Sentences and paragraphs of HII's Risk Factors and MD&A, 10-K 2026-02-05 against 10-K 2025-02-06.
Each links to the text at sec.gov.
AddedRisk Factors
We conduct most of our business with the U.S. Government, primarily the Department. Substantially all of our revenues in 2025 was derived from products and services sold to the U.S. Government. We expect this to continue for the foreseeable future. Our U.S. Government contracts are subject to various risks. We cannot predict the impact on our existing or future contracts due to changes in the global geopolitical and economic environment, including inflationary pressures, defense spending levels and priorities, government efficiency and other budgetary priorities, customer procurement practices and processes, and other factors that may impact our customer’s short- and long-term plans and priorities or our ability to compete, capture, and perform successfully on such contracts. Any of these factors could materially adversely affect our business with the U.S. Government and our financial position, results of operations, or cash flows.
Read it in 10-K 2026-02-05 at sec.gov ↗
AddedRisk Factors
resolution, a full or partial federal government shutdown may occur, as occurred in October 2025. A federal government shutdown could, in turn, result in the delay or cancellation of government programs, or the delay of payments by our customer, which could have a negative effect on our cash flows and adversely affect our future results of operations.
Read it in 10-K 2026-02-05 at sec.gov ↗
AddedRisk Factors
We have been, and may in the future be, exposed to damaging storms and other extreme weather conditions, such as hurricanes and floods (which may be exacerbated by changing weather patterns or environmental conditions), rising sea waters, environmental disasters such as oil spills, acts of terrorism, and health epidemics, pandemics, and similar outbreaks. We also may experience disruptions to electrical and other power distribution networks, information technology, and other critical infrastructure needed for normal business operations and our performance. We anticipate that our facilities and operations, particularly in regions prone to natural disasters and extreme weather events, will continue to be at risk for future natural disasters.
Read it in 10-K 2026-02-05 at sec.gov ↗
Show the other 16
AddedRisk Factors
facilities of our customers or suppliers, or other impacts. Events impacting waterways and bodies of water used for transporting or testing our ships can cause schedule delays under our contracts with the U.S. Navy and the U.S. Coast Guard. These events also may impact our suppliers' and subcontractors' ability to perform and may disrupt the availability of raw materials and supplies needed for our performance.
Read it in 10-K 2026-02-05 at sec.gov ↗
AddedRisk Factors
Although we endeavor to mitigate the risk associated with these events, if insurance or other means of recovery or risk mitigation are unavailable or insufficient, or if we experience delays in such recovery, the damage and adverse impacts caused by such events may be significant, and our financial position, results of operations, or cash flows could be materially adversely affected.
Read it in 10-K 2026-02-05 at sec.gov ↗
AddedRisk Factors
proceedings, which could result in fines, penalties, repayments, sanctions, compensatory, treble, or other damages. Allegations of impropriety can also cause significant reputational damage.
Read it in 10-K 2026-02-05 at sec.gov ↗
AddedRisk Factors
Various federal, state, and local environmental laws and regulations impose restrictions on the discharge of pollutants into the environment and establish standards for the transportation, storage, and disposal of toxic and
Read it in 10-K 2026-02-05 at sec.gov ↗
AddedMD&A
U.S. Political and Economic Environment – The political and economic landscape of the United States in 2025 has been characterized by policy realignment and a complex macroeconomic environment. The Trump Administration (the "Administration") has pursued a renewed emphasis on domestic production, trade protectionism, and deregulation, particularly across the energy, manufacturing, and technology sectors. Heightened political polarization and intermittent fiscal disputes, including a historic 43-day funding lapse, have underscored the challenges of policy continuity and long-term fiscal planning. Despite these disruptions, defense spending continues to benefit from strong bipartisan support, with consensus around the need to maintain U.S. technological superiority and military readiness amid rising global security challenges.
Read it in 10-K 2026-02-05 at sec.gov ↗
AddedMD&A
The Administration’s “America First” economic and security agenda has accelerated efforts to repatriate critical manufacturing and expand production capacity. Policy initiatives have prioritized procurement reform, domestic
Read it in 10-K 2026-02-05 at sec.gov ↗
AddedMD&A
sourcing mandates, and investment incentives to stimulate innovation in advanced defense technologies, including hypersonics, cyber defense, artificial intelligence, and space systems.
