Subsidiary Guarantors | 3 Months Ended |
Mar. 31, 2015 |
Subsidiary Guarantors [Abstract] | |
Subsidiary Guarantors | SUBSIDIARY GUARANTORS |
Performance of the Company's obligations under the senior notes, including any repurchase obligations resulting from a change of control, is fully and unconditionally guaranteed, jointly and severally, on an unsecured basis, by each of HII's existing and future domestic subsidiaries that guarantees debt under the Credit Facility (the "Subsidiary Guarantors"). See Note 13: Debt. The guarantees rank equally with all other unsecured and unsubordinated indebtedness of the Subsidiary Guarantors. The Subsidiary Guarantors are each directly or indirectly 100% owned by HII. |
Set forth below are the unaudited condensed consolidating statements of operations and comprehensive income for the three months ended March 31, 2015 and 2014, unaudited condensed consolidating statements of financial position as of March 31, 2015, and December 31, 2014, and the unaudited condensed consolidating statements of cash flows for the three months ended March 31, 2015 and 2014, for HII, its aggregated subsidiary guarantors and its aggregated non-guarantor subsidiaries. |
|
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME |
|
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, 2015 |
($ in millions) | | Huntington Ingalls Industries, Inc. | | Subsidiary Guarantors | | Non-Guarantor Subsidiaries | | Eliminations | | Consolidated |
Sales and service revenues | | | | | | | | | | |
Product sales | | $ | — | | | $ | 1,250 | | | $ | — | | | $ | — | | | $ | 1,250 | |
|
Service revenues | | — | | | 309 | | | 11 | | | — | | | 320 | |
|
Total sales and service revenues | | — | | | 1,559 | | | 11 | | | — | | | 1,570 | |
|
Cost of sales and service revenues | | | | | | | | | | |
Cost of product sales | | — | | | 985 | | | — | | | — | | | 985 | |
|
Cost of service revenues | | — | | | 271 | | | 9 | | | — | | | 280 | |
|
Income (loss) from operating investments, net | | — | | | 1 | | | — | | | — | | | 1 | |
|
General and administrative expenses | | — | | | 147 | | | 3 | | | — | | | 150 | |
|
Operating income (loss) | | — | | | 157 | | | (1 | ) | | — | | | 156 | |
|
Interest expense | | (22 | ) | | (1 | ) | | — | | | — | | | (23 | ) |
|
Equity in earnings (loss) of subsidiaries | | 101 | | | — | | | — | | | (101 | ) | | — | |
|
Earnings (loss) before income taxes | | 79 | | | 156 | | | (1 | ) | | (101 | ) | | 133 | |
|
Federal income taxes | | (8 | ) | | 54 | | | — | | | — | | | 46 | |
|
Net earnings (loss) | | $ | 87 | | | $ | 102 | | | $ | (1 | ) | | $ | (101 | ) | | $ | 87 | |
|
Other comprehensive income (loss), net of tax | | 13 | | | 15 | | | (2 | ) | | (13 | ) | | 13 | |
|
Comprehensive income (loss) | | $ | 100 | | | $ | 117 | | | $ | (3 | ) | | $ | (114 | ) | | $ | 100 | |
|
|
|
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, 2014 |
($ in millions) | | Huntington Ingalls Industries, Inc. | | Subsidiary Guarantors | | Non-Guarantor Subsidiaries | | Eliminations | | Consolidated |
Sales and service revenues | | | | | | | | | | |
Product sales | | $ | — | | | $ | 1,332 | | | $ | — | | | $ | — | | | $ | 1,332 | |
|
Service revenues | | — | | | 262 | | | 2 | | | (2 | ) | | 262 | |
|
Total sales and service revenues | | — | | | 1,594 | | | 2 | | | (2 | ) | | 1,594 | |
|
Cost of sales and service revenues | | | | | | | | | | |
Cost of product sales | | — | | | 1,060 | | | — | | | — | | | 1,060 | |
|
Cost of service revenues | | — | | | 227 | | | 2 | | | (2 | ) | | 227 | |
