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**UNITED STATESSECURITIES AND EXCHANGE COMMISSION****WASHINGTON,D.C. 20549**

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**FORM10-Q**

| x | **QUARTERLY REPORT PURSUANT TO SECTION 13 OR15(d)   OF THE SECURITIES EXCHANGE ACT OF 1934** |
|---|---------------------------------------------------------------------------------------------------|

**For thequarterly period ended June 30, 2003**

**or**

| o | **TRANSITION REPORT PURSUANT TO SECTION 13 OR15(d)   OF THE SECURITIES EXCHANGE ACT OF 1934** |
|---|----------------------------------------------------------------------------------------------------|

**For thetransition periodfrom                 to                 **

**Commission file number 1-6035**

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**THETITAN CORPORATION**(Exact name of registrant as specified in its charter)

| **DELAWARE**(State or other jurisdiction of incorporation or organization) |     | **95-2588754**(I.R.S. Employer Identification No.) |
|----------------------------------------------------------------------------|--------------------|----------------------------------------------------|

**3033Science Park RoadSan Diego, California 92121-1199**(Address ofprincipal executive offices, zip code)

(Registrant's telephone number, including areacode)**(858) 552-9500**

                                                                                                                                                   (Former name, former address and former fiscal year, if changedsince last report.)

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      Indicate bycheck mark whether the registrant (1) has filed all reportsrequired to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or forsuch shorter period that the registrant was required to file suchreports), and (2) has been subject to such filing requirementsfor the past 90 days.  Yes x  No o.

      Indicate bycheck mark whether the registrant is an accelerated filer asdefined in rule 12b-2 of the Securities Exchange Act of1934.  Yes x  No o.

      The number ofshares of registrant's common stock outstanding at August 4, 2003,was 80,314,450.****

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**Part I—FINANCIALINFORMATION**

**Item 1. Financial Statements**

**THE TITAN CORPORATIONCONSOLIDATED STATEMENTS OF OPERATIONS****(Unaudited) (in thousands, except per share data)**

| ** **                                                                                                                                             | **   **                           | **Threemonths ended June 30,** |         | **Sixmonths ended June 30,** | ** ** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------|--------------------------------|---------|------------------------------|------------|
|                                                                                                                                                        |                                                  | ****                           |         | ****                         |            |
|                                                                                                                                                        |                                                  | **2003**                       |         | **2002**                     |            | **2003** |  | **2002** |  |
|                                                                                                                                                        |                                                  |                                |         |                              |            |  |  |  |  |
| Revenues                                                                                                                                               |                                                  | $                              | 437,680 |                              | $          | 345,631 |   | $ | 815,560 |   | $ | 659,979 |   |
|                                                                                                                                                        |                                                  |                                |         |                              |            |  |  |  |  |
| Costs andexpenses:                                                                                                                                     |                                             |                           |         |                         |       |  |   |   |  |   |   |  |   |
|                                                                                                                                         | Cost ofrevenues                                  |                           |         | 365,288                      |            |  | 276,759 |  |  | 680,564 |  |  | 530,184 |   |
|                                                                                                                                         | Selling, general andadministrative               |                           |         | 41,277                       |            |  | 40,402 |  |  | 80,794 |  |  | 75,055 |   |
|                                                                                                                                         | Research anddevelopment                          |                           |         | 2,356                        |            |  | 2,325 |  |  | 4,724 |  |  | 4,772 |   |
|                                                                                                                                         | Exit and restructuringcharges and other (Note 2) |                           |         | —                      |            |  | 1,833 |  |  | — |  |  | 3,319 |   |
|                                                                                                                                                        |                                                  |                                |         |                              |            |  |  |  |  |
|                                                                                                                          | Total costs andexpenses                          |                           |    | 408,921                      |            |  | 321,319 |  |  | 766,082 |  |  | 613,330 |  |
|                                                                                                                                                        |                                                  |                                |         |                              |            |  |  |  |  |
| Operatingprofit                                                                                                                                        |                                             |                                | 28,759  |                              |            | 24,312 |  |  | 49,478 |  |  | 46,649 |  |
| Interestexpense                                                                                                                                        |                                             |                                | (8,683  | )                            |            | (7,686 | ) |  | (16,782 | ) |  | (16,008 | ) |
| Interest income                                                                                                                                        |                                             |                                | 819     |                              |            | 116 |  |  | 1,431 |  |  | 251 |  |
| Debt extinguishment costs(Notes 1 and 5)                                                                                                               |                                             |                                | (12,423 | )                            |            | (9,435 | ) |  | (12,423 | ) |  | (9,435 | ) |
|                                                                                                                                                        |                                                  |                                |         |                              |            |  |  |  |  |
| Income from continuingoperations before income taxes and cumulative effect ofchange    in accounting principle                          |                                                  |                                | 8,472   |                              |            | 7,307 |  |  | 21,704 |  |  | 21,457 |  |
| Income taxprovision                                                                                                                                    |                                             |                                | 3,389   |                              |            | 2,553 |  |  | 8,682 |  |  | 8,790 |  |
|                                                                                                                                                        |                                                  |                                |         |                              |            |  |  |  |  |
| Income from continuingoperations before cumulative effect of change in accounting    principle                                          |                                             |                                | 5,083   |                              |            | 4,754 |  |  | 13,022 |  |  | 12,667 |  |
| Income (loss) fromdiscontinued operations, net of tax benefit (Note 4)                                                                                 |                                             |                                | 782     |                              |            | (16,521 | ) |  | (156 | ) |  | (17,947 | ) |
|                                                                                                                                                        |                                                  |                                |         |                              |            |  |  |  |  |
| Income (loss) beforecumulative effect of change in accounting principle                                                                                |                                             |                                | 5,865   |                              |            | (11,767 | ) |  | 12,866 |  |  | (5,280 | ) |
| Cumulative effect ofchange in accounting principle, net of tax benefit(discontinued    operations) (Note 3)                             |                                             |                                | — |                              |            | — |  |  | — |  |  | (40,111 | ) |
|                                                                                                                                                        |                                                  |                                |         |                              |            |  |  |  |  |
| Net income(loss)                                                                                                                                       |                                             |                                | 5,865   |                              |            | (11,767 | ) |  | 12,866 |  |  | (45,391 | ) |
| Dividend requirements onpreferred stock                                                                                                                |                                             |                                | (172    | )                            |            | (173 | ) |  | (344 | ) |  | (345 | ) |
|                                                                                                                                                        |                                                  |                                |         |                              |            |  |  |  |  |
| Net income (loss)applicable to common stock                                                                                                            |                                                  | $                              | 5,693   |                              | $          | (11,940 | ) | $ | 12,522 |  | $ | (45,736 | ) |
|                                                                                                                                                        |                                                  |                                |         |                              |            |  |  |  |  |
| Basic earnings (loss) pershare:                                                                                                                        |                                             |                           |    |                         |       |  |   |   |   |   |   |   |   |
|    Incomefrom continuing operations before cumulative effect of change inaccounting       principle       |                                                  | $                              | 0.06    |                              | $          | 0.06 |  | $ | 0.16 |  | $ | 0.17 |  |
|    Income(loss) from discontinued operations, net of tax benefit                                                                        |                                             |                                | 0.01    |                              |            | (0.21 | ) |   | — |  |   | (0.24 | ) |
|    Cumulative effect of change inaccounting principle, net of tax benefit (discontinued       operations) |                                             |                                | — |                              |            | — |  |   | — |  |   | (0.54 | ) |
|                                                                                                                                                        |                                                  |                                |         |                              |            | 0.16 |  |  |  |
|    Netincome (loss)                                                                                                                     |                                                  | $                              | 0.07    |                              | $          | (0.15 | ) | $ | 0.16 |  | $ | (0.61 | ) |
|                                                                                                                                                        |                                                  |                                |         |                              |            |  |  |  |  |
|    Weightedaverage shares                                                                                                               |                                             |                                | 79,258  |                              |            | 77,119 |   |   | 78,947 |   |   | 73,981 |   |
|                                                                                                                                                        |                                                  |                                |         |                              |            |  |  |  |  |
| Diluted earnings (loss)per share:                                                                                                                      |                                             |                           |         |                         |       |  |   |   |   |   |   |   |   |
|    Incomefrom continuing operations before cumulative effect of change inaccounting       principle       |                                                  | $                              | 0.06    |                              | $          | 0.05 |  | $ | 0.16 |  | $ | 0.13 |  |
|    Income(loss) from discontinued operations, net of tax benefit                                                                        |                                             |                                | 0.01    |                              |            | (0.21 | ) |   | — |  |   | (0.24 | ) |
|    Cumulative effect of change inaccounting principle, net of tax benefit (discontinued       operations) |                                             |                                | — |                              |            | — |  |   | — |  |   | (0.53 | ) |
|                                                                                                                                                        |                                                  |                                |         |                              |            | 0.15 |  |  |  |
|    Netincome (loss)                                                                                                                     |                                                  | $                              | 0.07    |                              | $          | (0.16 | ) | $ | 0.16 |  | $ | (0.64 | ) |
|                                                                                                                                                        |                                                  |                                |         |                              |            |  |  |  |  |
|    Weightedaverage shares                                                                                                               |                                             |                                | 81,372  |                              |            | 78,528 |   |   | 81,329 |   |   | 75,476 |   |
|                                                                                                                                                        |                                                  |                                |         |                              |            |  |  |  |  |

Theaccompanying notes are an integral part of these consolidatedfinancial statements.

**THE TITAN CORPORATIONCONSOLIDATED BALANCE SHEETS  (in thousands, except share and per sharedata)**

|                                                                                                                                                                                                                                                                                                            |            | **June30, 2003** | ** ** | **December 31, 2002** |            |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------------|------------|----------------------------|------------|
| ** **                                                                                                                                                                                                                                                                                                 | ** ** |                  |            |                            | ** ** |
| **Assets**                                                                                                                                                                                                                                                                                                 |       | **(Unaudited)**  |       |                       |            |  |
| Current Assets:                                                                                                                                                                                                                                                                                            |       |             |       |                       |       |  |  |
|       Cash and cashequivalents                                                                                                                                                                                                                                               |       | $                | 23,628     |                            | $          | 34,123 |  |
|       Restrictedcash                                                                                                                                                                                                                                                         |       |                  | —    |                            |            | 394 |  |
|       Accounts receivable—net                                                                                                                                                                                                                                          |       |             | 330,321    |                            |       | 314,363 |  |
|       Inventories                                                                                                                                                                                                                                                            |       |             | 25,161     |                            |       | 31,280 |  |
|       Prepaid expenses and other                                                                                                                                                                                                                                             |       |             | 26,113     |                            |       | 19,441 |  |
|       Deferredincome taxes                                                                                                                                                                                                                                                   |       |             | 103,246    |                            |       | 108,046 |  |
|       Currentassets of discontinued operations                                                                                                                                                                                                                               |       |             | 102,549    |                            |       | 103,871 |  |
| ** **                                                                                                                                                                                                                                                                                                 | ** ** |                  |            |                            | ** ** |
|           Total current assets                                                                                                                                                                                                                           |       |             | 611,018    |                            |       | 611,518 |  |
|                                                                                                                                                                                                                                                                                                            |            |                  |            |                            |            |  |  |
| Property and equipment— net                                                                                                                                                                                                                                                                          |       |             | 65,574     |                            |       | 63,705 |  |
| Goodwill                                                                                                                                                                                                                                                                                                   |       |             | 465,601    |                            |       | 462,719 |  |
| Other assets —net                                                                                                                                                                                                                                                                                    |       |             | 87,280     |                            |       | 99,903 |  |
| Deferred incometaxes                                                                                                                                                                                                                                                                                       |            |                  | 53,015     |                            |            | 53,015 |  |
| Non-current assets ofdiscontinued operations                                                                                                                                                                                                                                                               |       |             | 3,859      |                            |       | 6,582 |  |
| ** **                                                                                                                                                                                                                                                                                                 | ** ** |                  |            |                            | ** ** |
|           Total assets                                                                                                                                                                                                                                   |       | $                | 1,286,347  |                            | $          | 1,297,442 |  |
| ** **                                                                                                                                                                                                                                                                                                 | ** ** |                  |            |                            | ** ** |
| **Liabilities and Stockholders'Equity**                                                                                                                                                                                                                                                                    |       |             |            |                            |       |  |  |
| CurrentLiabilities:                                                                                                                                                                                                                                                                                        |       |             |            |                            |       |  |  |
|       Current portion of amounts outstanding under line ofcredit                                                                                                                                                                                                             |       | $                | 3,500      |                            | $          | 3,500 |  |
|       Accounts payable                                                                                                                                                                                                                                                       |       |             | 75,681     |                            |       | 81,376 |  |
|       Current portion of long-term debt                                                                                                                                                                                                                                      |       |             | 858        |                            |       | 847 |  |
|       Accrued compensation and benefits                                                                                                                                                                                                                                      |       |             | 68,978     |                            |       | 66,639 |  |
|       Other accrued liabilities                                                                                                                                                                                                                                              |       |             | 81,569     |                            |       | 87,602 |  |
|       Current liabilities of discontinued operations                                                                                                                                                                                                                         |       |             | 41,456     |                            |       | 49,143 |  |
| ** **                                                                                                                                                                                                                                                                                                 | ** ** |                  |            |                            | ** ** |
|           Total current liabilities                                                                                                                                                                                                                      |       |             | 272,042    |                            |       | 289,107 |  |
| ** **                                                                                                                                                                                                                                                                                                 | ** ** |                  |            |                            | ** ** |
| Long-term portion ofamounts outstanding under line of credit                                                                                                                                                                                                                                               |       |             | 383,875    |                            |       | 344,750 |  |
| ** **                                                                                                                                                                                                                                                                                                 | ** ** |                  |            |                            | ** ** |
| Senior subordinatednotes                                                                                                                                                                                                                                                                                   |            |                  | 200,000    |                            |            | — |  |
|                                                                                                                                                                                                                                                                                                            |            |                  |            |                            |            |
| Other long-termdebt                                                                                                                                                                                                                                                                                        |       |             | 1,605      |                            |       | 2,045 |  |
| ** **                                                                                                                                                                                                                                                                                                 | ** ** |                  |            |                            | ** ** |
| Other non-currentliabilities                                                                                                                                                                                                                                                                               |       |             | 55,623     |                            |       | 54,401 |  |
| ** **                                                                                                                                                                                                                                                                                                 | ** ** |                  |            |                            | ** ** |
| Non-current liabilities ofdiscontinued operations                                                                                                                                                                                                                                                          |            |                  | 37,674     |                            |            | 44,826 |  |
| ** **                                                                                                                                                                                                                                                                                                 | ** ** |                  |            |                            | ** ** |
| Company obligatedmandatory redeemable convertible preferred securities of asubsidiary trust whose sole assets are       senior subordinated debenturesof Titan                                                                                                               |       |             | —    |                            |       | 250,000 |  |
| ** **                                                                                                                                                                                                                                                                                                 | ** ** |                  |            |                            | ** ** |
| Stockholders'Equity:                                                                                                                                                                                                                                                                                       |       |             |            |                            |       |  |  |
|       Preferred stock: $1 par value, authorized 5,000,000shares:                                                                                                                                                                                                             |       |             |            |                            |       |  |  |
|           Cumulative convertible, $13,800 liquidationpreference, designated 1,068,102 shares: 688,029 and688,129                 shares issued and outstanding |       |             | 688        |                            |       | 688 |  |
|           Series A junior participating: designated 1,000,000authorized shares:  None issued                                                                                                                                                   |       |             |            |                            |       | — |  |
|       Common stock:  $.01 par value, authorized200,000,000 shares, issued and outstanding: 79,721,270and             78,344,550shares                                                             |       |             | 797        |                            |       | 783 |  |
|       Capital in excess of par value                                                                                                                                                                                                                                         |       |             | 652,570    |                            |       | 647,752 |  |
|       Deferred compensation                                                                                                                                                                                                                                                  |       |             | (3,111     | )                          |       | (8,791 | ) |
|       Retained earnings (deficit)                                                                                                                                                                                                                                            |       |             | (314,452   | )                          |       | (327,318 | ) |
|       Accumulated other comprehensive income (loss)                                                                                                                                                                                                                          |       |             | (162       | )                          |       | (132 | ) |
|       Treasury stock (436,619 and 245,750 shares), atcost                                                                                                                                                                                                                    |       |             | (802       | )                          |       | (669 | ) |
| ** **                                                                                                                                                                                                                                                                                                 | ** ** |                  |            |                            | ** ** |
|           Total stockholders' equity                                                                                                                                                                                                                     |            |             | 335,528    |                            |       | 312,313 |  |
| ** **                                                                                                                                                                                                                                                                                                 | ** ** |                  |            |                            | ** ** |
|           Total liabilities and stockholders'equity                                                                                                                                                                                                      |       | $                | 1,286,347  |                            | $          | 1,297,442 |  |
| ** **                                                                                                                                                                                                                                                                                                 | ** ** |                  |            |                            | ** ** |

Theaccompanying notes are an integral part of these consolidatedfinancial statements.

