What changed in this filing

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Item 1. Financial Statements

2026-07-30 compared with 2026-05-05 · 199 added, 77 removed, 437 unchanged (39% of the section changed)

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)

Three Months Ended March 31

Three Months Ended June 30 Six Months Ended June 30

(in millions, except per share amounts) 2026 2025 2026 2025

7 unchanged sentences

Income from operating investments, net 21 8 26 21

Other income and gains, net — 1 — 1

General and administrative expenses 242 241 500 487

21 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)

($ in millions) March 31, 2026 December 31, 2025

($ in millions) June 30, 2026 December 31, 2025

Current Assets

44 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended March 31

Six Months Ended June 30

($ in millions) 2026 2025

1 unchanged sentence

Net earnings $ 357 $ 301

Adjustments to reconcile net cash used in operating activities:

Adjustments to reconcile net cash provided by (used in) operating activities:

Depreciation 112 110

2 unchanged sentences

Deferred income taxes 89 ( 19 )

Loss (gain) on investments in marketable securities 3 ( 3 )

Gain on investments in marketable securities ( 19 ) ( 10 )

Other non-cash transactions, net 12 9

5 unchanged sentences

Retiree benefits ( 90 ) ( 77 )

Net cash used in operating activities ( 390 ) ( 395 )

Net cash provided by (used in) operating activities ( 421 ) 428

Investing Activities:

3 unchanged sentences

Acquisitions of businesses — ( 133 )

Proceeds from disposition of assets — 1

Other investing activities, net 1 2

Net cash used in investing activities ( 189 ) ( 291 )

Financing Activities:

Repayment of long-term debt — ( 500 )

Proceeds from line of credit borrowings 17 —

8 unchanged sentences

Supplemental Cash Flow Disclosure

Cash paid for income taxes (net of refunds) $ 12 $ 55

Cash paid for interest $ 59 $ 42

4 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)

Three Months Ended March 31, 2026 and 2025

Three Months Ended June 30, 2026 and 2025

($ in millions) Common Stock Additional Paid-in Capital Retained Earnings Treasury Stock Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity

Balance as of December 31, 2024 $ 1 $ 2,045 $ 5,097 $ ( 2,449 ) $ ( 28 ) $ 4,666

Balance as of March 31, 2025 $ 1 $ 2,057 $ 5,191 $ ( 2,449 ) $ ( 27 ) $ 4,773

Net earnings — — 152 — — 152

3 unchanged sentences

Other comprehensive income, net of tax — — — — 1 1

Balance as of June 30, 2025 $ 1 $ 2,066 $ 5,290 $ ( 2,449 ) $ ( 26 ) $ 4,882

Balance as of March 31, 2026 $ 1 $ 2,070 $ 5,577 $ ( 2,449 ) $ ( 52 ) $ 5,147

Net earnings — — 208 — — 208

Dividends declared ($ 1.38 per share)

— — ( 55 ) — — ( 55 )

Stock-based compensation — 10 — — — 10

Other comprehensive income, net of tax — — — — 2 2

Balance as of June 30, 2026 $ 1 $ 2,080 $ 5,730 $ ( 2,449 ) $ ( 50 ) $ 5,312

Six Months Ended June 30, 2026 and 2025

($ in millions) Common Stock Additional Paid-in Capital Retained Earnings Treasury Stock Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity

Balance as of December 31, 2024 $ 1 $ 2,045 $ 5,097 $ ( 2,449 ) $ ( 28 ) $ 4,666

4 unchanged sentences

Other comprehensive income, net of tax — — — — 2 2

Balance as of March 31, 2026 $ 1 $ 2,070 $ 5,577 $ ( 2,449 ) $ ( 52 ) $ 5,147

Balance as of June 30, 2025 $ 1 $ 2,066 $ 5,290 $ ( 2,449 ) $ ( 26 ) $ 4,882

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

Net earnings — — 357 — — 357

Dividends declared ($ 2.76 per share)

— — ( 109 ) — — ( 109 )

Stock-based compensation — ( 7 ) ( 5 ) — — ( 12 )

Other comprehensive income, net of tax — — — — 3 3

Balance as of June 30, 2026 $ 1 $ 2,080 $ 5,730 $ ( 2,449 ) $ ( 50 ) $ 5,312

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

24 unchanged sentences

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

These trusts were valued at $ 244 million and $ 249 million as of March 31, 2026, and December 31, 2025, respectively, and are presented within miscellaneous other assets on the unaudited condensed consolidated statements of financial position.

