UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 22, 1997
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 1-12385
NEWPORT NEWS SHIPBUILDING INC.
(Exact name of registrant as specified in its charter)
Delaware 74-1541566
- -------- ----------
State or Other Jurisdiction of IRS Employer
Incorporation or Organization Identification No.
4101 Washington Avenue, Newport News, Virginia 23607
- ---------------------------------------------- -----
Address of Principal Executive Offices Zip Code
(757) 380-2000
Registrant's Telephone Number, Including Area Code
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 X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Common Stock, par value $.01 per share: 34,918,303 shares as of July 15, 1997.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Part I--Financial Information
Newport News Shipbuilding Inc.
Statements of Earnings - Second Quarter..................................................... 2
Statements of Earnings - Six Months......................................................... 3
Consolidated Balance Sheets................................................................. 4
Statements of Cash Flows.................................................................... 5
Notes to Financial Statements............................................................... 6
Management's Discussion and Analysis of Financial Condition and Results of Operations....... 8
Part II--Other Information
Item 1. Legal Proceedings....................................................................... 11
Item 2. Changes in Securities................................................................... *
Item 3. Defaults Upon Senior Securities......................................................... *
Item 4. Submission of Matters to a Vote of Security Holders..................................... 11
Item 5. Other Information....................................................................... *
Item 6. Exhibits and Reports on Form 8-K........................................................ 11
</TABLE>
*No response to this item is included herein for the reason that it is
inapplicable or the answer to such item is negative.
THIS QUARTERLY REPORT ON FORM 10-Q SHOULD BE READ IN CONJUNCTION WITH THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1996 AND
ITS QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 26, 1997.
1
<PAGE>
PART I
FINANCIAL INFORMATION
NEWPORT NEWS SHIPBUILDING INC.
STATEMENTS OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
Second Quarter Ended
-----------------------------------
June 22, 1997 June 30, 1996
------------- -------------
Millions (Except Shares and Per Share Amounts) (Consolidated) (Combined)
<S> <C>
Revenues............................................................... $ 450 $ 477
Operating Costs and Expenses........................................... 413 437
-------- ---------
Operating Earnings..................................................... 37 40
Interest Expense, net of interest capitalized.......................... 13 8
-------- ---------
Earnings Before Income Taxes........................................... 24 32
Provision for Income Taxes............................................. 10 14
-------- ---------
Net Earnings........................................................... $ 14 $ 18
======== =========
Weighted Average Number of Common Shares Outstanding................... 34,809,914 N/A
========== =========
Net Earnings Per Common Share.......................................... $ .39 $ N/A
======== =========
Dividends Declared Per Common Share.................................... $ .04 $ N/A
======== =========
</TABLE>
The accompanying notes to unaudited financial statements are an integral
part of these statements of earnings.
2
<PAGE>
PART I
FINANCIAL INFORMATION
NEWPORT NEWS SHIPBUILDING INC.
STATEMENTS OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
-----------------------------------
June 22, 1997 June 30, 1996
------------- -------------
Millions (Except Shares and Per Share Amounts) (Consolidated) (Combined)
<S> <C>
Revenues............................................................... $ 853 $ 915
Operating Costs and Expenses........................................... 781 834
-------- ---------
Operating Earnings..................................................... 72 81
Interest Expense, net of interest capitalized.......................... 26 17
-------- ---------
Earnings Before Income Taxes........................................... 46 64
Provision for Income Taxes............................................. 19 27
-------- ---------
Net Earnings........................................................... $ 27 $ 37
======== =========
Weighted Average Number of Common Shares Outstanding................... 34,626,133 N/A
========== =========
Net Earnings Per Common Share.......................................... $ .77 $ N/A
======== =========
Dividends Declared Per Common Share.................................... $ .08 $ N/A
======== =========
</TABLE>
The accompanying notes to unaudited financial statements are an integral
part of these statements of earnings.
