Huntington Ingalls Industries, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the fourth quarter 2025 HII earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, please press star followed by one on your telephone keypad. If you change your mind, please press star followed by two on your telephone keypad. Please be advised that today's conference is being recorded. If you need further assistance, please press star zero to reach an operator. I would like now to handle the call over to Christy Thomas, Vice President of Investor Relations. Mrs. Thomas, you may.

Thank you, operator, and good morning, everyone. Welcome to the HII fourth quarter 2025 conference call. Matters discussed on today's call that constitute forward-looking statements, including our estimates regarding the company's outlook, involve risks and uncertainties and reflect the company's judgment based on information available at the time of this call. These risks and uncertainties may cause our actual results to differ materially. Additional information regarding these factors is contained in today's press release and the company's SEC filings. We will also refer to non-GAAP financial measures. For additional disclosures about these non-GAAP measures, including reconciliations to comparable GAAP measures, please see the slides that accompany this webcast, which are available on the Investor Relations page of our website at ir.hii.com. On the call today are Chris Kastner, President and Chief Executive Officer, and Tom Steele, Executive Vice President and Chief Financial Officer. Now I'll turn the call over to Chris.

Thanks, Christy. Good morning, everyone, and thank you for joining us on our fourth quarter 2025 earnings call. Before discussing the results, highlights, and guidance, I'd like to take a moment to reflect upon our progress over the past year. The solid results we posted this morning are the outcome of a measurable increase in shipbuilding throughput, a key indicator for schedule performance. During 2025, in partnership with our government customers, we've taken steps to increase our hiring, improve our retention, and strengthen proficiency levels within our workforce. What these efforts represent are thousands of skilled shipbuilders, engineers, technologists, and professionals who are committed to HAI's mission. I'd like to say thank you to our 44,000 employees. Every improvement in our operations, every efficiency we unlock, Every day we reduce from a schedule translates directly into capability our customers urgently need and can deploy to protect American interests. Now, turning to our 2025 results, revenues of $12.5 billion grew 8.2%, and EPS was $15.39. 2025 awards totaled $16.9 billion. All three of our divisions reached record revenue levels and hit key milestones. Now, I'd like to share some of the 2025 division highlights, starting with Mission Technologies. In 2025, Mission Technologies delivered another year of top-line growth, with record revenues topping the $3 billion mark for the first time. Throughout 2025, we announced key milestones that highlight the breadth of our defense technology offerings. These included developing the U.S. Army's high-energy laser weapon system Debuting Grim Spectrum Dominance EW solution, delivering Lionfish small unmanned underwater vehicles to the U.S. Navy, expanding shipboard and shore-based training for U.S. and coalition forces, and delivering our 750th Remus autonomous underwater vehicle. To accelerate support of a hybrid fleet, we unveiled the Romulus family of unmanned surface vessels powered by our own Odyssey Autonomy software suite, and construction of the first prototype is well underway on the Gulf Coast. In summary, the Mission Technologies team is executing well, and we are confident in continuing this success, particularly given how closely our portfolio maps to our defense customers' needs. Shifting to shipbuilding, at Ingalls, we delivered our second Flight 3 destroyer, DDG-128 Ted Stevens, launched DDG-129 Jeremiah Denton, and authenticated the keel of DDG-135 Thad Cochran. Also in January, we completed sea trials on DDG-1000 Zumwalt. On the amphibious ship programs, we christened LPD-30 Harrisburg and began fabrication of LPD-32 Philadelphia. And LHA 8 Bougainville is actively in the test program and is the chief generator light off. We also signed a memorandum of agreement with HD Hyundai Heavy Industries, reinforcing our strategic collaboration to explore future partnership opportunities. Additionally, in December, the U.S. Navy announced a Golden Fleet, which includes a Trump-class battleship, as well as a frigate, which will leverage the proven design of the Ingalls-built Legend-class National Security Cutter. I have great confidence in Ingalls' team to execute this program and in our ongoing efforts with our partners to successfully expand the U.S. Shipbuilding Industrial Base to meet the Navy's needs. In 2025, at Newport News Shipbuilding, we delivered Virginia-class submarine SSN 798 Massachusetts, launched SSN 800 Arkansas, laid the keel of SSN 804 Barb, and undocked SSN 796 New Jersey in preparation for her re-delivery to the fleet. We also delivered the bow of the first Columbia-class submarine, SSBN 826, District of Columbia. In our aircraft carrier programs, last year we completed dock trials on CVN 79 Kennedy, and the team is now