These trusts were valued at $ 263 million and $ 249 million as of June 30, 2026, and December 31, 2025, respectively, and are presented within miscellaneous other assets on the unaudited condensed consolidated statements of financial position.

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

The estimated fair values of the Company's total long-term debt as of March 31, 2026 and December 31, 2025 were $ 2,688 million and $ 2,730 million, respectively.

The estimated fair values of the Company's total long-term debt as of June 30, 2026 and December 31, 2025 were $ 2,699 million and $ 2,730 million, respectively.

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 of the fair value hierarchy.

1 unchanged sentence

Recently Adopted Guidance

There were no new Accounting Standards Updates (“ASU”) adopted during the three months ended March 31, 2026 that had a material impact on the Company’s consolidated financial statements.

Accounting Guidance Issued But Not Adopted as of March 31, 2026

There were no new Accounting Standards Updates (“ASU”) adopted during the six months ended June 30, 2026 that had a material impact on the Company’s consolidated financial statements.

Accounting Guidance Issued But Not Adopted as of June 30, 2026

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

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

For each of the three months ended March 31, 2026 and 2025, the Company did not repurchase any shares.

For each of the six months ended June 30, 2026 and 2025, the Company did not repurchase any shares.

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

Dividends - The Company paid cash dividends totaling $ 54 million and $ 53 million for the three months ended March 31, 2026 and 2025, respectively.

Dividends - The Company paid cash dividends totaling $ 109 million and $ 106 million for the six months ended June 30, 2026 and 2025, respectively.

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 $ 52 million and $ 53 million as of March 31, 2026, and December 31, 2025, respectively.

The changes in accumulated other comprehensive loss by component for the three months ended March 31, 2026 and 2025, were as follows:

The accumulated other comprehensive loss was comprised of unamortized benefit plan costs of $ 50 million and $ 53 million as of June 30, 2026, and December 31, 2025, respectively.

The changes in accumulated other comprehensive loss by component for the three and six months ended June 30, 2026 and 2025, were as follows:

($ in millions) Benefit Plans Total

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

Balance as of March 31, 2025 $ ( 27 ) $ ( 27 )

Amounts reclassified from accumulated other comprehensive loss

Amortization of prior service cost⁽¹⁾ 4 4

Amortization of net actuarial loss (1)

Amortization of net actuarial gain⁽¹⁾ ( 3 ) ( 3 )

Net current period other comprehensive income 1 1

Balance as of June 30, 2025 $ ( 26 ) $ ( 26 )

Balance as of March 31, 2026 $ ( 52 ) $ ( 52 )

Amounts reclassified from accumulated other comprehensive loss

Amortization of prior service cost⁽¹⁾ 4 4

Amortization of net actuarial gain⁽¹⁾ ( 2 ) ( 2 )

Net current period other comprehensive income 2 2

Balance as of June 30, 2026 $ ( 50 ) $ ( 50 )

($ in millions) Benefit Plans Total

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

1 unchanged sentence

Amortization of prior service cost⁽¹⁾ 8 8

Amortization of net actuarial loss (1)

Amortization of net actuarial gain⁽¹⁾ ( 6 ) ( 6 )

Net current period other comprehensive income 2 2

Balance as of June 30, 2025 $ ( 26 ) $ ( 26 )

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

Amounts reclassified from accumulated other comprehensive loss

Amortization of prior service cost⁽¹⁾ 8 8

Amortization of net actuarial gain⁽¹⁾ ( 4 ) ( 4 )

Tax expense for items of other comprehensive income ( 1 ) ( 1 )

Net current period other comprehensive income 3 3

Balance as of March 31, 2026 $ ( 52 ) $ ( 52 )

Balance as of June 30, 2026 $ ( 50 ) $ ( 50 )

(1) These accumulated comprehensive loss components are included in the computation of net periodic benefit cost.

Employee Pension and Other Postretirement Benefits.

