NYSE: HII · Aerospace & Defense
Huntington Ingalls Industries
Huntington Ingalls Industries (HII), based in Newport News, Virginia, is a defense company whose Newport News (Virginia) and Ingalls (Mississippi) shipyards have built more ships in more classes than any other U.S. naval shipbuilder. Newport News builds nuclear-powered aircraft carriers and submarines ($6,507 million of 2025 revenue), Ingalls builds amphibious assault ships, destroyers and cutters ($3,078 million), and Mission Technologies provides defense IT, unmanned systems and other services ($3,044 million). 2025 revenues rose 8% to $12,484 million and net earnings to $605 million. Backlog grew from $53.1 billion at end-2025 to $86.2 billion at September 30, 2026 after $32.4 billion of Q3 awards, substantially all from the U.S. Government.
Last updated
Analysis last edited: October 31, 2026 · Financial data fetched: October 25, 2026 04:07 (SEC EDGAR) · Source 10-K filed: February 5, 2026
Built on10-K FY2025 · filed 2026-02-0510-Q (quarter ended 2026-09-30) · filed 2026-10-29Proxy statement (2026)
Next update expectedAfter FY2026’s 10-K is filed (roughly 60–90 days after fiscal year end (sooner for larger filers)), financials and analysis will be refreshed.
01
At a glanceFrom SEC data
Eight headline measures, each placed among the companies covered on this site.
- Revenue growthCAGRSmooths out year-to-year swings into "grew X% a year on average." Makes growth pace comparable across companies of very different sizes.
- 5.9%
- Operating marginOperating marginHow many cents of operating profit are left per dollar of revenue. Reflects pricing power and cost structure.
- 5.3%
- ROIC minus WACCROIC − WACC spreadThe difference between ROIC and WACC. Consistently positive implies value creation; consistently negative implies value destruction.
- -1.3 pts
- Net debt ÷ EBITDAEBITDAOperating income with D&A added back. A rough proxy for cash-generating power that’s less distorted by capital intensity, depreciation method, or financing/tax differences than net income.
- 2.0x
- Cash conversionOperating CF ÷ net income (cash conversion)How much of reported profit shows up as actual cash. 1x or higher means profit is backed by cash.
- 1.98x
- Dividend raisesDividend per shareTotal annual dividend paid per share (sum of all declared payments for the year).
- 5 of 5
- P/E todayP/EShare price ÷ EPS — how many years of current earnings the stock price represents. This site uses the period-end figure as reported in the filing.
- 16.5x
- Betaβ (beta)How much a stock moves, on average, for a 1% move in the overall market. Above 1 means more volatile than the market, which raises the return shareholders require. This site computes it from about 2.5 years (roughly 130 weeks) of weekly returns, built from Yahoo Finance daily prices, regressed against an S&P 500 ETF (SPY) as the market proxy, then applies the well-known long-run mean-reversion adjustment (0.67 × β + 0.33) as the WACC default.
- 0.81
Higher than 32% of 372 non-financial companies
Average yearly growth over the years shown
Higher than 15% of 311 non-financial companies
Latest fiscal year (FY2025)
Higher than 22% of 311 non-financial companies
Return on capital above (or below) its estimated cost
Higher than 53% of 304 non-financial companies
Below 0 means more cash than debt
Higher than 73% of 349 non-financial companies
Operating cash flow ÷ net income
Years the dividend per share rose, of the last 5
Latest close 2026-11-04; trailing 12 months to 2026-09-30
Above 1 = moves more than the market
Each marker shows where this company sits among the non-financial companies covered on this site, not all listed companies (left = lowest, right = highest). A high position is not automatically good — for net debt ÷ EBITDA, higher means more debt. Details and formulas are in the sections below and in How to read this.
02
Valuation todayFrom SEC data
Price-based measures at the latest close, next to the same measures at the last fiscal year-end.
Share price$308.66close on 2026-11-04
Market cap$12.11B
- P/EP/EShare price ÷ EPS — how many years of current earnings the stock price represents. This site uses the period-end figure as reported in the filing. today
- 16.5x
- P/BP/BShare price ÷ book value per share. Below 1x means the market values the company below its accounting net worth. This site uses the closing price nearest the fiscal year-end and highlights sub-1x readings. today
- 2.4x
- EV/EBITDAEV/EBITDAEnterprise value (≈ market cap + interest-bearing debt − cash) as a multiple of EBITDA — roughly, "how many years of EBITDA to buy the whole company." Lower is generally viewed as cheaper, and it’s more comparable than P/E across companies with different debt loads or depreciation policies. This site excludes noncontrolling interests from the EV calculation. today
- 14.2x
- FCF yieldFree cash flow (FCF)Operating CF minus capital expenditures — cash generated by the business after funding its own investment, available for dividends, buybacks, acquisitions, or debt paydown. Acquisitions and securities purchases (also in investing CF) are not subtracted, so FCF can be positive in a year when total investing CF exceeds operating CF. today
- 6.6%
- Dividend yieldDividend per shareTotal annual dividend paid per share (sum of all declared payments for the year). today
- 1.8%
At FY2025 year-end: 22.1x
Earnings: trailing 12 months to 2026-09-30
At FY2025 year-end: 2.6x
Book value at FY2025 year-end
At FY2025 year-end: 15.5x
EBITDA for FY2025
At FY2025 year-end: 5.9%
Free cash flow for FY2025
Dividends per share for FY2025
“Today” uses the latest closing price (2026-11-04, Yahoo Finance daily closing prices) and shares outstanding at the last fiscal year-end. The rest of this page — including the financial table and ROIC vs. WACC — uses fiscal year-end prices. These are reference figures, not a judgment of whether the stock is cheap or expensive.
03
What changed since last earningsFrom SEC data
The latest reported quarter against the same quarter a year earlier, the balance sheet against the previous quarter-end, and what management said in its latest earnings release.
Quarter ended Sep 30, 2026.
