|
(273
|
)
|
|
—
|
|
||
Net cash provided by (used in) investing activities
|
|
(324
|
)
|
|
(55
|
)
|
||
Financing Activities
|
|
|
|
|
||||
Repayment of long-term debt
|
|
(14
|
)
|
|
(13
|
)
|
||
Dividends paid
|
|
(20
|
)
|
|
(10
|
)
|
||
Repurchases of common stock
|
|
(104
|
)
|
|
(25
|
)
|
||
Employee taxes on certain share-based payment arrangements
|
|
(64
|
)
|
|
—
|
|
||
Proceeds from stock option exercises
|
|
2
|
|
|
3
|
|
||
Excess tax benefit related to stock-based compensation
|
|
15
|
|
|
3
|
|
||
Net cash provided by (used in) financing activities
|
|
(185
|
)
|
|
(42
|
)
|
||
Change in cash and cash equivalents
|
|
(451
|
)
|
|
(434
|
)
|
||
Cash and cash equivalents, beginning of period
|
|
1,043
|
|
|
1,057
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
592
|
|
|
$
|
623
|
|
Supplemental Cash Flow Disclosure
|
|
|
|
|
||||
Cash paid for income taxes
|
|
$
|
94
|
|
|
$
|
41
|
|
Cash paid for interest
|
|
$
|
52
|
|
|
$
|
55
|
|
Non-Cash Investing and Financing Activities
|
|
|
|
|
||||
Capital expenditures accrued in accounts payable
|
|
$
|
3
|
|
|
$
|
3
|
|
Six Months Ended June 30, 2014 and 2013 ($ in millions)
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings (Deficit)
|
|
Treasury Stock
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total Stockholders' Equity
|
||||||||||||
Balance as of December 31, 2012
|
|
$
|
—
|
|
|
$
|
1,894
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
(1,226
|
)
|
|
$
|
667
|
|
Net earnings (loss)
|
|
—
|
|
|
—
|
|
|
101
|
|
|
—
|
|
|
—
|
|
|
101
|
|
||||||
Dividends declared ($0.20 per share)
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
||||||
Additional paid-in capital
|
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||||
Other comprehensive income (loss), net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
130
|
|
|
130
|
|
||||||
Common stock
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Treasury stock activity
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
|
—
|
|
|
(26
|
)
|
||||||
Balance as of June 30, 2013
|
|
$
|
1
|
|
|
$
|
1,904
|
|
|
$
|
91
|
|
|
$
|
(27
|
)
|
|
$
|
(1,096
|
)
|
|
$
|
873
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance as of December 31, 2013
|
|
$
|
1
|
|
|
$
|
1,925
|
|
|
$
|
236
|
|
|
$
|
(120
|
)
|
|
$
|
(521
|
)
|
|
$
|
1,521
|
|
Net earnings (loss)
|
|
—
|
|
|
—
|
|
|
190
|
|
|
—
|
|
|
—
|
|
|
190
|
|
||||||
Dividends declared ($0.40 per share)
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
||||||
Additional paid-in capital
|
|
—
|
|
|
(29
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29
|
)
|
||||||
Other comprehensive income (loss), net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
12
|
|
||||||
Treasury stock activity
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(105
|
)
|
|
—
|
|
|
(105
|
)
|
||||||
Balance as of June 30, 2014
|
|
$
|
1
|
|
|
$
|
1,896
|
|
|
$
|
406
|
|
|