**THE TITAN CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS****(Unaudited)  (in thousands of dollars)**

|                                                                                                                                                                                           |            |          | **Sixmonths ended June 30,** |            |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------|------------------------------|------------|
| ** **                                                                                                                                                                                | ** ** |          |                              | ** ** |
| ** **                                                                                                                                                                                |            | **2003** |                              | **2002**   | ** ** |
| ** **                                                                                                                                                                                | ** ** |          |                              |            |  |
| **Cash Flows fromOperating Activities:**                                                                                                                                             |       |          |                         |       |   |   |   |
| Income from continuingoperations before cumulative effect of change in accountingprinciple                                                                                                |       | $        | 13,022                       |            | $ | 12,667 |  |
| Adjustments to reconcileincome from continuing operations to net cash provided byoperating       activities, net of effects ofbusinesses acquired and sold: |       |          |                              |       |  |  |
|       Debtextinguishment costs                                                                                                                              |            | 12,423   |                              |            | 9,435 |  |
|       Depreciationand amortization                                                                                                                          |       | 10,138   |                              |       | 10,644 |  |
|       Deferredincome taxes and other                                                                                                                        |       | 8,961    |                              |       | (1,169 | ) |
|       Deferredcompensation                                                                                                                                  |       | 5,680    |                              |       | 2,411 |  |
|       Changes inoperating assets and liabilities, net of the effects of businessesacquired and sold:                                                        |       |          |                              |       |  |  |
|             Accountsreceivable                                                                                                |       | (12,944  | )                            |       | 58,034 |  |
|             Inventories                                                                                                       |       | 301      |                              |       | (2,214 | ) |
|             Prepaidexpenses and other assets                                                                                  |       | (946     | )                            |       | (13,201 | ) |
|             Accountspayable                                                                                                   |       | (11,027  | )                            |       | (29,297 | ) |
|             Accruedcompensation and benefits                                                                                  |       | 2,339    |                              |       | (6,985 | ) |
|             Incometaxes payable                                                                                               |       | —  |                              |       | 17 |  |
|             Otherliabilities                                                                                                  |       | 4,512    |                              |       | (6,424 | ) |
| ** **                                                                                                                                                                                | ** ** |          |                              |            |  |
| Net cash provided bycontinuing operations                                                                                                                                                 |       | 32,459   |                              |            | 33,918 |  |
| ** **                                                                                                                                                                                | ** ** |          |                              |            |  |
| Loss from discontinued operations                                                                                                                                                         |       | (156     | )                            |            | (17,947 | ) |
| Minority interestattributable to discontinued operations                                                                                                                                  |       | —  |                              |       | (82 | ) |
| Issuance of stock insubsidiaries                                                                                                                                                          |       | —  |                              |       | 132 |  |
| Holdback payment relatedto prior year acquisition (Note 6)                                                                                                                                |            | (2,000   | )                            |            | — |  |
| Deferred compensationcharge attributable to discontinued operations                                                                                                                       |       | —  |                              |       | 7,780 |  |
| Changes in net assets andliabilities of discontinued operations                                                                                                                           |       | (13,860  | )                            |            | (54,926 | ) |
| ** **                                                                                                                                                                                | ** ** |          |                              |            |  |
| Net cash used fordiscontinued operations                                                                                                                                                  |       | (16,016  | )                            |            | (65,043 | ) |
| ** **                                                                                                                                                                                | ** ** |          |                              |            |  |
| Net cash provided by (usedfor) operating activities                                                                                                                                       |       | 16,443   |                              |            | (31,125 | ) |
| ** **                                                                                                                                                                                | ** ** |          |                              |            |  |
| **Cash Flows fromInvesting Activities:**                                                                                                                                                  |       |          |                              |       |  |  |
| Capitalexpenditures                                                                                                                                                                       |       | (5,461   | )                            |            | (10,471 | ) |
| Acquisition of businesses,net of cash acquired                                                                                                                                            |       | —  |                              |            | 29,907 |  |
| Proceeds from sale ofinvestments and business                                                                                                                                             |       | —  |                              |            | 1,500 |  |
| Otherinvestments                                                                                                                                                                          |       | (93      | )                            |            | (3,998 | ) |
| Other                                                                                                                                                                                     |       | 166      |                              |            | 2,254 |  |
| ** **                                                                                                                                                                                | ** ** |          |                              |            |  |
| Net cash provided by (usedfor) investing activities                                                                                                                                       |       | (5,388   | )                            |            | 19,192 |  |
| ** **                                                                                                                                                                                | ** ** |          |                              |            |  |
| **Cash Flows fromFinancing Activities:**                                                                                                                                                  |       |          |                              |       |  |  |
| Extinguishment of HIGHTIDES and other debt reductions                                                                                                                                     |       | (250,429 | )                            |            | (4,048 | ) |
| Issuance of seniorsubordinated notes and other debt additions                                                                                                                             |            | 239,125  |                              |            | 20,000 |  |
| Issuance of stock bysubsidiaries                                                                                                                                                          |       | —  |                              |            | 286 |  |
| Deferred debt issuancecosts                                                                                                                                                               |       | (7,727   | )                            |            | (8,706 | ) |
| Debt extinguishmentcosts                                                                                                                                                                  |            | (4,352   | )                            |            | — |  |
| Decrease (increase) inrestricted cash                                                                                                                                                     |       | 394      |                              |            | (1,104 | ) |
| Proceeds from exercise ofstock options and other                                                                                                                                          |       | 1,935    |                              |            | 7,061 |  |
| Dividends paid                                                                                                                                                                            |       | (344     | )                            |            | (345 | ) |
| Other                                                                                                                                                                                     |       | (122     | )                            |            | (861 | ) |
| ** **                                                                                                                                                                                | ** ** |          |                              |            |  |
| Net cash provided by (usedfor) financing activities                                                                                                                                       |       | (21,520  | )                            |            | 12,283 |  |
| ** **                                                                                                                                                                                | ** ** |          |                              |            |  |
| Effect of exchange ratechanges on cash                                                                                                                                                    |       | (30      | )                            |            | (4 | ) |
| ** **                                                                                                                                                                                | ** ** |          |                              |            |  |
| Net increase (decrease) incash and cash equivalents                                                                                                                                       |       | (10,495  | )                            |            | 346 |  |
| Cash and cash equivalentsat beginning of period                                                                                                                                           |       | 34,123   |                              |       | 18,621 |  |
| ** **                                                                                                                                                                                | ** ** |          |                              |            |  |
| Cash and cash equivalentsat end of period                                                                                                                                                 |       | $        | 23,628                       |            | $ | 18,967 |  |
| ** **                                                                                                                                                                                | ** ** |          |                              |            |  |

Theaccompanying notes are an integral part of these consolidatedfinancial statements.

**THE TITAN CORPORATIONCONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY(Unaudited) (In thousands of dollars, except per share data)**

| ** **                                                                                                                                                      | ** ** | **Cumulative Convertible Preferred Stock****** | ** ** | **Common Stock****** | ** ** | **Capital In Excess of Par Value****** | ** ** | **Deferred Compen- sation****** | ** ** | **Retained Earnings (Deficit)****** | ** ** | **Accumulated Other Comprehensive Income****(Loss)** | ** ** | **Treasury Stock****** | ** ** | **Total****** | ** ** |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------------------------------------------|------------|----------------------|------------|----------------------------------------|------------|---------------------------------|------------|-------------------------------------|------------|------------------------------------------------------|------------|------------------------|------------|---------------|------------|
| ** **                                                                                                                                                      | ** ** | ****                                           | ** ** | ****                 | ** ** | ****                                   | ** ** | ****                            | ** ** | ****                                | ** ** | ****                                                 | ** ** | ****                   | ** ** | ****          | ** ** |
| **Six Months Ended June 30, 2003**                                                                                                                              |            |                                           |
| Balances at December 31, 2002                                                                                                                              |       | $                                              | 688        |                 | $          | 783                                    |       | $                               | 647,752    |                                | $          | (8,791                                               | )          | $                      | (327,318   | )             | $          | (132 | ) | $ | (669 | ) | $ | 312,313 |  |
|    Exercise of stock options       and other                                                                       |       |                                           |            |                      |            | 8                                      |       |                                 | 2,060      |                                     |       |                                                      |            |                   |            |               |       |  |  |   | (133 | ) |   | 1,935 |  |
|    Returnof shares related to       acquisition (Note6)                                                            |            |                                                |            |                      |            |                                        |            |                                 | (2,000     | )                                   |            |                                                      |            |                        |            |               |            |  |  |  |  |  |  | (2,000 | ) |
|    Amortization of deferred      compensation                                                                      |       |                                           |       |                 |            |                                        |       |                                 |            |                                |       | 5,680                                                |       |                   |            |               |       |  |  |   |   |   |   | 5,680 |  |
|    Foreign currency      translation adjustment                                                                    |       |                                           |       |                 |            |                                        |       |                                 |            |                                |       |                                                      |       |                   |            |               |       | (30 | ) |  |  |  |  | (30 | ) |
|    Shares contributed to       employee benefitplans                                                               |       |                                           |       |                 |       | 6                                      |            |                                 | 5,102      |                                |       |                                                      |       |                   |            |               |       |  |  |   |  |   |   | 5,108 |  |
|    Dividends on preferred stock -       Cumulative convertible,       $.50 per share |       |                                           |       |                 |       |                                        |       |                                 | (344       | )                                   |       |                                                 |       |                   |            |               |       |   |   |   |   |   |   | (344 | ) |
|    Net income                                                                                                                                    |       |                                           |       |                 |       |                                   |       |                                 |            |                                |       |                                                 |       |                   | 12,866     |               |       |   |   |   |   |   |   | 12,866 |  |
| ** **                                                                                                                                                      | ** ** | ****                                           | ** ** | ****                 | ** ** | ****                                   | ** ** | ****                            | ** ** | ****                                | ** ** | ****                                                 | ** ** | ****                   | ** ** | ****          | ** ** |
| Balances at June 30, 2003                                                                                                                                       |       | $                                              | 688        |                      | $          | 797                                    |            | $                               | 652,570    |                                     | $          | (3,111                                               | )          | $                      | (314,452   | )             | $          | (162 | ) | $ | (802 | ) | $ | 335,528 |  |
| ** **                                                                                                                                                      | ** ** | ****                                           | ** ** | ****                 | ** ** | ****                                   | ** ** | ****                            | ** ** | ****                                | ** ** | ****                                                 | ** ** | ****                   | ** ** | ****          | ** ** |
| **Six Months Ended June 30, 2002**                                                                                                                              |            |                                           |
| Balances at December 31, 2001                                                                                                                              |       | $                                              | 690        |                 | $          | 701                                    |       | $                               | 586,802    |                                | $          | (34,519                                              | )          | $                      | (55,857    | )             | $          | 128 |  | $ | (987 | ) | $ | 496,958 |   |
|    Issuanceof stock for       acquisitions                                                                         |       |                                           |       |                      |            | 66                                     |       |                            | 134,506    |                                |       |                                                 |       |                   |       |          |       |   |   |   | 39 |  |  | 134,611 |   |
|    Exercise of stock options       and other                                                                       |       |                                           |       |                      |            | 8                                      |       |                            | 7,053      |                                |       |                                                 |       |                   |       |          |       |   |   |   |  |  |  | 7,061 |   |
|    Deferredcompensation       related to the issuanceof       stock options          |            |                                                |            |                      |            |                                        |            |                                 | 133        |                                     |            | (133                                                 | )          |                        |            |               |            |  |  |  |  |  |  | — |  |
|    Write-off of deferred       compensation related to       discontinuedoperations  |            |                                                |            |                      |            |                                        |            |                                 | (629       | )                                   |            | 629                                                  |            |                        |            |               |            |  |  |  |  |  |  | — |  |
|    Amortization of deferred      compensation                                                                      |       |                                           |       |                 |            |                                   |       |                                 |       |                                |       | 10,191                                               |       |                   |       |          |       |   |   |   |   |   |   | 10,191 |   |
|    Foreign currency      translation adjustment                                                                    |       |                                           |       |                 |            |                                   |       |                                 |       |                                |       |                                                 |       |                   |       |          |       | (4 | ) |   |   |   |   | (4 | ) |
|    Sharescontributed to       employee benefitplans                                                                |       |                                           |       |                 |       | 2                                      |            |                                 | 3,597      |                                |       |                                                 |       |                   |            |               |       |   |   |   | 6 |   |   | 3,605 |  |
|    Dividends on preferred stock -       Cumulative convertible,      $.50 per share  |       |                                           |       |                 |       |                                   |       |                                 | (345       | )                                   |       |                                                 |       |                   |            |               |       |   |   |   |   |   |   | (345 | ) |
| Net loss                                                                                                                                                        |       |                                           |       |                 |       |                                   |       |                                 |            |                                |       |                                                 |       |                   | (45,391    | )             |       |   |   |   |   |   |   | (45,391 | ) |
| ** **                                                                                                                                                      | ** ** | ****                                           | ** ** | ****                 | ** ** | ****                                   | ** ** | ****                            | ** ** | ****                                | ** ** | ****                                                 | ** ** | ****                   | ** ** | ****          | ** ** |
| Balances at June 30, 2002                                                                                                                                       |       | $                                              | 690        |                 | $          | 777                                    |       | $                               | 731,117    |                                | $          | (23,832                                              | )          | $                      | (101,248   | )             | $          | 124 |  | $ | (942 | ) | $ | 606,686 |   |
| ** **                                                                                                                                                      | ** ** | ****                                           | ** ** | ****                 | ** ** | ****                                   | ** ** | ****                            | ** ** | ****                                | ** ** | ****                                                 | ** ** | ****                   | ** ** | ****          | ** ** |

Theaccompanying notes are an integral part of these consolidatedfinancial statements.

**THETITAN CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2003(in thousands, except share and per share data, or as otherwisenoted)**

**Note (1) Basis of Financial StatementPreparation**

      Theaccompanying consolidated financial information of The TitanCorporation and its subsidiaries ("Titan" or the "Company") shouldbe read in conjunction with the Notes to Consolidated FinancialStatements contained in the Company's Annual Report on Form10-K**to the Securities and Exchange Commission for the yearended December 31, 2002, and as updated in the Company’sReport on Form 8-K dated July 9, 2003.  The accompanyingfinancial information includes substantially all subsidiaries on aconsolidated basis and all normal recurring adjustments which areconsidered necessary by the Company's management for a fairpresentation of the financial position, results of operations andcash flows for the periods presented.  However, these resultsare not necessarily indicative of results for a full fiscalyear.  Additionally, certain prior period amounts have beenreclassified to conform to the current periodpresentation.

      Thepreparation of financial statements in conformity with accountingprinciples generally accepted in the United States of Americarequires management to make estimates and assumptions that affectthe reported amounts of assets and liabilities and disclosure ofcontingent assets and liabilities at the date of the financialstatements and the reported amounts of revenues and expenses duringthe reporting period.  Actual results could differ from thoseestimates.

      Prior to thediscontinuance of certain operations in 2002 and 2001, the Companygrouped its businesses into five business segments – TitanSystems, Titan Wireless, Software Systems (including Cayenta),Titan Technologies and the SureBeam business.  As discussed inNote 4, Titan is no longer reporting the results of operations bythese segments, however, reference may be made to these segments indiscussions of other historical information.  In accordancewith Statement of Financial Accounting Standards(“SFAS”) No. 131, “Disclosures about Segments ofan Enterprise and Related Information,” substantially all ofthe Company’s operations are aggregated into one reportablesegment given the similarities of economic characteristics betweenthe operations and the common nature of the products, services, andcustomers.

**Recent AccountingPronouncements**

***      ***The Company has elected toadopt the disclosure only provisions of SFAS No. 123, "Accountingfor Stock-Based Compensation".  Accordingly, the Companyaccounts for its stock-based compensation plans under theprovisions of APB No. 25.  The Company also follows thedisclosure requirements of SFAS No. 148, “Accounting forStock-Based Compensation – Transition and Disclosure,”which amends SFAS No. 123.

      As allowed bySFAS No. 123, the Company has elected to continue to apply theintrinsic value based method of accounting described in APB No.25.  Compensation cost, if any, is measured as the excess ofthe quoted market price of the Company's stock on the date of grantover the exercise price of the grant.  Had compensation costfor the Company's stock-based compensation plans been determinedbased on the fair value at the grant dates for awards under thoseplans consistent with the fair value method under SFAS No. 123, theCompany's results of operations would have been reduced to the proforma amounts indicated below:

|                                                                                                                                                                                                                                                                                | ** ** | **Threemonths ended June 30,** |            | **Sixmonths ended June 30,** |            |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------|------------|------------------------------|------------|
|                                                                                                                                                                                                                                                                                | ** ** | ****                           | ** ** | ****                         |            |
|                                                                                                                                                                                                                                                                                | ** ** | **2003**                       |            | **2002**                     |            | **2003** |  | **2002** |  |
|                                                                                                                                                                                                                                                                                | ** ** | ****                           | ** ** | ****                         | ** ** | **** | ** ** | **** |  |
| Net income (loss), asreported                                                                                                                                                                                                                                                  |       | $                              | 5,865      |                         | $          | (11,767 | ) | $ | 12,866 |   | $ | (45,391 | ) |
| Less:  Additional stock-based employeecompensation           expensedetermined under fair value based method           forall awards, net of related tax effects |       |                           | (333       | )                            |       | (572 | ) |   | (697 | ) |   | (1,466 | ) |
|                                                                                                                                                                                                                                                                                | ** ** | ****                           | ** ** | ****                         | ** ** | **** | ** ** | **** |  |
| Net income (loss), proforma                                                                                                                                                                                                                                                    |       | $                              | 5,532      |                         | $          | (12,339 | ) | $ | 12,169 |   | $ | (46,857 | ) |
|                                                                                                                                                                                                                                                                                | ** ** | ****                           | ** ** | ****                         | ** ** | **** | ** ** | **** |  |
| Earnings (loss) pershare:                                                                                                                                                                                                                                                      |       |                           |            |                         |       |  |   |  |  |   |   |  |  |
|       Basic asreported                                                                                                                                                                                                                           |            | $                              | 0.07       |                              | $          | (0.15 | ) | $ | 0.16 |  | $ | (0.61 | ) |
|       Basic proforma                                                                                                                                                                                                                             |            | $                              | 0.07       |                              | $          | (0.16 | ) | $ | 0.15 |  | $ | (0.63 | ) |
|       Diluted asreported                                                                                                                                                                                                                         |            | $                              | 0.07       |                              | $          | (0.16 | ) | $ | 0.16 |  | $ | (0.64 | ) |
|       Diluted proforma                                                                                                                                                                                                                           |            | $                              | 0.07       |                              | $          | (0.17 | ) | $ | 0.15 |  | $ | (0.65 | ) |

      The fairvalue of each option grant is estimated on the date of grant usingthe Black-Scholes option-pricing model.  There have been nochanges to the weighted average assumptions used at December 31,2002.

      In April2002, The Financial Accounting Standards Board (“FASB”)issued SFAS No. 145, Rescission of FASB Statements No. 4,44, and 64, Amendment of FASB Statement No. 13, and TechnicalCorrections as of April 2002, which is effective for fiscalyears beginning after May 15, 2002. SFAS No. 145 rescindsSFAS No. 4 and SFAS No. 64, which required that all gainsand losses from extinguishment of debt be aggregated, and ifmaterial, classified as an extraordinary item. As a result ofchanges in the criteria, gains and losses from debt extinguishmentare to be classified as extraordinary only if they meet thecriteria set forth in Accounting Principles Board(“APB”) Opinion No. 30, “Reporting theResults of Operations—Reporting the Effects of Disposal of aSegment of a Business, and Extraordinary, Unusual and InfrequentlyOccurring Events and Transactions.”  In accordance withSFAS 145 and APB 30,  the deferred debt issuance costs andother extinguishment costs related to the HIGH TIDES were expensedupon extinguishment of that debt.  The charge is reflected inthe results of continuing operations as Debt Extinguishment Costsin the accompanying consolidated statement of operations. Also in accordance with SFAS No. 145, 2002 debt extinguishmentcosts associated with the termination of a senior credit facilityhave been reclassified from an extraordinary item to results fromcontinuing operations.  See Note 5 for further discussion ofthe charges.

      In May 2003,the FASB issued SFAS No. 150, “Accounting for CertainFinancial Instruments with Characteristics of both Liabilities andEquity.”  SFAS No. 150 requires that certain financialinstruments, which under previous guidance were accounted for asequity, must now be accounted for as liabilities.  Thefinancial instruments affected include mandatory redeemable stock,certain financial instruments that require or may require theissuer to buy back some of its shares in exchange for cash or otherassets and certain obligations that can be settled with shares ofstock.  SFAS No. 150 is effective for all financialinstruments entered into or modified after May 31, 2003, andotherwise is effective at the beginning of the first interim periodbeginning after June 15, 2003.  The Company intends to adoptSFAS No. 150 effective July 1, 2003, and does not believe that theadoption will have a material impact on its consolidated financialposition or results of operations.

**Note (2) Exit and Restructuring Charges andOther**

      Included inthe quarter and six months ended June 30, 2002 are$1.8 million and $3.3 million, respectively, ofrestructuring costs related to the shutdown of Cayenta’sheadquarters office and network operations center. 

      At December31, 2002, accruals for all exit and restructuring charges totaled$37.8 million, comprised primarily of restructuring chargesrelated to the merger of Titan Systems into Titan on September 25,2002 and exit charges related to the shutdown of Cayenta’sheadquarters office.  These exit and restructuring activitieswere accounted for under the Financial Accounting StandardsBoard’s (“FASB”) Emerging Issues Task Force(EITF) Issue No. 94-3, which allowed accrual of restructuring costsupon commitment to a plan and certain other criteria. Effective January 1, 2003, the Company was required to adopt SFASNo. 146 “Accounting for Costs Associated with Exit orDisposal Activities”.  SFAS No. 146 requires companiesto defer recognition of a liability for a cost associated with anexit or disposal activity until that liability is incurred and canbe measured at fair value.   As these restructuring activitieswere entered into prior to the Company’s adoption of SFAS No.146, the Company accounted for these activities under EITF94-3.  A summary of the utilization of exit and restructuringaccruals during the six months ended June 30, 2003 is asfollows (in millions):

|                                                                                   |  | **Balance December 31, 2002** |      | **Cash paid 2003** |   | **Balance June 30, 2003** |   |
|-----------------------------------------------------------------------------------|--|-------------------------------|------|--------------------|---|---------------------------|---|
|                                                                                   |  |                               |      |                    |   |                           |   |
| Titan Systemsrestructuring:                                                       |  |                               |      |                    |   |                           |   |  |  |  |
|       Estimatedfacilities consolidation costs       |  | $                             | 32.1 |                    | $ | (2.6                      | ) | $ | 29.5 |  |
|       Employeetermination/retention costs and other |  |                               | 1.7  |                    |   | (1.7                      | ) |  | — |  |
|                                                                                   |  |                               |      | **(4.6**           |   |                           |   |
|                                                                                   |  |                               | 33.8 |                    |   | (4.3                      | ) |  | 29.5 |  |
| Unsuccessful transactioncosts                                                     |  |                               | 0.6  |                    |   | (0.6                      | ) |  | — |  |
|                                                                                   |  |                               |      |                    |   |                           |   |
|                                                                                   |  |                               | 34.4 |                    |   | (4.9                      | ) |  | 29.5 |  |
|                                                                                   |  |                               |      |                    |   |                           |   |
| Cayenta headquarters exitcosts:                                                   |  |                               |      |                    |   |                           |   |  |  |  |
|       Leasecommitment costs                         |  |                               | 3.2  |                    |   | (1.3                      | ) |  | 1.9 |  |
|       Employeetermination costs and other           |  |                               | 0.2  |                    |   | (0.1                      | ) |  | 0.1 |  |
|                                                                                   |  |                               |      |                    |   |                           |   |
|                                                                                   |  |                               | 3.4  |                    |   | (1.4                      | ) |  | 2.0 |  |
|                                                                                   |  |                               |      |                    |   |                           |   |
|                                                                                   |  | $                             | 37.8 |                    | $ | (6.3                      | ) | $ | 31.5 |  |
|                                                                                   |  |                               |      |                    |   |                           |   |

****

      At June 30,2003, $17.5 million of the exit and restructuring accruals areincluded in Other Accrued Liabilities on the consolidated balancesheet and $14.0 million are included in Other Non-currentLiabilities.  The remaining accrual balance is primarilycomprised of amounts due under the facilities consolidation, whichrequires payments in 2003 and 2004 for certain lease cancellationfees and other lease costs, net of assumed sublease income, withthe remainder expected to be paid over the remaining lease terms,which expire in 2009.

