Artificial Intelligence
HII Reports Third Quarter 2022 Results
- Revenues were $2.6 billion in the quarter
- Net earnings of $138 million or $3.44 diluted earnings per share
- Narrows FY22 revenue guidance ranges
- Reaffirms shipbuilding operating margin1 guidance, revises Mission Technologies operating margin guidance
- Increases FY22 free cash flow1 guidance and updates for current R&D tax treatment
NEWPORT NEWS, Va., Nov. 03, 2022 (GLOBE NEWSWIRE) — HII (NYSE: HII) reported third quarter 2022 revenues of $2.6 billion, up 12.3% from the third quarter of 2021, primarily driven by revenue attributable to the acquisition of Alion Science and Technology (Alion) in the third quarter of 2021, as well as revenue growth at Newport News Shipbuilding.
Operating income in the third quarter of 2022 was $131 million and operating margin was 5.0%, compared to $118 million and 5.0%, respectively, in the third quarter of 2021. The increase in operating income was primarily driven by favorable changes to non-current state income taxes and operating FAS/CAS adjustment compared to the prior year, as well as higher segment operating income1.
Segment operating income1 in the third quarter of 2022 was $166 million and segment operating margin1 was 6.3%, compared to $163 million and 7.0%, respectively, in the third quarter of 2021. The increase in segment operating income1 was driven primarily by improved results at Newport News Shipbuilding.
Net earnings in the quarter were $138 million, compared to $147 million in the third quarter of 2021. Diluted earnings per share in the quarter was $3.44, compared to $3.65 in the third quarter of 2021. The decrease in diluted earnings per share was driven by a significant tax benefit in the prior year, as well as negative impacts related to equity investments in the current quarter, partially offset by a more favorable non-operating retirement benefit in the current quarter.
Net cash used in operating activities in the quarter was $19 million and free cash flow1 was negative $96 million, compared to cash provided by operating activities of $350 million and free cash flow1 of $277 million in the third quarter of 2021.
New contract awards in the third quarter of 2022 were approximately $2.1 billion, bringing total backlog to approximately $46.7 billion as of September 30, 2022.
“Notwithstanding a continued challenging economic environment, we remain focused on consistent shipbuilding program execution and capturing contract awards at our Mission Technologies division,” said Chris Kastner, HII’s president and CEO. “We are confident in the positioning of the business for long-term value creation given the tremendous volume of shipbuilding work we have secured in backlog and a Mission Technologies division that is poised for growth in markets of critical importance to our customers.”
1Non-GAAP measures. See Exhibit B for definitions and reconciliations.
Results of Operations
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||
| September 30 | September 30 | |||||||||||||||||||||
| ($ in millions, except per share amounts) | 2022 | 2021 | $ Change | % Change | 2022 | 2021 | $ Change | % Change | ||||||||||||||
| Sales and service revenues | $ | 2,626 | $ | 2,338 | $ | 288 | 12.3 | % | $ | 7,864 | $ | 6,847 | $ | 1,017 | 14.9 | % | ||||||
| Operating income | 131 | 118 | 13 | 11.0 | % | 460 | 393 | 67 | 17.0 | % | ||||||||||||
| Operating margin % | 5.0 | % | 5.0 | % | (6) bps | 5.8 | % | 5.7 | % | 11 bps | ||||||||||||
| Segment operating income1 | 166 | 163 | 3 | 1.8 | % | 567 | 523 | 44 | 8.4 | % | ||||||||||||
| Segment operating margin %1 | 6.3 | % | 7.0 | % | (65) bps | 7.2 | % | 7.6 | % | (43) bps | ||||||||||||
| Net earnings | 138 | 147 | (9 | ) | (6.1 | )% | 456 | 424 | 32 | 7.5 | % | |||||||||||
| Diluted earnings per share | $ | 3.44 | $ | 3.65 | $ | (0.21 | ) | (5.8 | )% | $ | 11.37 | $ | 10.52 | $ | 0.85 | 8.1 | % | |||||
| 1 Non-GAAP measures that exclude non-segment factors affecting operating income. See Exhibit B for definitions and reconciliations. | ||||||||||||||||||||||
Segment Operating Results
Ingalls Shipbuilding
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| September 30 | September 30 | ||||||||||||||||||||||
| ($ in millions) | 2022 | 2021 | $ Change | % Change | 2022 | 2021 | $ Change | % Change | |||||||||||||||
| Revenues | $ | 623 | $ | 628 | $ | (5 | ) | (0.8 | )% | $ | 1,912 | $ | 1,947 | $ | (35 | ) | (1.8 | )% | |||||
| Segment operating income1 | 50 | 62 | (12 | ) | (19.4 | )% | 242 | 233 | 9 | 3.9 | % | ||||||||||||
| Segment operating margin %1 | 8.0 | % | 9.9 | % | (185) bps | 12.7 | % | 12.0 | % | 69 bps | |||||||||||||
| 1 Non-GAAP measures. See Exhibit B for definitions and reconciliations. | |||||||||||||||||||||||
Ingalls Shipbuilding revenues for the third quarter of 2022 were $623 million, a decrease of $5 million, or 0.8%, from the same period in 2021, primarily driven by lower revenues in the Legend-class National Security Cutter (NSC) program and amphibious assault ships, partially offset by higher revenues in surface combatants. Revenues on the NSC program decreased due to lower volumes on Friedman (NSC 11) and Calhoun (NSC 10). Revenues on amphibious assault ships decreased due to lower volumes on USS Fort Lauderdale (LPD 28), partially offset by higher volumes on LHA 9 (unnamed). Revenues on surface combatants increased due to higher volumes on Thad Cochran (DDG 135) and Telesforo Trinidad (DDG 139), partially offset by lower volumes on Frank E. Petersen Jr. (DDG 121), Jeremiah Denton (DDG 129) and Ted Stevens (DDG 128).
Ingalls Shipbuilding segment operating income1 for the third quarter of 2022 was $50 million, a decrease of $12 million from the same period in 2021. Segment operating margin1 in the third quarter of 2022 was 8.0%, compared to 9.9% in the same period last year. The decreases were primarily driven by lower risk retirement on Ted Stevens (DDG 128) and USS Delbert D. Black (DDG 119) related to a capital expenditure incentive received in the third quarter of 2021, partially offset by higher risk retirement on USS Portland (LPD 27).
