What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-06 compared with 2024-02-01 · 303 added, 242 removed, 1142 unchanged (32% of the section changed)

20 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which it relates.

Revenue – Shipbuilding Contracts — Refer to Note 2 and 7 to the financial statements

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue – Shipbuilding Contracts — Refer to Notes 2 and 6 to the financial statements

Critical Audit Matter Description

6 unchanged sentences

Cost of sales is recognized as incurred, and revenues are determined by adding a proportionate amount of the estimated profit to the amount reported as cost of sales.

Given the judgments necessary to estimate total material costs, labor costs, and profit in order to recognize revenue for certain shipbuilding contracts, auditing such estimates required extensive audit effort due to the complexity of the contracts and a high degree of auditor judgment, especially for contracts where there is limited historical data.

Given the judgments necessary to estimate total material costs, labor costs, and profit in order to recognize revenue for certain shipbuilding contracts, auditing such estimates required extensive audit effort due to the complexity of the contracts and a high degree of auditor’s judgment, especially for contracts where there is limited historical data.

How the Critical Audit Matter Was Addressed in the Audit

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• We obtained the population of contracts during 2024 and assessed the financial and performance risk of the contracts based on our knowledge gained through prior-year audits of the Company, industry experience, and ongoing conversations with members of program management regarding the contract performance to identify contracts that we believe were riskier.

For contracts selected, we performed tailored audit procedures to address the specific characteristics of audit interest identified.

Procedures performed, among others, may have included:

For such contracts selected, we performed tailored audit procedures to address the specific characteristics of audit interest identified.

Procedures performed included:

◦ Read the relevant portions of contracts including any recent contract modifications to understand contract terms, including incentives, fee arrangement, scope of work, and other unusual contract terms.

1 unchanged sentence

◦ Performed inquiries with the business managers and corroborated the information gained from these inquiries with other parties who have detailed knowledge of the contract’s progress, issues being encountered, and overall production status.

▪ Evaluated management’s material and labor estimates against historical performance, underlying performance metrics, and metrics of similar performance obligations.

◦ Evaluated the appropriateness and consistency of management’s material and labor estimates against historical performance, underlying performance metrics, and metrics of similar performance obligations.

◦ Evaluated the range and probabilities of reasonably possible outcomes and where management set its point estimate within the range and tested the accuracy and completeness of the key data used in developing estimates.

◦ Performed retrospective reviews when evaluating the thoroughness and precision of management’s estimation process by comparing costs incurred to date to previous estimates.

◦ Tested the appropriateness of the timing and accuracy of changes in estimates, including inspection of underlying source documentation, and consideration of any contradictory information.

◦ Evaluated the necessity and appropriateness of any constraints applied against any variable consideration.

Goodwill - Mission Technologies reporting unit – Refer to Note 2 and 11 to the financial statements

Critical Audit Matter Description

The Company performed a quantitative impairment evaluation of the goodwill for the Mission Technologies reporting unit by comparing the estimated fair value of the reporting unit to its carrying value.

The Company’s testing approach utilizes a combination of discounted cash flow analysis and comparative market-based valuation methodologies to determine the fair value of the reporting unit for comparison to its corresponding book value.

Estimating the fair value of a reporting unit requires the exercise of significant judgment and assumptions including judgments about the forecasted revenue, forecasted earnings before income tax, depreciation, and amortization (“EBITDA”), and the selection of the long-term growth rate and the discount rate.

Changes in these assumptions could have a significant impact on the fair value of the reporting unit, the amount of any goodwill impairment charge, or both.

The goodwill balance was $2.6 billion as of December 31, 2023 of which $1.7 billion related to the Mission Technologies reporting unit.

The fair value of the Mission Technologies reporting unit exceeded the carrying value by 10.4% as of the measurement date and, therefore, no impairment was recognized.

Given the significant judgments made by management to estimate the fair value of the Mission Technologies reporting unit and the difference between its fair value and carrying value, performing audit procedures to test the Company’s estimate of the fair value of the Mission Technologies reporting unit, which included evaluating estimates and assumptions related to forecasted revenue, forecasted EBITDA, and the selection of the long-term growth rate and the discount rate, required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the selection of the forecasted revenue, forecasted EBITDA, and the selection of the long-term growth rate and the discount rate for the Mission Technologies reporting unit included the following, among others:

• We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over the selection of the assumptions used in the fair value models.

• We evaluated management’s ability to accurately forecast revenue and EBITDA by comparing actual results to management’s historical forecasts.

• We evaluated the reasonableness of management’s forecasted revenue and EBITDA by comparing the forecasts to internal communications to management and the Board of Directors and comparing the forecasts to third-party economic and industry data.

• We performed sensitivity analyses to evaluate the risk of impairment if key assumptions are changed.

• We evaluated, with the assistance of our fair value specialists, the reasonableness of the (1) valuation methodology utilized by management, and (2) the selected long-term growth rate and discount rate by:

◦ Comparing the valuation methodologies used to generally accepted valuation practices.

◦ Testing the appropriateness of source information used by management to select the long-term growth rate and discount rate used by management.

◦ Developing a range of independent estimates and comparing those to the discount rate selected by management.

• We evaluated the carrying value of the Mission Technologies reporting unit including the corporate allocations.

/s/ Deloitte & Touche LLP

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150,000,000 shares authorized;

53,595,748 issued and 39,618,880 outstanding as of December 31, 2023, and 53,503,317 issued and 39,863,456 outstanding as of December 31, 2022

53,714,128 issued and 39,129,419 outstanding as of 2024, and 53,595,748 issued and 39,618,880 outstanding as of 2023

Additional paid-in capital 2,045 2,045

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Amortization of purchased intangibles 109 128 140

Amortization of debt issuance costs 8 8 8

Provision for expected credit losses 6 ( 7 ) 7

Other non-cash transactions, net 10 29 15

Stock-based compensation 23 34 36

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Retiree benefits ( 112 ) ( 75 ) ( 127 )

Other non-cash transactions, net 15 14 10

Net cash provided by operating activities 393 970 766

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Grant proceeds for capital expenditures 14 14 12

Acquisitions of businesses, net of cash received — — ( 1,643 )

Investment in affiliates — ( 24 ) ( 5 )

Proceeds from equity method investment — 63 6

Proceeds from disposition of business — — 20

Other investing activities, net 5 3 3

15 unchanged sentences

Supplemental Cash Flow Disclosure

Cash paid for income taxes (net of refunds) $ 330 $ 127 $ 33

Cash paid for interest $ 101 $ 101 $ 100

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

N OTES TO THE CONSOLIDATED FINANC IAL STATEMENTS

D ESCRIPTION OF BUSINESS

S UMM ARY OF SIGNIFICANT ACCOUNTING POLICIES

A CCOUNTING STANDARDS UPDAT ES

S TOCKHOLDERS' EQUITY

E ARNINGS PER SHARE

S EGMENT INFORMATION

A CCOUNTS RECEIVABLE

I NVENTORIED COSTS, NET

G OODWILL AND OTHER INTANGIBLE ASSETS

I NCOME TAXES

I NVESTI GATIONS , CLAIMS, AND L ITIGATION

C OMMITMENTS AND CONTINGENCIES

E MPLOYEE PENSION AND OTHER POSTRETIREMENT BENE FITS

S TOCK COMPENSATION P LANS

S UBSIDIARY GUARANTORS

SUBSEQUENT EVENTS

HUNTINGTON INGALLS INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DESCRIPTION OF BUSINESS

23 unchanged sentences

When the Company determines that revenue should be recognized over time, the Company utilizes a measure of progress that best depicts the transfer of control of the relevant goods and services to the customer.

Generally, the terms and conditions of the contracts result in a transfer of control over the related goods and services as the Company satisfies its performance obligations.

Generally, the terms and conditions of the contracts result in a transfer of control of the related goods and services as the Company satisfies its performance obligations.

Accordingly, the Company recognizes revenue over time using the cost-to-cost method to measure performance progress.

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A significant change in an estimate on one or more contracts in a period could have a material effect on the Company's consolidated financial position or results of operations for that period.

When estimates of total costs to be incurred exceed estimates of total revenue to be earned on a performance obligation related to a complex, construction-type contract, a provision for the entire loss on the performance obligation is recognized in the period the loss is determined.

When estimates of total costs to be incurred exceed estimates of total revenue to be earned on a complex, construction-type contract or a performance obligation related to such a contract, a provision for the entire loss on the contract or the performance obligation is recognized in the period the loss is determined.

The determination of whether the loss is identified at the contract or performance obligation level is an accounting policy election that is applied consistently to similar contract types.

Accounts Receivable - Accounts receivable include amounts related to any unconditional Company right to receive consideration and are presented as accounts receivable, net in the consolidated statements of financial position, separate from other contract balances.

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Because the Company's accounts receivable are primarily with the U.S.

Government or with companies acting as a contractor to the U.S.

Government or with companies

acting as a contractor to the U.S.

Government, the Company does not have material exposure to accounts receivable credit risk.

Contract Assets - Contract assets primarily relate to the Company’s rights to consideration for work completed but not billed as of the reporting date when the right to payment is not just subject to the passage of time, including retention amounts.

