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Table of Contents                                        
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 ______________________________________________________________
FORM 10-Q
 ______________________________________________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission file number 001-34910
  ______________________________________________________________
HUNTINGTON INGALLS INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
 ______________________________________________________________
Delaware90-0607005
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
4101 Washington Avenue Newport News, Virginia 23607
(Address of principal executive offices and zip code)
(757380-2000
(Registrant’s telephone number, including area code)
 ______________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common StockHIINew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. 
Large Accelerated Filer
Accelerated Filer
Non-Accelerated FilerSmaller Reporting Company
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes No  
As of October 29, 2021, 40,060,998 shares of the registrant's common stock were outstanding.



Table of Contents                                        
TABLE OF CONTENTS
 
  
PART I – FINANCIAL INFORMATIONPage
Item 1.
Item 2.
Item 3.
Item 4.
PART II – OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.



Table of Contents                                        
HUNTINGTON INGALLS INDUSTRIES, INC.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)
 
 Three Months Ended
September 30
Nine Months Ended
September 30
(in millions, except per share amounts)2021202020212020
Sales and service revenues
Product sales$1,701 $1,699 $5,185 $4,743 
Service revenues637 615 1,662 1,861 
Sales and service revenues2,338 2,314 6,847 6,604 
Cost of sales and service revenues
Cost of product sales1,453 1,388 4,402 3,931 
Cost of service revenues554 490 1,450 1,550 
Income from operating investments, net11 6 31 19 
Other income and gains2 — 3 — 
General and administrative expenses226 220 636 648 
Operating income118 222 393 494 
Other income (expense)
Interest expense(24)(27)(63)(68)
Non-operating retirement benefit45 29 135 89 
Other, net2 2 10 (8)
Earnings before income taxes141 226 475 507 
Federal and foreign income tax expense (benefit)(6)4 51 60 
Net earnings$147 $222 $424 $447 
Basic earnings per share$3.65 $5.47 $10.52 $11.01 
Weighted-average common shares outstanding40.3 40.6 40.3 40.6 
Diluted earnings per share$3.65 $5.45 $10.52 $10.98 
Weighted-average diluted shares outstanding40.3 40.7 40.3 40.7 
Dividends declared per share$1.14 $1.03 $3.42 $3.09 
Net earnings from above$147 $222 $424 $447 
Other comprehensive income
Change in unamortized benefit plan costs43 24 102 70 
Other(1)1 1 — 
Tax expense for items of other comprehensive income(11)(6)(26)(18)
Other comprehensive income, net of tax31 19 77 52 
Comprehensive income$178 $241 $501 $499 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1