Key Ingalls Shipbuilding milestones for the quarter:
- Awarded a design engineering contract for the next-generation guided-missile destroyer – DDG(X)
- Authenticated the keel of guided-missile destroyer Jeremiah Denton (DDG 129)
- Awarded a contract to begin combat systems availability for the Zumwalt-class destroyer, Lyndon B. Johnson (DDG 1002)
- Began fabrication of amphibious transport dock Pittsburgh (LPD 31)
1Non-GAAP measures. See Exhibit B for definitions and reconciliations.
Newport News Shipbuilding
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||
| September 30 | September 30 | ||||||||||||||||||||
| ($ in millions) | 2022 | 2021 | $ Change | % Change | 2022 | 2021 | $ Change | % Change | |||||||||||||
| Revenues | $ | 1,445 | $ | 1,354 | $ | 91 | 6.7 | % | $ | 4,268 | $ | 4,124 | $ | 144 | 3.5 | % | |||||
| Segment operating income1 | 102 | 88 | 14 | 15.9 | % | 277 | 257 | 20 | 7.8 | % | |||||||||||
| Segment operating margin %1 | 7.1 | % | 6.5 | % | 56 bps | 6.5 | % | 6.2 | % | 26 bps | |||||||||||
| 1 Non-GAAP measures. See Exhibit B for definitions and reconciliations. | |||||||||||||||||||||
Newport News Shipbuilding revenues for the third quarter of 2022 were $1.4 billion, an increase of $91 million, or 6.7%, from the same period in 2021, primarily driven by higher revenues in naval nuclear support services, submarines and aircraft carriers. Naval nuclear support services revenues increased primarily as a result of higher volumes in submarine and carrier fleet support services. Submarine revenues increased due to higher volumes on the Columbia-class submarine program and Block V boats of the Virginia-class submarine (VCS) program, partially offset by lower volumes on submarine services and Block IV boats of the VCS program. Aircraft carrier revenues increased primarily as a result of higher volumes on the refueling and complex overhaul (RCOH) of USS John C. Stennis (CVN 74), partially offset by lower volumes on the RCOH of USS George Washington (CVN 73).
Newport News Shipbuilding segment operating income1 for the third quarter of 2022 was $102 million, an increase of $14 million from the same period in 2021. Segment operating margin1 in the third quarter of 2022 was 7.1%, compared to 6.5% in the same period last year. The increases were primarily due to contract incentives on the Columbia-class submarine program, partially offset by lower risk retirement on the VCS program.
Key Newport News Shipbuilding milestones for the quarter:
- Achieved pressure hull complete on Virginia-class submarine Massachusetts (SSN 798)
- Celebrated the ceremonial keel laying of aircraft carrier Enterprise (CVN 80)
- Reached approximate 98% completion of the RCOH of USS George Washington (CVN 73)
- Reached approximate 87% completion of John F. Kennedy (CVN 79)
- Turned over the 1,000th compartment of 2,615 total spaces to the crew of John F. Kennedy (CVN 79)
1 Non-GAAP measures. See Exhibit B for definitions and reconciliations.
Mission Technologies
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||
| September 30 | September 30 | ||||||||||||||||||||
| ($ in millions) | 2022 | 2021 | $ Change | % Change | 2022 | 2021 | $ Change | % Change | |||||||||||||
| Revenues | $ | 595 | $ | 394 | $ | 201 | 51.0 | % | $ | 1,785 | $ | 890 | $ | 895 | 100.6 | % | |||||
| Segment operating income1 | 14 | 13 | $ | 1 | 7.7 | % | 48 | 33 | $ | 15 | 45.5 | % | |||||||||
| Segment operating margin %1 | 2.4 | % | 3.3 | % | (95) bps | 2.7 | % | 3.7 | % | (102) bps | |||||||||||
| 1 Non-GAAP measures. See Exhibit B for definitions and reconciliations. | |||||||||||||||||||||
Mission Technologies revenues for the third quarter of 2022 were $595 million, an increase of $201 million from the same period in 2021. The increase was primarily due to higher volumes in Defense & Federal Solutions (DFS) attributable to the acquisition of Alion, which was completed on August 19, 2021.
Mission Technologies segment operating income1 for the third quarter of 2022 was $14 million, compared to $13 million in the third quarter of 2021. Segment operating margin1 in the third quarter of 2022 was 2.4%, compared to 3.3% in the same period last year. The increase in segment operating income1 was primarily driven by the acquisition of Alion in the third quarter of 2021 and higher equity income, partially offset by higher amortization of purchased intangible assets in 2022.
The decrease in segment operating margin1 was primarily driven by approximately $24 million of amortization of Alion related purchased intangible assets in the third quarter of 2022, compared to approximately $8 million in the same period last year. Mission Technologies EBITDA margin1 in the third quarter of 2022 was 8.4%.
Key Mission Technologies milestones for the quarter:
- Awarded a task order to provide spectrum assessments across technical, policy and strategy areas for the U.S. DoD Chief Information Officer
- Awarded an $826 million task order to provide Decisive Mission Actions and Technology Services (DMATS) to U.S. DoD
- Awarded a $127 million task order to support the Defense Security Cooperation Agency (DSCA) to perform research, development, test and evaluation of emerging technologies
1Non-GAAP measures. See Exhibit B for definitions and reconciliations.
2022 Financial Outlook1
- Expect FY22 revenue at lower end of previous guidance ranges given challenging labor environment and timing of material delivery
- Expect FY22 shipbuilding revenue2 between $8.2 and $8.3 billion, shipbuilding operating margin2 between 8.0% and 8.1%
- Expect FY22 Mission Technologies revenue of approximately $2.4 billion, segment operating margin2 of approximately 2.3%; and Mission Technologies EBITDA margin2 of approximately 8.3%
- Expect FY22 free cash flow2 of approximately $350 million4 based on current tax law
- Expect cumulative FY20-FY24 free cash flow2 of approximately $2.9 billion4
| Prior Outlook |
Current Outlook |
|||
| Shipbuilding Revenue2 | $8.2B – $8.5B | $8.2B – $8.3B | ||
| Shipbuilding Operating Margin2 | 8.0% – 8.1% | 8.0% – 8.1% | ||
| Mission Technologies Revenue | $2.4B – $2.6B | ~$2.4B | ||
| Mission Technologies Segment Operating Margin2 | ~2.5% | ~2.3% | ||
| Mission Technologies EBITDA Margin2 | 8.0% – 8.5% | ~8.3% | ||
| Operating FAS/CAS Adjustment | ($143M) | ($143M) | ||
| Non-current State Income Tax Expense3 | ($5M) | ($5M) | ||
| Interest Expense | ($102M) | ($106M) | ||
| Non-operating Retirement Benefit | $273M | $276M | ||
| Effective Tax Rate | ~21% | ~19% | ||
| Depreciation & Amortization | $365M | $365M | ||
| Capital Expenditures | 2.5% – 3.0% of Sales |
2.5% – 3.0% of Sales |
||
| Free Cash Flow2 based on current tax law4 | $200M – $250M | ~$350M |
1The financial outlook, expectations and other forward looking statements provided by the company for 2022 and beyond reflect the company’s judgment based on the information available at the time of this release.
