INDUSTRY DATA
Huntington Ingalls Industries (HII) Update
Sole Source Shipbuilder on Three Programs
LPD-17 San Antonio -Class
LHA-6 Am erica- Class
• LHA-6
LHA 6 America is 1st ship in LHA(R)
program
• Next generation of amphibious ship for
joint operations with enhanced aviation
capabilities
–
Delivered April 2014
• LHA-7 Tripoli is 2nd ship
–
Contract awarded in May 2012
–
2018 delivery
National Security Cutter
• Newest ship in the U.S. Navy’s amphibious
fleet used to transport 700 to 800 marines,
their equipment and supplies
• Delivered LPD-22 USS San Diego in 2011,
LPD-23 Anchorage in Q3 2012, LPD-24
Arlington in Q4 2012, and LPD-25
Somerset in Q4 2013
• LPD-26 Murtha and LPD-27 Portland
currently under construction with delivery
in 2016 and 2017, respectively.
•
Largest and most capable new multimission cutter
•
Coast Guard plans to build 7 or 8 NSCs to
replace aging fleet
•
NSC-4 and NSC-5 under construction
•
NSC-6 contract awarded in May 2013
•
NSC-7 contract awarded in March 2014
Surface Combatant Programs
DDG-51 Arleigh B urk e -Class
DDG-1000 Zum w alt -Class
•
US Navy’s primary surface combatant class
•
•
Designed for conducting anti-air, anti-submarine, antisurface and strike operations
Next generation multi-mission surface combatant class
(three-ship class)
•
•
Most advanced state-of-the-art surface combat ships
•
Original 62-ship program / 28 awarded to HII
previously
Ingalls work-share consists of composite
deckhouse/hangar and steel aft peripheral vertical
launch systems
•
•
Awarded construction contracts for DDG-113 and
DDG-114, first two ships of the program re-start
Unique composites characteristics include light weight
and increased stealth
•
Co-lead on ship design (work-share products related)
•
DDG-1001 expected to be delivered in second quarter
2014
•
Awarded a $3.3 billion contract for five DDG-51s in
June 2013
Source: Huntington Ingalls Industries
COPYRIGHT © 2014 PENTON
INDUSTRY DATA
Huntington Ingalls Industries (HII) Update
Investment Highlights
• Nation’s premier naval and principal nuclear
shipbuilder
FY 2013 Revenue Breakdown
–
Sole source for U.S. Navy nuclear-powered aircraft
carriers and their refueling and inactivation services
–
One of two builders constructing Virginia-class
nuclear-powered submarines
–
Builder of record for LPD, LHD and LHA-class
amphibious assault ships
Ingalls
Surface
Combatants
Fleet Support &
Other
Carrier
Construction
Expeditionary
Warfare
Carrier RCOH
• Mission critical partnership with the U.S. Navy
• Significant revenue stability and visibility
Coast Guard
Newport
News
Submarines
Fleet Support &
Other
• Opportunity for margin expansion and cash
flow improvement
Company Snapshot
FY 2013 Revenues:
$6.8 bn
Employees:
~38,000
FY 2013 EBIT:
$512 mn
Engineers / Designers:
FY 2013 Pension-adj. EBIT:(1)
$573 mn
Headquarters:
Current Backlog:
~$19 bn
History:
(1)
~7,500
Newport News, VA
128 years
Refer to reconciliation to reported GAAP financial data on page 26.
Universal Pegasus International (UPI) — Acqisition Overview
UPI Overview
Deal Overview
• Based in Houston, TX with ~1,500
Employees
• All cash transaction
• Accretive pending purchase accounting
determination
• Expect EBITDA to track to industry average or
slightly above
• UPI will be included in a separate segment for
financial reporting purposes
• Closed in June 2014
• Global footprint with operations in
Calgary, AB (Canada); London &
Aberdeen (United Kingdom); Trinidad
& Tobago
• Providers of engineering and project
management services to the domestic
and international energy markets
2014 Engineering
N ew s R ecord #61
Strategic Rationale
Customers and Projects
• Fits HIIʼs strategy to enter adjacent markets through
engineering
• Capable and experienced management team with
proven engineering services track records
• Strategic adjacent market that is growing
• Provides access to a broad customer base,
including many fortune 500 companies
• Creates strong engineering services growth platform
for HII
Key Customers
 TransCanada
Projects
Keystone XL
Prince Rupert Transmission
 Enbridge
Flanagan South Pipeline
 Enterprise
Seaway Crude Pipeline
 Kinder Morgan
Trans Mountain Expansion
 ENI U.S. Co.
Longhorn Subsea Tieback
Source: Huntington Ingalls Industries
COPYRIGHT © 2014 PENTON