Contract Assets - Contract assets primarily relate to the Company’s right to consideration for work completed but not billed as of the reporting date when the right to payment is not subject only to the passage of time, including retention amounts.

Contract assets are classified as current assets and, in accordance with industry practice, include amounts that may be billed and collected beyond one year due to the long-term nature of many of the Company's contracts.

9 unchanged sentences

Costs to Obtain or Fulfill a Contract - Costs to obtain a contract are incremental direct costs incurred to obtain a contract with a customer and are capitalized if material.

Costs to fulfill a contract include costs directly related to a contract or a specific anticipated contract (for example, mobilization and set-up) that generate or enhance our ability to satisfy our performance obligations under a contract.

Costs to fulfill a contract include costs directly related to a contract or a specific anticipated contract (for example, mobilization and set-up) that generate or enhance the Company's ability to satisfy its performance obligations under a contract.

These costs are capitalized to the extent they are expected to be recovered from the associated contract.

Capitalized costs to obtain or fulfill a contract are amortized to expense over the expected period of benefit.

As of December 31, 2023, capitalized costs to obtain or fulfill a contract were $ 24 million, included in prepaid expenses and other current assets in the consolidated statements of financial position.

Costs to obtain or fulfill a contract are reported within prepaid expenses and other current assets on the consolidated statements of financial position and are not material as of December 31, 2024 and 2023.

Warranty Costs - Certain of the Company’s contracts contain assurance-type warranty provisions, which generally promise that the service or vessel will comply with agreed upon specifications.

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In such cases, the Company accounts for the warranty as a separate performance obligation to the extent it is material within the context of the contract.

Warranty liabilities are reported within other current liabilities and are not material.

Warranty liabilities are reported within other current liabilities and are not material as of December 31, 2024 and 2023.

Government Grants - The Company recognizes incentive grants, inclusive of transfers of depreciable assets, from federal, state, and local governments at fair value upon compliance with the conditions of their receipt and reasonable assurance that the grants will be received or the depreciable assets will be transferred.

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Grants related to depreciable assets are recognized over the periods and in the proportions in which depreciation expense on those assets is recognized.

For the years ended December 31, 2023, 2022, and 2021, the Company recognized cash grant benefits of $ 14 million, $ 12 million, and $ 20 million, respectively, in other long-term liabilities in the consolidated statements of financial position.

Government grants are reported within other current liabilities and other long term liabilities and are not material as of December 31, 2024 and 2023.

General and Administrative Expenses - In accordance with industry practice and regulations that govern the cost accounting requirements for government contracts, most general corporate expenses incurred at both the segment and corporate locations are allowable and allocable costs on government contracts.

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Expenses for research and development sponsored by the customer are charged directly to the related contracts.

Environmental Costs - Environmental liabilities are accrued when the Company determines remediation costs are probable and such costs are reasonably estimable.

When only a range of costs is established and no amount within the range is more probable than another, the minimum amount in the range is accrued.

Environmental liabilities are recorded on an undiscounted basis and are not material.

Environmental expenditures are expensed or capitalized as appropriate.

Capitalized expenditures, if any, relate to long-lived improvements in currently operating facilities.

The Company does not record insurance recoveries before collection is probable.

As of December 31, 2023 and 2022, the Company did not have any accrued receivables related to insurance reimbursements or recoveries for environmental matters.

Fair Value of Financial Instruments - The accounting standard for fair value measurements provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements.

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The Company maintains multiple grantor trusts to fund certain non-qualified pension plans.

These trusts were valued at $ 220 million and $ 209 million as of December 31, 2023 and 2022, respectively, and are presented within miscellaneous other assets within the consolidated statements of financial position.

These trusts were valued at $ 233 million and $ 220 million as of December 31, 2024 and 2023, respectively, and are presented within miscellaneous other assets on the consolidated statements of financial position.

These trusts consist primarily of investments in marketable securities, which are held at fair value within Level 1 of the fair value hierarchy.

Asset Retirement Obligations - Environmental remediation and/or asset decommissioning may be required when the Company ceases to utilize certain facilities.

Asset Retirement Obligations - Asset decommissioning and/or remediation activities may be required when the Company ceases to utilize certain facilities.

The Company records, within other current liabilities or other long-term liabilities as appropriate, all known asset retirement obligations for which the liability's fair value can be reasonably estimated, including certain asbestos removal, asset decommissioning, and lease restoration obligations.

Asset retirement obligations for which the liability's fair value can be reasonably estimated were immaterial as of December 31, 2023 and 2022.

Asset retirement obligations for which the liability's fair value can be reasonably estimated are not material as of December 31, 2024 and 2023.

Income Taxes - Income tax expense and other related information are based on the prevailing statutory rates for U.S.

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Deferred income taxes are recorded when revenues and expenses are recognized in different periods for financial statement purposes and for tax return purposes.

Deferred tax asset or liability account balances are calculated at

the balance sheet date using current tax laws and rates expected to be in effect when the deferred tax items reverse in future periods.

Deferred tax asset or liability account balances are calculated at the balance sheet date using current tax laws and rates expected to be in effect when the deferred tax items reverse in future periods.

The Company recognizes deferred tax assets to the extent it believes these assets are more likely than not to be realized.

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Major improvements are capitalized while expenditures for maintenance, repairs, and minor improvements are expensed.

Costs incurred for computer software developed or purchased for internal use are capitalized and amortized over the expected useful life of the software, not to exceed nine years.

Costs incurred for computer software developed or purchased for internal use are capitalized and amortized over the expected useful life of the software, not to exceed ten years.

Leasehold improvements are amortized over the shorter of their useful lives or the term of the lease.

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The Company recognizes a lease liability at the lease commencement date, as the present value of future lease payments, using an estimated rate of interest that the Company would pay to borrow equivalent funds over an equivalent term on a collateralized basis.

A lease asset is recognized based on the lease

liability value and adjusted for any prepaid lease payments, initial direct costs, or lease incentive amounts.

A lease asset is recognized based on the lease liability value and adjusted for any prepaid lease payments, initial direct costs, or lease incentive amounts.

The lease term at the commencement date includes any renewal options or termination options when it is reasonably certain that the Company will exercise or not exercise those options, respectively.

4 unchanged sentences

Rent expense for operating leases is recognized on a straight-line basis over the lease term and included in cost of sales and service revenues in the consolidated statements of operations and comprehensive income.

Variable lease payments are recognized as incurred and include lease operating expenses, which are based on contractual lease terms.

Variable lease payments are generally recognized to expense as incurred and are not included in the right of use assets or lease liabilities.

The Company elected, for all asset classes, to exclude from its consolidated statements of financial position leases having terms of 12 months or less (short-term leases) and elected not to separate lease and non-lease components in the determination of lease payment obligations for its long-term lease contracts.

Goodwill and Other Intangible Assets - The Company performs impairment tests for goodwill annually each year and between annual impairment tests if evidence of potential impairment exists.

During the second quarter of 2023, the Company elected to change the measurement date of its annual goodwill impairment test from November 30 to October 31.

The change is not material to the consolidated financial statements as it does not result in the delay, acceleration or avoidance of an impairment charge, and the test is still performed in the fourth quarter.

The Company tests for impairment by assessing qualitative factors to determine whether it is more likely than not that the fair value of other intangible assets or the goodwill allocated to the reporting unit is less than its carrying amount.

If the qualitative assessment indicates a possible impairment, the carrying value of the asset or reporting unit is compared with its fair value.

Goodwill and Other Intangible Assets - The Company performs impairment tests for goodwill annually as of October 31 and between annual impairment tests if an event occurs or circumstances of potential impairment exist.

The Company tests for impairment of goodwill by assessing qualitative factors to determine whether it is more likely than not that the fair value of the goodwill allocated to the reporting unit is less than its carrying amount.

If the qualitative assessment indicates a possible impairment, the carrying value of the reporting unit is compared to its fair value.

If the fair value is determined to be less than the carrying value, the Company records an impairment charge to the reporting unit.

Purchased intangible assets are amortized on a straight-line basis or a method based on the pattern of benefits over their estimated useful lives, and the carrying value of these assets is reviewed for impairment when events indicate that a potential impairment may have occurred.

Equity Method Investments - Investments in which the Company has the ability to exercise significant influence over the investee but does not own a majority interest or otherwise control are accounted for under the equity method of accounting and included in miscellaneous other assets in its consolidated statements of financial position.

The Company's equity investments align strategically and are integrated with the Company's operations.

Accordingly, the Company's share of the net earnings or losses of the investee is included in operating income.

The Company evaluates its equity investments for other than temporary impairment whenever events or changes in business circumstances indicate that the carrying amounts of such investments may not be fully recoverable.

The Company evaluates the recoverability of its intangible long-lived assets when changes in economic circumstances or business objectives indicate the carrying value may not be recoverable.

The Company's purchased intangible assets are amortized on a straight-line basis or a method based on the pattern of benefits over their estimated useful lives.

