<PAGE>
[LOGO]
Newport News Shipbuilding
Morgan Stanley Dean Witter
Aerospace & Defense Conference
September 2000
William P. Fricks
Chairman & CEO
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NNS At A Glance
Balanced Portfolio
Engineering
Fleet 15%
Services
42%
Construction
43%
Revenues = $2 Billion
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Financial Performance
Revenues Approaching $2 Billion
(millions)
1997 1,707
1998 1,862
1999 1,863
2000 consensus 1,950+
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Financial Performace
Solid EBIT Growth
(millions)
1997 155
1998 175
1999 193
2000 consensus 197+
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Financial Performance
EPS Showing Even Greater Growth
(dollars)
1997 1.62
1998 1.85
1999 2.31
2000 consensus 2.65+
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Financial Performance
1st Half Shows Continued Strong Trend
%
($ Millions) 1999 2000 Growth
------ ------ --------
Revenues $ 874 $1,001 15
EBIT 91 101 11
EPS (Diluted) 1.05 1.37 30
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Financial Performance
Excellent Earnings Quality
1998 1999 2000 1H
-------- -------- -------
EPS $ 1.85 $ 2.31 $ 1.36
Cash/Share 2.51 3.44 2.35
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Defense Budget
FY 2001 Defense Appropriations Act Supports Programs
FY 2001
Segment Budget
------- -------
CVN 77 4,100
CVN X 20
Virginia-Class 1,700
CVN Refueling & Overhaul 700
-------
Total NNS Programs 6,600
Total SCN 12,300
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Defense Budget
Doubling of Backlog in Next 6 Months
$ (billions)
1997 2.9
1998 3.8
1999 3.2
2000/2001 6+
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Program Review: Aircraft Carriers
New Construction
00 01 02 03 04 05 06 07 08 09 10
-- -- -- -- -- -- -- -- -- -- --
Reagan ================
CVN77 ===+++++++++++++++++++++++++++++++++
CVNX @@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@
=== Under Contract ++++Funds Appropriated @@@@@ Navy Schedule
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Program Review: Aircraft Carriers
CVN 77
[PHOTO] CVNX 1
New Island House [PHOTO] CVNX 2
New Warfare System
New Propulsion Plant [PHOTO]
Redesigned Hull Form
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Program Review: Submarines
New construction
00 01 02 03 04 05 06 07 08 09 10
-- -- -- -- -- -- -- -- -- -- --
Virginia =====================
Texas ==========================
Hawaii ===========================
NSSN 4 =============================
NSSN 5 +++++++++++++++++++++++++++++++++
NSSN 6 +++++++++++++++++++++++++++++++
NSSN 7 ++++++++++++++++++++++++++++
==== Under Contract ++++ Navy Schedule
<PAGE>
Program Review: Submarines
Force Level Is Well Below JCS Study
[GRAPH APPEARS HERE]
<PAGE>
Program Review: Fleet Services
Overhaul & Refuelings
00 01 02 03 04 05 06 07 08 09 10
-- -- -- -- -- -- -- -- -- -- --
Nimitz ======
Eisenhower +++++++++++++++
Vinson ++++++++++++++
Roosevelt ++++++
==== Under Contract ++++ Navy Schedule
<PAGE>
Program Review: Fleet Services
Expanding Geographic Coverage
SEATTLE *
[UNITED STATES MAP] * NORFOLK
SAN DIEGO *
*JACKSONVILLE
--------------------
* HOMEPORT
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Program Review: Fleet Services
Major Submarine Overhauls at Public Shipyards
<TABLE>
<CAPTION>
[GRAPH APPEARS HERE]
00 01 02 03 04 05 06 07 08 09 10 Total
-- -- -- -- -- -- -- -- -- -- -- -----
<S> <C>
Norfolk 2 2 1 1 1 1 1 9
Portsmouth, NH 2 2 1 2 1 1 2 1 1 1 2 16
Pearl Harbor 1 1 1 1 1 1 2 1 1 1 11
Puget Sound 1 1 1 1 1 1 2 1 9
Potential 688/SSGN 15
----
60
</TABLE>
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Program Review: Engineering
Engineering Program Support
Submarines 24%
CVN In-Service 9%
CVN Refueling and
Overhauling 34%
CVNX Design 14%
CVN Construction 19%
<PAGE>
Program Review: Engineering
New Carrier Integration Center