2 Non-GAAP measures. See Exhibit B for definitions. Reconciliations of forward–looking GAAP and non–GAAP measures are not provided because we are unable to provide such reconciliations without unreasonable effort due to the uncertainty and inherent difficulty of predicting the future occurrence and financial impact of certain elements of GAAP and non-GAAP measures.
3 Outlook is based on current tax law. Repeal or deferral of provisions requiring capitalization of R&D expenditures would result in elevated non-current state income tax expense.
4 Outlook is based on current tax law and assumes the provisions requiring capitalization of R&D expenditures for tax purposes is not deferred or repealed.
About Huntington Ingalls Industries
HII is a global, all-domain defense partner, building and delivering the world’s most powerful, survivable naval ships and technologies that safeguard our seas, sky, land, space and cyber. As America’s largest shipbuilder and with a more than 135-year history of advancing U.S. national defense, we are united by our mission in service of the heroes who protect our freedom. HII’s diverse workforce includes skilled tradespeople; artificial intelligence, machine learning (AI/ML) experts; engineers; technologists; scientists; logistics experts; and business professionals. Headquartered in Virginia, HII’s workforce is 43,000 strong. For more information, please visit www.HII.com.
Conference Call Information
HII will webcast its earnings conference call at 9 a.m. Eastern time today. A live audio broadcast of the conference call and supplemental presentation will be available on the investor relations page of the company’s website: www.HII.com. A telephone replay of the conference call will be available from noon today through Thursday, November 10th by calling (866) 813-9403 or (929) 458-6194 and using access code 083595.
Cautionary Statement Regarding Forward-Looking Statements
Statements in this release, other than statements of historical fact, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You can generally identify forward-looking statements by words such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” and similar words or phrases or the negative of these words or phrases. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. Although we believe the expectations reflected in the forward-looking statements are reasonable when made, we cannot guarantee future results, levels of activity, performance, or achievements. There are a number of important factors that could cause our actual results to differ materially from the results anticipated by our forward-looking statements, which include, but are not limited to: changes in government and customer priorities and requirements (including government budgetary constraints, shifts in defense spending, and changes in customer short-range and long-range plans); our ability to estimate our future contract costs, including cost increases due to inflation, and perform our contracts effectively; changes in procurement processes and government regulations and our ability to comply with such requirements; our ability to deliver our products and services at an affordable life cycle cost and compete within our markets; natural and environmental disasters and political instability; our ability to execute our strategic plan, including with respect to share repurchases, dividends, capital expenditures and strategic acquisitions; adverse economic conditions in the United States and globally; health epidemics, pandemics and similar outbreaks, including the COVID-19 pandemic, and the impacts of vaccination mandates on our workforce; our ability to attract and retain a qualified workforce; disruptions impacting the global supply, including those attributable to the ongoing COVID-19 pandemic and the ongoing conflict between Russia and Ukraine; our ability to effectively integrate the operations of Alion Science and Technology into our business; changes in key estimates and assumptions regarding our pension and retiree health care costs; security threats, including cyber security threats, and related disruptions; and other risk factors discussed in our filings with the U.S. Securities and Exchange Commission. There may be other risks and uncertainties that we are unable to predict at this time or that we currently do not expect to have a material adverse effect on our business, and we undertake no obligation to update any forward-looking statements. You should not place undue reliance on any forward-looking statements that we may make. This release also contains non-GAAP financial measures and includes a GAAP reconciliation of these financial measures. Non-GAAP financial measures should not be construed as being more important than comparable GAAP measures.
Exhibit A: Financial Statements
HUNTINGTON INGALLS INDUSTRIES, INC.
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) | 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Sales and service revenues | ||||||||||||||||
| Product sales | $ | 1,774 | $ | 1,701 | $ | 5,327 | $ | 5,185 | ||||||||
| Service revenues | 852 | 637 | 2,537 | 1,662 | ||||||||||||
| Sales and service revenues | 2,626 | 2,338 | 7,864 | 6,847 | ||||||||||||
| Cost of sales and service revenues | ||||||||||||||||
| Cost of product sales | 1,517 | 1,453 | 4,511 | 4,402 | ||||||||||||
| Cost of service revenues | 747 | 554 | 2,252 | 1,450 | ||||||||||||
| Income from operating investments, net | 13 | 11 | 47 | 31 | ||||||||||||
| Other income and gains, net | — | 2 | — | 3 | ||||||||||||
| General and administrative expenses | 244 | 226 | 688 | 636 | ||||||||||||
| Operating income | 131 | 118 | 460 | 393 | ||||||||||||
| Other income (expense) | ||||||||||||||||
| Interest expense | (27 | ) | (24 | ) | (79 | ) | (63 | ) | ||||||||
| Non-operating retirement benefit | 71 | 45 | 209 | 135 | ||||||||||||
| Other, net | (13 | ) | 2 | (30 | ) | 10 | ||||||||||
| Earnings before income taxes | 162 | 141 | 560 | 475 | ||||||||||||
| Federal and foreign income tax expense (benefit) | 24 | (6 | ) | 104 | 51 | |||||||||||
| Net earnings | $ | 138 | $ | 147 | $ | 456 | $ | 424 | ||||||||
| Basic earnings per share | $ | 3.44 | $ | 3.65 | $ | 11.37 | $ | 10.52 | ||||||||
| Weighted-average common shares outstanding | 40.1 | 40.3 | 40.1 | 40.3 | ||||||||||||
