Huntington Ingalls Industries Reports Third Quarter Results

Huntington Ingalls Industries Reports Third Quarter Results

  *Revenues were $1.64 billion for the third quarter of 2013
  *Diluted earnings per share was $1.36 for the quarter
  *Adjusted diluted earnings per share, which excludes the impact of
    hurricane insurance recoveries and the Gulfport closure and the FAS/CAS
    Adjustment, was $1.17
  *Cash and cash equivalents at the end of the quarter were $895 million

NEWPORT NEWS, Va., Nov. 7, 2013 (GLOBE NEWSWIRE) -- Huntington Ingalls
Industries (NYSE:HII) reported third quarter 2013 revenues of $1.64 billion,
up 2.6 percent from the same period last year. Third quarter diluted earnings
per share was $1.36, compared to $0.26 in the same period of 2012.

Segment operating income in the third quarter was $142 million, compared to
$89 million in the same period last year. Total operating income for the
quarter was $127 million, compared to $66 million in the same period of 2012.
The increases were primarily attributable to the impact of hurricane insurance
recoveries and the absence in 2013 of the workers' compensation expense
adjustment, partially offset by the impact of closing the Gulfport Composite
Center of Excellence (the "Gulfport facility") and the favorable resolution
last year of outstanding contract changes. Total operating margin was 7.8
percent for the quarter compared to 4.1 percent in the third quarter of 2012.

Cash provided by operating activities in the third quarter was $281 million,
up $144 million from the same period last year. New business awards for the
quarter were $0.2 billion, bringing total backlog to $19.3 billion as of the
end of the quarter, of which $12.8 billion is funded.

"During this uncertain budget environment, our healthy backlog continues to
support our programs, and we remain confident in our ability to deliver 9 plus
percent operating margin by 2015," said Mike Petters, HII's president and
chief executive officer. "Despite challenges encountered during the test
programs for the last two underperforming ships, we delivered LPD-25 Somerset
shortly after the quarter end and are on a path to deliver LHA-6 America at
the end of the first quarter of 2014."

Results of Operations


                              Three Months Ended                  
                              September 30                        
(in millions, except per share 2013         2012        $ Change    % Change
amounts)
Sales and service revenues     $ 1,637      $ 1,596     $ 41        2.6%
Segment operating income^1     142          89          53          59.6%
Segment operating margin %^1   8.7%         5.6%                   310 bps
Total operating income         127          66          61          92.4%
Operating margin %             7.8%         4.1%                   362 bps
Net earnings                   69           13          56          430.8%
Diluted earnings per share     $ 1.36       $ 0.26      $1.10       423.1%
Weighted-average diluted       50.6         50.3                   
shares outstanding
                                                                
Adjusted Figures                                                 
Sales and service revenues^2   $ 1,665      $ 1,596     $ 69        4.3%
Segment operating income^1,3   $ 113        $ 113       —           —%
Segment operating margin %^1,3 6.8%         7.1%                   -29 bps
Total operating income^3       $ 98         $ 90        8           8.9%
Operating margin %^3           5.9%         5.6%                   25 bps
Net earnings^3,4               59           49          10          20.4%
Diluted earnings per share^3,4 $ 1.17       $ 0.98      $ 0.19      19.4%
Weighted-average diluted       50.6         50.3                   
shares outstanding

^1 Non-GAAP metrics that exclude non-segment factors affecting operating
income. See Exhibit B for reconciliation.
^2 Non-GAAP metrics that exclude the impact of hurricane insurance recoveries
and the Gulfport closure in 2013. See Exhibit B for reconciliation.
^3 Non-GAAP metrics that exclude the impact of hurricane insurance recoveries
and the Gulfport closure in 2013 and the impact of the non-cash workers'
compensation charge in 2012. See Exhibit B for reconciliation.
^4 Non-GAAP metrics that exclude the non-cash tax expense related to the Tax
Matters Agreement in 2012 and the after-tax FAS/CAS Adjustment. See Exhibit B
for reconciliation.