**Note (3) Cumulative Effect of Change inAccounting Principle**

      EffectiveJanuary 1, 2002, the Company adopted SFAS No. 142,"Goodwill and Other Intangible Assets," which establishes financialaccounting and reporting for acquired goodwill and other intangibleassets andsupersedesAPB Opinion No. 17, "Intangible Assets". Goodwill and intangible assetsacquired in a purchase business combination and determined to havean indefinite useful life are not amortized, but instead tested forimpairment at least annually in accordance with the provisions ofSFAS No. 142. SFAS No. 142 also requires thatintangible assets with estimable useful lives be amortized overtheir respective estimated useful lives to their estimated residualvalues, and reviewed for impairment in accordance with SFASNo. 144, “Accounting for Impairment or Disposal ofLong-Lived Assets.”  

      SFASNo. 142 requires that goodwill be tested for impairment at thereporting unit level at adoption and at least annually thereafter,utilizing a two step methodology.  The initial step requiresthe Company to assess whether indications of impairmentexist.  If indications of impairment are determined to exist,the second step of measuring impairment is performed, wherein thefair value of the relevant reporting unit is compared to thecarrying value, including goodwill, of such unit.  If the fairvalue exceeds the carrying value, no impairment loss isrecognized.  However,if the carrying value of the reporting unitexceeds its fair value, the goodwill of the reporting unit isimpaired. 

      In connectionwith the initial adoption of this standard as ofJanuary 1, 2002, during the first quarter of 2002, theCompany’s independent valuation consultant, Bearing Point(formerly KPMG Consulting, Inc.), completed step one of the testfor impairment, which indicated that the carrying values of certainreporting units exceeded their estimated fair values, as determinedutilizing various evaluation techniques including discounted cashflow and comparative market analysis.  Thereafter, given theindication of a potential impairment, the Company completed steptwo of the test.  Based on that analysis, a transitionalimpairment loss of $40.1 million, which was net of a$10.0 million tax benefit, was recognized in the first quarterof 2002 as the cumulative effect of an accounting change.  Theimpairment charge resulted from a change in the criteria forthemeasurement of theimpairment loss from an undiscounted cash flow method, as requiredby SFAS No. 121, "Accounting for the Impairment of Long-LivedAssets and for Long-Lived Assets to Be Disposed Of," to anestimated fair value analysis as required by SFASNo. 142. The gross $50.1 million impairment charge recorded in thefirst quarter of 2002 was comprised of approximately$27.5 million in certain components of the Cayenta business,approximately $14.9 million in the AverCom business, which waspreviously reported in the Titan Technologies segment, bothattributable to lower valuations and weakened outlook in commercialIT services, and approximately $7.7 million in the TitanWireless business.  The entire $50.1 million charge wasrelated to discontinued businesses; approximately$42.4 million of this charge pertained to businesses that werediscontinued by the Company on March 1, 2002 with theremaining charge of $7.7 million related to theCompany’s long distance telecommunications business that wasdiscontinued in the third quarter of 2002.

      The Companyperforms its annual testing for impairment of goodwill and otherintangible assets in the first quarter of each year.  At June30, 2003, there were no indications of impairment.

**Note (4) DiscontinuedOperations**

      InAugust 2002, the Company’s board of directors made thedecision to sell or otherwise divest its LinCom Wireless businessand to sell a remaining commercial information technology business,both of which were previously reported in the Company’s TitanTechnologies segment.  Accordingly, Titan has reflected bothoperations as discontinued in accordance with SFASNo. 144.  In October 2002, the LinCom Wireless businesswas shut down.  Titan is currently in negotiations with anumber of potential buyers to sell its remaining informationtechnology business, a part of the Cayenta business formerlyreported as a part of the Company’s Titan Technologiessegment.

      InJuly 2002, the Company’s board of directors made thedecision to exit all of its international telecommunicationsbusiness through a combination of selling its operations within itsTitan Wireless segment.  Titan began implementing theseactions immediately and expects to complete these actions during2003.  The Company has reported this exit of the TitanWireless segment as a discontinued operation in accordance withSFAS No. 144.  In the second quarter of 2003 Titan soldits interest in Ivoire Telecom.  Titan is currently innegotiation with a number of potential buyers for its GlobalNetbusiness and is in the process of exiting the remaining Wirelessbusinesses.

      During thefirst quarter of 2002, the Company’s board of directors madethe decision to sell certain of its commercial informationtechnology operations within its Cayenta segment and the AverCombusiness within the Titan Technologies segment.  In the thirdquarter of 2002, all of these operations weresold. 

      In accordancewith SFAS No. 144, all commercial operations that have beensold or that are held for sale have been reflected as discontinuedoperations for all periods presented in Titan’s consolidatedfinancial statements.   SFAS No. 144 contains criteriathat must be met for businesses to be classified as held-for-saleand recorded as discontinued operations.  The Companyperiodically re-evaluates those criteria for businessesheld-for-sale, and if such criteria are no longer met, the Companywould be required to reclassify the operation and assets andliabilities of non-qualifying businesses into continuingoperations.  All businesses currently held-for-sale meet thiscriteria and therefore have been reported as discontinuedoperations in accordance with SFAS No. 144.

      OnMarch 16, 2001, SureBeam Corporation, Titan's formersubsidiary that provides electronic food irradiation systems andservices, completed an initial public offering ("IPO") of 6,700,000shares of Class A common stock at a price of $10 per share. On October 16, 2001, Titan adopted a definitive plan to spinoff SureBeam in the form of a tax-free dividend to Titanstockholders within the next 12 months from that date.  Theplan involved filing a letter ruling request with the InternalRevenue Service ("IRS") to obtain approval of the tax-freedistribution.  Titan received a favorable ruling in May 2002,and on August 5, 2002, Titan’s remaining ownership interestin SureBeam was spun-off to Titan stockholders as a tax-free stockdividend. 

      Following isa summary by original business segment of the income (loss) fromdiscontinued operations for 2003 (amountsin millions):

|                       |        | **Threemonths ended June 30, 2003** |      |
|-----------------------|--------|-------------------------------------|------|
|                       |        |                                     |      |
|                       | ****   | **Titan Wireless**                  | **** | **Titan Technologies** |  | **Cayenta** |  | **SureBeam** |  | **Total** |  |
|                       |        | ****                                |      | **** |  | **** |  | **** |  | **** |  |
| Losses fromoperations |   | $                                   | (0.4 | ) | $ | (1.4 | ) | $ | — |  | $ | — |  | $ | (1.8 | ) |
| Tax benefit           |   |                                | (0.2 | ) |  | (2.4 | ) |  | — |  |  | — |  |  | (2.6 | ) |
|                       |   |                                     |      |  |  |  |  |  |  |  |  |
| Net income(loss)      |        | $                                   | (0.2 | ) | $ | 1.0 |  | $ | — |  | $ | — |  | $ | 0.8 |  |
|                       |   |                                     |      |  |  |  |  |  |  |  |  |

|                       |        | **Sixmonths ended June 30, 2003** |      |
|-----------------------|--------|-----------------------------------|------|
|                       |        |                                   |      |
|                       | ****   | **Titan Wireless**                | **** | **Titan Technologies** |  | **Cayenta** |  | **SureBeam** |  | **Total** |  |
|                       |        | ****                              |      | **** |  | **** |  | **** |  | **** |  |
| Losses fromoperations |   | $                                 | (0.9 | ) | $ | (2.3 | ) | $ | — |  | $ | — |  | $ | (3.2 | ) |
| Tax benefit           |   |                              | (0.4 | ) |  | (2.7 | ) |  | — |  |  | — |  |  | (3.1 | ) |
|                       |   |                                   |      |  |  |  |  |  |  |  |  |
| Net income(loss)      |        | $                                 | (0.5 | ) | $ | 0.4 |  | $ | — |  | $ | — |  | $ | (0.1 | ) |
|                       |   |                                   |      |  |  |  |  |  |  |  |  |

      Included inthe results above for the quarter and six months ended June 30,2003, is a tax benefit of $2.3 million recorded to reflect theestimated tax impact of the carrying value of certain assets whichare currently held for sale related to a part of theCompany’s Cayenta business that was formerly reported in theCompany’s Titan Technologies segment.

**Balance SheetSummary**

      The currentand non-current assets and liabilities of each discontinuedoperation are as follows:

|                                                  |   | **Asof June 30, 2003** |    | **Asof December 31, 2002** |   |
|-------------------------------------------------------|--------|------------------------|---------|---------------------------------|--------|
|                                                       |        |                        |         |                                 |        |
| Current assets ofdiscontinued operations:             |   |                        |         |                            |        |  |   |
|       TitanWireless     |   | $                      | 90,146  |                                 | $      | 93,145 |  |
|       Cayenta           |   |                        | 661     |                                 |        | 661 |   |
|       SureBeam          |   |                        | — |                                 |        | — |  |
|       TitanTechnologies |   |                        | 11,742  |                                 |        | 10,065 |  |
|                                                       |        |                        |         |                                 |        |
|                                                       |        | $                      | 102,549 |                                 | $      | 103,871 |  |
|                                                       |        |                        |         |                                 |        |
| Non-current assets ofdiscontinued operations:         |   |                   |         |                                 |   |  |  |
|       TitanWireless     |   | $                      | 1,686   |                                 | $      | 4,212 |  |
|       Cayenta           |   |                        | — |                                 |        | — |   |
|       SureBeam          |   |                        | — |                                 |        | — |  |
|       TitanTechnologies |   |                        | 2,173   |                                 |        | 2,370 |  |
|                                                       |        |                        |         |                                 |        |
|                                                       |        | $                      | 3,859   |                                 | $      | 6,582 |  |
|                                                       |        |                        |         |                                 |        |
| Current liabilities ofdiscontinued operations:        |   |                        |         |                                 |        |  |   |
|       TitanWireless     |   | $                      | 32,422  |                                 | $      | 38,603 |  |
|       Cayenta           |   |                        | 791     |                                 |        | 2,155 |   |
|       SureBeam          |   |                        | 202     |                                 |        | 187 |  |
|       TitanTechnologies |   |                        | 8,041   |                                 |        | 8,198 |  |
|                                                       |        |                        |         |                                 |        |
|                                                       |        | $                      | 41,456  |                                 | $      | 49,143 |  |
|                                                       |        |                        |         |                                 |        |
| Non-current liabilities ofdiscontinued operations:    |   |                   |         |                                 |   |  |  |
|       TitanWireless     |   | $                      | 36,212  |                                 | $      | 42,821 |  |
|       Cayenta           |   |                        | 826     |                                 |        | 1,205 |   |
|       SureBeam          |   |                        | — |                                 |        | — |  |
|       TitanTechnologies |   |                        | 636     |                                 |        | 800 |  |
|                                                       |        |                        |         |                                 |        |
|                                                       |        | $                      | 37,674  |                                 | $      | 44,826 |  |
|                                                       |        |                        |         |                                 |        |

      Included inthe total assets of Titan Wireless as of June 30, 2003 areapproximately $85.4 million of gross accounts receivable, lessapproximately $35.5 million (classified as a non-currentliability) representing the amounts drawn on the non-recourse loanfacility with the African Merchant Bank to cover subcontract costson Titan Wireless’s contract with the Office of Post andTelecommunications (OPT).  During the second quarter and sixmonths of 2003, there was approximately $5.0 million inpayments made on the non-recourse debt from cash generated from theOPT project.  The net accounts receivable of$49.9 million are comprised of approximately$31.7 million due from the OPT, $14.6 million due fromTitan Wireless’s customer in Nigeria, and $3.6 milliondue from customers of the GlobalNet business.  The currentliabilities of $32.4 million of Titan Wireless includeapproximately $7.4 million of remaining exit costs andapproximately $22.0 million of accounts payable and leaseobligations of GlobalNet.  Titan is endeavoring to divestthese businesses through stock and asset sales and is currently innegotiations with a number of potential buyers of GlobalNet. In the event that Titan is unsuccessful in its endeavors to sellGlobalNet, Titan may incur a net cash outlay of approximately$8.5 million, the net liability balance of GlobalNet, as wellas potential unforeseen liabilities to shut down thebusiness.

      The currentassets of Titan Technologies are primarily comprised of accountsreceivable balances and prepaid assets.

**Note (5) Debt**

      At June 30,2003, total borrowings outstanding under the Company's seniorcredit facility were $387.4 million at a weighted averageinterest rate of 4.50%.  Commitments under letters of creditwere $12.2 million at June 30, 2003, which reducesavailability of the senior line of credit, resulting in$82.8 million of borrowing availability on the senior line ofcredit at June 30, 2003.  Of the total outstanding borrowings,$3.5 million was short-term.  At June 30, 2003, theCompany was in compliance with all financial covenants under itsvarious debt agreements.

**Senior SubordinatedNotes**

      On May 15,2003, the Company sold $200 million of 8% senior subordinated notesdue May 15, 2011 in a private placement (the“Notes”).  The Company used the net proceeds fromthe issuance of the Notes, plus borrowings of $50 million madeunder its senior line of credit facility and additional cash onhand, to redeem all of the $250 million of thethen-outstanding 5 3/4% HIGH TIDES convertible preferredsecurities.  The redemption of HIGH TIDES occurred on June 4,2003.  In what it considered favorable corporate bond marketconditions, the Company made the decision to refinance the HIGHTIDES to eliminate the interest rate risk and potential dilution tostockholders associated with the mandatory remarketing feature ofthe HIGH TIDES.

      The Companywill pay interest on the Notes semi-annually in arrears onMay 15 and November 15 at the rate of 8% per annum. The first scheduled interest payment date for the outstanding Notesis November 15, 2003.  The Company may redeem the Notes,in whole or in part, on or after May 15, 2007 at the followingredemption prices, plus accrued and unpaid interest and liquidateddamages, if any:

| **Year**           |        | **Percentage** |   |
|--------------------|--------|----------------|---|
|                    |        |                |   |
| 2007               |   | 104.0          | % |
| 2008               |   | 102.0          | % |
| 2009 andthereafter |   | 100.0          | % |

In addition, on or priorto May 15, 2006, the Company may redeem up to 35% of theaggregate principal amount of the Notes with the net proceeds ofcertain equity offerings at a redemption price of 108% of principaltogether with accrued and unpaid interest.  The Notes areunsecured and rank or will rank equally with our current or futuresenior subordinated indebtedness.  Each of the Company’sdomestic subsidiaries other than Cayenta guarantees theNotes.  The guarantees are unsecured and rank equally with theguarantors' senior subordinated indebtedness.  The Notes andthe guarantees are junior to all of the Company’s and theguarantors' senior indebtedness and senior to all of theCompany’s and the guarantors' subordinatedindebtedness.  Upon a change of control, the Company will berequired to make an offer to purchase the Notes at a price equal to101% of their principal amount plus accrued and unpaid interest andliquidated damages, if any, to the date ofrepurchase. 

      In the secondquarter of 2003,theCompany recorded approximately $12.4 million in chargesrelated to the extinguishment of the HIGH TIDES, comprised of thewrite-off of $8.1 million of remaining deferred debt issuancecosts, a call premium of $3.6 million, and approximately$0.7 million of interest during the call period.  Inaccordance with SFAS No. 145, all extinguishment charges wererecorded as a charge to income from continuing operations and areclassified as Debt Extinguishment Costs in the accompanyingconsolidated statement of operations.  Also in accordance withSFAS No. 145, prior year debt extinguishment costs associated withthe termination of a senior credit facility have been reclassifiedfrom an extraordinary item to results from continuingoperations. 

**Senior CreditFacility**

      In connectionwith the issuance of the Notes, the Company entered into anamendment to its senior credit facility to permit, among otherthings, the issuance of the Notes and the redemption of the HIGHTIDES.

*      General.*      OnMay 23, 2002, the Company entered into an agreement withWachovia Bank, National Association and Wachovia Securities for a$485 million senior credit facility from a syndicate ofcommercial banks including Wachovia Securities acting as sole leadarranger and Wachovia Bank, National Association, as AdministrativeAgent, The Bank of Nova Scotia and Comerica Bank as Co-SyndicationAgents and Branch Banking and Trust Company and Toronto DominionBank as Co-Documentation Agents and other financialinstitutions.  The senior credit facility is comprised of anaggregate credit commitment of $485 million, consisting of aseven-year term loan in an aggregate principal amount of$350 million and a six-year $135 million revolving creditfacility.

*      InterestRates; Fees.*      As amended inconnection with the issuance of the Notes, the senior creditfacility provides for interest rates per annum applicable toamounts outstanding under the term loan and the revolving creditfacility that are, at the Company’s option, either theadministrative agent's most recently established base rate for U.S.dollars loaned in the United States (or, if greater, the FederalFunds Rate plus 0.5%) plus a margin of 0.75% per annum to 2.00% perannum, based on the Company’s ratio of total debt to EBITDA(as defined in the senior credit facility), or the LIBOR rate forthe applicable interest period plus a margin of 2.00% per annum to3.25% per annum, based on the Company’s ratio of total debtto EBITDA.  The Company’s interest rates for base rateand LIBOR revolving loans are generally 0.50% to 0.75% lower thanits interest rates for base rate and LIBOR term loans at the sameratio of total debt to EBITDA.  The Company is required to paythe lenders under the senior credit facility a non-utilization feeranging from 0.50% per annum to 1.00% per annum, payable quarterlyin arrears, based on the applicable percentage of the undrawnportion of the revolving credit facility.  The Company is alsorequired to pay letter of credit fees for outstanding letters ofcredit equal to 0.25% per annum of the stated amount of the letterof credit, plus the product of the applicable margin (from 2.00% to2.75%, based on its ratio of total debt to EBITDA) for loans underthe revolving credit facility maintained as LIBOR loans multipliedby the stated amount of the letter of credit.

*      Amortization;Prepayments.*      TheCompany’s seven-year term loan matures on June 30, 2009and the revolving credit facility matures on May 23,2008.  The seven-year term loan amortizes at 1.0% per year foryears one through six (through the quarter ending June 30,2008), with the remaining 94% due in four equal quarterly paymentsin year seven of the loan (through the quarter ending June 30,2009).  The Company may prepay amounts borrowed under the termloan and the revolving credit facility at its option without anyfee.  The Company is also required to make prepayments,subject to certain exceptions, of the outstanding amounts under theterm loan and the revolving credit facility from asset sales,issuance of subordinated debt and equity securities, insurance orcondemnation proceeds and from excess cash flows.  Any suchprepayments will be applied first to reduce the amount of the termloan outstanding under the senior credit facility, and then toreduce revolving loans under the senior credit facility. Pursuantto the amendment to the senior credit facility that was enteredinto in connection with the issuance of the outstanding Notes, noneof that offering's proceeds were subject to mandatory prepaymentsunder the senior credit facility.