$
|
(225
|
)
|
|
$
|
(509
|
)
|
|
$
|
1,569
|
|
($ in millions)
|
|
Benefit Plans
|
|
Other
|
|
Total
|
||||||
Balance as of March 31, 2013
|
|
$
|
(1,225
|
)
|
|
$
|
1
|
|
|
$
|
(1,224
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
177
|
|
|
(1
|
)
|
|
176
|
|
|||
Amounts reclassified from accumulated other comprehensive income (loss)
|
|
|
|
|
|
|
||||||
Amortization of prior service cost (credit)
1
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Amortization of net actuarial loss (gain)
1
|
|
33
|
|
|
—
|
|
|
33
|
|
|||
Tax benefit (expense) for items of other comprehensive income
|
|
(82
|
)
|
|
1
|
|
|
(81
|
)
|
|||
Net current period other comprehensive income (loss)
|
|
128
|
|
|
—
|
|
|
128
|
|
|||
Balance as of June 30, 2013
|
|
$
|
(1,097
|
)
|
|
$
|
1
|
|
|
$
|
(1,096
|
)
|
|
|
|
|
|
|
|
||||||
Balance as of March 31, 2014
|
|
$
|
(518
|
)
|
|
$
|
3
|
|
|
$
|
(515
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
—
|
|
|
1
|
|
|
1
|
|
|||
Amounts reclassified from accumulated other comprehensive income (loss)
|
|
|
|
|
|
|
||||||
Amortization of prior service cost (credit)
1
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||
Amortization of net actuarial loss (gain)
1
|
|
10
|
|
|
—
|
|
|
10
|
|
|||
Tax benefit (expense) for items of other comprehensive income
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||
Net current period other comprehensive income (loss)
|
|
5
|
|
|
1
|
|
|
6
|
|
|||
Balance as of June 30, 2014
|
|
$
|
(513
|
)
|
|
$
|
4
|
|
|
$
|
(509
|
)
|
($ in millions)
|
|
Benefit Plans
|
|
Other
|
|
Total
|
||||||
Balance as of December 31, 2012
|
|
$
|
(1,226
|
)
|
|
$
|
—
|
|
|
$
|
(1,226
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
146
|
|
|
1
|
|
|
147
|
|
|||
Amounts reclassified from accumulated other comprehensive income (loss)
|
|
|
|
|
|
|
||||||
Amortization of prior service cost (credit)
1
|
|
2
|
|
|
—
|
|
|
2
|
|
|||
Amortization of net actuarial loss (gain)
1
|
|
67
|
|
|
—
|
|
|
67
|
|
|||
Tax benefit (expense) for items of other comprehensive income
|
|
(86
|
)
|
|
—
|
|
|
(86
|
)
|
|||
Net current period other comprehensive income (loss)
|
|
129
|
|
|
1
|
|
|
130
|
|
|||
Balance as of June 30, 2013
|
|
$
|
(1,097
|
)
|
|
$
|
1
|
|
|
$
|
(1,096
|
)
|
|
|
|
|
|
|
|
||||||
Balance as of December 31, 2013
|
|
$
|
(523
|
)
|
|
$
|
2
|
|
|
$
|
(521
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
—
|
|
|
2
|
|
|
2
|
|
|||
Amounts reclassified from accumulated other comprehensive income (loss)
|
|
|
|
|
|
|
||||||
Amortization of prior service cost (credit)
1
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||
Amortization of net actuarial loss (gain)
1
|
|
20
|
|
|
—
|
|
|
20
|
|
|||
Tax benefit (expense) for items of other comprehensive income
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|||
Net current period other comprehensive income (loss)
|
|
10
|
|
|
2
|
|
|
12
|
|
