OVERVIEW Our Business Huntington Ingalls Industries, Inc. ("HII", "we", "us", or "our") 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. For more than a century, our Ingalls Shipbuilding segment ("Ingalls") in Mississippi and Newport News Shipbuilding segment ("Newport News") in Virginia have built more ships in more ship classes than any other U.S. naval shipbuilder, making us America's largest shipbuilder. Our Mission Technologies segment develops integrated technology solutions and products that enable today's connected, all-domain force. Headquartered in Newport News, Virginia, we employ approximately 45,000 people domestically and internationally. We conduct most of our business with the U.S. Government, primarily the Department of War. As prime contractor, principal subcontractor, team member, or partner, we participate in many high-priority U.S. defense programs. Ingalls includes our non-nuclear ship design, construction, repair, and maintenance businesses. Newport News includes all of our nuclear ship design, construction, overhaul, refueling, and repair and maintenance businesses. Our Mission Technologies segment provides a wide range of services and products, including command, control, computers, communications, cyber, intelligence, surveillance, and reconnaissance systems and operations; the application of artificial intelligence and machine learning to battlefield decisions; defense and offensive cyberspace strategies and electronic warfare; unmanned autonomous systems; live, virtual, and constructive training solutions; platform modernization; and critical nuclear operations. 19 Table of Contents The following discussion should be read along with the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the year ended December 31, 2025 (our "2025 Annual Report on Form 10-K"). Business Environment Against a backdrop of heightened geopolitical tension and domestic policy realignment, we continue to see uncertainty in the economy, our industry, and our company. Our customers, suppliers, and subcontractors continue to face challenges. We cannot predict how long these challenges will continue, whether these challenges will change over time, or whether our actions to address these challenges will be successful. Defense Spending Environment – The President submitted the fiscal year 2027 budget request on April 3, 2026, which is now under consideration by Congress. The budget request reflects continued investment in shipbuilding, recommending $60.2 billion in discretionary funding for the shipbuilding construction account and an additional $5.6 billion in mandatory funding, for a total of $65.8 billion for shipbuilding procurement. The discretionary request funds one Columbia class (SSBN 826) submarine, two Virginia class (SSN 774) submarines, one Arleigh Burke class (DDG 51) destroyer, one San Antonio class (LPD 17) amphibious transport dock ship, one America class (LHA 6) amphibious assault ship, and the first Frigate class (FF(X)) ship. The fiscal year 2027 budget request continues funding Gerald R. Ford class (CVN 78) aircraft carriers and aircraft carrier refueling programs, and provides initial advance procurement funding for the lead ship of the Trump class (BBG(X)) battleship program. The fiscal year 2027 budget request also reflects increased investments in capability enablers including unmanned surface and underwater vehicles. Congressional consideration of the fiscal year 2027 budget request began following its release and is ongoing. The House Appropriations Committee voted out a defense appropriations measure that supports the President’s topline budget request. The Senate Appropriations Committee has yet to conduct markups, and the timing of committee action remains uncertain. The House and Senate Armed Services Committees have each acted on their respective National Defense Authorization bills for fiscal year 2027. We cannot predict the outcome of the fiscal year 2027 budget process or whether a short-term funding measure will be provided in the event annual appropriations measures are not finalized by the October 1 start of the fiscal year. Global Geopolitical and Economic Environment – The global geopolitical and economic environment continues to be impacted by uncertainty, heightened geopolitical tensions, and instability. Geopolitical relationships continue to change, and the U.S. and its allies face a global security environment that includes threats from state and non-state actors, including major global powers, as well as terrorist organizations, emerging nuclear tensions, diverse regional security concerns, and political instability. These global threats persist across all domains, from undersea to space to cyber, and the global market for defense products, services, and solutions is driven by these complex and evolving security challenges. In addition, changes in the global economic environment, including changes in international trade policies, including those imposing tariffs, could further impact the global market for defense products. Our current operating environment exists in the broader context of political and socioeconomic priorities and reflects, among other things, the continued impact of and uncertainty surrounding geopolitical tensions, financial market volatility, inflation, trade policy, and a challenging labor market. For further information on our business environment, see the Business Environment section under Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our 2025 Annual Report on Form 10-K. Critical Accounting Policies, Estimates, and Judgments As discussed in our 2025 Annual Report on Form 10-K, we consider our policies relating to the following matters to be critical accounting policies and estimates: •Revenue recognition; •Retirement related benefit plans; and •Workers' compensation. 