|
Income (loss) from operating investments, net | | — | | | 2 | | | — | | | — | | | 2 | |
|
General and administrative expenses | | — | | | 150 | | | — | | | — | | | 150 | |
|
Operating income (loss) | | — | | | 159 | | | — | | | — | | | 159 | |
|
Interest expense | | (25 | ) | | (2 | ) | | — | | | — | | | (27 | ) |
|
Equity in earnings (loss) of subsidiaries | | 107 | | | — | | | — | | | (107 | ) | | — | |
|
Earnings (loss) before income taxes | | 82 | | | 157 | | | — | | | (107 | ) | | 132 | |
|
Federal income taxes | | (8 | ) | | 50 | | | — | | | — | | | 42 | |
|
Net earnings (loss) | | $ | 90 | | | $ | 107 | | | $ | — | | | $ | (107 | ) | | $ | 90 | |
|
Other comprehensive income (loss), net of tax | | 6 | | | 6 | | | — | | | (6 | ) | | 6 | |
|
Comprehensive income (loss) | | $ | 96 | | | $ | 113 | | | $ | — | | | $ | (113 | ) | | $ | 96 | |
|
|
CONDENSED CONSOLIDATING STATEMENTS OF FINANCIAL POSITION |
|
| | | | | | | | | | | | | | | | | | | | |
| | March 31, 2015 |
($ in millions) | | Huntington Ingalls Industries, Inc. | | Subsidiary Guarantors | | Non-Guarantor Subsidiaries | | Eliminations | | Consolidated |
Assets | | | | | | | | | | |
Current Assets | | | | | | | | | | |
Cash and cash equivalents | | $ | 874 | | | $ | 2 | | | $ | 28 | | | $ | — | | | $ | 904 | |
|
Accounts receivable, net | | — | | | 1,209 | | | 10 | | | — | | | 1,219 | |
|
Inventoried costs, net | | — | | | 336 | | | — | | | — | | | 336 | |
|
Deferred income taxes | | — | | | 132 | | | — | | | — | | | 132 | |
|
Prepaid expenses and other current assets | | — | | | 36 | | | 1 | | | — | | | 37 | |
|
Total current assets | | 874 | | | 1,715 | | | 39 | | | — | | | 2,628 | |
|
Property, plant, and equipment, net | | — | | | 1,766 | | | 2 | | | — | | | 1,768 | |
|
Goodwill | | — | | | 1,032 | | | — | | | — | | | 1,032 | |
|
Other purchased intangibles, net | | — | | | 540 | | | — | | | — | | | 540 | |
|
Pension plan asset | | — | | | 21 | | | — | | | — | | | 21 | |
|
Long-term deferred tax asset | | — | | | 203 | | | — | | | — | | | 203 | |
|
Miscellaneous other assets | | 27 | | | 100 | | | — | | | — | | | 127 | |
|
Investment in subsidiaries | | 3,500 | | | — | | | — | | | (3,500 | ) | | — | |
|
Intercompany receivables | | — | | | 1,429 | | | — | | | (1,429 | ) | | — | |
|
Total assets | | $ | 4,401 | | | $ | 6,806 | | | $ | 41 | | | $ | (4,929 | ) | | $ | 6,319 | |
|
Liabilities and Stockholders' Equity | | | | | | | | | | |
Current Liabilities | | | | | | | | | | |
Trade accounts payable | | $ | — | | | $ | 305 | | | $ | 2 | | | $ | — | | | $ | 307 | |
|
Accrued employees’ compensation | | — | | | 182 | | | 1 | | | — | | | 183 | |
|
Current portion of long-term debt | | 108 | | | — | | | — | | | — | | | 108 | |
|
Current portion of postretirement plan liabilities | | — | | | 143 | | | — | | | — | | | 143 | |
|
Current portion of workers’ compensation liabilities | | — | | | 223 | | | — | | | — | | | 223 | |
|
Advance payments and billings in excess of revenues | | — | | | 78 | | | — | | | — | | | 78 | |
|
Other current liabilities | | 11 | | | 261 | | | 18 | | | — | | | 290 | |
|
Total current liabilities | | 119 | | | 1,192 | | | 21 | | | — | | | 1,332 | |
|
Long-term debt | | 1,488 | | | 104 | | | — | | | — | | | 1,592 | |
|
Pension plan liabilities | | — | | | 949 | | | — | | | — | | | 949 | |
|
Other postretirement plan liabilities | | — | | | 509 | | | — | | | — | | | 509 | |
|
Workers’ compensation liabilities | | — | | | 453 | | | — | | | — | | | 453 | |