The tax expense recorded in stockholders' equity for the amounts reclassified from accumulated other comprehensive loss for the three months ended March 31, 2026 and 2025, was $ 1 million and less than $ 1 million, respectively.

The tax expense recorded in stockholders' equity for the amounts reclassified from accumulated other comprehensive loss for each of the three months ended June 30, 2026 and 2025 was less than $ 1 million.

The tax expense recorded in stockholders' equity for the amounts reclassified from accumulated other comprehensive loss for the six months ended June 30, 2026 and 2025 was $ 1 million and less than $ 1 million, respectively.

EARNINGS PER SHARE

Basic and diluted earnings per common share were calculated as follows:

Three Months Ended March 31

Three Months Ended June 30 Six Months Ended June 30

(in millions, except per share amounts) 2026 2025 2026 2025

5 unchanged sentences

Earnings per share - diluted $ 5.27 $ 3.86 $ 9.06 $ 7.66

Under the treasury stock method, the Company has excluded from the diluted share amounts presented above the effects of 0.3 million and 0.4 million Restricted Performance Stock Rights ("RPSRs") for the three months ended March 31, 2026 and 2025, respectively, and 0.1 million and 0.2 million Restricted Stock Rights ("RSRs") for the three months ended March 31, 2026, and 2025, respectively.

Under the treasury stock method, the Company has excluded from the diluted share amounts presented above the effects of 0.3 million and 0.4 million Restricted Performance Stock Rights ("RPSRs") for each of the three and six months ended June 30, 2026 and 2025, respectively.

The Company has also excluded the effects of 0.1 million Restricted Stock Rights ("RSRs") for each of the three and six months ended June 30, 2026, and 0.1 million and 0.2 million RSRs for the three and six months ended June 30, 2025, respectively.

Disaggregation of Revenue

The following tables present revenues on a disaggregated basis:

Three Months Ended March 31, 2026

Three Months Ended June 30, 2026

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

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Sales and service revenues $ 845 $ 1,849 $ 760 $ ( 36 ) $ 3,418

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

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

6 unchanged sentences

Commercial — 1 2 — 3

State and local government agencies — — 1 — 1

Intersegment 3 1 32 ( 36 ) —

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Sales and service revenues $ 724 $ 1,603 $ 791 $ ( 36 ) $ 3,082