3
<PAGE>
NEWPORT NEWS SHIPBUILDING INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
June 22, 1997 December 31, 1996
------------- -----------------
<S> <C>
Millions (Except Share Amounts)
ASSETS
Current Assets
Cash and Cash Equivalents......................................... $ 41 $ 1
Accounts Receivable............................................... 137 182
Contracts in Process.............................................. 247 258
Inventory......................................................... 42 45
Other Current Assets.............................................. 7 5
--------- ---------
Total Current Assets.............................................. 474 491
--------- ---------
Noncurrent Assets
Property, Plant and Equipment, net................................ 815 836
Other Assets...................................................... 170 162
--------- ---------
Total Noncurrent Assets........................................... 985 998
--------- ---------
$ 1,459 $ 1,489
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Trade Accounts Payable............................................ $ 121 $ 123
Short-Term Debt................................................... 28 28
Deferred Income Taxes............................................. 9 4
Accrued Liabilities & Other....................................... 115 101
--------- ---------
Total Current Liabilities......................................... 273 256
--------- ---------
Noncurrent Liabilities
Long-Term Debt.................................................... 566 596
Deferred Income Taxes............................................. 184 183
Postretirement Benefits........................................... 110 109
Other Long-Term Liabilities....................................... 61 113
Commitments and Contingencies (See Note 3)........................
--------- ---------
Total Noncurrent Liabilities...................................... 921 1,001
--------- ---------
Stockholders' Equity
Common Stock, $.01 par value -
authorized 70,000,000 shares; issued
and outstanding 34,862,101 shares at June 22, 1997,
and 34,297,451 shares at December 31, 1996................... 1 1
Paid-In Capital................................................... 254 245
Retained Earnings / (Accumulated Deficit)......................... 10 (14)
--------- ---------
Total Stockholders' Equity........................................ 265 232
--------- ---------
$ 1,459 $ 1,489
========= =========
</TABLE>
The accompanying notes to unaudited financial statements are an integral
part of these balance sheets.
4
<PAGE>
NEWPORT NEWS SHIPBUILDING INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
-----------------------------------
June 22, 1997 June 30, 1996
------------- -------------
Millions (Consolidated) (Combined)
<S> <C>
Cash Flows from Operating Activities:
Net Earnings ........................................................... $ 27 $ 37
Adjustments to Reconcile Net Earnings Before Accounting Changes to
Net Cash Provided by Operating Activities -
Depreciation.................................................... 34 32
Deferred Income Taxes........................................... 14 (32)
Allocated Corporate Interest, net of tax........................ - 12
Changes in Components of Working Capital -
Decrease (Increase) in -
Accounts Receivable........................................ 45 (58)
Contracts in Process....................................... (49) (19)
Inventory.................................................. 3 5
Note Receivable............................................ - 18
Other Current Assets....................................... (3) (19)
Increase (Decrease) in -
Trade Accounts Payable..................................... (2) 11
Accrued Liabilities & Other................................ 6 (10)
Other, net...................................................... 5 22
------ -------
Net Cash Provided (Used) by Operating Activities......................... 80 (1)
------ -------
Cash Flows from Investing Activities:
Capital Expenditures..................................................... (12) (36)
Other.................................................................... (3) (9)
------ -------
Net Cash Used by Investing Activities.................................... (15) (45)
------ -------
Cash Flows from Financing Activities:
Cash Transfer from Former Parent......................................... - 45
Proceeds from Issuance of Common Stock................................... 8 -
Dividends Paid........................................................... (3) -
Payments on Long-Term Debt............................................... (6) -
Net Decrease in Revolving Credit Facility................................ (24) -
------ -------
Net Cash (Used) Provided by Financing Activities......................... (25) 45
------ -------
Net Increase (Decrease) in Cash and Cash Equivalents..................... 40 (1)
Cash and Cash Equivalents at Beginning of Period......................... 1 2
------ -------
Cash and Cash Equivalents at End of Period............................... $ 41 $ 1
====== =======
Cash Paid During the Period for Income Taxes............................. $ - $ 50
====== =======
Cash Paid During the Period for Interest................................. $ 28 $ -
====== =======
</TABLE>
The accompanying notes to unaudited financial statements are an integral
part of these statements of cash flows.
5
<PAGE>
NEWPORT NEWS SHIPBUILDING INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PREPARATION
Unless the context otherwise requires, the term "Company" refers to Newport News
Shipbuilding Inc. ("NNS") and its consolidated subsidiaries. Although certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to SEC rules and regulations, the Company believes
that the disclosures included herein are adequate to make the information
presented not misleading. Operating results for the three and six month periods
ended June 22, 1997, are not necessarily indicative of the results that may be
expected for the year ending December 31, 1997. These unaudited financial
statements should be read in conjunction with the audited financial statements
and notes thereto included in the Company's Annual Report on Form 10-K for the
year ended December 31, 1996.