20 Table of Contents As of June 30, 2026, there had been no material changes to the foregoing critical accounting policies, estimates, and judgments since December 31, 2025. Program Descriptions For convenience, a brief description of certain programs discussed in this Quarterly Report on Form 10-Q is included in the Glossary of Programs in this section. As of June 30, 2026, Frigate class (FF(X)) ships are included in the Glossary of Programs in this section. Frigate class (FF(X)) ships are included as part of surface combatants described Part I, Item 1 in the 2025 Annual Report on Form 10-K. CONSOLIDATED OPERATING RESULTS The following table presents selected financial highlights: Three Months Ended June 30 Six Months Ended June 30 2026 vs. 2025 2026 vs. 2025 ($ in millions) 2026 2025 Dollars Percent 2026 2025 Dollars Percent Sales and service revenues $ 3,418 $ 3,082 $ 336 11 % $ 6,517 $ 5,816 $ 701 12 % Cost of product sales and service revenues 2,987 2,687 300 11 % 5,678 5,027 651 13 % Income from operating investments, net 21 8 13 163 % 26 21 5 24 % Other income and gains, net — 1 (1) (100) % — 1 (1) (100) % General and administrative expenses 242 241 1 — % 500 487 13 3 % Operating income 210 163 47 29 % 365 324 41 13 % Other income (expense) Interest expense (27) (28) 1 4 % (49) (56) 7 13 % Non-operating retirement benefit 53 47 6 13 % 106 95 11 12 % Other, net 18 6 12 200 % 20 12 8 67 % Federal and foreign income taxes 46 36 10 28 % 85 74 11 15 % Net earnings $ 208 $ 152 $ 56 37 % $ 357 $ 301 $ 56 19 % Operating Performance Assessment and Reporting We manage and assess the performance of our business based on our performance on individual contracts and programs using the financial measures referred to below, with consideration given to the Critical Accounting Policies, Estimates, and Judgments referred to in this section. Our portfolio of long-term contracts is largely flexibly-priced. Therefore, sales tend to fluctuate in concert with costs across our large portfolio of active contracts, with operating income being a critical measure of operating performance. Under the Federal Acquisition Regulation rules that govern our business with the U.S. Government, most types of costs are allowable, and we do not focus on individual cost groupings, such as cost of sales or general and administrative expenses, as much as we do on total contract costs, which are a key factor in determining contract operating income. As a result, in evaluating our operating performance, we look primarily at changes in sales and service revenues, as well as operating income, including the effects of significant changes in operating income as a result of changes in contract financial estimates and the use of the cumulative catch-up method of accounting in accordance with GAAP. This approach is consistent with the long-term life cycle of our 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. Consequently, our discussion of business segment performance focuses on net sales and operating profit, consistent with our approach for managing our business. Sales and Service Revenues Period-to-period revenues reflect performance under new and ongoing contracts. Changes in sales and service revenues are typically expressed in terms of volume. Unless otherwise described, volume generally refers to increases (or decreases) in reported revenues due to varying production activity levels, delivery rates, or service 21 Table of Contents levels on individual contracts. Volume changes will typically carry a corresponding income change based on the profit margin rate for a particular contract. Sales and service revenues for the three months ended June 30, 2026, increased $336 million, or 11%, compared to the same period in 2025, primarily due to higher volumes at Newport News and Ingalls. Sales and service revenues for the six months ended June 30, 2026, increased $701 million, or 12%, compared to the same period in 2025, primarily due to higher volumes at Newport News and Ingalls. Net Cumulative Catch-up Revenue Adjustments For the three and six months ended June 30, 2026 and 2025, favorable and unfavorable cumulative catch-up revenue adjustments were as follows: Three Months Ended June 30 Six Months Ended June 30 ($ in millions) 2026 2025 2026 2025 Gross favorable adjustments $ 168 $ 138 $ 234 $ 218 Gross unfavorable adjustments (158) (148) (223) (228) Net adjustments $ 10 $ (10) $ 11 $ (10) See Note 6: Revenue and Segment Operating Results in this section for additional information on our net cumulative catch-up revenue adjustments. Cost of Product Sales and Service Revenues Cost of sales for both product sales and service revenues consists of materials, labor, and subcontracting costs, as well as an allocation of indirect costs for overhead. We manage the type and amount of costs at the contract level, which is the basis for estimating our total costs at completion of our contracts. Unusual fluctuations in operating performance driven by changes in a specific cost element across multiple contracts are described in our analysis. Refer to Segment Operating Results and Product and Service Revenues and Cost Analysis in this section for details related to cost of sales for both product sales and service revenues. Income from Operating Investments, Net The activities of our operating investments are closely aligned with the operations of the segments holding the investments. We therefore record income related to earnings from equity method investments in our operating income. Refer to Segment Operating Results in this section for details related to income from operating investments. General and Administrative Expenses In accordance with industry practice and the regulations that govern the cost accounting requirements for government contracts, most general and administrative expenses are considered allowable and allocable costs on government contracts. These costs are allocated to contracts in progress on a systematic basis, and contract performance factors include this cost component as an element of cost. General and administrative expenses for the three and six months ended June 30, 2026 increased $1 million and $13 million, respectively, from the same periods in 2025, primarily due to higher non-current state income taxes. Operating Income We consider operating income an important measure for evaluating our operating performance, and, consistent with industry practice, we define operating income as revenues less the related costs of producing the revenues and general and administrative expenses. 