- Revenue$3.19B → $3.54B (vs. a year earlier)↑ +10.8%$3.19B → $3.54B (vs. a year earlier)
- Operating margin5.0% → 7.0% (vs. a year earlier)↑ +1.9 pts5.0% → 7.0% (vs. a year earlier)
- Net income$145M → $217M (vs. a year earlier)↑ +49.7%$145M → $217M (vs. a year earlier)
- Diluted EPS$3.68 → $5.48 (vs. a year earlier)↑ +48.9%$3.68 → $5.48 (vs. a year earlier)
- Cash$12M → $387M (vs. previous quarter-end)↑ +3125.0%$12M → $387M (vs. previous quarter-end)
- Long-term debt$2.7B → $2.7B (vs. previous quarter-end)→ +0.1%$2.7B → $2.7B (vs. previous quarter-end)
Source: Form 10-Q ↗ (SEC XBRL). Long-term debt is the tagged long-term debt figure and leaves out short-term borrowings.
From the earnings release of Oct 29, 2026.
Management outlook ↑ Raised
Raised FY26 shipbuilding revenue guidance to $10.5–$10.7 billion. Source sentence
Company raises the FY26 shipbuilding revenue guidance range to between $10.5 and $10.7 billion 1
Key changes
Q3 revenues $3.5B, up 10.8%. Source sentence
Third quarter 2026 revenues of $3.5 billion were up 10.8% from the third quarter of 2025, driven by growth at Newport News Shipbuilding and Ingalls Shipbuilding.
Operating income $246M, margin 7.0%. Source sentence
Operating income in the third quarter of 2026 was $246 million and operating margin was 7.0%, compared to $161 million and 5.0%, respectively, in the third quarter of 2025.
Written by AI. A line appears only if its figures and direction match the quoted sentence, which an automatic check confirms. Companies' outlooks are their own and may not be met. Read the release ↗
04
Company profileFrom SEC dataShow
- Legal name
- HUNTINGTON INGALLS INDUSTRIES, INC.
- Headquarters
- NEWPORT NEWS, VA
- Incorporated in
- Delaware
- Fiscal year end
- 12/31
- Exchange & ticker
- NYSE: HII
- Industry
- Aerospace & Defense
- CIK
- 1501585
- Website
- https://hii.com/ ↗
- IR page
- https://ir.hii.com/ ↗
Workforce (as of FY2025 year-end)
Employees
44,000
Source: Form 10-K (FY2025) cover page and business description
05
Earnings calendarFrom SEC dataShow
When the company reports each quarter: the quarter-end date, the day results were released, and when the 10-Q or 10-K was filed.
Next report
Q4 FY2026
Quarter end: December 2026. In past years, Q4 results were released 32–37 days after quarter end (Feb 5, 2026; Feb 6, 2025; Feb 1, 2024). No date has been announced in the sources this site uses.
Reporting pattern
- Fiscal year ends around December 31.
- Reports four times a year: three quarterly reports (10-Q) and an annual report (10-K) for Q4.
- Earnings releases came 29–37 days after quarter end over the last 12 quarters.
| Quarter | Quarter ended | Earnings release (8-K) | Report filed (10-Q / 10-K) |
|---|---|---|---|
| Q3 FY2026 | Sep 30, 2026 | Oct 29, 2026 (+29 days) | Oct 29, 2026 10-Q (+29 days) |
| Q2 FY2026 | Jun 30, 2026 | Jul 30, 2026 (+30 days) | Jul 30, 2026 10-Q (+30 days) |
| Q1 FY2026 | Mar 31, 2026 | May 5, 2026 (+35 days) | May 5, 2026 10-Q (+35 days) |
| Q4 FY2025 | Dec 31, 2025 | Feb 5, 2026 (+36 days) | Feb 5, 2026 10-K (+36 days) |
| Q3 FY2025 | Sep 30, 2025 | Oct 30, 2025 (+30 days) | Oct 30, 2025 10-Q (+30 days) |
| Q2 FY2025 | Jun 30, 2025 | Jul 31, 2025 (+31 days) | Jul 31, 2025 10-Q (+31 days) |
| Q1 FY2025 | Mar 31, 2025 | May 1, 2025 (+31 days) | May 1, 2025 10-Q (+31 days) |
| Q4 FY2024 | Dec 31, 2024 | Feb 6, 2025 (+37 days) | Feb 6, 2025 10-K (+37 days) |
| Q3 FY2024 | Sep 30, 2024 | Oct 31, 2024 (+31 days) | Oct 31, 2024 10-Q (+31 days) |
| Q2 FY2024 | Jun 30, 2024 | Aug 1, 2024 (+32 days) | Aug 1, 2024 10-Q (+32 days) |
| Q1 FY2024 | Mar 31, 2024 | May 2, 2024 (+32 days) | May 2, 2024 10-Q (+32 days) |
| Q4 FY2023 | Dec 31, 2023 | Feb 1, 2024 (+32 days) | Feb 1, 2024 10-K (+32 days) |
Source: SEC EDGAR filing history. Release dates are the dates the earnings release was furnished to the SEC on Form 8-K (Item 2.02), which is normally the day results are announced. For a quarter whose 10-Q or 10-K isn’t filed yet, the date is the latest Item 2.02 8-K since the previous report, which may be a preliminary or other results-related update. Fiscal years are labeled by the calendar year in which they end.
06
Flagship products & servicesSite analysis
Newport News
Aircraft carriers and submarines
Nuclear-powered aircraft carriers and Virginia- and Columbia-class submarines (with General Dynamics Electric Boat); the only company currently capable of refueling nuclear-powered carriers (RCOH) plus fleet support.
Ingalls
Amphibious assault ships and surface combatants
Amphibious assault and transport dock ships, Arleigh Burke-class destroyers and National Security Cutters.
Mission Technologies
Defense technology services
C5ISR, cyber, unmanned systems and live, virtual and constructive training solutions.
From the Form 10-K, FY2025.
U.S., worldwide and country/regional share of flagship products/services
Only shares the company itself states (in its filings or press releases, sometimes citing a research firm) are shown. Scope and timing vary by figure — treat these as approximate.
Naval shipbuilding
U.S. naval shipbuilding
U.S. share
Most ships in most classes
Company-disclosedIngalls and Newport News “have built more ships in more ship classes than any other U.S. naval shipbuilder.”
Worldwide share
—
Not disclosed
07
Recent strategic focusSite analysis
Recent developments.
2025 results
Revenues $12,484M (+8%); operating income $657M; net earnings $605M; EPS $15.39.