Equity Method Investments - Investments in which the Company has the ability to exercise significant influence over the investee, but does not own a majority interest or otherwise control, are accounted for under the equity method of accounting and are included in miscellaneous other assets in the consolidated statements of financial position.

The Company's equity method investments align strategically and are integrated with the Company's operations.

Accordingly, the Company's share of the net earnings or losses of the investee is included in income from operating investments, net within the consolidated statements of operations and comprehensive income.

The Company evaluates its equity method investments for other than temporary impairment whenever events or changes in business circumstances indicate that the carrying amounts of such investments may not be fully recoverable.

If a decline in the value of an equity method investment is determined to be other than temporary, a loss is recorded in earnings in the current period.

In 2021, the Company contributed its San Diego Shipyard business to a joint venture, Titan Acquisition Holdings, L.P.

("Titan"), in exchange for a 10 % non-controlling interest, which was recorded under the equity method of accounting.

In 2023, the Company sold its investment in Titan.

For the year ended December 31, 2023, the Company received $ 63 million in proceeds and recognized an immaterial loss on sale.

Self-Insured Group Medical Insurance - The Company maintains a self-insured group medical insurance plan.

1 unchanged sentence

Estimated liabilities for incurred but not paid claims utilize actuarial methods based on various assumptions, which include, but are not limited to, HII's historical loss experience and projected loss development factors.

These liabilities are recorded in other current liabilities and were immaterial.

These liabilities are recorded in other current liabilities on the consolidated statements of financial position and are not material as of December 31, 2024 and 2023.

Self-Insured Workers' Compensation Plan - The Company's operations are subject to federal and state workers' compensation laws.

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The loan receivable approximates fair value and is recorded in miscellaneous other assets on the consolidated statements of financial position.

Interest income is recognized on an accrual basis using the effective yield method.

Interest income is recognized on an accrual basis using the effective yield method and reported within other, net on the consolidated statements of operations and comprehensive income and is not material for the years ended December 31, 2024, 2023, and 2022.

The discount is accreted into income using the effective yield method over the estimated life of the loan receivable.

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ACCOUNTING STANDARDS UPDATES

In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional exceptions to GAAP for certain transactions related to the transition away from The London Interbank Offered Rate (“LIBOR”).

The amended guidance is designed to provide relief from the accounting analysis and impacts that may otherwise be required for modifications to agreements (e.g., loans, debt securities, derivatives, borrowings) necessitated by the reference rate reform.

It also provides optional expedients to enable companies to continue to apply hedge accounting to certain hedging relationships impacted by the reference rate reform.

Application of the guidance in the amendment is optional, is only available in certain situations, and is only available for companies to apply until December 31, 2022.

This standard did not impact the Company's financial results or disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

The new guidance requires new tabular and narrative segment disclosures of significant

expenses that are regularly reported to the chief operating decision maker and the nature of segment expense information used to manage operations.

The new guidance is effective for annual reporting periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company is currently evaluating the impacts of the new guidance on its consolidated financial statements.

Recently Adopted Guidance

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which requires, among other things, segment disclosures of significant expenses that are regularly reported to the chief operating decision maker and the nature of segment expense information used to manage operations.

The guidance was effective on a retrospective basis for annual reporting periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company’s adoption of the guidance did not have a material impact on its consolidated financial statements.

Segment Information.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

The new guidance requires disaggregated information about the effective tax rate reconciliation and additional information on taxes paid that meet a quantitative threshold.

The new guidance is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted.

Improvements to Income Tax Disclosures, which requires disaggregated information about the effective tax rate reconciliation and taxes paid, including additional information on taxes paid that meet a quantitative threshold.

The guidance is effective for annual

reporting periods beginning after December 15, 2024, with early adoption permitted.

The Company early adopted the guidance on a retrospective basis for the annual reporting period ending December 31, 2024, and the guidance did not have a material impact on the Company’s consolidated financial statements.

Income Taxes.

Accounting Guidance Issued But Not Adopted as of December 31, 2024

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

The new guidance requires, among other things, tabular and qualitative disclosure of disaggregated expense information that is included in certain expense line items presented on the consolidated statement of operations.

The new guidance also requires that the total amount and definition of selling expenses be disclosed.

The new guidance is effective on a prospective basis for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption and retrospective application permitted.

The Company is currently evaluating the impacts of the new guidance on its consolidated financial statements.

Other accounting pronouncements issued but not effective until after December 31, 2024, are not expected to have a material impact on the Company's consolidated financial position, results of operations, or cash flows.

ACQUISITIONS AND DIVESTITURES

Acquisition of Alion

In August 2021, the Company acquired all of the outstanding common stock of Alion Holding Corp., the parent company of Alion Science and Technology Corporation (“Alion”), a technology-driven solutions provider.

The Company accounted for the transaction as a business combination using the acquisition method of accounting in accordance with Accounting Standards Codification ("ASC") 805 – “Business Combinations.” The purchase price was $ 1.79 billion, including $ 148 million of cash received in the acquisition.

Pro Forma Financial Information

The following unaudited consolidated pro forma summary has been prepared by adjusting the Company's historical data to give effect to the acquisition of Alion as if it had occurred on January 1, 2021.

Pro Forma (Unaudited)

Year Ended December 31

($ in millions, except per share amounts) 2023 2022 2021

Sales and service revenues $ 11,454 $ 10,676 $ 10,364

Net earnings $ 681 $ 579 $ 539

Basic earnings per share $ 17.07 $ 14.44 $ 13.37

Diluted earnings per share $ 17.07 $ 14.44 $ 13.37

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

The unaudited consolidated pro forma financial information was prepared in accordance with GAAP and is not necessarily indicative of the results of operations that would have occurred if the acquisition had been completed on the date indicated, nor is it indicative of the future operating results of the Company.

The unaudited pro forma results do not reflect events that either have occurred or may occur in the future, including, but not limited to, the anticipated realization of operating synergies in subsequent periods.

These results also do not give effect to certain charges that the Company incurred in connection with the acquisition, including, but not limited to, additional professional fees and employee integration.

In February 2021, the Company contributed its San Diego Shipyard business to a joint venture, Titan Acquisition Holdings, L.P.

("Titan"), in exchange for a 10 % non-controlling interest.

Titan is a leading provider of ship repair and specialty fabrication services to government and commercial customers.

The joint venture contribution was completed as part of the Company’s operating strategy.

The Company recognized its interest in Titan at fair value, which approximated $ 83 million.

No gain or loss was recognized in the transaction.

The Company transferred

$ 22 million to Titan as part of the exchange.

The Company's investment in Titan, inclusive of equity earnings and distributions, of $ 70 million as of December 31, 2022, is recorded in miscellaneous other assets in the consolidated statements of financial position.

In June 2023, the Company sold its investment in Titan.

For the year ended December 31, 2023, the Company received $ 63 million in proceeds and recognized an immaterial loss on sale.

STOCKHOLDERS' EQUITY

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Repurchases are made from time to time at management's discretion in accordance with applicable federal securities laws.

For the year ended December 31, 2023, the Company repurchased 337,007 shares at an aggregate cost of $ 75 million.

For the year ended December 31, 2024, the Company repurchased 607,841 shares at an aggregate cost of $ 163 million, including $ 1 million of accrued excise tax.

For the years ended December 31, 2023 and 2022, the Company repurchased 337,007 and 244,561 shares, respectively, at aggregate costs of $ 75 million and $ 52 million, respectively.

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The changes in accumulated other comprehensive loss by component for the years ended December 31, 2024, 2023, and 2022, were as follows:

($ in millions) Benefit Plans Other Total

($ in millions) Benefit Plans Total

Balance as of December 31, 2021 $ ( 923 ) $ ( 923 )

3 unchanged sentences

Amortization of net actuarial loss 1

Settlement gain 1

Tax benefit (expense) for items of other comprehensive income ( 112 ) ( 112 )

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Amortization of net actuarial loss 1

Settlement gain 1

( 4 ) — ( 4 )

Tax expense for items of other comprehensive income ( 61 ) ( 61 )

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The Company's calculation of diluted earnings per common share includes the dilutive effects of the assumed exercise of stock options and vesting of restricted stock based on the treasury stock method.

Under the treasury stock method, the Company has excluded from the diluted share amounts presented above the effects of 0.4 million Restricted Performance Stock Rights ("RPSRs") for each of the years ended December 31, 2023, 2022, and 2021.

Under the treasury stock method, the Company has excluded from the diluted share amounts presented above the effects of 0.4 million

Restricted Performance Stock Rights ("RPSRs") and 0.1 million Restricted Stock Rights ("RSRs") for the year ended December 31, 2024, and 0.4 million RPSRs for each of the years ended December 31, 2023 and 2022.

The following is a description of principal activities from which the Company generates its revenues.

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Alternatively, in instances in which the performance obligations in the modifications are deemed distinct, contract modifications are accounted for prospectively.

The Company’s multi-year shipbuilding contracts with the U.S.

Government are routinely modified as the result of unpriced change orders arising in the ordinary course of business.

These anticipated changes are accounted for as contract modifications when the scope of the work has been approved and it is probable that the price will be approved.