| Diluted earnings per share | $ | 3.44 | $ | 3.65 | $ | 11.37 | $ | 10.52 | ||||||||
| Weighted-average diluted shares outstanding | 40.1 | 40.3 | 40.1 | 40.3 | ||||||||||||
| Dividends declared per share | $ | 1.18 | $ | 1.14 | $ | 3.54 | $ | 3.42 | ||||||||
| Net earnings from above | $ | 138 | $ | 147 | $ | 456 | $ | 424 | ||||||||
| Other comprehensive income (loss) | ||||||||||||||||
| Change in unamortized benefit plan costs | 12 | 43 | (61 | ) | 102 | |||||||||||
| Other | (1 | ) | (1 | ) | (2 | ) | 1 | |||||||||
| Tax benefit (expense) for items of other comprehensive income | (3 | ) | (11 | ) | 16 | (26 | ) | |||||||||
| Other comprehensive income (loss), net of tax | 8 | 31 | (47 | ) | 77 | |||||||||||
| Comprehensive income | $ | 146 | $ | 178 | $ | 409 | $ | 501 | ||||||||
HUNTINGTON INGALLS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
| ($ in millions) | September 30, 2022 |
December 31, 2021 |
||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 117 | $ | 627 | ||||
| Accounts receivable, net of allowance for doubtful accounts of $2 million as of 2022 and $9 million as of 2021 | 721 | 433 | ||||||
| Contract assets | 1,564 | 1,310 | ||||||
| Inventoried costs | 174 | 161 | ||||||
| Income taxes receivable | 180 | 209 | ||||||
| Prepaid expenses and other current assets | 61 | 50 | ||||||
| Total current assets | 2,817 | 2,790 | ||||||
| Property, Plant, and Equipment, net of accumulated depreciation of $2,283 million as of 2022 and $2,149 million as of 2021 | 3,136 | 3,107 | ||||||
| Other Assets | ||||||||
| Operating lease assets | 236 | 241 | ||||||
| Goodwill | 2,618 | 2,628 | ||||||
| Other intangible assets, net of accumulated amortization of $846 million as of 2022 and $741 million as of 2021 | 1,054 | 1,159 | ||||||
| Pension plan assets | 355 | 281 | ||||||
| Miscellaneous other assets | 399 | 421 | ||||||
| Total other assets | 4,662 | 4,730 | ||||||
| Total assets | $ | 10,615 | $ | 10,627 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current Liabilities | ||||||||
| Trade accounts payable | 539 | 603 | ||||||
| Accrued employees’ compensation | 355 | 361 | ||||||
| Current portion of long-term debt | 399 | — | ||||||
| Current portion of postretirement plan liabilities | 137 | 137 | ||||||
| Current portion of workers’ compensation liabilities | 241 | 252 | ||||||
| Contract liabilities | 768 | 651 | ||||||
| Other current liabilities | 453 | 423 | ||||||
| Total current liabilities | 2,892 | 2,427 | ||||||
| Long-term debt | 2,605 | 3,298 | ||||||
| Pension plan liabilities | 394 | 351 | ||||||
| Other postretirement plan liabilities | 360 | 368 | ||||||
| Workers’ compensation liabilities | 486 | 506 | ||||||
| Long-term operating lease liabilities | 202 | 194 | ||||||
| Deferred tax liabilities | 274 | 313 | ||||||
| Other long-term liabilities | 354 | 362 | ||||||
| Total liabilities | 7,567 | 7,819 | ||||||
| Commitments and Contingencies | ||||||||
| Stockholders’ Equity | ||||||||
| Common stock, $0.01 par value; 150 million shares authorized; 53.5 million shares issued and 39.9 million shares outstanding as of September 30, 2022, and 53.4 million shares issued and 40 million shares outstanding as of December 31, 2021 | 1 | 1 | ||||||
| Additional paid-in capital | 2,014 | 1,998 | ||||||
| Retained earnings | 4,203 | 3,891 | ||||||
| Treasury stock | (2,200 | ) | (2,159 | ) | ||||
| Accumulated other comprehensive loss | (970 | ) | (923 | ) | ||||
| Total stockholders’ equity | 3,048 | 2,808 | ||||||
| Total liabilities and stockholders’ equity | $ | 10,615 | $ | 10,627 | ||||
HUNTINGTON INGALLS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| Nine Months Ended September 30 | |||||||
| ($ in millions) | 2022 | 2021 | |||||
| Operating Activities | |||||||
| Net earnings | $ | 456 | $ | 424 | |||
| Adjustments to reconcile to net cash provided by (used in) operating activities | |||||||
| Depreciation | 158 | 154 | |||||
| Amortization of purchased intangibles | 105 | 48 | |||||
| Amortization of debt issuance costs | 6 | 6 | |||||
| Provision for doubtful accounts | (7 | ) | — | ||||
| Stock-based compensation | 28 | 19 | |||||
| Deferred income taxes | (14 | ) | 74 | ||||
| Loss (gain) on investments in marketable securities | 34 | (12 | ) | ||||
| Change in | |||||||
| Accounts receivable | (281 | ) | 52 | ||||
| Contract assets | (254 | ) | (179 | ) | |||
| Inventoried costs | (13 | ) | (7 | ) | |||
| Prepaid expenses and other assets | (4 | ) | (116 | ) | |||
| Accounts payable and accruals | 48 | 93 | |||||
| Retiree benefits | (99 | ) | (73 | ) | |||
| Other non-cash transactions, net | 2 | 6 | |||||
| Net cash provided by operating activities | 165 | 489 | |||||
| Investing Activities | |||||||
| Capital expenditures | |||||||
| Capital expenditure additions | (179 | ) | (216 | ) | |||
| Grant proceeds for capital expenditures | — | 11 | |||||
| Acquisitions of businesses, net of cash received | — | (1,636 | ) | ||||
| Investment in affiliates | (5 | ) | (22 | ) | |||
| Proceeds from disposition of business | — | 20 | |||||
| Other investing activities, net | 6 | 1 | |||||
| Net cash used in investing activities | (178 | ) | (1,842 | ) | |||
| Financing Activities | |||||||
| Proceeds from issuance of long-term debt | — | 1,650 | |||||
| Repayment of long-term debt | (300 | ) | — | ||||
| Debt issuance costs | — | (22 | ) | ||||
| Dividends paid | (142 | ) | (138 | ) | |||
| Repurchases of common stock | (41 | ) | (87 | ) | |||
| Employee taxes on certain share-based payment arrangements | (14 | ) | (7 | ) | |||
| Net cash (used in) provided by financing activities | (497 | ) | 1,396 | ||||
| Change in cash and cash equivalents | (510 | ) | 43 | ||||
| Cash and cash equivalents, beginning of period | 627 | 512 | |||||
| Cash and cash equivalents, end of period | $ | 117 | $ | 555 | |||
| Supplemental Cash Flow Disclosure | |||||||
| Cash paid for income taxes (net of refunds) | $ | 107 | $ | 31 | |||
| Cash paid for interest | $ | 61 | $ | 39 | |||
| Non-Cash Investing and Financing Activities | |||||||
| Capital expenditures accrued in accounts payable | $ | 5 | $ | 4 | |||
Exhibit B: Non-GAAP Measures Definitions & Reconciliations
We make reference to “segment operating income,” “segment operating margin,” “shipbuilding revenue,” “shipbuilding operating margin,” “Mission Technologies EBITDA margin” and “free cash flow.”
