Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 28, 2022 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-34910 | |
Entity Registrant Name | HUNTINGTON INGALLS INDUSTRIES, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 90-0607005 | |
Entity Address, Address Line One | 4101 Washington Avenue | |
Entity Address, City or Town | Newport News | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 23607 | |
City Area Code | 757 | |
Local Phone Number | 380-2000 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | HII | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 39,903,536 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
Entity Central Index Key | 0001501585 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Operations and Comprehensive Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Sales and service revenues | ||||
Sales and service revenues | $ 2,626 | $ 2,338 | $ 7,864 | $ 6,847 |
Cost of sales and service revenues | ||||
Income (loss) from operating investments, net | 13 | 11 | 47 | 31 |
Other income and gains (losses), net | 2 | 3 | ||
General and administrative expenses | 244 | 226 | 688 | 636 |
Operating income (loss) | 131 | 118 | 460 | 393 |
Other income (expense) | ||||
Interest expense | (27) | (24) | (79) | (63) |
Non-operating retirement benefit | 71 | 45 | 209 | 135 |
Other, net | (13) | 2 | (30) | 10 |
Earnings (loss) before income taxes | 162 | 141 | 560 | 475 |
Federal and foreign income tax expense (benefit) | 24 | (6) | 104 | 51 |
Net earnings (loss) | $ 138 | $ 147 | $ 456 | $ 424 |
Basic earnings (loss) per share (in dollars per share) | $ 3.44 | $ 3.65 | $ 11.37 | $ 10.52 |
Weighted-average common shares outstanding (in shares) | 40.1 | 40.3 | 40.1 | 40.3 |
Diluted earnings (loss) per share | $ 3.44 | $ 3.65 | $ 11.37 | $ 10.52 |
Weighted-average diluted shares outstanding (in shares) | 40.1 | 40.3 | 40.1 | 40.3 |
Dividends declared per share | $ 1.18 | $ 1.14 | $ 3.54 | $ 3.42 |
Other comprehensive income (loss) | ||||
Change in unamortized benefit plan costs | $ 12 | $ 43 | $ (61) | $ 102 |
Other | (1) | (1) | (2) | 1 |
Tax benefit (expense) for items of other comprehensive income | (3) | (11) | 16 | (26) |
Other comprehensive income (loss), net of tax | 8 | 31 | (47) | 77 |
Comprehensive income (loss) | 146 | 178 | 409 | 501 |
Product [Member] | ||||
Sales and service revenues | ||||
Sales and service revenues | 1,774 | 1,701 | 5,327 | 5,185 |
Cost of sales and service revenues | ||||
Cost of sales and service revenues | 1,517 | 1,453 | 4,511 | 4,402 |
Service [Member] | ||||
Sales and service revenues | ||||
Sales and service revenues | 852 | 637 | 2,537 | 1,662 |
Cost of sales and service revenues | ||||
Cost of sales and service revenues | $ 747 | $ 554 | $ 2,252 | $ 1,450 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements Of Financial Position (Unaudited) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 117 | $ 627 |
Accounts receivable, net | 721 | 433 |
Contract assets | 1,564 | 1,310 |
Inventoried costs, net | 174 | 161 |
Income taxes receivable | 180 | 209 |
Prepaid expenses and other current assets | 61 | 50 |
Total current assets | 2,817 | 2,790 |
Property, plant, and equipment, net | 3,136 | 3,107 |
Operating lease assets | 236 | 241 |
Goodwill | 2,618 | 2,628 |
Other intangible assets, net | 1,054 | 1,159 |
Pension plan assets | 355 | 281 |
Miscellaneous other assets | 399 | 421 |
Total assets | 10,615 | 10,627 |
Current Liabilities | ||
Trade accounts payable | 539 | 603 |
Accrued employees' compensation | 355 | 361 |
Current portion of long-term debt | 399 | |
Current portion of postretirement plan liabilities | 137 | 137 |
Current portion of workers' compensation liabilities | 241 | 252 |
Contract liabilities | 768 | 651 |
Other current liabilities | 453 | 423 |
Total current liabilities | 2,892 | 2,427 |
Long-term debt | 2,605 | 3,298 |
Pension plan liabilities | 394 | 351 |
Other postretirement plan liabilities | 360 | 368 |
Workers' compensation liabilities | 486 | 506 |
Long-term operating lease liabilities | 202 | 194 |
Deferred tax liabilities | 274 | 313 |
Other long-term liabilities | 354 | 362 |
Total liabilities | 7,567 | 7,819 |
Commitments and Contingencies (Note 12) | ||
Stockholders' Equity | ||
Common stock | 1 | 1 |
Additional paid-in capital | 2,014 | 1,998 |
Retained earnings (deficit) | 4,203 | 3,891 |
Treasury stock | (2,200) | (2,159) |
Accumulated other comprehensive income (loss) | (970) | (923) |
Total stockholders' equity | 3,048 | 2,808 |
Total liabilities and stockholders' equity | $ 10,615 | $ 10,627 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements Of Financial Position (Unaudited) (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Accounts Receivable, Allowance for Credit Loss, Current | $ 2 | $ 9 |
Accumulated depreciation | 2,283 | 2,149 |
Accumulated amortization | $ 846 | $ 741 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 53,500,000 | 53,400,000 |
Common stock, shares outstanding (in shares) | 39,900,000 | 40,000,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements Of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Operating Activities | ||
Net earnings (loss) | $ 456 | $ 424 |
Adjustments to reconcile to net cash provided by (used in) operating activities | ||
Depreciation | 158 | 154 |
Amortization of intangibles | 105 | 48 |
Amortization of debt issuance costs | 6 | 6 |
Provision for doubtful accounts | (7) | |
Stock-based compensation | 28 | 19 |
Deferred income taxes | (14) | 74 |
Loss (gain) on investments in marketable securities | 34 | (12) |
Change in | ||
Accounts Receivable | (281) | 52 |
Contract assets | (254) | (179) |
Inventoried costs | (13) | (7) |
Prepaid expenses and other assets | (4) | (116) |
Accounts payable and accruals | 48 | 93 |
Retiree benefits | (99) | (73) |
Other non-cash transactions, net | 2 | 6 |
Net cash provided by (used in) operating activities | 165 | 489 |
Investing Activities | ||
Capital expenditure additions | (179) | (216) |
Grant proceeds for capital expenditures | 11 | |
Acquisitions of businesses, net of cash received | (1,636) | |
Investment in affiliates | (5) | (22) |
Proceeds from disposition of business | 20 | |
Other investing activities, net | 6 | 1 |
Net cash provided by (used in) investing activities | (178) | (1,842) |
Financing Activities | ||
Proceeds from issuance of long-term debt | 1,650 | |
Repayment of long-term debt | (300) | |
Debt issuance costs | (22) | |
Dividends paid | (142) | (138) |
Repurchases of common stock | (41) | (87) |
Employee taxes on certain share-based payment arrangements | (14) | (7) |
Net cash provided by (used in) financing activities | (497) | 1,396 |
Change in cash and cash equivalents | (510) | 43 |
Cash and cash equivalents, beginning of period | 627 | 512 |
Cash and cash equivalents, end of period | 117 | 555 |
Supplemental Cash Flow Disclosure | ||
Cash paid for income taxes (net of refunds) | 107 | 31 |
Cash paid for interest | 61 | 39 |
Non-Cash Investing and Financing Activities | ||
Capital expenditures accrued in accounts payable | $ 5 | $ 4 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements Of Changes In Equity (Unaudited) - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Retained Earnings (Deficit) | Treasury Stock | Accumulated Other Comprehensive Income (Loss) |
Balance at Dec. 31, 2020 | $ 1,901 | $ 1 | $ 1,972 | $ 3,533 | $ (2,058) | $ (1,547) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings (loss) | 424 | 424 | ||||
Dividends declared | (138) | (138) | ||||
Stock-based compensation | 12 | 12 | ||||
Other comprehensive income (loss), net of tax | 77 | 77 | ||||
Treasury stock activity | (87) | (87) | ||||
Balance at Sep. 30, 2021 | 2,189 | 1 | 1,984 | 3,819 | (2,145) | (1,470) |
Balance at Jun. 30, 2021 | 2,067 | 1 | 1,977 | 3,718 | (2,128) | (1,501) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings (loss) | 147 | 147 | ||||
Dividends declared | (46) | (46) | ||||
Stock-based compensation | 7 | 7 | ||||
Other comprehensive income (loss), net of tax | 31 | 31 | ||||
Treasury stock activity | (17) | (17) | ||||
Balance at Sep. 30, 2021 | 2,189 | 1 | 1,984 | 3,819 | (2,145) | (1,470) |
Balance at Dec. 31, 2021 | 2,808 | 1 | 1,998 | 3,891 | (2,159) | (923) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings (loss) | 456 | 456 | ||||
Dividends declared | (142) | (142) | ||||
Stock-based compensation | 14 | 16 | (2) | |||
Other comprehensive income (loss), net of tax | (47) | (47) | ||||
Treasury stock activity | (41) | (41) | ||||
Balance at Sep. 30, 2022 | 3,048 | 1 | 2,014 | 4,203 | (2,200) | (970) |
Balance at Jun. 30, 2022 | 2,952 | 1 | 2,002 | 4,113 | (2,186) | (978) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings (loss) | 138 | 138 | ||||
Dividends declared | (48) | (48) | ||||
Stock-based compensation | 12 | 12 | ||||
Other comprehensive income (loss), net of tax | 8 | 8 | ||||
Treasury stock activity | (14) | (14) | ||||
Balance at Sep. 30, 2022 | $ 3,048 | $ 1 | $ 2,014 | $ 4,203 | $ (2,200) | $ (970) |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Changes in Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Dividends declared per share | $ 1.18 | $ 1.14 | $ 3.54 | $ 3.42 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | DESCRIPTION OF BUSINESS Huntington Ingalls Industries, Inc. ("HII" or the "Company") is a global, all-domain defense partner, building and delivering the world’s most powerful, survivable naval ships and technologies that safeguard America’s seas, sky, land, space, and cyber. HII is organized into three reportable segments: Ingalls Shipbuilding ("Ingalls"), Newport News Shipbuilding ("Newport News"), and Mission Technologies (formerly named Technical Solutions). For more than a century, the Company's Ingalls segment in Mississippi and Newport News segment in Virginia have built more ships in more ship classes than any other U.S. naval shipbuilder. The Mission Technologies segment delivers high-value engineering and technology solutions to enable multi-domain distributed operations in the government and commercial services markets. HII conducts most of its business with the U.S. Government, primarily the Department of Defense ("DoD"). As prime contractor, principal subcontractor, team member, or partner, the Company participates in many high-priority U.S. defense programs. Through its Ingalls segment, HII is a builder of amphibious assault and expeditionary warfare ships for the U.S. Navy, the sole builder of National Security Cutters for the U.S. Coast Guard, and one of only two companies that builds the Navy's current fleet of Arleigh Burke class (DDG 51) destroyers. Through its Newport News segment, HII is the nation's sole designer, builder, and refueler of nuclear-powered aircraft carriers, and one of only two companies currently designing and building nuclear-powered submarines for the U.S. Navy. The Mission Technologies segment provides a wide range of services and products, including