Source: Form 10-K (FY2025)
Q3 2026
Record Q3 revenue of $3.5B (+10.8%); operating margin 7.0% (vs 5.0%); net earnings $217M ($5.48 per share vs $3.68). HII raised 2026 shipbuilding revenue guidance to $10.5–10.7B and kept its 6.0–6.5% shipbuilding margin guidance.
Source: Q3 2026 earnings release
Backlog
$86.2B at September 30, 2026 versus $53.1B at end-2025, on $32.4B of Q3 contract awards.
Source: Form 10-Q (quarter ended 2026-09-30)
Capex ÷ D&A (FY2025)
1.22x
Roughly matches depreciation — mostly maintenance/replacement
formulacapital expenditures ÷ depreciation & amortization
e.g.$402M ÷ $329M = 1.22x
termsCapital expenditures (capex) · Depreciation & amortization (D&A)
R&D-to-revenue ratio (FY2025)
0.2%
formularesearch & development expense ÷ revenue × 100
e.g.$26M ÷ $12,484M × 100 = 0.2%
M&A spend (6-year total)
$2.19B
Latest year: $132M
Cash-flow-statement spending on acquisitions, net of cash acquired
Where the money goes, over time
Unit: $M. Capex went from $353M in FY2020 to $402M in FY2025
- Capex
- R&D
- M&A spend
formulacapital expenditures ÷ depreciation & amortization
termsCapital expenditures (capex) · Depreciation & amortization (D&A)
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-05
08
Key figures at a glanceFrom SEC data
FY2020–FY2025, 6 years.
Revenue (FY2025)
$12.48B
As reported in the 10-K
Revenue CAGR (5 years)
+5.9%▲favorable
formula(last-period revenue ÷ first-period revenue) ^ (1 ÷ years) − 1
e.g.($12,484M ÷ $9,361M) ^ (1÷5) − 1 = 5.9%
termsCAGR · ^ (exponent) · Revenue (net sales)
Operating margin (FY2025)
5.3%▼caution
-3.3pt vs. 5 years ago
formulaoperating income ÷ revenue × 100
e.g.$657M ÷ $12,484M × 100 = 5.3%
ROE (FY2025)
12.4%▲favorable
6-year average: 20.2%
As reported in the 10-K
P/B (FY2025 end)
2.63x
formulafiscal year-end closing price ÷ book value per share
e.g.$340.07 ÷ $129.28 = 2.63x
Period-end (fiscal year-end) value, not today's P/B
EV/EBITDA (FY2025 end)
15.5x
formula(market cap + interest-bearing debt − cash and equivalents) ÷ (operating income + depreciation & amortization)
e.g.($13,345M + $2,700M − $774M) ÷ ($657M + $329M) = 15.5x
termsEV/EBITDA · Market capitalization · Interest-bearing debt · EBITDA · Depreciation & amortization (D&A)
Period-end (fiscal year-end) value, not today's multiple
- ▲
Revenue grew +5.9% a year over 5 years (strong growth)
From $9.36B in FY2020 to $12.48B in FY2025. The annualized rate (CAGR) makes it possible to compare growth pace across companies of different sizes.
- ▼
Operating margin declined: 8.5% → 5.3%
How much operating profit is left per $100 of revenue. It moved -3.3 points over 5 years — pricing power, cost control, and product mix all show up here.
- ―
Equity ratio is 39.8% (a middling level)
The share of total assets funded by equity rather than debt. 50%+ is often read as low bankruptcy risk, though the right level varies by industry (real estate and leasing run lower, for instance).
- ▲
Free cash flow was positive in 6 of 6 years
Operating cash flow minus capital expenditures: the cash left over after funding the business’s own investment, available for dividends, buybacks, acquisitions, or debt paydown. A negative year can mean heavy investment, or weak core earnings — worth distinguishing.
- ▲
ROE averaged 20.2% over 6 years (latest: 12.4%)
How much profit was generated on shareholders’ equity. Roughly 10%+ is often cited as solid for a U.S. company, though this varies a lot by industry and capital intensity.
09
Business modelSite analysis
Business Model Canvas
The whole company in nine blocks. Left side: how it delivers (partners, activities, resources, costs). Right side: who it serves and how it earns. Every entry comes from the company’s filings shown on this page.
08 · who helps
Key partners
No partners or suppliers named in the filings.
07 · what it does
Key activities
- Aircraft carriers and submarines (Newport News)
- Amphibious ships, destroyers and cutters (Ingalls)
- C5ISR, unmanned systems, cyber and training (Mission Technologies)
06 · what it draws on
Key resources
- About 44,000 employees
- Newport News and Ingalls shipyards (Newport News has seven graving docks)
- Nuclear shipbuilding capability
02 · why customers buy
Value propositions
- Naval ships and submarines built for the U.S. Navy, plus repair and mission technologies.
04 · how it keeps them
Customer relationships
- Long-term multi-ship contracts, such as the multi-year awards for Arleigh Burke class destroyers.
03 · how it reaches them
Channels
- Contracts directly with the U.S. Navy, Coast Guard and other federal agencies.
01 · who it serves
Customer segments
- U.S. Navy, Coast Guard and other U.S. Government agencies
09 · where money goes
Cost structure
FY2025, share of revenue ($12.48B)
- Research & development0.2%
- Selling, general & administrative7.8%
- Other operating costs (incl. cost of goods sold)86.7%
Operating profit left: 5.3% of revenue. Depreciation & amortization (inside the costs above): $329M. Capital spending: $402M.
Source: Form 10-K income statement and cash-flow statement (SEC XBRL).
05 · how money comes in
Revenue streams
- Newport News $6,507M
- Ingalls $3,078M
- Mission Technologies $3,044M (2025)
Value propositions, channels and customer relationships: Form 10-K (FY2025)
Designs, builds, overhauls and repairs naval ships, mostly under long-term fixed-price incentive and cost-type contracts with the U.S. Navy and Coast Guard, and sells defense technology services.