The Company recognizes variable consideration included in the transaction price for a modified contract to the extent the Company believes a significant reversal of revenue is not probable.

The Company considers incentive and award fees to be variable consideration and includes in the transaction price at inception the consideration to which the Company expects to be entitled under the terms and conditions of the contract, generally estimated using a most likely amount approach.

8 unchanged sentences

In determining transaction price, the Company considers incentives and other contingencies to be variable consideration and includes in the initial transaction price the consideration to which the Company expects to be entitled under the terms and conditions of the contract, generally estimated using a most likely amount approach.

Transaction price is limited to the extent of funding allotted by the customer and available for performance, and estimated revenues represent those amounts for which the Company believes a significant reversal of revenue is not probable.

Transaction price is limited to the extent of funding allotted by the customer and available for performance, and

estimated revenues represent those amounts for which the Company believes a significant reversal of revenue is not probable.

Where a series of distinct services has been identified, the Company generally allocates variable consideration to distinct time increments of service.

The Company generally recognizes revenue as it satisfies the related performance obligations over time using a cost-to-cost input method to measure performance progress, because, even when the Company has identified a series of services, its cost incurrence pattern generally is not ratable given the complex nature of the services the Company provides.

Invoices are issued and related payments are received, on the basis of performance progress,

no less frequently than monthly.

Invoices are issued and related payments are received, on the basis of performance progress, no less frequently than monthly.

In addition, many of the Company's U.S.

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C5ISR, CEW&S, LVC 2,458 2,232 1,950

Oil and gas services — — 14

Other 479 467 437

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Contract Balances

Contract assets primarily relate to the Company's rights to consideration for work completed but not billed as of the reporting date when the right to payment is not just subject to the passage of time.

Contract assets primarily relate to the Company's right to consideration for work completed but not billed as of the reporting date when the right to payment is not subject only to the passage of time.

Contract liabilities relate to advance payments, billings in excess of revenues, and deferred revenue amounts.

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Net contract assets were comprised as follows:

($ in millions) 2023 2022 2023 over 2022

($ in millions) 2024 2023

Contract assets $ 1,683 $ 1,537

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Net contract assets $ 909 $ 474

For the year ended December 31, 2023, the Company recognized revenue of $ 690 million related to its contract liabilities as of December 31, 2022.

For the year ended December 31, 2022, the Company recognized revenue of $ 562 million related to its contract liabilities as of December 31, 2021.

For the year ended December 31, 2021, the Company recognized revenue of $ 382 million related to its contract liabilities as of December 31, 2020.

The Company recognized revenue related to its prior year-end contract liabilities of $ 938 million, $ 690 million, and $ 562 million for the years ended December 31, 2024, 2023, and 2022, respectively.

SEGMENT INFORMATION

The Company is organized into three reportable segments:

Ingalls, Newport News, and Mission Technologies, consistent with how management makes operating decisions and assesses performance.

The Company is organized into three operating segments, which are also its reportable segments:

Ingalls, Newport News, and Mission Technologies, consistent with HII’s principal lines of business.

Ingalls includes the Company’s non-nuclear ship design, construction, repair, and maintenance businesses.

Newport News includes all of the Company’s nuclear ship design, construction, overhaul, refueling, and repair and maintenance businesses.

The Mission Technologies segment provides a wide range of services and products, including command, control, computers, communications, cyber, intelligence, surveillance, and reconnaissance systems and operations;

the application of artificial intelligence and machine learning to battlefield decisions;

defense and offensive cyberspace strategies and electronic warfare;

uncrewed autonomous systems;

live, virtual, and constructive training solutions;

fleet sustainment;

and critical nuclear operations.

The Company’s operations are managed by senior executives reporting to the Company’s President and Chief Executive Officer, the chief operating decision maker, who regularly reviews the reportable segments’ operating results to assess performance and allocate resources.

The Company internally manages operations by reference to segment operating income, which is defined as operating income before the Operating FAS/CAS Adjustment and non-current state income taxes, neither of which affects contract performance.

In evaluating operating performance, the chief operating decision maker looks primarily at changes in sales and service revenues, as well as segment operating income.

This approach is consistent with the long-term life cycle of the Company’s contracts, as management assesses the bidding of each contract by focusing on net sales and operating profit and monitors performance in a similar manner through contract completion.

Government Sales - Revenues from the U.S.

Government include revenues from contracts for which HII is the prime contractor, as well as contracts for which the Company is a subcontractor and the ultimate customer is the U.S.

The Company derived over 95 % of its revenues from the U.S.

The Company derived substantially all of its revenues from the U.S.

Government for each of the years ended December 31, 2024, 2023, and 2022.

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Results of Operations by Segment

The following table presents the Company's operating results by segment:

The following tables present the Company's operating results by segment:

Year Ended December 31, 2024

($ in millions) 2023 2022 2021

($ in millions) Ingalls Newport News Mission Technologies Intersegment Eliminations Total

Sales and Service Revenues

Ingalls $ 2,752 $ 2,570 $ 2,528

Newport News 6,133 5,852 5,663

Mission Technologies 2,699 2,387 1,476

Intersegment eliminations ( 130 ) ( 133 ) ( 143 )

Product sales $ 2,424 $ 4,921 $ 119 $ — $ 7,464

Service Revenues 335 1,045 2,691 — 4,071

Intersegment 8 3 127 ( 138 ) —

Total sales and service revenues 2,767 5,969 2,937 ( 138 ) 11,535

Operating Income

Ingalls $ 362 $ 292 $ 281

Newport News 379 357 352

Mission Technologies 101 63 50

Segment Operating Income

Income from operating investments, net 1 — 48 — 49

Other income and gains, net — 10 ( 1 ) — 9

Cost of sales and service revenues

Product 2,070 4,276 102 — 6,448

Service 294 865 2,416 — 3,575

Intersegment 8 3 127 ( 138 ) —

Other segment items 185 589 223 — 997

Total segment operating income $ 211 $ 246 $ 116 $ — $ 573

Non-segment factors affecting operating income

Non-segment factors affecting operating

Operating FAS/CAS Adjustment ( 62 )

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Total operating income $ 535

Year Ended December 31, 2023

($ in millions) Ingalls Newport News Mission Technologies Intersegment Eliminations Total

Sales and Service Revenues

Product sales $ 2,495 $ 5,053 $ 116 $ — $ 7,664

Service Revenues 248 1,077 2,465 — 3,790

Intersegment 9 3 118 ( 130 ) —

Total sales and service revenues 2,752 6,133 2,699 ( 130 ) 11,454

Segment Operating Income

Income from operating investments, net — — 37 — 37

Other income and gains, net 71 — 49 — 120

Cost of sales and service revenues

Product 2,031 4,254 121 — 6,406

Service 207 900 2,223 — 3,330

Intersegment 9 3 118 ( 130 ) —

Other segment items 214 597 222 — 1,033

Total segment operating income $ 362 $ 379 $ 101 $ — $ 842

Non-segment factors affecting operating

Operating FAS/CAS Adjustment ( 72 )

Non-current state income taxes 11

Total operating income $ 781

Year Ended December 31, 2022

($ in millions) Ingalls Newport News Mission Technologies Intersegment Eliminations Total

Sales and Service Revenues

Product sales $ 2,372 $ 4,821 $ 90 $ — $ 7,283

Service Revenues 186 1,026 2,181 — 3,393

Intersegment 12 5 116 ( 133 ) —

Total sales and service revenues 2,570 5,852 2,387 ( 133 ) 10,676

Segment Operating Income

Income from operating investments, net — — 48 — 48

Other income and gains, net — — 1 — 1

Cost of sales and service revenues

Product 1,931 4,097 73 — 6,101

Service 162 858 1,970 — 2,990

Intersegment 12 5 116 ( 133 ) —

Other segment items 173 535 214 — 922

Total segment operating income $ 292 $ 357 $ 63 $ — $ 712

Non-segment factors affecting operating

Operating FAS/CAS Adjustment ( 145 )

Non-current state income taxes ( 2 )

Total operating income $ 565

Sales transactions between segments are generally recorded at cost.

Other segment items consist of general and administrative expenses.

Other Financial Information

The following tables present the Company's assets, capital expenditures, and depreciation and amortization by segment:

($ in millions) 2023 2022 2021

Ingalls $ 1,619 $ 1,633 $ 1,659

Newport News 4,612 4,344 4,179

Mission Technologies 3,161 3,347 3,553

Corporate 1,823 1,533 1,236

Total assets $ 11,215 $ 10,857 $ 10,627

The following tables present the Company's capital expenditures, as presented to the chief operating decision maker, and depreciation and amortization by segment:

Year Ended December 31

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Mission Technologies 18 11 20

Total segment capital expenditures 346 272 271

Corporate 7 6 1

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Mission Technologies 110 120 130

Total segment depreciation and amortization 324 346 357

Corporate 2 1 1

Total depreciation and amortization $ 326 $ 347 $ 358

Asset information by segment is not disclosed because it is not a key measure of performance used by the chief operating decision maker.

ACCOUNTS RECEIVABLE

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The Company's accounts receivable are primarily with the U.S.

