Item 1. Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)

						Three Months Ended March 31
(in millions, except per share amounts)						2026						2025
Sales and service revenues
Product sales						$	2,004					$	1,713
Service revenues						1,095						1,021
Sales and service revenues						3,099						2,734
Cost of sales and service revenues
Cost of product sales						1,741						1,451
Cost of service revenues						950						889
Income from operating investments, net						5						13
General and administrative expenses						258						246
Operating income						155						161
Other income (expense)
Interest expense						(22)						(28)
Non-operating retirement benefit						53						48
Other, net						2						6
Earnings before income taxes						188						187
Federal and foreign income tax expense						39						38
Net earnings						$	149					$	149
Basic earnings per share						$	3.79					$	3.79
Weighted-average common shares outstanding						39.3						39.3
Diluted earnings per share						$	3.79					$	3.79
Weighted-average diluted shares outstanding						39.3						39.3
Dividends declared per share						$	1.38					$	1.35
Net earnings from above						$	149					$	149
Other comprehensive income
Change in unamortized benefit plan costs						2						1
Tax expense for items of other comprehensive income						(1)						—
Other comprehensive income, net of tax						1						1
Comprehensive income						$	150					$	150

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

HUNTINGTON INGALLS INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)

($ in millions)						March 31, 2026						December 31, 2025
Assets
Current Assets
Cash and cash equivalents						$	216					$	774
Accounts receivable, net of allowance for expected credit losses of $3 million as of 2026 and $2 million as of 2025						406						339
Contract assets						1,989						1,758
Inventoried costs						230						219
Income taxes receivable						278						284
Prepaid expenses and other current assets						98						77
Total current assets						3,217						3,451
Property, plant, and equipment, net of accumulated depreciation of $2,799 million as of 2026 and $2,754 million as of 2025						3,742						3,726
Operating lease assets						274						267
Goodwill						2,650						2,650
Other intangible assets, net of accumulated amortization of $1,243 million as of 2026 and $1,222 million as of 2025						673						694
Pension plan assets						1,586						1,544
Miscellaneous other assets						391						417
Total assets						$	12,533					$	12,749
Liabilities and Stockholders' Equity
Current Liabilities
Trade accounts payable						$	692					$	556
Accrued employees’ compensation						345						443
Current portion of postretirement plan liabilities						119						119
Current portion of workers’ compensation liabilities						219						217
Contract liabilities						822						1,220
Other current liabilities						505						490
Total current liabilities						2,702						3,045
Long-term debt						2,701						2,700
Pension plan liabilities						155						155
Other postretirement plan liabilities						195						200
Workers’ compensation liabilities						446						442
Long-term operating lease liabilities						230						223
Deferred tax liabilities						615						572
Other long-term liabilities						342						339
Total liabilities						7,386						7,676
Commitments and Contingencies (Note 10)
Stockholders’ Equity
Common stock, $0.01 par value; 150,000,000 shares authorized; 53,962,478 shares issued and 39,377,769 shares outstanding as of 2026, and 53,826,236 shares issued and 39,241,527 shares outstanding as of 2025						1						1
Additional paid-in capital						2,070						2,087
Retained earnings						5,577						5,487
Treasury stock						(2,449)						(2,449)
Accumulated other comprehensive loss						(52)						(53)
Total stockholders’ equity						5,147						5,073
Total liabilities and stockholders’ equity						$	12,533					$	12,749