During the third quarter of 2013, the company settled hurricane-related
insurance claims for its Ingalls segment and received $180 million in cash.
This settlement decreased Ingalls revenues by $37 million due to lower
overhead costs and increased Ingalls operating income by $46 million,
reflecting the economic position of the customer's recent direction for the
treatment of the insurance-related cost and recoveries. Also during the
quarter, the company announced its plan to close the Gulfport facility as a
result of the Navy's decision to proceed with a steel deckhouse on DDG-1002
Lyndon B. Johnson, instead of a composite deckhouse. Ingalls revenues
increased by $9 million due to the overhead impact of this decision, and the
resulting Gulfport closure charge decreased Ingalls operating income by $17
million (together, the "Gulfport closure impact").

Reported revenues for the third quarter were $1.6 billion, a 2.6 percent
increase over the same period prior year. Adjusted for the hurricane insurance
recoveries and the Gulfport closure impact in 2013, third quarter revenues
were $1.7 billion, an increase of $69 million or 4.3 percent over Q3 2012.

Adjusted for the hurricane insurance recoveries and the Gulfport closure
impact in 2013, and the non-cash workers' compensation charge in 2012, segment
operating income was $113 million in Q3 2013, flat compared to Q3 2012 on an
adjusted basis. Adjusted segment operating margin was 6.8 percent in the third
quarter, compared to 7.1 percent in the same period in 2012 on an adjusted
basis.

Total operating income in Q3 2013 was $127 million, whereas adjusted total
operating income was $98 million, an increase of $8 million, or 8.9 percent,
from the same period of 2012 on an adjusted basis, primarily as a result of a
lower FAS/CAS Adjustment. Operating margin in the third quarter was 7.8
percent, while adjusted operating margin was 5.9 percent, up 25 basis points
from Q3 2012 on an adjusted basis.

Reported diluted earnings per share was $1.36 in the third quarter, compared
to $0.26 in the same period prior year. Adjusted diluted earnings per share
was $1.17 in the third quarter, compared to $0.98 in the same period of 2012
on an adjusted basis, which also excludes the after-tax FAS/CAS Adjustment of
$0.18 per share in 2013 and $0.24 per share in 2012.

Operating Segment Results

Ingalls Shipbuilding


               Three Months Ended                                 
               September 30                                       
                       As                  As
($ in millions) 2013   Adjusted^1   2012   Adjusted^2   $ Change^3  % Change^3
                       2013                2012
Sales and
service         $ 639  $ 667        $ 670  $ 670        $ (3)       (0.4)%
revenues
Operating       49     20           1      10           10          100.0%
income (loss)
Operating       7.7%   3.0%         0.1%   1.5%                    151 bps
margin %
^1 Non-GAAP metrics that exclude the impact of hurricane insurance recoveries
and the Gulfport closure.See Exhibit B for reconciliation.
^2 Non-GAAP metrics that exclude the impact of the non-cash workers'
compensation charge.See Exhibit B for reconciliation.
^3 Comparison of "As Adjusted 2013" to "As Adjusted 2012" figures.On an
unadjusted basis, revenues decreased by $31 million and operating income
increased by $48 million.

Ingalls revenues for the third quarter decreased $31 million, or 4.6 percent,
from the same period in 2012. Adjusting for $37 million of hurricane insurance
recoveries and $9 million of Gulfport closure impact in 2013, Ingalls revenues
for the third quarter were $667 million, a decrease of $3 million or 0.4
percent from the same period prior year, driven by lower sales in amphibious
assault ships and surface combatants. The decrease in amphibious assault ship
revenues was due to lower sales on LPD-23 USS Anchorage, LPD-24 USS Arlington,
LPD-25 Somerset, LPD-26 John P. Murtha and LHA-6 America, partially offset by
higher sales on LPD-27 Portland and LHA-7 Tripoli. Surface combatant revenues
decreased due to lower volumes on the DDG-1000 Zumwalt-class destroyer program
and DDG-114 Ralph Johnson, partially offset by higher volumes on DDG-117 Paul
Ignatius.

Ingalls operating income for the third quarter was $49 million, up $48 million
over the same period last year. Adjusting for $46 million of hurricane
insurance recoveries and $17 million of Gulfport closure impact in 2013 and
the $9 million non-cash workers' compensation charge in 2012, Ingalls
operating income for the third quarter of 2013 was $20 million, compared to
$10 million in the same period of 2012. Ingalls adjusted operating margin was
3.0 percent for the quarter, an increase of 151 basis points from the same
period last year on an adjusted basis. These increases were primarily
attributable to risk retirement on the National Security Cutter (NSC)
program.