01 what it draws on
Inputs & resources
- About 44,000 employees
- Newport News and Ingalls shipyards (Newport News has seven graving docks)
- Nuclear shipbuilding capability
02 what it does
Activities
- Aircraft carriers and submarines (Newport News)
- Amphibious ships, destroyers and cutters (Ingalls)
- C5ISR, unmanned systems, cyber and training (Mission Technologies)
03 who it serves
Customers
- U.S. Navy, Coast Guard and other U.S. Government agencies
04 how money comes in
How it earns
- Newport News $6,507M
- Ingalls $3,078M
- Mission Technologies $3,044M (2025)
How the business makes money
- About 21% of the $53.1B end-2025 backlog is expected to convert to sales in 2026.
- New contract awards in 2025 were about $16.9B.
- Largest industrial employer in Virginia and largest private employer in Mississippi.
Government & regulation around the business
Non-market factors from the company’s filings: what governments and regulators fund, buy, set, approve or restrict, and which part of the flow above each one touches.
HII builds and maintains ships for the U.S. Navy and Coast Guard under government cost rules.
Government as customer
U.S. Navy as core customer
Maintains and modernizes the vast majority of the U.S. Navy’s fleet.
Supports and constrainsTouches: Customers · How it earnsSource: Form 10-K (FY2025)
Political engagement
Unallowable lobbying costs
Federal cost rules (FAR/CAS) make lobbying costs, charitable donations and some other costs unallowable on government contracts.
Constrains the businessTouches: How it earnsSource: Form 10-K (FY2025)
Trade & export rules
Trade policy and contract costs
Changes in trade policy, including tariffs, can drive contract cost growth.
Constrains the businessTouches: Inputs & resourcesSource: Form 10-K (FY2025)
Revenue by segment (FY2025)
Unit: $M — bar length = revenue, (%) = share of total company revenue
Newport News
6,507 (52%)Ingalls
3,078 (24%)Mission Technologies
3,044 (24%)
Source: Form 10-K (FY2025) Segment sales and service revenues before intersegment eliminations; total $12,484M.
10
Contract structureSite analysisShow
Short-term or spot sales carry different earnings quality than long-term or auto-renewing contracts — this shows how the company actually contracts with its customers.
11
Customers & suppliersSite analysis
Who the company sells to and buys from. Companies rarely name either, so named counterparties come only from the company's own filings and press releases; otherwise this lists the concentration figures the 10-K discloses.
Customers
U.S. Navy, Coast Guard and other federal agencies.
Named by the company
U.S. Government orders comprised substantially all of backlog; no commercial customer is material.
Suppliers
Suppliers of steel, nuclear components, propulsion and electronics.
Named by the company
No single supplier is named as material.
12
Competitors & peersSite analysis
Competitors the 10-K names, and the peer group the company itself chose in its proxy statement. Nothing here is this site's own pick.
Newport News and Ingalls compete primarily with General Dynamics and, in some non-nuclear programs, smaller shipyards; Mission Technologies competes with defense and federal services companies.
Competitors named in the 10-K
Naval shipbuilding
Peer group the company chose
2025 compensation peer group (16 companies), from the proxy statement. Peers are companies the board considers comparable — for example when setting executive pay — not necessarily direct competitors.
Peer group used for 2025 NEO compensation analysis.
- Booz Allen Hamiltonsite ↗
- Leidossite ↗
- Cognizantsite ↗
- Northrop Grummansite ↗
- Doversite ↗
- Oshkoshsite ↗
- General Dynamicssite ↗
- Parker-Hannifinsite ↗
- Howmet Aerospacesite ↗
- Spirit AeroSystemssite ↗
- Jacobs Solutionssite ↗
- Teledynesite ↗
- KBRsite ↗
- Textronsite ↗
- L3Harrissite ↗
- TransDigmsite ↗
Company names link to this site’s analysis where one exists; “site ↗” opens the company’s own website.
13
Six years of financialsFrom SEC data
Each chart's axis holds a single unit (never mixing dollars, %, and $/share). The table's per-period header links to the filing the numbers came from.
Revenue over time
Unit: $M
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-05
Profit over time (operating → net)
Unit: $M
- Operating income
- Pretax income
- Net income
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-05
Margins over time
Unit: %
- Operating margin
- Net margin
formulaoperating income ÷ revenue × 100
formulanet income attributable to the company ÷ revenue × 100
Cash flow over time
Unit: $M (below zero = cash went out)
- Operating CF
- Investing CF
- Free CF
formulacash flow from operations − capital expenditures
termsFree cash flow (FCF) · Cash flow from operations (operating CF) · Capital expenditures (capex)
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-05
Financial stability & capital efficiency
Unit: %
- Equity ratio
- ROE
formulatotal equity ÷ total assets × 100 (as reported in the 10-K)
termsStockholders’ equity · Total assets
formulanet income ÷ average equity (beginning + ending, ÷2) × 100 (as reported in the 10-K)
termsNet income (attributable to the company) · Stockholders’ equity
Earnings per share (EPS) and dividend per share
Unit: $
- EPS
- Dividend per share
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-05
| Line item | FY2020In next year’s 10-K | FY202110-K on EDGAR ↗ | FY202210-K on EDGAR ↗ | FY202310-K on EDGAR ↗ | FY202410-K on EDGAR ↗ | FY202510-K on EDGAR ↗ |
|---|---|---|---|---|---|---|
| Income statement ($M) | ||||||
| Revenue | 9,361 | 9,524 | 10,676 | 11,454 | 11,535 | 12,484 |
| Operating income | 799 | 513 | 565 | 781 | 535 | 657 |
