What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-05 compared with 2025-02-06 · 219 added, 220 removed, 1225 unchanged (26% of the section changed)

7 unchanged sentences

and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2025, the related notes and the financial statement schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with the accounting principles generally accepted in the United States of America.

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 5, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.

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We compared those estimates to revenue recognized by the Company.

• 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.

• We obtained the population of contracts during 2025 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 have an increased level of risk.

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

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Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Huntington Ingalls Industries, Inc.

W e have audited the internal control over financial reporting of Huntington Ingalls Industries, Inc.

and subsidiaries (the "Company") as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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Change in unamortized benefit plan costs ( 33 ) 528 238

Tax expense for items of other comprehensive income ( 134 ) ( 61 ) ( 112 )

Other comprehensive income, net of tax 394 177 324

Tax benefit (expense) for items of other comprehensive income 8 ( 134 ) ( 61 )

Other comprehensive income (loss), net of tax ( 25 ) 394 177

Comprehensive income $ 580 $ 944 $ 858

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Contract assets 1,758 1,683

Inventoried costs, net 208 186

Inventoried costs 219 208

Income taxes receivable 284 204

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Amortization of purchased intangibles 104 109 128

Other non-cash transactions, net 10 29 15

Stock-based compensation 54 23 34

Deferred income taxes 203 ( 122 ) ( 113 )

Loss (gain) on investments in marketable securities ( 22 ) ( 23 ) 25

Gain on investments in marketable securities ( 34 ) ( 22 ) ( 23 )

Other non-cash transactions, net 23 10 29

Accounts receivable ( 127 ) 256 168

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Inventoried costs ( 11 ) ( 22 ) ( 3 )

Prepaid expenses and other current assets ( 33 ) ( 42 ) 20

Prepaid expenses and other assets ( 66 ) ( 33 ) ( 42 )

Accounts payable and accruals 449 ( 315 ) 264

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Grant proceeds for capital expenditures 6 14 14

Acquisitions of businesses ( 132 ) — —

Investment in affiliates — — ( 24 )

Proceeds from equity method investment — — 63

Proceeds from sale of investments 5 — —

Other investing activities, net 2 5 3

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Stock compensation — 42 ( 2 ) — — 40

Other comprehensive income, net of tax — — — — 394 394

Treasury stock activity — — — ( 163 ) — ( 163 )

Other comprehensive loss, net of tax — — — — ( 25 ) ( 25 )

Balance as of December 31, 2025 $ 1 $ 2,087 $ 5,487 $ ( 2,449 ) $ ( 53 ) $ 5,073

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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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DESCRIPTION OF BUSINESS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ACCOUNTING STANDARDS UPDATES

STOCKHOLDERS' EQUITY

EARNINGS PER SHARE

SEGMENT INFORMATION

ACCOUNTS RECEIVABLE

INVENTORIED COSTS

GOODWILL AND OTHER INTANGIBLE ASSETS

INVESTIGATIONS, CLAIMS, AND LITIGATION

COMMITMENTS AND CONTINGENCIES

EMPLOYEE PENSION AND OTHER POSTRETIREMENT BENEFITS

STOCK COMPENSATION PLANS

SUBSIDIARY GUARANTORS

HUNTINGTON INGALLS INDUSTRIES, INC.

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naval shipbuilder, making HII America’s largest shipbuilder.

The Mission Technologies segment develops integrated solutions that enable today's connected, all-domain force.

The Mission Technologies segment develops integrated technology solutions and products that enable today's connected, all-domain force.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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The use of the cost-to-cost method to measure performance progress over time is supported by clauses in the related contracts that allow the customer to unilaterally terminate the contract for convenience, pay the Company for costs incurred plus a reasonable profit, and take control of any work in process.

The Company utilizes the cost-to-cost method to measure performance progress because it best reflects the continuous transfer of control over the related goods and services to the customer as the Company satisfies its performance obligations.

The Company utilizes the cost-to-cost method to measure performance progress because it best reflects the continuous transfer of control of the related goods and services to the customer as the Company satisfies its performance obligations.

When the customer is not a U.S.

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When using the cost-to-cost method to measure performance progress, certain contracts may include costs that are not representative of performance progress, such as large upfront purchases of uninstalled materials, unexpected waste, or inefficiencies.

In these cases, the Company adjusts its measure of progress to exclude such costs, with the goal of better reflecting the transfer of control over the related goods or services to the customer and recognizing revenue only to the extent of the costs incurred that reflect the Company's performance under the contract.

In addition, for time and material arrangements, the Company often utilizes the practical expedient allowing the recognition of revenue in the amount the Company invoices, which corresponds with the value provided to the customer and to which the Company is entitled to payment for performance to date.

In these cases, the Company adjusts its measure of progress to exclude such costs, with the goal of better reflecting the transfer of control of the related goods or services to the customer and recognizing revenue only to the extent of the costs incurred that reflect the Company's performance under the contract.

In addition, for time and material arrangements, the Company often utilizes the practical expedient allowing the recognition of revenue in the amount the Company has a right to invoice, which corresponds with the value provided to the customer and to which the Company is entitled to payment for performance to date.

A performance obligation is a promise to transfer a distinct good or service to the customer and is the unit of account for which revenue is recognized.

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Contracts are often modified to account for changes in contract specifications and requirements.

In the majority of circumstances, modifications do not result in additional performance obligations that are distinct from the existing performance obligations in the contract, and the effects of the modifications are recognized as an adjustment to revenue on a cumulative catch-up basis.