[PICTURE]
<PAGE>
Program Review: 10-Year Visibility
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Carrier Construction
Reagan @@@@@@@@@@@@@@@@@@@@
CVN 77 @@@@========================================
CVNX 1 +++++++++++++++++++++++++++++++++++++++++++++++++++
Submarine Construction
Virginia @@@@@@@@@@@@@@@@@@@@@@@@@@@
Texas @@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@
Hawaii @@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@
NSSN 4 @@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@
NSSN 5 +++++++++++++++++++++++++++++++++
NSSN 6 +++++++++++++++++++++++++++++++
NSSN 7 +++++++++++++++++++++++++
Carrier Refuelings
Nimitz @@@@@
Eisenhower +++++++++++++
Vinson ++++++++++++
Roosevelt ++++
@@@@ Under Contract ===== Fund Appropriated +++ Navy Schedule
<PAGE>
Summary
. Excellent 10-Year Visibility
. Upside For Submarine Construction
. Growth Opportunities In Fleet Services
. Significant Free Cash Flow
. Focused Effective Cash Redeployment
. Solid EPS Growth
<PAGE>
Performance Goals
1999 Goal
------- ------
Revenues ($ M) $ 1,863 ** 5% *
Operating Margin 10.4% ** 11%
Free Cash ($ M) $ 122 ** $120 *
EPS Growth $ 2.31 ** 12% *
* Annual Goal
** greater than
<PAGE>
Cautionary Statement for Purposes of "Safe Harbor" Provisions of the Private
Securities Litigation Reform Act of 1995
This written Presentation and the oral information provided in connection
therewith contain forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 concerning, among other things, the
Company's prospects, developments and business strategies for its operations,
all of which are subject to risks and uncertainties. These forward-looking
statements are identified by their use of such terms and phrases as "intend,"
"intends," "intended," ""goal," "estimate," "estimates," "expect," "expects,"
"expected," "project," "projects," "projected," "projections," "plans,"
"anticipate," "anticipates," "anticipated," "should," "designed to,"
"foreseeable future," "believe," "believes," and "scheduled."
When a forward-looking statement includes a statement of the assumptions or
basis underlying the forward-looking statement, the Company cautions that, while
it believes such assumptions or basis to be reasonable and makes them in good
faith, assumed facts or basis almost always vary from actual results, and the
differences between assumed facts or basis and actual results can be material,
depending upon the circumstances. Where, in any forward-looking statement, the
Company or its management expresses an expectation or belief as to future
results, such expectation or belief is expressed in good faith and believed to
have a reasonable basis, but there can be no assurance that the statement of
expectation or belief will result or be achieved or accomplished.
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: (a) the general political, economic and competitive conditions in the
United States and other markets where the Company operates; (b) initiatives to
reduce the federal budget deficit and reductions in defense spending; (c)
reductions in the U.S. Navy contracts awarded to the Company; (d) unanticipated
events or circumstances adversely affecting design and manufacturing processes,
which impair or prevent the Company's efforts to reduce production costs and
cycle time, or its ability to realize, or realize in a timely manner, some or
all of such cost and time savings; (e) changes in capital availability or costs,
such as changes in interest rates, market perceptions of the industry in which
the Company operates, or security ratings; (f) employee workforce factors,
including issues relating to collective bargaining agreements or work stoppages;
and (g) authoritative generally accepted accounting principles or policy changes
from such standard-setting bodies as the Financial Accounting Standards Board
and the Securities and Exchange Commission.