| Pretax income | 810 | 622 | 719 | 853 | 643 | 777 |
| Net income (attributable) | 696 | 544 | 579 | 681 | 550 | 605 |
| Revenue growthcalc(this year’s revenue − last year’s revenue) ÷ last year’s revenue × 100 | — | 1.7% | 12.1% | 7.3% | 0.7% | 8.2% |
| Operating margincalcoperating income ÷ revenue × 100 | 8.5% | 5.4% | 5.3% | 6.8% | 4.6% | 5.3% |
| Net margincalcnet income attributable to the company ÷ revenue × 100 | 7.4% | 5.7% | 5.4% | 5.9% | 4.8% | 4.8% |
| Balance sheet ($M) | ||||||
| Total assets | 8,157 | 10,627 | 10,857 | 11,215 | 12,141 | 12,749 |
| Total equity | 1,901 | 2,808 | 3,489 | 4,093 | 4,666 | 5,073 |
| Interest-bearing debtSum of short- and long-term borrowings, notes/bonds payable | 1,686 | 3,298 | 2,905 | 2,445 | 2,700 | 2,700 |
| Equity ratio | 23.3% | 26.4% | 32.1% | 36.5% | 38.4% | 39.8% |
| ROE | 36.6% | 23.1% | 18.4% | 18.0% | 12.6% | 12.4% |
| Cash flow ($M) | ||||||
| Operating CF | 1,093 | 760 | 766 | 970 | 393 | 1,196 |
| Investing CF | -759 | -1,954 | -268 | -236 | -348 | -521 |
| Financing CF | 103 | 1,309 | -658 | -771 | 356 | -732 |
| Free cash flowcalccash flow from operations − capital expenditures | 740 | 429 | 482 | 678 | 26 | 794 |
| Cash and equivalents | 512 | 627 | 467 | 430 | 831 | 774 |
| Per share & other | ||||||
| EPS ($) | 17.14 | 13.50 | 14.44 | 17.07 | 13.96 | 15.39 |
| BVPS ($) | 46.94 | 70.20 | 87.52 | 103.31 | 119.25 | 129.28 |
| Dividend per share ($) | 4.23 | 4.60 | 4.78 | 5.02 | 5.25 | 5.43 |
| Payout ratiocalcdividend per share ÷ diluted EPS × 100 | 24.7% | 34.1% | 33.1% | 29.4% | 37.6% | 35.3% |
| P/E (x) | 10.0 | 13.8 | 16.0 | 15.2 | 13.5 | 22.1 |
| EV/EBITDA (x)calc(market cap + interest-bearing debt − cash and equivalents) ÷ (operating income + depreciation & amortization) | 7.7 | 12.6 | 12.6 | 10.9 | 10.8 | 15.5 |
| P/B (x)calcfiscal year-end closing price ÷ book value per share | 3.63 | 2.66 | 2.64 | 2.51 | 1.58 | 2.63 |
P/B and EV/EBITDA use each period’s period-end (fiscal year-end) figures, not the current share price. Figures without a "calc" tag are as reported in the Form 10-K (the consolidated financial statements and, for older years, earlier 10-Ks), pulled automatically from SEC EDGAR. Where a later filing restated a prior period, the restated figure is used.
Last 8 quarters
Three-month figures from 10-Q filings. Change is versus the same quarter a year earlier. Newest quarter on top.
| Quarter ended | Revenue | Operating income | Net income | Diluted EPS |
|---|---|---|---|---|
| 2026-09-30 | $3.54B+10.8% | $246M+52.8% | $217M+49.7% | $5.48 |
| 2026-06-30 | $3.42B+10.9% | $210M+28.8% | $208M+36.8% | $5.27 |
| 2026-03-31 | $3.1B+13.4% | $155M-3.7% | $149M+0.0% | $3.79 |
| 2025-12-31 † | $3.48B+15.7% | $172M+56.4% | $159M+29.3% | — |
| 2025-09-30 | $3.19B | $161M | $145M | $3.68 |
| 2025-06-30 | $3.08B | $163M | $152M | $3.86 |
| 2025-03-31 | $2.73B | $161M | $149M | $3.79 |
| 2024-12-31 † | $3B | $110M | $123M | — |
† Fourth quarter = the 10-K’s annual figure minus the first three quarters; quarterly EPS isn’t derived this way because share counts change during the year.
14
Is ROIC above WACC?From SEC data
ROIC (the return on money invested in the business) above WACC (the cost of raising that money) means the company is creating value. WACC is an estimate, so its assumptions can be adjusted below.
ROIC (FY2025)
7.0%
formulaoperating income × (1 − tax rate) ÷ invested capital × 100 *invested capital = interest-bearing debt + total equity (average of beginning/ending)
e.g.$657M × (1 − 19%) ÷ $7,570M × 100 = 7.0%
termsOperating income · Effective tax rate · Invested capital · Interest-bearing debt · Total equity
WACC (this site’s estimate)
8.35%
formulacost of equity × equity weight + cost of debt × (1 − tax rate) × debt weight
e.g.Equity weight: $13.34B ÷ ($13.34B + $2.7B) = 83.2%
e.g.Debt weight: $2.7B ÷ ($13.34B + $2.7B) = 16.8%
e.g.WACC: 9.4% × 83.2% + 3.9% × (1 − 19%) × 16.8% = 8.35%
termsCost of equity · Equity weight (E/(D+E)) · Cost of debt · (1 − tax rate) · Debt weight (D/(D+E)) · Market capitalization
How firm is this? With the equity risk premium ±1 point and beta ±0.2, WACC runs 6.9%–10.1% and ROIC − WACC runs −3.1 to +0.1 points. The sign flips inside this range, so the result depends on the assumptions. This describes the latest year and does not predict future value creation.
WACC 8.35% is this site’s estimate under the assumptions below (not a figure the company has published)
- Risk-free rate
- 4.95% (10-year Treasury, 2026-11-03)
- β
- 0.81 (price-derived adjusted beta, but correlation with the market is low (R² 0.08), so reliability is limited)
- Equity risk premium
- 5.5%
- Cost of equity
- 9.41%
- Cost of debt
- 3.89%
- Tax rate
- 19% (effective rate, FY2023–FY2025)
- Capital structure (equity : debt)
- 83% : 17%
ROIC over time, vs. WACC
Unit: % — bars = each period's ROIC, horizontal line = latest WACC. Bars above the line are green, below are red
- ROIC (above WACC)
- ROIC (below WACC)
- WACC 8.35%
formulaoperating income × (1 − tax rate) ÷ invested capital × 100 *invested capital = interest-bearing debt + total equity (average of beginning/ending)
termsOperating income · Effective tax rate · Invested capital · Interest-bearing debt · Total equity
formulacost of equity × equity weight + cost of debt × (1 − tax rate) × debt weight
termsCost of equity · Equity weight (E/(D+E)) · Cost of debt · (1 − tax rate) · Debt weight (D/(D+E)) · Market capitalization
Try different WACC assumptions
β and the equity risk premium are estimates with a real range of plausible values — move the sliders to check whether ROIC > WACC still holds. The risk-free rate starts at the 10-year Treasury yield on 2026-11-03 (U.S. Treasury).