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

HUNTINGTON INGALLS INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

						Three Months Ended March 31
($ in millions)						2026						2025
Operating Activities:
Net earnings						$	149					$	149
Adjustments to reconcile net cash used in operating activities:
Depreciation						55						54
Amortization of purchased intangibles						21						25
Stock-based compensation						21						24
Deferred income taxes						43						(11)
Loss (gain) on investments in marketable securities						3						(3)
Other non-cash transactions, net						3						3
Change in
Accounts receivable						(67)						(175)
Contract assets						(231)						(334)
Inventoried costs						(11)						(7)
Prepaid expenses and other assets						7						44
Accounts payable and accruals						(338)						(126)
Retiree benefits						(45)						(38)
Net cash used in operating activities						(390)						(395)
Investing Activities:
Capital expenditures
Capital expenditure additions						(74)						(67)
Grant proceeds for capital expenditures						3						—
Acquisitions of businesses						—						(133)
Proceeds from disposition of assets						—						1
Net cash used in investing activities						(71)						(199)
Financing Activities:
Proceeds from line of credit borrowings						15						—
Repayment of line of credit borrowings						(15)						—
Dividends paid						(54)						(53)
Employee taxes on certain share-based payment arrangements						(43)						(14)
Other financing activities, net						—						(3)
Net cash used in financing activities						(97)						(70)
Change in cash and cash equivalents						(558)						(664)
Cash and cash equivalents, beginning of period						774						831
Cash and cash equivalents, end of period						$	216					$	167
Supplemental Cash Flow Disclosure
Cash paid for interest						$	35					$	8
Non-Cash Investing and Financing Activities
Capital expenditures accrued in accounts payable						$	13					$	16

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

HUNTINGTON INGALLS INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)

Three Months Ended March 31, 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
Net earnings						—						—						149						—						—						149
Dividends declared ($1.35 per share)						—						—						(53)						—						—						(53)
Stock-based compensation						—						12						(2)						—						—						10
Other comprehensive income, net of tax						—						—						—						—						1						1
Balance as of March 31, 2025						$	1					$	2,057					$	5,191					$	(2,449)					$	(27)					$	4,773
Balance as of December 31, 2025						$	1					$	2,087					$	5,487					$	(2,449)					$	(53)					$	5,073
Net earnings						—						—						149						—						—						149
Dividends declared ($1.38 per share)						—						—						(54)						—						—						(54)
Stock-based compensation						—						(17)						(5)						—						—						(22)
Other comprehensive income, net of tax						—						—						—						—						1						1
Balance as of March 31, 2026						$	1					$	2,070					$	5,577					$	(2,449)					$	(52)					$	5,147

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

HUNTINGTON INGALLS INDUSTRIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. DESCRIPTION OF BUSINESS

Huntington Ingalls Industries, Inc. ("HII" or the "Company") is a global, all-domain defense partner, building and delivering the world’s most powerful, survivable naval ships and technologies that safeguard America’s seas, sky, land, space, and cyber. HII is organized into three reportable segments: Ingalls Shipbuilding ("Ingalls"), Newport News Shipbuilding ("Newport News"), and Mission Technologies. For more than a century, the Company's Ingalls segment in Mississippi and Newport News segment in Virginia have built more ships in more ship classes than any other U.S. naval shipbuilder, making HII America's largest shipbuilder. The Mission Technologies segment develops integrated technology solutions and products that enable today's connected, all-domain force.

2. BASIS OF PRESENTATION

Principles of Consolidation - The unaudited condensed consolidated financial statements of HII and its subsidiaries have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") and the instructions to Form 10-Q promulgated by the Securities and Exchange Commission ("SEC"). As used in the Notes to the Condensed Consolidated Financial Statements (Unaudited), the terms "HII" and "the Company" refer to HII and its subsidiaries. All intercompany transactions and balances are eliminated in consolidation. For classification of current assets and liabilities related to its long-term production contracts, the Company uses the duration of these contracts as its operating cycle, which is generally longer than one year. Additionally, certain prior year amounts have been reclassified to conform to the current year presentation.

These unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature considered necessary by management for a fair presentation of the unaudited condensed consolidated financial position, results of operations, and cash flows and should be read in conjunction with the Company's audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Annual Report on Form 10-K").

The quarterly information is labeled using a calendar convention; that is, first quarter is consistently labeled as ending on March 31, second quarter as ending on June 30, and third quarter as ending on September 30. It is management's long-standing practice to establish interim closing dates using a "fiscal" calendar, which requires the businesses to close their books on a Friday near these quarter-end dates in order to normalize the potentially disruptive effects of quarterly closings on business processes. This practice only exists for interim periods within a reporting year.

Accounting Estimates - The preparation of the Company's unaudited condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Estimates have been prepared on the basis of the most current and best available information, and actual results could differ materially from those estimates.

Fair Value of Financial Instruments - Except for the Company's long-term debt, the carrying amounts of the Company's financial instruments that are recorded at historical cost approximate fair value due to the short-term nature of the instruments and low credit risk associated with the respective counterparties.

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 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 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.