command, control, computers, communications, cyber, intelligence, surveillance, and reconnaissance ("C5ISR") systems and operations; the application of Artificial Intelligence and machine learning to battlefield decisions; defensive and offensive cyberspace strategies and electronic warfare; unmanned autonomous systems; live, virtual, and constructive training solutions; platform modernization; and critical nuclear operations. |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION Principles of Consolidation - The unaudited condensed consolidated financial statements of HII and its subsidiaries have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") and the instructions to Form 10-Q promulgated by the Securities and Exchange Commission ("SEC"). All intercompany transactions and balances are eliminated in consolidation. For classification of current assets and liabilities related to its long-term production contracts, the Company uses the duration of these contracts as its operating cycle, which is generally longer than one year. These unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature considered necessary by management for a fair presentation of the unaudited condensed consolidated financial position, results of operations, and cash flows and should be read in conjunction with the Company's audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021. The quarterly information is labeled using a calendar convention; that is, first quarter is consistently labeled as ending on March 31, second quarter as ending on June 30, and third quarter as ending on September 30. It is management's long-standing practice to establish interim closing dates using a "fiscal" calendar, which requires the businesses to close their books on a Friday near these quarter-end dates in order to normalize the potentially disruptive effects of quarterly closings on business processes. The effects of this practice only exist for interim periods within a reporting year. Accounting Estimates - The preparation of the Company's unaudited condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Estimates have been prepared on the basis of the most current and best available information, and actual results could differ materially from those estimates. Fair Value of Financial Instruments - Except for the Company's long-term debt, the carrying amounts of the Company's financial instruments recorded at historical cost approximate fair value due to the short-term nature of the instruments and low credit risk associated with the respective counterparties. The Company maintains multiple grantor trusts to fund certain non-qualified pension plans. These trusts were valued at $196 million and $220 million as of September 30, 2022, and December 31, 2021, respectively, and are presented within miscellaneous other assets within the unaudited condensed consolidated statements of financial position. These trusts consist primarily of investments in marketable securities, which are held at fair value within Level 1 of the fair value hierarchy. The estimated fair values of the Company's total long-term debt (including current portion) as of September 30, 2022, and December 31, 2021, were $2,768 million and $3,449 million, respectively. The estimated fair value of the current portion of the Company's long-term debt was $386 million as of September 30, 2022. The fair values of the Company's long-term debt were calculated based on recent trades of the Company's debt instruments in inactive markets, which fall within Level 2 under the fair value hierarchy. Debt Prepayment - As of September 30, 2022, $325 million of the Company's Term Loan due August 19, 2024 has been prepaid, with a remaining balance of $325 million. |
Accounting Standards Updates
Accounting Standards Updates | 9 Months Ended |
Sep. 30, 2022 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Accounting Standards Updates | ACCOUNTING STANDARDS UPDATESAccounting pronouncements issued but not effective until after December 31, 2022, are not expected to have a material impact on the Company's consolidated financial position, results of operations, and cash flows. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2022 | |
Acquisitions and Divestitures [Abstract] | |
Acquisitions | ACQUISITIONS On August 19, 2021, the Company acquired all of the outstanding common stock of Alion Holding Corp., the parent company of Alion Science and Technology Corporation (“Alion”), a technology-driven solutions provider. The Company accounted for the transaction as a business combination using the acquisition method of accounting in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 805 Business Combinations . The purchase price was $1.79 billion, including $148 million of cash received in the acquisition. In connection with the acquisition, the Company originally recorded $1,024 million of goodwill, which included the value of Alion's workforce, and $720 million of intangible assets related to customer relationships and existing contract backlog. The goodwill is attributable to operational synergies and growth opportunities and was allocated to the Company's Mission Technologies segment. For the nine months ended September 30, 2022, the Company recorded a decrease to goodwill of $10 million, resulting from updates to Alion’s tax carryforwards and the true-up of estimated taxes to filed income tax returns for the pre-acquisition period. The acquisition accounting was completed at September 30, 2022. None of the goodwill resulting from this acquisition is expected to be amortizable for tax purposes. Alion provides advanced engineering and research and development services in the areas of intelligence, surveillance, and reconnaissance, military training and simulation, cyber, data analytics, and other next-generation technology based solutions to the DoD and intelligence community customers, with the U.S. Navy representing about one-third of current annual revenues. Pro Forma Financial Information The following unaudited consolidated pro forma summary has been prepared by adjusting the Company's historical data to give effect to the acquisition of Alion as if it had occurred on January 1, 2021. Three Months Ended Nine Months Ended ($ in millions, except per share amounts) 2022 Pro Forma 2021 2022 Pro Forma 2021 Sales and service revenues $ 2,626 $ 2,532 $ 7,864 $ 7,687 Net earnings $ 138 $ 142 $ 456 $ 416 Basic earnings per share $ 3.44 $ 3.52 $ 11.37 $ 10.32 Diluted earnings per share $ 3.44 $ 3.52 $ 11.37 $ 10.32 These unaudited pro forma results include adjustments associated with the acquisition, such as the amortization of acquired intangible assets and interest expense on debt financing. The unaudited consolidated pro forma financial information was prepared in accordance with GAAP and is not necessarily indicative of the results of operations that would have occurred if the acquisition had been completed on the date indicated, nor is it indicative of the future operating results of the Company. The unaudited pro forma results do not reflect events that either have occurred or may occur after the acquisition date, including, but not limited to, the anticipated realization of operating synergies in subsequent periods. These results also do not give effect to certain charges that the Company incurred in connection with the acquisition, including, but not limited to, additional professional fees and employee integration. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity [Text Block] | STOCKHOLDERS' EQUITY Treasury Stock - In November 2019, the Company's board of directors authorized an increase in the Company's stock repurchase program from $2.2 billion to $3.2 billion and an extension of the term of the program to October 31, 2024. Repurchases are made from time to time at management's discretion in accordance with applicable federal securities laws. For the nine months ended September 30, 2022, the Company repurchased 196,850 shares at an aggregate cost of $41 million. For the nine months ended September 30, 2021, the Company repurchased 469,436 shares at an aggregate cost of $87 million. The cost of purchased shares is recorded as treasury stock in the unaudited condensed consolidated statements of financial position. Dividends - The Company paid cash dividends totaling $142 million and $138 million for the nine months ended September 30, 2022 and 2021, respectively. Accumulated Other Comprehensive Loss - Other comprehensive income (loss) refers to gains and losses recorded as an element of stockholders' equity but excluded from net earnings. The accumulated other comprehensive loss as of September 30, 2022, was comprised of unamortized benefit plan costs of $969 million and other comprehensive loss of $1 million. The accumulated other comprehensive loss as of December 31, 2021, was comprised of unamortized benefit plan costs of $923 million. The changes in accumulated other comprehensive income (loss) by component for the three and nine months ended September 30, 2022 and 2021, were as follows: ($ in millions) Benefit Plans Other Total Balance as of June 30, 2021 $ (1,502) $ 1 $ (1,501) Other comprehensive income (loss) before reclassifications 14 (1) 13 Amounts reclassified from accumulated other comprehensive loss Amortization of prior service cost 1 2 — 2 Amortization of net actuarial loss 1 27 — 27 Tax expense for items of other comprehensive income (11) — (11) Net current period other comprehensive income (loss) 32 (1) 31 Balance as of September 30, 2021 $ (1,470) $ — $ (1,470) Balance as of June 30, 2022 $ (977) $ (1) $ (978) Other comprehensive income (loss) before reclassifications 3 (1) 2 Amounts reclassified from accumulated other comprehensive loss Amortization of prior service cost 1 5 — 5 Amortization of net actuarial loss 1 8 — 8 Settlement gain 1 (4) — (4) Tax (expense) benefit for items of other comprehensive income (loss) (4) 1 (3) Net current period other comprehensive income 8 — 8 Balance as of September 30, 2022 $ (969) $ (1) $ (970) ($ in millions) Benefit Plans Other Total Balance as of December 31, 2020 $ (1,546) $ (1) $ (1,547) Other comprehensive income before reclassifications 14 1 15 Amounts reclassified from accumulated other comprehensive loss Amortization of prior service cost 1 8 — 8 Amortization of net actuarial loss 1 80 — 80 Tax expense for items of other comprehensive income (26) — (26) Net current period other comprehensive income 76 1 77 Balance as of September 30, 2021 $ (1,470) $ — $ (1,470) Balance as of December 31, 2021 $ (923) $ — $ (923) Other comprehensive loss before reclassifications (94) (2) (96) Amounts reclassified from accumulated other comprehensive loss Amortization of prior service cost 1 13 — 13 Amortization of net actuarial loss 1 24 — 24 Settlement gain 1 (4) — (4) Tax benefit for items of other comprehensive loss 15 1 16 Net current period other comprehensive loss (46) (1) (47) Balance as of September 30, 2022 $ (969) $ (1) $ (970) 1 These accumulated comprehensive loss components are included in the computation of net periodic benefit cost. See Note 13: Employee Pension and Other Postretirement Benefits. The tax benefit associated with amounts reclassified from accumulated other comprehensive loss for the three months ended September 30, 2022 and 2021, was $2 million and $8 million, respectively. The tax benefit associated with amounts reclassified from accumulated other comprehensive loss for the nine months ended September 30, 2022 and 2021, was $8 million and $23 million, respectively. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE Basic and diluted earnings per common share were calculated as follows: Three Months Ended Nine Months Ended (in millions, except per share amounts) 2022 2021 2022 2021 Net earnings $ 138 $ 147 $ 456 $ 424 Weighted-average common shares outstanding 40.1 40.3 40.1 40.3 Net dilutive effect of stock awards — — — — Dilutive weighted-average common shares outstanding 40.1 40.3 40.1 40.3 Earnings per share - basic $ 3.44 $ 3.65 $ 11.37 $ 10.52 Earnings per share - diluted $ 3.44 $ 3.65 $ 11.37 $ 10.52 Under the treasury stock method, the Company has excluded from the diluted share amounts presented above the effects of 0.4 million Restricted Performance Stock Rights ("RPSRs") for each of the three and nine months ended September 30, 2022 and 2021. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2022 | |