Initial β: 0.81 (price-derived adjusted beta. Raw β 0.71, R² 0.08, 130 weeks)
formula0.67 × β + 0.33 (β = the slope of weekly stock returns regressed on weekly market returns)
e.g.0.67 × 0.713 + 0.33 = 0.808
termsβ (beta)
Period 2024-05-10–2026-11-04, using S&P 500 ETF (SPY) as the market proxy. Source: Yahoo Finance price history.
formularisk-free rate + β × equity risk premium
e.g.5.0% + 0.81 × 5.5% = 9.4%
termsCAPM · Risk-free rate · β (beta) · Equity risk premium (market risk premium)
formulafiscal year-end closing price × shares outstanding (= market cap)
formulainterest expense ÷ interest-bearing debt × 100 (clamped to 0–10%; falls back to the risk-free rate if there’s no debt)
15
What the price implies (DCF)From SEC data
A company's value can be written as its free cash flow divided by (cost of capital − perpetual growth). Working that backwards from the market's valuation shows how much growth the share price assumed — compared here with the company's actual past growth.
Growth the price implies (price on 2026-11-04)
2.7%
Perpetual FCF growth: g = r − FCF ÷ EV = 8.4% − 5.7%
Past FCF growth (FY2020–FY2025)
+1.4%
Compound annual rate, 5 years
Past revenue growth (FY2020–FY2025)
+5.9%
Compound annual rate, 5 years
Inputs (FY2025): free cash flow $794M (operating CF − capex); enterprise value $14.04B = market cap $12.11B (latest close, 2026-11-04) + debt $2.7B − cash and short-term investments $774M; r = WACC of 8.4% using this page’s default assumptions (β 0.81, risk-free 5.0%, market premium 5.5%).
Three WACC scenarios
The same calculation under cautious, base and optimistic cost-of-capital assumptions (risk-free rate fixed at the 10-year Treasury yield). Pick one to load it into the sliders below.
Try your own assumptions
V = FCF ÷ (r − g). It starts at the implied growth rate, where the theoretical value equals today’s enterprise value.
Theoretical enterprise value
$13.93B
FCF $794M ÷ (8.4% − 2.7%)
Theoretical ÷ actual enterprise value
0.99x
Below 1x: these assumptions value the business below the market did
How sensitive the answer is
Theoretical ÷ actual enterprise value for each combination of r and g.
| g \ r | 6.4% | 7.4% | 8.4% | 9.4% | 10.4% |
|---|---|---|---|---|---|
| 0% | 0.88x | 0.76x | 0.67x | 0.60x | 0.54x |
| 2% | 1.29x | 1.05x | 0.88x | 0.76x | 0.67x |
| 4% | 2.36x | 1.66x | 1.29x | 1.05x | 0.88x |
| 6% | 14.14x | 4.04x | 2.36x | 1.66x | 1.29x |
| 8% | — | — | 14.14x | 4.04x | 2.36x |
A simplified model for seeing what the market price assumes, not a forecast or a target price. It treats free cash flow as growing at one constant rate forever; the result swings widely with small changes in r and g, and is undefined when g reaches r. Free cash flow here is operating cash flow minus capex, which is after interest — a full DCF of enterprise value would use cash flow before interest. Market cap uses the latest close (2026-11-04) × shares at fiscal year-end; free cash flow and WACC inputs are from the latest fiscal year.
16
Earnings qualityFrom SEC dataShow
The same reported profit can mean different things depending on whether it's backed by cash, driven by the core business, or the result of a one-off item. Four checks below.
- ✓
Operating CF ÷ net income: averages 1.40x
Profit is backed by cash coming in.
- ✓
Accrual ratio (latest): -4.7%
A small share of profit rests on accounting estimates.
- ✓
Core-earnings share (operating income ÷ pretax income): 85%
Most profit comes from core operations.
- ✓
Days sales outstanding: 15 → 8 days
No major slowdown in collecting on sales.
Operating CF vs. net income
Unit: $M — operating CF above net income means profit is backed by cash
- Operating CF
- Net income
formulacash flow from operations ÷ net income attributable to the company
termsCash flow from operations (operating CF) · Net income (attributable to the company)
formula(net income − operating CF) ÷ average total assets × 100
termsNet income (attributable to the company) · Cash flow from operations (operating CF) · Total assets
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-05
Profit bridge (FY2025)
Unit: $M — what moved profit from operating income to net income
- Profit (each stage)
- Pushed profit up
- Pushed profit down
formulaoperating income ÷ income before income taxes × 100
termsOperating income · Income before income taxes (pretax income)
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-05
Receivables & inventory days
Unit: days — days grow when receivables or inventory build up faster than sales
- Days sales outstanding
formulaaverage receivables (opening + closing ÷ 2) ÷ revenue × 365
formulaaverage inventory (opening + closing ÷ 2) ÷ cost of revenue × 365
termsInventory · Cost of revenue (COGS)
Worked examples (latest period)
formulacash flow from operations ÷ net income attributable to the company
e.g.$1,196M ÷ $605M = 1.98x
termsCash flow from operations (operating CF) · Net income (attributable to the company)
formulaoperating income ÷ income before income taxes × 100
e.g.$657M ÷ $777M × 100 = 85%
termsOperating income · Income before income taxes (pretax income)
formulaaverage receivables (opening + closing ÷ 2) ÷ revenue × 365
e.g.($212M + $339M) ÷ 2 ÷ $12,484M × 365 = 8 days
formulaaverage inventory (opening + closing ÷ 2) ÷ cost of revenue × 365
termsInventory · Cost of revenue (COGS)
17
Who holds the sharesFrom SEC dataShow
How much of the stock large institutional investors report owning on SEC Form 13F, how much the directors and executive officers hold (and how much of the vote they control), and roughly how much is left for individual investors. Shown next to beta so the holder mix can be read alongside how much the stock swings.
Institutions, insiders and everyone else, 13F holdings as of 2026-06-30
“Everyone else” is what remains after shares reported on Form 13F and shares held by directors and executive officers: mostly individual investors, plus non-insider families or foundations and smaller or foreign institutions. The figures have different dates and 13F reports count some shares twice — read it as an approximate split.