Three Months Ended March 31

Six Months Ended June 30, 2026

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

Product sales $ 1,335 $ 2,884 $ 56 $ — $ 4,275

Service revenues 230 630 1,382 — 2,242

Intersegment 5 — 70 ( 75 ) —

Sales and service revenues $ 1,570 $ 3,514 $ 1,508 $ ( 75 ) $ 6,517

Customer Type

Federal $ 1,565 $ 3,514 $ 1,430 $ — $ 6,509

Commercial — — 8 — 8

Intersegment 5 — 70 ( 75 ) —

Sales and service revenues $ 1,570 $ 3,514 $ 1,508 $ ( 75 ) $ 6,517

Contract Type

Firm fixed-price $ 14 $ 2 $ 211 $ — $ 227

Fixed-price incentive 1,322 1,588 1 — 2,911

Cost-type 229 1,924 1,166 — 3,319

Time and materials — — 60 — 60

Intersegment 5 — 70 ( 75 ) —

Sales and service revenues $ 1,570 $ 3,514 $ 1,508 $ ( 75 ) $ 6,517

Six Months Ended June 30, 2025

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

Product sales $ 1,136 $ 2,479 $ 55 $ — $ 3,670

Service revenues 218 519 1,409 — 2,146

Intersegment 7 1 62 ( 70 ) —

Sales and service revenues $ 1,361 $ 2,999 $ 1,526 $ ( 70 ) $ 5,816

Customer Type

Federal $ 1,354 $ 2,997 $ 1,457 $ — $ 5,808

Commercial — 1 6 — 7

State and local government agencies — — 1 — 1

Intersegment 7 1 62 ( 70 ) —

Sales and service revenues $ 1,361 $ 2,999 $ 1,526 $ ( 70 ) $ 5,816

Contract Type

Firm fixed-price $ 5 $ 4 $ 201 $ — $ 210

Fixed-price incentive 1,131 1,574 3 — 2,708

Cost-type 218 1,419 1,188 — 2,825

Time and materials — 1 72 — 73

Intersegment 7 1 62 ( 70 ) —

Sales and service revenues $ 1,361 $ 2,999 $ 1,526 $ ( 70 ) $ 5,816

Three Months Ended June 30 Six Months Ended June 30

($ in millions) 2026 2025 2026 2025

2 unchanged sentences

Surface combatants and coast guard cutters 394 397 771 696

Other 4 3 7 9

Total Ingalls 845 724 1,570 1,361

8 unchanged sentences

Sales and service revenues $ 3,418 $ 3,082 $ 6,517 $ 5,816

As of March 31, 2026, the Company had $ 54.0 billion of remaining performance obligations.

As of June 30, 2026, the Company had $ 57.3 billion of remaining performance obligations.

The Company expects to recognize approximately 35 % of its remaining performance obligations as revenue through 2027, an additional 35 % through 2029, and the balance thereafter.

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The following table presents the effect of net cumulative catch-up revenue adjustments on operating income and diluted earnings per share:

Three Months Ended March 31

Three Months Ended June 30 Six Months Ended June 30

($ in millions, except per share amounts) 2026 2025 2026 2025

Effect on operating income (1)

$ 10 $ ( 10 ) $ 11 $ ( 10 )

Effect on diluted earnings per share (net of tax) $ 0.20 $ ( 0.20 ) $ 0.22 $ ( 0.20 )

(1) For the three months ended March 31, 2026, the effect of net cumulative catch-up revenue adjustments on

operating income is materially consistent with the effect on revenue.

For the three months ended March 31, 2026, no individual favorable or unfavorable cumulative catch-up revenue adjustment was material to the Company's unaudited condensed consolidated statements of operations and comprehensive income.

For the three months ended March 31, 2025, cumulative catch-up revenue adjustments netted to zero, and did not have an effect on operating income or diluted earnings per share.

The Company's Newport News segment experienced performance challenges in the construction of aircraft carriers and Virginia class (SSN 774) submarines.

For the three months ended March 31, 2025, cumulative catch-up revenue adjustments included significant unfavorable performance adjustments on the Enterprise (CVN 80) and Doris Miller (CVN 81) construction contract and the Virginia class (SSN 774) submarine program, which were offset by contract incentives.

(1) For each of the three and six months ended June 30, 2026 and 2025, the effect of net cumulative catch-up revenue adjustments on operating income is materially consistent with the effect on revenue.

For the three months ended June 30, 2026, cumulative catch-up revenue adjustments included a favorable adjustment of $ 28 million on the refueling and complex overhaul ("RCOH") of USS John C.

Stennis (CVN 74) at the Company's Newport News segment.

For the three months ended June 30, 2026, cumulative catch-up revenue adjustments included an unfavorable adjustment of $ 48 million on the RCOH of USS George Washington (CVN 73) at the Company's Newport News segment.

For the six months ended June 30, 2026, no individual favorable cumulative catch-up revenue adjustment was material to the Company's unaudited condensed consolidated statements of operations and comprehensive income.

For the six months ended June 30, 2026, cumulative catch-up revenue adjustments included an unfavorable adjustment of $ 48 million on the RCOH of USS George Washington (CVN 73) at the Company's Newport News segment.

For the three months ended June 30, 2025, cumulative catch-up revenue adjustments included a favorable adjustment of $ 32 million on the Arleigh Burke class (DDG 51) multi-year construction contract awarded in 2018 at the Company's Ingalls segment.

For the three months ended June 30, 2025, cumulative catch-up revenue adjustments included unfavorable adjustments of $ 42 million on the Enterprise (CVN 80) and Doris Miller (CVN 81) construction contract at the Company's Newport News segment and $ 20 million on the Bougainville (LHA 8) construction contract at the Company's Ingalls segment.

For the six months ended June 30, 2025, cumulative catch-up revenue adjustments included a favorable adjustment of $ 33 million on the Arleigh Burke class (DDG 51) multi-year construction contract awarded in 2018 at the Company's Ingalls segment.

For the six months ended June 30, 2025, cumulative catch-up revenue adjustments included an unfavorable adjustment of $ 43 million on the Enterprise (CVN 80) and Doris Miller (CVN 81) construction contract at the Company's Newport News segment.