|||
Balance as of June 30, 2014
|
|
$
|
(513
|
)
|
|
$
|
4
|
|
|
$
|
(509
|
)
|
|
|
Three Months Ended
June 30 |
|
Six Months Ended
June 30 |
||||||||||||
(in millions, except per share amounts)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net earnings (loss)
|
|
$
|
100
|
|
|
$
|
57
|
|
|
$
|
190
|
|
|
$
|
101
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding
|
|
48.8
|
|
|
50.2
|
|
|
49.0
|
|
|
50.0
|
|
||||
Net dilutive effect of stock options and awards
|
|
0.3
|
|
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
||||
Dilutive weighted-average common shares outstanding
|
|
49.1
|
|
|
50.7
|
|
|
49.5
|
|
|
50.5
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share - basic
|
|
$
|
2.05
|
|
|
$
|
1.14
|
|
|
$
|
3.88
|
|
|
$
|
2.02
|
|
Earnings (loss) per share - diluted
|
|
$
|
2.04
|
|
|
$
|
1.12
|
|
|
$
|
3.84
|
|
|
$
|
2.00
|
|
|
|
Three Months Ended
June 30 |
|
Six Months Ended
June 30 |
||||||||||||
($ in millions)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Sales and Service Revenues
|
|
|
|
|
|
|
|
|
||||||||
Ingalls
|
|
$
|
572
|
|
|
$
|
592
|
|
|
$
|
1,119
|
|
|
$
|
1,142
|
|
Newport News
|
|
1,129
|
|
|
1,092
|
|
|
2,176
|
|
|
2,104
|
|
||||
Other
|
|
20
|
|
|
—
|
|
|
20
|
|
|
—
|
|
||||
Intersegment eliminations
|
|
(2
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
(1
|
)
|
||||
Total sales and service revenues
|
|
$
|
1,719
|
|
|
$
|
1,683
|
|
|
$
|
3,313
|
|
|
$
|
3,245
|
|
Operating Income (Loss)
|
|
|
|
|
|
|
|
|
||||||||
Ingalls
|
|
$
|
59
|
|
|
$
|
31
|
|
|
$
|
102
|
|
|
$
|
55
|
|
Newport News
|
|
104
|
|
|
105
|
|
|
198
|
|
|
201
|
|
||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total segment operating income (loss)
|
|
163
|
|
|
136
|
|
|
300
|
|
|
256
|
|
||||
Non-segment factors affecting operating income (loss)
|
|
|
|
|
|
|
|
|
||||||||
FAS/CAS Adjustment
|
|
21
|
|
|
(18
|
)
|
|
43
|
|
|
(41
|
)
|
||||
Deferred state income taxes
|
|
(3
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|
(4
|
)
|
||||
Total operating income (loss)
|
|
$
|
181
|
|
|
$
|
116
|
|
|
$
|
340
|
|
|
$
|
211
|
|
($ in millions)
|
|
June 30
2014 |
|
December 31
2013 |
||||
Assets
|
|
|
|
|
||||
Ingalls
|
|
$
|
1,557
|
|
|
$
|
1,663
|
|
Newport News
|
|
3,236
|
|
|
3,111
|
|
||
Other
|
|
265
|
|
|
—
|
|
||
Corporate
|
|
1,022
|
|
|
1,451
|
|
||
Total assets
|
|
$
|
6,080
|
|
|
$
|
6,225
|
|
($ in millions)
|
|
June 30
2014 |
|
December 31
2013 |
||||
Production costs of contracts in process
|
|
$
|
195
|
|
|
$
|
218
|
|
General and administrative expenses
|
|
3
|
|
|
2
|
|
||
|
|
198
|
|
|
220
|
|
||
Raw material inventory
|
|
96
|
|
|
91
|
|
||
Total inventoried costs, net
|
|
$
|
294
|
|
|
$
|
311
|
|
($ in millions)
|
|
Ingalls
|
|
Newport News
|
|
Other
|
|
Total
|
||||||||
Balance as of December 31, 2013
|
|
$
|
175
|
|
|
$
|
706
|
|
|
$
|
—
|
|
|
$
|
881
|
|
Acquisitions
|
|
—
|
|
|
42
|
|
|
166
|
|
|
208