Table of Contents                                        
HUNTINGTON INGALLS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
($ in millions)September 30, 2021December 31, 2020
Assets
Current Assets
Cash and cash equivalents$555 $512 
Accounts receivable, net of allowance for doubtful accounts of $2 million as of 2021 and 2020
446 397 
Contract assets1,363 1,049 
Inventoried costs, net143 137 
Income taxes receivable221 171 
Assets held for sale 133 
Prepaid expenses and other current assets66 45 
Total current assets2,794 2,444 
Property, plant, and equipment, net of accumulated depreciation of $2,105 million as of 2021 and $2,024 million as of 2020
3,043 2,978 
Operating lease assets246 192 
Goodwill2,684 1,617 
Other intangible assets, net of accumulated amortization of $702 million as of 2021 and $655 million as of 2020
1,187 512 
Deferred tax assets10 133 
Miscellaneous other assets436 281 
Total assets$10,400 $8,157 
Liabilities and Stockholders' Equity
Current Liabilities
Trade accounts payable$508 $460 
Accrued employees’ compensation367 293 
Current portion of postretirement plan liabilities131 133 
Current portion of workers’ compensation liabilities231 225 
Contract liabilities674 585 
Liabilities held for sale 68 
Other current liabilities533 462 
Total current liabilities2,444 2,226 
Long-term debt3,321 1,686 
Pension plan liabilities833 960 
Other postretirement plan liabilities379 401 
Workers’ compensation liabilities522 511 
Long-term operating lease liabilities198 157 
Deferred tax liabilities154 — 
Other long-term liabilities360 315 
Total liabilities8,211 6,256 
Commitments and Contingencies (Note 14)
Stockholders’ Equity
Common stock, $0.01 par value; 150 million shares authorized; 53.4 million shares issued and 40.1 million shares outstanding as of September 30, 2021, and 53.3 million shares issued and 40.5 million shares outstanding as of December 31, 2020
1 1 
Additional paid-in capital1,984 1,972 
Retained earnings3,819 3,533 
Treasury stock(2,145)(2,058)
Accumulated other comprehensive loss(1,470)(1,547)
Total stockholders’ equity2,189 1,901 
Total liabilities and stockholders’ equity$10,400 $8,157 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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HUNTINGTON INGALLS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 Nine Months Ended
September 30
($ in millions)20212020
Operating Activities
Net earnings$424 $447 
Adjustments to reconcile to net cash provided by (used in) operating activities
Depreciation154 136 
Amortization of purchased intangibles48 41 
Amortization of debt issuance costs6 5 
Provision for doubtful accounts (2)
Stock-based compensation19 16 
Deferred income taxes74 (7)
Loss (gain) on investments in marketable securities(12)(3)
Asset impairments 13 
Change in
Accounts receivable52 (164)
Contract assets(179)(63)
Inventoried costs(7)(5)
Prepaid expenses and other assets(116)(60)
Accounts payable and accruals93 315 
Retiree benefits(73)(183)
Other non-cash transactions, net6 5 
Net cash provided by operating activities489 491 
Investing Activities
Capital expenditures
Capital expenditure additions(216)(220)
Grant proceeds for capital expenditures11 17 
Acquisitions of businesses, net of cash received(1,636)(377)
Investment in affiliates(22)— 
Proceeds from disposition of business20 — 
Other investing activities, net1 (6)
Net cash used in investing activities(1,842)(586)
Financing Activities
Proceeds from issuance of long-term debt1,650 1,000 
Proceeds from revolving credit facility borrowings 385 
Repayment of revolving credit facility borrowings (385)
Debt issuance costs(22)(13)
Dividends paid(138)(126)
Repurchases of common stock(87)(84)
Employee taxes on certain share-based payment arrangements(7)(13)
Net cash provided by financing activities1,396 764 
Change in cash and cash equivalents43 669 
Cash and cash equivalents, beginning of period512 75 
Cash and cash equivalents, end of period$555 $744 
Supplemental Cash Flow Disclosure
Cash paid for income taxes (net of refunds)$31 $106 
Cash paid for interest$39 $33 
Non-Cash Investing and Financing Activities
Capital expenditures accrued in accounts payable$4 $8 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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HUNTINGTON INGALLS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED) 
Three Months Ended September 30, 2021 and 2020
($ in millions)
Common StockAdditional Paid-in CapitalRetained Earnings (Deficit)Treasury StockAccumulated Other Comprehensive Income (Loss)Total Stockholders' Equity
Balance as of June 30, 2020$1 $1,961 $3,150 $(2,058)$(1,376)$1,678 
Net earnings— — 222 — — 222 
Dividends declared ($1.03 per share)— — (42)— — (42)
Stock compensation— 3 — — — 3 
Other comprehensive income, net of tax— — — — 19 19 
Balance as of September 30, 2020$1 $1,964 $3,330 $(2,058)$(1,357)$1,880 
Balance as of June 30, 2021$1 $1,977 $3,718 $(2,128)$(1,501)$2,067 
Net earnings  147   147 
Dividends declared ($1.14 per share)  (46)  (46)
Stock compensation 7    7 
Other comprehensive income, net of tax    31 31 
Treasury stock activity   (17) (17)
Balance as of September 30, 2021$1 $1,984 $3,819 $(2,145)$(1,470)$2,189 