3. ACCOUNTING STANDARDS UPDATES

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

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. The new guidance requires, among other things, tabular and qualitative disclosure of disaggregated expense information that is included in certain expense line items presented on the consolidated statement of operations. The new guidance also requires that the total amount and definition of selling expenses be disclosed. The new guidance is effective on a prospective basis for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption and retrospective application permitted. The Company is currently evaluating the impacts of the new guidance on its consolidated financial statements.

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, 2026, are not expected to have a material impact on the Company's consolidated financial position, results of operations, or cash flows.

4. STOCKHOLDERS' EQUITY

Treasury Stock - In January 2024, the Company's board of directors authorized an increase in the Company's stock repurchase program from $3.2 billion to $3.8 billion and an extension of the term of the program to December 31, 2028. 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. 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.

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:

($ in millions)						Benefit Plans												Total
Balance as of December 31, 2024						$	(28)											$	(28)
Amounts reclassified from accumulated other comprehensive loss
Amortization of prior service cost(1)						4												4
Amortization of net actuarial loss(1)						(3)												(3)
Net current period other comprehensive income						1												1
Balance as of March 31, 2025						$	(27)											$	(27)
Balance as of December 31, 2025						$	(53)											$	(53)
Amounts reclassified from accumulated other comprehensive loss
Amortization of prior service cost(1)						4												4
Amortization of net actuarial loss(1)						(2)												(2)
Tax expense for items of other comprehensive income						(1)												(1)
Net current period other comprehensive income						1												1
Balance as of March 31, 2026						$	(52)											$	(52)

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

See Note 11: 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.

5. EARNINGS PER SHARE

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

						Three Months Ended March 31
(in millions, except per share amounts)						2026						2025
Net earnings						$	149					$	149
Weighted-average common shares outstanding						39.3						39.3
Net dilutive effect of stock awards						—						—
Dilutive weighted-average common shares outstanding						39.3						39.3
Earnings per share - basic						$	3.79					$	3.79
Earnings per share - diluted						$	3.79					$	3.79

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.

6. REVENUE

Disaggregation of Revenue

The following tables present revenues on a disaggregated basis:

						Three Months Ended March 31, 2026
($ in millions)						Ingalls						Newport News						Mission Technologies						Intersegment Eliminations						Total
Revenue Type
Product sales						$	614					$	1,364					$	26					$	—					$	2,004
Service revenues						108						301						686						—						1,095
Intersegment						3						—						36						(39)						—
Sales and service revenues						$	725					$	1,665					$	748					$	(39)					$	3,099
Customer Type
Federal						$	722					$	1,665					$	709					$	—					$	3,096
Commercial						—						—						3						—						3
Intersegment						3						—						36						(39)						—
Sales and service revenues						$	725					$	1,665					$	748					$	(39)					$	3,099
Contract Type
Firm fixed-price						$	1					$	—					$	103					$	—					$	104
Fixed-price incentive						613						744						—						—						1,357
Cost-type						108						921						581						—						1,610
Time and materials						—						—						28						—						28
Intersegment						3						—						36						(39)						—
Sales and service revenues						$	725					$	1,665					$	748					$	(39)					$	3,099

						Three Months Ended March 31, 2025
($ in millions)						Ingalls						Newport News						Mission Technologies						Intersegment Eliminations						Total
Revenue Type
Product sales						$	526					$	1,160					$	27					$	—					$	1,713
Service revenues						107						236						678						—						1,021
Intersegment						4						—						30						(34)						—
Sales and service revenues						$	637					$	1,396					$	735					$	(34)					$	2,734
Customer Type
Federal						$	633					$	1,396					$	701					$	—					$	2,730
Commercial						—						—						4						—						4
Intersegment						4						—						30						(34)						—
Sales and service revenues						$	637					$	1,396					$	735					$	(34)					$	2,734
Contract Type
Firm fixed-price						$	—					$	2					$	97					$	—					$	99
Fixed-price incentive						526						766						2						—						1,294
Cost-type						107						627						569						—						1,303
Time and materials						—						1						37						—						38
Intersegment						4						—						30						(34)						—
Sales and service revenues						$	637					$	1,396					$	735					$	(34)					$	2,734