We internally manage our operations by reference to segment operating income and segment operating margin, which are not recognized measures under GAAP. When analyzing our operating performance, investors should use segment operating income and segment operating margin in addition to, and not as alternatives for, operating income and operating margin or any other performance measure presented in accordance with GAAP. They are measures that we use to evaluate our core operating performance. We believe that segment operating income and segment operating margin reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. We believe these measures are used by investors and are a useful indicator to measure our performance. Because not all companies use identical calculations, our presentation of segment operating income and segment operating margin may not be comparable to similarly titled measures of other companies.
Shipbuilding revenue, shipbuilding operating margin and Mission Technologies EBITDA margin are not measures recognized under GAAP. They are measures that we use to evaluate our core operating performance. When analyzing our operating performance, investors should use shipbuilding revenue, shipbuilding operating margin and Mission Technologies EBITDA margin in addition to, and not as alternatives for, operating income and operating margin or any other performance measure presented in accordance with GAAP. We believe that shipbuilding revenue, shipbuilding operating margin and Mission Technologies EBITDA margin reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. We believe these measures are used by investors and are a useful indicator to measure our performance.
Free cash flow is not a measure recognized under GAAP. Free cash flow has limitations as an analytical tool and should not be considered in isolation from, or as a substitute for net earnings as a measure of our performance or net cash provided or used by operating activities as a measure of our liquidity. We believe free cash flow is an important measure for our investors because it provides them insight into our current and period-to-period performance and our ability to generate cash from continuing operations. We also use free cash flow as a key operating metric in assessing the performance of our business and as a key performance measure in evaluating management performance and determining incentive compensation. Free cash flow may not be comparable to similarly titled measures of other companies.
Reconciliations of forward-looking GAAP and non-GAAP measures are not provided because we are unable to provide such reconciliations without unreasonable effort due to the uncertainty and inherent difficulty of predicting the future occurrence and financial impact of certain elements of GAAP and non-GAAP measures.
Segment operating income is defined as operating income for the relevant segment(s) before the Operating FAS/CAS Adjustment and non-current state income taxes.
Segment operating margin is defined as segment operating income as a percentage of sales and service revenues.
Shipbuilding revenue is defined as the combined sales and service revenues from our Newport News Shipbuilding segment and Ingalls Shipbuilding segment.
Shipbuilding operating margin is defined as the combined segment operating income of our Newport News Shipbuilding segment and Ingalls Shipbuilding segment as a percentage of shipbuilding revenue.
Mission Technologies EBITDA margin is defined as Mission Technologies segment operating income before interest expense, income taxes, depreciation, and amortization as a percentage of Mission Technologies revenues.
Free cash flow is defined as net cash provided by (used in) operating activities less capital expenditures net of related grant proceeds.
Operating FAS/CAS Adjustment is defined as the difference between the service cost component of our pension and other postretirement expense determined in accordance with GAAP (FAS) and our pension and other postretirement expense under U.S. Cost Accounting Standards (CAS).
Non-current state income taxes are defined as deferred state income taxes, which reflect the change in deferred state tax assets and liabilities and the tax expense or benefit associated with changes in state uncertain tax positions in the relevant period. These amounts are recorded within operating income. Current period state income tax expense is charged to contract costs and included in cost of sales and service revenues in segment operating income.
We present financial measures adjusted for the Operating FAS/CAS Adjustment and non-current state income taxes to reflect the company’s performance based upon the pension costs and state tax expense charged to our contracts under CAS. We use these adjusted measures as internal measures of operating performance and for performance-based compensation decisions.
Reconciliations of Segment Operating Income and Segment Operating Margin
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30 | September 30 | |||||||||||||||
| ($ in millions) | 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Ingalls revenues | $ | 623 | $ | 628 | $ | 1,912 | $ | 1,947 | ||||||||
| Newport News revenues | 1,445 | 1,354 | 4,268 | 4,124 | ||||||||||||
| Mission Technologies revenues | 595 | 394 | 1,785 | 890 | ||||||||||||
| Intersegment eliminations | (37 | ) | (38 | ) | (101 | ) | (114 | ) | ||||||||
| Sales and Service Revenues | 2,626 | 2,338 | 7,864 | 6,847 | ||||||||||||
| Operating Income | 131 | 118 | 460 | 393 | ||||||||||||
| Operating FAS/CAS Adjustment | 36 | 41 | 108 | 118 | ||||||||||||
| Non-current state income taxes | (1 | ) | 4 | (1 | ) | 12 | ||||||||||
| Segment Operating Income | 166 | 163 | 567 | 523 | ||||||||||||
| As a percentage of sales and service revenues | 6.3 | % | 7.0 | % | 7.2 | % | 7.6 | % | ||||||||
| Ingalls segment operating income | 50 | 62 | 242 | 233 | ||||||||||||
| As a percentage of Ingalls revenues | 8.0 | % | 9.9 | % | 12.7 | % | 12.0 | % | ||||||||
| Newport News segment operating income | 102 | 88 | 277 | 257 | ||||||||||||
| As a percentage of Newport News revenues | 7.1 | % | 6.5 | % | 6.5 | % | 6.2 | % | ||||||||
| Mission Technologies operating income | 14 | 13 | 48 | 33 | ||||||||||||
| As a percentage of Mission Technologies revenues | 2.4 | % | 3.3 | % | 2.7 | % | 3.7 | % | ||||||||
Reconciliation of Free Cash Flow
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30 | September 30 | |||||||||||||||
| ($ in millions) | 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Net cash provided by operating activities | $ | (19 | ) | $ | 350 | $ | 165 | $ | 489 | |||||||
| Less capital expenditures: | ||||||||||||||||
| Capital expenditure additions | (77 | ) | (82 | ) | (179 | ) | (216 | ) | ||||||||
| Grant proceeds for capital expenditures | — | 9 | — | 11 | ||||||||||||
| Free cash flow | $ | (96 | ) | $ | 277 | $ | (14 | ) | $ | 284 | ||||||
Reconciliation of Mission Technologies EBITDA and EBITDA Margin
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30 | September 30 | |||||||||||||||
| ($ in millions) | 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Mission Technologies sales and service revenues | $ | 595 | $ | 394 | $ | 1,785 | $ | 890 | ||||||||
| Mission Technologies segment operating income | $ | 14 | $ | 13 | $ | 48 | $ | 33 | ||||||||
| Mission Technologies depreciation expense | 3 | 2 | 8 | 4 | ||||||||||||
| Mission Technologies amortization expense | 30 | 16 | 90 | 32 | ||||||||||||
| Mission Technologies state tax expense | 3 | (1 | ) | 9 | 5 | |||||||||||
| Mission Technologies EBITDA | $ | 50 | $ | 30 | $ | 155 | $ | 74 | ||||||||
| Mission Technologies EBITDA margin | 8.4 | % | 7.6 | % | 8.7 | % | 8.3 | % | ||||||||
Contacts:
Brooke Hart (Media)
[email protected]
202-264-7108
Christie Thomas (Investors)
[email protected]
757-380-2104
Artificial Intelligence
IBM, Government of Canada, Government of Quebec Sign Agreements to Strengthen Canada’s Semiconductor Industry
Up to $187M CAD to be invested to progress expansion of chip packaging capacity and capabilities and to strengthen R&D at IBM Canada’s Bromont plant
BROMONT, QC, April 26, 2024 /PRNewswire/ — IBM (NYSE: IBM), the Government of Canada, and the Government of Quebec today announced agreements that will strengthen Canada’s semiconductor industry, and further develop the assembly, testing and packaging (ATP) capabilities for semiconductor modules to be used across a wide range of applications including telecommunications, high performance computing, automotive, aerospace & defence, computer networks, and generative AI, at IBM Canada’s plant in Bromont, Quebec. The agreements reflect a combined investment valued at approximately $187M CAD.