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

Generally, modifications do not result in additional performance obligations that are distinct from the existing performance obligations in the contract, and the effects of the modifications are recognized as an adjustment to revenue on a cumulative catch-up basis.

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

The amount of revenue recognized as the Company satisfies performance obligations associated with contracts with customers is based upon the determination of transaction price.

Transaction price reflects the amount of consideration to which the Company expects to be entitled for performance under the terms and conditions of the relevant contract and may reflect fixed and variable components, including shareline incentive fees whereby the value of the contract is variable based upon the amount of costs incurred, as well as other incentive fees based upon achievement of contractual schedule commitments or other specified criteria in the contract.

Transaction price reflects the amount of consideration to which the Company expects to be entitled for performance under the terms and conditions of the contract.

Transaction price may include fixed and variable components, including shareline incentive fees whereby the value of the contract is variable based upon the amount of costs incurred, as well as other incentive fees based upon achievement of contractual schedule commitments or other specified criteria in the contract.

Shareline incentive fees are determined based upon the formula under the relevant contract using the Company’s estimated cost to complete for each period.

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In all such instances, the estimated revenues represent those amounts for which the Company believes a significant reversal of revenue is not probable.

Contract Estimates - In estimating contract costs, the Company utilizes a profit-booking rate based upon performance expectations that takes into consideration a number of assumptions and estimates regarding risks related to technical requirements, feasibility, schedule, and contract costs.

Contract Estimates - In estimating contract performance, the Company utilizes a profit-booking rate based upon performance expectations that takes into consideration a number of assumptions and estimates regarding risks related to technical requirements, feasibility, schedule, and contract costs.

Management performs periodic reviews of the contracts to evaluate the underlying risks, which may increase the profit-booking rate as the Company is able to mitigate and retire such risks.

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Warranty liabilities are reported within other current liabilities and are not material as of December 31, 2025 and 2024.

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.

Government Grants - The Company recognizes incentive grants, including 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.

Grants related to specific expenses are recognized in the period in which the expenses are incurred as an offset to the related expenses.

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

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.

Fair value is defined as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date.

The accounting standard provides a fair value hierarchy, which requires an entity to maximize the use of observable inputs, where available.

The three levels of inputs consist of:

Fair Value of Financial Instruments - In measuring fair value, the use of observable inputs is required to be maximized, where available.

The fair value hierarchy provides for three levels of inputs:

Quoted prices in active markets for identical assets and liabilities.

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

In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.

Based on the Company's evaluation of these deferred tax assets, valuation allowances of $ 25 million and $ 26 million were recognized as of December 31, 2025 and 2024, respectively.

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The Company recognizes the amount of tax benefit that is more than 50 % likely to be realized upon ultimate settlement with the related tax authority.

If a tax position does not meet the minimum statutory threshold to avoid payment of penalties, the Company recognizes an expense for the amount of the penalty in the period the tax position is claimed or expected to be claimed in its tax return.

If a tax position does not meet the minimum statutory threshold to avoid payment of penalties, the Company recognizes an expense for the amount of

the penalty in the period the tax position is claimed or expected to be claimed in its tax return.

Penalties and accrued interest related to unrecognized tax benefits are recognized as a component of income tax expense.

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Only one supplier may exist for certain components and parts required to manufacture the Company's products.

Property, Plant, and Equipment - Depreciable properties owned by the Company are recorded at cost and depreciated over the estimated useful lives of individual assets.

Property, Plant, and Equipment - Depreciable properties owned by the Company are recorded at cost and depreciated over the estimated useful lives of individual assets and asset classes.

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 ten 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 nine years.

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

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As these assumptions and estimates may change over time, it may or may not be necessary to record impairment charges.

Cloud Computing Arrangements - Certain costs to implement cloud computing service arrangements hosted by third party vendors are capitalized when incurred during the application development stage.

Implementation costs are subsequently amortized using the straight-line method over the expected term of the related cloud computing service arrangement, generally ten years or less.

Capitalized implementation costs are reported net of accumulated amortization within miscellaneous other assets on the consolidated statements of financial position and are not material as of December 31, 2025 and 2024.

Leases - The Company determines if an arrangement is a lease at contract inception.

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Right of use assets associated with operating leases are recognized in operating lease assets in the consolidated statements of financial position.

Lease liabilities associated with operating leases are recognized in long-term operating lease liabilities, with short-term lease liability amounts included in other current liabilities in the consolidated statements of financial position.

Lease liabilities associated with operating leases are recognized in long-term operating lease liabilities, with short-term lease liability amounts included in other current liabilities in the

consolidated statements of financial position.

Right of use assets associated with finance leases are included in miscellaneous other assets in the consolidated statements of financial position.

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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.

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.

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 that would more likely than not reduce the fair values of the Company's reporting units below their carrying values.

The Company's reporting units are aligned with its operating 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.

If the qualitative assessment indicates a possible impairment, the carrying value of the reporting unit is compared to its fair value, which is determined using a combination of discounted cash flow analysis and comparative market multiples.

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

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Self-insurance accruals include amounts related to liabilities for reported claims and an estimated accrual for claims incurred but not reported.

The Company's workers' compensation liability was discounted at 4.58 % and 3.93 % as of December 31, 2024 and 2023, respectively.

The Company's workers' compensation liability

was discounted at 4.09 % and 4.58 % as of December 31, 2025 and 2024, respectively.