22 Table of Contents Segment Operating Income We internally manage our operations by reference to "segment operating income," which is a non-GAAP measure and is defined as operating income before the Operating FAS/CAS Adjustment and non-current state income taxes, neither of which affects contract performance. Segment operating income is a measure we use to evaluate our core operating performance as it reflects the aggregate performance results of contracts within a segment. When analyzing our operating performance, investors should use segment operating income in addition to, and not as an alternative for, operating income or any other performance measure presented in accordance with GAAP. We believe segment operating income reflects an additional way of viewing aspects of our operations that, when viewed with our GAAP results, provides a more complete understanding of factors and trends affecting our business. We believe the measure is used by investors and is a useful indicator to measure our performance. Because not all companies use identical calculations, our presentation of segment operating income may not be comparable to similarly titled measures of other companies. Changes in segment operating income are typically expressed in terms of volume, as discussed in Sales and Service Revenues above, or performance. Performance refers to changes in contract profit margin rates. These changes typically relate to profit recognition associated with revisions to estimated costs at completion ("EAC"), which reflect improved or deteriorated operating performance on that contract. Operating income changes are accounted for on a cumulative to date basis at the time an EAC change is recorded. Segment operating income may also be affected by, among other things, contract performance, inflationary pressures on our supply chain, the effects of workforce stoppages and other labor-related shortfalls, the availability of raw materials, the effects of natural disasters such as hurricanes, resolution of disputed items with the customer, recovery of insurance proceeds, and other discrete events. At the completion of a long-term contract, any originally estimated costs not incurred or reserves not fully utilized, such as warranty reserves, could also impact contract earnings. Where such items have occurred and the effects are material, a separate description is provided. Refer to Segment Operating Results in this section for activity within each segment. The following table reconciles operating income to segment operating income: Three Months Ended June 30 Six Months Ended June 30 2026 vs. 2025 2026 vs. 2025 ($ in millions) 2026 2025 Dollars Percent 2026 2025 Dollars Percent Operating income $ 210 $ 163 $ 47 29 % $ 365 $ 324 $ 41 13 % Operating FAS/CAS Adjustment 8 6 2 33 % 17 16 1 6 % Non-current state income taxes 6 3 3 100 % 14 3 11 367 % Segment operating income $ 224 $ 172 $ 52 30 % $ 396 $ 343 $ 53 15 % FAS/CAS Adjustment and Operating FAS/CAS Adjustment The FAS/CAS Adjustment reflects the difference between expenses for pension and other postretirement benefits determined in accordance with GAAP ("FAS") and the expenses for these items included in segment operating income in accordance with U.S. Cost Accounting Standards ("CAS"). The Operating FAS/CAS Adjustment excludes the following components of net periodic benefit costs: interest cost, expected return on plan assets, amortization of prior service cost (credit) and actuarial loss (gain), and settlement and curtailment effects. The components of the Operating FAS/CAS Adjustment were as follows: Three Months Ended June 30 Six Months Ended June 30 2026 vs. 2025 2026 vs. 2025 ($ in millions) 2026 2025 Dollars Percent 2026 2025 Dollars Percent FAS benefit $ 30 $ 25 $ 5 20 % $ 61 $ 50 $ 11 22 % CAS cost 15 16 (1) (6) % 28 29 (1) (3) % FAS/CAS Adjustment 45 41 4 10 % 89 79 10 13 % Non-operating retirement benefit (53) (47) (6) (13) % (106) (95) (11) (12) % Operating FAS/CAS Adjustment expense $ (8) $ (6) $ (2) (33) % $ (17) $ (16) $ (1) (6) % 23 Table of Contents The Operating FAS/CAS Adjustment was a net expense of $8 million and $6 million for the three months ended June 30, 2026 and 2025, respectively. The Operating FAS/CAS Adjustment was a net expense of $17 million and $16 million for the six months ended June 30, 2026 and 2025, respectively. The unfavorable change in the Operating FAS/CAS Adjustment for each period was primarily driven by higher asset returns in 2025. Non-current State Income Taxes 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 taxes are charged to contract costs and included in cost of sales and service revenues in segment operating income. Non-current state income tax expense was $6 million and $3 million for the three months ended June 30, 2026 and 2025, respectively. The unfavorable change in non-current state income taxes was driven by an increase in deferred state income tax expense, primarily attributable to a change in net capitalized research and development expenditures. Non-current state income tax expense was $14 million and $3 million for the six months ended June 30, 2026 and 2025, respectively. The unfavorable change in non-current state income taxes was driven by an increase in deferred state income tax expense, primarily attributable to a change in net capitalized research and development expenditures and a change in state unrecognized tax benefits for the prior period. SEGMENT OPERATING RESULTS Our discussion of business segment performance focuses on sales and service revenues and operating income, consistent with our approach for managing our business. We are aligned into three reportable segments: Ingalls, Newport News, and Mission Technologies. The following table presents segment operating results: Three Months Ended June 30 Six Months Ended June 30 2026 vs. 2025 2026 vs. 2025 ($ in millions) 2026 2025 Dollars Percent 2026 2025 Dollars Percent Sales and Service Revenues Ingalls $ 845 $ 724 $ 121 17 % $ 1,570 $ 1,361 $ 209 15 % Newport News 1,849 1,603 246 15 % 3,514 2,999 515 17 % Mission Technologies 760 791 (31) (4) % 1,508 1,526 (18) (1) % Intersegment eliminations (36) (36) — — % (75) (70) (5) (7) % Sales and service revenues $ 3,418 $ 3,082 $ 336 11 % $ 6,517 $ 5,816 $ 701 12 % Operating Income Ingalls $ 58 $ 54 $ 4 7 % $ 107 $ 100 $ 7 7 % Newport News 111 82 29 35 % 199 167 32 19 % Mission Technologies 55 36 19 53 % 90 76 14 18 % Segment operating income 224 172 52 30 % 396 343 53 15 % Non-segment factors affecting operating income Operating FAS/CAS Adjustment (8) (6) (2) (33) % (17) (16) (1) (6) % Non-current state income taxes (6) (3) (3) (100) % (14) (3) (11) (367) % Operating income $ 210 $ 163 $ 47 29 % $ 365 $ 324 $ 41 13 % Key Segment Financial Measures Refer to Consolidated Operating Results in this section for details related to sales and service revenues and segment operating income. 