Contract Balances

1 unchanged sentence

Net contract assets were comprised as follows:

($ in millions) March 31, 2026 December 31, 2025

($ in millions) June 30, 2026 December 31, 2025

Contract assets $ 2,154 $ 1,758

1 unchanged sentence

Net contract assets $ 1,464 $ 538

The Company’s net contract assets increased $ 629 million from December 31, 2025 to March 31, 2026, primarily as a result of the timing of billings across programs on certain U.S.

The Company’s net contract assets increased $ 926 million from December 31, 2025 to June 30, 2026, primarily as a result of the timing of billings across programs on certain U.S.

Navy contracts.

The Company recognized revenue related to its prior year-end contract liabilities of $ 758 million and $ 552 million for the three months ended March 31, 2026 and 2025, respectively.

For the three and six months ended June 30, 2026, the Company recognized revenue of $ 197 million and $ 955 million, respectively, related to its contract liabilities as of December 31, 2025.

For the three and six months ended June 30, 2025, the Company

recognized revenue of $ 52 million and $ 604 million, respectively, related to its contract liabilities as of December 31, 2024.

SEGMENT INFORMATION

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

Three Months Ended March 31, 2026

Three Months Ended June 30, 2026

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

16 unchanged sentences

Total operating income $ 210

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

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

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Total operating income $ 163

Six Months Ended June 30, 2026

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

Sales and Service Revenues

Product sales $ 1,335 $ 2,884 $ 56 $ — $ 4,275

Service revenues 230 630 1,382 — 2,242

Intersegment 5 — 70 ( 75 ) —

Total sales and service revenues 1,570 3,514 1,508 ( 75 ) 6,517

Segment Operating Income

Income from operating investments, net — — 26 — 26

Cost of sales and service revenues

Product 1,162 2,506 44 — 3,712

Service 207 530 1,212 — 1,949

Intersegment 5 — 70 ( 75 ) —

Other segment items 89 279 118 — 486

Total segment operating income $ 107 $ 199 $ 90 $ — 396

Non-segment factors affecting operating income

Operating FAS/CAS Adjustment ( 17 )

Non-current state income taxes ( 14 )

Total operating income $ 365

Six Months Ended June 30, 2025

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

Sales and Service Revenues

Product sales $ 1,136 $ 2,479 $ 55 $ — $ 3,670

Service revenues 218 519 1,409 — 2,146

Intersegment 7 1 62 ( 70 ) —

Total sales and service revenues 1,361 2,999 1,526 ( 70 ) 5,816

Segment Operating Income

Income from operating investments, net — — 21 — 21

Cost of sales and service revenues

Product 978 2,116 40 — 3,134

Service 190 427 1,260 — 1,877

Intersegment 7 1 62 ( 70 ) —

Other segment items 86 288 109 — 483

Total segment operating income $ 100 $ 167 $ 76 $ — 343

Non-segment factors affecting operating income

Operating FAS/CAS Adjustment ( 16 )

Non-current state income taxes ( 3 )

Total operating income $ 324

Sales transactions between segments are generally recorded at cost.

Other segment items consist of general and administrative expenses.

Other segment items consist of general and administrative expenses and other income and gains, net.

Other Financial Information

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

Three Months Ended March 31

Three Months Ended June 30 Six Months Ended June 30

($ in millions) 2026 2025 2026 2025

7 unchanged sentences

(1) Net of grant proceeds for capital expenditures

Three Months Ended March 31

Three Months Ended June 30 Six Months Ended June 30

($ in millions) 2026 2025 2026 2025

7 unchanged sentences

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

The Company's earnings are primarily domestic, and its effective income tax rates on earnings from operations for the three months ended March 31, 2026 and 2025, were 20.7 % and 20.3 %, respectively.

For the three months ended March 31, 2026, the Company’s effective tax rate did not differ materially from the federal statutory corporate income tax rate of 21 %.

The Company's unrecognized tax benefits increased by $ 3 million during the three months ended March 31, 2026.

As of March 31, 2026, the estimated amounts of the Company's unrecognized tax benefits, excluding interest and penalties, were liabilities of $ 108 million.