These discount rates were determined using a risk-free rate based on future payment streams.

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Loan Receivable - The Company holds a loan receivable in connection with the financing of the sale of its previously owned Avondale Shipyard facility.

The receivable was carried at amortized cost of $ 44 million, net of $ 7 million of loan discount, as of December 31, 2024, and at amortized cost of $ 41 million, net of $ 9 million loan discount, as of December 31, 2023.

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

The loan receivable is reported at amortized cost, net of loan discount, and approximates fair value.

The current and non-current portions of the loan receivable are reported in prepaid expenses and other current assets and miscellaneous other assets on the consolidated statements of financial position, respectively.

The loan receivable is not material for the years ended December 31, 2025 and 2024.

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, 2025, 2024, and 2023.

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

Retirement Related Benefit Costs - The Company accounts for its retirement related benefit plans on the accrual basis.

Retirement Related Benefit Plans - The Company accounts for its retirement related benefit plans on the accrual basis.

The measurements of obligations, costs, assets, and liabilities require significant judgment.

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A discount rate is established for each of the retirement related benefit plans at its respective measurement date.

The expected return on plan assets component of retirement related costs is used to calculate net periodic expense.

Unless plan assets and benefit obligations are subject to re-measurement during the year, the expected return on assets is based on the fair value of plan assets at the beginning of the year.

The expected return on plan assets component of retirement related costs is used to calculate net periodic expense, based on such factors as historical returns, targeted asset allocations, investment policy, duration, expected future long-term performance of individual asset classes, interest rates, inflation, portfolio volatility, investment management and administrative fees, and risk management strategies.

Historical plan asset performance alone has inherent limitations in predicting future returns.

While studies are helpful in understanding past and current trends and performance, the rate of return assumption is based more on long-term prospective views to avoid short-term market influences.

Unless plan assets and benefit obligations are subject to re-measurement during the year, the expected return on plan assets is based on the fair value of plan assets at the beginning of the year.

The costs of plan amendments that provide benefits already earned by plan participants (prior service costs and credits) are deferred in accumulated other comprehensive loss and amortized over the expected future service period of active participants as of the date of amendment.

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Unrecognized deferred amounts, such as demographic or asset gains or losses and the impacts of plan amendments, are included in accumulated other comprehensive loss and amortized as described above.

Stock Compensation - Stock-based compensation value is determined based on the closing market price of the Company's common stock on grant date, and the expense is recognized over the vesting period.

At each reporting date, the number of shares is adjusted to equal the number ultimately expected to vest based on the Company's expectations regarding the relevant performance and service criteria.

Stock Compensation - The fair value of stock-based compensation is measured based on the closing market price of the Company's common stock on the grant date.

Compensation expense for stock awards is measured based on the grant date fair value and recognized over the vesting period, generally three years .

For purposes of measuring compensation expense, the number of shares ultimately expected to vest is estimated at each reporting date based on the Company's expectations regarding the relevant service or performance criteria.

ACCOUNTING STANDARDS UPDATES

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, 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.

There were no new Accounting Standards Updates (“ASU”) adopted during the year ended December 31, 2025 that had a material impact on the Company’s consolidated financial statements.

Accounting Guidance Issued But Not Adopted as of December 31, 2025

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

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

Disaggregation of Income Statement Expenses.

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

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software.

Among other targeted improvements, the new guidance amends existing software cost capitalization guidance by removing all references to software project development stages and providing criteria that clarify the threshold for software cost capitalization to begin.

The new guidance is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted.

The new guidance may be applied on a prospective basis, retrospective basis, or modified basis for in-process projects.

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

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832):

Accounting for Government Grants Received by Business Entities.

The new standard establishes authoritative guidance for the recognition, measurement, and presentation of a grant received by a business entity from a government, including guidance for a grant related to an asset and a grant related to income.

The new guidance also amends certain existing disclosure requirements for government assistance provided to business entities.

The new guidance is effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods, with early adoption permitted.

The new guidance may be applied on a modified prospective basis, modified retrospective basis, or full retrospective basis.

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, 2025, are not expected to have a material impact on the Company's consolidated financial position, results of operations, or cash flows.

In January 2025, the Company acquired substantially all of the assets of W International SC, LLC and Vivid Empire SC, LLC (collectively “W International”), a South Carolina-based complex metal fabricator specializing in the manufacture of shipbuilding structures, modules, and assemblies, for a purchase price of $ 132 million.

The acquired manufacturing facility expands the Company’s shipbuilding capacity and operates within the Newport News segment.

The transaction closed using cash on hand and qualifies as a business combination under FASB Accounting Standards Codification ("ASC") Topic 805 – "Business Combinations."

The Company recognized $ 32 million of goodwill, which includes expected synergies and the value of W International’s acquired workforce, all of which was allocated to the Newport News segment and is tax deductible.

There have been no other changes to the Company's goodwill since December 31, 2024.

Goodwill and Other Intangible Assets.

The assets, liabilities, and results of operations of W International are not material to the Company’s consolidated financial position, results of operations, or cash flows.

STOCKHOLDERS' EQUITY

Common Stock - Changes in the number of Company outstanding shares for the year ended December 31, 2024, resulted from shares purchased in the open market under the Company's stock repurchase program and share activity under its stock compensation plans.

Common Stock - Changes in the number of Company outstanding shares for the year ended December 31, 2025, resulted from share activity under its stock compensation plans.