Government and include balance amounts from companies acting as a prime contractor to the U.S.

Government and include amounts from companies acting as a prime contractor to the U.S.

The Company does not have material exposure to accounts receivable credit risk.

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HII performs impairment tests for goodwill each year and between annual impairment tests if an event occurs or circumstances change that would more likely than not reduce the fair values of the Company's reporting units below their carrying values.

Reporting units are aligned with the Company's businesses.

Reporting units are aligned with the Company's segments.

The Company assesses qualitative factors to determine whether it is more likely than not that the fair value of the goodwill allocated to the reporting unit is less than its carrying amount.

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In connection with the Company’s annual goodwill impairment test as of October 31, 2024, management tested goodwill for each of its three reporting units with goodwill balances.

Based on the annual goodwill impairment

analysis, the Company estimated that the fair value of the Mission Technologies segment exceeded its carrying value by approximately 10 %.

The Company determined that the estimated fair values of its remaining reporting units exceeded by more than 10 % their corresponding carrying values as of October 31, 2023.

As of each of December 31, 2023 and 2022, accumulated goodwill impairment losses were $ 2,755 million, comprised of $ 1,568 million and $ 1,187 million at Ingalls and Newport News, respectively.

For the year ended December 31, 2022, the Company recorded goodwill adjustments of $ 10 million related to the acquisition of Alion in 2021, resulting from updates to Alion's tax carryforwards and the true-up of estimated taxes to filed income tax returns for the pre-acquisition period.

For the years ended December 31, 2023 and 2022, the carrying amounts of goodwill changed as follows:

Based on the annual goodwill impairment analysis, the Company determined that the estimated fair values of all reporting units exceeded by more than 10 % their corresponding carrying values as of October 31, 2024.

As of both December 31, 2024 and 2023, accumulated goodwill impairment losses were $ 2,755 million, comprised of $ 1,568 million and $ 1,187 million at Ingalls and Newport News, respectively.

For the years ended December 31, 2024 and 2023, the carrying amounts of goodwill were as follows:

($ in millions) Ingalls Newport News Mission Technologies Total

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Other Intangible Assets

The Company performs tests for impairment of long-lived assets whenever events or circumstances suggest that long-lived assets may be impaired.

The Company evaluates the recoverability of its intangible long-lived assets when changes in economic circumstances or business objectives indicate the carrying value may not be recoverable.

The Company's purchased intangible assets are being amortized on a straight-line basis or a method based on the pattern of benefits over their estimated useful lives.

Net intangible assets consist primarily of amounts relating to customer relationships and existing contract backlog within Mission Technologies, as well as nuclear-powered aircraft carrier and submarine program intangible assets, with an aggregate weighted-average useful life of 29 years based on the long life cycle of the related programs.

Aggregate amortization expense for the years ended December 31, 2023, 2022, and 2021, was $ 128 million, $ 140 million, and $ 86 million, respectively.

Net intangible assets consist primarily of amounts relating to acquired customer relationships and contract backlog within Mission Technologies, as well as nuclear-powered aircraft carrier and submarine program intangible assets, with an aggregate weighted-average useful life of 29 years based on the long life cycle of the related programs.

Amortization expense for the years ended December 31, 2024, 2023, and 2022, was $ 109 million, $ 128 million, and $ 140 million, respectively.

The Company expects amortization for currently recorded purchased intangible assets of $ 99 million in 2025, $ 80 million in 2026, $ 60 million in 2027, $ 53 million in 2028, and $ 48 million in 2029.

The Company's earnings are primarily domestic, and its effective tax rate on earnings from operations for the year ended December 31, 2024, was 14.5 %, compared with 20.2 % and 19.5 % for 2023 and 2022, respectively.

For the year ended December 31, 2023, the Company's effective tax rate differed from the statutory federal corporate income tax rate primarily as a result of estimated research and development tax credits for 2023 and prior years.

For the year ended December 31, 2022, the Company's effective tax rate differed from the statutory federal corporate income tax rate primarily as a result of estimated research and development tax credits for 2022 and prior years.

For the year ended December 31, 2021, the Company’s effective tax rate differed from the statutory federal corporate income tax rate primarily as a result of a tax loss associated with the sale of the Company's oil and gas business and estimated research and development tax credits for 2021 and prior years.

For the years ended December 31, 2024, 2023, and 2022, the Company's effective tax rate differed from the statutory federal corporate income tax rate primarily as a result of research and development tax credits.

Non-current state income taxes include 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 unrecognized tax benefits in the relevant period.

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Current period state income tax expense is charged to contract costs and included in cost of sales and service revenues in segment operating income.

For the years ended December 31, 2024, 2023, and 2022, state income taxes in Virginia make up the majority of the state income tax expense.

Federal and foreign income tax expense for the years ended December 31, 2024, 2023, and 2022, consisted of the following:

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Earnings and income tax from foreign operations are not material for any periods presented.

The following table reconciles our actual income tax expense to income tax expense based on the statutory federal corporate income tax rate:

The following table reconciles the Company's actual income tax expense to income tax expense based on the statutory federal corporate income tax rate:

Year Ended December 31

($ in millions) 2023 2022 2021

Income tax expense (benefit) on operations at statutory rate $ 179 $ 151 $ 131

Tax benefit - sale of business — — ( 11 )

Unrecognized tax benefits 7 7 30

2024 2023 2022

($ in millions) Dollars Percent Dollars Percent Dollars Percent

federal statutory tax rate $ 135 21.0 % $ 179 21.0 % $ 151 21.0 %

Foreign tax effects 2 0.3 % — — % — — %

Effect of cross-border tax laws ( 3 ) ( 0.5 ) % ( 1 ) ( 0.1 ) % — — %

Research and development tax credit ( 49 ) ( 7.6 ) % ( 22 ) ( 2.6 ) % ( 22 ) ( 3.1 ) %

Other, net 8 7 6

Total federal and foreign income taxes $ 172 $ 140 $ 78

Other ( 2 ) ( 0.3 ) % ( 2 ) ( 0.2 ) % ( 1 ) ( 0.1 ) %

Nontaxable or nondeductible items 1 0.2 % 6 0.7 % 6 0.8 %

Changes in unrecognized tax benefits 18 2.8 % 10 1.2 % 8 1.1 %

Interest accrual on tax refunds ( 8 ) ( 1.2 ) % ( 6 ) ( 0.7 ) % ( 3 ) ( 0.4 ) %

Other adjustments ( 1 ) ( 0.2 ) % 8 0.9 % 1 0.2 %

Effective income tax rate $ 93 14.5 % $ 172 20.2 % $ 140 19.5 %

Cash paid for income taxes (net of refunds) consisted of the following:

($ in millions) 2024 2023 2022

Federal $ 182 $ 273 $ 96

Virginia 56 30 13

Mississippi (a) (a) 8

Other 17 26 10

Total state 73 56 31

Foreign — 1 —

Cash paid for income taxes (net of refunds) $ 255 $ 330 $ 127

(a) The amount of income taxes paid during the year does not meet the 5 % disaggregation threshold and is included in 'Other.

Unrecognized Tax Benefits - Unrecognized tax benefits represent the gross value of the Company's uncertain tax positions that have not been reflected in the consolidated statements of operations and comprehensive income.

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Unrecognized tax benefits at end of the year $ 110 $ 98 90

As of December 31, 2023 and 2022, the estimated amounts of the Company's uncertain tax positions, excluding interest and penalties, were liabilities of $ 98 million and $ 90 million, respectively.

Assuming sustainment of these positions, as of December 31, 2023 and 2022, the reversal of $ 76 million and $ 70 million, respectively, of the accrued amounts would favorably affect the Company's effective federal income tax rate in future periods.

Assuming sustainment of these positions, as of December 31, 2024, 2023, and 2022, the reversal of $ 91 million, $ 76 million, and $ 70 million, respectively, of the accrued amounts would favorably affect the Company's effective federal income tax rate in future periods.

The Company recognizes interest and penalties related to unrecognized tax benefits as income tax expense.

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Virginia 2021 - 2023

(1) The 2016, 2018, 2019, 2021, and 2022 tax years are closed except for the research and development tax credits, and the 2017 tax year is closed except for the manufacturing deduction and research and development tax credit.

Although the Company believes it has adequately provided for all unrecognized tax benefits, positions asserted by tax authorities could result in amounts greater than the Company's accrued position.

Accordingly, additional provisions for federal and state income tax related matters could be recorded in the future as revised estimates are made or the underlying matters are effectively settled or otherwise resolved.

Conversely, the Company could settle positions with tax authorities for amounts lower than have been accrued.

It is reasonably possible that within the next 12 months the amount of unrecognized tax benefits could decrease by $ 17 million due to the lapse of the statute of limitations.

During 2013 the Company entered into the pre-Compliance Assurance Process with the IRS for years 2011 and 2012.

Tax years 2014 and 2015 have been closed with the IRS.

The Company is part of the IRS Compliance Assurance Process program for the 2014 through 2023 tax years.

Open tax years related to state jurisdictions remain subject to examination.

