Huntington Ingalls Industries (HII) risk factors, 2025 10-K

Other

1. 01Significant delays or reductions in appropriations for our programs and/or changes in customer priorities could have a material adverse effect on our financial position, results of operations, or cash flows
2. 02Changes in estimates used in contract accounting and contract cost growth have affected and could continue to affect our profitability and our overall financial position
3. 03Changes to DoD business practices could have a material effect on DoD's procurement process and adversely impact our current programs and potential new awards
4. 04Competition within our markets or an increase in bid protests may reduce our revenues and market share
5. 05Our level of indebtedness and our ability to make payments on or service our indebtedness may adversely affect our financial and operating activities or our ability to incur additional debt
6. 06We have classified contracts with the U.S. government, which limits investor insight into portions of our business
7. 07Cost growth on flexibly priced contracts that does not result in higher contract prices due from customers reduces our profit and exposes us to the potential loss of future business
8. 08renegotiate contracts on less favorable terms, be forced to pay penalties or liquidated damages, or suffer major losses if the customer exercises its right to terminate
9. 09We depend on the recruitment and retention of qualified personnel, and challenges associated with our ability to attract, train and retain such personnel have harmed and may continue to negatively impact our business
10. 10Our earnings and profitability depend, in part, upon subcontractor performance and raw material and component availability and pricing
11. 11Our future success depends in part on our ability to increase our current and future shipbuilding capacity. If we are unable to do so, or to do so in a cost-effective manner, our business could be materially adversely affected
12. 12We could be negatively impacted by security threats, including cyber security threats, and related disruptions
13. 13We utilize artificial intelligence, which could expose us to liability or adversely affect our business, especially if we are unable to compete effectively with others in adopting artificial intelligence
14. 14tools we use rely, we also may incur liability through the violation of applicable laws and regulations, third-party intellectual property, data privacy, or other rights, or contracts to which we are a party
15. 15Our business is subject to disruptions caused by natural disasters, environmental disasters, and other events that could have a material adverse effect on our financial position, results of operations, or cash flows
16. 16We face risks related to health epidemics, pandemics, and similar outbreaks
17. 17Our business could be negatively impacted if we are unsuccessful negotiating new collective bargaining agreements
18. 18Changes in future business conditions could cause business investments, recorded goodwill, and/or purchased intangible assets to become impaired, resulting in losses and write-downs that would reduce our operating income
19. 19contract payments upon its assessment that deficiencies exist with one or more of our business systems, which can have a material impact on the timing of our cash receipts
20. 20We are subject to investigations, claims, litigation, disputes and other legal proceedings that could ultimately be resolved against us
21. 21Environmental costs could have a material adverse effect on our financial position, results of operations, or cash flows
22. 22Water Act, the facility or facilities involved in the violation could be placed by the EPA on a list of facilities that generally cannot be used in performing on U.S. Government contracts until the violation is corrected
23. 23Our nuclear operations subject us to environmental, regulatory, financial, and other risks
24. 24Our reputation and our ability to conduct business may be impacted by the improper conduct of employees, agents, suppliers, subcontractors or business partners
25. 25Changes in tax laws and regulations or exposure to additional tax liabilities could adversely affect our financial results
26. 26We may be unable to adequately protect our intellectual property rights, which could affect our ability to compete
27. 27Anti-takeover provisions in our organizational documents and Delaware law, as well as regulatory requirements, could delay or prevent a change in control
28. 28Our Restated Bylaws include an exclusive forum requirement for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for such disputes with us or our directors, officers, or employees
29. 29Our insurance coverage may be inadequate to cover all of our significant risks or our insurers may deny coverage of material losses we incur, which could adversely affect our profitability and financial position
30. 30Market volatility and adverse capital market conditions may affect our ability to access cost-effective sources of funding and may expose us to risks associated with the financial viability of suppliers and subcontractors
31. 31If we fail to manage acquisitions, joint ventures, equity investments, and other transactions successfully or if acquired businesses or equity investments fail to perform as expected, our financial results, business, and future prospects could be harmed
32. 32We can provide no assurance we will continue to increase our dividends or repurchase shares of our common stock