“Today’s announcement is a massive win for Canada and our dynamic tech sector. It will create high-paying jobs, invest in innovation, strengthen supply chains, and help make sure the most advanced technologies are Canadian-made. Semiconductors power the world, and we’re putting Canada at the forefront of that opportunity,” said the Right Honourable Justin Trudeau, Prime Minister of Canada
In addition to the advancement of packaging capabilities, IBM will be conducting R&D to develop methods for scalable manufacturing and other advanced assembly processes to support the packaging of different chip technologies, to further Canada’s role in the North American semiconductor supply chain and expand and anchor Canada’s capabilities in advanced packaging.
The agreements also allow for collaborations with small and medium-sized Canadian-based enterprises with the intent of fostering the development of a semiconductor ecosystem, now and into the future.
“IBM has long been a leader in semiconductor research and development, pioneering breakthroughs to meet tomorrow’s challenges. With the demand for compute surging in the age of AI, advanced packaging and chiplet technology is becoming critical for the acceleration of AI workloads,” said Darío Gil, IBM Senior Vice President and Director of Research. “As one of the largest chip assembly and testing facilities in North America, IBM’s Bromont facility will play a central role in this future. We are proud to be working with the governments of Canada and Quebec toward those goals and to build a stronger and more balanced semiconductor ecosystem in North America and beyond.”
IBM Canada’s Bromont plant is one of North America’s largest chip assembly and testing facilities, having operated in the region for 52 years. Today, the facility transforms advanced semiconductor components into state-of-the-art microelectronic solutions, playing a key role in IBM’s semiconductor R&D leadership alongside IBM’s facilities at the Albany NanoTech Complex and throughout New York’s Hudson Valley. These agreements will help to further establish a corridor of semiconductor innovation from New York to Bromont.
“Advanced packaging is a crucial component of the semiconductor industry, and IBM Canada’s Bromont plant has led the world in this process for decades,” said Deb Pimentel, president of IBM Canada. “Building upon IBM’s 107-year legacy of technology innovation and R&D in Canada, the Canadian semiconductor industry will now become even stronger, allowing for robust supply chains and giving Canadians steady access to even more innovative technologies and products. This announcement represents just one more example of IBM’s leadership and commitment to the country’s technology and business landscape.”
Chip packaging, the process of connecting integrated circuits on a chip or circuit board, has become more complex as electronic devices have shrunk and the components of chips themselves get smaller and smaller. IBM announced the world’s first 2 nanometer chip technology in 2021 and, as the semiconductor industry moves towards new methods of chip construction, advances in packaging will grow in importance.
“Semiconductors are part of our everyday life. They are in our phones, our cars, and our appliances. Through this investment, we are supporting Canadian innovators, creating good jobs, and solidifying Canada’s semiconductor industry to build a stronger economy. Canada is set to play a larger role in the global semiconductor industry thanks to projects like the one we are announcing today. Because, when we invest in semiconductor and quantum technologies, we invest in economic security.” — The Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry
“This investment by IBM in Bromont will ensure that Quebec continues to stand out in the field of microelectronics. An increase in production capacity will solidify Quebec’s position in the strategic microelectronics sector in North America.” — The Honourable Pierre Fitzgibbon, Minister of Economy, Innovation and Energy, Minister responsible for Regional Economic Development and Minister responsible for the Metropolis and the Montreal region
About IBMIBM is a leading provider of global hybrid cloud and AI, and consulting expertise. We help clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs and gain the competitive edge in their industries. More than 4,000 government and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM’s hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently and securely. IBM’s breakthrough innovations in semiconductors, AI, quantum computing, industry-specific cloud solutions and consulting deliver open and flexible options to our clients. All of this is backed by IBM’s legendary commitment to trust, transparency, responsibility, inclusivity and service. Visit www.ibm.com for more information.
Media ContactLorraine BaldwinIBM [email protected]
Willa HahnIBM [email protected]
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View original content:https://www.prnewswire.co.uk/news-releases/ibm-government-of-canada-government-of-quebec-sign-agreements-to-strengthen-canadas-semiconductor-industry-302128212.html
Artificial Intelligence
HITACHI ACQUIRES MA MICRO AUTOMATION OF GERMANY IN EFFORT TO ACCELERATE GLOBAL EXPANSION OF ROBOTIC SI BUSINESS IN THE MEDICAL AND OTHER FIELDS
HOLLAND, Mich., April 26, 2024 /PRNewswire/ — Hitachi Ltd. (TSE: 6501, “Hitachi”) has signed a stock purchase agreement on April 26 to acquire all shares of MA micro automation GmbH (“MA micro automation”, headquartered in St. Leon-Rot, Germany) from MAX Management GmbH (a subsidiary of MAX Automation SE). MA micro automation is a leading provider of robotic and automation technology (robotic SI) including high-speed linear handling systems, high-precision assembly lines, and high-speed vision inspection technology for Europe, North America, and Southeast Asia, for EUR 71.5M million. The transaction is expected to close in the second half of 2024, pending completion of the customary regulatory filings. After the acquisition is completed, MA micro automation will join JR Automation Technologies, LLC (“JR Automation”), a market leader in providing advanced automation solutions and digital technologies in the robotic system integration business for North America, Europe, and Southeast Asia as a continued effort to expand the company’s global presence.