*      Covenants.*      The terms ofthe senior credit facility require the Company to provide certaincustomary covenants for a senior credit facility, including certainfinancial covenants.  As amended, these financial covenants,as defined per the senior credit agreement, are comprised of amaximum total debt to EBITDA ratio of 5.5 to 1, declining to 5.25to 1 beginning with the quarter ending September 30, 2003through the quarter ending March 31, 2004, a maximum totalsenior debt to EBITDA ratio of 3.75 to 1, declining to 3.5 to 1beginning with the quarter ending December 31, 2003 throughthe quarter ending March 31, 2004, a minimum interest coverageratio of 2.75 to 1 through the quarter ending March 31, 2004,a minimum fixed charge coverage ratio of 1.25 to 1 through thequarter ending March 31, 2004 and a minimum net worth. Themaximum and minimum thresholds for compliance under the financialcovenants in the senior credit facility will further adjust in thefuture in accordance with the terms of the senior creditfacility.

      Costs andexpenses of $8.7 million related to the senior credit facilityhave been deferred and included in Other Assets at June 30, 2003and will be amortized over the remaining term of the senior creditfacility.  Costs and expenses of $5.2 million related tothe issuance of the Notes have also been deferred and included inOther Assets at June 30, 2003, and will be amortized over the termof the Notes.

**Note (6) Other FinancialInformation**

      The Company'sonly element of other comprehensive income resulted from foreigncurrency translation adjustments in all periods reported, which isreflected in the Consolidated Statements of Stockholders'Equity.

      In connectionwith the determination of the fair value of assets acquired inconnection with acquisitions in 2001, 2000 and 1999, and pursuantto the provisions of SFAS No. 141, the Company has valued acquiredcontracts in process at contract price, minus the estimated coststo complete and an allowance for the normal industry profit on itseffort to complete such contracts.  This adjustment has beenreflected in the accompanying consolidated balance sheet as anincrease to goodwill and a corresponding increase to deferredprofit.  The Company recognized approximately$0.5 million and $0 million as a reduction of costsagainst the deferred profit in the three months ended June 30, 2002and 2003, respectively, and recognized $1.3 million and$0 million as a reduction of costs against the deferred profitin the six months ended June 30, 2002 and 2003, respectively. The remaining amount of deferred profit of $0.8 million atJune 30, 2003 is estimated to reduce costs through 2007.

*Earnings PerShare*

      The followingdata summarize information relating to the per share computationsfor income from continuing operations before the cumulative effectof a change in accounting principle:

|                                                                                                                                     |   | **Threemonths ended June 30, 2003** |    | **Threemonths ended June 30, 2002** |    |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|---------|-------------------------------------|---------|
|                                                                                                                                          |        |                                     |         |                                     |         |
|                                                                                                                                     |   | **Income (Numerator)**              |    | **Shares (000's) (Denominator)**    |    | **Per Share Amounts** |   | **Income (Numerator)** |   | **Shares (000's) (Denominator)** |   | **Per Share Amounts** |   |
|                                                                                                                                          |        |                                     |         |                                     |         |  |  |  |  |  |  |  |  |
| Income from continuingoperations                                                                                                         |   | $                                   | 5,083   |                                     |    |   |   |   |   | $ | 4,754 |  |   |   |   |   |   |
| Less preferred stockdividends                                                                                                            |   |                                | (172    | )                                   |    |   |   |   |   |   | (173 | ) |   |   |   |   |   |
| Effect of minorityinterests                                                                                                              |   |                                | — |                                     |    |   |   |   |   |   | (6 | ) |   |   |   |   |   |
|                                                                                                                                          |        |                                     |         |                                     |         |  |  |  |  |  |  |  |  |
| Basic EPS:                                                                                                                               |   |                                |    |                                |    |   |   |   |   |   |   |   |   |   |   |   |   |
|     Income from continuingoperations         available tocommon stockholders |   |                                | 4,911   |                                     | 79,258  |   | $ | 0.06 |  | $ | 4,575 |  | 77,119 |   | $ | 0.06 |  |
| Effect of minorityinterests                                                                                                              |   |                                | — |                                     | — |   |   | — |  |   | (634 | ) | — |   |   | (0.01 | ) |
| Effect of dilutivesecurities:                                                                                                            |   |                                |    |                                |    |   |   |   |   |   |   |   |   |   |   |   |   |
|     Stock options andwarrants                                                                                        |   |                                | — |                                     | 2,114   |   |   | — |  |   | — |   | 1,409 |   |   | — |   |
|                                                                                                                                          |        |                                     |         |                                     |         |  |  |  |  |  |  |  |  |
| Diluted EPS:                                                                                                                             |   |                                |    |                                |    |   |   |   |   |   |   |   |   |   |   |   |   |
|     Income from continuingoperations         available tocommon stockholders |   | $                                   | 4,911   |                                     | 81,372  |   | $ | 0.06 |  | $ | 3,941 |  | 78,528 |   | $ | 0.05 |  |
|                                                                                                                                     |   |                                     |    |                                     |    |  |   |  |   |  |   |  |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | **Sixmonths ended June 30, 2003** |    | **Sixmonths ended June 30, 2002** |    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|---------|-----------------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                               |        |                                   |         |                                   |         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | **Income (Numerator)**            |    | **Shares (000's) (Denominator)**  |    | **Per Share Amounts** |   | **Income (Numerator)** |   | **Shares (000's) (Denominator)** |   | **Per Share Amounts** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                               |        |                                   |         |                                   |         |  |  |  |  |  |  |  |  |
| Income from continuingoperations       before cumulative effectof       change in accountingprinciple                                                                                                                                                                                                                                                                                             |   | $                                 | 13,022  |                                   |         |   |   |   |   | $ | 12,667 |  |   |   |   |   |   |
| Less preferred stockdividends                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                              | (344    | )                                 |    |   |   |   |   |   | (345 | ) |   |   |   |   |   |
| Effect of minorityinterests                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                              | — |                                   |         |   |   |   |   |   | 15 |  |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                               |        |                                   |         |                                   |         |  |  |  |  |  |  |  |  |
| Basic EPS:                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                              |    |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |
|       Income fromcontinuing operations             beforecumulative effect of             changein accounting principle             availableto common             stockholders |   |                              | 12,678  |                                   | 78,947  |   | $ | 0.16 |  |  | 12,337 |  | 73,981 |   | $ | 0.17 |  |
| Effect of minorityinterests                                                                                                                                                                                                                                                                                                                                                                                                                                   |        |                                   | — |                                   | — |  |  | — |  |  | (2,221 | ) | — |  |  | (0.03 | ) |
| Effect of dilutivesecurities:                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                              |    |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |
|       Stock optionsand warrants                                                                                                                                                                                                                                                                                                                                                                                                 |   |                              | — |                                   | 2,382   |   |   | — |  |   | — |   | 1,495 |   |   | (0.01 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                               |        |                                   |         |                                   |         |  |  |  |  |  |  |  |  |
| Diluted EPS:                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                              |    |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |
|       Income fromcontinuing operations             beforecumulative effect of             changein accounting principle             availableto common             stockholders |   | $                                 | 12,678  |                                   | 81,329  |   | $ | 0.16 |  | $ | 10,116 |  | 75,476 |   | $ | 0.13 |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                               |        |                                   |         |                                   |         |  |  |  |  |  |  |  |  |

      The effect ofthe minority interests primarily represents the dilutive effect ofoutstanding stock options of Titan’s subsidiaries, notablyTitan Systems in 2002.

      In the threemonths ended June 30, 2003, options and warrants to purchaseapproximately 4,629,700 shares of common stock at pricesranging from $8.61 to $29.74 per share were not included in thecomputation of diluted EPS, as the effect would have beenanti-dilutive due to the exercise price.  Similarly, optionsto purchase approximately 1,214,800 shares of common stock atprices ranging from $21.35 to $40.00 per share, were notincluded in the computation of diluted EPS for the three monthperiod ended June 30, 2002.

      In the sixmonths ended June 30, 2003, options and warrants to purchaseapproximately 4,665,600 shares of common stock at pricesranging from $9.22 to $29.74 per share were not included in thecomputation of diluted EPS as the effect would have beenanti-dilutive due to the exercise price.  Options to purchaseapproximately 1,224,300 shares of common stock at prices rangingfrom $20.94 to $40.00 per share were not included in thecomputation of diluted EPS for the six month period endedJune 30, 2002, as the effect would have been anti-dilutive dueto the exercise price.

      Approximately4,989,300 and 5,862,800 shares in the three and six-months endedJune 30, 2003, respectively, that could have been issued from thepotential conversion of remarketable term income deferrable equitysecurities (HIGH TIDES) were not included in the computations astheir effect was anti-dilutive.  Approximately 5,038,000shares in the three months and six months ended June 30, 2002, thatcould have been issued from the potential conversion of the HIGHTIDES were not included in the computations, as their effect wasanti-dilutive.  Approximately 537,400 shares of common stockin the three and six month periods in 2003 and approximately460,000 shares of common stock in the three and six month periodsin 2002 that could have been issued from the potential conversionof cumulative convertible preferred stock were not included in thecomputations of diluted EPS, as the effect would have beenanti-dilutive.  The primary change in potential dilution from2002 to 2003 for the HIGH TIDES and preferred stock is the changein conversion ratios due to the SureBeam spin-off (see Note 4) andthe extinguishment of the HIGH TIDES on May 15, 2003.

*Select Balance SheetData*

      Following aredetails concerning certain balance sheet data:

|                                                |      | **June30, 2003** |   | **December 31, 2002** |
|-----------------------------------------------------|--------------------------|------------------|--------|----------------------------|
|                                                     |                          |                  |        |                            |
| Inventories:                                        |                     |             |   |                       |   |   |
|       Materials       |                     | $                | 9,641  |                       | $ | 11,213 |
|       Work-in-process |                     |             | 9,014  |                       |   | 9,947 |
|       Finishedgoods   |                     |             | 6,506  |                       |   | 10,120 |
|                                                     |                          |                  |        |                            |
|                                                |                     | $                | 25,161 |                       | $ | 31,280 |
|                                                     |                          |                  |        |                            |

*Supplemental Cash FlowInformation*

      Supplementaldisclosure of cash flow information:

| ** **                                                                                                                                                                       | **    ** | **Sixmonths ended June 30,****** |            |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------|----------------------------------|------------|
|                                                                                                                                                                                  |                              |                                  |            |
| ** **                                                                                                                                                                       | ** **                   | **2003**                         | ** ** | **2002** |  |
|                                                                                                                                                                                  |                              |                                  |            |  |  |
| Noncash investing andfinancing activities:                                                                                                                                       |                         |                             |       |   |   |   |  |
|       Issuance ofstock for acquisitions                                                                                                            |                         | $                                | —    |   | $ | 134,611 |  |
|       Write-off ofdeferred debt issuance costs                                                                                                     |                              |                                  | 8,071      |  |  | 9,435 |  |
|       Sharescontributed to employee benefit plans                                                                                                  |                         |                             | 5,108      |   |   | 3,605 |  |
|       Sharestendered for stock option exercise                                                                                                     |                              |                                  | 133        |  |  | — |  |
|       Notesreceivable in connection with sale of buildings                                                                                         |                              |                                  | —    |  |  | 5,417 |  |
|       Write-off ofdeferred compensation related to discontinued             operations |                              |                                  | —    |  |  | 629 |  |
|       Deferredcompensation related to the issuance of stock             options        |                              |                                  | —    |  |  | 133 |  |
|                                                                                                                                                                                  |                              |                                  |            |  |  |
| Cash paid forinterest                                                                                                                                                            |                         | $                                | 14,532     |   | $ | 18,676 |  |
| Cash paid for (providedby) income tax                                                                                                                                            |                         |                             | 944        |  |  | (6 | ) |

      In 2002, theCompany issued 172,153 shares of Titan common stock valued at$3.8 million as consideration for the purchase of assets of acompany which became part of the Cayenta business, now reported indiscontinued operations.  In the second quarter of 2003, theindemnification period as defined per the asset purchase agreementexpired, and as provided for in the purchase agreement, the Companyelected to exchange all of the Titan common stock for cash of$2.0 million and the extinguishment of notes receivable of$1.8 million for cash advances made in 2002.

      In addition,net cash proceeds of $29.9 million resulting from theacquisition of businesses, net of cash acquired, was reported forthe six months ended June 30, 2002.  This was primarily theresult of cash acquired from Jaycor, which was a stock-for-stockmerger completed in March 2002.

**Note (7) Commitments andContingencies**

*      *During the first quarter of2003, the Company entered into new long-term lease and subleaseagreements for office space in Virginia and Maryland as part of theCompany’s restructuring efforts to consolidate variousfacilities of its government business into centralized locations(see Note 2).  The lease and subleases in Virginia requirefuture minimum lease payments of approximately $100.4 millionover approximately 13 years, commencing at various dates from May2003 through May 2004.  The lease in Maryland requires futureminimum lease payments of approximately $45.8 million over 10years, commencing approximately July 1, 2004.

       OnAugust 16, 2002, Perimex International Corporation(“Perimex”) filed a complaint against Titan, oursubsidiary, Titan Wireless, and a former Titan Wireless employee inSan Diego Superior Court in San Diego, California.  Thecomplaint alleged breach of contract, breach of the covenant ofgood faith and fair dealing, intentional interference with existingcontractual relationships and prospective business advantage andviolation of the California unfair competition law arising from analleged failure of Titan Wireless to enter a joint venture withPerimex to provide wireless telecommunication services in Argentinaand other related alleged misconduct.  The complaint soughtdamages of $52.65 million and sought injunctive relief prohibitingTitan and Titan Wireless from transferring any of Titan Wireless'sassets.  The court denied Perimex's request for a preliminaryinjunction, sustained Titan’s and Titan Wireless's demurreras to all causes of action in the complaint and granted Perimexleave to amend the complaint.  The court also ordered Perimexto post a bond for $0.09 million to secure payment ofTitan’s and Titan Wireless’s costs if Titan prevails,or if Perimex does not prevail.  Perimex elected not to postthe bond and dismissed its complaint voluntarily withoutprejudice.  On May 22, 2003, however, Perimex filed a newcomplaint in the United States District Court for the SouthernDistrict of California alleging substantially similar causes ofaction and claiming a similar amount of damages.  The Companybelieves that Perimex's claims are without merit and the Companyintends to defend its position vigorously.

      The Companyis involved in legal actions in the normal course of theCompany’s business, including audits and investigations byvarious governmental agencies that result from the Company’swork as a defense contractor.  The Company  and itssubsidiaries are named as defendants in legal proceedings from timeto time and may assert claims from time to time.  Inaddition, the Company acquires companies from time to time thathave legal actions pending against them at the time ofacquisition. 

      The Company has received a grandjury subpoena from the Antitrust Division of the Department ofJustice requesting the production of documents relating toinformation technology services performed for the Air Force atHanscom Air Force Base in Massachusetts.  The Company has beeninformed that other companies who have performed such services havereceived subpoenas as well.  The Company has been and willcontinue to cooperate fully with the investigation.

      The Company received a subpoena from theoffice of Inspector General for the National Aeronautics and SpaceAdministration, or NASA, seeking certain records relating tobilling for labor services in connection with the Company’scontracts with NASA. The Company also received a subpoena from theoffice of Inspector General for the General ServicesAdministration, or GSA, seeking similar records relating to billingfor labor categories in connection with contracts with GSA. TheCompany is fully cooperating with the government’s inquiriesin these areas.

      Based uponcurrent information available to the Company, in the opinion ofmanagement, the amount of ultimate liability or recovery withrespect to these actions will not materially affect ourconsolidated financial position or results of operations taken as awhole.  However, our evaluation of the likely impact of theseactions could change in the future, and an unfavorable outcome,depending upon the amount and timing, could have a material adverseeffect on the Company’s results of operations or cash flowsin a future period.

**Note (8) Related PartyTransactions**

*Agreements WithExecutive Officers*

      In 2000, theCompany entered into an agreement with the Company’s Chairmanof the Board, President and Chief Executive Officer and theCompany’s General Counsel (hereinafter referred to as the"Executives") to reinforce and encourage their continued dedicationwithout distraction arising from the possibility of a change incontrol of Titan. The terms of the agreements provide that, in theevent of a Change in Control (as defined), and the termination ofthe Executive's employment at any time during the three-year periodthereafter by the Company other than for cause (as defined) or bythe Executive for good reason (as defined), the Executives will bepaid a lump sum amount equal to three times their base salary plusmaximum annual bonus. Additionally, the Executives will receive aprorated bonus for the year of termination and continuation ofmedical and dental benefits covering the Executives and theirdependents for three years following the termination.

      Under theagreements, Change in Control is deemed to have occurred in theevent of (i) the acquisition by any person, together with itsaffiliates, of beneficial ownership of our voting securitiespossessing 20% or more of the combined voting power of ouroutstanding voting securities, (ii) the majority of themembers of the board being comprised of individuals other thanthose who were members at the time of execution of the agreements,unless the new members elected were approved or nominated by amajority of the members of the then-incumbent board or(iii) the consummation of a merger, reorganization,consolidation or sale or other disposition of all or substantiallyall of our assets, subject to certain exceptions.

      OnApril 2, 2003, the Company entered into an EmploymentAgreement with the Company’s Chairman of the Board, Presidentand Chief Executive Officer (hereinafter referred to as the“CEO”) in connection with his duties in thesepositions.  Among other things, the terms of the agreementprovide for continued employment of the CEO by Titan for a term ofthree years, eligibility to receive annual incentive awards and toparticipate in long-term incentive and employee benefit andretirement programs.  In the event that the CEO is terminatedwithout cause, or retires at the end of the term of the agreement,he will be entitled to a lump sum equal to three times the sum ofhis current base salary and target bonus, a prorated bonus for theyear of termination, vesting of all outstanding stock options andparticipation for the CEO and his dependents in our extended healthbenefits program for retired senior executives.  The Companywill record the estimated future cash payments under the agreementon a pro rata basis during the three-year service period. During the three and six months ended June 30, 2003, an expense of$0.4 million was accrued and is included in AccruedCompensation and Benefits on the accompanying balance sheet. Also, on April 2, 2003 the Company entered into EmploymentAgreements with the Company’s General Counsel and theCompany’s Chief Financial Officer (hereinafter referred to asthe “Officers”) in connection with their duties inthose positions. Among other things, the terms of their agreementsprovide for continued employment by Titan for a term of two years,eligibility to receive annual incentive awards and to participatein long-term incentive, employee benefit and retirement programs.In the event of termination without cause, the Officers will eachbe entitled to a lump sum equal to two times the sum of theirrespective current base salaries and target bonuses, a proratedbonus for the year of termination, vesting of all outstanding stockoptions and continued medical and dental benefits coverage for aperiod of two years.  The agreements with the Officers do notinclude the same retirement benefit as does the CEO’sagreement, and accordingly, expense will be recognized only in theevent of termination.  The CEO and Officers have agreed tonon-competition and non-solicitation covenants in connection withtheir respective employment agreements.

*Certain RelationshipsAnd Related Transactions*

      Inconjunction with Titan’s plan to exit its internationaltelecommunications business, Titan entered into an agreement withGeolutions, Inc. (“Geolutions”) to assume and performall of Titan Wireless’s outstanding warrantyobligations.  Geolutions is a newly formed company, founded bya former executive of Titan Wireless and former officer ofTitan.  Titan has a fixed price contract of $1.9 million,plus incidental expenses of up to $0.6 million and other thirdparty costs of an aggregate maximum of $1.4 million, which ispayable through mid 2004, the period over which Titan’swarranty obligations exist on its existing customercontracts.  The contract is cancelable by Titan under certaincircumstances of non-performance by Geolutions.  Inconjunction with Titan’s agreement with Geolutions, Titan hasassigned its existing warranty obligations in its internationaltelecommunications business with its existing customers toGeolutions.  If Geolutions fails to perform these contractedobligations, Titan Wireless remains obligated to perform them andmay incur costs in excess of these contracted amounts.