Disaggregation of Revenue [Abstract] | |
Revenue from Contract with Customer | REVENUE Disaggregation of Revenue The Company's contracts with customers typically fall into one of four categories: firm fixed-price, fixed-price incentive, cost-type, and time and materials. • Firm Fixed-Price Contracts - A firm fixed-price contract is a contract in which the specified scope of work is agreed to for a price that is predetermined by bid or negotiation and not generally subject to adjustment regardless of costs incurred by the contractor. • Fixed-Price Incentive Contracts - Fixed-price incentive contracts provide for reimbursement of the contractor's allowable costs, but are subject to a cost-share limit that affects profitability. Fixed-price incentive contracts effectively become firm fixed-price contracts once the cost-share limit is reached. • Cost-Type Contracts - Cost-type contracts provide for reimbursement of the contractor's allowable costs plus a fee that represents profit. Cost-type contracts generally require that the contractor use its reasonable efforts to accomplish the scope of the work within some specified time and some stated dollar limitation. • Time and Materials - Time and materials contracts specify a fixed hourly billing rate for each direct labor hour expended and reimbursement for allowable material costs and expenses. The following tables present revenues on a disaggregated basis: Three Months Ended September 30, 2022 ($ in millions) Ingalls Newport News Mission Technologies Intersegment Eliminations Total Revenue Type Product sales $ 577 $ 1,185 $ 12 $ — $ 1,774 Service revenues 41 259 552 — 852 Intersegment 5 1 31 (37) — Sales and service revenues $ 623 $ 1,445 $ 595 $ (37) $ 2,626 Customer Type Federal $ 618 $ 1,444 $ 554 $ — $ 2,616 Commercial — — 9 — 9 State and local government agencies — — 1 — 1 Intersegment 5 1 31 (37) — Sales and service revenues $ 623 $ 1,445 $ 595 $ (37) $ 2,626 Contract Type Firm fixed-price $ 1 $ 1 $ 59 $ — $ 61 Fixed-price incentive 577 723 — — 1,300 Cost-type 40 720 437 — 1,197 Time and materials — — 68 — 68 Intersegment 5 1 31 (37) — Sales and service revenues $ 623 $ 1,445 $ 595 $ (37) $ 2,626 Three Months Ended September 30, 2021 ($ in millions) Ingalls Newport News Mission Technologies Intersegment Eliminations Total Revenue Type Product sales $ 586 $ 1,088 $ 27 $ — $ 1,701 Service revenues 38 263 336 — 637 Intersegment 4 3 31 (38) — Sales and service revenues $ 628 $ 1,354 $ 394 $ (38) $ 2,338 Customer Type Federal $ 624 $ 1,351 $ 354 $ — $ 2,329 Commercial — — 9 — 9 Intersegment 4 3 31 (38) — Sales and service revenues $ 628 $ 1,354 $ 394 $ (38) $ 2,338 Contract Type Firm fixed-price $ 5 $ 15 $ 52 $ — $ 72 Fixed-price incentive 585 686 — — 1,271 Cost-type 34 650 261 — 945 Time and materials — — 50 — 50 Intersegment 4 3 31 (38) — Sales and service revenues $ 628 $ 1,354 $ 394 $ (38) $ 2,338 Nine Months Ended September 30, 2022 ($ in millions) Ingalls Newport News Mission Technologies Intersegment Eliminations Total Revenue Type Product sales $ 1,766 $ 3,496 $ 65 $ — $ 5,327 Service revenues 136 768 1,633 — 2,537 Intersegment 10 4 87 (101) — Sales and service revenues $ 1,912 $ 4,268 $ 1,785 $ (101) $ 7,864 Customer Type Federal $ 1,902 $ 4,264 $ 1,665 $ — $ 7,831 Commercial — — 32 — 32 State and local government agencies — — 1 — 1 Intersegment 10 4 87 (101) — Sales and service revenues $ 1,912 $ 4,268 $ 1,785 $ (101) $ 7,864 Contract Type Firm fixed-price $ 7 $ 12 $ 192 $ — $ 211 Fixed-price incentive 1,762 2,180 — — 3,942 Cost-type 133 2,072 1,299 — 3,504 Time and materials — — 207 — 207 Intersegment 10 4 87 (101) — Sales and service revenues $ 1,912 $ 4,268 $ 1,785 $ (101) $ 7,864 Nine Months Ended September 30, 2021 ($ in millions) Ingalls Newport News Mission Technologies Intersegment Eliminations Total Revenue Type Product sales $ 1,814 $ 3,300 $ 71 $ — $ 5,185 Service revenues 121 815 726 — 1,662 Intersegment 12 9 93 (114) — Sales and service revenues $ 1,947 $ 4,124 $ 890 $ (114) $ 6,847 Customer Type Federal $ 1,935 $ 4,115 $ 760 $ — $ 6,810 Commercial — — 37 — 37 Intersegment 12 9 93 (114) — Sales and service revenues $ 1,947 $ 4,124 $ 890 $ (114) $ 6,847 Contract Type Firm fixed-price $ 29 $ 30 $ 132 $ — $ 191 Fixed-price incentive 1,790 2,121 3 — 3,914 Cost-type 116 1,964 492 — 2,572 Time and materials — — 170 — 170 Intersegment 12 9 93 (114) — Sales and service revenues $ 1,947 $ 4,124 $ 890 $ (114) $ 6,847 Three Months Ended Nine Months Ended ($ in millions) 2022 2021 2022 2021 Major Programs Amphibious assault ships $ 325 $ 326 $ 1,060 $ 1,032 Surface combatants and coast guard cutters 291 286 840 898 Other 7 16 12 17 Total Ingalls 623 628 1,912 1,947 Aircraft carriers 762 742 2,318 2,228 Submarines 519 490 1,459 1,419 Other 164 122 491 477 Total Newport News 1,445 1,354 4,268 4,124 Government and energy services 595 394 1,785 876 Oil and gas services — — — 14 Total Mission Technologies 595 394 1,785 890 Intersegment eliminations (37) (38) (101) (114) Sales and service revenues $ 2,626 $ 2,338 $ 7,864 $ 6,847 As of September 30, 2022, the Company had $46.7 billion of remaining performance obligations. The Company expects to recognize approximately 30% of its remaining performance obligations as revenue through 2023, an additional 35% through 2025, and the balance thereafter. Cumulative Catch-up Adjustments For the three months ended September 30, 2022, net cumulative catch-up adjustments increased operating income and increased diluted earnings per share by $27 million and $0.53, respectively. For the three months ended September 30, 2021, net cumulative catch-up adjustments increased operating income and increased diluted earnings per share by $21 million and $0.41, respectively. For the nine months ended September 30, 2022, net cumulative catch-up adjustments increased operating income and increased diluted earnings per share by $140 million and $2.75, respectively. For the nine months ended September 30, 2021, net cumulative catch-up adjustments increased operating income and increased diluted earnings per share by $106 million and $2.07, respectively. Cumulative catch-up adjustments for the three months ended September 30, 2022, included a favorable adjustment of $41 million on a contract at the Company's Newport News segment, which increased diluted earnings per share by $0.80. For the nine months ended September 30, 2022, no individual favorable adjustment was material to the Company's unaudited condensed consolidated statements of operations and comprehensive income. For the three and nine months ended September 30, 2022, no individual unfavorable adjustment was material to the Company's unaudited condensed consolidated statements of operations and comprehensive income. For the three and nine months ended September 30, 2021, no individual adjustment was material to the Company's unaudited condensed consolidated statements of operations and comprehensive income. Contract Balances The Company reports contract balances in a net contract asset or contract liability position on a contract-by-contract basis at the end of each reporting period. The Company’s net contract assets increased $137 million from December 31, 2021, to September 30, 2022, primarily resulting from an increase in contract assets related to revenue on certain U.S. Navy contracts. For the three and nine months ended September 30, 2022, the Company recognized revenue of $17 million and $548 million, respectively, related to its contract liabilities as of December 31, 2021. For the three months ended September 30, 2021, the Company did not recognize revenue related to its contract liabilities as of December 31, 2020. For the nine months ended September 30, 2021, the Company recognized revenue of $447 million related to its contract liabilities as of December 31, 2020. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION The following table presents segment results for the three and nine months ended September 30, 2022 and 2021: Three Months Ended Nine Months Ended ($ in millions) 2022 2021 2022 2021 Sales and Service Revenues Ingalls $ 623 $ 628 $ 1,912 $ 1,947 Newport News 1,445 1,354 4,268 4,124 Mission Technologies 595 394 1,785 890 Intersegment eliminations (37) (38) (101) (114) Sales and service revenues $ 2,626 $ 2,338 $ 7,864 $ 6,847 Operating Income Ingalls $ 50 $ 62 $ 242 $ 233 Newport News 102 88 277 257 Mission Technologies 14 13 48 33 Segment operating income 166 163 567 523 Non-segment factors affecting operating income Operating FAS/CAS Adjustment (36) (41) (108) (118) Non-current state income taxes 1 (4) 1 (12) Operating income $ 131 $ 118 $ 460 $ 393 Operating FAS/CAS Adjustment - The Operating FAS/CAS Adjustment represents the difference between the service cost component of our pension and other postretirement benefit plan expense determined in accordance with GAAP ("FAS") and our pension and other postretirement expense under CAS. The following table presents the Company's assets by segment: ($ in millions) September 30, 2022 December 31, 2021 Assets Ingalls $ 1,716 $ 1,659 Newport News 4,558 4,179 Mission Technologies 3,403 3,553 Corporate 938 1,236 Total assets $ 10,615 $ 10,627 |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill Disclosure | GOODWILLThe Company’s annual goodwill impairment test will be performed as of November 30, 2022, whereby management will test goodwill for each of its three reporting units with goodwill balances to determine whether an event occurred or circumstances changed that would more likely than not reduce the fair values of the Company's reporting units below their respective carrying values. The Company expects that the fair value of the Government Services reporting unit within the Mission Technologies segment will exceed carrying value by less than 10%. The Company expects that the estimated fair values of its remaining reporting units will exceed by more than 10% their corresponding carrying values as of November 30, 2022. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company's earnings are primarily domestic, and its effective income tax rates on earnings from operations for the three months ended September 30, 2022 and 2021, were 14.8% and (4.3)%, respectively. For the nine months ended September 30, 2022 and 2021, the Company's effective income tax rates on earnings from operations were 18.6% and 10.7%, respectively. The higher effective tax rates for the three and nine months ended September 30, 2022, were primarily attributable to research and development tax credits for prior periods recorded in 2021. For each of the three and nine months ended September 30, 2022 and 2021, the Company’s effective tax rates differed from the federal statutory corporate income tax rate primarily as a result of research and development tax credits for prior periods. The Company's unrecognized tax benefits increased by $5 million and $10 million during the three and nine months ended September 30, 2022, respectively. As of September 30, 2022, the estimated amounts of the Company's unrecognized tax benefits, excluding interest and penalties, were liabilities of $91 million. Assuming a sustainment of these tax positions, a reversal of $69 million of the accrued amounts would favorably affect the Company's effective federal income tax rate in future periods. The Company recognizes interest and penalties related to unrecognized tax benefits as income tax expense. For the three and nine months ended September 30, 2022, interest resulting from the unrecognized tax benefits noted above increased income tax expense by less than $1 million and $1 million, respectively. Non-current state income taxes include deferred state income taxes, which reflect the change in deferred state tax assets and liabilities, and the tax expense or benefit associated with changes in unrecognized state tax benefits in the relevant period. These amounts are recorded within operating income. Current period state income tax expense is charged to contract costs and included in cost of sales and service revenues in segment operating income. |
Investigations, Claims, and Lit
Investigations, Claims, and Litigation | 9 Months Ended |
Sep. 30, 2022 | |
Investigations, Claims, And Litigation [Abstract] | |
Investigations, Claims, And Litigation | INVESTIGATIONS, CLAIMS, AND LITIGATION The Company is involved in legal proceedings before various courts and administrative agencies, and is periodically subject to government examinations, inquiries and investigations. Pursuant to FASB ASC 450 Contingencies, the Company has accrued for losses associated with investigations, claims, and litigation when, and to the extent that, loss amounts related to the investigations, claims, and litigation are probable and can be reasonably estimated. The actual losses that might be incurred to resolve such investigations, claims, and litigation may be higher or lower than the amounts accrued. The Company has, in certain cases, provided disclosure regarding certain matters for which the Company believes at this time that the likelihood of material loss is remote. False Claims Act Complaint - In 2016, the Company was made aware that it is a defendant in a qui tam False Claims Act lawsuit pending in the U.S. District Court for the Middle District of Florida related to the Company’s purchases of allegedly non-conforming parts from a supplier for use in connection with U.S. Government contracts. In August 2019, the Department of Justice (“DoJ”) declined to intervene in the lawsuit, and the lawsuit was unsealed. The court dismissed the complaint in September 2021, and the plaintiff has appealed the dismissal to the United States Court of Appeals for the 11th Circuit. Insurance Claims - In September 2020, the Company filed a complaint against 32 reinsurers in the Superior Court, State of Vermont, Franklin Unit, seeking a judgment declaring that the Company's business interruption and other losses associated with COVID-19 are covered by the Company's property insurance program. The Company also initiated arbitration proceedings against six other reinsurers seeking similar relief. In July 2021, the Vermont court granted the reinsurers’ motion for judgment on the pleadings, which would have ended the Company’s claim. The Company appealed the decision to the Vermont Supreme Court, which reversed and remanded the lower court’s decision in September 2022, allowing the Company’s claim to proceed. No assurances can be provided regarding the ultimate resolution of this matter. In September 2021, the Company filed a complaint in the Superior Court of Delaware, seeking a judgment against certain insurers for breach of contract and breach of the implied covenant of good faith and fair dealing under three representations and warranties insurance policies purchased in connection with the Company’s acquisition of Hydroid. The policies insure the Company against losses relating to the seller’s breach of certain representations and warranties in the Hydroid acquisition agreement. The coverage limit under the insurance policies is $70 million, and the Company believes it has incurred losses equal to at least that amount as a result of breaches of the acquisition agreement. No assurances can be provided regarding the ultimate resolution of this matter. U.S. Government Investigations and Claims - Departments and agencies of the U.S. Government have the authority to investigate various transactions and operations of the Company, and the results of such investigations may lead to administrative, civil, or criminal proceedings, the ultimate outcome of which could be fines, penalties, repayments or compensatory, treble, or other damages. U.S. Government regulations provide that certain findings against a contractor may also lead to suspension or debarment from future U.S. Government contracts or the loss of export privileges. Any suspension or debarment would have a material effect on the Company because of its reliance on government contracts. Asbestos Related Claims - HII and its predecessors-in-interest are defendants in a longstanding series of cases that have been and continue to be filed in various jurisdictions around the country, wherein former and current employees and various third parties allege exposure to asbestos containing materials while on or associated with HII premises or while working on vessels constructed or repaired by HII. In some instances, partial or full insurance coverage is available for the Company's liabilities. The costs to resolve cases during the nine months ended September 30, 2022 and 2021, were not material individually or in the aggregate. The Company’s estimate of asbestos-related liabilities is subject to uncertainty because liabilities are influenced by many variables that are inherently difficult to predict. Although the Company believes the ultimate resolution of current cases will not have a material effect on its consolidated financial position, results of operations, and cash flows, it cannot predict what new or revised claims or litigation might be asserted or what information might come to light and can, therefore, give no assurances regarding the ultimate outcome of asbestos related litigation. Other Litigation - The Company and its predecessor-in-interest have been in litigation with the Bolivarian Republic of Venezuela (the "Republic") since 2002 over a contract for the repair, refurbishment, and modernization at Ingalls of two foreign-built frigates. Following an arbitration proceeding between the parties, in February 2018, the arbitral tribunal awarded the Company approximately $151 million on its claims and awarded the Republic approximately $22 million on its counterclaims. The Company is seeking to enforce and execute upon the award in multiple jurisdictions. No assurances can be provided regarding the ultimate resolution of this matter. The Company is party to various other claims, legal proceedings, and investigations that arise in the ordinary course of business, including U.S. Government investigations that could result in administrative, civil, or criminal proceedings involving the Company. The Company is a contractor with the U.S. Government, and such proceedings can therefore include False Claims Act allegations against the Company. Although the Company believes that the resolution of these other claims, legal proceedings, and investigations will not have a material effect on its consolidated financial position, results of operations, and cash flows, the Company cannot predict what new or revised claims or litigation might be asserted or what information might come to light and can, therefore, give no assurances regarding the ultimate outcome of these matters. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Contract Performance Contingencies - Contract profit margins may include estimates of revenues for matters on which the customer and the Company have not reached agreement, such as settlements in the process of negotiation, contract changes, claims, and requests for equitable adjustment for unanticipated contract costs. These estimates are based upon management's best assessment of the underlying causal events and circumstances and recognized to the extent of expected recovery based upon contractual entitlements and the probability of successful negotiation with the customer. As of September 30, 2022, amounts recognized in connection with claims and requests for equitable adjustment were not material individually or in the aggregate. Environmental Matters - The estimated cost to complete environmental remediation has been accrued when it is probable that the Company will incur such costs in the future to address environmental conditions at currently or formerly owned or leased operating facilities, or at sites where it has been named a Potentially Responsible Party by the Environmental Protection Agency or similarly designated by another environmental agency, and the related costs can be estimated by management. These accruals do not include any litigation costs related to environmental matters, nor do they include amounts recorded as asset retirement obligations. Management estimates that as of September 30, 2022, the probable estimable future cost for environmental remediation was not material. Although management cannot predict whether new information gained as remediation progresses or the Company incurs additional remediation obligations will materially affect the estimated liability accrued, management does not believe that future remediation expenditures will have a material effect on the Company's consolidated financial position, results of operations, and