Nine Months Ended September 30, 2021 and 2020
($ in millions)
Common StockAdditional Paid-in CapitalRetained Earnings (Deficit)Treasury StockAccumulated Other Comprehensive Income (Loss)Total Stockholders' Equity
Balance as of December 31, 2019$1 $1,961 $3,009 $(1,974)$(1,409)$1,588 
Net earnings— — 447 — — 447 
Dividends declared ($3.09 per share)— — (126)— — (126)
Stock compensation— 3 — — — 3 
Other comprehensive income, net of tax— — — — 52 52 
Treasury stock activity— — — (84)— (84)
Balance as of September 30, 2020$1 $1,964 $3,330 $(2,058)$(1,357)$1,880 
Balance as of December 31, 2020$1 $1,972 $3,533 $(2,058)$(1,547)$1,901 
Net earnings  424   424 
Dividends declared ($3.42 per share)  (138)  (138)
Stock compensation 12    12 
Other comprehensive income, net of tax    77 77 
Treasury stock activity   (87) (87)
Balance as of September 30, 2021$1 $1,984 $3,819 $(2,145)$(1,470)$2,189 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


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HUNTINGTON INGALLS INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. DESCRIPTION OF BUSINESS

Huntington Ingalls Industries, Inc. ("HII" or the "Company") is one of America’s largest military shipbuilding companies and a provider of professional services to partners in government and industry. HII is organized into three reportable segments: Ingalls Shipbuilding ("Ingalls"), Newport News Shipbuilding ("Newport News"), and 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 Technical Solutions segment provides a range of services to government and commercial customers.

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 Technical Solutions segment provides a wide range of professional services and products, including defense and federal solutions ("DFS"), nuclear and environmental services, and unmanned systems.

2. 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, 2020.

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.

Government Grants - The Company recognizes incentive grants, inclusive of transfers of depreciable assets, from federal, state, and local governments at fair value upon compliance with the conditions of their receipt and reasonable assurance that the grants will be received or the depreciable assets will be transferred. Grants in recognition of specific expenses are recognized in the same period as an offset to those related expenses. Grants related to depreciable assets are recognized over the periods and in the proportions in which depreciation expense on those assets is recognized.

For the nine months ended September 30, 2021, the Company recognized cash grant benefits of approximately $11 million in other long-term liabilities in the unaudited condensed consolidated statements of financial position. For the
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nine months ended September 30, 2020, the Company recognized cash grant benefits of approximately $17 million in other long-term liabilities in the unaudited condensed consolidated statements of financial position.
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 $209 million and $182 million as of September 30, 2021, and December 31, 2020, 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.

Loan Receivable - The Company holds a loan receivable in connection with the financing of the sale of its previously owned Avondale Shipyard facility. The receivable was carried at amortized cost of $36 million, net of $13 million of loan discount as of September 30, 2021, and at amortized cost of $34 million, net of $15 million of loan discount as of December 31, 2020, which approximates fair value. The loan receivable is recorded in miscellaneous other assets on the unaudited condensed consolidated statements of financial position. Interest income is recognized on an accrual basis using the effective yield method. The discount is accreted into income using the effective yield method over the estimated life of the loan receivable.

Other Current Liabilities - Other current liabilities were $533 million as of September 30, 2021, and $462 million as of December 31, 2020. Payroll taxes payable, which is a component of other current liabilities, was $132 million as of September 30, 2021, and $125 million as of December 31, 2020. No other component of other current liabilities was more than 5% of total current liabilities.

3. ACCOUNTING STANDARDS UPDATES

In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updates ("ASU") 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which amends and simplifies the requirements for income taxes. The ASU is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. The adoption did not result in a material impact to the Company's financial results or disclosures.

Accounting pronouncements issued but not effective until after December 31, 2021, are not expected to have a material impact on the Company's consolidated financial position, results of operations, or cash flows.

4. ACQUISITIONS AND DIVESTITURES

Acquisition of Alion

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 ASC 805 – “Business Combinations.” The preliminary purchase price was $1.78 billion, including $148 million of cash received in the acquisition. The purchase price was paid in cash and funded through the net proceeds of the Company’s issuance of $400 million aggregate principal amount of 0.670% Senior Notes due 2023 and $600 million aggregate principal amount of 2.043% Senior Notes due 2028, together with the proceeds of a $650 million term loan. See Note 12: Debt. The preliminary purchase price is subject to customary adjustments as provided in the purchase agreement.

