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Impacts From Hurricanes
9 Months Ended
Sep. 30, 2013
Extraordinary and Unusual Items [Abstract]  
Impacts From Hurricanes
IMPACTS FROM HURRICANES

In August 2005, the Company's Ingalls operations were significantly impacted by Hurricane Katrina, and the Company's shipyards in Louisiana and Mississippi sustained significant windstorm damage from the hurricane. As a result of the storm, the Company incurred costs to replace or repair destroyed or damaged assets, suffered losses under its contracts, and incurred substantial costs to clean up and recover its operations. At the time of the storm, the Company had a comprehensive insurance program that provided coverage for, among other things, property damage, business interruption impact on net profitability, and costs associated with clean-up and recovery. The Company recovered a portion of its Hurricane Katrina claim from certain of its participating program insurers in prior periods. In the third quarter of 2013, the Company resolved litigation against its remaining insurer, Factory Mutual Insurance Company ("FM Global"), resulting in a total recovery from its insurers of $677.5 million for its Hurricane Katrina claim, including $180 million from FM Global.

The Company’s predecessor-in-interest commenced litigation against FM Global on November 4, 2005 in California Superior Court and was removed to the U.S. District Court for the Central District of California, Western Division. In an interlocutory appeal, the U.S. Court of Appeals for the Ninth Circuit held that the FM Global excess policy unambiguously excluded damage from the storm surge caused by Hurricane Katrina under its "Flood" exclusion and remanded the case to the U.S. District Court to determine whether the California efficient proximate cause doctrine afforded coverage under the policy, even if the Flood exclusion of the policy was unambiguous. In August 2010, the U.S. District Court granted FM Global's motion for summary judgment based upon California's doctrine of efficient proximate cause and denied FM Global's motion for summary judgment based upon breach of contract, finding that triable issues of fact remained as to whether and to what extent the Company sustained wind damage apart from the hurricane storm surge. In July 2011, the U.S. District Court held that the flood sublimit in the primary layer applies only to property damage loss, not to time element loss. In September 2011, the U.S. District Court granted FM Global's motion for summary judgment to dismiss the claims for bad faith damages and for contract reformation. In July 2013, the U.S. District Court issued an order regarding the parties’ cross-motions for summary judgment.  Among other things, it held that there were material issues of disputed fact warranting a trial by jury. On September 6, 2013, the Company and FM Global entered into a settlement agreement, pursuant to which FM Global made a cash payment of $180 million to the Company and the Company agreed to release its claim against FM Global.

In January 2011, the Company, through a predecessor-in-interest, filed suit in Superior Court in California against Aon Risk Insurance Services West, Inc. ("Aon"), which acted as broker to the predecessor-in-interest in connection with the policy with FM Global, seeking damages for breach of contract, professional negligence and negligent misrepresentation, as well as declaratory relief. Those damages include over $200 million in damages unrecovered from FM Global plus costs, legal fees and expenses incurred in the lawsuit against FM Global, as well as interest. The Company intends to continue pursuing its claims against Aon. No assurances can be provided as to the ultimate outcome of the matter. If, however, the claims are successful, the potential impact to the Company's consolidated financial position, results of operations and cash flows would be favorable.

In February 2013, the Company submitted a certified claim requesting a final decision on the allowability and allocability of certain post-Katrina depreciation and other Katrina-related expenses and on the apportionment of insurance proceeds. In October 2013, the Company received a Contracting Officer's Final Decision ("COFD") disallowing certain post-Katrina depreciation costs and other Katrina-related expenses, as well as providing direction on the apportionment of Katrina-related insurance recoveries. The Company has the right to appeal the COFD and is currently evaluating its options.

In the third quarter of 2013, the Company recorded a $46 million favorable impact to operating income from hurricane insurance recoveries and as a result of customer direction on the apportionment of Katrina-related insurance recovery discussed above.