Newport News Shipbuilding

Transcription

1 Newport News Shipbuilding 2015 Investor Day November 10, 2015 Matthew J. Mulherin Corporate VP and President, Newport News Shipbuilding

2 2 NNS Video

3 Newport News At A Glance Sole designer and builder of U.S. Navy nuclear-powered aircraft carriers and sole provider of refueling and complex overhaul (RCOH) and inactivation services for these carriers FY 2014 Revenue Breakdown One of two providers of nuclear-powered submarines Designer and builder of unmanned underwater vehicles (UUV) for domestic and international military customers Provider of ship repair and fleet services for naval ships Component fabricator for commercial nuclear power facilities Capabilities and expertise to operate, manage and provide clean-up services to environmental hazard sites for the Department of Energy (DoE) and commercial clients Largest industrial employer in Virginia Segment Snapshot Carrier Construction Submarine Construction Carrier RCOH and Inactivation Navy Services Nuclear Energy Services FY 2014 Revenues: $4.54B Employees: ~24,500 FY 2014 Operating Income: $415M Engineers / Designers: ~3,300 FY 2014 Operating Margin: 9.1% Headquarters: Newport News, VA Current Backlog: ~$16.4B History: 129 years 3 Over 100 years of shipbuilding experience with unique visibility and stability

4 Financial Review Segment Revenue and Operating Margin Segment Backlog $16.4M Current Backlog 8.8% 8.9% 9.2% 9.1% 8.9% $9,464 $7,709 $4,010 $4,180 $4,382 $4,536 $3,404 $5,185 $2,698 $3,638 $5,387 $5,823 $5,495 $6,158 $6,935 FY 2011 FY 2012 FY 2013 FY 2014 Q3 YTD 2015 Revenue ($M) Operating Margin FY 2011 FY 2012 FY 2013 FY 2014 Q3 YTD 2015 Funded ($M) Unfunded ($M) 4 Long horizon business with stable revenues and margins

5 Aircraft Carrier Program Overview Aircraft Carrier Construction Aircraft Carrier Refueling and Complex Overhaul (RCOH) Aircraft Carrier Inactivation CVN 78 Gerald R. Ford CVN 79 John F. Kennedy CVN 72 USS Abraham Lincoln CVN 73 USS George Washington CVN 65 USS Enterprise New aircraft carrier for 21 st century and replacement for Nimitz-class Second Ford-class aircraft carrier Fifth Nimitz-class aircraft carrier to be refueled Sixth Nimitz-class aircraft carrier to be refueled First nuclear aircraft carrier to be defueled and inactivated 2009 keel laid 2015 keel laid 2013 refueling execution start 2015 planning start 2013 arrival 2013 launch 2020 launch 2014 undock 2017 refueling execution start 2016 undock 2016 delivery 2022 delivery 2016 redelivery 2021 redelivery 2017 redelivery 5 Sole designer, builder, refueler and inactivater of nuclear aircraft carriers

6 Submarine Program Overview NNS GDEB Stern Sections 8 / 9 Sections 6 / 7 Virginia Payload Module (VCS Block V and Later) Sections 2B / 5 Bow Sections 1 / 2A and Sail Virginia Class Submarines Block III Virginia Class Submarines Block IV Virginia Class Submarines Block V Eight submarines (SSN 784 to SSN 791) Transitioned to two submarines per year SSN 785 delivered in 2015 Ten submarines (SSN 792 to SSN 801) SSN 792 started construction in 2014 SSN 792 delivers in 2019 Expected 2019 award Nine submarines (SSN 802 to SSN 810) May incorporate Virginia Payload Module (VPM) SSN 791 delivers in 2019 SSN 801 delivers in 2023 Deliveries Highly successful submarine construction teaming arrangement