Key Ingalls program milestones for the quarter:

  *Delivered the final aft peripheral vertical launch system (PVLS)
    assemblies and the composite hangar for DDG-1001 Michael Monsoor
  *Launched the fourth U.S. Coast Guard NSC, WMSL-753 Hamilton
  *Completed successful builder's sea trials for LPD-25 Somerset, the ninth
    San Antonio-class ship
  *Started fabrication of DDG-114 Ralph Johnson, Ingalls' 30^th Arleigh
    Burke-class destroyer
  *Approved a new collective bargaining agreement between the company's
    Avondale subsidiary and the New Orleans Metal Trades Council (NOMTC) and
    the Metal Trades Department (MTD)

Newport News Shipbuilding


                   Three Months Ended                            
                   September 30                                  
($ in millions)     2013      2012    As Adjusted^1    $ Change^2  % Change^2
                                      2012
Sales and service   $ 1,018   $ 944   $ 944            $ 74        7.8%
revenues
Operating income    93        88      103              (10)        (9.7)%
(loss)
Operating margin %  9.1%      9.3%    10.9%                       -178 bps
^1 Non-GAAP metrics that exclude the impact of the non-cash workers'
compensation charge.See Exhibit B for reconciliation.
^2 Comparison of "2013" to "As Adjusted 2012" figures.On an unadjusted basis,
operating income increased by $5 million.

Newport News revenues for the third quarter increased $74 million, or 7.8
percent, from the same period in 2012, primarily driven by higher sales in
aircraft carriers and fleet support services, partially offset by lower sales
in submarines. The increase in aircraft carriers sales was primarily driven by
higher volumes on the execution contract for the CVN-72 USS Abraham Lincoln
refueling and complex overhaul (RCOH), the construction preparation for CVN-79
John F. Kennedy, and the inactivation contract for CVN-65 USS Enterprise,
partially offset by lower volumes on the execution contract for the CVN-71 USS
Theodore Roosevelt RCOH. Higher revenues in fleet support services were
primarily the result of volumes associated with the repair work on SSN-765 USS
Montpelier. Decreased submarine sales were related to the SSN-774
Virginia-class submarine program, primarily driven by lower volumes on Block
II boats following the delivery of SSN-783 USS Minnesota, partially offset by
higher volumes on Block III boats.

Newport News operating income for the third quarter was $93 million, compared
with $88 million in the same period of 2012. Adjusting for the $15 million
non-cash workers' compensation charge in 2012, operating income decreased $10
million from Q3 2012. The decline from the prior year adjusted amount was
primarily related to the favorable resolution last year of outstanding
contract changes on the CVN-65 USS Enterprise Extended Drydocking Selected
Restricted Availability (EDSRA). Newport News operating margin was 9.1 percent
in Q3 2013, down 178 basis points from the same period last year on an
adjusted basis.

Key Newport News program milestones for the quarter:

  *Installed the third and final aircraft elevator on CVN-78 Gerald R. Ford
  *Redelivered CVN-71 USS Theodore Roosevelt following successful sea trials
    that tested the ship's systems after its RCOH

The Company

Huntington Ingalls Industries (HII) designs, builds and maintains nuclear and
non-nuclear ships for the U.S. Navy and Coast Guard and provides after-market
services for military ships around the globe. For more than a century, HII has
built more ships in more ship classes than any other U.S. naval shipbuilder at
its Newport News Shipbuilding and Ingalls Shipbuilding divisions. Employing
more than 37,000 in Virginia, Mississippi, Louisiana and California, HII also
provides a wide variety of products and services to the commercial energy
industry and other government customers, including the Department of Energy.
For more information, please visit www.huntingtoningalls.com.

Huntington Ingalls Industries will webcast its earnings conference call at 9
a.m. Eastern Time on Nov. 7. A live audio broadcast of the conference call and
supplemental presentation will be available on the investor relations page of
the company's website: www.huntingtoningalls.com.

Statements in this release, other than statements of historical fact,
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements involve
risks and uncertainties that could cause our actual results to differ
materially from those expressed in these statements. Factors that may cause
such differences include: changes in government and customer priorities and
requirements (including government budgetary constraints, shifts in defense
spending, and changes in customer short-range and long-range plans); our
ability to obtain new contracts, estimate our future contract costs and
perform our contracts effectively; changes in government regulations and
procurement processes and our ability to comply with such requirements; our
ability to realize the expected benefits from consolidation of our Ingalls
facilities; natural disasters; adverse economic conditions in the United
States and globally; risks related to our indebtedness and leverage; and other
risk factors discussed in our filings with the U.S. Securities and Exchange
Commission. There may be other risks and uncertainties that we are unable to
predict at this time or that we currently do not expect to have a material
adverse effect on our business, and we undertake no obligations to update any
forward-looking statements. You should not place undue reliance on any
forward-looking statements that we may make.