finishing up her first sea trial evolution, moving another step closer to preliminary acceptance and delivery. In addition, having completed deck over of both engine rooms post-receipt of the remaining major engine room components, CVN 80 has now reached 50% erected in the dry dock and CVN 81 keel units are in fabrication and we continue to receive major material components in support of production. After delivering two ships in 2025, DDG 128 and SSN 798, we expect to deliver another two ships in 2026, SSN 800 and LPT 30, as well as complete preliminary acceptance of CVN 79. I'll note that we've accelerated our forecast of LPD 30 delivery into 2026 and adjusted LHA 8 Bougainville delivery to 2027. This ensures that we avoid any potential conflicts, people or equipment, and establishes clear and consistent priorities for the joint Ingalls and Navy teams throughout all the interim milestones leading to delivery. Now I'd like to update you on our operational initiatives. In 2025, we set out to improve throughput and achieve 14% year-over-year increase. As we continue to invest with our customer partner in our workforce, facilities, technology, and supply chain, we've established our 2026 target to increase throughput by another 15%. Supporting the throughput increase, we hired over 6,600 shipbuilders in 2025 and expect to hire at least this many in 2026. Given recent investments in wages and workforce, we expect continued improvement in our retention rate and will continue to develop our workforce to maximize productivity. Also, we plan to continue to ramp our distributed shipbuilding strategy. While we doubled outsourcing year-over-year in 2025, we are planning to increase outsourcing by another 30% in 2026. Our second operational initiative in 2025 was a cost reduction target of $250 million. which we met by removing mostly overhead and support labor costs for improved efficiency. Lastly, we expect several shipbuilding contract awards in 2026, including Virginia Class Block 6, Columbia Bill 2, CVN 75 RCOH, and CVN 82 Longleaf Material. Regarding capital allocation, we have historically taken a very balanced approach, leading with reinvestments into our shipyards. stakeholders that have visited our yards have seen firsthand the tremendous amount of investment we have made over the past decade at both Ingalls and Newport News. In 2026, we will again target hundreds of millions of dollars of capital investment in the shipyards. Specifically, at Newport News, these projects include finishing a multipurpose carrier refueling and overhaul work center, making peer updates to support carrier inactivation, significant investments in manufacturing centers of excellence to support higher submarine throughput, and completion of a new parking garage that began construction in 2025. Now I'd like to see a few words about guidance, and Tom will provide more detail in his remarks. With our keen focus on execution, the progress made this past year, the large investments in shipbuilding, and the unprecedented demand for our products and services, we are raising our medium-term shipbuilding revenue growth guidance from approximately 4% to approximately 6%. We did have some sales, driven by material timing, move into 2025 that were expected in 2026, so our current year outlook for shipbuilding revenues is between $9.7 and $9.9 billion, and shipbuilding margins in the range of 5.5 to 6.5%. For mission technologies, we expect revenues between $3 and $3.2 billion, and margins of approximately 5%, with EBITDA margins between 8.4 and 8.6%. Our free cash flow outlook for 2026 is between $500 and $600 million. Turning to activities in Washington for a moment, Congress, on a bipartisan basis, passed the National Defense Authorization Act for fiscal year 2026 in December. The fiscal year 2026 NDAA strongly supports our shipbuilding programs, including incremental funding and block buy procurement authorization for CVNs 82 and 83. incremental funding and procurement authorization for up to five Columbia-class submarines, and continuous production authority for a range of Virginia-class components to optimize construction schedules and supply chain resilience. The fiscal year 2026 Defense Appropriations Bill shows strong support for our programs. The bill includes continued incremental funding for CVNs 80 and 81, along with advanced procurement for CVN 82, continued funding for CVN 74, our COH, funding for the Virginia-class and Columbia-class submarine programs, advanced procurement for the DDG 51 program, and funding for long-lead materials for the new frigate program. Combined with the shipbuilding funding provided in the budget reconciliation bill that was enacted into law in July 2025, the FY26 Defense Appropriations Bill continues the strong support for the shipbuilding industry. In summary, we've made meaningful progress over the past year. and have increased throughput and improved execution. We must build on this momentum and continue to increase our shipbuilding throughput. The U.S. Navy and all of our defense customers need our ships and technologies now more than ever. The global security environment demands that we operate with a sense of urgency and purpose that matches the seriousness of the threats our nation faces. Now I will turn the call over to Tom for some remarks on our financial results and guidance. Tom?