MA micro automation is a technology leader for automation solutions within micro-assembly. Through its state-of-the-art proprietary high-speed and high-precision automation know-how, combined with unique optical image inspection capabilities, MA micro automation serves high-growth med-tech automation end-markets, covering the production, assembly, and testing medical and optical components including contact lenses, IVD and diabetes diagnostics consumables, and injection molding for medical use. The company was established in 2003 through a carve-out from Siemens*1 and since 2013 has been part of the MAX Automation group.
JR Automation is a leading provider of intelligent automated manufacturing technology solutions, serving customers across the globe in a variety of industries including automotive, life sciences, e-mobility, consumer and industrial products. With over 20 locations between North America, Europe, and Southeast Asia, the leading integrator offers nearly 2 million square feet (185,806 sq. m) of available build and engineering floorspace. This acquisition allows JR Automation to further grow and strengthen both the company’s geographical footprint and their continued commitment on expanding support capabilities within the European region and medical market vertical.
“MA micro automation provides engineering, build and support expertise with established capabilities in complex vision applications, high-speed and high-precision automation technologies. When integrated with JR Automation’s uniform global process and digital technologies, this partnership will further enhance our ability to deliver added value and support to all of our customers worldwide and continue to grow our capabilities in the medical market,” says Dave DeGraaf, CEO of JR Automation. “As we integrate this new dimension, impressive talents and abilities of the MA micro automation team we further enhance our ability to serve our customers, creating a more robust and globally balanced offering.”
With this acquisition, Hitachi aims to further enhance its ability to provide a “Total Seamless Solution*2” to connect manufacturer’s factory floors seamlessly and digitally with their front office data, allowing them to achieve total optimization and bringing Industry 4.0 to life. This “Total Seamless Solution” strategy links organizations’ operational activities such as engineering, supply chain, and purchasing to the plant floor and allows for real time, data-driven decision-making that improves the overall business value for customers.
Kazunobu Morita, Vice President and Executive Officer, CEO of Industrial Digital Business Unit, Hitachi, Ltd. says, “We are very pleased to welcome MA micro automation to the Hitachi Group. The team is based in Europe, providing robotic SI to global medical device manufacturing customers with its high technological capabilities and will join forces with JR Automation and Hitachi Automation to strengthen our global competitiveness. Hitachi aims to enhance its ability to provide value to customers and grow alongside them by leveraging its strengths in both OT, IT, including robotic SI, and “Total Seamless Solution” through Lumada*3’s customer co-creation framework.”
Joachim Hardt, CEO MA micro automation GmbH says, “Following the successful establishment and growth of MA micro automation within the attractive automation market for medical technology products, we are now opening a new chapter. Our partnership with Hitachi will not only strengthen our global competitive position, but we will also benefit from joint technological synergies and a global market presence. We look forward to a synergistic partnership with Hitachi and JR Automation.”
Outline of MA micro automation
Name
MA micro automation GmbH
Head Office
St. Leon-Rot, Germany
Representative
Joachim Hardt (CEO)
Outline of Business
Automation solutions within micro-assembly
Total no. of Employees:
Approx. 200 (As of April 2024)
Founded
2003
Revenues (2023)
€ 46.5 million
Website
*1
“Siemens” is a registered trademark or trademark of Siemens Trademark GmbH & Co. KG in the U.S. and other countries.
*2
“Total Seamless Solution” is a registered trademark of Hitachi, Ltd. in the U.S. and Japan.
*3
Lumada: A collective term for solutions, services and technologies based on Hitachi’s advanced digital technologies for creating value from customers’ data accelerating digital innovation. https://www.hitachi.com/products/it/lumada/global/en/index.html
About JR AutomationEstablished in 1980, JR Automation is a leading provider of intelligent automated manufacturing technology solutions that solve customers’ key operational and productivity challenges. JR Automation serves customers across the globe in a variety of industries, including automotive, life sciences, aerospace, and more.
In 2019, JR Automation was acquired by Hitachi, Ltd. In a strategic effort towards offering a seamless connection between the physical and cyber space for industrial manufacturers and distributers worldwide. With this partnership, JR Automation provides customers a unique, single-source solution for complete integration of their physical assets and data information, offering greater speed, flexibility, and efficiencies towards achieving their Industry 4.0 visions. JR Automation employs over 2,000 people at 21 manufacturing facilities in North America, Europe, and Asia. For more information, please visit www.jrautomation.com.
About Hitachi, Ltd.Hitachi drives Social Innovation Business, creating a sustainable society through the use of data and technology. We solve customers’ and society’s challenges with Lumada solutions leveraging IT, OT (Operational Technology) and products. Hitachi operates under the 3 business sectors of “Digital Systems & Services” – supporting our customers’ digital transformation; “Green Energy & Mobility” – contributing to a decarbonized society through energy and railway systems, and “Connective Industries” – connecting products through digital technology to provide solutions in various industries. Driven by Digital, Green, and Innovation, we aim for growth through co-creation with our customers. The company’s revenues as 3 sectors for fiscal year 2023 (ended March 31, 2024) totaled 8,564.3 billion yen, with 573 consolidated subsidiaries and approximately 270,000 employees worldwide. For more information on Hitachi, please visit the company’s website at https://www.hitachi.com.
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Artificial Intelligence
$10 million Artificial Intelligence Mathematical Olympiad Prize appoints further advisory committee members
D. Sculley, Kevin Buzzard, Leo de Moura, Lester Mackey and Peter J. Liu appointed to the advisory committee for the Artificial Intelligence Mathematical Olympiad Prize.
LONDON, April 26, 2024 /PRNewswire/ — XTX Markets’ newly created Artificial Intelligence Mathematical Olympiad Prize (‘AIMO Prize’) is a $10mn challenge fund designed to spur the creation of a publicly shared AI model capable of winning a gold medal in the International Mathematical Olympiad (IMO).
XTX Markets is delighted to announce the appointment of five further advisory committee members. This group brings great expertise in machine learning, including D. Sculley, the CEO of Kaggle; Lester Mackey, a Principal Researcher at Microsoft Research and a Macarthur Fellow; and Peter J. Liu, a research scientist at Google DeepMind.
Prolific mathematicians Kevin Buzzard, who achieved a perfect score in the International Mathematical Olympiad, and Leo De Moura who is the Chief Architect for Lean, the automated reasoning tool, also join the advisory group.