24 Table of Contents Net Cumulative Catch-up Revenue Adjustments by Segment For the three and six months ended June 30, 2026 and 2025, net cumulative catch-up revenue adjustments by segment were as follows: Three Months Ended June 30 Six Months Ended June 30 ($ in millions) 2026 2025 2026 2025 Ingalls $ (2) $ 4 $ (5) $ 4 Newport News 8 (17) (1) (23) Mission Technologies 4 3 17 9 Net adjustments $ 10 $ (10) $ 11 $ (10) See Note 6: Revenue and Consolidated Operating Results in this section for additional information on our net cumulative catch-up revenue adjustments. Ingalls Three Months Ended June 30 Six Months Ended June 30 2026 vs. 2025 2026 vs. 2025 ($ in millions) 2026 2025 Dollars Percent 2026 2025 Dollars Percent Sales and service revenues $ 845 $ 724 $ 121 17 % $ 1,570 $ 1,361 $ 209 15 % Segment operating income 58 54 4 7 % 107 100 7 7 % As a percentage of segment sales 6.9 % 7.5 % 6.8 % 7.3 % Sales and Service Revenues Ingalls revenues, including intersegment sales, for the three months ended June 30, 2026, increased $121 million, or 17%, from the same period in 2025, primarily driven by higher volumes in amphibious assault ships. Ingalls revenues, including intersegment sales, for the six months ended June 30, 2026, increased $209 million, or 15%, from the same period in 2025, primarily driven by higher volumes in amphibious assault ships and surface combatants. Segment Operating Income Ingalls segment operating income for the three months ended June 30, 2026, was $58 million, compared to segment operating income of $54 million for the same period in 2025. The increase was primarily driven by higher volumes in amphibious assault ships, partially offset by contract adjustments in surface combatants in 2025. Ingalls segment operating income for the six months ended June 30, 2026, was $107 million, compared to segment operating income of $100 million for the same period in 2025. The increase was primarily driven by higher volumes in amphibious assault ships and surface combatants, partially offset by contract adjustments in surface combatants in 2025. 25 Table of Contents Newport News Three Months Ended June 30 Six Months Ended June 30 2026 vs. 2025 2026 vs. 2025 ($ in millions) 2026 2025 Dollars Percent 2026 2025 Dollars Percent Sales and service revenues $ 1,849 $ 1,603 $ 246 15 % $ 3,514 $ 2,999 $ 515 17 % Segment operating income 111 82 29 35 % 199 167 32 19 % As a percentage of segment sales 6.0 % 5.1 % 5.7 % 5.6 % Sales and Service Revenues Newport News revenues, including intersegment sales, for the three months ended June 30, 2026, increased $246 million, or 15%, from the same period in 2025, primarily driven by higher volumes in aircraft carriers and submarines. Newport News revenues, including intersegment sales, for the six months ended June 30, 2026, increased $515 million, or 17%, from the same period in 2025, primarily driven by higher volumes in aircraft carriers and submarines. Segment Operating Income Newport News segment operating income for the three months ended June 30, 2026, was $111 million, compared to segment operating income of $82 million for the same period in 2025. The increase was primarily driven by contract adjustments and incentives in aircraft carriers and the higher volumes described above, partially offset by lower performance in aircraft carriers. Newport News segment operating income for the six months ended June 30, 2026, was $199 million, compared to segment operating income of $167 million for the same period in 2025. The increase was primarily driven by contract adjustments and incentives in aircraft carriers and the higher volumes described above, partially offset by lower performance in aircraft carriers. Mission Technologies Three Months Ended June 30 Six Months Ended June 30 2026 vs. 2025 2026 vs. 2025 ($ in millions) 2026 2025 Dollars Percent 2026 2025 Dollars Percent Sales and service revenues $ 760 $ 791 $ (31) (4) % $ 1,508 $ 1,526 $ (18) (1) % Segment operating income 55 36 19 53 % 90 76 14 18 % As a percentage of segment sales 7.2 % 4.6 % 6.0 % 5.0 % Sales and Service Revenues Mission Technologies revenues, including intersegment sales, for the three months ended June 30, 2026, decreased $31 million, or 4%, from the same period in 2025, primarily due to lower volumes in All-Domain Operations and Global Security, partially offset by higher volumes in Warfare Systems and Unmanned Systems. Mission Technologies revenues, including intersegment sales, for the six months ended June 30, 2026, decreased $18 million, or 1%, from the same period in 2025, primarily due to lower volumes in All-Domain Operations and Global Security, partially offset by higher volumes in Warfare Systems and Unmanned Systems. Segment Operating Income Mission Technologies segment operating income for the three months ended June 30, 2026, was $55 million, compared to segment operating income of $36 million for the same period in 2025. The increase was primarily due to higher equity income from nuclear and environmental joint ventures. Mission Technologies segment operating income for the six months ended June 30, 2026, was $90 million, compared to segment operating income of $76 million for the same period in 2025. The increase was primarily due 26 Table of Contents to lower purchased intangible amortization, higher performance in Warfare Systems, and higher equity income from nuclear and environmental joint ventures. PRODUCT AND SERVICE REVENUES AND COST ANALYSIS The following tables present segment sales and service revenues and segment cost of sales and service revenues by both product and service: Sales and Service Revenues Segment Cost of Product Sales and Service Revenues ($ in millions) Three Months Ended June 30 2026 vs. 2025 Three Months Ended June 30 2026 vs. 2025 Segment Information 2026 2025 Dollars Percent 2026 2025 Dollars Percent Ingalls Product $ 721 $ 610 $ 111 18 % $ 631 $ 526 $ 105 20 % Service 122 111 11 10 % 111 100 11 11 % Intersegment 2 3 (1) (33) % 2 3 (1) (33) % Total Ingalls 845 724 121 17 % 744 629 115 18 % Newport News Product 1,520 1,319 201 15 % 1,327 1,145 182 16 % Service 329 283 46 16 % 275 234 41 18 % Intersegment — 1 (1) (100) % — 1 (1) (100) % Total Newport News 1,849 1,603 246 15 % 1,602 1,380 222 16 % Mission Technologies Product 30 28 2 7 % 20 20 — — % Service 696 731 (35) (5) % 615 656 (41) (6) % Intersegment 34 32 2 6 % 34 32 2 6 % Total Mission Technologies 760 791 (31) (4) % 669 708 (39) (6) % Segment Totals Product $ 2,271 $ 1,957 $ 314 16 % $ 1,978 $ 1,691 $ 287 17 % Service 1,147 1,125 22 2 % 1,001 990 11 1 % Total Segment(1) $ 3,418 $ 3,082 $ 336 11 % $ 2,979 $ 2,681 $ 298 11 % (1) Operating FAS/CAS Adjustment is excluded from segment cost of product sales and service revenues. 