|
Other long-term liabilities | | — | | | 104 | | | — | | | — | | | 104 | |
|
Intercompany liabilities | | 1,414 | | | — | | | 15 | | | (1,429 | ) | | — | |
|
Total liabilities | | 3,021 | | | 3,311 | | | 36 | | | (1,429 | ) | | 4,939 | |
|
Stockholders’ equity | | 1,380 | | | 3,495 | | | 5 | | | (3,500 | ) | | 1,380 | |
|
Total liabilities and stockholders’ equity | | $ | 4,401 | | | $ | 6,806 | | | $ | 41 | | | $ | (4,929 | ) | | $ | 6,319 | |
|
CONDENSED CONSOLIDATING STATEMENTS OF FINANCIAL POSITION |
|
| | | | | | | | | | | | | | | | | | | | |
| | December 31, 2014 |
($ in millions) | | Huntington Ingalls Industries, Inc. | | Subsidiary Guarantors | | Non-Guarantor Subsidiaries | | Eliminations | | Consolidated |
Assets | | | | | | | | | | |
Current Assets | | | | | | | | | | |
Cash and cash equivalents | | $ | 980 | | | $ | 4 | | | $ | 6 | | | $ | — | | | $ | 990 | |
|
Accounts receivable, net | | — | | | 1,022 | | | 16 | | | — | | | 1,038 | |
|
Inventoried costs, net | | — | | | 339 | | | — | | | — | | | 339 | |
|
Deferred income taxes | | — | | | 129 | | | — | | | — | | | 129 | |
|
Prepaid expenses and other current assets | | 1 | | | 48 | | | 5 | | | (4 | ) | | 50 | |
|
Total current assets | | 981 | | | 1,542 | | | 27 | | | (4 | ) | | 2,546 | |
|
Property, plant, and equipment, net | | — | | | 1,790 | | | 2 | | | — | | | 1,792 | |
|
Goodwill | | — | | | 1,026 | | | — | | | — | | | 1,026 | |
|
Other purchased intangibles, net | | — | | | 547 | | | — | | | — | | | 547 | |
|
Pension plan asset | | — | | | 17 | | | — | | | — | | | 17 | |
|
Long-term deferred tax assets | | — | | | 212 | | | — | | | — | | | 212 | |
|
Miscellaneous other assets | | 30 | | | 99 | | | — | | | — | | | 129 | |
|
Investment in subsidiaries | | 3,421 | | | — | | | — | | | (3,421 | ) | | — | |
|
Intercompany receivables | | — | | | 1,469 | | | — | | | (1,469 | ) | | — | |
|
Total assets | | $ | 4,432 | | | $ | 6,702 | | | $ | 29 | | | $ | (4,894 | ) | | $ | 6,269 | |
|
Liabilities and Stockholders' Equity | | | | | | | | | | |
Current Liabilities | | | | | | | | | | |
Trade accounts payable | | $ | — | | | $ | 265 | | | $ | 4 | | | $ | — | | | $ | 269 | |
|
Accrued employees’ compensation | | — | | | 247 | | | 1 | | | — | | | 248 | |
|
Current portion of long-term debt | | 108 | | | — | | | — | | | — | | | 108 | |
|
Current portion of postretirement plan liabilities | | — | | | 143 | | | — | | | — | | | 143 | |
|
Current portion of workers’ compensation liabilities | | — | | | 221 | | | — | | | — | | | 221 | |
|
Advance payments and billings in excess of revenues | | — | | | 74 | | | — | | | — | | | 74 | |
|
Other current liabilities | | 15 | | | 234 | | | 4 | | | (4 | ) | | 249 | |
|
Total current liabilities | | 123 | | | 1,184 | | | 9 | | | (4 | ) | | 1,312 | |
|
Long-term debt | | 1,488 | | | 104 | | | — | | | — | | | 1,592 | |
|
Pension plan liabilities | | — | | | 939 | | | — | | | — | | | 939 | |
|
Other postretirement plan liabilities | | — | | | 507 | | | — | | | — | | | 507 | |
|
Workers’ compensation liabilities | | — | | | 449 | | | — | | | — | | | 449 | |
|
Other long-term liabilities | | — | | | 105 | | | — | | | — | | | 105 | |
|
Intercompany liabilities | | 1,456 | | | — | | | 13 | | | (1,469 | ) | | — | |
|
Total liabilities | | 3,067 | | | 3,288 | | | 22 | | | (1,473 | ) | | 4,904 | |
|
Stockholders’ equity | | 1,365 | | | 3,414 | | | 7 | | | (3,421 | ) | | 1,365 | |
|
Total liabilities and stockholders’ equity | | $ | 4,432 | | | $ | 6,702 | | | $ | 29 | | | $ | (4,894 | ) | | $ | 6,269 | |