						Three Months Ended March 31
($ in millions)						2026						2025
Major Programs
Amphibious assault ships						$	345					$	332
Surface combatants and coast guard cutters						377						299
Other						3						6
Total Ingalls						725						637
Aircraft carriers						881						758
Submarines						622						516
Other						162						122
Total Newport News						1,665						1,396
All-domain operations and warfare systems						492						485
Global security, unmanned systems, and other						256						250
Total Mission Technologies						748						735
Intersegment eliminations						(39)						(34)
Sales and service revenues						$	3,099					$	2,734

As of March 31, 2026, the Company had $54.0 billion of remaining performance obligations. The Company expects to recognize approximately 40% of its remaining performance obligations as revenue through 2027, an additional 35% through 2029, and the balance thereafter.

Cumulative Catch-up Revenue Adjustments

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
($ in millions, except per share amounts)						2026						2025
Effect on operating income(1)						$	1					$	—
Effect on diluted earnings per share (net of tax)						$	0.02					$	—

(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.

Contract Balances

The Company reports contract balances in a net contract asset or contract liability position on a contract-by-contract basis at the end of each reporting period. Net contract assets were comprised as follows:

($ in millions)						March 31, 2026						December 31, 2025
Contract assets						$	1,989					$	1,758
Contract liabilities						822						1,220
Net contract assets						$	1,167					$	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. 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.

7. SEGMENT INFORMATION

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

						Three Months Ended March 31, 2026
($ in millions)						Ingalls						Newport News						Mission Technologies						Intersegment Eliminations						Total
Sales and Service Revenues
Product sales						$	614					$	1,364					$	26					$	—					$	2,004
Service revenues						108						301						686						—						1,095
Intersegment						3						—						36						(39)						—
Total sales and service revenues						725						1,665						748						(39)						3,099
Segment Operating Income
Income from operating investments, net						—						—						5						—						5
Less:
Cost of sales and service revenues
Product						531						1,179						24						—						1,734
Service						96						255						597						—						948
Intersegment						3						—						36						(39)						—
Other segment items						46						143						61						—						250
Total segment operating income						$	49					$	88					$	35					$	—					172
Non-segment factors affecting operating income
Operating FAS/CAS Adjustment																														(9)
Non-current state income taxes																														(8)
Total operating income																														$	155

						Three Months Ended March 31, 2025
($ in millions)						Ingalls						Newport News						Mission Technologies						Intersegment Eliminations						Total
Sales and Service Revenues
Product sales						$	526					$	1,160					$	27					$	—					$	1,713
Service revenues						107						236						678						—						1,021
Intersegment						4						—						30						(34)						—
Total sales and service revenues						637						1,396						735						(34)						2,734
Segment Operating Income
Income from operating investments, net						—						—						13						—						13
Less:
Cost of sales and service revenues
Product						452						971						20						—						1,443
Service						90						193						604						—						887
Intersegment						4						—						30						(34)						—
Other segment items						45						147						54						—						246
Total segment operating income						$	46					$	85					$	40					$	—					171
Non-segment factors affecting operating income
Operating FAS/CAS Adjustment																														(10)
Non-current state income taxes																														—
Total operating income																														$	161

Sales transactions between segments are generally recorded at cost.

Other segment items consist of general and administrative expenses.

Other Financial Information

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

						Three Months Ended March 31
($ in millions)						2026						2025
Capital Expenditures**(1)**
Ingalls						$	10					$	14
Newport News						57						49
Mission Technologies						3						1
Total segment capital expenditures						70						64
Corporate						1						3
Total capital expenditures						$	71					$	67

(1) Net of grant proceeds for capital expenditures

						Three Months Ended March 31
($ in millions)						2026						2025
Depreciation and Amortization
Ingalls						$	20					$	20
Newport News						35						33
Mission Technologies						20						25
Total segment depreciation and amortization						75						78
Corporate						1						1
Total depreciation and amortization						$	76					$	79

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

8. INCOME TAXES

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. 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.

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

Internal Revenue Service ("IRS") Audits - The Company reached an agreement in principle with the IRS on the research and development tax credits for the 2016-2021 tax years in 2025. This resolution was submitted to the Joint Committee on Taxation for approval in March 2026. Also, in the first quarter of 2026, the IRS initiated an audit of the research and development tax credits claimed on the Company's filed returns for the 2022-2023 tax years. The Company believes that its unrecognized tax benefits are adequate and will cover the expected impact of the agreement with the IRS and any adjustments resulting from the IRS audit of the 2022-2023 research and development tax credits.