During the prior year, the Company reported quarterly results on a
calendar-month basis consistent with its former parent. Beginning in 1997, the
Company is reporting quarterly results on an accounting-month basis.
In the opinion of the Company's management, the unaudited financial statements
contain all adjustments (consisting only of normal recurring accruals) necessary
for a fair presentation.
2. EARNINGS PER SHARE
Because there is no material dilution, net earnings per share is based upon the
weighted average number of common shares outstanding during the period. The
weighted average shares were 34.8 million and 34.6 million for the three and six
months ended June 22, 1997, respectively. Since the Company was a wholly-owned
subsidiary prior to being spun off by its former parent on December 11, 1996,
there are no comparable results for the prior periods.
3. COMMITMENTS AND CONTINGENCIES
Government Contracting
As a general practice within the defense industry, the Defense Contract Audit
Agency (the "DCAA") and other agencies continually review the cost accounting
practices of government contractors and conduct other various investigations. In
the course of those reviews, cost accounting and other issues are identified,
discussed and settled, or resolved through legal proceedings. The Company is
currently engaged in discussions on several cost accounting and other matters
the likely resolution of which, management believes, will not have a material
adverse effect on the Company's financial position or results of operations.
For example, the Company and its former parent have received letters from the
DCAA inquiring about certain aspects of the spinoff, including the disposition
of the former parent's retirement plan (the "FPRP"), which covers salaried
employees of the Company. In the event there is a determination that an amount
is due to the Government related to the FPRP, the Company and its former parent
will share the obligation for such amount, plus the amount of related defense
expenses, in the ratio of 20% and 80%, respectively. Also, the DCAA recently
conducted a post-award audit of the contract to build the aircraft carrier
Reagan. The audit concerned the Company's submission to the U.S. Navy of data
relating to labor and overhead costs in connection with the Reagan contract. A
draft audit report was presented to the Company on May 27, 1997 along with a
request for comments. The draft report is being reviewed and evaluated by the
Company. While the ultimate outcome of these issues are uncertain, and no
assurances can be given, it is not anticipated that they will have a material
adverse impact on the financial position or results of operations of the
Company.
6
<PAGE>
NEWPORT NEWS SHIPBUILDING INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
Significant Estimates
In 1994 and 1995, the Company entered into fixed price contracts to construct a
total of nine Double Eagle product tankers. In January 1997, the Company, one of
the original purchasers and Mobil Oil Corporation ("Mobil") entered into an
agreement whereby Mobil agreed to acquire the first ship. In accordance with the
terms of the agreement, the first ship is being modified at Mobil's expense for
use in the domestic market in compliance with the Merchant Marine Act of 1920,
as amended, and the Shipping Act of 1916, as amended (collectively, the "Jones
Act"). The Jones Act currently requires that all vessels transporting products
between U.S. ports be constructed by U.S. shipyards.
The first two of the nine ships are scheduled for delivery in 1997. The
remaining seven ships are scheduled for delivery in 1998 and 1999. The Company
has estimated that it will incur construction costs of approximately $102
million in excess of the fixed contract prices on these vessels and has
previously reserved this amount through charges against earnings. The Company
believes that additional excess costs may be incurred in the construction of
these vessels in the future, although the likelihood, timing and amount of such
additional costs cannot be determined at this time. Whether the Company incurs
such additional costs, and the amount, will depend on the level and timeliness
of success it achieves in improving vessel design producibility and implementing
a different building strategy going forward.
The Company intends to continue to review this program at the end of each
quarter, and the estimate of excess costs to be incurred on these contracts may
be revised upward at that time based on the facts then known to the Company.
Litigation
The Company is a defendant in matters of varying nature related to the normal
conduct of its business. In the opinion of management, the outcome of these
proceedings should not have a material adverse impact on the financial position
or results of operations of the Company.
7
<PAGE>
NEWPORT NEWS SHIPBUILDING INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
BUSINESS OVERVIEW
The Company's primary business is the design, construction, repair, overhaul and
refueling of nuclear-powered aircraft carriers and submarines for the U.S. Navy.
The Company also provides ongoing maintenance for other U.S. Navy vessels
through work in overhauling, lifecycle engineering and repair. The U.S.