cash flows. Financial Arrangements - In the ordinary course of business, HII uses letters of credit issued by commercial banks to support certain leases, insurance policies, and contractual performance obligations, as well as surety bonds issued by insurance companies principally to support the Company's self-insured workers' compensation plans. As of September 30, 2022, the Company had $14 million in issued but undrawn letters of credit and $360 million of surety bonds outstanding. U.S. Government Claims - From time to time, the U.S. Government communicates to the Company potential claims, disallowed costs, and penalties concerning prior costs incurred by the Company with which the U.S. Government disagrees. When such preliminary findings are presented, the Company and U.S. Government representatives engage in discussions, from which the Company evaluates the merits of the claims and assesses the amounts being questioned. Although the Company believes that the resolution of any of these matters will not have a material effect on its consolidated financial position, results of operations, and cash flows, it cannot predict the ultimate outcome of these matters. Other Matters - In 1985, the Company and the U.S. Navy entered into a settlement agreement to resolve disputes associated with billing and allocating to contracts the cost of workers’ compensation self-insurance, among other matters. Consistent with the 1985 settlement agreement, the Company has not recovered cumulative billable costs resulting from the different treatment of workers' compensation costs between CAS and U.S. GAAP Financial Accounting Standards ("FAS"). Under the 1985 settlement agreement, these costs would be recovered in future periods. In December 2020, a U.S. Navy Contracting Officer issued a determination that the 1985 settlement agreement did not comply with CAS and directed the Company to develop and implement a different process to bill and allocate the cost of workers’ compensation self-insurance. The Company has submitted to the Navy a proposed draft alternative approach to billing and allocating the cost of workers’ compensation self-insurance, while continuing to reiterate its belief that the 1985 settlement agreement remains binding on the parties. Although the Company believes the 1985 settlement agreement is CAS-compliant and cannot be unilaterally terminated, the Company is seeking to negotiate a resolution of the matter with the Contracting Officer. In August 2022, the Navy Contracting Officer issued a written determination that the Ingalls Shipbuilding Property Management System had a significant deficiency, resulting in a 2% withhold of payments on certain invoices issued under one contract. The withhold will terminate and withheld funds paid to the Company when the Contracting Officer determines that the significant deficiency has been corrected. Although the Company believes the ultimate resolution of this matter will not have a material effect on its consolidated financial position, results of operations, or cash flows, it cannot predict or give assurances regarding the ultimate outcome of this matter. Collective Bargaining Agreements - Of the Company's approximately 43,000 employees, approximately 45% are covered by a total of nine collective bargaining agreements and one site stabilization agreement. The Company believes its relationship with its employees is satisfactory. |
Employee Pension And Other Post
Employee Pension And Other Postretirement Benefits | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Employee Pension and Other Postretirement Benefits | EMPLOYEE PENSION AND OTHER POSTRETIREMENT BENEFITS The Company provides eligible employees defined benefit pension plans, other postretirement benefit plans, and defined contribution pension plans. The costs of the Company's defined benefit pension plans and other postretirement benefit plans for the three and nine months ended September 30, 2022 and 2021, were as follows: Three Months Ended Nine Months Ended Pension Benefits Other Benefits Pension Benefits Other Benefits ($ in millions) 2022 2021 2022 2021 2022 2021 2022 2021 Components of Net Periodic Benefit Cost Service cost $ 45 $ 50 $ 2 $ 2 $ 135 $ 149 $ 7 $ 7 Interest cost 65 60 3 4 194 180 10 11 Expected return on plan assets (148) (138) — — (446) (414) — — Amortization of prior service cost (credit) 6 3 (1) (1) 16 11 (3) (3) Amortization of net actuarial loss (gain) 8 28 — (1) 26 82 (2) (2) Settlement gain (4) — — — (4) — — — Net periodic benefit (income) cost $ (28) $ 3 $ 4 $ 4 $ (79) $ 8 $ 12 $ 13 The Company made the following contributions to its defined benefit pension plans and other postretirement benefit plans for the nine months ended September 30, 2022 and 2021: Nine Months Ended ($ in millions) 2022 2021 Pension plans Discretionary Qualified $ — $ 60 Non-qualified 7 6 Other benefit plans 25 28 Total contributions $ 32 $ 94 As of September 30, 2022, the Company anticipates no further significant cash contributions to its qualified defined benefit pension plans in 2022. On September 6, 2022, the Company purchased annuity contracts to transfer $32 million of gross defined benefit pension obligations and related plan assets to an insurance company for approximately 500 retirees and beneficiaries. The annuity contracts were purchased using assets from the pension master trust, and no additional funding contribution was required. This transaction had no impact on the amount, timing, or form of the monthly retirement benefit payments to the affected retirees and beneficiaries. In connection with this transaction, the Company recognized a noncash, non-operating pension settlement gain of $4 million for the affected plan, which represents the accelerated recognition of actuarial losses that were included in accumulated other comprehensive loss within stockholders' equity. In March 2022, the Company concluded negotiations on one of its collective bargaining agreements, which required an amendment to one of the Company's pension plans. As a result of the amendment, the remeasurement of the plan increased the pension liability and pre-tax accumulated other comprehensive loss by approximately $97 million. |
Stock Compensation Plans
Stock Compensation Plans | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Compensation Plans | STOCK COMPENSATION PLANS During the nine months ended September 30, 2022 and 2021, the Company issued new stock awards as follows: Restricted Performance Stock Rights - For the nine months ended September 30, 2022, the Company granted approximately 0.2 million RPSRs at a weighted average share price of $201.48. These rights are subject to cliff vesting on December 31, 2024. For the nine months ended September 30, 2021, the Company granted approximately 0.2 million RPSRs at a weighted average share price of $180.05. These rights are subject to cliff vesting on December 31, 2023. All of the RPSRs are subject to the achievement of performance-based targets at the end of the respective vesting periods and will ultimately vest between 0% and 200% of grant date value. For the nine months ended September 30, 2022 and 2021, awards of approximately 0.2 million and 0.1 million shares of stock vested, respectively, of which less than 0.1 million each period were transferred to the Company from employees in satisfaction of minimum tax withholding obligations. The following table summarizes the status of the Company's outstanding stock awards as of September 30, 2022: Stock Awards Weighted-Average Weighted-Average Remaining Contractual Term Total stock awards 509 $ 188.84 1.2 Compensation Expense The Company recorded stock-based compensation for the value of awards granted to Company employees and non-employee members of the board of directors of $12 million and $7 million for the three months ended September 30, 2022 and 2021, respectively. The Company recorded stock-based compensation for the value of awards granted to Company employees and non-employee members of the board of directors of $28 million and $19 million for the nine months ended September 30, 2022 and 2021, respectively. The Company recorded tax benefits related to stock awards of $3 million and $1 million for the three months ended September 30, 2022 and 2021, respectively. The Company recorded tax benefits related to stock awards of $5 million and $3 million for the nine months ended September 30, 2022 and 2021, respectively. The Company recognized tax benefits associated with the issuance of stock in settlement of stock awards of less than $1 million for each of the three months ended September 30, 2022 and 2021. The Company recognized tax benefits associated with the issuance of stock in settlement of stock awards of $4 million and $2 million for the nine months ended September 30, 2022 and 2021, respectively. Unrecognized Compensation Expense As of September 30, 2022, the Company had $3 million of unrecognized compensation expense associated with Restricted Stock Rights granted in 2022 and 2021, which will be recognized over a weighted average period of 1 year, and $37 million of unrecognized compensation expense associated with RPSRs granted in 2022, 2021, and 2020, which will be recognized over a weighted average period of 1.3 years. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation - The unaudited condensed consolidated financial statements of HII and its subsidiaries have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") and the instructions to Form 10-Q promulgated by the Securities and Exchange Commission ("SEC"). All intercompany transactions and balances are eliminated in consolidation. For classification of current assets and liabilities related to its long-term production contracts, the Company uses the duration of these contracts as its operating cycle, which is generally longer than one year. These unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature considered necessary by management for a fair presentation of the unaudited condensed consolidated financial position, results of operations, and cash flows and should be read in conjunction with the Company's audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021. |
Fiscal Period Policy | The quarterly information is labeled using a calendar convention; that is, first quarter is consistently labeled as ending on March 31, second quarter as ending on June 30, and third quarter as ending on September 30. It is management's long-standing practice to establish interim closing dates using a "fiscal" calendar, which requires the businesses to close their books on a Friday near these quarter-end dates in order to normalize the potentially disruptive effects of quarterly closings on business processes. The effects of this practice only exist for interim periods within a reporting year. |