27 Table of Contents Sales and Service Revenues Segment Cost of Product Sales and Service Revenues ($ in millions) Six Months Ended June 30 2026 vs. 2025 Six Months Ended June 30 2026 vs. 2025 Segment Information 2026 2025 Dollars Percent 2026 2025 Dollars Percent Ingalls Product $ 1,335 $ 1,136 $ 199 18 % $ 1,162 $ 978 $ 184 19 % Service 230 218 12 6 % 207 190 17 9 % Intersegment 5 7 (2) (29) % 5 7 (2) (29) % Total Ingalls 1,570 1,361 209 15 % 1,374 1,175 199 17 % Newport News Product 2,884 2,479 405 16 % 2,506 2,116 390 18 % Service 630 519 111 21 % 530 427 103 24 % Intersegment — 1 (1) (100) % — 1 (1) (100) % Total Newport News 3,514 2,999 515 17 % 3,036 2,544 492 19 % Mission Technologies Product 56 55 1 2 % 44 40 4 10 % Service 1,382 1,409 (27) (2) % 1,212 1,260 (48) (4) % Intersegment 70 62 8 13 % 70 62 8 13 % Total Mission Technologies 1,508 1,526 (18) (1) % 1,326 1,362 (36) (3) % Segment Totals Product $ 4,275 $ 3,670 $ 605 16 % $ 3,712 $ 3,134 $ 578 18 % Service 2,242 2,146 96 4 % 1,949 1,877 72 4 % Total Segment(1) $ 6,517 $ 5,816 $ 701 12 % $ 5,661 $ 5,011 $ 650 13 % (1) Operating FAS/CAS Adjustment is excluded from segment cost of product sales and service revenues. Product Sales and Segment Cost of Product Sales Product sales for the three months ended June 30, 2026, increased $314 million, or 16%, from the same period in 2025, primarily due to higher volumes in aircraft carriers and submarines at Newport News, and amphibious assault ships at Ingalls. Segment cost of product sales for the three months ended June 30, 2026, increased $287 million, or 17%, compared with the same period in 2025, primarily due to the higher volumes described above. Product sales for the six months ended June 30, 2026, increased $605 million, or 16%, from the same period in 2025, primarily due to higher volumes in aircraft carriers and submarines at Newport News, and amphibious assault ships and surface combatants at Ingalls. Segment cost of product sales for the six months ended June 30, 2026, increased $578 million, or 18%, compared with the same period in 2025, primarily due to the higher volumes described above. Service Revenues and Segment Cost of Service Revenues Service revenues for the three months ended June 30, 2026, increased $22 million, or 2%, from the same period in 2025, primarily due to higher volumes in naval nuclear support services and aircraft carriers at Newport News, and higher volumes in Warfare Systems at Mission Technologies, partially offset by lower volumes in All-Domain Operations and Global Security at Mission Technologies. Segment cost of service revenues for the three months ended June 30, 2026, increased $11 million, or 1%, compared with the same period in 2025, primarily due to the higher volumes described above. Service revenues for the six months ended June 30, 2026, increased $96 million, or 4%, from the same period in 2025, primarily due to higher volumes in naval nuclear support services and aircraft carriers at Newport News, and 28 Table of Contents higher volumes in Warfare Systems at Mission Technologies, partially offset by lower volumes in All-Domain Operations and Global Security at Mission Technologies. Segment cost of service revenues for the six months ended June 30, 2026, increased $72 million, or 4%, compared with the same period in 2025, primarily due to the higher volumes described above, partially offset by lower purchased intangible amortization. OTHER FINANCIAL INFORMATION Interest Expense Interest expense for the three months ended June 30, 2026, was $27 million, compared to $28 million for the same period in 2025. Interest expense for the six months ended June 30, 2026, was $49 million, compared to $56 million for the same period in 2025. The decrease in interest expense was driven by a decrease in outstanding long-term debt compared to the prior year period. Non-Operating Retirement Benefit The non-operating retirement benefit includes the following components of net periodic benefit costs: interest cost, expected return on plan assets, amortization of prior service cost (credit) and actuarial loss (gain), and settlement and curtailment effects. For the three and six months ended June 30, 2026, the non-operating retirement benefit was $53 million and $106 million, respectively, compared with $47 million and $95 million, respectively, for the same periods in 2025. The favorable change in the non-operating retirement benefit for both periods was primarily driven by higher asset returns in 2025. Other, Net Other, net income for the three and six months ended June 30, 2026, was $18 million and $20 million, respectively, compared with other, net income of $6 million and $12 million, respectively, for the same periods in 2025. The increase in other, net income for both periods was primarily driven by an increase in unrealized gains on investments. Federal and Foreign Income Taxes Our 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. Our effective income tax rates on earnings from operations for the six months ended June 30, 2026 and 2025, 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 each of the three and six months ended June 30, 2026, our effective tax rates differed from the federal statutory corporate income tax rate of 21% primarily due to income tax benefits associated with stock award settlement activity. In January 2026, the Organization for Economic Co-operation and Development issued administrative guidance on Pillar Two’s 15% global minimum tax, including a “side-by-side" ("SbS") system with permanent and temporary safe harbors. The U.S. is recognized as a qualified SbS regime, which effectively alleviates U.S. based multi-national