Alion provides advanced engineering and R&D 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.

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The table below summarizes the preliminary fair value estimates of identifiable assets acquired and liabilities assumed in the acquisition. These estimates are subject to revisions, which may result in an adjustment to the preliminary values presented below.
($ in millions)Preliminary 8/19/2021
Cash and cash equivalents$148 
Accounts receivable228 
Operating lease assets46 
Intangible assets710 
Other identifiable assets acquired21 
Total identifiable assets acquired1,153 
Trade accounts payable95
Accrued employees' compensation60
Deferred tax liabilities - noncurrent177
Operating lease liabilities49
Other identifiable liabilities assumed68
Total identifiable liabilities assumed449
Net identifiable assets acquired704
Transaction price1,784
Goodwill$1,080 

The Company is in various phases of valuing the assets acquired and liabilities assumed in the acquisition, including right-of-use assets, lease liabilities and tax balances, and its estimate of these values was still preliminary as of September 30, 2021. These provisional amounts are therefore subject to change as the Company continues to evaluate information required to complete the valuations through the measurement period, which will not exceed one year from the acquisition date.

Goodwill is calculated as the excess of the purchase price over the fair value of the net assets acquired. The recognized goodwill is attributable to operational synergies and growth opportunities and was allocated to the Company's Technical Solutions segment. None of the goodwill resulting from this acquisition is expected to be amortizable for tax purposes.

Approximately $16 million of one-time acquisition-related costs was included in general and administrative expenses in the unaudited condensed consolidated statements of operations and comprehensive income for the nine months ended September 30, 2021.

The Company identified Alion’s contract backlog and customer relationships as finite-lived assets with fair values of $240 million and $470 million, respectively. The finite-lived assets are subject to amortization under the pattern of benefits method over six years for backlog and 20 years for customer relationships.

Total revenue and operating income for Alion for the period from August 19, 2021 through September 30, 2021 were as follows:
($ in millions)Period from 8/19/2021-9/30/2021
Sales and service revenues$163 
Operating income$4 

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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, 2020.
Pro Forma (Unaudited)
Three Months Ended
September 30
Nine Months Ended
September 30
 
($ in millions, except per share amounts)2021202020212020
Sales and service revenues$2,532 $2,628 $7,687 $7,416 
Net earnings$142 $217 $416 $409 
Basic earnings per share$3.52 $5.34 $10.32 $10.07 
Diluted earnings per share$3.52 $5.33 $10.32 $10.05 

These unaudited pro forma results include adjustments, such as the amortization of acquired intangible assets and interest expense on debt financing, in connection with the acquisition.

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 expects to incur in connection with the acquisition, including, but not limited to, additional professional fees and employee integration.

Other Acquisitions

In December 2020, the Company acquired the autonomy business of Spatial Integrated Systems, Inc. ("SIS"), a leading provider of autonomous technology, for approximately $40 million in cash. The acquisition further expanded the Company's unmanned systems capabilities. In connection with this acquisition, the Company preliminarily recorded $40 million of goodwill, which included the value of SIS's workforce, all of which was allocated to the Company's Technical Solutions segment. For the nine months ended September 30, 2021, the Company recorded a decrease in goodwill of $13 million, due to a reallocation of purchase price to intangible assets related to technology and existing contract backlog. See Note 10: Goodwill and Other Intangible Assets. The assets, liabilities, and results of operations of SIS are not material to the Company’s consolidated financial position, results of operations, or cash flows.

In March 2020, the Company acquired Hydroid, Inc. ("Hydroid"), a leading provider of advanced marine robotics to the defense and maritime markets, for approximately $377 million in cash, net of $2 million of acquired cash. The acquisition expanded the Company's capabilities in the strategically important and rapidly growing autonomous and unmanned maritime systems market. In connection with this acquisition, the Company recorded $239 million of goodwill, which included the value of Hydroid's workforce, and $76 million of intangible assets related to technology and existing contract backlog. See Note 10: Goodwill and Other Intangible Assets. The assets, liabilities, and results of operations of Hydroid are not material to the Company’s consolidated financial position, results of operations, or cash flows.