|
|
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS |
|
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, 2015 |
($ in millions) | | Huntington Ingalls Industries, Inc. | | Subsidiary Guarantors | | Non-Guarantor Subsidiaries | | Eliminations | | Consolidated |
Net cash provided by (used in) operating activities | | $ | (16 | ) | | $ | (8 | ) | | $ | 21 | | | $ | — | | | $ | (3 | ) |
|
Investing Activities | | | | | | | | | | |
|
Additions to property, plant, and equipment | | — | | | (19 | ) | | (1 | ) | | — | | | (20 | ) |
|
Acquisitions of businesses, net of cash received | | — | | | (6 | ) | | — | | | — | | | (6 | ) |
|
Proceeds from disposition of assets | | — | | | 32 | | | — | | | — | | | 32 | |
|
Net funding from (to) parent | | — | | | 40 | | | 2 | | | (42 | ) | | — | |
|
Net cash provided by (used in) investing activities | | — | | | 47 | | | 1 | | | (42 | ) | | 6 | |
|
Financing Activities | | | | | | | | | | |
|
Dividends paid | | (19 | ) | | — | | | — | | | — | | | (19 | ) |
|
Repurchases of common stock | | (29 | ) | | — | | | — | | | — | | | (29 | ) |
|
Employee taxes on certain share-based payment arrangements | | — | | | (54 | ) | | — | | | — | | | (54 | ) |
|
Excess tax benefit related to stock-based compensation | | — | | | 13 | | | — | | | — | | | 13 | |
|
Net funding from (to) subsidiary | | (42 | ) | | — | | | — | | | 42 | | | — | |
|
Net cash provided by (used in) financing activities | | (90 | ) | | (41 | ) | | — | | | 42 | | | (89 | ) |
|
Change in cash and cash equivalents | | (106 | ) | | (2 | ) | | 22 | | | — | | | (86 | ) |
|
Cash and cash equivalents, beginning of period | | 980 | | | 4 | | | 6 | | | — | | | 990 | |
|
Cash and cash equivalents, end of period | | $ | 874 | | | $ | 2 | | | $ | 28 | | | $ | — | | | $ | 904 | |
|
|
|
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, 2014 |
($ in millions) | | Huntington Ingalls Industries, Inc. | | Subsidiary Guarantors | | Non-Guarantor Subsidiaries | | Eliminations | | Consolidated |
Net cash provided by (used in) operating activities | | $ | (36 | ) | | $ | (196 | ) | | $ | 18 | | | $ | — | | | $ | (214 | ) |
|
Investing Activities | | | | | | | | | | |
|
Additions to property, plant, and equipment | | — | | | (24 | ) | | — | | | — | | | (24 | ) |
|
Acquisitions of businesses, net of cash received | | — | | | (46 | ) | | — | | | — | | | (46 | ) |
|
Net funding from (to) parent | | — | | | 264 | | | — | | | (264 | ) | | — | |
|
Net cash provided by (used in) investing activities | | — | | | 194 | | | — | | | (264 | ) | | (70 | ) |
|
Financing Activities | | | | | | | | | | |
|
Dividends paid | | (10 | ) | | — | | | — | | | — | | | (10 | ) |
|
Repurchases of common stock | | (10 | ) | | — | | | — | | | — | | | (10 | ) |
|
Proceeds from stock option exercises | | — | | | 1 | | | — | | | — | | | 1 | |
|
Excess tax benefit related to stock-based compensation | | — | | | 2 | | | — | | | — | | | 2 | |
|
Net funding from (to) subsidiary | | (264 | ) | | — | | | — | | | 264 | | | — | |
|
Net cash provided by (used in) financing activities | | (284 | ) | | 3 | | | — | | | 264 | | | (17 | ) |
|
Change in cash and cash equivalents | | (320 | ) | | 1 | | | 18 | | | — | | | (301 | ) |
|
Cash and cash equivalents, beginning of period | | 1,042 | | | — | | | 1 | | | — | | | 1,043 | |
|
Cash and cash equivalents, end of period | | $ | 722 | | | $ | 1 | | | $ | 19 | | | $ | — | | | $ | 742 | |
|
| | | | | | | | | | | | | | | | | | | | | |