(1) Returns for the 2016, 2018, 2019, 2021, and 2022 tax years were filed under the Compliance Assurance Process ("CAP") program and accepted by the IRS with the exception of the research and development tax credit.

The 2017 tax year was also filed under the CAP program and was accepted by the IRS with the exception of the manufacturing deduction and the research and development tax credit.

The statute of limitations for the 2020 tax year has been extended to October 8, 2025.

IRS Audits - The Company was part of the IRS CAP program for the 2014 through 2023 tax years.

Tax years through 2015 have been closed with the IRS.

In calendar years 2020, 2021, and 2022, the Company filed refund claims for the research and development ("R&D") tax credit for tax years 2016-2019.

Since these are refund claims, any adjustments to the amount claimed would not result in cash tax payments to the IRS.

In addition, the Company has claimed R&D tax credits on its original filed returns since 2020.

The status of the pending R&D tax credits is reviewed below.

2016-2017 claims - In December 2024, following an audit, an IRS examination team issued a Notice of Proposed Adjustment ("NOPA") proposing to disallow the Company’s 2016-2017 R&D tax credit refund claims.

The Company plans to pursue IRS administrative appeals in an effort to resolve issues raised by the NOPA.

If acceptable resolutions are not achieved through IRS administrative processes, the Company intends to vigorously defend its positions through litigation, which will likely take several years to achieve resolution.

2018 claim - In March 2023, the IRS notified the Company that the IRS would not process its 2018 refund claim for the R&D tax credit because the agency determined the claim did not satisfy the requirements of Chief Counsel Memorandum 20214101F, an internal agency memorandum addressing the required contents of R&D tax credit refund claims.

The Company disagrees with that determination and believes the 2018 claim was well-supported, met all applicable requirements, and should have been processed.

The Company will take all necessary steps to pursue the 2018 refund claim including litigation, which will likely take several years to resolve.

2019 claim - The IRS has processed the company’s amended R&D tax credit refund claim for 2019 and assigned it to IRS exam for audit.

The amended refund claim was filed in October 2023 with a claimed credit amount that was substantively the same as the Company’s original refund claim for the 2019 tax year.

2020-2023 credits - The IRS initiated audits for the 2020, 2021, and 2022 tax years, with minimal activity to date.

The audits for 2021 and 2022 are limited to the R&D tax credit as the returns for those years were filed under the CAP program and were accepted by the IRS with the exception of the R&D tax credit.

The Company’s conclusion that it is more likely than not the Company’s R&D tax credit positions will ultimately be sustained is unchanged as of December 31, 2024.

While the Company believes it has adequately provided for all unrecognized tax benefits, the Company might ultimately settle any disputed item for amounts greater than or less than the Company's accrued position.

Accordingly, additional provisions for federal and state income tax related matters could be recorded in the future, and may be material, as revised estimates are made or the underlying matters are effectively settled or otherwise resolved.

Deferred Income Taxes - Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and for income tax purposes.

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Deferred Tax Assets

Retirement benefits $ — $ 23

Workers' compensation $ 150 $ 157

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($ in millions) 2024 2023

Senior notes due December 1, 2027, 3.483% $ 600 $ 600

Senior notes due May 1, 2025, 3.844% $ 500 $ 500

Senior notes due May 1, 2030, 4.200% 500 500

Senior notes due August 16, 2023, 0.670% — 400

Senior notes due December 1, 2027, 3.483% 600 600

Senior notes due August 16, 2028, 2.043% 600 600

Term loan due August 19, 2024 145 225

Senior notes due January 15, 2030, 5.353% 500 —

Senior notes due May 1, 2030, 4.200% 500 500

Senior notes due January 15, 2035, 5.749% 500 —

Mississippi economic development revenue bonds due May 1, 2024, 7.81% — 84

Term loan due August 19, 2024 — 145

Gulf opportunity zone industrial development revenue bonds due December 1, 2028, 4.55% 21 21

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Long-term debt, net of current portion $ 2,700 $ 2,214

Debt Facilities - In April 2023, the Company amended its existing $ 1.5 billion credit facility, which includes a letter of credit subfacility of $ 300 million (the "Revolving Credit Facility"), and term loan due August 19, 2024 (the “Term Loan”), to change the benchmark interest rate from the London Interbank Offered Rate to the Secured Overnight Financing Rate (“SOFR”).

The interest rate on both facilities is based on SOFR plus an interest spread, currently 1.475 %, based on the Company's credit rating, which may vary between 1.225 % and 2.100 %.

The commitment fee rate on the Revolving Credit Facility as of December 31, 2023, was 0.200 % and may vary between 0.125 % and 0.300 %.

The Company does not expect the transition to the SOFR benchmark to materially impact its consolidated financial position, results of operations, or cash flows.

As of December 31, 2023, the Company had $ 12 million in issued but undrawn letters of credit and $ 1,488 million unutilized under the Revolving Credit Facility.

Debt Facilities - In September 2024, the Company amended its existing $ 1.5 billion credit facility, increasing the capacity thereunder to $ 1.7 billion and extending the maturity date for five years from signing (the "Second Amended and Restated Revolving Credit Facility").

The Second Amended and Restated Revolving Credit Facility has a variable interest rate on outstanding borrowings based on the Secured Overnight Financing Rate ("SOFR") plus an interest spread, currently 1.475 % based upon the Company's credit rating, which may vary between 1.225 % and 2.100 %.

The commitment fee rate on the Second Amended and Restated Revolving Credit Facility as of December 31, 2024, was 0.200 % and may vary between 0.125 % and 0.300 %.

The Second Amended and Restated Revolving Credit Facility includes a letter of credit sub-facility of $ 300 million.

As of December 31, 2024, the Company had $ 11 million in issued but undrawn letters of credit and $ 1,689 million unutilized under the Second Amended and Restated Revolving Credit Facility.

The Company had unamortized debt issuance costs associated with its debt facilities of $ 10 million and $ 6 million as of December 31, 2024 and 2023, respectively.

The Revolving Credit Facility and the Term Loan contain customary affirmative and negative covenants, as well as a financial covenant based on a maximum total leverage ratio.

Each of the Company's existing and future material wholly owned domestic subsidiaries, except those that are specifically designated as unrestricted subsidiaries, are and will be guarantors under the Revolving Credit Facility and the Term Loan.

Subsidiary Guarantors.

The Company maintains an unsecured commercial paper note program, under which the Company may issue up to $ 1 billion of unsecured commercial paper notes.

The Second Amended and Restated Revolving Credit Facility contains customary affirmative and negative covenants and events of default, as well as a financial covenant based on a maximum total leverage ratio.

The maximum total leverage ratio covenant limits our borrowing capacity under the Second Amended and Restated Revolving Credit Facility to $ 1,474 million as of December 31, 2024.

In September 2024, the Company's borrowing capacity under its unsecured commercial paper note program increased from $ 1 billion to $ 1.7 billion.

As of December 31, 2024, the Company had no outstanding debt under the commercial paper program.

Senior Notes - The terms of the Company's senior notes limit the Company’s ability and the ability of certain of its subsidiaries to create liens, enter into sale and leaseback transactions, sell assets, and effect consolidations or mergers.

Senior Notes - In November 2024, the Company issued $ 500 million aggregate principal amount of 5.353% senior notes due 2030 and $ 500 million aggregate principal amount of 5.749% senior notes due 2035.

The net proceeds from these senior notes were expected to be used for general corporate purposes, including debt repayment (which may include repayment of its 3.844 % senior notes due 2025 and commercial paper borrowings) and working capital.

The terms of the Company's senior notes limit the Company’s ability and the ability of certain of its subsidiaries to create liens, enter into sale and leaseback transactions, sell assets, and effect consolidations or mergers.

Interest on the senior notes is payable semiannually.

The Company had unamortized debt issuance costs associated with the senior notes of $ 17 million and $ 11 million as of December 31, 2024 and 2023, respectively.

I n August 2023, the Company repaid $ 400 million aggregate principal amount of 0.670 % senior notes upon their maturity.

Interest on the Mississippi Economic Development Revenue Bonds and Gulf Opportunity Zone Industrial Development Revenue Bonds is payable semiannually.

In May 2024, the Company repaid $ 84 million aggregate principal amount of 7.81 % Mississippi Economic Development Revenue Bonds upon their maturity.

Interest on the Gulf Opportunity Zone Industrial Development Revenue Bonds is payable semiannually.

The agreements governing the Company's debt contain customary affirmative and negative covenants.

The Company was in compliance with all debt covenants during the year ended December 31, 2024.

Each of the Company's existing and future materially wholly owned domestic subsidiaries, except those that are specifically designated as unrestricted subsidiaries, are and will be guarantors under existing debt facilities, with the exception of the Gulf Opportunity Zone Industrial Development Revenue Bonds.

The estimated fair values of the Company's total long-term debt, including the current portion of long-term debt and excluding finance lease liabilities, as of December 31, 2024, and December 31, 2023, were $ 3,110 million and $ 2,309 million, respectively.

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The fair values of the Company's long-term debt were calculated based on recent trades of the Company's debt instruments in inactive markets, which fall within Level 2 under the fair value hierarchy.