Stock Compensation Plans.

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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, 2025, the Company did not repurchase any shares.

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.

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

The cost of purchased shares is recorded as treasury stock in the consolidated statements of financial position.

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The Company paid cash dividends totaling $ 213 million ($ 5.43 per share), $ 206 million ($ 5.25 per share), and $ 200 million ($ 5.02 per share) in the years ended December 31, 2025, 2024, and 2023, respectively.

Accumulated Other Comprehensive Loss - Other comprehensive loss refers to gains and losses recorded as an element of stockholders' equity but excluded from net earnings.

Accumulated Other Comprehensive Loss - Other comprehensive income (loss) refers to gains and losses recorded as an element of stockholders' equity but excluded from net earnings.

The accumulated other comprehensive loss was comprised of unamortized benefit plan costs of $ 53 million and $ 28 million as of December 31, 2025 and 2024, respectively.

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Amortization of net actuarial loss (1)

Settlement gain 1

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

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

Net current period other comprehensive income 177 177

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Balance as of December 31, 2024 ( 28 ) ( 28 )

Other comprehensive income before reclassifications 509 509

Other comprehensive loss before reclassifications ( 37 ) ( 37 )

Amounts reclassified from accumulated other comprehensive loss

Amortization of prior service cost (1)

Amortization of net actuarial loss 1

Tax expense for items of other comprehensive income ( 134 ) ( 134 )

Net current period other comprehensive income 394 394

Amortization of net actuarial gain (1)

( 12 ) ( 12 )

Tax benefit for items of other comprehensive loss 8 8

Net current period other comprehensive loss ( 25 ) ( 25 )

Balance as of December 31, 2025 $ ( 53 ) $ ( 53 )

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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") 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.

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 each of the years ended December 31, 2025 and 2024, and 0.4 million RPSRs for the year ended December 31, 2023.

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

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Segment Information.

For more detailed information regarding the Company's significant accounting policy for revenue, see Note 2:

For more detailed information regarding the Company's accounting policy for revenue, see Note 2:

Summary of Significant Accounting Policies.

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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.

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Government services contracts are time and material arrangements.

As a result, the Company often utilizes the practical expedient allowing the recognition of revenue in the amount the Company invoices, which corresponds with the value provided to the customer and to which the Company is entitled to payment for performance to date.

As a result, the Company often utilizes the practical expedient allowing the recognition of revenue in the amount the Company has a right to invoice, which corresponds with the value provided to the customer and to which the Company is entitled to payment for performance to date.

Government Contracts

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Government contract portfolio is comprised of a large number of time and material arrangements.

Disaggregation of Revenue

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product versus service type, customer type, contract type, and major program.

Segment Information.

The Company believes that this level of disaggregation provides investors with information to evaluate the Company’s financial performance and provides the Company with information to make capital allocation decisions in the most appropriate manner.

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Total Newport News 6,507 5,969 6,133

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

Other 479 467 437

All-domain operations and warfare systems 2,011 1,957 1,717

Global security, unmanned systems, and other 1,033 980 982

Total Mission Technologies 3,044 2,937 2,699

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For each of the years ended December 31, 2025, 2024, and 2023, no individual favorable cumulative catch-up revenue adjustment was material to the Company's consolidated statements of operations and comprehensive income.

For the year ended December 31, 2025, cumulative catch-up revenue adjustments included an unfavorable adjustment of $ 71 million on the construction of Enterprise (CVN 80) and Doris Miller (CVN 81) at the Company's Newport News segment.

For each of the years ended December 31, 2024 and 2023, no individual unfavorable cumulative catch-up revenue adjustment was material to the Company's consolidated statements of operations and comprehensive income.

The Company’s Newport News segment continues to experience performance challenges in the construction of aircraft carriers and the Virginia class (SSN 774) submarine program.

For the year ended December 31, 2025, cumulative catch-up revenue adjustments included significant unfavorable performance adjustments on the construction of aircraft carriers and Virginia class (SSN 774) submarines, which were offset by contract incentives.

Contract Balances

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.

Contract assets include retention amounts, substantially all of which were under U.S.

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

defense and offensive cyberspace strategies and electronic warfare;

uncrewed autonomous systems;

defense and offensive cyberspace

strategies and electronic warfare;

unmanned autonomous systems;

live, virtual, and constructive training solutions;

fleet sustainment;

platform modernization;

and critical nuclear operations.

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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.

The Operating FAS/CAS Adjustment represents the difference between the service cost component of the Company's pension and other postretirement benefit plan expense determined in accordance with GAAP ("FAS") and the Company's pension and other postretirement expense under CAS.

Government Sales - Revenues from the U.S.

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Total segment operating income $ 233 $ 331 $ 153 $ — $ 717

Non-segment factors affecting operating

Non-segment factors affecting operating income

Operating FAS/CAS Adjustment ( 35 )

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

Non-segment factors affecting operating

Non-segment factors affecting operating income

Operating FAS/CAS Adjustment ( 62 )

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

Non-segment factors affecting operating

Non-segment factors affecting operating income

Operating FAS/CAS Adjustment ( 72 )

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ACCOUNTS RECEIVABLE

Accounts receivable include amounts related to any unconditional Company right to receive consideration.

Substantially all amounts included in accounts receivable as of December 31, 2024, are expected to be collected in 2025.

The Company's accounts receivable are primarily with 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.