Accounting Estimates | Accounting Estimates - The preparation of the Company's unaudited condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Estimates have been prepared on the basis of the most current and best available information, and actual results could differ materially from those estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments - Except for the Company's long-term debt, the carrying amounts of the Company's financial instruments recorded at historical cost approximate fair value due to the short-term nature of the instruments and low credit risk associated with the respective counterparties. The Company maintains multiple grantor trusts to fund certain non-qualified pension plans. These trusts were valued at $196 million and $220 million as of September 30, 2022, and December 31, 2021, respectively, and are presented within miscellaneous other assets within the unaudited condensed consolidated statements of financial position. These trusts consist primarily of investments in marketable securities, which are held at fair value within Level 1 of the fair value hierarchy. The estimated fair values of the Company's total long-term debt (including current portion) as of September 30, 2022, and December 31, 2021, were $2,768 million and $3,449 million, respectively. The estimated fair value of the current portion of the Company's long-term debt was $386 million as of September 30, 2022. The fair values of the Company's long-term debt were calculated based on recent trades of the Company's debt instruments in inactive markets, which fall within Level 2 under the fair value hierarchy. |
Debt Policy | Debt Prepayment - As of September 30, 2022, $325 million of the Company's Term Loan due August 19, 2024 has been prepaid, with a remaining balance of $325 million. |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Acquisitions and Divestitures [Abstract] | |
Business Acquisition, Pro Forma Information | The following unaudited consolidated pro forma summary has been prepared by adjusting the Company's historical data to give effect to the acquisition of Alion as if it had occurred on January 1, 2021. Three Months Ended Nine Months Ended ($ in millions, except per share amounts) 2022 Pro Forma 2021 2022 Pro Forma 2021 Sales and service revenues $ 2,626 $ 2,532 $ 7,864 $ 7,687 Net earnings $ 138 $ 142 $ 456 $ 416 Basic earnings per share $ 3.44 $ 3.52 $ 11.37 $ 10.32 Diluted earnings per share $ 3.44 $ 3.52 $ 11.37 $ 10.32 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The changes in accumulated other comprehensive income (loss) by component for the three and nine months ended September 30, 2022 and 2021, were as follows: ($ in millions) Benefit Plans Other Total Balance as of June 30, 2021 $ (1,502) $ 1 $ (1,501) Other comprehensive income (loss) before reclassifications 14 (1) 13 Amounts reclassified from accumulated other comprehensive loss Amortization of prior service cost 1 2 — 2 Amortization of net actuarial loss 1 27 — 27 Tax expense for items of other comprehensive income (11) — (11) Net current period other comprehensive income (loss) 32 (1) 31 Balance as of September 30, 2021 $ (1,470) $ — $ (1,470) Balance as of June 30, 2022 $ (977) $ (1) $ (978) Other comprehensive income (loss) before reclassifications 3 (1) 2 Amounts reclassified from accumulated other comprehensive loss Amortization of prior service cost 1 5 — 5 Amortization of net actuarial loss 1 8 — 8 Settlement gain 1 (4) — (4) Tax (expense) benefit for items of other comprehensive income (loss) (4) 1 (3) Net current period other comprehensive income 8 — 8 Balance as of September 30, 2022 $ (969) $ (1) $ (970) ($ in millions) Benefit Plans Other Total Balance as of December 31, 2020 $ (1,546) $ (1) $ (1,547) Other comprehensive income before reclassifications 14 1 15 Amounts reclassified from accumulated other comprehensive loss Amortization of prior service cost 1 8 — 8 Amortization of net actuarial loss 1 80 — 80 Tax expense for items of other comprehensive income (26) — (26) Net current period other comprehensive income 76 1 77 Balance as of September 30, 2021 $ (1,470) $ — $ (1,470) Balance as of December 31, 2021 $ (923) $ — $ (923) Other comprehensive loss before reclassifications (94) (2) (96) Amounts reclassified from accumulated other comprehensive loss Amortization of prior service cost 1 13 — 13 Amortization of net actuarial loss 1 24 — 24 Settlement gain 1 (4) — (4) Tax benefit for items of other comprehensive loss 15 1 16 Net current period other comprehensive loss (46) (1) (47) Balance as of September 30, 2022 $ (969) $ (1) $ (970) 1 These accumulated comprehensive loss components are included in the computation of net periodic benefit cost. See Note 13: Employee Pension and Other Postretirement Benefits. The tax benefit associated with amounts reclassified from accumulated other comprehensive loss for the three months ended September 30, 2022 and 2021, was $2 million and $8 million, respectively. The tax benefit associated with amounts reclassified from accumulated other comprehensive loss for the nine months ended September 30, 2022 and 2021, was $8 million and $23 million, respectively. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Calculation of Basic and Diluted Earnings Per Share | Basic and diluted earnings per common share were calculated as follows: Three Months Ended Nine Months Ended (in millions, except per share amounts) 2022 2021 2022 2021 Net earnings $ 138 $ 147 $ 456 $ 424 Weighted-average common shares outstanding 40.1 40.3 40.1 40.3 Net dilutive effect of stock awards — — — — Dilutive weighted-average common shares outstanding 40.1 40.3 40.1 40.3 Earnings per share - basic $ 3.44 $ 3.65 $ 11.37 $ 10.52 Earnings per share - diluted $ 3.44 $ 3.65 $ 11.37 $ 10.52 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Disaggregation of Revenue [Abstract] | |
Disaggregation of Revenue [Table Text Block] | The following tables present revenues on a disaggregated basis: Three Months Ended September 30, 2022 ($ in millions) Ingalls Newport News Mission Technologies Intersegment Eliminations Total Revenue Type Product sales $ 577 $ 1,185 $ 12 $ — $ 1,774 Service revenues 41 259 552 — 852 Intersegment 5 1 31 (37) — Sales and service revenues $ 623 $ 1,445 $ 595 $ (37) $ 2,626 Customer Type Federal $ 618 $ 1,444 $ 554 $ — $ 2,616 Commercial — — 9 — 9 State and local government agencies — — 1 — 1 Intersegment 5 1 31 (37) — Sales and service revenues $ 623 $ 1,445 $ 595 $ (37) $ 2,626 Contract Type Firm fixed-price $ 1 $ 1 $ 59 $ — $ 61 Fixed-price incentive 577 723 — — 1,300 Cost-type 40 720 437 — 1,197 Time and materials — — 68 — 68 Intersegment 5 1 31 (37) — Sales and service revenues $ 623 $ 1,445 $ 595 $ (37) $ 2,626 Three Months Ended September 30, 2021 ($ in millions) Ingalls Newport News Mission Technologies Intersegment Eliminations Total Revenue Type Product sales $ 586 $ 1,088 $ 27 $ — $ 1,701 Service revenues 38 263 336 — 637 Intersegment 4 3 31 (38) — Sales and service revenues $ 628 $ 1,354 $ 394 $ (38) $ 2,338 Customer Type Federal $ 624 $ 1,351 $ 354 $ — $ 2,329 Commercial — — 9 — 9 Intersegment 4 3 31 (38) — Sales and service revenues $ 628 $ 1,354 $ 394 $ (38) $ 2,338 Contract Type Firm fixed-price $ 5 $ 15 $ 52 $ — $ 72 Fixed-price incentive 585 686 — — 1,271 Cost-type 34 650 261 — 945 Time and materials — — 50 — 50 Intersegment 4 3 31 (38) — Sales and service revenues $ 628 $ 1,354 $ 394 $ (38) $ 2,338 Nine Months Ended September 30, 2022 ($ in millions) Ingalls Newport News Mission Technologies Intersegment Eliminations Total Revenue Type Product sales $ 1,766 $ 3,496 $ 65 $ — $ 5,327 Service revenues 136 768 1,633 — 2,537 Intersegment 10 4 87 (101) — Sales and service revenues $ 1,912 $ 4,268 $ 1,785 $ (101) $ 7,864 Customer Type Federal $ 1,902 $ 4,264 $ 1,665 $ — $ 7,831 Commercial — — 32 — 32 State and local government agencies — — 1 — 1 Intersegment 10 4 87 (101) — Sales and service revenues $ 1,912 $ 4,268 $ 1,785 $ (101) $ 7,864 Contract Type Firm fixed-price $ 7 $ 12 $ 192 $ — $ 211 Fixed-price incentive 1,762 2,180 — — 3,942 Cost-type 133 2,072 1,299 — 3,504 Time and materials — — 207 — 207 Intersegment 10 4 87 (101) — Sales and service revenues $ 1,912 $ 4,268 $ 1,785 $ (101) $ 7,864 Nine Months Ended September 30, 2021 ($ in millions) Ingalls Newport News Mission Technologies Intersegment Eliminations Total Revenue Type Product sales $ 1,814 $ 3,300 $ 71 $ — $ 5,185 Service revenues 121 815 726 — 1,662 Intersegment 12 9 93 (114) — Sales and service revenues $ 1,947 $ 4,124 $ 890 $ (114) $ 6,847 Customer Type Federal $ 1,935 $ 4,115 $ 760 $ — $ 6,810 Commercial — — 37 — 37 Intersegment 12 9 93 (114) — Sales and service revenues $ 1,947 $ 4,124 $ 890 $ (114) $ 6,847 Contract Type Firm fixed-price $ 29 $ 30 $ 132 $ — $ 191 Fixed-price incentive 1,790 2,121 3 — 3,914 Cost-type 116 1,964 492 — 2,572 Time and materials — — 170 — 170 Intersegment 12 9 93 (114) — Sales and service revenues $ 1,947 $ 4,124 $ 890 $ (114) $ 6,847 Three Months Ended Nine Months Ended ($ in millions) 2022 2021 2022 2021 Major Programs Amphibious assault ships $ 325 $ 326 $ 1,060 $ 1,032 Surface combatants and coast guard cutters 291 286 840 898 Other 7 16 12 17 Total Ingalls 623 628 1,912 1,947 Aircraft carriers 762 742 2,318 2,228 Submarines 519 490 1,459 1,419 Other 164 122 491 477 Total Newport News 1,445 1,354 4,268 4,124 Government and energy services 595 394 1,785 876 Oil and gas services — — — 14 Total Mission Technologies 595 394 1,785 890 Intersegment eliminations (37) (38) (101) (114) Sales and service revenues $ 2,626 $ 2,338 $ 7,864 $ 6,847 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment operating results | The following table presents segment results for the three and nine months ended September 30, 2022 and 2021: Three Months Ended Nine Months Ended ($ in millions) 2022 2021 2022 2021 Sales and Service Revenues Ingalls $ 623 $ 628 $ 1,912 $ 1,947 Newport News 1,445 1,354 4,268 4,124 Mission Technologies 595 394 1,785 890 Intersegment eliminations (37) (38) (101) (114) Sales and service revenues $ 2,626 $ 2,338 $ 7,864 $ 6,847 Operating Income Ingalls $ 50 $ 62 $ 242 $ 233 Newport News 102 88 277 257 Mission Technologies 14 13 48 33 Segment operating income 166 163 567 523 Non-segment factors affecting operating income Operating FAS/CAS Adjustment (36) (41) (108) (118) Non-current state income taxes 1 (4) 1 (12) Operating income $ 131 $ 118 $ 460 $ 393 |
Segment assets | The following table presents the Company's assets by segment: ($ in millions) September 30, 2022 December 31, 2021 Assets Ingalls $ 1,716 $ 1,659 Newport News 4,558 4,179 Mission Technologies 3,403 3,553 Corporate 938 1,236 Total assets $ 10,615 $ 10,627 |
Employee Pension and Other Po_2