As of December 31, 2023, the aggregate amounts of principal payments due on long-term debt, excluding finance lease liabilities, within the next five years consisted of $ 229 million due in 2024, $ 500 million due in 2025, $ 600 million due in 2027, and $ 621 million due in 2028.

As of December 31, 2024, the aggregate amounts of principal payments due on long-term debt, excluding finance lease liabilities, within the next five years consisted of $ 500 million due in 2025, $ 600 million due in 2027, and $ 621 million due in 2028.

In January 2024, the Company prepaid the remaining $ 145 million balance of the Term Loan.

1 unchanged sentence

The Company is involved in legal proceedings before various courts and administrative agencies, and is periodically subject to government examinations, inquiries and investigations.

Pursuant to FASB ASC 450 - "Contingencies" , the Company has accrued for losses associated with investigations, claims, and litigation when, and to the extent that, loss amounts related to the investigations, claims, and litigation are probable and can be reasonably estimated.

The actual losses that might be incurred to resolve such investigations, claims, and litigation may be higher or lower than the amounts accrued.

The Company has also provided footnote disclosure for matters for which a material loss is reasonably possible but a reserve has not been accrued because the likelihood of a material loss is not probable.

The Company accrues for losses associated with legal proceedings when, and to the extent that, loss amounts related to the legal proceedings are probable and can be reasonably estimated.

The actual losses that might be incurred to resolve such legal proceedings may be higher or lower than the amounts accrued.

The Company also provides footnote disclosure for matters for which a material loss is reasonably possible but a reserve has not been accrued because the likelihood of a material loss is not probable.

Antitrust Complaint - On October 6, 2023, a class action antitrust lawsuit was filed against the Company and other defendants in the U.S.

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The case is at an early stage, and, as a result, the Company currently is unable to estimate an amount or range of reasonably possible loss or to express an opinion regarding the ultimate outcome of the matter.

False Claims Act Complaint - In 2016, the Company was made aware that it is a defendant in a qui tam False Claims Act lawsuit pending in the U.S.

District Court for the Middle District of Florida related to the Company’s purchases of allegedly non-conforming parts from a supplier for use in connection with U.S.

Government contracts.

In August 2019, the Department of Justice (“DoJ”) declined to intervene in the lawsuit, and the lawsuit was unsealed.

The court dismissed the complaint in September 2021, and the plaintiff appealed the dismissal to the United States Court of Appeals for the 11th Circuit.

In August 2023, the 11th Circuit confirmed the district court's dismissal of the complaint.

Insurance Claims - In September 2020, the Company filed a complaint against 32 reinsurers in the Superior Court, State of Vermont, Franklin Unit, seeking a judgment declaring that the Company's business interruption and other losses associated with COVID-19 are covered by the Company's property insurance program.

The Company also has initiated arbitration proceedings against six other reinsurers seeking similar relief.

The Company also initiated arbitration proceedings against six other reinsurers seeking similar relief.

In July 2021, the Vermont court granted the reinsurers’ motion for judgment on the pleadings, which would have ended the Company’s claim.

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Any suspension or debarment would have a material effect on the Company because of its reliance on government contracts.

During the third quarter of 2024, the Company identified certain quality issues involving noncompliance with welding procedures at Newport News.

The Company has commenced an investigation and disclosed the matter to the U.S.

The Company is working with its U.S.

Navy customer to evaluate the full extent of the matter and its potential impact on operations.

Based upon the early stage of the Company’s investigation, the Company cannot at this time predict or reasonably estimate the outcome of this matter, including its financial impact.

Asbestos Related Claims - HII and its predecessors-in-interest are defendants in a longstanding series of cases that have been and continue to be filed in various jurisdictions around the country, wherein former and current employees and various third parties allege exposure to asbestos containing materials while on or associated with HII premises or while working on vessels constructed or repaired by HII.

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The Company's consideration also includes a contingent participating interest in the final amount recovered.

The Company is party to various other claims, legal proceedings, and investigations that arise in the ordinary course of business, including U.S.

Government investigations that could result in administrative, civil, or criminal proceedings involving the Company.

The Company is party to various other claims, arbitrations, investigations, and other legal proceedings that arise in the ordinary course of business, including U.S.

Government investigations and claims that could result in administrative, civil, or criminal proceedings involving the Company.

The Company is a contractor with the U.S.

Government, and such proceedings can therefore include False Claims Act allegations against the Company.

Although the Company believes that the resolution of these other claims, legal proceedings, and investigations will not have a material effect on its consolidated financial position, results of operations, or cash flows, the Company cannot predict what new or revised claims or litigation might be asserted or what information might come to light and can, therefore, give no assurances regarding the ultimate outcome of these matters.

Although, based on the information available to the Company to date, the Company believes that the resolution of these other claims, legal proceedings, and investigations will not have a material effect on its consolidated financial position, results of operations, or cash flows, the Company cannot predict what new or revised claims or litigation might be asserted or what information might come to light and can, therefore, give no assurances regarding the ultimate outcome of these matters.

The Company leases certain land, warehouses, office space, and production, office, and technology equipment, among other items.

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Many land, warehouse, and office space leases include renewal terms that can extend the lease term.

The exercise of lease renewal options is at our sole discretion.

The exercise of lease renewal options is at the Company's sole discretion.

The depreciable life of assets and leasehold improvements is generally limited by the expected lease term.

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The Company believes its outstanding customer settlements will be resolved without material impact to its financial position, results of operations, or cash flows.

Environmental Matters - The estimated cost to complete environmental remediation has been accrued when it is probable that the Company will incur such costs in the future to address environmental conditions at currently or formerly owned or leased operating facilities, or at sites where it has been named a Potentially Responsible Party by the Environmental Protection Agency or similarly designated by another environmental agency, and the related costs can be estimated by management.

These accruals do not include any litigation costs related to environmental matters, nor do they include amounts recorded as asset retirement obligations.

Management estimates that as of December 31, 2023, the probable estimable future cost for environmental remediation was not material.

that future remediation expenditures will have a material effect on the Company's consolidated financial position, results of operations, or cash flows.

Environmental Matters - The estimated costs to complete environmental remediation are accrued when it is probable that the Company will incur such costs in the future to address environmental conditions at currently or formerly owned or leased operating facilities, or at sites where it has been named a Potentially Responsible Party by the Environmental Protection Agency or similarly designated by another environmental agency, and the related costs can be reasonably estimated by management.

When only a range of costs is established and no amount within the range is more probable than another, the minimum amount in the range is accrued.

Environmental liabilities are recorded on an undiscounted basis and are expensed or capitalized as appropriate.

Capitalized expenditures, if any, relate to long-lived improvements in currently operating facilities.

The Company does not

record insurance recoveries before collection is probable.

As of December 31, 2024 and 2023, the Company did not have any accrued receivables related to insurance reimbursements or recoveries for environmental matters.

The Company’s environmental liability accruals do not include any litigation costs related to environmental matters, nor do they include amounts recorded as asset retirement obligations.

Management estimates that as of December 31, 2024, the probable estimable future cost for environmental remediation is not material.

Although management cannot predict whether new information gained as remediation progresses or the Company incurs additional remediation obligations will materially affect the estimated liability accrued, management does not believe that future remediation expenditures will have a material effect on the Company's consolidated financial position, results of operations, or cash flows.

Financial Arrangements - In the ordinary course of business, HII uses letters of credit issued by commercial banks to support certain leases, insurance policies, and contractual performance obligations, as well as surety bonds issued by insurance companies principally to support the Company's self-insured workers' compensation plans.

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Although the Company believes that the resolution of any of these matters will not have a material effect on its consolidated financial position, results of operations, or cash flows, it cannot predict the ultimate outcome of these matters.

Other Matters - The Company has been in negotiations with a Mission Technologies customer since January 2023 to address issues related to a manufacturing contract.

The Company has recorded provisions for contract losses that were not material to the Company's consolidated financial position, results of operations, or cash flows.

The parties have not agreed upon a resolution of the matter, and the Company could incur additional future losses on the contract.

The Company therefore cannot predict or give assurances regarding the ultimate outcome of this matter.

Other Matters - The Company began negotiations with a Mission Technologies customer in January 2023 to address issues related to a manufacturing contract, and the parties settled the matter in May 2024.

The Company has recorded losses relating to the contract that were not material to the Company's consolidated financial position, results of operations, or cash flows.

The Company previously disclosed an issue regarding the degree of corrosion of certain steel plates used to fabricate Friedman (NSC 11).

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Those estimates include management's best assessment of the underlying causal events, contractual entitlements, and the probability of successful resolution with the customer.

During the fourth quarter of 2024, the Company updated its estimates to reflect recent developments and progress made in ongoing negotiations with the customer regarding alternatives to resolve the matter.

The Company does not expect the final resolution of the matter to have a material impact to the Company's consolidated financial position, results of operations, or cash flows.

Collective Bargaining Agreements - Of the Company's over 44,000 employees, approximately 45 % are covered by a total of nine collective bargaining agreements and one site stabilization agreement.

Newport News has three collective bargaining agreements covering represented employees, which expire in April 2024, February 2027, and December 2027.