Accounts receivable were comprised of the following:

Accounts receivable, net were comprised of the following:

($ in millions) 2025 2024

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Total accounts receivable, net $ 339 $ 212

INVENTORIED COSTS, NET

Substantially all amounts included in accounts receivable as of December 31, 2025, are expected to be collected in 2026.

INVENTORIED COSTS

Inventoried costs are principally associated with contracts for which the U.S.

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Raw material inventory 196 181

Total inventoried costs, net $ 208 $ 186

Total inventoried costs $ 219 $ 208

GOODWILL AND OTHER INTANGIBLE ASSETS

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 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.

If the qualitative assessment indicates a possible impairment, then the Company utilizes a combination of discounted cash flow analysis and comparative market multiples to determine the fair values of its businesses for comparison to their corresponding book values.

In connection with the Company’s annual goodwill impairment test as of October 31, 2025, management tested goodwill for each of its three reporting units with goodwill balances.

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Balance as of December 31, 2024 175 721 1,722 2,618

Adjustments — — — —

Acquisitions — 32 — 32

Balance as of December 31, 2025 $ 175 $ 753 $ 1,722 $ 2,650

Other Intangible Assets

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 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.

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 within Newport News, with an aggregate weighted-average useful life of 28 years based on the long life cycle of the related programs.

Amortization expense for the years ended December 31, 2025, 2024, and 2023, was $ 104 million, $ 109 million, and $ 128 million, respectively.

The Company expects amortization for currently recorded purchased intangible assets of $ 84 million in 2026, $ 62 million in 2027, $ 56 million in 2028, $ 50 million in 2029, and $ 41 million in 2030.

Tax Reform - Public Law 119-21 (the "Act"), signed into law on July 4, 2025, provides for significant changes to the U.S.

federal income tax law that impacts corporations, including making certain business deductions permanent, such as bonus depreciation, immediate expensing of domestic research and development ("R&D") expenditures, and providing an election to accelerate the deduction for the remaining unamortized domestic R&D expenditures capitalized during the 2022 through 2024 tax years.

These unamortized expenditures can be deducted over one or two years.

The Act contains other provisions that are not expected to have a material impact on the Company's consolidated financial position, results of operations, or cash flows.

The Company’s financial statements as of December 31, 2025 include the impact of the following significant items:

Domestic R&D expenditures:

The Company recorded a current tax benefit of $ 115 million based on its intent to expense all current year domestic R&D expenditures and to accelerate the deduction for the remaining unamortized domestic R&D expenditures capitalized during the 2022 through 2024 tax years over a two -year period.

resulted in an increase of approximately $ 115 million to the Company’s current income taxes receivable and a corresponding increase in its net deferred tax liability.

Bonus Depreciation:

While the Company has not completed its analysis of all capital expenditures that may qualify for immediate expensing, the Company recorded an estimated current tax benefit of $ 16 million based on its intent to fully expense all qualified property acquired and placed into service after January 19, 2025.

This resulted in an increase of approximately $ 16 million to the Company’s current income taxes receivable and a corresponding increase in its net deferred tax liability.

The Company's earnings are primarily domestic, and its effective tax rate on earnings from operations for the year ended December 31, 2025, was 22.1 %, compared with 14.5 % and 20.2 % for 2024 and 2023, respectively.

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.

For the year ended December 31, 2025, the Company's effective tax rate differed from the statutory federal corporate income tax rate primarily as a result of a decrease in the estimated R&D tax credits for the prior period.

For the years ended December 31, 2024 and 2023, the Company's effective tax rate differed from the statutory federal corporate income tax rate primarily as a result of R&D 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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Virginia 19 56 30

Mississippi (a) (a) 8

Other 7 17 26

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Cash paid for income taxes (net of refunds) $ 96 $ 255 $ 330

(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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Additions based on tax positions related to prior years 1 4 —

Reductions based on tax positions related to prior years ( 7 ) — —

Lapse of statute of limitations ( 4 ) ( 5 ) ( 3 )

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

As a result of the unrecognized tax benefits noted above, income tax expense increased by $ 5 million in 2024 for interest, resulting in an interest liability of $ 14 million as of December 31, 2024.

As a result of the unrecognized tax benefits noted above, income tax expense increased by $ 6 million in 2025 for interest and penalties, resulting in an interest and penalty liability of $ 20 million as of December 31, 2025.

In 2024, income tax expense increased $ 5 million for interest, resulting in an interest liability of $ 14 million as of December 31, 2024.

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Virginia 2022 - 2024

(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.

(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 Internal Revenue Service ("IRS") with the exception of the R&D 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 R&D tax credit.

The 2023 tax year was filed under the CAP program and accepted by the IRS with the exception of the R&D tax credit and capitalized R&D expenses.

The statute of limitations for the 2020 and 2021 tax years has been extended to June 30, 2027.

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.

In calendar years 2020, 2021, and 2022, the Company filed refund claims for the 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.

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

2016-2019 claims and 2020-2021 credits - The Company reached an administrative resolution with the IRS on the 2016-2019 R&D tax credit refund claims and the R&D tax credit for the 2020-2021 tax years.

After the IRS administrative review of the agreement is completed, it will be submitted to the Joint Committee on Taxation for approval.

2022-2023 credits - The IRS initiated audits for the 2022 and 2023 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.

The 2022 audit is limited to the R&D tax credit.

The 2023 audit is limited to the R&D tax credit and capitalized R&D expenses.