9. 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 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 - 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. 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 complaint seeks class certification, treble damages, and any other relief to which the plaintiffs are entitled. 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. In March 2026, the Company reached agreement with the plaintiffs to resolve their claims. The Company has recorded a liability related to the agreement that is not material to the Company's consolidated financial position, results of operations, or cash flows.

Insurance Claim - In September 2020, the Company filed a complaint against 32 reinsurers in the Superior Court, State of Vermont, Franklin Unit, seeking a judgment declaring that the Company's business interruption and other losses associated with COVID-19 are covered by the Company's property insurance program. The Company also initiated arbitration proceedings against six other reinsurers seeking similar relief. In July 2021, the Vermont court granted the reinsurers’ motion for judgment on the pleadings, which would have ended the Company’s claim. 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.

U.S. Government Investigations and Claims - Departments and agencies of the U.S. Government have the authority to investigate various transactions and operations of the Company, and the results of such investigations may lead to administrative, civil, or criminal proceedings, the ultimate outcome of which could be fines, penalties, repayments or compensatory, treble, or other damages. U.S. Government regulations provide that certain findings against a contractor may also lead to suspension or debarment from future U.S. Government contracts or the loss of export privileges. Any suspension or debarment would have a material effect on the Company because of its reliance on government contracts.

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. Government. 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. 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 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 condensed 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.

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. The Company is a contractor with the U.S. Government, and such proceedings can therefore include False Claims Act allegations against the Company. 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.

10. 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. 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.

Environmental Matters - The estimated costs to complete environmental remediation are accrued when it is probable that the Company will incur such costs in the future to address environmental conditions at currently or formerly owned or leased operating facilities, or at sites where it has been named a Potentially Responsible Party by the Environmental Protection Agency or similarly designated by another environmental agency, and the related costs can be reasonably estimated by management. When only a range of costs is established and no amount within the range is more probable than another, the minimum amount in the range is accrued. Environmental liabilities are recorded on an undiscounted basis and are expensed or capitalized as appropriate. Capitalized expenditures, if any, relate to long-lived improvements in currently operating facilities. The Company does not record insurance recoveries before collection is probable. As of March 31, 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. 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.

U.S. Government Claims - From time to time, the U.S. Government communicates to the Company potential claims, disallowed costs, and penalties concerning prior costs incurred by the Company with which the U.S. Government disagrees. When such preliminary findings are presented, the Company and U.S. Government representatives engage in discussions, from which the Company evaluates the merits of the claims and assesses the amounts being questioned. 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.

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 2031. 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.

11. EMPLOYEE PENSION AND OTHER POSTRETIREMENT BENEFITS

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
($ in millions)						2026						2025						2026						2025
Components of net periodic benefit cost
Service cost						$	21					$	22					$	1					$	1
Interest cost						85						84						4						4
Expected return on plan assets						(144)						(137)						—						—
Amortization of prior service cost (credit)						4						4						—						—
Amortization of net actuarial loss (gain)						1						—						(3)						(3)
Net periodic benefit (income) cost						$	(33)					$	(27)					$	2					$	2

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
($ in millions)						2026						2025
Pension plans
Discretionary
Qualified						$	1					$	—
Non-qualified						3						4
Other benefit plans						10						9
Total contributions						$	14					$	13

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.

12. 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. 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. 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. 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.

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 Awards (in thousands)						Weighted-Average Grant Date Fair Value						Weighted-Average Remaining Contractual Term (in years)
Outstanding at December 31, 2024						550						$	221.59					1.0 year
Granted						301						169.05
Adjusted due to performance						16						169.05
Vested						(191)						215.19
Forfeited						(4)						288.33
Outstanding at March 31, 2025						672						$	199.42					1.6 years
Outstanding at December 31, 2025						663						$	199.43					1.0 year
Granted						116						434.34
Adjusted due to performance						22						434.34
Vested						(235)						214.13
Forfeited						(8)						204.33
Outstanding at March 31, 2026						558						$	242.54					1.4 years