Government accounted for approximately 89% and 94% of the Company's revenues for
the six months ended June 22, 1997 and June 30, 1996, respectively.
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Second Quarter Ended
- -------------------------------------------------------------------------------------------------------------------
1997 1996
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
Millions
Revenues...................................................... $ 450 $ 477
Operating Earnings............................................ 37 40
</TABLE>
Revenues for the quarter of $450 million were $27 million less than the level
reported for the same period in 1996. Aircraft carrier and commercial ship
construction volume grew in comparison to last year, but overall Construction
revenues dropped from $276 million in 1996 to $264 million in the second quarter
of 1997 due to the absence of submarine construction work. Additionally,
Overhaul & Repair revenues declined $33 million from $151 million to $118
million as a result of the Eisenhower carrier delivery in January of 1997.
Second quarter 1997 operating earnings decreased $3 million over the prior year
second quarter. The earnings decline reflects lower income contributions
associated with the completion of the Los Angeles-class submarine construction
program in 1996 and lower Overhaul & Repair income associated with the January
1997 delivery of the aircraft carrier Eisenhower, as well as favorable margins
in 1996 attributable to the mix of work and the maturity of several contracts.
Partially offsetting these decreases was the 1997 improvement in the
Construction area reflecting strong carrier contributions, while 1996 was
impacted by the recognition of commercial construction and Sealift losses.
<TABLE>
<CAPTION>
For the Six Months Ended
- -------------------------------------------------------------------------------------------------------------------
1997 1996
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
Millions
Revenues...................................................... $ 853 $ 915
Operating Earnings............................................ 72 81
</TABLE>
Revenues for the 1997 first half decreased $62 million to $853 million compared
with the 1996 period primarily due to the completion of the Los Angeles-class
submarine construction program in 1996 and less Overhaul & Repair activity,
partially offset by increased product tanker and carrier construction revenue.
First half 1997 operating earnings decreased $9 million over the prior year
first half primarily due to the same factors explained above for the second
quarter.
The Company's backlog was $3.1 billion at June 22, 1997, substantially all of
which was U.S. Navy-related.
8
<PAGE>
NEWPORT NEWS SHIPBUILDING INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
NEW ACCOUNTING STANDARDS
The SEC issued final rules (Release 33-7386) governing disclosure requirements
for financial instruments, including derivatives. These rules identify seven
items to be disclosed, when material. The Company has no material items to
report related to these disclosure requirements.
LIQUIDITY AND CAPITAL RESOURCES
CASH FLOWS
The following table reflects the summarized components of the Company's cash
flows for the periods indicated:
<TABLE>
<CAPTION>
For the Six Months Ended
- -------------------------------------------------------------------------------------------------------------------
1997 1996
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
Millions
Net cash provided (used) by operating activities.............. $ 80 $ (1)
Capital expenditures.......................................... (12) (36)
Other investing cash flows.................................... (3) (9)
------- -------
Subtotal...................................................... 65 (46)
Financing activities.......................................... (25) 45
------- -------
Net increase (decrease) in cash and cash equivalents.......... $ 40 $ (1)
======= =======
</TABLE>
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
The $81 million increase in 1997's comparative cash flows from operating
activities is primarily due to a decreased investment in working capital,
partially offset by lower operating earnings. The lower operating earnings are
attributable to the factors discussed above in "Results of Operations." The
reduction in working capital was due to normal timing fluctuations and
management initiatives as well as efforts by the Company to reduce inventories.
This decrease was partially offset by the fact that prices on certain commercial
construction contracts are not billable until delivery, and as such, attendant
contracts in process costs incurred during the first half of 1997 that were not
billable increased over the comparable period in 1996. Additionally, 1997
reflects lower tax payments due to the recognition of losses previously deferred
for tax purposes on commercial tankers and a net operating loss carry forward
from 1996.
CAPITAL EXPENDITURES
The $24 million decrease in capital expenditures for the quarter ended June 22,
1997 compared to the quarter ended June 30, 1996 is attributable to higher
expenditures related to capital improvement programs during the prior year. The
1996 capital improvement programs consisted principally of three separate
projects: (i) the development of a state-of-the-art automated steel cutting and
fabrication facility; (ii) the extension of a dry dock facility; and (iii) the
construction of the Carrier Refueling Complex. All three of these projects were
substantially complete at the end of 1996, thus explaining the current period
reduction in capital investments.