The Company funded the SIS and Hydroid acquisitions using cash on hand, issuances of commercial paper, and borrowings on its revolving credit facility. The acquisition costs incurred in connection with these acquisitions were not material. The operating results of these businesses have been included in the Company’s consolidated results as of the respective closing dates of the acquisitions. In allocating the purchase prices of these businesses, the Company considered the estimated fair values of net tangible and intangible assets acquired, with any excess purchase price recorded as goodwill. The total amount of goodwill resulting from these acquisitions is expected to be amortizable for tax purposes. These acquisitions are not material either individually or in the aggregate, and pro forma revenues and results of operations have therefore not been provided.

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Divestitures

On February 1, 2021, the Company contributed its San Diego Shipyard (“SDSY”) business to a joint venture, Titan Acquisition Holdings, L.P. ("Titan"), in exchange for a non-controlling interest. Titan is a leading provider of ship repair and specialty fabrication services to government and commercial customers. The joint venture contribution was completed as part of the Company’s operating strategy. The Company recognized its interest in Titan at fair value, which approximated $83 million. No gain or loss was recognized in the transaction. The contributed assets and liabilities were previously reported in assets and liabilities held for sale. The Company transferred $22 million to Titan as part of the exchange.

On February 1, 2021, the Company completed the sale of its oil and gas business. The divestiture was completed as part of the Company’s plan to exit this part of the oil and gas industry and focus on its core services and customers. The divested assets and liabilities were previously reported in assets and liabilities held for sale. In connection with the sale, the Company received $25 million net cash and recorded an initial net pre-tax gain of $3 million in other income and gains within operating income in the unaudited condensed consolidated statements of operations. For the nine months ended September 30, 2021, the Company recognized a net pre-tax gain on sale of $1 million due to final purchase price adjustments.

5. 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, 2021, the Company repurchased 469,436 shares at an aggregate cost of $87 million. For the nine months ended September 30, 2020, the Company repurchased 390,904 shares at an aggregate cost of $84 million. The cost of purchased shares is recorded as treasury stock in the unaudited condensed consolidated statements of financial position.

Dividends - The Company declared cash dividends per share of $1.14 and $1.03 for the three months ended September 30, 2021 and 2020, respectively. The Company declared cash dividends per share of $3.42 and $3.09 for the nine months ended September 30, 2021 and 2020, respectively. The Company paid cash dividends totaling $138 million and $126 million for the nine months ended September 30, 2021 and 2020, 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, 2021, was comprised of unamortized benefit plan costs of $1,470 million. The accumulated other comprehensive loss as of December 31, 2020, was comprised of unamortized benefit plan costs of $1,546 million and other comprehensive loss items of $1 million.