- Held by 13F filers
- 88.9%
- Directors & officers (shares)
- <1%
- Everyone else (est.)
- 11.1%
- Directors & officers (voting power)
- <1%
- Institutional-ownership rank
- 209 of 416
- Beta (adjusted)
- 0.81
individuals and other non-13F holders
no separate voting figure; shown as shares
1 = most institutional; 50% of covered companies have more
above 1 = swings more than the market
- 35.1M shares reported by 815 13F filers ÷ 39.4M shares outstanding on 2026-07-24. Option positions are excluded.
- Directors and executive officers as a group, from the proxy statement’s beneficial-ownership table (percentage computed from the group’s share count ÷ shares outstanding); includes shares they can acquire within 60 days.
- A large “everyone else” share can still reflect a family, trust or foundation stake held outside the board; check the proxy statement’s 5% holders.
Sources: SEC Form 13F data set (holdings as of 2026-06-30) · Form DEF 14A filed 2026-03-20 (beneficial ownership table) · Form 10-Q cover page (shares outstanding as of 2026-07-24)
18
Strengths & weaknessesSite analysis
Strengths
1. Record backlog
Backlog of $53.1B at end-2025 rose to $57.3B by June 30, 2026 and $86.2B by September 30, 2026, after $32.4B of new awards in Q3.
Evidence: Form 10-Q (quarter ended 2026-09-30); Q3 2026 earnings release
2. Unique position
Newport News is one of the largest shipyards in the U.S.; Newport News and Ingalls compete primarily only with General Dynamics.
Evidence: Form 10-K (FY2025)
3. Dividend growth
Dividend per share rose every year from $4.23 (2020) to $5.43 (2025); quarterly dividend raised to $1.38 in November 2025.
Evidence: Form 10-K (FY2025)
Weaknesses
1. Thin margins
Operating income was $657M on $12,484M of 2025 revenue (5.3%).
Evidence: Form 10-K (FY2025)
2. Customer dependence
Substantially all backlog is from the U.S. Government.
Evidence: Form 10-K (FY2025)
3. Volatile cash flow
Operating cash flow fell to $393M in 2024 before recovering to $1,196M in 2025.
Evidence: Form 10-K (FY2025)
19
What draws investors to itSite analysis
Why the stock can look attractive to investors — each point paired with what has to hold for it to stay true, and the opposing view. This is this site's analysis, not a recommendation to buy or sell.
P/E (FY2025)
22.1x
Price at fiscal year-end ÷ diluted EPS
Dividend yield (FY2025)
1.60%
Dividends per share ÷ fiscal year-end price
Payout ratio (FY2025)
35%
Dividends per share ÷ diluted EPS
FCF yield (FY2025)
5.9%
(Operating CF − capex) ÷ market cap
1. Long-duration backlog
Backlog covers more than four years of 2025 revenue.
- What has to hold
- Navy funding continues.
- The other side
- Margins on fixed-price ships.
Evidence: Form 10-K (FY2025)
2. Dividend
Quarterly dividend of $1.38.
- What has to hold
- Cash flow stays steady.
- The other side
- Working-capital swings.
Evidence: Form 10-K (FY2025)
Revenue is almost entirely from the U.S. Government.
20
ResilienceSite analysisShow
How well the company could absorb a bad year: its financial buffer, how its revenue and profit held up in the worst year on record, and what the 10-K says about the business's exposure to shocks. Figures and filing statements only — no overall rating.
1. Financial buffer (FY2025)
Cash & short-term investments ÷ debt due within a year
—
$774M vs. —
Interest coverage (operating income ÷ interest expense)
6.3x
$657M vs. $105M
Free cash flow ÷ dividends paid
3.7x
$794M vs. $213M (FCF = operating CF − capex)
2. Worst year in the record, and the recovery
| Figure | Worst year-over-year change | Back to the prior level? |
|---|---|---|
| Revenue | No decline in the record | — |
| Operating income | -35.8% in FY2021 ($799M → $513M) | Not yet, as of FY2025 |
Covers only the 6 fiscal years on record (FY2020–FY2025), which may not include a full recession — the worst year here isn’t necessarily how the company would fare in a severe downturn.
3. Business resilience (from the 10-K)
Profitable every year
Net earnings stayed between $544M and $696M in every year 2020–2025.
Source: Form 10-K (FY2025)
21
Legal & regulatory mattersSite analysisShow
Lawsuits, government investigations, enforcement actions and settlements the company discloses — where each stands, what is at stake, and what comes next. From the 10-K's Legal Proceedings and contingencies note, the latest 10-Q, and 8-Ks.
HII is a defendant in a naval engineer no-poach antitrust class action and is pursuing COVID-19 business interruption insurance claims against reinsurers.
2 open matters
Naval engineer no-poach antitrust class action
PendingAntitrustNaval engineers v. HII companies and other defendants (E.D. Va.)
Filed October 2023 in the E.D. Va. alleging a “gentlemen’s agreement” among defendants not to recruit each other’s naval engineers; seeks class certification and treble damages. Dismissal on limitations grounds was reversed by the Fourth Circuit, and in November 2025 the District Court denied the remaining motions to dismiss.
Source: Form 10-K (FY2025) — Note 16, Commitments and Contingencies
COVID-19 business interruption insurance claim
PendingContract disputeHII v. 32 reinsurers (Vermont Superior Court)
HII sued 32 reinsurers in Vermont (2020) and began arbitration against six others, claiming COVID-19 losses are covered; after the Vermont Supreme Court allowed the claim to proceed (2022), dispositive motions were filed in 2025 and HII has appealed a later lower-court decision.
Source: Form 10-Q (quarter ended 2026-09-30) — Commitments and Contingencies
Company statement: Other proceedings are described as ordinary-course and not expected to be material.
Based on Form 10-Q (quarter ended 2026-09-30) — Commitments and Contingencies, reviewed 2026-10-25. Routine ordinary-course claims are not listed. “Major” is this site’s judgment of which matters could materially affect results.