9
<PAGE>
NEWPORT NEWS SHIPBUILDING INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OTHER INVESTING CASH FLOWS
The 1997 and 1996 investing activities relate to an investment for a 49%
ownership interest in a vessel-owning limited partnership with a U.S. shipping
firm.
FINANCING ACTIVITIES
For the six months ended June 30, 1996, the Company received $45 million from
its former parent to meet working capital needs and fund capital expenditure
requirements. The financing activities in 1997 reflect the receipt of $8 million
from the issuance of common stock related to the Company's benefit plans. These
funds, as well as those generated from operations, enabled the Company to pay
off long-term debt and pay quarterly dividends of four cents per share.
DEBT AND INTEREST ALLOCATION
Results for the six months ended June 30, 1996 reflect the Company's former
parent's historical practice to incur indebtedness for its consolidated group at
the parent company level or at a limited number of subsidiaries, rather than at
the operating company level, and centrally manage various cash functions.
Consequently, corporate debt of the former parent and its related interest
expense was allocated to the Company based on the portion of their investment in
the Company which was deemed to be debt, generally based upon the ratio of the
Company's net assets to the former parent's consolidated net assets plus debt.
Interest expense was allocated at a rate equivalent to the weighted-average cost
of all corporate debt. The Company was also allocated tax benefits approximating
35% of the allocated pre-tax interest expense. Although interest expense, and
the related tax effects, were allocated to the Company for financial reporting
on a historical basis, the Company was not billed for these amounts.
CAUTIONARY STATEMENT FOR PURPOSES OF "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
This Quarterly Report on Form 10-Q contains forward-looking statements
concerning, among other things, the Company's prospects, developments and
business strategies. These forward-looking statements are identified by their
use of such terms and phrases as "intends," "estimates," "expects," "projects,"
"anticipates," "should," "believes" and "scheduled." The Company's actual
results may differ materially from the results discussed in the forward-looking
statements. Factors that might cause such a difference include (i) the factors
discussed in Note 3 to the Company's Financial Statements, (ii) the factors
addressed in Management's Discussion and Analysis of Financial Condition and
Results of Operations, and (iii) the following factors: (a) general political,
economic and competitive conditions; (b) initiatives to reduce the federal
budget deficit and reductions in defense spending; (c) reductions in the volume
of U.S. Navy contracts awarded to the Company; and (d) unanticipated events
affecting delivery and production schedules or design and manufacturing
processes, thus impairing the Company's efforts to deliver its products on time
or to reduce production costs and cycle time or realize in a timely manner some
or all of the benefits, if any, of such reductions.
10
<PAGE>
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Reference is made to Note 3, "Commitments and Contingencies" to the Company's
Financial Statements contained herein, which is incorporated in this Item 1 of
Part II by reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On May 16, 1997, the Company held its 1997 Annual Meeting of stockholders. In
addition to the re-election of three Class I directors, three proposals were
presented to the stockholders for their approval. The outcome of the voting on
the three proposals was as follows:
1. Proposal to approve an amendment to the Newport News Shipbuilding Stock
Ownership Plan to increase by 1,250,000 shares the number of shares of the
Company's common stock available for awards under the plan.
For Against Abstain Broker Non-votes
---------- --------- ------- ----------------
23,738,482 7,286,712 135,642 None
2. Proposal to approve an amendment to the Newport News Shipbuilding 1997
Employee Stock Purchase Plan to increase by 400,000 shares the number of
shares of the Company's common stock authorized for issuance under the
plan.
For Against Abstain Broker Non-votes
---------- --------- ------- ----------------
28,936,453 2,049,253 175,130 None
3. Proposal to ratify the appointment of Arthur Andersen LLP as the Company's
independent accountants for 1997.
For Against Abstain Broker Non-votes
---------- ------- ------- ----------------
31,029,598 73,059 58,179 None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
Exhibit 11.1 Statement Re Computation of Per Share Earnings - Second Quarter
Exhibit 11.2 Statement Re Computation of Per Share Earnings - Six Months Ended
Exhibit 27.1 Financial Data Schedule
Newport News Shipbuilding Inc. filed a current report on Form 8-K on April 1,
1997. The Form 8-K was filed to report the amendment of the Rights Agreement,
dated as of December 11, 1996, between the Company and First Chicago Trust
Company of New York, as Rights Agent, whereby the minimum percentage share
ownership at which the Company's Board of Directors, under circumstances
described in the Rights Agreement, can declare a shareholder an "Adverse Person"
was increased from 10% to 15% of the Company's issued and outstanding Common
Stock.