The Company's earnings are primarily domestic, and its effective income tax rates on earnings from operations for the three months ended June 30, 2026 and 2025, were 18.1 % and 19.1 %, respectively.

For the six months ended June 30, 2026 and 2025, the Company's effective income tax rates on earnings from operations were 19.2 % and 19.7 %, respectively.

The lower effective tax rates for the three and six months ended June 30, 2026, were primarily attributable to income tax benefits associated with stock award settlement activity.

For the three and six months ended June 30, 2026, the Company’s effective tax rate differed from the federal statutory corporate income tax rate of 21 % primarily due to income tax benefits associated with stock award settlement activity.

The Company's unrecognized tax benefits increased by $ 1 million and $ 4 million during the three and six months ended June 30, 2026, respectively.

As of June 30, 2026, the estimated amounts of the Company's unrecognized tax benefits, excluding interest and penalties, were liabilities of $ 109 million.

Assuming a sustainment of these tax positions, a reversal of $ 85 million of the accrued amounts would favorably affect the Company's effective federal income tax rate in future periods.

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

For the three months ended March 31, 2026, interest and penalties resulting from the unrecognized tax benefits noted above increased income tax expense by $ 2 million.

For the three and six months ended June 30, 2026, interest and penalties resulting from the unrecognized tax benefits noted above increased income tax expense by $ 1 million and $ 3 million, respectively.

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.

9 unchanged sentences

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.

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

1 unchanged sentence

The lawsuit names several HII companies, among other companies, as defendants.

The named plaintiffs generally allege that the defendant companies have

adhered to a “gentlemen’s agreement” that prohibits any defendant from actively recruiting naval engineers from other defendants.

The named plaintiffs generally allege that the defendant companies have adhered to a “gentlemen’s agreement” that prohibits any defendant from actively recruiting naval engineers from other defendants.

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

8 unchanged sentences

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.

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 April 2026, the lower court granted the reinsurers' motion for summary judgment.

The Company has appealed the lower court's decision to the Vermont Supreme Court and cannot at this time predict the outcome of this matter.

Government Investigations and Claims - Departments and agencies of the U.S.

9 unchanged sentences

In some instances, partial or full insurance coverage is available for the Company's liabilities.

The costs to resolve cases during the three months ended March 31, 2026 and 2025, were not material individually or in the aggregate.

The costs to resolve cases during the six months ended June 30, 2026 and 2025, were not material individually or in the aggregate.

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.

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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 condensed 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.

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.

COMMITMENTS AND CONTINGENCIES

Contract Performance Contingencies - Contract profit margins may include estimates of revenues for matters on which the customer and the Company have not reached agreement, such as settlements in the process of negotiation, contract changes, claims, and requests for equitable adjustment for unanticipated contract costs.

estimates are based upon management's best assessment of the underlying causal events and circumstances and recognized to the extent of expected recovery based upon contractual entitlements and the probability of successful negotiation with the customer.

These estimates are based upon management's best assessment of the underlying causal events and circumstances and recognized to the extent of expected recovery based upon contractual entitlements and the probability of successful negotiation with the customer.

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

4 unchanged sentences

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

As of March 31, 2026 and December 31, 2025, the Company did not have any accrued receivables related to insurance reimbursements or recoveries for environmental matters.

As of June 30, 2026 and December 31, 2025, the Company did not have any accrued receivables related to insurance reimbursements or recoveries for environmental matters.

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

Management estimates that as of March 31, 2026, the probable estimable future cost for environmental remediation is not material.

Management estimates that as of June 30, 2026, the probable estimable future cost for environmental remediation is not material.

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

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

As of March 31, 2026, the Company had $ 11 million in issued but undrawn letters of credit and $ 368 million of surety bonds outstanding.

As of June 30, 2026, the Company had $ 10 million in issued but undrawn letters of credit and $ 283 million of surety bonds outstanding.

Government Claims - From time to time, the U.S.

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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 or minimum

quantities to be purchased;

fixed, minimum, or variable price provisions;

3 unchanged sentences

The Company provides eligible employees defined benefit pension plans, defined contribution benefit plans, and other postretirement benefit plans.