Exhibit A: Financial Statements

HUNTINGTON INGALLS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(UNAUDITED)


                                         Three Months Ended Nine Months Ended
                                         September 30       September 30
(in millions, except per share amounts)   2013      2012     2013     2012
Sales and service revenues                                         
Product sales                             $ 1,394   $ 1,367  $ 4,138  $ 4,224
Service revenues                          243       229      744      661
Total sales and service revenues          1,637     1,596    4,882    4,885
Cost of sales and service revenues                                 
Cost of product sales                     1,123     1,187    3,366    3,578
Cost of service revenues                  210       186      650      562
Income (loss) from operating investments, 9         7        13       13
net
General and administrative expenses       186       164      541      506
Operating income (loss)                   127       66       338      252
Other income (expense)                                             
Interest expense                          (28)      (29)     (87)     (88)
Earnings (loss) before income taxes       99        37       251      164
Federal income taxes                      30        24       81       68
Net earnings (loss)                       $ 69      $ 13     $ 170    $ 96
                                                                  
Basic earnings (loss) per share           $ 1.38    $ 0.26   $ 3.41   $ 1.95
Weighted-average common shares            49.9      49.6     49.9     49.3
outstanding
                                                                  
Diluted earnings (loss) per share         $ 1.36    $ 0.26   $ 3.37   $ 1.92
Weighted-average diluted shares           50.6      50.3     50.5     49.9
outstanding
                                                                  
Dividends declared per share              $ 0.10    $ —      $ 0.30   $ —
                                                                  
Net earnings (loss) from above            $ 69      $ 13     $ 170    $ 96
Other comprehensive income (loss)                                  
Change in unamortized benefit plan costs  31        23       246      68
Other                                     2         —        3        —
Tax benefit (expense) for items of other  (15)      (6)      (101)    (23)
comprehensive income
Other comprehensive income (loss), net of 18        17       148      45
tax
Comprehensive income (loss)               $ 87      $ 30     $ 318    $ 141
                                                                  

HUNTINGTON INGALLS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)


                                                    September30 December31
($ in millions)                                      2013         2012
Assets                                                           
Current Assets                                                   
Cash and cash equivalents                            $ 895        $ 1,057
Accounts receivable, net                             1,055        905
Inventoried costs, net                               340          288
Deferred income taxes                                218          213
Prepaid expenses and other current assets            23           21
Total current assets                                 2,531        2,484
Property, plant, and equipment, net                  1,964        2,034
Goodwill                                             881          881
Other purchased intangibles, net                     532          548
Long-term deferred tax asset                         248          329
Miscellaneous other assets                           123          116
Total assets                                         $ 6,279      $ 6,392
Liabilities and Stockholders' Equity                             
Current Liabilities                                              
Trade accounts payable                               $ 287        $ 377
Accrued employees' compensation                      205          235
Current portion of long-term debt                    65           51
Current portion of postretirement plan liabilities   148          166
Current portion of workers' compensation liabilities 225          216
Advance payments and billings in excess of revenues  139          134
Income taxes payable                                 73           —
Other current liabilities                            260          205
Total current liabilities                            1,402        1,384
Long-term debt                                       1,743        1,779
Pension plan liabilities                             1,082        1,301
Other postretirement plan liabilities                656          799
Workers' compensation liabilities                    409          403
Other long-term liabilities                          52           59
Total liabilities                                    5,344        5,725
Commitments and Contingencies                        —            —
Stockholders' Equity                                             
Common stock                                         1            —
Additional paid-in capital                           1,914        1,894
Retained earnings (deficit)                          155          —
Treasury stock                                       (57)         (1)
Accumulated other comprehensive income (loss)        (1,078)      (1,226)
Total stockholders' equity                           935          667
Total liabilities and stockholders' equity           $ 6,279      $ 6,392
                                                                