      InMarch 2002, our Board of Directors adopted a stock optionrelinquishment program, the primary purpose of which was to alignthe interests of our directors and senior executives more closelywith our stockholders' interests by allowing directors and seniorexecutives to participate in the appreciation in our equityvalue:
|        | ·       | without requiring ourDirectors and executive officers to trade shares of our commonstock obtained through the exercise of options on the open market;and |
|--------------------------------------|----------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |                | *      *                                                                                                                   |
|                                 |                | ·                                                                                                                   | without the dilutive andpotentially stock-price depressive effects associated with theexercise and subsequent sale of stock option shares. |

        Theprogram also was intended to assist the participants with theirindividual financial planning. Under the program, a participant wasallowed to relinquish eligible, in-the-money stock options inexchange for a loan, the principal amount of which was 150% of thedifference between the aggregate exercise price of the options andthe product of (i) the number of shares issuable upon exerciseof the options and (ii) a 20 day trailing average of thedaily high and low sales price of our common stock prior torelinquishment. The loans bear interest at a rate equal to theapplicable federal rate as published by the Internal RevenueService for the month in which the loan was made. The loans weremade contingent upon the participant's utilizing a portion of theloan proceeds to purchase a life insurance policy with a deathbenefit sufficient to repay the loan and accrued interest thereonupon maturity.

        Underthe program the following transactions occurred:
|        | ·       | Dr. Ray, Chairman ofthe Board and Chief Executive Officer: 222,380 options relinquishedon June 18, 2002, $3,985,725 principal amount of loan, 5.48%interest per annum; |
|--------------------------------------|----------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |                | *      *                                                                                                                                           |
|                                 |                | ·                                                                                                                                           | Mr. Fink, Director:15,000 options relinquished on June 27, 2002, $336,337.50principal amount of loan, 5.48% interest per annum; and |
|        |                | *      *                                                                                                                                           |
|                                 |                | ·                                                                                                                                           | Mr. Alexander,Director: 19,972 options relinquished effective June 19, 2002,$499,999 principal amount of loan, 5.48% interest perannum. |

      The amount ofthe stock options relinquished under the program do not reflect anyadjustment as a result of the spin-off of our subsidiary SureBeamCorporation on August 5, 2002, since the relinquishmentoccurred before the date for said adjustment. Titan has recorded interest incomeof $0.2 million to date related to the accrued interest on theoutstanding loans due from the directors notedabove. 

      As of theeffective date of the Sarbanes-Oxley Act in July 2002, whichprecludes such loans to company officers and directors, the StockOption and Relinquishment Plan is no longer available to ourDirectors and executive officers.

*SureBeamAgreements*

      Prior to thespin-off of SureBeam Corporation, Titan and SureBeam entered into anumber of agreements.

      *CreditAgreement*.  The Company has extended a $50 millionsenior secured revolving loan commitment to SureBeam that allowsSureBeam to borrow up to $12.5 million per quarter beginningin the fourth quarter of 2002 through the fourth quarter of 2003,subject to the $50 million limitation on borrowing.  Theamount available for borrowing in the second, third and fourthquarters of 2003 is based upon SureBeam’s earnings beforeinterest, taxes, depreciation and amortization (EBITDA) for theprior quarter as a percentage of the EBITDA target in its financialplan submitted to Titan.  As of June 30, 2003, SureBeam hadborrowed $25 million on this facility, of which$18.1 million is reflected as a non-current asset in OtherAssets and $6.9 million is reflected as a current asset inPrepaid Expenses and Other on the consolidated balance sheet, inaccordance with the payment terms of the credit agreement.  OnFebruary 3, 2003, SureBeam filed a Form 8-K with the Securities andExchange Commission wherein SureBeam stated that they do notanticipate borrowing additional amounts on the credit facilityduring 2003 or during the remaining period that the credit facilityis outstanding.  Under the credit agreement, there are nofunds available for borrowing during the third quarter of 2003 asSureBeam has not met the requisite financial covenants required forfurther advances under the credit agreement.

      SureBeam isobligated to make quarterly principal payments on the creditfacility as follows:  13.75% of the outstanding principalbalance as of December 31, 2003 during each quarter in 2004;25% of the outstanding principal balance as of December 31,2004 during each quarter in 2005; and all remaining principal byDecember 31, 2005.  In March 2003, SureBeam and Titanentered into an agreement amending the credit agreement.  Thatamendment waived, subject to certain conditions, SureBeam’sobligation to use net proceeds from the sale of up to$25 million of its equity securities to make mandatorypayments under the credit agreement during the period of March 2003through September 2004.  In connection therewith, SureBeamagreed to provide for certain change orders and the furnishing ofmaintenance services under an Equipment ServicesAgreement.

      In addition,Titan has guaranteed certain lease obligations of SureBeam, andSureBeam is obligated to reimburse Titan for any payments Titanmakes under these guarantees.  Any guarantee payments Titanmakes reduce amounts available for future borrowing under thecredit agreement.  The aggregate amount of the leaseobligations Titan has guaranteed as of June 30, 2003 isapproximately $22.7 million.  The leases extend throughperiods ending in 2020.

      In relationto SureBeam's strategic alliance with Hawaii Pride, Titan hasguaranteed up to the greater of SureBeam's equity interest inHawaii Pride (which is currently zero), or 19.9% of Hawaii Pride's$6.8 million, 15-year loan from its lender, Web Bank.  Asof June 30, 2003, Titan has guaranteed approximately$1.2 million, or 19.9% of the current loan balance of$5.9 million.  In the event that Hawaii Pride defaults onthe loan, Titan may be obligated to cover any defaults on theentire outstanding balance of the loan. 

      UnderFinancial Interpretation No. 45, Titan is required to assess andrecord the fair value of all such guarantees made.  As of June30, 2003, Titan’s estimate of the fair value of theseguarantees is $0.

      *TaxAllocation Agreement and Tax Disaffiliation and Tax SharingAgreement*.  We have agreed to pay SureBeam for any taxbenefits we realized through our use of net operating lossesgenerated by SureBeam while it was a member of our consolidatedgroup for federal income tax purposes.  Through 2001, Titanutilized net operating losses previously generated by SureBeamwhich resulted in an estimated liability of approximately$6.2 million.  The Company estimates that in 2002 it willutilize net operating losses previously generated by SureBeam whichmay result in a liability of approximately $1.9 million, whichwill be finalized upon completion of the Company’s 2002corporate tax return.  As of June 30, 2003, all amounts havebeen accrued related to the estimated liability related to theutilization of the net operating losses previously generated bySureBeam.  Payment is due the earlier of the first year inwhich SureBeam could have used those losses to reduce its taxes orwhen the net operating losses expire.  SureBeam has notgenerated taxable income since its inception, and we do not know ifand when SureBeam will generate taxable income and, accordingly,when such payment will become due.  The net operating lossesgenerated in 2001 and 2002 expire in 2021 and 2022,respectively.

      *OtherAgreements.*  In connection with the license Titanpurchased to use SureBeam’s intellectual property, theremaining unamortized balance of $7.3 million at June 30,2003, is reflected as a non-current asset in Other Assets in theconsolidated balance sheet.  The license is being amortizedover a 15 year life, the average life of the relatedpatents.

      Titan hasagreed to purchase all of its requirements for electron beamaccelerators from SureBeam through December 31, 2003 unlessSureBeam does not offer competitive pricing or cannot meet requireddelivery schedules.  The equipment and services are priced atSureBeam’s cost plus a 20% markup unless Titan agrees to analternative pricing arrangement for a purchaseorder. 

      Titan hassubleased to SureBeam approximately 70,522 square feet used for itsservice center in Sioux City, Iowa, as well as facilities inDublin, California, Omaha, Nebraska and Saudi Arabia. Generally, SureBeam is paying Titan sublease payments equal toTitan’s monthly expense under these leases plus a 10%markup.  SureBeam is obligated to continue to seek to haveitself substituted as the direct lessee under each master lease sothat the sublease can be terminated.

**Note 9.  Guarantor CondensedConsolidating Financial Statements**

      As discussedin Note 5, on May 15, 2003, the Company sold $200 million of 8%senior subordinated notes in a private placement.  The Companyused the net proceeds from the issuance of the 8% seniorsubordinated notes, plus borrowings of $50 million made under ourrevolving credit facility and additional cash on hand, to redeemall of the then-outstanding 53/4% HIGH TIDESconvertible preferred securities.  The redemption of HIGHTIDES occurred on  June 4, 2003.

      Following areconsolidating condensed balance sheets as of December 31, 2002 andJune 30, 2003 (unaudited), and unaudited statements of operationsfor the three months and six months ended 2002 and 2003, andstatements of cash flows for the six months ended June 30, 2002 and2003 for the Guarantor Subsidiaries and the Non-GuarantorSubsidiaries as defined below.  The following consolidatedcondensed financial statements present financial informationfor:

      Parent: The Titan Corporation on a stand-alone basis.

      GuarantorSubsidiaries:  All directly and indirectly owned domesticsubsidiaries of Parent other than Cayenta Inc. on a stand-alonebasis.

      Non-GuarantorSubsidiaries:  Cayenta Inc. and all direct and indirectsubsidiaries of Parent that are not organized under the laws of theUnited States, any state of the United States or the District ofColumbia and that conduct substantially all business operationsoutside the United States.

      Reclassificationsand Eliminations:  Entries that eliminate the investment insubsidiaries and intercompany balances and transactions.

      The TitanCorporation and Subsidiaries:  The financial information forThe Titan Corporation on a condensed consolidated basis.

      Theclassification of operating entities within each of the columns isbased on the legal status of the entity as of June 30, 2003. Accordingly, certain legal entities that existed in prior yearsthat have been merged into Titan as of June 30, 2003 have beenreclassified in the prior year condensed financial statements toconform with the current year presentation.

**Condensed Consolidating Parent Company, Guarantorand Non-guarantorStatement of OperationsFor the Three Months Ended June 30, 2003(Unaudited)(In thousands)**

|                                                                                                 | ** ** | **Parent** | ** ** | **Guarantor Subsidiaries** | ** ** | **Non-guarantor Subsidiaries** | ** ** | **Reclassifications and Eliminations** | ** ** | **The Titan Corporation and Subsidiaries** | ** ** |
|-------------------------------------------------------------------------------------------------|------------|------------|------------|----------------------------|------------|--------------------------------|------------|----------------------------------------|------------|--------------------------------------------|------------|
|                                                                                                 |            | ****       |            | ****                       |            | ****                           |            | ****                                   |            | ****                                       |            |
| Revenues                                                                                        |       | $          | 270,440    |                            | $          | 163,901                        |            | $                                      | 7,717      |                                            | $          | (4,378 | ) | $ | 437,680 |  |
|                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| Cost andexpenses:                                                                               |       |       |            |                            |            |                                |            |                                        |            |                                            |            |  |  |  |  |  |
|       Cost ofrevenues                                             |       |       | 221,805    |                            |            | 137,937                        |            |                                        | 7,271      |                                            |            | (1,725 | ) |  | 365,288 |  |
|       Selling,general and administrative                          |       |       | 28,515     |                            |            | 10,154                         |            |                                        | 2,608      |                                            |            | — |  |  | 41,277 |  |
|       Research anddevelopment                                     |       |       | 1,237      |                            |            | 1,119                          |            |                                        | —    |                                            |            | — |  |  | 2,356 |  |
|                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
|       Total costsand expenses                                     |       |       | 251,557    |                            |            | 149,210                        |            |                                        | 9,879      |                                            |            | (1,725 | ) |  | 408,921 |  |
|                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| Operatingprofit                                                                                 |       |       | 18,883     |                            |            | 14,691                         |            |                                        | (2,162     | )                                          |            | (2,653 | ) |  | 28,759 |  |
| Interestexpense                                                                                 |       |       | (8,569     | )                          |            | (113                           | )          |                                        | (1         | )                                          |            | — |  |  | (8,683 | ) |
| Interest income                                                                                 |       |       | 803        |                            |            | 14                             |            |                                        | 2          |                                            |            | — |  |  | 819 |  |
| Debt extinguishmentcosts                                                                        |            |            | (12,423    | )                          |            | —                        |            |                                        | —    |                                            |            | — |  |  | (12,423 | ) |
|                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| Income (loss) fromcontinuing operations before       income taxes |       |       | (1,306     | )                          |            | 14,592                         |            |                                        | (2,161     | )                                          |            | (2,653 | ) |  | 8,472 |  |
| Income tax provision(benefit)                                                                   |            |            | (523       | )                          |            | 5,837                          |            |                                        | (864       | )                                          |            | (1,061 | ) |  | 3,389 |  |
|                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| Income (loss) fromcontinuing operations                                                         |       |       | (783       | )                          |            | 8,755                          |            |                                        | (1,297     | )                                          |            | (1,592 | ) |  | 5,083 |  |
| Income (loss) fromdiscontinued operations, net       of taxes     |       |       | —    |                            |            | (305                           | )          |                                        | 1,087      |                                            |            | — |  |  | 782 |  |
|                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| Earnings (loss) beforeequity in earnings of       subsidiaries    |       |       | (783       | )                          |            | 8,450                          |            |                                        | (210       | )                                          |            | (1,592 | ) |  | 5,865 |  |
| Equity in earnings ofsubsidiaries                                                               |       |            | 8,240      |                            |            | —                        |            |                                        | —    |                                            |            | (8,240 | ) |  | — |  |
|                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| Net earnings(loss)                                                                              |            | $          | 7,457      |                            | $          | 8,450                          |            | $                                      | (210       | )                                          | $          | (9,832 | ) | $ | 5,865 |  |
|                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |

**Condensed Consolidating Parent Company, Guarantorand Non-guarantorStatement of OperationsFor the Six Months Ended June 30, 2003(Unaudited)(In thousands)**

|                                                                                                 | ** ** | **Parent** | ** ** | **Guarantor Subsidiaries** | ** ** | **Non-guarantor Subsidiaries** | ** ** | **Reclassifications and Eliminations** | ** ** | **The Titan Corporation and Subsidiaries** | ** ** |
|-------------------------------------------------------------------------------------------------|------------|------------|------------|----------------------------|------------|--------------------------------|------------|----------------------------------------|------------|--------------------------------------------|------------|
|                                                                                                 |            | ****       |            | ****                       |            | ****                           |            | ****                                   |            | ****                                       |            |
| Revenues                                                                                        |       | $          | 516,354    |                            | $          | 291,372                        |            | $                                      | 15,643     |                                            | $          | (7,809 | ) | $ | 815,560 |  |
|                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| Cost andexpenses:                                                                               |       |       |            |                            |            |                                |            |                                        |            |                                            |            |  |  |  |  |  |
|       Cost ofrevenues                                             |       |       | 430,119    |                            |            | 244,509                        |            |                                        | 12,832     |                                            |            | (6,896 | ) |  | 680,564 |  |
|       Selling,general and administrative                          |       |       | 56,775     |                            |            | 19,599                         |            |                                        | 4,420      |                                            |            | — |  |  | 80,794 |  |
|       Research anddevelopment                                     |       |       | 2,225      |                            |            | 2,499                          |            |                                        | —    |                                            |            | — |  |  | 4,724 |  |
|                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
|       Total costsand expenses                                     |       |       | 489,119    |                            |            | 266,607                        |            |                                        | 17,252     |                                            |            | (6,896 | ) |  | 766,082 |  |
|                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| Operating profit(loss)                                                                          |       |       | 27,235     |                            |            | 24,765                         |            |                                        | (1,609     | )                                          |            | (913 | ) |  | 49,478 |  |
| Interestexpense                                                                                 |       |       | (16,555    | )                          |            | (225                           | )          |                                        | (2         | )                                          |            |  |  |  | (16,782 | ) |
| Interest income                                                                                 |       |       | 1,394      |                            |            | 30                             |            |                                        | 7          |                                            |            | — |  |  | 1,431 |  |
| Debt extinguishmentcosts                                                                        |            |            | (12,423    | )                          |            | —                        |            |                                        | —    |                                            |            | — |  |  | (12,423 | ) |
|                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| Income (loss) fromcontinuing operations before       income taxes |       |       | (349       | )                          |            | 24,570                         |            |                                        | (1,604     | )                                          |            | (913 | ) |  | 21,704 |  |
| Income tax provision(benefit)                                                                   |            |            | (139       | )                          |            | 9,828                          |            |                                        | (642       | )                                          |            | (365 | ) |  | 8,682 |  |
|                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| Income (loss) fromcontinuing operations                                                         |       |       | (210       | )                          |            | 14,742                         |            |                                        | (962       | )                                          |            | (548 | ) |  | 13,022 |  |
| Income (loss) fromdiscontinued operations, net of taxes                                         |       |       | —    |                            |            | (965                           | )          |                                        | 809        |                                            |            | — |  |  | (156 | ) |
|                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| Earnings (loss) beforeequity in earnings of       subsidiaries    |       |       | (210       | )                          |            | 13,777                         |            |                                        | (153       | )                                          |            | (548 | ) |  | 12,866 |  |
| Equity in earnings ofsubsidiaries                                                               |       |            | 13,624     |                            |            | —                        |            |                                        | —    |                                            |            | (13,624 | ) |  | — |  |
|                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| Net earnings(loss)                                                                              |            | $          | 13,414     |                            | $          | 13,777                         |            | $                                      | (153       | )                                          | $          | (14,172 | ) | $ | 12,866 |  |
|                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |

**Condensed Consolidating Parent Company, Guarantorand Non-guarantorStatement of OperationsFor the Three Months Ended June 30, 2002(Unaudited)(In thousands)**

|                                                                                                 | ** ** | **Parent** | ** ** | **Guarantor Subsidiaries** | ** ** | **Non-guarantor Subsidiaries** | ** ** | **Reclassifications and Eliminations** | ** ** | **The Titan Corporation and Subsidiaries** | ** ** |
|-------------------------------------------------------------------------------------------------|------------|------------|------------|----------------------------|------------|--------------------------------|------------|----------------------------------------|------------|--------------------------------------------|------------|
|                                                                                                 |            | ****       |            | ****                       |            | ****                           |            | ****                                   |            | ****                                       |            |
| Revenues                                                                                        |       | $          | 241,957    |                            | $          | 100,651                        |            | $                                      | 7,234      |                                            | $          | (4,211 | ) | $ | 345,631 |  |
|                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| Cost andexpenses:                                                                               |       |       |            |                            |            |                                |            |                                        |            |                                            |            |  |  |  |  |  |
|       Cost ofrevenues                                             |       |       | 195,181    |                            |            | 82,216                         |            |                                        | 3,437      |                                            |            | (4,075 | ) |  | 276,759 |  |
|       Selling,general and administrative                          |       |       | 29,287     |                            |            | 9,427                          |            |                                        | 1,688      |                                            |            | — |  |  | 40,402 |  |
|       Research anddevelopment                                     |       |       | 1,208      |                            |            | 1,117                          |            |                                        | —    |                                            |            | — |  |  | 2,325 |  |
|       Exit andrestructuring charges and other                     |       |       | —    |                            |            | —                        |            |                                        | 1,833      |                                            |            | — |  |  | 1,833 |  |
|                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
|       Total costsand expenses                                     |       |       | 225,676    |                            |            | 92,760                         |            |                                        | 6,958      |                                            |            | (4,075 | ) |  | 321,319 |  |
|                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| Operatingprofit                                                                                 |       |       | 16,281     |                            |            | 7,891                          |            |                                        | 276        |                                            |            | (136 | ) |  | 24,312 |  |
| Interestexpense                                                                                 |       |       | (7,492     | )                          |            | (193                           | )          |                                        | (1         | )                                          |            | — |  |  | (7,686 | ) |
| Interest income                                                                                 |       |       | 77         |                            |            | 39                             |            |                                        | —    |                                            |            | — |  |  | 116 |  |
| Debt extinguishmentcosts                                                                        |            |            | (9,435     | )                          |            | —                        |            |                                        | —    |                                            |            | — |  |  | (9,435 | ) |
|                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| Income (loss) fromcontinuing operations       before income taxes |       |       | (569       | )                          |            | 7,737                          |            |                                        | 275        |                                            |            | (136 | ) |  | 7,307 |  |
| Income tax provision(benefit)                                                                   |            |            | (140       | )                          |            | 2,610                          |            |                                        | 83         |                                            |            | — |  |  | 2,553 |  |
|                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| Income (loss) fromcontinuing operations                                                         |       |       | (429       | )                          |            | 5,127                          |            |                                        | 192        |                                            |            | (136 | ) |  | 4,754 |  |
| Loss from discontinuedoperations, net of       taxes              |       |       | (10,594    | )                          |            | (4,023                         | )          |                                        | (1,904     | )                                          |            | — |  |  | (16,521 | ) |
|                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| Income (loss) beforeequity in losses of       subsidiaries        |       |       | (11,023    | )                          |            | 1,104                          |            |                                        | (1,712     | )                                          |            | (136 | ) |  | (11,767 | ) |
| Equity in losses ofsubsidiaries                                                                 |       |       | (608       | )                          |            | (5,953                         | )          |                                        | —    |                                            |            | 6,561 |  |  | — |  |
|                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| Net loss                                                                                        |            | $          | (11,631    | )                          | $          | (4,849                         | )          | $                                      | (1,712     | )                                          | $          | 6,425 |  | $ | (11,767 | ) |
|                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |

**Condensed Consolidating Parent Company, Guarantorand Non-guarantorStatement of OperationsFor the Six Months Ended June 30, 2002(Unaudited)(In thousands)**

|                                                                                                                                                                                    | ** ** | **Parent** | ** ** | **Guarantor Subsidiaries** | ** ** | **Non-guarantor Subsidiaries** | ** ** | **Reclassifications and Eliminations** | ** ** | **The Titan Corporation and Subsidiaries** | ** ** |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------|------------|----------------------------|------------|--------------------------------|------------|----------------------------------------|------------|--------------------------------------------|------------|
|                                                                                                                                                                                    |            | ****       |            | ****                       |            | ****                           |            | ****                                   |            | ****                                       |            |
| Revenues                                                                                                                                                                           |       | $          | 458,943    |                            | $          | 193,244                        |            | $                                      | 14,152     |                                            | $          | (6,360 | ) | $ | 659,979 |  |
|                                                                                                                                                                                    |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| Cost andexpenses:                                                                                                                                                                  |       |       |            |                            |            |                                |            |                                        |            |                                            |            |  |  |  |  |  |
|       Cost ofrevenues                                                                                                                                |       |       | 370,832    |                            |            | 157,903                        |            |                                        | 7,237      |                                            |            | (5,788 | ) |  | 530,184 |  |
|       Selling,general and administrative                                                                                                             |       |       | 54,234     |                            |            | 17,882                         |            |                                        | 3,275      |                                            |            | (336 | ) |  | 75,055 |  |
|       Research anddevelopment                                                                                                                        |       |       | 2,381      |                            |            | 2,391                          |            |                                        | —    |                                            |            | — |  |  | 4,772 |  |
|       Exit andrestructuring charges and other                                                                                                        |       |       | —    |                            |            | —                        |            |                                        | 3,319      |                                            |            | — |  |  | 3,319 |  |
|                                                                                                                                                                                    |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
|       Total costsand expenses                                                                                                                        |       |       | 427,447    |                            |            | 178,176                        |            |                                        | 13,831     |                                            |            | (6,124 | ) |  | 613,330 |  |
|                                                                                                                                                                                    |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| Operating profit(loss)                                                                                                                                                             |       |       | 31,496     |                            |            | 15,068                         |            |                                        | 321        |                                            |            | (236 | ) |  | 46,649 |  |
| Interestexpense                                                                                                                                                                    |       |       | (15,763    | )                          |            | (245                           | )          |                                        | —    |                                            |            | — |  |  | (16,008 | ) |
| Interest income                                                                                                                                                                    |       |       | 223        |                            |            | 28                             |            |                                        | —    |                                            |            | — |  |  | 251 |  |
| Debt extinguishmentcosts                                                                                                                                                           |            |            | (9,435     | )                          |            | —                        |            |                                        | —    |                                            |            | — |  |  | (9,435 | ) |
|                                                                                                                                                                                    |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| Income from continuingoperations before       income taxes and cumulativeeffect of       change in accountingprinciple |       |       | 6,521      |                            |            | 14,851                         |            |                                        | 321        |                                            |            | (236 | ) |  | 21,457 |  |
| Income taxprovision                                                                                                                                                                |            |            | 2,841      |                            |            | 5,895                          |            |                                        | 54         |                                            |            | — |  |  | 8,790 |  |
|                                                                                                                                                                                    |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| Income from continuingoperations before       cumulative effect of change inaccounting       principle                 |       |       | 3,680      |                            |            | 8,956                          |            |                                        | 267        |                                            |            | (236 | ) |  | 12,667 |  |
| Loss from discontinuedoperations, net of taxes                                                                                                                                     |       |       | (10,406    | )                          |            | (5,234                         | )          |                                        | (2,307     | )                                          |            | — |  |  | (17,947 | ) |
|                                                                                                                                                                                    |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| Loss before cumulativeeffect of change in       accountingprinciple                                                                                  |       |       | (6,726     | )                          |            | 3,722                          |            |                                        | (2,040     | )                                          |            | (236 | ) |  | (5,280 | ) |
| Cumulative effect ofchange in accounting       principle, net of taxbenefit                                                                          |       |       | (9,414     | )                          |            | —                        |            |                                        | (30,697    | )                                          |            | — |  |  | (40,111 | ) |
|                                                                                                                                                                                    |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| Income (loss) beforeequity in losses of       subsidiaries                                                                                           |       |       | (16,140    | )                          |            | 3,722                          |            |                                        | (32,737    | )                                          |            | (236 | ) |  | (45,391 | ) |
| Equity in losses ofsubsidiaries                                                                                                                                                    |       |       | (29,015    | )                          |            | (6,960                         | )          |                                        | —    |                                            |            | 35,975 |  |  | — |  |
|                                                                                                                                                                                    |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| Net loss                                                                                                                                                                           |            | $          | (45,155    | )                          | $          | (3,238                         | )          | $                                      | (32,737    | )                                          | $          | 35,739 |  | $ | (45,391 | ) |
|                                                                                                                                                                                    |       |            |            |                            |            |                                |            |                                        |            |                                            |            |

**Condensed Consolidating Parent Company, Guarantorand Non-guarantorBalance SheetAs of June 30, 2003(Unaudited)  (In thousands)**

|                                                                                                                                                                       | ** ** | **Parent** | ** ** | **Guarantor Subsidiaries** | ** ** | **Non-guarantor Subsidiaries** | ** ** | **Reclassifications and Eliminations** | ** ** | **The Titan Corporation and Subsidiaries** | ** ** |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------|------------|----------------------------|------------|--------------------------------|------------|----------------------------------------|------------|--------------------------------------------|------------|
|                                                                                                                                                                       |            | ****       |            | ****                       |            | ****                           |            | ****                                   |            | ****                                       |            |
| **Assets**                                                                                                                                                            |       |            |            |                            |            |                                |            |                                        |            |                                            |            |  |  |  |  |  |
| Current Assets:                                                                                                                                                       |       |       |            |                            |            |                                |            |                                        |            |                                            |            |  |  |  |  |  |
|       Cash and cashequivalents                                                                                                          |       | $          | 20,010     |                            | $          | 2,126                          |            | $                                      | 1,492      |                                            | $          | — |  | $ | 23,628 |  |
|       Accountsreceivable—net                                                                                                      |       |       | 194,662    |                            |            | 107,971                        |            |                                        | 27,688     |                                            |            | — |  |  | 330,321 |  |
|       Inventories                                                                                                                       |       |       | 19,958     |                            |            | 5,182                          |            |                                        | 21         |                                            |            | — |  |  | 25,161 |  |
|       Prepaidexpenses and other                                                                                                         |       |       | 21,744     |                            |            | 4,000                          |            |                                        | 1,282      |                                            |            | (913 | ) |  | 26,113 |  |
|       Deferredincome taxes                                                                                                              |       |       | 103,246    |                            |            | —                        |            |                                        | —    |                                            |            | — |  |  | 103,246 |  |
|       Currentassets of discontinued operations                                                                                          |       |       | —    |                            |            | 90,146                         |            |                                        | 12,403     |                                            |            | — |  |  | 102,549 |  |
|                                                                                                                                                                       |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
|             Totalcurrent assets                                                                           |       |       | 359,620    |                            |            | 209,425                        |            |                                        | 42,886     |                                            |            | (913 | ) |  | 611,018 |  |
| Property and equipment, net                                                                                                                                           |       |       | 32,636     |                            |            | 19,952                         |            |                                        | 12,986     |                                            |            | — |  |  | 65,574 |  |
| Goodwill                                                                                                                                                              |       |       | 310,744    |                            |            | 154,798                        |            |                                        | 59         |                                            |            | — |  |  | 465,601 |  |
| Otherassets—net                                                                                                                                                 |       |       | 69,448     |                            |            | 17,827                         |            |                                        | 5          |                                            |            | — |  |  | 87,280 |  |
| Deferred incometaxes                                                                                                                                                  |       |       | 53,015     |                            |            | —                        |            |                                        | —    |                                            |            | — |  |  | 53,015 |  |
| Non-current assets ofdiscontinued operations                                                                                                                          |       |       | —    |                            |            | 1,686                          |            |                                        | 2,173      |                                            |            | — |  |  | 3,859 |  |
| Intercompany investments,advances and liabilities       —net                                                                      |       |       | 517,739    |                            |            | (353,811                       | )          |                                        | (163,766   | )                                          |            | (162 | ) |  | — |  |
|                                                                                                                                                                       |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
|             Totalassets                                                                                   |       | $          | 1,343,202  |                            | $          | 49,877                         |            | $                                      | (105,657   | )                                          | $          | (1,075 | ) | $ | 1,286,347 |  |
|                                                                                                                                                                       |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| **Liabilities andStockholders’ Equity**                                                                                                                         |            |            |            |                            |            |                                |            |                                        |            |                                            |            |  |  |  |  |  |
| CurrentLiabilities:                                                                                                                                                   |       |       |            |                            |            |                                |            |                                        |            |                                            |            |  |  |  |  |  |
|       Currentportion of amounts outstanding under             lineof credit |       | $          | 3,500      |                            | $          | —                        |            | $                                      | —    |                                            | $          | — |  | $ | 3,500 |  |
|       Accountspayable                                                                                                                   |            |            | 44,824     |                            |            | 26,837                         |            |                                        | 4,020      |                                            |            | — |  |  | 75,681 |  |
|       Currentportion of long-term debt                                                                                                  |            |            | 108        |                            |            | 750                            |            |                                        | —    |                                            |            | — |  |  | 858 |  |
|       Accruedcompensation and benefits                                                                                                  |            |            | 44,729     |                            |            | 23,558                         |            |                                        | 691        |                                            |            | — |  |  | 68,978 |  |
|       Other accruedliabilities                                                                                                          |            |            | 45,176     |                            |            | 32,874                         |            |                                        | 3,519      |                                            |            | — |  |  | 81,569 |  |
|       Currentliabilities of discontinued operations                                                                                     |            |            | 1,015      |                            |            | 34,651                         |            |                                        | 5,790      |                                            |            | — |  |  | 41,456 |  |
|                                                                                                                                                                       |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
|             Totalcurrent liabilities                                                                      |            |            | 139,352    |                            |            | 118,670                        |            |                                        | 14,020     |                                            |            | — |  |  | 272,042 |  |
|                                                                                                                                                                       |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| Long-term portion ofamounts outstanding under       line of credit                                                                      |       |       | 383,875    |                            |            | —                        |            |                                        | —    |                                            |            | — |  |  | 383,875 |  |
| Senior subordinatednotes                                                                                                                                              |            |            | 200,000    |                            |            | —                        |            |                                        | —    |                                            |            | — |  |  | 200,000 |  |
| Other long-termdebt                                                                                                                                                   |       |       | 855        |                            |            | 750                            |            |                                        | —    |                                            |            | — |  |  | 1,605 |  |
| Other non-currentliabilities                                                                                                                                          |       |       | 49,440     |                            |            | 4,983                          |            |                                        | 1,200      |                                            |            | — |  |  | 55,623 |  |
| Non-current liabilities ofdiscontinued operations                                                                                                                     |       |       | —    |                            |            | 36,333                         |            |                                        | 1,341      |                                            |            | — |  |  | 37,674 |  |
| Stockholders’ equity(deficit)                                                                                                                                   |       |            | 569,680    |                            |            | (110,859                       | )          |                                        | (122,218   | )                                          |            | (1,075 | ) |  | 335,528 |  |
|                                                                                                                                                                       |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
|       Totalliabilities and equity                                                                                                       |       | $          | 1,343,202  |                            | $          | 49,877                         |            | $                                      | (105,657   | )                                          | $          | (1,075 | ) | $ | 1,286,347 |  |
|                                                                                                                                                                       |       |            |            |                            |            |                                |            |                                        |            |                                            |            |

**Condensed Consolidating Parent Company, Guarantorand Non-guarantorBalance SheetAs of December 31, 2002(In thousands)**

|                                                                                                                                                                                                                                                                                 | ** ** | **Parent** | ** ** | **Guarantor Subsidiaries** | ** ** | **Non-guarantor Subsidiaries** | ** ** | **Reclassifications and Eliminations** | ** ** | **The Titan Corporation and Subsidiaries** | ** ** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------|------------|----------------------------|------------|--------------------------------|------------|----------------------------------------|------------|--------------------------------------------|------------|
|                                                                                                                                                                                                                                                                                 |            | ****       |            | ****                       |            | ****                           |            | ****                                   |            | ****                                       |            |
| **Assets**                                                                                                                                                                                                                                                                      |       |            |            |                            |            |                                |            |                                        |            |                                            |            |  |  |  |  |  |
| Current Assets:                                                                                                                                                                                                                                                                 |       |       |            |                            |            |                                |            |                                        |            |                                            |            |  |  |  |  |  |
|       Cash and cashequivalents                                                                                                                                                                                                                    |       | $          | 31,997     |                            | $          | 2,186                          |            | $                                      | (60        | )                                          | $          | — |  | $ | 34,123 |  |
|       Restrictedcash                                                                                                                                                                                                                              |       |       | 394        |                            |            | —                        |            |                                        | —    |                                            |            | — |  |  | 394 |  |
|       Accountsreceivable—net                                                                                                                                                                                                                |       |       | 195,241    |                            |            | 92,006                         |            |                                        | 27,116     |                                            |            | — |  |  | 314,363 |  |
|       Inventories                                                                                                                                                                                                                                 |       |       | 22,392     |                            |            | 4,363                          |            |                                        | 4,525      |                                            |            | — |  |  | 31,280 |  |
|       Prepaidexpenses and other                                                                                                                                                                                                                   |       |       | 15,114     |                            |            | 2,868                          |            |                                        | 1,986      |                                            |            | (527 | ) |  | 19,441 |  |
|       Deferredincome taxes                                                                                                                                                                                                                        |       |       | 108,046    |                            |            | —                        |            |                                        | —    |                                            |            | — |  |  | 108,046 |  |
|       Currentassets of discontinued operations                                                                                                                                                                                                    |       |       | —    |                            |            | 93,145                         |            |                                        | 10,726     |                                            |            | — |  |  | 103,871 |  |
|                                                                                                                                                                                                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
|             Totalcurrent assets                                                                                                                                                                                     |       |       | 373,184    |                            |            | 194,568                        |            |                                        | 44,293     |                                            |            | (527 | ) |  | 611,518 |  |
| Property and equipment, net                                                                                                                                                                                                                                                     |       |       | 33,483     |                            |            | 21,081                         |            |                                        | 9,141      |                                            |            | — |  |  | 63,705 |  |
| Goodwill                                                                                                                                                                                                                                                                        |       |       | 311,336    |                            |            | 151,324                        |            |                                        | 59         |                                            |            | — |  |  | 462,719 |  |
| Otherassets—net                                                                                                                                                                                                                                                           |       |       | 88,234     |                            |            | 11,664                         |            |                                        | 5          |                                            |            | — |  |  | 99,903 |  |
| Deferred incometaxes                                                                                                                                                                                                                                                            |       |       | 53,015     |                            |            | —                        |            |                                        | —    |                                            |            | — |  |  | 53,015 |  |
| Non-current assets ofdiscontinued operations                                                                                                                                                                                                                                    |       |       | —    |                            |            | 4,212                          |            |                                        | 2,370      |                                            |            | — |  |  | 6,582 |  |
| Intercompany investments,advances and liabilities       —net                                                                                                                                                                                |       |       | 499,919    |                            |            | (342,881                       | )          |                                        | (157,038   | )                                          |            | — |  |  | — |  |
|                                                                                                                                                                                                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
|             Totalassets                                                                                                                                                                                             |       | $          | 1,359,171  |                            | $          | 39,968                         |            | $                                      | (101,170   | )                                          | $          | (527 | ) | $ | 1,297,442 |  |
|                                                                                                                                                                                                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| **Liabilities andStockholders’ Equity**                                                                                                                                                                                                                                   |            |            |            |                            |            |                                |            |                                        |            |                                            |            |  |  |  |  |  |
| CurrentLiabilities:                                                                                                                                                                                                                                                             |       |       |            |                            |            |                                |            |                                        |            |                                            |            |  |  |  |  |  |
|       Currentportion of amounts outstanding under             lineof credit                                                                                                           |       | $          | 3,500      |                            | $          | —                        |            | $                                      | —    |                                            | $          | — |  | $ | 3,500 |  |
|       Accountspayable                                                                                                                                                                                                                             |            |            | 41,102     |                            |            | 30,385                         |            |                                        | 9,889      |                                            |            | — |  |  | 81,376 |  |
|       Currentportion of long-term debt                                                                                                                                                                                                            |            |            | 8          |                            |            | 839                            |            |                                        | —    |                                            |            | — |  |  | 847 |  |
|       Accruedcompensation and benefits                                                                                                                                                                                                            |            |            | 46,468     |                            |            | 19,604                         |            |                                        | 567        |                                            |            | — |  |  | 66,639 |  |
|       Other accruedliabilities                                                                                                                                                                                                                    |            |            | 61,406     |                            |            | 23,002                         |            |                                        | 3,194      |                                            |            | — |  |  | 87,602 |  |
|       Currentliabilities of discontinued operations                                                                                                                                                                                               |            |            | 1,999      |                            |            | 41,506                         |            |                                        | 5,638      |                                            |            | — |  |  | 49,143 |  |
|                                                                                                                                                                                                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
|             Totalcurrent liabilities                                                                                                                                                                                |            |            | 154,483    |                            |            | 115,336                        |            |                                        | 19,288     |                                            |            | — |  |  | 289,107 |  |
|                                                                                                                                                                                                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
| Long-term portion ofamounts outstanding under       line of credit                                                                                                                                                                                |       |       | 344,750    |                            |            | —                        |            |                                        | —    |                                            |            | — |  |  | 344,750 |  |
| Other long-termdebt                                                                                                                                                                                                                                                             |       |       | 1,009      |                            |            | 1,036                          |            |                                        | —    |                                            |            | — |  |  | 2,045 |  |
| Other non-currentliabilities                                                                                                                                                                                                                                                    |       |       | 49,388     |                            |            | 5,002                          |            |                                        | 11         |                                            |            | — |  |  | 54,401 |  |
| Non-current liabilities ofdiscontinued operations                                                                                                                                                                                                                               |       |       | —    |                            |            | 43,230                         |            |                                        | 1,596      |                                            |            | — |  |  | 44,826 |  |
| Company obligatedmandatory redeemable       convertible preferredsecurities of a subsidiary       trust whose sole assets aresenior subordinated       convertible debentures ofTitan |       |            | 250,000    |                            |            | —                        |            |                                        | —    |                                            |            | — |  |  | 250,000 |  |
| Stockholders’ equity(deficit)                                                                                                                                                                                                                                             |       |            | 559,541    |                            |            | (124,636                       | )          |                                        | (122,065   | )                                          |            | (527 | ) |  | 312,313 |  |
|                                                                                                                                                                                                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |
|       Totalliabilities and equity                                                                                                                                                                                                                 |       | $          | 1,359,171  |                            | $          | 39,968                         |            | $                                      | (101,170   | )                                          | $          | (527 | ) | $ | 1,297,442 |  |
|                                                                                                                                                                                                                                                                                 |       |            |            |                            |            |                                |            |                                        |            |                                            |            |