|
|
||||
Balance as of June 30, 2014
|
|
$
|
175
|
|
|
$
|
748
|
|
|
$
|
166
|
|
|
$
|
1,089
|
|
($ in millions)
|
|
June 30
2014 |
|
December 31
2013 |
||||
Gross carrying amount
|
|
$
|
980
|
|
|
$
|
939
|
|
Accumulated amortization
|
|
(423
|
)
|
|
(411
|
)
|
||
Net carrying amount
|
|
$
|
557
|
|
|
$
|
528
|
|
($ in millions)
|
|
June 30
2014 |
|
December 31
2013 |
||||
Net current deferred tax assets
|
|
$
|
179
|
|
|
$
|
170
|
|
Net non-current deferred tax liabilities
|
|
(112
|
)
|
|
(83
|
)
|
||
Total net deferred tax assets
|
|
$
|
67
|
|
|
$
|
87
|
|
($ in millions)
|
|
June 30
2014 |
|
December 31
2013 |
||||
Term loan due March 30, 2016
|
|
$
|
460
|
|
|
$
|
474
|
|
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
|
|
1,765
|
|
|
1,779
|
|
||
Less current portion
|
|
86
|
|
|
79
|
|
||
Long-term debt, net of current portion
|
|
$
|
1,679
|
|
|
$
|
1,700
|
|
|
|
Three Months Ended
June 30 |
|
Six Months Ended
June 30 |
||||||||||||||||||||||||||||
|
|
Pension Benefits
|
|
Other Benefits
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||||||||||||||
($ in millions)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||||||||||
Components of Net Periodic Benefit Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Service cost
|
|
$
|
34
|
|
|
$
|
36
|
|
|
$
|
3
|
|
|
$
|
6
|
|
|
$
|
68
|
|
|
$
|
73
|
|
|
$
|
6
|
|
|
$
|
11
|
|
Interest cost
|
|
62
|
|
|
54
|
|
|
7
|
|
|
8
|
|
|
123
|
|
|
107
|
|
|
15
|
|
|
18
|
|
||||||||
Expected return on plan assets
|
|
(81
|
)
|
|
(72
|
)
|
|
—
|
|
|
—
|
|
|
(161
|
)
|
|
(144
|
)
|
|
—
|
|
|
—
|
|
||||||||
Amortization of prior service cost (credit)
|
|
4
|
|
|
5
|
|
|
(6
|
)
|
|
(5
|
)
|
|
9
|
|
|
9
|
|
|
(13
|
)
|
|
(7
|
)
|
||||||||
Amortization of net actuarial loss (gain)
|
|
10
|
|
|
29
|
|
|
—
|
|
|
4
|
|
|
20
|
|
|
59
|
|
|
—
|
|
|
8
|
|
||||||||
Net periodic benefit cost
|
|
$
|
29
|
|
|
$
|
52
|
|
|
$
|
4
|
|
|
$
|
13
|
|
|
$
|
59
|
|
|
$
|
104
|
|
|
$
|
8
|
|
|
$
|
30
|
|
|
|
Six Months Ended
June 30 |
||||||
($ in millions)
|
|
2014
|
|
2013
|
||||
Pension plans
|
|
|
|
|
||||
Qualified minimum
|
|
$
|
—
|
|
|
$
|
—
|
|
Discretionary
|
|
|
|
|
||||
Qualified
|
|
123
|
|
|
301
|
|
||
Non-qualified
|
|
2
|
|
|
2
|
|
||
Other benefit plans
|
|
16
|
|
|
15
|
|
||
Total contributions
|
|
$
|
141
|
|
|
$
|
318
|
|
|
|
Shares Under
Option
(in thousands)
|
|
Weighted-
Average
Exercise Price
|
|
Weighted- Average
Remaining
Contractual Term
(in years)
|
|
Aggregate
Intrinsic
Value
($ in millions)
|
|||||
Outstanding and exercisable at June 30, 2014
|
|
680
|
|
|
$
|
35.81
|
|
|
1.8
|
|
$
|
40
|
|
|
|
Stock Awards
(in thousands)
|
|
Weighted-Average
Grant Date Fair
Value
|
|
Weighted-Average Remaining Contractual Term
(in years)
|
|||
Total stock awards
|
|
1,307
|
|
|
$
|
49.96
|
|
|
1.2
|
|
|
Three Months Ended June 30, 2014
|
||||||||||||||||||
($ in millions)
|
|
Huntington Ingalls Industries, Inc.