HUNTINGTON INGALLS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


                                               Nine Months Ended September 30
($ in millions)                                 2013            2012
Operating Activities                                           
Net earnings (loss)                             $170          $96
Adjustments to reconcile to net cash provided                  
by (used in) operating activities
Depreciation                                    135             122
Amortization of purchased intangibles           16              15
Amortization of debt issuance costs             6               6
Stock-based compensation                        28              25
Excess tax benefit related to stock-based       (5)             —
compensation
Deferred income taxes                           (19)            44
Change in                                                      
Accounts receivable                             (150)           (172)
Inventoried costs                               (102)           57
Prepaid expenses and other assets               (16)            (8)
Accounts payable and accruals                   12              (134)
Retiree benefits                                (134)           (93)
Other non-cash transactions, net                3               1
Net cash provided by (used in) operating        (56)            (41)
activities
Investing Activities                                           
Additions to property, plant, and equipment     (85)            (92)
Proceeds from insurance settlement              58              —
Net cash provided by (used in) investing        (27)            (92)
activities
Financing Activities                                           
Repayment of long-term debt                     (22)            (22)
Dividends paid                                  (15)            —
Repurchases of common stock                     (53)            —
Proceeds from stock option exercises            6               6
Excess tax benefit related to stock-based       5               —
compensation
Net cash provided by (used in) financing        (79)            (16)
activities
Change in cash and cash equivalents             (162)           (149)
Cash and cash equivalents, beginning of period  1,057           915
Cash and cash equivalents, end of period        $895          $766
Supplemental Cash Flow Disclosure                              
Cash paid for income taxes                      $54           $28
Cash paid for interest                          $101          $102
Non-Cash Investing and Financing Activities                    
Capital expenditures accrued in accounts        $2            $2
payable
                                                              

Exhibit B: Reconciliations

We make reference to "segment operating income," "segment operating margin,"
"adjusted sales and service revenues," "adjusted segment operating income,"
"adjusted segment operating margin," "adjusted total operating income,"
adjusted operating margin," "adjusted net earnings," and "adjusted diluted
earnings per share."

Adjusted sales and service revenues is defined as total sales and service
revenues adjusted for the impact of the hurricane insurance recoveries and the
Gulfport closure impact in 2013.

Segment operating income is defined as total operating income before the
FAS/CAS Adjustment and deferred state income taxes.

Segment operating margin is defined as segment operating income as a
percentage of total sales and service revenues.

Adjusted segment operating income is defined as segment operating income
adjusted for the impact of the hurricane insurance recoveries and the Gulfport
closure impact in 2013 and the impact of the non-cash workers' compensation
charge in 2012.

Adjusted segment operating margin is defined as adjusted segment operating
income as a percentage of adjusted segment sales and service revenues.

Adjusted total operating income is defined as total operating income adjusted
for the impact of the hurricane insurance recoveries and the Gulfport closure
impact in 2013 and the impact of the non-cash workers' compensation charge in
2012.

Adjusted operating margin is defined as adjusted total operating income as a
percentage of adjusted sales and service revenues.

Adjusted net earnings is defined as net income adjusted for the 2013 tax
effected impact of the hurricane insurance recoveries, the 2013 tax effected
impact of the Gulfport closure, the 2012 tax effected impact of the non-cash
workers' compensation charge, the 2012 tax expense related to the spin-off Tax
Matters Agreement with Northrop Grumman and the tax effected FAS/CAS
Adjustment.

Adjusted diluted earnings per share is defined as adjusted net earnings
divided by the weighted-average diluted common shares outstanding.

Segment operating income and segment operating margin are two of the key
metrics we use to evaluate operating performance because they exclude items
that do not affect segment performance. We believe adjusted sales and service
revenues, adjusted total operating income, adjusted operating margin, adjusted
net earnings and adjusted diluted earnings per share are also useful metrics
because they exclude non-operating items that we do not consider indicative of
our core operating performance. Therefore, we believe it is appropriate to
disclose these measures to help investors analyze our operating performance.
However, these measures are not measures of financial performance under GAAP
and may not be defined or calculated by other companies in the same manner.