Newport News craft workers employed at the Kesselring Site near Saratoga Springs, New York are represented under an indefinite Department of Energy ("DoE") site agreement.

Collective Bargaining Agreements - Of the Company's over 44,000 employees, approximately 45 % are covered by a total of nine collective bargaining agreements.

Newport News has three collective bargaining agreements covering represented employees, which expire in February 2027, December 2027 and April 2029.

Ingalls has five collective bargaining agreements covering represented employees, all of which expire in March 2026.

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Company contributions for most defined contribution pension plans are based on the matching of employee contributions up to 4 % of eligible compensation.

Certain hourly employees are covered under a target benefit plan.

In addition to the 401(k) defined contribution pension benefit formula, non-collectively bargained employees hired after June 30, 2008, and certain collectively bargained employees hired after July 10, 2017, are eligible to participate in a defined contribution benefit program in lieu of a defined benefit pension plan.

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Benefits paid ( 307 ) ( 333 ) ( 45 ) ( 41 )

Transfers 2 — — —

Settlement ( 74 ) ( 390 ) — —

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(2) Included in pension plan liabilities and other postretirement plan liabilities, respectively.

On November 3, 2023, the Company purchased an annuity contract to transfer $ 411 million of gross defined benefit pension obligations and related plan assets to an insurance company for approximately 10,000 retirees and beneficiaries.

In 2024, the Company offered a bulk lump sum window for participants not currently receiving benefits where the present value of the deferred benefit is less than $ 75 thousand.

Approximately 3,900 participants received lump sum distributions of approximately $ 80 million.

The transaction did not trigger settlement accounting under FASB Accounting Standards Codification ("ASC") 715 – “Compensation – Retirement Benefits.”

In 2023, the Company purchased an annuity contract to transfer $ 411 million of gross defined benefit pension obligations and related plan assets to an insurance company for approximately 10,000 retirees and beneficiaries.

The annuity contract was purchased using assets from the pension master trust, and no additional funding contribution was required.

This transaction had no impact on the amount, timing, or form of the monthly retirement benefit payments to the affected retirees and beneficiaries.

The transaction did not trigger settlement accounting under ASC 715 – “Compensation – Retirement Benefits.”

The transaction did not trigger settlement accounting under FASB ASC 715 – “Compensation – Retirement Benefits.”

In 2022, the Company purchased annuity contracts to transfer $ 32 million of gross defined benefit pension obligations and related plan assets to an insurance company for approximately 500 retirees and beneficiaries.

The annuity contracts were purchased using assets from the pension master trust, and no additional funding contribution was required.

The annuity contracts were purchased using assets from the pension master trust, and no additional funding contribution

was required.

This transaction had no impact on the amount, timing, or form of the monthly retirement benefit payments to the affected retirees and beneficiaries.

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The ABO is similar to the PBO, but does not provide for future salary increases.

The PBOs and fair values of plan assets for all qualified and non-qualified pension plans with PBOs in excess of plan assets were $ 864 million and $ 607 million, respectively, as of December 31, 2023, and $ 868 million and $ 611 million, respectively, as of December 31, 2022.

The PBOs and fair values of plan assets for all qualified and non-qualified pension plans with PBOs in excess of plan assets were $ 189 million and zero, respectively, as of December 31, 2024, and $ 864 million and $ 607 million, respectively, as of December 31, 2023.

The ABOs for all qualified and non-qualified pension plans with ABOs in excess of plan assets were $ 178 million and $ 186 million as of December 31, 2024, and 2023, respectively.

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Certain agreements with counterparties employ set-off agreements, collateral support arrangements, and other risk mitigation practices designed to reduce the net credit risk exposure in the event of a counterparty default.

The Company has credit policies and processes that manage concentrations of risk by seeking to undertake transactions with large well-capitalized counterparties and by monitoring the creditworthiness of these counterparties.

The Company has credit policies and processes that manage

concentrations of risk by seeking to undertake transactions with large well-capitalized counterparties and by monitoring the creditworthiness of these counterparties.

Certain investments that are measured at fair value using NAV per share (or its equivalent) as a practical expedient are not required to be categorized in the fair value hierarchy table.

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Group annuity contract 3 — 3 —

Cash and cash equivalents, net 21 21 — —

Net plan assets subject to leveling $ 3,787 $ 1,520 $ 2,267 $ —

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Group annuity contract 3 — 3 —

Cash and cash equivalents, net 28 28 — —

Net plan assets subject to leveling $ 3,643 $ 1,723 $ 1,920 $ —

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The 2022 Plan permits awards of stock options, stock appreciation rights, and other stock awards.

Stock awards, in the form of RPSRs, restricted stock rights ("RSRs"), and stock rights, are granted to key employees and members of the board of directors without payment to the Company.

Stock awards, in the form of RPSRs, RSRs, and stock rights, are granted to key employees and members of the board of directors without payment to the Company.

The 2022 Plan authorized (i) 1.3 million new shares;

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All of the RPSRs are subject to the achievement of performance-based targets at the end of the respective vesting periods and will ultimately vest between 0 % and 200 % of grant date value.

Restricted Stock Rights - Retention stock awards are granted to key employees primarily to ensure business continuity.

In 2023, the Company granted approximately 9,500 RSRs at a weighted average share price of $ 213.37 , with cliff vesting two to three years from the grant date.

In 2022, the Company granted approximately 2,400 RSRs at a weighted average share price of $ 208.81 , with cliff vesting one to three years from the grant date.

In 2021, the Company granted approximately 31,400 RSRs at a weighted average share price of $ 187.59 , with cliff vesting one to three years from the grant date.

As of December 31, 2023, approximately 13,600 RSRs were outstanding.

Compensation Restricted Stock Rights - For the year ended December 31, 2024, the Company granted approximately 0.1 million compensation RSRs at a weighted average share price of $ 287.38 .

These rights vest 33 1/3% upon each of the first, second, and third anniversaries of the grant date.

No compensation RSRs were granted for the years ended December 31, 2023 and 2022.

Retention Restricted Stock Rights - Retention stock awards are granted to key employees primarily to incentivize continued employment with the Company.

In 2024, the Company granted approximately 2,200 retention RSRs at a weighted average share price of $ 281.01 , with cliff vesting one to three years from the grant date.

In 2023, the Company granted approximately 9,500 retention RSRs at a weighted average share price of $ 213.37 , with cliff vesting two to three years from the grant date.

In 2022, the Company granted approximately 2,400 retention RSRs at a weighted average share price of $ 208.81 , with cliff vesting one to three years from the grant date.

As of December 31, 2024, approximately 9,200 retention RSRs were outstanding.

The Company also received transfers of stock awards from employees in satisfaction of minimum tax withholding obligations associated with the vesting of stock awards during the period.

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Non-employee directors may also elect to receive their annual cash retainers in the form of stock units that become payable upon termination of the director’s board service.

Non-employee directors who elect to receive their annual cash retainers in the form of stock units and have met their stock ownership requirements may elect under the terms of the Amended and Restated Directors’ Compensation Policy and Amended and Restated Board Deferred Compensation Policy to receive in the following calendar year either shares of the Company's common stock or stock units that are payable in the fifth calendar year after the year in which the stock units are earned, or, if earlier, upon termination of the director’s board service.

stock units that are payable in the fifth calendar year after the year in which the stock units are earned, or, if earlier, upon termination of the director’s board service.

Stock award activity for the years ended December 31, 2024, 2023, and 2022, was as follows:

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Debt, the Company issued senior notes through the consolidating parent company, HII.

Performance of the Company's obligations under its senior notes outstanding as of December 31, 2023, including any repurchase obligations resulting from a change of control, is fully and unconditionally guaranteed, jointly and severally, on an unsecured basis, by each of HII's existing and future material domestic subsidiaries ("Subsidiary Guarantors").

Performance of the Company's obligations under its senior notes outstanding as of December 31, 2024, including any repurchase obligations resulting from a change of control, is fully and unconditionally guaranteed, jointly and severally, on an unsecured basis, by each of HII's existing and future material domestic subsidiaries ("Subsidiary

Guarantors").

The Subsidiary Guarantors are 100 % owned by HII.

Each HII subsidiary that did not provide a guarantee ("Non-Guarantors") is not material and HII, as the parent company issuer, did not have independent assets or operations.

There are no significant restrictions on the ability of the parent company and the Subsidiary

Guarantors to obtain funds from their respective subsidiaries by dividend or loan, except those imposed by applicable law.

There are no significant restrictions on the ability of the parent company and the Subsidiary Guarantors to obtain funds from their respective subsidiaries by dividend or loan, except those imposed by applicable law.

SUBSEQUENT EVENTS

In December 2024, the Company entered into a definitive agreement to acquire substantially all of the assets of W International, a South Carolina-based complex metal fabricator specializing in the manufacture of shipbuilding structures, modules, and assemblies, for a purchase price of $ 140 million, subject to customary purchase price adjustments.

The transaction closed in January 2025 using cash on hand, and the Company is in the process of completing its purchase accounting evaluation and other related disclosures.

The acquired manufacturing facility operates within the Newport News segment.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data