11
<PAGE>
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
Newport News Shipbuilding Inc.
David J. Anderson
By___________________________________
Senior Vice President and
Chief Financial Officer
Date: August 4, 1997
12
<PAGE>
- -----------------------------------------------------------------------------
Exhibit 11.1, 2nd Quarter
- -----------------------------------------------------------------------------
Form 10-Q, Commission File Number 1-12385
NEWPORT NEWS SHIPBUILDING INC.
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
Second Quarter
-----------------------------
1997 1996
------------- ------------
<S> <C>
Millions (Except Shares and Per Share Data)
NET EARNINGS:
Continuing Operations...................................................... $ 14 $ 18
Discontinued Operations.................................................... - -
------------- -------
$ 14 $ 18
============= =======
Weighted average common shares outstanding................................. 34,809,914 N/A
NET EARNINGS PER SHARE - PRIMARY:
Continuing Operations...................................................... $ .38 $ N/A
Discontinued Operations.................................................... - N/A
------------- -------
$ .38 $ N/A
============= =======
Common shares from above................................................... 34,809,914 N/A
Assumed exercise of options (treasury stock method)........................ 416,986 N/A
------------- -------
35,226,900 N/A
============= =======
NET EARNINGS PER SHARE - FULLY DILUTED:
Continuing Operations...................................................... $ .37 $ N/A
Discontinued Operations.................................................... - N/A
------------- -------
$ .37 $ N/A
============= =======
Common shares from above................................................... 34,809,914 N/A
Assumed exercise of options (treasury stock method)........................ 634,299 N/A
------------- -------
35,444,213 N/A
============= =======
</TABLE>
13
<PAGE>
Exhibit 11.2, Six Months Ended
Form 10-Q, Commission File Number 1-12385
NEWPORT NEWS SHIPBUILDING INC.
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
--------------------------
1997 1996
------------- ---------
<S> <C>
Millions (Except Shares and Per Share Data)
NET EARNINGS:
Continuing Operations...................................................... $ 27 $ 37
Discontinued Operations.................................................... - -
------------- -------
$ 27 $ 37
============= =======
Weighted average common shares outstanding................................. 34,626,133 N/A
NET EARNINGS PER SHARE - PRIMARY:
Continuing Operations...................................................... $ .76 $ N/A
Discontinued Operations.................................................... - N/A
------------- -------
$ .76 $ N/A
============= =======
Common shares from above................................................... 34,626,133 N/A
Assumed exercise of options (treasury stock method)........................ 450,207 N/A
------------- -------
35,076,340 N/A
============= =======
NET EARNINGS PER SHARE - FULLY DILUTED:
Continuing Operations...................................................... $ .75 $ N/A
Discontinued Operations.................................................... - N/A
------------- -------
$ .75 $ N/A
============= =======
Common shares from above................................................... 34,626,133 N/A
Assumed exercise of options (treasury stock method)........................ 634,299 N/A
------------- -------
35,260,432 N/A
============= =======
</TABLE>
14
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Newport News Shipbuilding Inc. Balance Sheet as of June 22, 1997,
and the related Statement of Earnings for the six months ended June
22, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-22-1997
<CASH> 41
<SECURITIES> 0
<RECEIVABLES> 137
<ALLOWANCES> 0
<INVENTORY> 42
<CURRENT-ASSETS> 474
<PP&E> 1,611
<DEPRECIATION> 796
<TOTAL-ASSETS> 1,459
<CURRENT-LIABILITIES> 273
<BONDS> 400
0
0
<COMMON> 1
<OTHER-SE> 264
<TOTAL-LIABILITY-AND-EQUITY> 1,459
<SALES> 853
<TOTAL-REVENUES> 853
<CGS> 781
<TOTAL-COSTS> 781
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 26
<INCOME-PRETAX> 46
<INCOME-TAX> 19
<INCOME-CONTINUING> 27
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 27
<EPS-PRIMARY> .76
<EPS-DILUTED> .75
</TABLE>