|
|
Subsidiary Guarantors
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Sales and service revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Product sales
|
|
$
|
—
|
|
|
$
|
1,433
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,433
|
|
Service revenues
|
|
—
|
|
|
281
|
|
|
13
|
|
|
(8
|
)
|
|
286
|
|
|||||
Total sales and service revenues
|
|
—
|
|
|
1,714
|
|
|
13
|
|
|
(8
|
)
|
|
1,719
|
|
|||||
Cost of sales and service revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of product sales
|
|
—
|
|
|
1,131
|
|
|
—
|
|
|
—
|
|
|
1,131
|
|
|||||
Cost of service revenues
|
|
—
|
|
|
234
|
|
|
12
|
|
|
(8
|
)
|
|
238
|
|
|||||
Income (loss) from operating investments, net
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
General and administrative expenses
|
|
—
|
|
|
170
|
|
|
—
|
|
|
—
|
|
|
170
|
|
|||||
Operating income (loss)
|
|
—
|
|
|
180
|
|
|
1
|
|
|
—
|
|
|
181
|
|
|||||
Interest expense
|
|
(27
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(29
|
)
|
|||||
Equity in earnings (loss) of subsidiaries
|
|
118
|
|
|
—
|
|
|
—
|
|
|
(118
|
)
|
|
—
|
|
|||||
Earnings (loss) before income taxes
|
|
91
|
|
|
178
|
|
|
1
|
|
|
(118
|
)
|
|
152
|
|
|||||
Federal income taxes
|
|
(9
|
)
|
|
61
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|||||
Net earnings (loss)
|
|
$
|
100
|
|
|
$
|
117
|
|
|
$
|
1
|
|
|
$
|
(118
|
)
|
|
$
|
100
|
|
Other comprehensive income (loss), net of tax
|
|
6
|
|
|
6
|
|
|
—
|
|
|
(6
|
)
|
|
6
|
|
|||||
Comprehensive income (loss)
|
|
$
|
106
|
|
|
$
|
123
|
|
|
$
|
1
|
|
|
$
|
(124
|
)
|
|
$
|
106
|
|
|
|
Three Months Ended June 30, 2013
|
||||||||||||||||||
($ in millions)
|
|
Huntington Ingalls Industries, Inc.
|
|
Subsidiary Guarantors
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Sales and service revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Product sales
|
|
$
|
—
|
|
|
$
|
1,423
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,423
|
|
Service revenues
|
|
—
|
|
|
260
|
|
|
6
|
|
|
(6
|
)
|
|
260
|
|
|||||
Total sales and service revenues
|
|
—
|
|
|
1,683
|
|
|
6
|
|
|
(6
|
)
|
|
1,683
|
|
|||||
Cost of sales and service revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of product sales
|
|
—
|
|
|
1,157
|
|
|
—
|
|
|
—
|
|
|
1,157
|
|
|||||
Cost of service revenues
|
|
—
|
|
|
227
|
|
|
6
|
|
|
(6
|
)
|
|
227
|
|
|||||
Income (loss) from operating investments, net
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
General and administrative expenses
|
|
—
|
|
|
185
|
|
|
—
|
|
|
—
|
|
|
185
|
|
|||||
Operating income (loss)
|
|
—
|
|
|
116
|
|
|
—
|
|
|
—
|
|
|
116
|
|
|||||
Interest expense
|
|
(27
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(29
|
)
|
|||||
Equity in earnings (loss) of subsidiaries
|
|
75
|
|
|
—
|
|
|
—
|
|
|
(75
|
)
|
|
—
|
|
|||||
Earnings (loss) before income taxes
|
|
48
|
|
|
114
|
|
|
—
|
|
|
(75
|
)
|
|
87
|
|
|||||
Federal income taxes
|
|
(9
|
)
|
|
39
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|||||
Net earnings (loss)
|
|
$
|
57
|
|
|
$
|
75
|
|
|
$
|
—
|
|
|
$
|
(75
|
)
|
|
$
|
57
|
|
Other comprehensive income (loss), net of tax
|
|
128
|
|
|
128
|
|
|
—
|
|
|
(128
|
)
|
|
128
|
|
|||||
Comprehensive income (loss)
|
|
$
|
185
|
|
|
$
|
203
|
|
|
$
|
—
|
|
|
$
|
(203
|
)
|
|
$
|
185
|
|
|
|
Six Months Ended June 30, 2014
|
||||||||||||||||||
($ in millions)
|
|
Huntington Ingalls Industries, Inc.
|
|
Subsidiary Guarantors
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Sales and service revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Product sales
|
|
$
|
—
|
|
|
$
|
2,765
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,765
|
|
Service revenues
|
|
—
|
|
|
543
|
|
|
15
|
|
|
(10
|
)
|
|
548
|
|
|||||
Total sales and service revenues
|
|
—
|
|
|
3,308
|
|
|
15
|
|
|
(10
|
)
|
|
3,313
|
|
|||||
Cost of sales and service revenues
|
|
|
|
|
|
|
|
|
|