Reconciliation of Segment Operating Income and Segment Operating Margin


                                              Three Months Ended
                                              September 30
($ in millions)                                2013      2012
Sales and Service Revenues                              
Ingalls                                        $ 639     $ 670
Newport News                                   1,018     944
Intersegment eliminations                      (20)      (18)
Total Sales and Service Revenues               1,637     1,596
Segment Operating Income                                
Ingalls                                        49        1
As a percentage of revenues                    7.7%      0.1%
Newport News                                   93        88
As a percentage of revenues                    9.1%      9.3%
Total Segment Operating Income                 142       89
As a percentage of revenues                    8.7%      5.6%
Non-segment factors affecting operating income          
FAS/CAS Adjustment                             (13)      (19)
Deferred state income taxes                    (2)       (4)
Total Operating Income                         127       66
Interest expense                               (28)      (29)
Federal income taxes                           (30)      (24)
Net Earnings                                   $ 69      $ 13
                                                       

Reconciliation of Adjusted Sales and Service Revenues, Adjusted Segment
Operating Income, Adjusted Segment Operating Margin, Adjusted Total Operating
Income and Adjusted Operating Margin


                                                    Three Months Ended
                                                    September 30
$ in millions                                        2013      2012
Adjusted Sales and Service Revenues                           
Ingalls                                              639       670
Adjustment for hurricane insurance recoveries        37        —
Adjustment for Gulfport closure impact               (9)       —
Adjusted Ingalls                                     667       670
Newport News                                         1,018     944
Intersegment eliminations                            (20)      (18)
Adjusted Sales and Service Revenues                  1,665     1,596
                                                             
Adjusted Segment Operating Income (Loss)                      
Total Operating Income (Loss)                        $ 127     $ 66
As a percentage of sales                             7.8%      4.1%
Non-segment factors affecting operating income                
FAS/CAS Adjustment                                   13        19
Deferred state income taxes                          2         4
Segment Operating Income (Loss)                      $ 142     $ 89
As a percentage of sales                             8.7%      5.6%
                                                             
Non-recurring items affecting operating income:               
Ingalls                                              $ 49      $ 1
Adjustment for hurricane insurance recoveries        (46)      —
Adjustment for Gulfport closure impact               17        —
Adjustment for non-cash workers' compensation charge —         9
Adjusted Ingalls                                     20        10
As a percentage of sales                             3.0%      1.5%
Newport News                                         93        88
Adjustment for non-cash workers' compensation charge —         15
Adjusted Newport News                                93        103
As a percentage of sales                             9.1%      10.9%
Adjusted Segment Operating Income (Loss)             $113      $113
As a percentage of sales                             6.8%      7.1%
                                                             
Adjusted Total Operating Income (Loss)                        
Total Operating Income (Loss)                        $127      $66
As a percentage of sales                             7.8%      4.1%
Adjustment for hurricane insurance recoveries        (46)      —
Adjustment for Gulfport closure impact               17        —
Adjustment for non-cash workers' compensation charge —         24
Adjusted Total Operating Income (Loss)               $ 98      $ 90
As a percentage of sales                             5.9%      5.6%
                                                             

Reconciliation of Adjusted Net Earnings and Adjusted Diluted Earnings per
Share


                                                         Three Months Ended
                                                         September 30
$ in millions                                             2013       2012
Adjusted Net Earnings (Loss)                                        
Net Earnings (Loss)                                       $ 69       $ 13
Adjustment for hurricane insurance recoveries^(1)         (30)       —
Adjustment for Gulfport closure^(1)                       11         —
Adjustment for non-cash workers' compensation charge^(1)  —          16
Adjustment for non-cash tax expense                       —          8
Adjustment for FAS/CAS Adjustment^(1)                     9          12
Adjusted Net Earnings (Loss)                              59         49
                                                                   
Per Share Amounts                                                   
Weighted-Average Diluted Shares Outstanding               50.6       50.3
                                                                   
Adjusted Diluted EPS                                                
Diluted earnings (loss) per share                         $1.36      $0.26
After-tax hurricane insurance recoveries per share        $ (0.59)   —
After-tax Gulfport closure per share                      $0.22      —
After-tax non-cash workers' compensation charge per share —          $0.32
Non-cash tax expense per share                            —          $0.16
After-tax FAS/CAS Adjustment per share                    $0.18      $0.24
Adjusted Diluted EPS                                      $1.17      $0.98
                                                                   
^(1) Tax effected at 35% federal statutory tax rate.

CONTACT: Jerri Fuller Dickseski (Media)
         jerri.dickseski@hii-co.com
         757-380-2341
        
         Dwayne Blake (Investors)
         dwayne.blake@hii-co.com
         757-380-2104

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