They join the existing advisory committee members Terence Tao and Timothy Gowers, both winners of the Fields Medal, as well as Dan Roberts, Geoff Smith and Po-Shen Loh.
The AIMO Advisory Committee will support the development of the AIMO Prize, including advising on appropriate protocols and technical aspects, and designing the various competitions and prizes.
Simon Coyle, Head of Philanthropy at XTX Markets, commented:
“We are thrilled to complete the AIMO Advisory Committee with the appointments of D., Kevin, Leo, Lester and Peter. Together, they have enormous experience in machine learning and automated reasoning and are already bringing expertise and wisdom to the AIMO Prize. We look forward to announcing the winners of the AIMO’s first Progress Prize soon, and then publicly sharing the AI models to support the open and collaborative development of AI.”
Further information on the AIMO Prize
There will be a grand prize of $5mn for the first publicly shared AI model to enter an AIMO approved competition and perform at a standard equivalent to a gold medal in the IMO. There will also be a series of progress prizes, totalling up to $5mn, for publicly shared AI models that achieve key milestones towards the grand prize.
The first AIMO approved competition opened to participants in April 2024 on the Kaggle competition platform. The first progress prize focuses on problems pitched at junior and high-school level maths competitions. There is a total prize pot of $1.048m for the first progress prize, of which at least $254k will be awarded in July 2024, There will be a presentation of progress held in Bath, England in July 2024, as part of the 65th IMO.
For more information on the AIMO Prize visit: https://aimoprize.com/ or the competition page on Kaggle: https://www.kaggle.com/competitions/ai-mathematical-olympiad-prize/
Advisory Committee member profiles:
D. Sculley
D. is the CEO at Kaggle. Prior to joining Kaggle, he was a director at Google Brain, leading research teams working on robust, responsible, reliable and efficient ML and AI. In his career in ML, he has worked on nearly every aspect of machine learning, and has led both product and research teams including those on some of the most challenging business problems. Some of his well-known work involves ML technical debt, ML education, ML robustness, production-critical ML, and ML for scientific applications such as protein design.
Kevin Buzzard
Kevin a professor of pure mathematics at Imperial College London, specialising in algebraic number theory. As well as his research and teaching, he has a wide range of interests, including being Deputy Head of Pure Mathematics, Co-Director of a CDT and the department’s outreach champion. He is currently focusing on formal proof verification, including being an active participant in the Lean community. From October 2024, he will be leading a project to formalise a 21st century proof of Fermat’s Last Theorem. Before joining Imperial, some 20 years ago, he was a Junior Research Fellow at the University of Cambridge, where he had previously been named ‘Senior Wrangler’ (the highest scoring undergraduate mathematician). He was also a participant in the International Mathematical Olympiad, winning gold with a perfect score in 1987. He has been a visitor at the IAS in Princeton, a visiting lecturer at Harvard, has won several prizes both for research and teaching, and has given lectures all over the world.
Leo de Moura
Leo is a Senior Principal Applied Scientist in the Automated Reasoning Group at AWS. In his spare time, he dedicates himself to serving as the Chief Architect of the Lean FRO, a non-profit organization that he proudly co-founded alongside Sebastian Ullrich. He is also honoured to hold a position on the Board of Directors at the Lean FRO, where he actively contributes to its growth and development. Before joining AWS in 2023, he was a Senior Principal Researcher in the RiSE group at Microsoft Research, where he worked for 17 years starting in 2006. Prior to that, he worked as a Computer Scientist at SRI International. His research areas are automated reasoning, theorem proving, decision procedures, SAT and SMT. He is the main architect of several automated reasoning tools: Lean, Z3, Yices 1.0 and SAL. Leo’s work in automated reasoning has been acknowledged with a series of prestigious awards, including the CAV, Haifa, and Herbrand awards, as well as the Programming Languages Software Award by the ACM. Leo’s work has also been reported in the New York Times and many popular science magazines such as Wired, Quanta, and Nature News.
Lester Mackey
Lester Mackey is a Principal Researcher at Microsoft Research, where he develops machine learning methods, models, and theory for large-scale learning tasks driven by applications from climate forecasting, healthcare, and the social good. Lester moved to Microsoft from Stanford University, where he was an assistant professor of Statistics and, by courtesy, of Computer Science. He earned his PhD in Computer Science and MA in Statistics from UC Berkeley and his BSE in Computer Science from Princeton University. He co-organized the second place team in the Netflix Prize competition for collaborative filtering; won the Prize4Life ALS disease progression prediction challenge; won prizes for temperature and precipitation forecasting in the yearlong real-time Subseasonal Climate Forecast Rodeo; and received best paper, outstanding paper, and best student paper awards from the ACM Conference on Programming Language Design and Implementation, the Conference on Neural Information Processing Systems, and the International Conference on Machine Learning. He is a 2023 MacArthur Fellow, a Fellow of the Institute of Mathematical Statistics, an elected member of the COPSS Leadership Academy, and the recipient of the 2023 Ethel Newbold Prize.
Peter J. Liu
Peter J. Liu is a Research Scientist at Google DeepMind in the San Francisco Bay area, doing machine learning research with a specialisation in language models since 2015 starting in the Google Brain team. He has published and served as area chair in top machine learning and NLP conferences such as ICLR, ICML, NEURIPS, ACL and EMNLP. He also has extensive production experience, including launching the first deep learning model for Gmail Anti-Spam, and using neural network models to detect financial fraud for top banks. He has degrees in Mathematics and Computer Science from the University of Toronto.
About XTX Markets:
XTX Markets is a leading financial technology firm which partners with counterparties, exchanges and e-trading venues globally to provide liquidity in the Equity, FX, Fixed Income and Commodity markets. XTX has over 200 employees based in London, Paris, New York, Mumbai, Yerevan and Singapore. XTX is consistently a top 5 liquidity provider globally in FX (Euromoney 2018-present) and is also the largest European equities (systematic internaliser) liquidity provider (Rosenblatt FY: 2020-2023).
The company’s corporate philanthropy focuses on STEM education and maximum impact giving (alongside an employee matching programme). Since 2017, XTX has donated over £100mn to charities and good causes, establishing it as a major donor in the UK and globally.
In a changing world XTX Markets is at the forefront of making financial markets fairer and more efficient for all.
View original content:https://www.prnewswire.co.uk/news-releases/10-million-artificial-intelligence-mathematical-olympiad-prize-appoints-further-advisory-committee-members-302128542.html
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