companies from top-up tax collectible under Pillar Two. We expect that the SbS system or other transitional safe harbor provisions will be broadly applicable to our international operations and, accordingly, do not expect Pillar Two to have a material impact on our effective tax rate, consolidated results of operations, financial position, or cash flows. BACKLOG Total backlog as of June 30, 2026, and December 31, 2025, was $57.3 billion and $53.1 billion, respectively. Total backlog includes both funded backlog (firm orders for which funding is contractually obligated by the customer) and 29 Table of Contents unfunded backlog (firm orders for which funding is not currently contractually obligated by the customer). Backlog excludes unexercised contract options and unfunded indefinite delivery/indefinite quantity orders. For contracts having no stated contract values, backlog includes only the amounts committed by the customer as of June 30, 2026 and December 31, 2025, respectively. The following table presents funded and unfunded backlog by segment as of June 30, 2026, and December 31, 2025: June 30, 2026 December 31, 2025 ($ in millions) Funded Unfunded Total Backlog Funded Unfunded Total Backlog Ingalls $ 16,883 $ 2,470 $ 19,353 $ 14,925 $ 2,856 $ 17,781 Newport News 15,849 16,639 32,488 15,337 14,588 29,925 Mission Technologies 1,862 3,619 5,481 1,723 3,710 5,433 Total backlog $ 34,594 $ 22,728 $ 57,322 $ 31,985 $ 21,154 $ 53,139 We expect approximately 22% of the $53.1 billion total backlog as of December 31, 2025, to be converted into sales in 2026. U.S. Government orders comprised substantially all of the backlog as of June 30, 2026 and December 31, 2025. Contract Awards The value of new contract awards during the six months ended June 30, 2026, was approximately $10.7 billion, primarily driven by awards at Newport News and Ingalls. LIQUIDITY AND CAPITAL RESOURCES We seek to efficiently convert operating results into cash for deployment in operating our businesses, implementing our business strategy, and maximizing stockholder value. We use various financial measures to inform our capital deployment strategy, including net cash provided by (used in) operating activities and free cash flow. We believe these measures are useful to investors in assessing our financial performance. The following table summarizes key components of cash flow provided by (used in) operating activities: Six Months Ended June 30 2026 vs. 2025 ($ in millions) 2026 2025 Dollars Net earnings $ 357 $ 301 $ 56 Depreciation and amortization of purchased intangibles 155 162 (7) Stock-based compensation 31 33 (2) Deferred income taxes 89 (19) 108 Gain on investments in marketable securities (19) (10) (9) Other non-cash transactions, net 12 9 3 Retiree benefits (90) (77) (13) Change in trade working capital (956) 29 (985) Net cash provided by (used in) operating activities $ (421) $ 428 $ (849) We have historically maintained a capital structure comprised of a mix of equity and debt financing. We expect to meet our current debt obligations as they come due through internally generated funds from current levels of operations, existing borrowing facilities, and/or through refinancing in the debt markets prior to the maturity dates of our debt. 30 Table of Contents Cash Flows Operating Activities Cash used in operating activities for the six months ended June 30, 2026, was $421 million, compared with cash provided by operating activities of $428 million for the same period in 2025. The change in operating cash flow was primarily due to an unfavorable change in trade working capital driven by the timing of billings across programs. We expect cash generated from operations in combination with our current cash and cash equivalents, as well as existing borrowing facilities, to be sufficient to service debt and retiree benefit plans, meet contractual obligations, and fund capital expenditures for at least the next twelve calendar months beginning July 1, 2026, and beyond such twelve-month period based on our current business plans. Investing Activities Cash used in investing activities for the six months ended June 30, 2026, was $189 million, compared to $291 million used in investing activities for the same period in 2025. The change in investing cash was primarily driven by the acquisition of a business in 2025. For 2026, we expect our capital expenditures for maintenance and sustainment to be approximately 1.0% to 1.5% of annual revenues and our discretionary capital expenditures to be approximately 3.0% to 3.5% of annual revenues. Our capital expenditures are expected to increase due to investments to expand our shipbuilding capacity. Financing Activities Cash used in financing activities for the six months ended June 30, 2026, was $152 million, compared with $625 million used in financing activities for the same period in 2025. The change in cash used in financing activities was primarily due to the repayment of long-term debt in 2025. Free Cash Flow Free cash flow represents cash provided by (used in) operating activities less capital expenditures net of related grant proceeds. Free cash flow is not a measure recognized under GAAP. Free cash flow has limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, net earnings as a measure of our performance or net cash provided by (used in) operating activities as a measure of our liquidity. We believe free cash flow is an important liquidity measure for our investors because it provides them insight into our current and period-to-period performance and our ability to generate cash from continuing operations. We also use free cash flow as a key operating metric in assessing the performance of our business and as a key performance measure in evaluating management performance and determining incentive compensation. Free cash flow may not be comparable to similarly titled measures of other companies. The following table reconciles net cash provided by (used in) operating activities to free cash flow: Six Months Ended June 30 2026 vs. 2025 ($ in millions) 2026 2025 Dollars Net cash provided by (used in) operating activities $ (421) $ 428 $ (849) Less capital expenditures: Capital expenditure additions (193) (163) (30) Grant proceeds for capital expenditures 3 3 — Free cash flow $ (611) $ 268 $ (879) Free cash flow for the six months ended June 30, 2026, decreased $879 million from the same period in 2025, primarily due to an unfavorable change in trade working capital driven by the timing of billings across programs. 