7 Navy Services Aircraft Carrier and Submarine Fleet Support Engineering, Design, and Nuclear Support Logistics, Maintenance, Modernization and Training Surface Ship Fleet Support Unmanned Undersea Full-service supplier of technical, maintenance, modernization and logistics services Planning and executing maintenance on 5 of 10 Nimitz-class aircraft carriers Engineering Overhaul (EOH) of USS Columbus (SSN 762) Providing resources to public naval shipyards Planning and design yard for: Los Angeles-class Seawolf-class Aircraft carrier reactor plants Standard Navy valves Managing maintenance services for reactor prototypes at Navy s Kesselring site Leveraging R&D, modeling & simulation to develop future capabilities and reduce total ownership costs Providing logistics products and services throughout life cycle Implementing alterations and changes to installed shipboard systems and equipment Developing and implementing training programs for crew familiarization and operating and maintenance procedures Certified master ship repair (MSR) contractor Providing repairs and alterations on all types of major surface ships and associated systems: Aircraft carriers (non-nuclear work) Surface ships (CG, DDG, FFG, LCS) Amphibious ships (LHD, LHA, LSD, LPD) Auxiliary ships Undersea Solutions Group (USG) is leading designer and builder of manned and unmanned underwater vehicles for Navy and foreign military sales USG complements core competencies at NNS in engineered submarine systems Customers reach beyond traditional Navy to include SOCOM, classified programs and RDT&E 7 Expand leading market positions and capture emerging growth

8 Nuclear Energy Services Nuclear Management and Operations Environmental Remediation and Waste Management Commercial Nuclear Fabrication Nuclear site and facility operations and management National laboratory management Safe conduct of operations Special nuclear material and spent nuclear fuel handling Test, start-up and commissioning Radiological operations Security, environmental, health and safety Site remediation, environmental restoration, and decontamination and demolition Radioactive and hazard waste management, storage and disposal Radiological waste landfill construction and operation Groundwater, surface water and air monitoring and remediation Regulatory compliance, licensing and permitting Records and data management Fabrication of tanks, pressure vessels, structure and piping assemblies to nuclear, ASME and military requirements Plan, project manage and staff for the erection, modification and repair of commercial nuclear power plants Boiler water circulating pump repair and maintenance 8 Grow adjacent and nuclear energy business

9 Optimize and Expand the Portfolio Navy Programs Navy & Government Services Nuclear Energy Services Opportunities Ohio Replacement Program Virginia Payload Module Block V LDUUV / unmanned CVN inactivation / dismantlement Market Characteristics Capital intensive Long term visibility Return on sales metrics Opportunities Expanded aircraft carrier and submarine fleet support Ford Early Service Life Plan Carrier Engineering Maintenance Assist Team (AMSEC) CVN IDIQ San Diego (CMSD) Market Characteristics Low capital requirements Specialized skills Return on investment metrics Opportunities Nevada National Security Site Savannah River Site Hanford Site Sellafield, UK Commercial nuclear fabrication Market Characteristics Low capital requirements Highly competitive Return on investment metrics 9 Leverage unique shipbuilding, services and energy capabilities to capture growth

10 Robust Pipeline of Opportunities Markets Opportunities Navy Programs CVN 80 Construction VCS Block V Construction ORP Construction CVN 74 RCOH CVN 81 Advance Procurement LDUUV EDM and LRIP Navy & Government Services Ford Early Service Life Plan CVN PSM Norfolk CVN 65 Partial Dismantlement Mid-Atlantic RMC CEMAT SSN 762 EOH CVN IDIQ San Diego Nuclear Energy Services Savannah River Site Extension Nevada National Security Site M&O Services Savannah River Site M&O Services Hanford Waste Treatment Plant Operations Commercial Nuclear Fabrication Idaho National Laboratory M&O Services 10 Well positioned to capture opportunities in the next five years and beyond

11 Capital Investments Navy shipbuilding requires ongoing investments in infrastructure and processes Fabrication and Outfitting Facilities Future investments maintain key capabilities, sustain competitiveness, and reduce cost for our Navy customers Expanding work being performed under cover and maximizing pre-outfitting capability Enhancing submarine production lines for follow-on classes and variants Accelerating deployment of automated, state-of-the-art welding equipment Customer and state participation often accompanies significant investments Cranes and Production Equipment Specialized Fixtures Covered Assembly Footprint 11 Investments to enhance capabilities and reduce long-term operational costs

12 12 Specialized Fixtures

13 Positioning for the Future Focus In support of our nation s security, we will be the provider of choice for the highest quality nuclear products and services offering the best value to the Departments of Navy, Defense and Energy and commercial customers Objectives Continue solid performance in core Navy programs CVN 79 construction CVN 80 long-lead material procurement VCS Blocks IV and V construction CVN 73 RCOH Grow core and adjacent Navy business Ohio Replacement Program design and construction Nimitz-class inactivation Fleet services / AMSEC LDUUV / unmanned Grow adjacent and new Energy business DoE services Commercial nuclear fabrication 13 Continue building on strong foundation

14 Q&A