22
Risks (including geopolitical)Site analysis
Starting from the 10-K's Risk Factors section, organized by category — geopolitical, currency, raw materials, regulatory, disaster, and more — with impact and likelihood assessed by this site.
Risk map
Vertical = impact on results, horizontal = likelihood. Upper right = most severe. Numbers match the list below (placement is this site’s own assessment).
Likelihood →
"Company disclosure" vs. "this site’s assessment"
The description and mitigation for each risk are this site’s summary of the 10-K’s "Risk Factors" section. Impact and likelihood are this site’s own assessment, not the company’s — where the company discloses its own likelihood assessment, that is noted in the summary.
Impact is judged from how large the affected business is relative to total revenue/profit, and from the risk’s track record of moving results in the past. Likelihood is judged from the filing’s wording and the current business environment (already occurring, or recurring). See the rating criteria.
- 1Customer/supplier concentration
U.S. Government dependence
- Company disclosure (summarized from the 10-K)
- Revenue depends on Navy budgets and priorities; programs compete with each other for funding.
- Company’s stated mitigation
- Not stated in the filings.
- This site’s assessment
- Impact High / Likelihood Med
- 2Labor & workforce
Shipyard workforce
- Company disclosure (summarized from the 10-K)
- Hiring and retaining skilled shipbuilders affects schedules and costs.
- Company’s stated mitigation
- Not stated in the filings.
- This site’s assessment
- Impact Med / Likelihood High
- 3Costs & inflation
Fixed-price contract risk
- Company disclosure (summarized from the 10-K)
- Cost growth on fixed-price incentive contracts reduces margins.
- Company’s stated mitigation
- Not stated in the filings.
- This site’s assessment
- Impact Med / Likelihood High
- 4Supply chain
Supplier delays
- Company disclosure (summarized from the 10-K)
- Late or defective materials from suppliers can delay ship deliveries.
- Company’s stated mitigation
- We endeavor to mitigate supply chain risk through various measures, such as negotiating long-term agreements with certain suppliers and through price escalation provisions in certain customer contracts.
- This site’s assessment
- Impact Med / Likelihood High
- 5Law & regulation
Antitrust class action
- Company disclosure (summarized from the 10-K)
- A no-poach class action over naval engineer hiring is proceeding after motions to dismiss were denied.
- Company’s stated mitigation
- We have implemented a compliance program that is designed to prevent and detect misconduct.
- This site’s assessment
- Impact Med / Likelihood Med
23
What changed in the risk factorsFrom SEC data
Paragraphs in the latest 10-K's Risk Factors that have little overlap with the year before, and paragraphs that were dropped.
New or substantially reworded (6)
The U.S. Government also can stop work under a contract for a limited period of time for its convenience. Read more
In the event of a stop work order, contracts typically are protected by provisions covering reimbursement for costs incurred to date and for costs associated with the temporary stoppage of work plus a reasonable fee. However, such temporary stoppages may result in financial or other damages for which contractors may not be able to recover fully. In some cases, they could result in termination of a contract for convenience or reduced future orders.
Competition within our markets and bid protests may affect our ability to win new contracts and result in reduced revenues or market share.
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.
Natural disasters, environmental disasters, and other events outside of our control can result in significant adverse impacts to our business, including by adversely impacting our workforce and supply chain, resulting in increased costs or other financial impacts, causing schedule or production delays or temporary closures of our facilities or
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.
Our payment of dividends and share repurchases could vary from historical practices. Read more
The payment of cash dividends and repurchases of our common stock are subject to limitations under Delaware law, other applicable laws and regulations, and the discretion of our board of directors. Share repurchases also are subject to management’s discretion after consideration of various factors, including our share price, results of operations, capital requirements, and general business conditions. In addition, as a U.S. defense contractor, the Company may not be permitted to pay dividends or repurchase our common stock under certain circumstances, including if the U.S. Government determines that we are underperforming on our contracts. Therefore, there can be no assurance that we will pay quarterly dividends or repurchase shares of our common stock.
No longer in the text (4)
Our business is subject to a number of risks that, if realized, could materially affect our business, prospects, operating results and financial condition. Read more
These risks are discussed more fully below, and include, but are not limited to, the following:
• Our 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.
We conduct most of our business with the U.S. Government, primarily the DoD. Read more
The majority of our business consists of the design, construction, repair, and maintenance of nuclear-powered ships and non-nuclear ships for the U.S. Navy and coastal defense surface ships for the U.S. Coast Guard, as well as the refueling and overhaul and inactivation of nuclear-powered ships for the U.S. Navy. We also provide integrated solutions that enable today's connected, all-domain force, including C5ISR systems and operations; the application of artificial intelligence and machine learning to battlefield decisions; defense and offensive cyberspace strategies and electronic warfare; uncrewed autonomous systems; live, virtual, and constructive training solutions; fleet sustainment; and critical nuclear operations. Substantially all of our revenues in 2024 were derived from products and services sold to…
Competition within our markets or an increase in bid protests may reduce our revenues and market share.
11 more paragraphs differ; the filings below have the full text.
Matched automatically, quoted as filed, and may include rewording of an existing risk. Compares Item 1A of the 10-K filed Feb 5, 2026 ↗ with the 10-K filed Feb 6, 2025 ↗.
24
What to watch going forwardSite analysis
- Shipbuilding throughput and margins at Newport News and Ingalls.
- Navy budget and shipbuilding plans.
- Progress of the naval engineer no-poach antitrust case.
- Conversion of the $57.3B backlog.
25
Source documentsShow
This page's financial figures come from the Form 10-Ks listed below. Check the original filings for full detail.
Other sources referenced in the analysis
Last updated
Analysis last edited: October 31, 2026 · Financial data fetched: October 25, 2026 04:07 (SEC EDGAR) · Source 10-K filed: February 5, 2026
Built on10-K FY2025 · filed 2026-02-05Proxy statement (2026)
Next update expectedAfter FY2026’s 10-K is filed (roughly 60–90 days after fiscal year end (sooner for larger filers)), financials and analysis will be refreshed.
This page is this site’s own analysis based on public information, and does not represent Huntington Ingalls Industries’s views. It is not a recommendation to buy or sell any security, and this site does not guarantee the accuracy of any figure or statement here. Always verify against the original source documents before making an investment decision.