31 Table of Contents Governmental Regulation and Supervision The U.S. Government has the ability, pursuant to regulations relating to contractor business systems, to decrease or withhold contract payments if it determines material weaknesses exist in one or more such systems. As of June 30, 2026 and 2025, the cumulative amounts of payments withheld by the U.S. Government under our contracts subject to these regulations were not material to our liquidity or cash flows. Off-Balance Sheet Arrangements In the ordinary course of business, we use 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 our self-insured workers' compensation plans. As of June 30, 2026, $10 million in letters of credit were issued but undrawn and $283 million of surety bonds were outstanding. As of June 30, 2026, we had no other significant off-balance sheet arrangements. ACCOUNTING STANDARDS UPDATES See Note 3: Accounting Standards Updates for further information. FORWARD-LOOKING STATEMENTS AND PROJECTIONS Statements in this Quarterly Report on Form 10-Q and in our other filings with the SEC, as well as other statements we may make from time to time, other than statements of historical fact, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by words such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "guidance," "outlook," "predicts," "potential," "continue," and similar words or phrases or the negative of these words or phrases. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. Although we believe the expectations reflected in the forward-looking statements are reasonable when made, we cannot guarantee future results, levels of activity, performance, or achievements. There are a number of important factors that could cause our actual results to differ materially from the results anticipated by our forward-looking statements, which include, but are not limited to: •our dependence on the U.S. Government for substantially all of our business; •significant delays or reductions in appropriations for our programs and/or changes in customer priorities and requirements (including government budgetary constraints, government shutdowns, shifts in defense spending, and changes in customer short-range and long-range plans); •our ability to estimate our future contract costs, including cost increases due to inflation, labor challenges, changes in trade policy, or other factors and our efforts to recover or offset such costs and/or changes in estimated contract costs, and perform our contracts effectively; •changes in business practices, procurement processes and government regulations, including changes through executive orders, contract terms, or other policies or practices applicable to our industry, and our ability to comply with such requirements; •adverse economic conditions in the United States and globally; •our level of indebtedness and ability to service our indebtedness; •our ability to deliver our products and services at an affordable life cycle cost and compete within our markets; •our ability to attract, retain, and train a qualified workforce; •subcontractor and supplier performance and the availability and pricing of raw materials and components; •our ability to execute our strategic plan, including with respect to share repurchases, dividends, capital expenditures, and strategic acquisitions; •investigations, claims, disputes, enforcement actions, litigation (including criminal, civil, and administrative), and/or other legal proceedings, and improper conduct of employees, agents, subcontractors, suppliers, business partners, or joint ventures in which we participate, including the impact on our reputation or ability to do business; •changes in key estimates and assumptions regarding our pension and retiree health care costs; •security threats, including cybersecurity threats, and related disruptions; 32 Table of Contents •natural and environmental disasters and political instability; •health epidemics, pandemics and similar outbreaks; and •other risk factors discussed herein and in our other filings with the SEC. Additional factors include those described in our 2025 Annual Report on Form 10-K, including under the captions Risk Factors, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and Business, in our subsequent quarterly reports on Form 10-Q, including under the captions Risk Factors and Management’s Discussion and Analysis of Financial Condition and Results of Operations, and in our subsequent filings with the SEC. There may be other risks and uncertainties that we are unable to predict at this time or that we currently do not expect to have a material adverse effect on our business, and we undertake no obligation to update or revise any forward-looking statements. You should not place undue reliance on any forward-looking statements that we may make. 33 Table of Contents GLOSSARY OF PROGRAMS Included below are brief descriptions of some of the programs discussed in this Quarterly Report on Form 10-Q. Program Name Program Description Aircraft carrier RCOH Perform refueling and complex overhaul ("RCOH") of nuclear-powered aircraft carriers, which is required at the mid-point of their 50-year life cycle. USS John C. Stennis (CVN 74) arrived at Newport News for the start of its RCOH in May 2021, and USS George Washington (CVN 73) was redelivered to the U.S. Navy in May 2023. America class (LHA 6) amphibious assault ships Design and build large deck amphibious assault ships that provide forward presence and power projection as an integral part of joint, interagency and multinational maritime expeditionary forces. The America class (LHA 6) ships, together with the Wasp class (LHD 1) ships, are the successors to the decommissioned Tarawa class (LHA 1) ships. The America class (LHA 6) ships optimize aviation operations and support capabilities. In 2023, we were awarded a long-lead-time material contract for Helmand Province (LHA 10), and in 2024, we were awarded a contract modification for the detail design and construction of Helmand Province (LHA 10). We are currently constructing Bougainville (LHA 8) and Fallujah (LHA 9). Arleigh Burke class (DDG 51) destroyers Build