The Company believes that its unrecognized tax benefits are adequate and will cover the expected impact of the agreement with the IRS.

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.

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

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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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, 2025, the Company had no outstanding debt under the commercial paper program.

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.

Senior Notes - In May 2025, the Company repaid $ 500 million aggregate principal amount of its 3.844 % senior notes upon their maturity.

The repayment was funded using a combination of cash on hand and proceeds from the Company’s commercial paper program.

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 used for general corporate purposes, including debt repayment (which included 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.

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The Company had unamortized debt issuance costs associated with the senior notes of $ 13 million and $ 17 million as of December 31, 2025 and 2024, respectively.

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.

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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.

The estimated fair values of the current portion of the Company's long-term debt, excluding finance lease liabilities, were $ 497 million and $ 229 million as of December 31, 2024, and December 31, 2023, respectively.

The estimated fair value of the Company's total long-term debt as of December 31, 2025, was $ 2,730 million.

There was no current portion of long-term debt and no finance lease liabilities as of December 31, 2025.

The estimated fair value 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, was $ 3,110 million.

The estimated fair value of the current portion of the Company's long-term debt, excluding finance lease liabilities, was $ 497 million as of December 31, 2024.

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, 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.

As of December 31, 2025, the aggregate amounts of principal payments due on long-term debt within the next five years consisted of $ 600 million due in 2027, $ 621 million due in 2028, and $ 1 billion due in 2030.

INVESTIGATIONS, CLAIMS, AND LITIGATION

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

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 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.

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

District Court for the Eastern District of Virginia.

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The complaint seeks class certification, treble damages, and any other relief to which the plaintiffs are entitled.

Depending on the outcome of the lawsuit, the Company could be subject to penalties and damages that could have a material adverse effect on its consolidated financial position, results of operations, or cash flows.

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.

The District Court dismissed the lawsuit against all defendants in April 2024 on statute of limitations grounds without addressing the motions to dismiss filed by the defendants on other grounds.

The Fourth Circuit Court of Appeals reversed the dismissal and remanded the case to the District Court for further proceedings.

In November 2025, the District Court denied the defendants' remaining motions to dismiss the lawsuit.

The Company cannot at this time predict or reasonably estimate the outcome of this matter.

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.

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The Company appealed the decision to the Vermont Supreme Court, which reversed and remanded the lower court's decision in September 2022, allowing the Company's claim to proceed.

No assurances can be provided regarding the ultimate resolution of this matter.

In 2025, the parties filed dispositive motions and await the court’s decision.

The Company cannot at this time predict the outcome of this matter.

In September 2021, the Company filed a complaint in the Superior Court of Delaware, seeking a judgment against certain insurers for breach of contract and breach of the implied covenant of good faith and fair dealing under three representations and warranties insurance policies purchased in connection with the Company’s acquisition of Hydroid.

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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.

In 2024, the Company identified certain quality issues involving noncompliance with welding procedures at Newport News.

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

The Company continues to work with its U.S.

Navy customer to evaluate the full extent of the matter and cannot at this time predict or reasonably estimate the ultimate outcome of this matter.

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 costs to resolve cases during the years ended December 31, 2025, 2024, and 2023 were not material individually or in the aggregate.

The Company’s estimate of asbestos-related liabilities is subject to uncertainty because liabilities are influenced by many variables that are inherently difficult to predict.

The Company’s estimate of asbestos-related liabilities is subject to uncertainty because such liabilities are influenced by many variables that are inherently difficult to predict.

Although the Company believes the ultimate resolution of current cases will not have a material effect on its consolidated financial position, results of operations, or cash flows, it 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 asbestos related litigation.

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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, arbitrations, investigations, and other legal proceedings that arise in the ordinary course of business, including U.S.

Other - 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.

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

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.

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.

However, the Company cannot predict what new or revised claims, litigation, or other proceedings 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.

Most equipment is leased on a monthly basis.

Most equipment is leased on a short-term basis.

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

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

The Company does not

record insurance recoveries before collection is probable.

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

As of December 31, 2025 and 2024, the Company did not have any accrued receivables related to insurance reimbursements or recoveries for environmental matters.

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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 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).

The Company’s expectation regarding the resolution of the matter with the customer is included in contract cost and profit estimates.

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.

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

During the second quarter of 2025, the Company reached an agreement with the customer to resolve the matter.

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

Collective Bargaining Agreements - Of the Company's approximately 44,000 employees, 45 % are covered by a total of 13 collective bargaining agreements.

Newport News has three collective bargaining agreements covering represented employees, which expire in February 2030, December 2030, and April 2031.

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

Approximately 15 Mission Technologies employees in Klamath Falls, Oregon are covered by one collective bargaining agreement that expires in June 2025.

Mission Technologies has a total of 80 employees covered by five collective bargaining agreements, which expire in September 2026, December 2027, September 2028, and two that expire in August 2027.

Collective bargaining agreements generally expire after three to five years and are subject to renegotiation at that time.

The Company believes its relationship with its employees is satisfactory.

Purchase Obligations - Periodically the Company enters into agreements to purchase goods or services that are enforceable and legally binding on the Company and specify all significant terms, including:

fixed or minimum quantities to be purchased;

fixed, minimum, or variable price provisions;

and the approximate timing of the transaction.

These obligations are primarily comprised of open purchase order commitments to vendors and subcontractors pertaining to funded contracts.