Employee Pension and Other Postretirement Benefits (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of Net Benefit Costs | The costs of the Company's defined benefit pension plans and other postretirement benefit plans for the three and nine months ended September 30, 2022 and 2021, were as follows: Three Months Ended Nine Months Ended Pension Benefits Other Benefits Pension Benefits Other Benefits ($ in millions) 2022 2021 2022 2021 2022 2021 2022 2021 Components of Net Periodic Benefit Cost Service cost $ 45 $ 50 $ 2 $ 2 $ 135 $ 149 $ 7 $ 7 Interest cost 65 60 3 4 194 180 10 11 Expected return on plan assets (148) (138) — — (446) (414) — — Amortization of prior service cost (credit) 6 3 (1) (1) 16 11 (3) (3) Amortization of net actuarial loss (gain) 8 28 — (1) 26 82 (2) (2) Settlement gain (4) — — — (4) — — — Net periodic benefit (income) cost $ (28) $ 3 $ 4 $ 4 $ (79) $ 8 $ 12 $ 13 |
Schedule of Defined Benefit Plans Disclosures, Cash Contributions | The Company made the following contributions to its defined benefit pension plans and other postretirement benefit plans for the nine months ended September 30, 2022 and 2021: Nine Months Ended ($ in millions) 2022 2021 Pension plans Discretionary Qualified $ — $ 60 Non-qualified 7 6 Other benefit plans 25 28 Total contributions $ 32 $ 94 |
Stock Compensation Plans (Table
Stock Compensation Plans (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Status of Stock Awards | The following table summarizes the status of the Company's outstanding stock awards as of September 30, 2022: Stock Awards Weighted-Average Weighted-Average Remaining Contractual Term Total stock awards 509 $ 188.84 1.2 |
Description of Business (Narrat
Description of Business (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2022 segments | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 3 |
Basis of Presentation (Narrativ
Basis of Presentation (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | 14 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Assets held in rabbi trusts | $ 196 | $ 196 | $ 220 |
Fair value of total long term debt | 2,768 | 2,768 | $ 3,449 |
Fair value of current portion of long-term debt | 386 | 386 | |
Debt Instrument [Line Items] | |||
Repayments of Long-term Debt | (300) | ||
Term Loan | Term loan due August 19, 2024 | |||
Debt Instrument [Line Items] | |||
Repayments of Long-term Debt | (325) | ||
Long-term Debt | $ 325 | $ 325 |
Acquisitions - Alion (Narrative
Acquisitions - Alion (Narrative) (Details) - Alion Science and Technology - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Business Acquisition and Divestitures [Line Items] | ||
Payments to Acquire Businesses, Gross | $ 1,790 | |
Cash acquired | 148 | |
Goodwill | 1,024 | |
Intangible Assets | $ 720 | |
Goodwill, Purchase Accounting Adjustments | $ (10) |
Acquisitions and Divestitures,
Acquisitions and Divestitures, Pro Forma Information (Table) (Details) - Alion Science and Technology - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Business Combination, Pro Forma Information [Line Items] | ||||
Sales and service revenues | $ 2,626 | $ 2,532 | $ 7,864 | $ 7,687 |
Net earnings | $ 138 | $ 142 | $ 456 | $ 416 |
Basic earnings per share | $ 3.44 | $ 3.52 | $ 11.37 | $ 10.32 |
Diluted earnings per share | $ 3.44 | $ 3.52 | $ 11.37 | $ 10.32 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Nov. 05, 2019 | Nov. 07, 2017 | |
Stockholders' Equity [Line Items] | ||||||||||
Amount authorized for stock repurchase program | $ 3,200 | $ 2,200 | ||||||||
Repurchased shares of treasury stock | 196,850 | 469,436 | ||||||||
Treasury stock activity | $ 14 | $ 17 | $ 41 | $ 87 | ||||||
Dividends paid | 142 | 138 | ||||||||
Accumulated other comprehensive income (loss) | (970) | (1,470) | (970) | (1,470) | $ (978) | $ (923) | $ (1,501) | $ (1,547) | ||
Benefit Plans | ||||||||||
Stockholders' Equity [Line Items] | ||||||||||
Accumulated other comprehensive income (loss) | (969) | $ (1,470) | (969) | $ (1,470) | (977) | $ (923) | (1,502) | (1,546) | ||
Other | ||||||||||
Stockholders' Equity [Line Items] | ||||||||||
Accumulated other comprehensive income (loss) | $ (1) | $ (1) | $ (1) | $ 1 | $ (1) |
Stockholders' Equity Accumulate
Stockholders' Equity Accumulated Other Comprehensive Income (Loss) (Table) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Balance, beginning | $ (978) | $ (1,501) | $ (923) | $ (1,547) | |||
Other comprehensive income (loss) before reclassifications | 2 | 13 | (96) | 15 | |||
Amortization of prior service cost (credit) | 5 | [1] | 2 | [1] | 13 | 8 | |
Amortization of net actuarial loss (gain) | 8 | [1] | 27 | [1] | 24 | 80 | |
Settlement loss (gain) | (4) | (4) | |||||
Tax benefit (expense) for items of other comprehensive income | (3) | (11) | 16 | (26) | |||
Other comprehensive income (loss), net of tax | 8 | 31 | (47) | 77 | |||
Balance, ending | (970) | (1,470) | (970) | (1,470) | |||
Income tax expense (benefit) | 24 | (6) | 104 | 51 | |||
Reclassification out of AOCI | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Income tax expense (benefit) | 2 | 8 | 8 | 23 | |||
Benefit Plans | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Balance, beginning | (977) | (1,502) | (923) | (1,546) | |||
Other comprehensive income (loss) before reclassifications | 3 | 14 | (94) | 14 | |||
Amortization of prior service cost (credit) | [1] | 5 | 2 | 13 | 8 | ||
Amortization of net actuarial loss (gain) | [1] | 8 | 27 | 24 | 80 | ||
Settlement loss (gain) | (4) | (4) | |||||
Tax benefit (expense) for items of other comprehensive income | (4) | (11) | 15 | (26) | |||
Other comprehensive income (loss), net of tax | 8 | 32 | (46) | 76 | |||
Balance, ending | (969) | (1,470) | (969) | (1,470) | |||
Other | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Balance, beginning | (1) | 1 | (1) | ||||
Other comprehensive income (loss) before reclassifications | (1) | (1) | (2) | 1 | |||
Tax benefit (expense) for items of other comprehensive income | 1 | 1 | |||||
Other comprehensive income (loss), net of tax | $ (1) | (1) | $ 1 | ||||
Balance, ending | $ (1) | $ (1) | |||||
[1]These accumulated comprehensive loss components are included in the computation of net periodic benefit cost. See Note 13: Employee Pension and Other Postretirement Benefits. The tax benefit associated with amounts reclassified from accumulated other comprehensive loss for the three months ended September 30, 2022 and 2021, was $2 million and $8 million, respectively. The tax benefit associated with amounts reclassified from accumulated other comprehensive loss for the nine months ended September 30, 2022 and 2021, was $8 million and $23 million, respectively. |
Basic and Diluted Earnings Per
Basic and Diluted Earnings Per Share (Table) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Net earnings (loss) | $ 138 | $ 147 | $ 456 | $ 424 |
Weighted-average common shares outstanding (in shares) | 40.1 | 40.3 | 40.1 | 40.3 |
Dilutive weighted-average common shares outstanding (in shares) | 40.1 | 40.3 | 40.1 | 40.3 |
Earnings (loss) per share - basic (in dollars per share) | $ 3.44 | $ 3.65 | $ 11.37 | $ 10.52 |
Earnings (loss) per share - diluted (in dollars per share) | $ 3.44 | $ 3.65 | $ 11.37 | $ 10.52 |
Earnings Per Share (Narrative)
Earnings Per Share (Narrative) (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Restricted performance stock rights | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Number of shares from stock awards excluded from computation of earnings per share | 0.4 | 0.4 | 0.4 | 0.4 |
Revenue (Table) (Details)
Revenue (Table) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | $ 2,626 | $ 2,338 | $ 7,864 | $ 6,847 |
Intersegment Elimination | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | (37) | (38) | (101) | (114) |
Firm fixed-price | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 61 | 72 | 211 | 191 |
Fixed-price incentive | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 1,300 | 1,271 | 3,942 | 3,914 |
Cost-type | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 1,197 | 945 | 3,504 | 2,572 |
Time-and-materials | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 68 | 50 | 207 | 170 |
Federal | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 2,616 | 2,329 | 7,831 | 6,810 |
Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 9 | 9 | 32 | 37 |
State and local government agencies | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 1 | 1 | ||
Product [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 1,774 | 1,701 | 5,327 | 5,185 |
Service [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 852 | 637 | 2,537 | 1,662 |
Ingalls | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 623 | 628 | 1,912 | 1,947 |
Ingalls | Amphibious assault ships | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 325 | 326 | 1,060 | 1,032 |
Ingalls | Surface combatants and coast guard cutters | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 291 | 286 | 840 | 898 |
Ingalls | Other programs | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 7 | 16 | 12 | 17 |
Ingalls | Firm fixed-price | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 1 | 5 | 7 | 29 |
Ingalls | Fixed-price incentive | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 577 | 585 | 1,762 | 1,790 |
Ingalls | Cost-type | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 40 | 34 | 133 | 116 |
Ingalls | Intersegment | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 5 | 4 | 10 | 12 |
Ingalls | Federal | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 618 | 624 | 1,902 | 1,935 |
Ingalls | Intersegment | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 5 | 4 | 10 | 12 |
Ingalls | Product [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 577 | 586 | 1,766 | 1,814 |
Ingalls | Service [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 41 | 38 | 136 | 121 |
Newport News | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 1,445 | 1,354 | 4,268 | 4,124 |
Newport News | Aircraft carriers | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 762 | 742 | 2,318 | 2,228 |
Newport News | Submarines | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 519 | 490 | 1,459 | 1,419 |
Newport News | Other programs | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 164 | 122 | 491 | 477 |
Newport News | Firm fixed-price | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 1 | 15 | 12 | 30 |
Newport News | Fixed-price incentive | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 723 | 686 | 2,180 | 2,121 |
Newport News | Cost-type | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 720 | 650 | 2,072 | 1,964 |
Newport News | Intersegment | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 1 | 3 | 4 | 9 |
Newport News | Federal | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 1,444 | 1,351 | 4,264 | 4,115 |
Newport News | Intersegment | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 1 | 3 | 4 | 9 |
Newport News | Product [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 1,185 | 1,088 | 3,496 | 3,300 |
Newport News | Service [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 259 | 263 | 768 | 815 |
Mission Technologies | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 595 | 394 | 1,785 | 890 |
Mission Technologies | Government and energy services | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 595 | 394 | 1,785 | 876 |
Mission Technologies | Oil and gas services | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 14 | |||