The costs of the Company's defined benefit pension plans and other postretirement benefit plans for the three months ended March 31, 2026 and 2025, were as follows:

Three Months Ended March 31

Pension Benefits Other Benefits

The costs of the Company's defined benefit pension plans and other postretirement benefit plans for each of the three and six months ended June 30, 2026 and 2025, were as follows:

Three Months Ended June 30 Six Months Ended June 30

Pension Benefits Other Benefits Pension Benefits Other Benefits

($ in millions) 2026 2025 2026 2025 2026 2025 2026 2025

6 unchanged sentences

Net periodic benefit (income) cost $ ( 32 ) $ ( 28 ) $ 2 $ 3 $ ( 65 ) $ ( 55 ) $ 4 $ 5

The Company made the following contributions to its defined benefit pension plans and other postretirement benefit plans for the three months ended March 31, 2026 and 2025:

Three Months Ended March 31

The Company made the following contributions to its defined benefit pension plans and other postretirement benefit plans for the six months ended June 30, 2026 and 2025:

Six Months Ended June 30

($ in millions) 2026 2025

5 unchanged sentences

Total contributions $ 29 $ 28

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.

As of June 30, 2026, the Company anticipates no further significant cash contributions to its qualified defined benefit pension plans in 2026.

STOCK COMPENSATION PLANS

During the three months ended March 31, 2026 and 2025, the Company issued new stock awards as follows:

Restricted Performance Stock Rights - For the three months ended March 31, 2026, the Company granted approximately 0.1 million RPSRs at a weighted average share price of $ 435.58 .

During the six months ended June 30, 2026 and 2025, the Company issued new stock awards as follows:

Restricted Performance Stock Rights - For the six months ended June 30, 2026, the Company granted approximately 0.1 million RPSRs at a weighted average share price of $ 433.96 .

These rights are subject to cliff vesting on December 31, 2028.

For the three months ended March 31, 2025, the Company granted approximately 0.2 million RPSRs at a weighted average share price of $ 168.81 .

For the six months ended June 30, 2025, the Company granted approximately 0.2 million RPSRs at a weighted average share price of $ 168.81 .

These rights are subject to cliff vesting on December 31, 2027.

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

Compensation Restricted Stock Rights - For the three months ended March 31, 2026, the Company granted approximately 0.1 million compensation RSRs at a weighted average share price of $ 435.58 .

For the three months ended March 31, 2025, the Company granted approximately 0.1 million compensation RSRs at a weighted average share price of $ 168.81 .

Compensation Restricted Stock Rights - For the six months ended June 30, 2026, the Company granted approximately 0.1 million compensation RSRs at a weighted average share price of $ 434.27 .

For the six months ended June 30, 2025, the Company granted approximately 0.1 million compensation RSRs at a weighted average share price of $ 168.92 .

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

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

For the three months ended March 31, 2026, the Company did not grant any retention stock awards.

For the three months ended March 31, 2025, the Company granted approximately 1,300 retention RSRs at a weighted average share price of $ 189.40 , with cliff vesting one to two years from the grant date.

For the six months ended June 30, 2026, the Company granted approximately 1,900 retention RSRs at a weighted average share price of $ 363.70 , with cliff vesting two years from the grant date.

For the six months ended June 30, 2025, the Company granted approximately 1,300 retention RSRs at a weighted average share price of $ 189.38 , with cliff vesting one to two years from the grant date.

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

Because the stock awards are surrendered in lieu of payments of cash to settle tax obligations and the stock is not issued, the Company does not account for these transfers as treasury stock.

Stock award activity for the three months ended March 31, 2026, and 2025, was as follows:

Stock award activity for the six months ended June 30, 2026, and 2025, was as follows:

(in thousands) Weighted-Average

6 unchanged sentences

Forfeited ( 24 ) 224.25

Outstanding at March 31, 2025 672 $ 199.42 1.6 years

Outstanding at June 30, 2025 657 $ 198.68 1.3 years

Outstanding at December 31, 2025 663 $ 199.43 1.0 year

3 unchanged sentences

Forfeited ( 25 ) 246.59

Outstanding at March 31, 2026 558 $ 242.54 1.4 years

Outstanding at June 30, 2026 521 $ 250.32 1.2 years

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-Q

Item 1. Financial Statements