EMPLOYEE PENSION AND OTHER POSTRETIREMENT BENEFITS

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The trusts’ fair values supporting these liabilities as of December 31, 2025 and 2024, were $ 249 million and $ 233 million, respectively, of which $ 192 million and $ 179 million, respectively, were related to the non-qualified defined benefit pension plans.

The Company provides contributory postretirement health care and life insurance benefits to a dominantly closed group of eligible employees, retirees, and their qualifying dependents.

The Company provides contributory postretirement health care and life insurance benefits to a predominantly closed group of eligible employees, retirees, and their qualifying dependents.

Covered employees achieve eligibility to participate in these contributory plans upon retirement from active service if they meet specified age, years of service, and grandfathered requirements.

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Amortization of net actuarial loss (gain) 1 18 17 ( 13 ) ( 13 ) ( 15 )

Settlement gain — — ( 4 ) — — —

Net periodic benefit (income) cost $ ( 109 ) $ ( 74 ) $ ( 40 ) $ 9 $ 10 $ 10

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Net actuarial loss (gain) 90 60 ( 103 ) ( 119 )

(1) Included in other current liabilities and current portion of postretirement plan liabilities, respectively.

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

(1) Included in other current liabilities and current portion of postretirement plan liabilities for pension benefits and other benefits, respectively.

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

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 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.

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

In connection with this transaction, the Company recognized a noncash, non-operating pension settlement gain of $ 4 million for the affected plan, which represents the accelerated recognition of actuarial losses that were included in accumulated other comprehensive loss within stockholders' equity.

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

The Projected Benefit Obligation ("PBO"), Accumulated Benefit Obligation ("ABO"), and asset values for the Company's qualified pension plans were $ 5,901 million, $ 5,714 million, and $ 7,446 million, respectively, as of December 31, 2025, and $ 5,602 million, $ 5,424 million, and $ 7,024 million, respectively, as of December 31, 2024.

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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 $ 189 million and zero, respectively, as of December 31, 2024, and $ 864 million and $ 607 million, respectively, as of December 31, 2023.

The PBOs and fair values of plan assets for all qualified and non-qualified pension plans with PBOs in excess of plan assets were $ 204 million and zero, respectively, as of December 31, 2025, and $ 189 million and zero, respectively, as of December 31, 2024.

The ABOs for all qualified and non-qualified pension plans with ABOs in excess of plan assets were $ 192 million and $ 178 million as of December 31, 2025, and 2024, respectively.

The ABOs for all pension plans were $ 5,906 million and $ 5,602 million as of December 31, 2025 and 2024, respectively.

The changes in amounts recorded in accumulated other comprehensive income (loss) were as follows:

The changes in amounts recorded in accumulated other comprehensive loss were as follows:

Pension Benefits Other Benefits

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($ in millions) 2025 2024 2023 2025 2024 2023

Prior service credit (cost) $ — $ — $ ( 97 ) $ — $ — $ —

Prior service cost $ ( 3 ) $ — $ — $ — $ — $ —

Amortization of prior service cost (credit) 17 16 17 ( 1 ) ( 2 ) ( 2 )

Net actuarial gain 475 202 384 26 19 103

Net actuarial gain (loss) ( 31 ) 475 202 ( 3 ) 26 19

Amortization of net actuarial loss (gain) 1 18 17 ( 13 ) ( 13 ) ( 15 )

Other — 9 — — ( 1 ) —

Total changes in accumulated other comprehensive income (loss) $ 518 $ 236 $ 340 $ 10 $ 2 $ 95

Total changes in accumulated other comprehensive loss $ ( 16 ) $ 518 $ 236 $ ( 17 ) $ 10 $ 2

The weighted average assumptions used to determine the net periodic benefit costs for each year ended December 31 were as follows:

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Using a combination of market expectations and economic projections as of December 31, 2025, the Company selected an expected initial health care cost trend rate of 6.50 % and an ultimate health care cost trend rate of 4.50 % to be reached in 2031 .

As of December 31, 2023, the Company assumed an expected initial health care cost trend rate of 6.00 % and an ultimate health care cost trend rate of 4.50 % to be reached in 2029 .

of December 31, 2024, the Company assumed an expected initial health care cost trend rate of 6.00 % and an ultimate health care cost trend rate of 4.50 % to be reached in 2030 .

The Employee Retirement Income Security Act of 1974 ("ERISA"), including amendments under pension relief legislation, defines the minimum amount the Company must contribute to its qualified defined benefit pension plans.

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Total contributions $ 54 $ 47 $ 44

For the year ending December 31, 2025, the Company expects its cash contributions to its qualified defined benefit pension plans to be less than $ 1 million, all of which will be discretionary.

For the year ending December 31, 2026, the Company expects its cash contributions to its qualified defined benefit pension plans to be approximately $ 2 million, all of which will be discretionary.

For the year ending December 31, 2026, the Company expects its cash contributions to its other postretirement benefit plans to be approximately $ 35 million.

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Management reviews independently appraised values, audited financial statements, and additional pricing information to evaluate the NAVs.

For the very limited group of investments for which market quotations are not readily available or for which the above valuation procedures are deemed not to reflect fair value, additional information is obtained from the investment manager and evaluated internally to determine whether any adjustments are required to reflect fair value.

For the limited group of investments for which market quotations are not readily available or for which the above valuation procedures are deemed not to reflect fair value, additional information is obtained from the investment manager and evaluated internally to determine whether any adjustments are required to reflect fair value.