guided missile destroyers designed for conducting anti-air, anti-submarine, anti-surface, and strike operations. The Aegis-equipped Arleigh Burke class (DDG 51) destroyers are the U.S. Navy's primary surface combatant, and have been constructed in variants, allowing technological advances during construction. We delivered USS Jack H. Lucas (DDG 125) and USS Ted Stevens (DDG 128) in 2023 and 2025, respectively. We have contracts to construct the following Arleigh Burke class (DDG 51) destroyers: Jeremiah Denton (DDG 129), George M. Neal (DDG 131), Sam Nunn (DDG 133), Thad Cochran (DDG 135), John F. Lehman (DDG 137), Telesforo Trinidad (DDG 139), Ernest E. Evans (DDG 141), Charles J. French (DDG 142), Richard J. Danzig (DDG 143), Intrepid (DDG 145), and Robert Kerrey (DDG 146). Columbia class (SSBN 826) submarines Design and construct modules for Columbia class (SSBN 826) nuclear ballistic missile submarines ("SSBNs") as a subcontractor to Electric Boat. SSBNs are the most secure and survivable of our nation’s nuclear deterrent triad. Columbia class SSBNs will carry approximately 70 percent of the nation’s nuclear arsenal. The Columbia class (SSBN 826) program plan of record is to construct 12 new SSBNs to replace the current aging Ohio class. As a subcontractor to Electric Boat, we leverage our Virginia class (SSN 774) experience to perform design work and build modules for the entire Columbia class (SSBN 826) submarine program. We have been awarded contracts from Electric Boat for integrated product and process development, providing long–lead–time material and advance construction, and construction of the first two boats of the Columbia class (SSBN 826) submarine program. Construction of the first Columbia class (SSBN 826) submarine began in 2020. In 2023, we received an award modification for long-lead-time material and advance construction for the next five boats. Gerald R. Ford class (CVN 78) aircraft carriers Design and construction for the Ford class program, which is the aircraft carrier replacement program for the decommissioned Enterprise (CVN 65) and Nimitz class (CVN 68) aircraft carriers. USS Gerald R. Ford (CVN 78), the first ship of the Ford class, was delivered to the U.S. Navy in the second quarter of 2017. In June 2015, we were awarded a contract for the detail design and construction of John F. Kennedy (CVN 79), following several years of engineering, advance construction, and purchase of long-lead-time components and material. In addition, we have received awards for detail design and construction of Enterprise (CVN 80) and Doris Miller (CVN 81). This category also includes the class' non-recurring engineering. The class is expected to bring improved warfighting capability, quality of life improvements for sailors, and reduced life cycle costs. 34 Table of Contents Frigate class (FF(X)) ships Design and build frigate ships that provide small blue-water surface combatants, producible in volume, and designed to fit within the Golden Fleet’s High/Low fleet architecture, complementing larger, multi-mission capable platforms. Frigate will be a vanguard of the Navy’s Hedge Strategy within the General-Purpose Force, handling routine missions across the globe and freeing the Main Battle Force to remain focused on high-end combat. Frigate will act as the command ship for Tailored Offsets, specifically Robotic and Autonomous Systems (RAS), and integrating with RAS to lead Tailored Forces into a cohesive warfighting approach. In 2026, we were awarded a lead yard services contract to begin Frigate class baseline design engineering and included funding for long-lead-material procurements and preconstruction efforts on the first ship in the class. Legend class National Security Cutter Design and build the U.S. Coast Guard's National Security Cutters ("NSCs"), the largest and most technically advanced class of cutter in the U.S. Coast Guard. The NSC is equipped to carry out maritime homeland security, maritime safety, protection of natural resources, maritime mobility, and national defense missions. There were initially 11 ships for this program, of which the first ten ships have been delivered. In 2025, we reached agreement with the U.S. Coast Guard to terminate production and delivery of the 11th and final ship. Naval nuclear support services Provide services to and in support of the U.S. Navy, ranging from services supporting the Navy's carrier and submarine fleets to maintenance services at U.S. Navy training facilities. Naval nuclear support services include design, construction, maintenance, and disposal activities for in-service U.S. Navy nuclear ships worldwide through mobile and in-house capabilities. Services include maintenance services on nuclear reactor prototypes, such as those at the Kenneth A. Kesselring Site, a research and development facility in New York that supports the U.S. Navy, which were completed in 2024. San Antonio class (LPD 17) amphibious transport dock ships Design and build amphibious transport dock ships, which are warships that embark, transport, and land elements of a landing force for a variety of expeditionary warfare missions, and also serve as the secondary aviation platform for Amphibious Readiness Groups. The San Antonio class (LPD 17) is the newest addition to the U.S. Navy's 21st century amphibious assault force, and these ships are a key element of the U.S. Navy's seabase transformation. In 2022, we were awarded a long-lead-time material contract for Philadelphia (LPD 32). In 2023, we received an award modification for the detail design and construction of Philadelphia (LPD 32). In 2024, we delivered USS Richard M. McCool Jr. (LPD 29), and we were awarded a multi-ship procurement contract for the construction of Travis Manion (LPD 33), LPD 34 (unnamed), and LPD 35 (unnamed). We are currently constructing Harrisburg (LPD 30), Pittsburgh (LPD 31), and Philadelphia (LPD 32). Virginia class (SSN 774) fast attack submarines Construct attack submarines as the principal subcontractor to Electric Boat. The Virginia class (SSN 774) is a post-Cold War design tailored to excel in a wide range of warfighting missions, including anti-submarine and surface ship warfare; special operation forces; strike; intelligence, surveillance, and reconnaissance; carrier and expeditionary strike group support; and mine warfare.