Total backlog as of June 30, 2024, was $48.5 billion, compared to $48.1 billion as of December 31, 2023. The backlog is comprised substantially of U.S. Government orders.

New contract awards during the six months ended June 30, 2024, totaled $6.2 billion. Significant awards include the maintenance and overhaul of USS Boise (SSN 764) and an award for construction of USS Richard J. Danzig (DDG 143).

Segment operating income changes are attributed to contract performance and revisions to estimated costs at completion (EAC). Management assesses bidding of each contract by focusing on net sales and operating profit and monitors performance in a similar manner through contract completion.

The company acknowledges that macroeconomic factors have contributed to increasing cost inflation for raw materials, components, supplies, and labor. Persistent cost inflation over the long-term may have an adverse impact on the company's financial position, results of operations, or cash flows.

The U.S. Government has the ability to decrease or withhold contract payments if it determines significant deficiencies exist in contractor business systems. As of June 30, 2024 and 2023, the cumulative amounts of payments withheld were not material.

Huntington Ingalls Industries is a global, all-domain defense partner, building and delivering the world's most powerful, survivable naval ships and technologies. The company's Ingalls and Newport News segments have built more ships in more ship classes than any other U.S. naval shipbuilder.

The company repurchased 250,109 shares for $258.65 per share during the quarter ended June 30, 2024. From the stock repurchase program's inception through June 30, 2024, the company has purchased 14,450,306 shares at an average price of $166.94 per share for a total of $2.4 billion.

The global geopolitical and economic environment continues to be impacted by uncertainty, heightened geopolitical tensions, and 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.