The Company might be unable to quickly liquidate some assets at amounts close or equal to fair value in order to meet plan liquidity requirements or respond to specific events, such as the creditworthiness of any particular issuer or counterparty.

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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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Plan assets not subject to leveling

and international equities (a) 1,199

and international equities (1)

Corporate and other debt securities 277

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Hedge funds 422

Cash and cash equivalents, net (b) 126

Cash and cash equivalents, net (2)

Total plan assets not subject to leveling 2,961

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and international equity securities include investments in small, medium, and large capitalization stocks of public companies held in commingled trust funds.

(b) Cash and cash equivalents are liquid short-term investment funds and include net receivables and payables of the trust.

(2) Cash and cash equivalents are liquid short-term investment funds and include net receivables and payables of the trust.

These funds are available for immediate use to fund daily operations, execute investment policies, and serve as a temporary investment vehicle.

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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 $ —

Plan assets not subject to leveling

and international equities (a) 1,134

and international equities (1)

Corporate and other debt securities 242

2 unchanged sentences

Hedge funds 275

Cash and cash equivalents, net (b) 114

Cash and cash equivalents, net (2)

Total plan assets not subject to leveling 3,237

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and international equity securities include investments in small, medium, and large capitalization stocks of public companies held in commingled trust funds.

(b) Cash and cash equivalents are liquid short-term investment funds and include net receivables and payables of the trust.

(2) Cash and cash equivalents are liquid short-term investment funds and include net receivables and payables of the trust.

These funds are available for immediate use to fund daily operations, execute investment policies, and serve as a temporary investment vehicle.

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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, 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 and RSRs, are granted to employees and members of the board of directors without payment to the Company.

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

plus (ii) any shares subject to outstanding awards under the 2012 Plan or 2011 Plan that were subsequently forfeited to the Company;

plus (iii) any shares subject to outstanding awards under the 2012 Plan or 2011 Plan that were subsequently exchanged by the participant as full or partial payment to the Company in connection with any such award or exchanged by a participant or withheld by the Company to satisfy the tax withholding obligations related to any such award.

plus (ii) any shares subject to outstanding awards under the 2012 Plan that were subsequently forfeited to the Company;

plus (iii) any shares subject to outstanding awards under the 2012 Plan that were subsequently exchanged by the participant as full or partial payment to the Company in connection with any such award or exchanged by a participant or withheld by the Company to satisfy the tax withholding obligations related to any such award.

As of December 31, 2025, the remaining aggregate number of shares of the Company's common stock authorized for issuance under the 2022 Plan was 0.9 million.

The 2012 Plan permitted awards of stock options, stock appreciation rights, and other stock awards.

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

The 2011 Plan permitted the awards of stock options and other stock awards.

The 2011 Plan and 2012 Plan permitted awards of stock options and other stock awards.

Stock awards, in the form of stock rights, were granted to members of the board of directors without payment to the Company.

Stock awards include RPSRs, RSRs, and stock rights.

The fair value of stock awards is determined based on the closing market price of the Company's common stock on the grant date.

Compensation expense for stock awards is measured based on the grant date fair value and recognized over the vesting period, generally three years .

For purposes of measuring compensation expense, the amount of shares ultimately expected to vest is estimated at each reporting date based on management's expectations regarding the relevant service or performance criteria.

The Company issued the following stock awards in the years ended December 31, 2025, 2024, and 2023:

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Compensation Restricted Stock Rights - For the year ended December 31, 2025, the Company granted approximately 0.1 million compensation RSRs at a weighted average share price of $ 170.99 .

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.

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 year ended December 31, 2023.

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

In 2025, the Company granted approximately 2,700 retention RSRs at a weighted average share price of $ 227.70 , with cliff vesting one to two years from the grant date.

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, 2025, approximately 5,200 retention RSRs were outstanding.

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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.

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.

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 award activity for the years ended December 31, 2025, 2024, and 2023, was as follows:

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The performance goals for outstanding RPSRs granted in 2025, 2024, and 2023 were based on three metrics as defined in the grant agreements:

earnings before interest, taxes, depreciation, amortization, and pension ("EBITDAP"), weighted at 40 %, pension-adjusted return on invested capital ("ROIC"), weighted at 40 %, and relative EBITDAP growth, weighted at 20 %.

earnings before interest, taxes, depreciation, amortization, and pension ("EBITDAP"), weighted at 40 %, pension-adjusted return on invested capital, weighted at 40 %, and relative EBITDAP growth, weighted at 20 %.

The Company's EBITDAP growth is measured against EBITDAP growth of the S&P Aerospace and Defense Select Index.

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Unrecognized Compensation Expense

As of December 31, 2024, the Company had $ 16 million of unrecognized compensation expense associated with RSRs granted in 2024 and 2023, which will be recognized over a weighted average period of 1.1 years, and $ 29 million of unrecognized expense associated with RPSRs granted in 2024 and 2023, which will be recognized over a weighted average period of 1 year .

As of December 31, 2025, the Company had $ 23 million of unrecognized compensation expense associated with RSRs granted in 2025 and 2024, which will be recognized over a weighted average period of 1.0 year, and $ 25 million of unrecognized expense associated with RPSRs granted in 2025 and 2024, which will be recognized over a weighted average period of 1.0 year.

SUBSIDIARY GUARANTORS

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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, 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").

Performance of the Company's obligations under its senior notes outstanding as of December 31, 2025, 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.

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.

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.

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