**Condensed Consolidating Parent Company, Guarantorand Non-guarantorStatement of Cash FlowsFor the Six Months Ended June 30, 2003(Unaudited)(In thousands)**

|                                                                                                                                                                                                  | ** ** | **Parent** | ** ** | **Guarantor Subsidiaries** | ** ** | **Non-guarantor Subsidiaries** | ** ** | **Reclassifications and Eliminations** | ** ** | **TheTitan Corporation and Subsidiaries** | ** ** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------|------------|----------------------------|------------|--------------------------------|------------|----------------------------------------|------------|-------------------------------------------|------------|
|                                                                                                                                                                                                  |            | ****       |            | ****                       |            | ****                           |            | ****                                   |            | ****                                      |            |
| **Cash Flows fromOperating Activities:**                                                                                                                                                         |       |            |            |                            |            |                                |            |                                        |            |                                           |            |  |  |  |  |  |
| Income (loss) fromcontinuing operations                                                                                                                                                          |       | $          | (210       | )                          | $          | 14,742                         |            | $                                      | (962       | )                                         | $          | (548 | ) | $ | 13,022 |  |
| Adjustments to reconcileincome (loss) from continuing       operations to net cashprovided by (used for) continuing       operations |       |            | 38,757     |                            |            | (14,160                        | )          |                                        | (6,073     | )                                         |            | 913 |  |  | 19,437 |  |
|                                                                                                                                                                                                  |       |            |            |                            |            |                                |            |                                        |            |                                           |            |
| Net cash provided by (usedfor) continuing operations                                                                                                                                             |       |       | 38,547     |                            |            | 582                            |            |                                        | (7,035     | )                                         |            | 365 |  |  | 32,459 |  |
|                                                                                                                                                                                                  |       |            |            |                            |            |                                |            |                                        |            |                                           |            |
| Income (loss) from discontinued operations                                                                                                                                                       |       |       | —    |                            |            | (965                           | )          |                                        | 809        |                                           |            | — |  |  | (156 | ) |
| Adjustments to reconcileincome (loss) from discontinued      operations to cash used fordiscontinued operations                                                    |       |       | (3,389     | )                          |            | (8,227                         | )          |                                        | (4,244     | )                                         |            | — |  |  | (15,860 | ) |
|                                                                                                                                                                                                  |            |            |            |                            |            |                                |            |                                        |            |                                           |            |
| Net cash used fordiscontinued operations                                                                                                                                                         |       |       | (3,389     | )                          |            | (9,192                         | )          |                                        | (3,435     | )                                         |            | — |  |  | (16,016 | ) |
|                                                                                                                                                                                                  |            |            |            |                            |            |                                |            |                                        |            |                                           |            |
| Net cash provided by (usedfor) operating activities                                                                                                                                              |       |       | 35,158     |                            |            | (8,610                         | )          |                                        | (10,470    | )                                         |            | 365 |  |  | 16,443 |  |
|                                                                                                                                                                                                  |            |            |            |                            |            |                                |            |                                        |            |                                           |            |
| **Cash Flows fromInvesting Activities:**                                                                                                                                                         |       |            |            |                            |            |                                |            |                                        |            |                                           |            |  |  |  |  |  |
| Capitalexpenditures                                                                                                                                                                              |       |            | (3,826     | )                          |            | (1,604                         | )          |                                        | (31        | )                                         |            | — |  |  | (5,461 | ) |
| Otherinvestments                                                                                                                                                                                 |       |            | (93        | )                          |            | —                        |            |                                        | —    |                                           |            | — |  |  | (93 | ) |
| Proceeds (payments) onintercompany investments, advances       and liabilities                                                                                     |            |            | (22,494    | )                          |            | 10,755                         |            |                                        | 12,104     |                                           |            | (365 | ) |  | — |  |
| Other                                                                                                                                                                                            |       |       | 288        |                            |            | (129                           | )          |                                        | 7          |                                           |            | — |  |  | 166 |  |
|                                                                                                                                                                                                  |            |            |            |                            |            |                                |            |                                        |            |                                           |            |
| Net cash provided by (usedfor) investing activities                                                                                                                                              |            |            | (26,125    | )                          |            | 9,022                          |            |                                        | 12,080     |                                           |            | (365 | ) |  | (5,388 | ) |
|                                                                                                                                                                                                  |            |            |            |                            |            |                                |            |                                        |            |                                           |            |
| **Cash Flows fromFinancing Activities:**                                                                                                                                                         |            |            |            |                            |            |                                |            |                                        |            |                                           |            |  |  |  |  |  |
| Extinguishment of HIGHTIDES and other debt reductions                                                                                                                                            |            |            | (250,054   | )                          |            | (375                           | )          |                                        | —    |                                           |            | — |  |  | (250,429 | ) |
| Issuance of seniorsubordinated notes and other debt additions                                                                                                                                    |            |            | 239,125    |                            |            | —                        |            |                                        | —    |                                           |            | — |  |  | 239,125 |  |
| Deferred debt issuancecosts                                                                                                                                                                      |            |            | (7,727     | )                          |            | —                        |            |                                        | —    |                                           |            | — |  |  | (7,727 | ) |
| Debt extinguishmentcosts                                                                                                                                                                         |            |            | (4,352     | )                          |            | —                        |            |                                        | —    |                                           |            | — |  |  | (4,352 | ) |
| Decrease in restrictedcash                                                                                                                                                                       |            |            | 394        |                            |            | —                        |            |                                        | —    |                                           |            | — |  |  | 394 |  |
| Proceeds from stockissuances                                                                                                                                                                     |            |            | 1,935      |                            |            | —                        |            |                                        | —    |                                           |            | — |  |  | 1,935 |  |
| Dividends paid                                                                                                                                                                                   |            |            | (344       | )                          |            | —                        |            |                                        | —    |                                           |            | — |  |  | (344 | ) |
| Other                                                                                                                                                                                            |       |       | 3          |                            |            | (97                            | )          |                                        | (28        | )                                         |            | — |  |  | (122 | ) |
|                                                                                                                                                                                                  |            |            |            |                            |            |                                |            |                                        |            |                                           |            |
| Net cash used forfinancing activities                                                                                                                                                            |       |       | (21,020    | )                          |            | (472                           | )          |                                        | (28        | )                                         |            | — |  |  | (21,520 | ) |
|                                                                                                                                                                                                  |            |            |            |                            |            |                                |            |                                        |            |                                           |            |
| Effect of exchange ratechanges on cash                                                                                                                                                           |       |       | —    |                            |            | —                        |            |                                        | (30        | )                                         |            | — |  |  | (30 | ) |
|                                                                                                                                                                                                  |            |            |            |                            |            |                                |            |                                        |            |                                           |            |
| Net increase (decrease) incash and cash equivalents                                                                                                                                              |       |            | (11,987    | )                          |            | (60                            | )          |                                        | 1,552      |                                           |            | — |  |  | (10,495 | ) |
| Cash and cash equivalentsat beginning of year                                                                                                                                                    |       |       | 31,997     |                            |            | 2,186                          |            |                                        | (60        | )                                         |            | — |  |  | 34,123 |  |
|                                                                                                                                                                                                  |       |            |            |                            |            |                                |            |                                        |            |                                           |            |
| Cash and cash equivalentsat end of period                                                                                                                                                        |       | $          | 20,010     |                            | $          | 2,126                          |            | $                                      | 1,492      |                                           | $          | — |  | $ | 23,628 |  |
|                                                                                                                                                                                                  |       |            |            |                            |            |                                |            |                                        |            |                                           |            |

**Condensed Consolidating Parent Company, Guarantorand Non-guarantorStatement of Cash FlowsFor the Six Months Ended June 30, 2002(Unaudited)(In thousands)**

|                                                                                                                                                       | ** ** | **Parent** | ** ** | **Guarantor Subsidiaries** | ** ** | **Non-guarantor Subsidiaries** | ** ** | **Reclassifications and Eliminations** | ** ** | **TheTitan Corporation and Subsidiaries** | ** ** |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------|------------|----------------------------|------------|--------------------------------|------------|----------------------------------------|------------|-------------------------------------------|------------|
|                                                                                                                                                       |            | ****       |            | ****                       |            | ****                           |            | ****                                   |            | ****                                      |            |
| **Cash Flows fromOperating Activities:**                                                                                                              |       |            |            |                            |            |                                |            |                                        |            |                                           |            |  |  |  |  |  |
| Income from continuingoperations                                                                                                                      |       | $          | 3,680      |                            | $          | 8,956                          |            | $                                      | 267        |                                           | $          | (236 | ) | $ | 12,667 |  |
| Adjustments to reconcileincome from continuing operations       to net cash provided by (usedfor) continuing operations |       |            | 44,924     |                            |            | (15,035                        | )          |                                        | (8,874     | )                                         |            | 236 |  |  | 21,251 |  |
|                                                                                                                                                       |       |            |            |                            |            |                                |            |                                        |            |                                           |            |
| Net cash provided by (usedfor) continuing operations                                                                                                  |       |       | 48,604     |                            |            | (6,079                         | )          |                                        | (8,607     | )                                         |            | — |  |  | 33,918 |  |
|                                                                                                                                                       |       |            |            |                            |            |                                |            |                                        |            |                                           |            |
| Loss from discontinued operations                                                                                                                     |       |       | (10,406    | )                          |            | (5,234                         | )          |                                        | (2,307     | )                                         |            | — |  |  | (17,947 | ) |
| Adjustments to reconcileloss from discontinued operations       to cash provided by (used for)discontinued operations   |       |       | 27,607     |                            |            | (51,232                        | )          |                                        | (23,471    | )                                         |            | — |  |  | (47,096 | ) |
|                                                                                                                                                       |            |            |            |                            |            |                                |            |                                        |            |                                           |            |
| Net cash provided by (usedfor) discontinued operations                                                                                                |       |       | 17,201     |                            |            | (56,466                        | )          |                                        | (25,778    | )                                         |            | — |  |  | (65,043 | ) |
|                                                                                                                                                       |            |            |            |                            |            |                                |            |                                        |            |                                           |            |
| Net cash provided by (usedfor) operating activities                                                                                                   |       |       | 65,805     |                            |            | (62,545                        | )          |                                        | (34,385    | )                                         |            | — |  |  | (31,125 | ) |
|                                                                                                                                                       |            |            |            |                            |            |                                |            |                                        |            |                                           |            |
| **Cash Flows fromInvesting Activities:**                                                                                                              |       |            |            |                            |            |                                |            |                                        |            |                                           |            |  |  |  |  |  |
| Capitalexpenditures                                                                                                                                   |       |            | (5,882     | )                          |            | (3,792                         | )          |                                        | (797       | )                                         |            | — |  |  | (10,471 | ) |
| Acquisition of businesses,net of cash acquired                                                                                                        |            |            | 29,735     |                            |            | 172                            |            |                                        | —    |                                           |            | — |  |  | 29,907 |  |
| Proceeds from sales ofinvestments and business                                                                                                        |            |            | 1,500      |                            |            | —                        |            |                                        | —    |                                           |            | — |  |  | 1,500 |  |
| Otherinvestments                                                                                                                                      |       |            | (3,998     | )                          |            | —                        |            |                                        | —    |                                           |            | — |  |  | (3,998 | ) |
| Proceeds (payments) onintercompany investments, advances       and liabilities                                          |            |            | (81,059    | )                          |            | 48,546                         |            |                                        | 32,513     |                                           |            | — |  |  | — |  |
| Other                                                                                                                                                 |       |       | 2,358      |                            |            | 58                             |            |                                        | (162       | )                                         |            | — |  |  | 2,254 |  |
|                                                                                                                                                       |            |            |            |                            |            |                                |            |                                        |            |                                           |            |
| Net cash provided by (usedfor) investing activities                                                                                                   |            |            | (57,346    | )                          |            | 44,984                         |            |                                        | 31,554     |                                           |            | — |  |  | 19,192 |  |
|                                                                                                                                                       |            |            |            |                            |            |                                |            |                                        |            |                                           |            |
| **Cash Flows fromFinancing Activities:**                                                                                                              |            |            |            |                            |            |                                |            |                                        |            |                                           |            |  |  |  |  |  |
| Retirements ofdebt                                                                                                                                    |            |            | (3,203     | )                          |            | (845                           | )          |                                        | —    |                                           |            | — |  |  | (4,048 | ) |
| Additions todebt                                                                                                                                      |            |            | 20,000     |                            |            | —                        |            |                                        | —    |                                           |            | — |  |  | 20,000 |  |
| Issuance of stock insubsidiaries                                                                                                                      |            |            | 286        |                            |            | —                        |            |                                        | —    |                                           |            | — |  |  | 286 |  |
| Deferred debt issuancecosts                                                                                                                           |            |            | (8,706     | )                          |            | —                        |            |                                        | —    |                                           |            | — |  |  | (8,706 | ) |
| Increase in restrictedcash                                                                                                                            |            |            | (1,104     | )                          |            | —                        |            |                                        | —    |                                           |            | — |  |  | (1,104 | ) |
| Proceeds from stockissuances                                                                                                                          |            |            | 7,061      |                            |            | —                        |            |                                        | —    |                                           |            | — |  |  | 7,061 |  |
| Dividends paid                                                                                                                                        |            |            | (345       | )                          |            | —                        |            |                                        | —    |                                           |            | — |  |  | (345 | ) |
| Other                                                                                                                                                 |       |       | (24        | )                          |            | (883                           | )          |                                        | 46         |                                           |            | — |  |  | (861 | ) |
|                                                                                                                                                       |            |            |            |                            |            |                                |            |                                        |            |                                           |            |
| Net cash provided by (usedfor) financing activities                                                                                                   |       |       | 13,965     |                            |            | (1,728                         | )          |                                        | 46         |                                           |            | — |  |  | 12,283 |  |
|                                                                                                                                                       |            |            |            |                            |            |                                |            |                                        |            |                                           |            |
| Effect of exchange ratechanges on cash                                                                                                                |       |       | —    |                            |            | —                        |            |                                        | (4         | )                                         |            | — |  |  | (4 | ) |
|                                                                                                                                                       |            |            |            |                            |            |                                |            |                                        |            |                                           |            |
| Net increase (decrease) incash and cash equivalents                                                                                                   |       |            | 22,424     |                            |            | (19,289                        | )          |                                        | (2,789     | )                                         |            | — |  |  | 346 |  |
| Cash and cash equivalentsat beginning of year                                                                                                         |       |       | 14,462     |                            |            | 4,563                          |            |                                        | (404       | )                                         |            | — |  |  | 18,621 |  |
|                                                                                                                                                       |       |            |            |                            |            |                                |            |                                        |            |                                           |            |
| Cash and cash equivalentsat end of period                                                                                                             |       | $          | 36,886     |                            | $          | (14,726                        | )          | $                                      | (3,193     | )                                         | $          | — |  | $ | 18,967 |  |
|                                                                                                                                                       |       |            |            |                            |            |                                |            |                                        |            |                                           |            |

**THETITAN CORPORATION**

**Item 2.    Management’sDiscussion and Analysis of Financial Condition and Results ofOperations**

**(Dollaramounts in thousands, except share and per share data, or asotherwise noted)**

**Overview andOutlook**

      We are aleading national security solutions provider for the Department ofDefense, the Department of Homeland Security, intelligence andother U.S. government organizations and agencies.  We focus onthe following four growing government market areas: C4ISR (Command,Control, Communications, Computers, Intelligence, Surveillance andReconnaissance), Transformational Programs, Enterprise InformationTechnology, and Homeland Security and the War onTerrorism.

      Our revenueshave grown internally and through our strategy of increasing ourcore competencies and expanding our customer base through acquiringgovernment information technology companies as part of the generaltrend of the defense and government information technology industryconsolidation.

      Our operatingmargins are affected by the mix of contract types (costreimbursement, fixed-price or time and materials) as well as by themix of prime contracts versus subcontracts.  Significantportions of our contracts are time and materials and costreimbursement contracts.  We are reimbursed for labor hours atnegotiated hourly billing rates and other direct expenses undertime and materials contracts and reimbursed for all actual costs,plus a fee, or profit, under cost reimbursement contracts. The financial risks under these contracts generally are lower thanthose associated with other types of contracts, and margins arealso typically lower than those on fixed-price contracts.  TheU.S. government also has awarded us fixed-price contracts. Such contracts carry higher financial risks because we must deliverthe products, systems or contracted services at a cost below thefixed price in order to earn a profit.  Of our total revenuesfrom our government business in 2002, approximately 43% weregenerated by time and materials contracts, approximately 36% weregenerated by cost reimbursement contracts and approximately 21%were generated by fixed-price contracts.

## **RESULTS OFOPERATIONS**

      As a result of Titan’s decision in the third quarterof 2002 to exit substantially all of its remaining commercialbusinesses and because most of Titan’s remaining operationsare its government businesses, Titan is no longer reporting theresults of operations by segments in accordance with SFASNo. 131, “Disclosures about Segments of an Enterpriseand Related Information.”  Also, as a result of thesedecisions, the Company merged its Titan Systems Corporationsubsidiary, which encompassed its primary government businesses,into The Titan Corporation on September 25,2002. 

### ***Revenues***

***ThreeMonths Ended June 30, 2002 and 2003:***

      Secondquarter consolidated revenues increased from $345.6 million in2002 to $437.7 million in 2003, a 27% increase. Increased revenues in several contracts with the intelligencecommunity for technical and systems integration servicescontributed to the revenue growth, most notably the linguistscontract with the Army’s Intelligence and Security Command,which provided increased revenues of approximately$24.5 million, and the Enterprise Architecture and DecisionSupport contract with the National Security Agency, whichcontributed increased revenues of approximately$4.9 million.  Continued growth under a contract toprovide enterprise information technology support for the SpecialForces Operations Command contributed approximately$11.5 million of increased revenues.  In addition,revenues increased due to increased demand for homeland securitycontinuity of operations planning, emergency response training, andwork for the Air Force Electronic Systems Center on a variety oftechnical, engineering, systems integration and acquisition supportcontracts.  Revenues from the Navy also increased in thesecond quarter due to work on development contracts for the Officeof Naval Research, and increased work for the Naval Air SystemsCommand for systems integration, systems engineering and programsupport services.  Also, the acquisition of Wave Science, Inc.in the fourth quarter of 2002 contributed approximately$5.2 million to the revenue increase in the second quarter of2003.  Aside from the linguist and enterprise informationtechnology contracts mentioned above, which contributed 6.2% and3.4% of total revenue, respectively, no single contract accountedfor more than 2% of revenue in the second quarter of2003. 

***Six Months ended June 30, 2002 and2003:***

      Consolidatedrevenues increased from $660.0 million in 2002 to$815.6 million in 2003, a 24% increase.  Revenuesincreased due to the increased work on the linguists contract withthe Army’s Intelligence and Security Command, whichcontributed approximately $36.5 million, and due to thecontract to provide enterprise information technology support forthe Special Forces Operations Command which contributedapproximately $24.1 million,  Revenues from the Navy alsoincreased in the six months due to work on development contractsfor the Office of Naval Research.  None of the other contractscontributing to the revenue increase provided more than 2% ofrevenue in the six months ended June 30, 2003.  Theacquisitions of Wave Science, Inc., in the fourth quarter of 2002and Jaycor, Inc. late in the first quarter of 2002 contributed anaggregate of approximately $21.4 million to the total revenueincrease.

***Selling, General andAdministrative***

***ThreeMonths Ended June 30, 2002 and 2003:***

      Our SG&Aexpenses increased from $40.4 million in the second quarter of2002, to $41.3 million in the second quarter of 2003, a 2.2%increase.  Included in SG&A was amortization of purchasedintangibles of $1.3 million and $1.1 million,respectively, and deferred compensation amortization expense of$1.4 million and $2.8 million, respectively, in thequarters ended June 30, 2002 and 2003.  The increase in thedeferred compensation in the quarter ended June 30, 2003 resultedfrom the merger of Titan’s defense subsidiary, Titan Systems,into Titan, which occurred on September 25, 2002, and resultedin the exchange of all outstanding Titan Systems stock options forTitan Corporation stock options.  Excluding the amortizationof purchased intangibles and deferred compensation, SG&Adecreased as a percentage of revenues from 10.9% of revenues in thequarter ended June 30, 2002 to 8.5% in the quarter ended June30, 2003.  The decrease is primarily attributable to overallincreased economies of scale with higher revenues, as well as, costreductions and facilities consolidation activities executed in2002. 

