Huntington Ingalls Industries, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the fourth quarter 2021 Huntington Ingalls Industries guidance conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the call, you may do so by pressing star then one on your telephone keypad. To withdraw your question, please press star then two. Please be advised that today's conference is being recorded. If you need further assistance, please signal the operator by pressing star then zero. I would now like to hand the call over to Christy Thomas, Vice President of Investor Relations. Ms. Thomas, you may begin.

Thanks. Good morning and welcome to the Huntington Ingalls Industries fourth quarter 2021 earnings conference call. With us today are Mike Petters, President and Chief Executive Officer, Chris Kastner, Executive Vice President and Chief Operating Officer, and Tom Steele, Executive Vice President and Chief Financial Officer. As a reminder, statements made in today's call that are not historical fact are considered forward-looking statements and are made pursuant to the safe harbor provisions of federal securities law. actual results may differ. Please refer to our SEC filings for a description of some of the factors that may cause actual results to vary materially from anticipated results. Also in their remarks today, Mike, Chris, and Tom will refer to certain non-GAAP measures. Reconciliations of these metrics to the comparable GAAP measures are included in the appendix of our earnings presentation that is posted on our website. We plan to address the posted presentation slides during the call to supplement our comments. Please access our website at HuntingtonEngels.com and click on the Investor Relations link to view the presentation as well as our earnings release. With that, I will turn the call over to our President and CEO, Mike Petters. Mike?

Thanks, Christy. Good morning, everyone, and thanks for joining us on today's call. Before getting into the results for the quarter and the full year, I want to personally thank each of our 44,000 employees for continuing to execute their daily activities with an unwavering commitment to our operational pillars of safety, quality, cost, and schedule. 2021 was a year of solid performance and resiliency during the COVID pandemic. At HII, we are committed to promoting and protecting the health and safety of our employees, their families, and their communities, and continuing to serve our customers in the vital national security interests of our country without disruption as an essential contributor to the nation's critical infrastructure. Most recently faced with uncertainty around the Omicron variant, our employees remain focused on execution while driving continuous improvement, innovation, and creativity. While HII has not become subject to a vaccine mandate through any of our shipbuilding contracts at this time, We continue to be committed to promoting the benefits of a vaccinated workforce. Our technical solutions division does have the vaccine requirement in a number of contracts, and currently we estimate that approximately 81% of our HII full time employees are fully vaccinated. Earlier this morning we released our 2021 results, which we believe reflect consistent shipbuilding program execution with year over year margin expansion. and a transformational year for our technical solutions division. During the year, we captured major contract awards, resulting in maintaining record backlog levels, and we expanded our portfolio by acquiring Alliant in our technical solutions division. With these actions, HII persevered to diligently pursue the business outcomes of driving growth, managing risk, and generating strong returns. Some highlights from the quarter start on slide three of the presentation. Sales of $2.7 billion for the fourth quarter are down 3% from the fourth quarter of 2020, and sales of $9.5 billion for the full year are up 2% from the full year of 2020. Given the numerous challenges in 2021, we were pleased to finish the year with shipbuilding revenues at the low end of our guidance, and we remain confident in the 3% shipbuilding average growth rate over time. We also saw strong growth as anticipated in our technical solutions division. Polluted EPS was $2.99 for the quarter and $13.50 for the full year, down from $6.15 in the fourth quarter of 2020 and $17.14 for the full year in 2020. Full year segment operating income of $683 million is an increase of $128 million or 23% over 2020. These returns, in line with our expectations, are the result of continued performance improvement in shipbuilding margins and strong performance in our technical solutions division. New contract awards during the quarter were approximately $1 billion, resulting in our backlog of approximately $48 billion at the end of the quarter, of which approximately $23 billion is currently funded. Now entering 2022, our shipbuilding program's backlog provides, we believe, unmatched stability and visibility, and we are laser-focused on methodically executing our contracts, while the technical solutions business is positioned to capture growth opportunities. We remain extremely pleased with the technology, capability, talent, and solutions that Alliant has brought to the HII family. Now shifting to activities in Washington for a moment, We are pleased with the passage and enactment of the fiscal year 2022 defense authorization bill and its strong support for shipbuilding. However, more than one quarter into the fiscal year, congressional appropriations have yet to be finalized, and the federal government continues to operate under a continuing resolution through February 18th. It remains uncertain at this point when annual funding measures will be finalized, and we continue to urge Congress to proceed expeditiously. We do remain optimistic that the appropriations process will be completed in the weeks ahead. Now, before I close, let me take a moment to address the recent announcement that, at my recommendation, our Board of Directors elected Chris Kastner to the role of President and CEO effective March 1st. This is consistent with the company's succession plan, and I fully endorse this transition. I truly believe this is a fantastic development for HII. As the Executive Vice Chairman of the Board, I will remain an HII employee through the rest of the year and will be able to support Chris and the Board. As the first CEO of this great company, I can tell you confidently that there is no better choice than Chris to lead HII into this bright new chapter. where I believe we are positioned better than ever before to successfully leverage our substantial backlog to generate strong free cash flow, demonstrate growth in our technical solutions division, and create long-term sustainable value for our shareholders, our customers, and our employees. And now I will turn the call over to Chris for his remarks on the operations.