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The changes in accumulated other comprehensive income (loss) by component for the three and nine months ended September 30, 2021 and 2020, were as follows:
($ in millions)Benefit PlansOtherTotal
Balance as of June 30, 2020$(1,373)$(3)$(1,376)
Other comprehensive income before reclassifications— 1 1 
Amounts reclassified from accumulated other comprehensive loss
Amortization of prior service credit1
(2)— (2)
Amortization of net actuarial loss1
26 — 26 
Tax expense for items of other comprehensive income(6)— (6)
Net current period other comprehensive income18 1 19 
Balance as of September 30, 2020$(1,355)$(2)$(1,357)
Balance as of June 30, 2021$(1,502)$1 $(1,501)
Other comprehensive income before reclassifications14 (1)13 
Amounts reclassified from accumulated other comprehensive loss
Amortization of prior service cost1
2  2 
Amortization of net actuarial loss1
27  27 
Tax expense for items of other comprehensive income(11) (11)
Net current period other comprehensive income32 (1)31 
Balance as of September 30, 2021$(1,470)$ $(1,470)
($ in millions)Benefit PlansOtherTotal
Balance as of December 31, 2019$(1,407)$(2)$(1,409)
Amounts reclassified from accumulated other comprehensive loss
Amortization of prior service credit1
(7)— (7)
Amortization of net actuarial loss1
77 — 77 
Tax expense for items of other comprehensive income(18)— (18)
Net current period other comprehensive income (loss)52 — 52 
Balance as of September 30, 2020$(1,355)$(2)$(1,357)
Balance as of December 31, 2020$(1,546)$(1)$(1,547)
Other comprehensive income before reclassifications14 1 15 
Amounts reclassified from accumulated other comprehensive loss
Amortization of prior service cost1
8  8 
Amortization of net actuarial loss1
80  80 
Tax expense for items of other comprehensive income(26) (26)
Net current period other comprehensive income76 1 77 
Balance as of September 30, 2021$(1,470)$ $(1,470)
1 These accumulated comprehensive loss components are included in the computation of net periodic benefit cost. See Note 15: 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, 2021 and 2020, was $8 million and $6 million, respectively. The tax benefit associated with amounts reclassified from accumulated other comprehensive loss for the nine months ended September 30, 2021 and 2020, was $23 million and $18 million, respectively.
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6. EARNINGS PER SHARE

Basic and diluted earnings per common share were calculated as follows:
 Three Months Ended
September 30
Nine Months Ended
September 30
(in millions, except per share amounts)2021202020212020
Net earnings$147 $222 $424 $447 
Weighted-average common shares outstanding40.3 40.6 40.3 40.6 
Net dilutive effect of stock awards 0.1  0.1 
Dilutive weighted-average common shares outstanding40.3 40.7 40.3 40.7 
Earnings per share - basic$3.65 $5.47 $10.52 $11.01 
Earnings per share - diluted$3.65 $5.45 $10.52 $10.98 

Under the treasury stock method, the Company has excluded from the diluted share amounts presented above the effects of 0.4 million and 0.3 million Restricted Performance Stock Rights ("RPSRs") for the three and nine months ended September 30, 2021 and 2020, respectively.

7. REVENUE

The following is a description of principal activities from which the Company generates its revenues. For more detailed information regarding reportable segments, see Note 8: Segment Information.

U.S. Government Contracts

The Ingalls and Newport News segments generate revenue primarily from performance under multi-year contracts with the U.S. Government, generally the U.S. Navy and U.S. Coast Guard, or prime contractors to contracts with the U.S. Government, relating to the advance planning, design, construction, repair, maintenance, refueling, overhaul, or inactivation of nuclear-powered ships and non-nuclear ships. The period over which the Company performs may extend past five years. The Technical Solutions segment also generates the majority of its revenue from contracts with the U.S. Government, including U.S. Government agencies. The Company generally invoices and receives related payments based upon performance progress no less frequently than monthly.

Shipbuilding - For most of the Company's shipbuilding contracts, the customer contracts with the Company to provide a comprehensive service of designing, procuring long-lead-time materials, manufacturing, and integrating complex equipment and technologies into a single ship or project, often resulting in a single performance obligation. Contract modifications to account for changes in specifications and requirements are recognized when approved by the customer. In the majority of circumstances, modifications do not result in additional performance obligations that are distinct from the existing performance obligations in the contract, and the effects of the modifications are recognized as an adjustment to revenue on a cumulative catch-up basis. Alternatively, in instances where the performance obligations in the modifications are deemed distinct, contract modifications are accounted for prospectively.

The Company considers incentive and award fees to be variable consideration and includes in the transaction price at inception the consideration to which the Company expects to be entitled under the terms and conditions of the contract, generally estimated using a most likely amount approach. Transaction price is limited to the extent of funding allotted by the customer and available for performance, and estimated revenues represent those amounts for which the Company believes a significant reversal of revenue is not probable.

The Company recognizes revenues related to shipbuilding contracts as it satisfies the related performance obligations over time using a cost-to-cost input method to measure performance progress, which best reflects the transfer of control to the customer.

Services