Read it in 10-K 2026-02-05 at sec.gov ↗
AddedMD&A
Economically, the United States continues to experience inflationary pressures and elevated interest rates. The economic and policy environment remains fluid, with the main variables revolving around tariffs and immigration. Fiscal conditions remain constrained, with federal debt exceeding 120% of GDP, highlighting the imbalances within the broader economy.
Read it in 10-K 2026-02-05 at sec.gov ↗
AddedMD&A
For the defense sector, these macroeconomic conditions have resulted in mixed impacts. While higher borrowing costs and input inflation have placed pressure on working capital and contract execution, strong defense demand and federal funding have continued to support revenue stability across the industrial base. Increased emphasis on domestic sourcing and production security has also stimulated capital investment in U.S. manufacturing facilities and supplier networks.
Read it in 10-K 2026-02-05 at sec.gov ↗
AddedMD&A
Supply chain realignment remains a central theme in 2025. Continued global disruptions and tariff adjustments have encouraged U.S. defense firms to diversify supplier networks, enhance vertical integration, and invest in advanced manufacturing technologies. Federal programs aimed at supporting small and mid-tier suppliers have further reinforced the broader defense ecosystem.
Read it in 10-K 2026-02-05 at sec.gov ↗
AddedMD&A
Defense Spending Environment – On May 2, 2025, the Administration released the President's topline recommendations on discretionary funding levels for fiscal year 2026, followed by detailed budget justification documents in June. Additionally, under the Act, Congress provided mandatory funding of more than $29 billion for Shipbuilding and the Maritime Industrial Base. This funding included one Virginia class (SSN 774) fast attack submarine and two Arleigh-Burke class (DDG 51) guided-missile destroyers, and provided additional funding for amphibious warfare ships and unmanned surface vessels.
Read it in 10-K 2026-02-05 at sec.gov ↗
AddedMD&A
Overall, the fiscal year 2026 NDAA authorizes $900.6 billion in national security funding. The legislation supports our shipbuilding priorities with a total authorization of $26 billion for shipbuilding programs, including procurement authorization for the third Columbia class (SSBN 826) submarine and advance procurement for future submarines, one Virginia class (SSN 774) fast attack submarine and advance procurement for future submarines, advance procurement for future Arleigh-Burke class (DDG 51) class destroyers, and full funding for the Gerald R. Ford class (CVN 78) aircraft carrier program. Additionally, the fiscal year 2026 NDAA provides authorization for William J. Clinton (CVN 82) and George W. Bush (CVN 83), including incremental funding, advance construction, and advance procurement authorities; incremental funding and authorization for up to five Columbia class (SSBN 826) submarines; and continuous production authority for certain components of Virginia class (SSN 774) submarines.
Read it in 10-K 2026-02-05 at sec.gov ↗
AddedMD&A
Fiscal year 2026 began on October 1, 2025 without annual appropriations legislation or a continuing resolution. As a result, parts of the U.S. Government temporarily shut down. On November 12, after a 43-day federal government shutdown, lawmakers passed and the President signed a continuing resolution funding the government until
Read it in 10-K 2026-02-05 at sec.gov ↗
AddedMD&A
January 30, 2026. Lawmakers also passed three annual funding bills – Military Construction-VA, Agriculture-FDA, and Legislative Branch – to fund parts of the government long-term.
Read it in 10-K 2026-02-05 at sec.gov ↗
AddedMD&A
The negotiated fiscal year 2026 defense appropriations bill includes continued incremental funding for Enterprise (CVN 80) and Doris Miller (CVN 81), along with advance procurement for William J. Clinton (CVN 82); continued funding for the RCOH of USS John C. Stennis (CVN 74); funding for the Virginia class (SSN 774) and Columbia class (SSBN 826) submarine programs; advanced procurement for the Arleigh Burke class (DDG 51) program, including additional funding for shipyard infrastructure and wage enhancements; and funding for long-lead-time materials for the new frigate program. Additionally, the bill provides $1.5 billion for the Maritime Industrial Base to invest in critical areas including supplier capacity and capability, strategic outsourcing, workforce training, and technology and infrastructure.
Read it in 10-K 2026-02-05 at sec.gov ↗
AddedMD&A
See Note 2: Summary of Significant Accounting Policies in Item 8 for further information.
Read it in 10-K 2026-02-05 at sec.gov ↗