Mission Technologies | Firm fixed-price | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 59 | 52 | 192 | 132 |
Mission Technologies | Fixed-price incentive | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 3 | |||
Mission Technologies | Cost-type | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 437 | 261 | 1,299 | 492 |
Mission Technologies | Time-and-materials | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 68 | 50 | 207 | 170 |
Mission Technologies | Intersegment | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 31 | 31 | 87 | 93 |
Mission Technologies | Federal | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 554 | 354 | 1,665 | 760 |
Mission Technologies | Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 9 | 9 | 32 | 37 |
Mission Technologies | State and local government agencies | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 1 | 1 | ||
Mission Technologies | Intersegment | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 31 | 31 | 87 | 93 |
Mission Technologies | Product [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | 12 | 27 | 65 | 71 |
Mission Technologies | Service [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and service revenues | $ 552 | $ 336 | $ 1,633 | $ 726 |
Revenue (Narrative) (Details)
Revenue (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Abstract] | ||||
Revenue, Remaining Performance Obligation, Amount | $ 46,700 | $ 46,700 | ||
Revenue, performance obligation, recognition percentage, year two | 30% | |||
Revenue, performance obligation, recognition percentage, year four | 35% | |||
Increase (Decrease) in Net Contract Assets | $ 137 | |||
Contract with Customer, Liability, Revenue Recognized | 17 | 548 | $ 447 | |
Contracts Accounted for under Percentage of Completion | ||||
Change in Accounting Estimate | ||||
Increase (decrease) in operating income due to net cumulative catch-up adjustments | $ 27 | $ 21 | $ 140 | $ 106 |
Increase (decrease) in diluted earnings per share due to net cumulative catch-up adjustments | $ 0.53 | $ 0.41 | $ 2.75 | $ 2.07 |
Contracts Accounted for under Percentage of Completion | Newport News contract | ||||
Change in Accounting Estimate | ||||
Increase (decrease) in operating income due to net cumulative catch-up adjustments | $ 41 | |||
Increase (decrease) in diluted earnings per share due to net cumulative catch-up adjustments | $ 0.80 |
Segment Information (Narrative)
Segment Information (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2022 segments | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Segment Operating Results (Tabl
Segment Operating Results (Table) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Sales and Service Revenues | ||||
Sales and service revenue | $ 2,626 | $ 2,338 | $ 7,864 | $ 6,847 |
Operating Income (Loss) | ||||
Operating income (loss) | 131 | 118 | 460 | 393 |
Intersegment Elimination | ||||
Sales and Service Revenues | ||||
Sales and service revenue | (37) | (38) | (101) | (114) |
Operating Segments | ||||
Operating Income (Loss) | ||||
Operating income (loss) | 166 | 163 | 567 | 523 |
Ingalls | ||||
Sales and Service Revenues | ||||
Sales and service revenue | 623 | 628 | 1,912 | 1,947 |
Operating Income (Loss) | ||||
Operating income (loss) | 50 | 62 | 242 | 233 |
Newport News | ||||
Sales and Service Revenues | ||||
Sales and service revenue | 1,445 | 1,354 | 4,268 | 4,124 |
Operating Income (Loss) | ||||
Operating income (loss) | 102 | 88 | 277 | 257 |
Mission Technologies | ||||
Sales and Service Revenues | ||||
Sales and service revenue | 595 | 394 | 1,785 | 890 |
Operating Income (Loss) | ||||
Operating income (loss) | 14 | 13 | 48 | 33 |
Corporate | ||||
Non-segment factors affecting operating income (loss) | ||||
Operating FAS/CAS Adjustment | (36) | (41) | (108) | (118) |
Non-current state income taxes | $ 1 | $ (4) | $ 1 | $ (12) |
Segment Assets (Table) (Details
Segment Assets (Table) (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Segment Reporting Information | ||
Assets | $ 10,615 | $ 10,627 |
Ingalls | ||
Segment Reporting Information | ||
Assets | 1,716 | 1,659 |
Newport News | ||
Segment Reporting Information | ||
Assets | 4,558 | 4,179 |
Mission Technologies | ||
Segment Reporting Information | ||
Assets | 3,403 | 3,553 |
Corporate | ||
Segment Reporting Information | ||
Assets | $ 938 | $ 1,236 |
Goodwill (Details)
Goodwill (Details) | 9 Months Ended |
Sep. 30, 2022 segments | |
Goodwill | |
Number of reportable segments | 3 |
Maximum | Mission Technologies | |
Goodwill | |
Minimum excess of fair value over carrying value | 10% |
Minimum | Operating segments excluding Mission Technologies | |
Goodwill | |
Minimum excess of fair value over carrying value | 10% |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Contingency [Line Items] | ||||
Effective income tax rate | 14.80% | (4.30%) | 18.60% | 10.70% |
Unrecognized Tax Benefits, Period Increase (Decrease) | $ 5 | $ 10 | ||
Unrecognized Tax Benefits | 91 | 91 | ||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 69 | 69 | ||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | $ 1 | |||
Maximum | ||||
Income Tax Contingency [Line Items] | ||||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | $ 1 |
Investigations, Claims, and L_2
Investigations, Claims, and Litigation (Narrative) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) numberOfReinsurers frigates | |
Loss Contingencies | |
Number of reinsurers/defendants | numberOfReinsurers | 32 |
Representation and warranty insurance policy, coverage limit | $ 70 |
Bolivarian Republic of Venezuela | |
Loss Contingencies | |
Number of Foreign Built Frigates | frigates | 2 |
Arbitral statement claim | $ 151 |
Arbitration | |
Loss Contingencies | |
Number of reinsurers/defendants | numberOfReinsurers | 6 |
Litigation counter claim [Member] | Bolivarian Republic of Venezuela | |
Loss Contingencies | |
Arbitral statement claim | $ 22 |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) $ in Millions | 2 Months Ended | 9 Months Ended |
Sep. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) | |
Commitments and Contingencies | ||
Entity Number of Employees | 43,000 | 43,000 |
Percentage of workforce subject to Collective Bargaining Arrangements | 45% | |
Number of Collective Bargaining Agreements | 9 | 9 |
Number of site stabilization agreements | 1 | 1 |
Surety Bonds Outstanding | ||
Commitments and Contingencies | ||
Surety bonds outstanding | $ 360 | $ 360 |
Revolving Credit Facility [Member] | ||
Commitments and Contingencies | ||
Letters of credit issued but undrawn | $ 14 | $ 14 |
Ingalls contract | ||
Commitments and Contingencies | ||
Customer withhold of payment | 2% |
Employee Pension and Other Po_3
Employee Pension and Other Postretirement Benefits Net Benefit Costs (Table) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Pension Benefits | ||||
Defined Benefit Plan Disclosure | ||||
Service cost | $ 45 | $ 50 | $ 135 | $ 149 |
Interest cost | 65 | 60 | 194 | 180 |
Expected return on plan assets | (148) | (138) | (446) | (414) |
Amortization of prior service cost (credit) | 6 | 3 | 16 | 11 |
Amortization of net actuarial loss (gain) | 8 | 28 | 26 | 82 |
Settlement gain | (4) | (4) | ||
Net periodic benefit cost | (28) | 3 | (79) | 8 |
Other Benefits | ||||
Defined Benefit Plan Disclosure | ||||
Service cost | 2 | 2 | 7 | 7 |
Interest cost | 3 | 4 | 10 | 11 |
Amortization of prior service cost (credit) | (1) | (1) | (3) | (3) |
Amortization of net actuarial loss (gain) | (1) | (2) | (2) | |
Net periodic benefit cost | $ 4 | $ 4 | $ 12 | $ 13 |
Employee Pension and Other Po_4
Employee Pension and Other Postretirement Benefits Cash Contributions (Table) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Defined Benefit Plan Disclosure | ||
Other benefit plans | $ 25 | $ 28 |
Total contributions | 32 | 94 |
Discretionary Contribution | Qualified | ||
Defined Benefit Plan Disclosure | ||
Pension contributions | 60 | |
Discretionary Contribution | Non-qualified | ||
Defined Benefit Plan Disclosure | ||
Pension contributions | $ 7 | $ 6 |
Employee Pension and Other Po_5
Employee Pension and Other Postretirement Benefits (Narrative) (Details) - Pension Benefits $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) | Sep. 06, 2022 USD ($) retireesAndBeneficiaries | |
Defined Benefit Plan Disclosure | |||
Defined Benefit Plan, Benefit Obligation, Annuity | $ 32 | ||
Number of Retirees and Beneficiaries | retireesAndBeneficiaries | 500 | ||
Pension settlement gain | $ (4) | $ (4) | |
Amendment to defined benefit plan | $ 97 |
Stock Compensation Plans (Narra
Stock Compensation Plans (Narrative) (Details) - $ / shares shares in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Stock awards | ||
Stock rights, weighted-average grant date fair value | $ 188.84 | |
Stock awards, vested in the period | 0.2 | 0.1 |
Maximum | ||
Stock awards | ||
Stock awards, transferred for employee withholding taxes | 0.1 | 0.1 |
Restricted performance stock rights | ||
Stock awards | ||
Stock rights, granted | 0.2 | 0.2 |
Stock rights, weighted-average grant date fair value | $ 201.48 | $ 180.05 |
Restricted performance stock rights | Minimum | ||
Stock awards | ||
Restricted performance stock rights ultimate vesting percentage | 0% | |
Restricted performance stock rights | Maximum | ||
Stock awards | ||
Restricted performance stock rights ultimate vesting percentage | 200% |
Schedule of Status of Stock Awa
Schedule of Status of Stock Awards (Table) (Details) shares in Thousands | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Stock awards | |
Stock awards, outstanding | shares | 509 |
Stock awards, weighted-average grant date fair value | $ / shares | $ 188.84 |
Stock awards, weighted-average remaining contractual term | 1 year 2 months 12 days |
Stock Compensation Plans Compen
Stock Compensation Plans Compensation and Unrecognized Compensation Expense (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Compensation Expense [Abstract] | ||||
Share-based Payment Arrangement, Expense | $ 12 | $ 7 | $ 28 | $ 19 |
Tax benefits for stock-based compensation | 3 | 1 | 5 | 3 |
Stock Awards [Member] | ||||
Compensation Expense [Abstract] | ||||
Employee Service Share-Based Compensation, Tax Benefit Realized From Issuance Of Instruments Other Than Options | 4 | $ 2 | ||
Restricted Stock [Member] | ||||
Unrecognized Compensation Expense [Abstract] | ||||
Unrecognized compensation expense | 3 | $ 3 | ||
Unrecognized compensation expense, period for recognition | 1 year | |||
Restricted performance stock rights | ||||
Unrecognized Compensation Expense [Abstract] | ||||
Unrecognized compensation expense | 37 | $ 37 | ||
Unrecognized compensation expense, period for recognition | 1 year 3 months 18 days | |||
Maximum | Stock Awards [Member] | ||||
Compensation Expense [Abstract] | ||||
Employee Service Share-Based Compensation, Tax Benefit Realized From Issuance Of Instruments Other Than Options | $ 1 | $ 1 |