***SixMonths ended June 30, 2002 and 2003:***

      Our SG&Aexpenses increased from $75.1 million in the six months endedJune 30, 2002, to $80.8 million in the six months ended June30, 2003, a 7.6% increase.  The increase is primarily a resultof the increased revenues discussed above and increased deferredcompensation amortization in 2003.  Included in SG&A wasamortization of purchased intangibles of $2.7 million and$2.3 million, respectively, and deferred compensationamortization expense of $2.4 million and $5.7 million,respectively, in the six months ended June 30, 2002 and 2003. The increase in the deferred compensation in the six months endedJune 30, 2003 resulted from the merger of Titan’s defensesubsidiary, Titan Systems, into Titan, which occurred onSeptember 25, 2002, and resulted in the exchange of alloutstanding Titan Systems stock options for Titan Corporation stockoptions.  Excluding the amortization of purchased intangiblesand deferred compensation, SG&A decreased as a percentage ofrevenues from 10.6% of revenues in the six months ended June 30,2002 to 8.9% in the six months ended June 30, 2003.  Thedecrease in 2003 is primarily attributable to overall increasedeconomies of scale with higher revenues, as well as cost reductionactivities.

**Research andDevelopment**

      Our R&Dexpenses stayed fairly constant year-to-year, going from$2.3 million in the second quarter of 2002 to$2.4 million in the second quarter of 2003 and from$4.8 million in the six months of 2002 to $4.7 million inthe six months ended June 30, 2003.  As a percentage ofrevenues, R&D expenses remained at less than 1% in allperiods.

      R&Dexpenses in the second quarter and first six months of 2003 wereincurred primarily on the Company’s development of a low costphased array radar system, satellite communications modems and theHF Manpack and portable radios.

**Debt ExtinguishmentCosts**

      In the threemonths and six months ended June 30, 2003, the Company recordedapproximately $12.4 millionin chargesrelated to the extinguishment of the HIGH TIDES, comprised of thewrite-off of $8.1 million of remaining deferred financingcosts of HIGH TIDES, a call premium of $3.6 million to redeemthe HIGH TIDES, and approximately $0.7 million of interestduring the call period.  All debt extinguishment charges wererecorded as a charge to income from continuingoperations.

      Debtextinguishment charges of $9.4 million in the three and sixmonths ended June 30, 2002, resulted from the Company’sextinguishment of its prior credit facility of $425 millionwith Credit Suisse First Boston.

### ***Exit andRestructuring Charges and Other***

      Exit andrestructuring charges and other of $1.8 million and$3.3 million in the three and six months ended June 30, 2002,were related to the shut-down of Cayenta’s headquartersoffice and network operations center. 

## **OperatingProfit**

*      *Our operating profit increased from operating profitof $24.3 million in the three months ended June 30, 2002 tooperating profit of $28.8 million in the three months endedJune 30, 2003.  Included in the operating results for thethree months ended June 30, 2002 is deferred compensationamortization expense of $1.4 million, amortization ofpurchased intangibles of $1.3 million and exit andrestructuring charges and other of $1.8 million. Included in the operating results for the three months ended June30, 2003 is deferred compensation amortization expense of$2.8 million and amortization of purchased intangibles of$1.1 million.  Excluding the impact of these charges,operating income increased from $28.9 million in the secondquarter of 2002 to $32.7 million in the second quarter of2003. The year over year increase inoverall operating profit was primarily due to the increase inrevenues discussed above, offset in part by the Company’snon-core commercial electron beam medical products sterilizationand mail sanitation business, which had particularly strong resultsin the second quarter of 2002 related to our contract with theUnited States Postal Service to deliver mail sanitationsystems.  Operating margin in the second quarter of 2003 wasadversely impacted by a $0.4 million loss in this business,compared to operating income of approximately $5.5 million inthis business in the second quarter of 2002.

*      *Our operating profit increased from an operatingprofit of $46.6 million in the six months ended June 30, 2002to operating profit of $49.5 million in the six months endedJune 30, 2003.  Included in the operating results for the sixmonths ended June 30, 2002 is deferred compensation amortizationexpense of $2.4 million, amortization of purchased intangiblesof $2.7 million and exit and restructuring charges and otherof $3.3 million.  Included in the operating results forthe six months ended June 30, 2003 is deferred compensationamortization expense of $5.7 million and amortization ofpurchased intangibles of $2.3 million.  Excluding theimpact of these charges, operating income increased from$55.0 million in the six months of 2002 to $57.4 millionin the second quarter of 2003. The yearover year increase in overall operating profit was primarilyrelated to the increase in revenues discussed above, offset in partby the Company’s non-core commercial electron beam medicalproducts sterilization and mail sanitation business, which hadparticularly strong results in the six months of 2002 related toour contract with the United States Postal Service to deliver mailsanitation systems.  Operating margin in the six months endedJune 30, 2003 was adversely impacted by a $1.4 million loss inthis business, which experienced higher than expected costs indelivering medical sterilization systems to two customers, comparedto operating income in this business of $9.7 million in thesix months ended June 30, 2002.

***Interest Expense,Net***

      Our netinterest expense increased from $7.6 million in the secondquarter of 2002, to $7.9 million in the second quarter of2003, due primarily to the higher interest rate on theCompany’s senior subordinated notes issued May 15, 2003,compared to the HIGH TIDES securities which the notesreplaced.  Borrowings from our senior credit facility,excluding working capital lines from acquired companies, averaged$341.6 million for the three months ended June 30, 2002, at aweighted average rate of 5.3%, compared to $363.2 million inthe three months ended June 30, 2003, at weighted average interestrates of 4.6%.

      Our netinterest expense decreased from $15.8 million in the sixmonths ended June 30, 2002, to $15.4 million in the six monthsended June 30, 2003.  Net interest expense decreased primarilyas a result of reduced effective interest rates on our creditfacility as well as an increase of interest income in 2003,partially offset by increased interest expense due to the higherinterest rate on the Company’s senior subordinated notesissued May 15, 2003, compared to the HIGH TIDES securities whichthe notes replaced.  The increase in interest income wasprimarily related to interest income due from SureBeam on theoutstanding balance of its credit facility.** ** Borrowingsfrom our senior credit facility, excluding working capital linesfrom acquired companies, averaged $349.7 million for the sixmonths ended June 30, 2002, at a weighted average rate of 5.2%,compared to $358.8 million in the six months ended June 30,2003, at weighted average interest rates of 4.7%.

***IncomeTaxes***

      Consolidatedincome taxes reflect effective rates of 35% and 41% in the quarterand six months ended June 30, 2002, compared to 40% in the quarterand six months ended June 30, 2003. The rates in the quarter and six months of2002 and 2003 reflect the expected provision rates for each of thefull fiscal years at the end of each of those periods.  Theexpected provision rates are impacted by any changes in the annualestimated book income and the estimated tax deductibility ofcertain operating expenses.

***Income (Loss) FromDiscontinued Operations***

      In thequarter ended June 30, 2002, loss from discontinued operations was$16.5 million, net of a tax benefit of$5.0 million.  The net loss was related to net operatinglosses of $9.9 million, $2.8 million, $2.2 millionand $1.6 million in the Company’s SureBeam, TitanWireless, LinCom Wireless, and commercial information technologybusinesses, respectively.

      In thequarter ended June 30, 2003, income from discontinued operationswas $0.8 million, net of a tax benefit of$2.6 million.  The total tax benefit included a$2.3 million benefit recorded to reflect the estimated taximpact of the carrying value of certain assets related to theCompany’s Cayenta business, which were previously reported aspart of the Company’s Titan Technologies segment.  Thenet income included $0.2 million in net operating lossesrelated to the exit of Titan Wireless, and $1.0 million in netoperating income from the disposal or wind-down of theCompany’s commercial information technology business and theLinCom Wireless business which were discontinued in the first andthird quarters of 2002, inclusive of the $2.3 million benefitrelated to the Company’s Cayenta business notedabove.

      In the sixmonths ended June 30, 2002, loss from discontinued operations was$17.9 million, net of a tax benefit of$6.5 million.  The net loss was related to net operatinglosses of $9.9 million, $4.1 million, $3.4 millionand $0.5 million in the Company’s SureBeam, LinComWireless, Titan Wireless, and commercial information technologybusinesses, respectively.

      In the sixmonths ended June 30, 2003, loss from discontinued operations was$0.1 million, net of a tax benefit of $3.1 million, whichincluded a tax credit of $2.3 million related to theCompany’s Cayenta business noted above.  The net lossincluded $0.5 million in net operating losses related to theexit of the Company’s international telecommunicationsbusiness, Titan Wireless, and $0.4 million in net operatingincome from the disposal or wind-down of the Company’scommercial information technology business and the LinCom Wirelessbusiness which were discontinued in the first and third quarters of2002, which includes a tax benefit of$3.1 million. 

***Net Income(Loss)***

      In thequarter ended June 30, 2002, we reported a net loss of$11.8 million, compared to net income of $5.9 million inthe quarter ended June 30, 2003.  Loss from discontinuedoperations was $16.5 million in the quarter ended June 30,2002, compared to income of $0.8 million in the quarter endedJune 30, 2003.  Included in the results for the quarters endedJune 30, 2002 and 2003 are debt extinguishment charges of$9.4 million and $12.4 million, respectively.

      In the sixmonth period ended June 30, 2002, we reported a net loss of$45.4 million, compared to net income of $12.9 million inthe six month period ended June 30, 2003.  Loss fromdiscontinued operations was $17.9 million in the quarter endedJune 30, 2002, compared to a loss of $0.2 million in thequarter ended June 30, 2003.  Included in the results for thesix month periods ended June 30, 2002 and 2003 are debtextinguishment charges of $9.4 million and $12.4 million,respectively.  Included in the net loss for the six monthsended June 30, 2002, is a charge of $40.1 million for theCompany’s adoption of SFAS No. 142, all related todiscontinued operations, which is reported as a cumulative effectof a change in accounting principle.

## **LIQUIDITY AND CAPITALRESOURCES**

      The Companygenerated cash of approximately $32.5 million from ourcontinuing operations during the six months ended June 30, 2003,primarily resulting from our core government business, net of anincrease in receivable balances of approximately$12.9 million.  The increase in accounts receivablebalances primarily reflects the growth in revenues over the firstsix months.  Our investing activities used net cash ofapproximately $5.4 million, primarily for capitalexpenditures.  Financing activities used $21.5 million,primarily from the increase in our senior credit facility used forthe redemption of the HIGH TIDES and the deferred debt issuancecosts related to the senior subordinated notes.  Proceeds fromstock issuances, primarily the exercise of stock options, provided$1.9 million.

      At June 30,2003, total borrowings under our senior credit facility were$387.4 million at a weighted average interest rate of4.50%.  Commitments under letters of credit were$12.2 million at June 30, 2003, which reduces availability ofsenior credit facility, resulting in $82.8 million ofborrowing availability on the senior credit facility at June 30,2003.  Of the total borrowings, $3.5 million wasshort-term.  At June 30, 2003, the Company was in compliancewith all financial covenants. 

**Senior SubordinatedNotes**

      On May 15,2003, the Company sold $200 million of 8% senior subordinated notesdue May 15, 2011 in a private placement (the“Notes”).  The Company used the net proceeds fromthe issuance of the 8% senior subordinated Notes, plus borrowingsof $50 million made under our revolving credit facility andadditional cash on hand, to redeem all of the $250 million ofthe then-outstanding 5 3/4% HIGH TIDES convertible preferredsecurities.  The redemption of HIGH TIDES occurred on June 4,2003.  In what it considered favorable corporate bond marketconditions, the Company made the decision to refinance the HIGHTIDES to eliminate the interest rate risk and potential dilution tostockholders associated with the mandatory remarketing feature ofthe HIGH TIDES.

      The Companywill pay interest on the Notes semi-annually in arrears onMay 15 and November 15 at the rate of 8% per annum. The first scheduled interest payment date for the outstanding Notesis November 15, 2003.  The Company may redeem the Notes,in whole or in part, on or after May 15, 2007 at the followingredemption prices, plus accrued and unpaid interest and liquidateddamages, if any:

| **Year**           |        | **Percentage** |   |
|--------------------|--------|----------------|---|
|                    |        |                |   |
| 2007               |   | 104.0          | % |
| 2008               |   | 102.0          | % |
| 2009 andthereafter |   | 100.0          | % |

In addition, on or priorto May 15, 2006, the Company may redeem up to 35% of theaggregate principal amount of the Notes with the net proceeds ofcertain equity offerings at a redemption price of 108% of principaltogether with accrued and unpaid interest.  The Notes areunsecured and rank or will rank equally with our current or futuresenior subordinated indebtedness.  Each of the Company’sdomestic subsidiaries other than Cayenta guarantees theNotes.  The guarantees are unsecured and rank equally with theguarantors' senior subordinated indebtedness.  The Notes andthe guarantees are junior to all of the Company’s and theguarantors' senior indebtedness and senior to all of theCompany’s and the guarantors' subordinatedindebtedness.  Upon a change of control, the Company will berequired to make an offer to purchase the Notes at a price equal to101% of their principal amount plus accrued and unpaid interest andliquidated damages, if any, to the date ofrepurchase. 

      The Company incurred approximately$12.4 million in charges related to the extinguishment of theHIGH TIDES, comprised of the write-off of $8.1 million ofremaining deferred debt issuance costs of HIGH TIDES, a callpremium of $3.6 million to redeem the HIGH TIDES, andapproximately $0.7 million of interest during the callperiod.  All extinguishment charges were recorded in thesecond quarter of 2003 as a charge to income from continuingoperations.  Following the redemption of the HIGH TIDES,availability on the working capital line was reduced by$50 million for the borrowings on the Company’srevolving line of credit. 

      The Companyused $16.0 million for discontinued operations in the firstsix months of 2003 due primarily to payments for vendor and leaseobligations, infusion of working capital, exit costs, and foroperating losses.  In addition, the Company incurred$2.0 million for a deferred payment related to a prior yearacquisition (see Note 6).

      Costs andexpenses of $8.7 million related to the senior credit facilityhave been deferred and included in Other Assets at June 30, 2003and will be amortized over the remaining term of the senior creditfacility.  Costs and expenses of $5.2 million related tothe issuance of the Notes have also been deferred and included inOther Assets at June 30, 2003, and will be amortized over the termof the Notes.

      Related tothe Company’s contract with the national telephone company ofBenin (the “OPT”), Titan has a $67.2 million grossreceivable due from the OPT, which is reflected in Current Assetsof Discontinued Operations as of June 30, 2003.  In addition,approximately $35.5 million was drawn on the non-recourse loanwith the Africa Merchant Bank, which has been reflected inNon-Current Liabilities of Discontinued Operations in theaccompanying consolidated balance sheet.  The$35.5 million drawn on the facility reflects the amount thathas been funded by the Africa Merchant Bank to cover subcontractcosts.  As of June 30, 2003, the carrying value, net ofnon-recourse debt, due on this contract was approximately$31.7 million.  During 2002, approximately$2.4 million was collected on the Company’s receivablefrom the OPT, and approximately $4.0 million has beencollected in the six months ended June 30, 2003.  During thesecond quarter and six months of 2003, there was approximately$5.0 million in payments made on the non-recourse debt fromcash generated from the OPT project.

      Titan isendeavoring to divest discontinued businesses through stock andasset sales, and is currently in negotiations with a number ofpotential buyers, including buyers interested in GlobalNet. In the event that Titan is unsuccessful in its endeavors to sellGlobalNet, Titan may incur a net cash outlay of approximately$8.5 million, the net liability balance of GlobalNet, as wellas potential unforeseen liabilities to shut down thebusiness.  Titan may also incur unforeseen liabilities if itdecides to shut down GlobalNet.

      The Companyperiodically re-evaluates the criteria for businesses held-for-saleunder SFAS No. 144, and if such criteria are no longer met, theCompany would be required to reclassify the operation and assetsand liabilities of non-qualifying businesses into continuingoperations. 

      There are noTitan guarantees of debt, either directly or indirectly, associatedwith Ivoire Telecom or Sakon or any other unconsolidatedsubsidiaries other than approximately $1.4 million ofequipment financing.

      TheCompany’s $50 million senior secured revolving loancommitment to SureBeam provides for borrowings up to$12.5 million per quarter beginning in the fourth quarter of2002 through the fourth quarter of 2003, subject to the$50 million limitation on borrowing.  The amountavailable for borrowing in the second, third and fourth quarters of2003 is based upon SureBeam’s earnings before interest,taxes, depreciation and amortization (EBITDA) for the prior quarteras a percentage of the EBITDA target in its financial plansubmitted to Titan.  Our aggregate levelof indebtedness, and our debt service requirements, may increase tothe extent we loan additional funds to SureBeam under the creditfacility. SureBeam is obligated to make quarterly principalpayments on the credit facility as follows:  13.75% of theoutstanding principal balance as of December 31, 2003 during eachquarter in 2004; 25% of the outstanding principal balance as ofDecember 31, 2004 during each quarter in 2005; and all remainingprincipal by December 31, 2005.  In addition, with someexceptions, including as described below in connection with ourrecent amendment to the credit agreement, SureBeam is obligated touse net proceeds from the sale of assets and its securities torepay amounts advanced under this facility.  In March 2003,Titan and SureBeam entered into an agreement amending the creditagreement.  That amendment waived, subject to certainconditions, SureBeam’s obligation to use net proceeds fromthe sale of up to $25 million of its equity securities during theperiod from March 2003 through September 2004 to make mandatorypayments under the credit agreement.  In connection therewith,SureBeam agreed to provide for certain change orders and thefurnishing of maintenance services under an Equipment ServicesAgreement between us and SureBeam executed in February 2002. Interest is payable monthly beginning in January 2003. As of June 30, 2003, SureBeam had borrowed $25 million on thisfacility.  On February 3, 2003, SureBeam filed a Form 8-K withthe Securities and Exchange Commission wherein SureBeam stated thatthey do not anticipate borrowing additional amounts on the creditfacility during 2003 or during the remaining period that the creditfacility is outstanding.  Under the credit agreement, thereare no funds available for borrowing during the third quarter of2003, as SureBeam has not met the requisite  financialcovenants required for further advances under the creditagreement.

      In addition,Titan has guaranteed certain lease obligations of SureBeamand SureBeam is obligated toreimburse us for any payments we make under these guarantees. Any guarantee payments we make reduce amounts available for futureborrowing under the credit agreement.  Some of the guaranteedleases have longer terms than the credit facility.  If Titanremains a guarantor at the maturity date for the credit facility,then SureBeam will enter into a reimbursement agreement with Titancovering the outstanding guarantees.  The aggregate amount of the leaseobligations Titan has guaranteed as of June 30, 2003 isapproximately $22.7 million.  The leases extend throughperiods ending in 2020.  In relation to SureBeam’sstrategic alliance with Hawaii Pride, Titan has guaranteed up tothe greater of SureBeam’s equity interest in Hawaii Pride(which is currently zero), or 19.9% of Hawaii Pride’s $6.8million, 15-year loan from its lender, Web Bank.  As of June30, 2003, Titan has guaranteed approximately $1.2 million, or19.9% of the current loan balance of $5.9 million.  Inthe event Hawaii Pride defaults on the loan, Titan may be obligatedto cover any defaults on the entire outstanding balance of theloan. 

      Titan andSureBeam have entered into an exclusive contract for the purchaseand sale of electronic beam accelerators through December 31, 2003unless SureBeam does not offer competitive pricing.

      Our strategicgoals include the pay down of indebtedness, continued funding ofcapital expenditures and the funding of potential strategicacquisitions.  We plan to finance these requirements from acombination of sources, which include cash generation from our corebusinesses, our credit facility and potential cash generated fromthe disposal of discontinued businesses.  Management believesthat the combination of our existing cash, amounts available underour credit facility and cash flow expected to be generated from ouroperations will be sufficient to fund planned investments andworking capital requirements for at least the next twelvemonths.  However, we could elect, or we could be required, toraise additional funds during that period and we may need to raiseadditional capital in the future.  Additional capital may notbe available at all, or may not be available on terms favorable tous.  Any additional issuance of equity or equity-linkedsecurities may result in substantial dilution to ourstockholders.  Management is continually monitoring andreevaluating its level of investment in all of its operations andthe financing sources available to achieve our goals.

**Critical AccountingPolicies**

*Use ofEstimates*

      Thepreparation of financial statements in conformity with accountingprinciples generally accepted in the United States requiresmanagement to make estimates and assumptions that affect thereported amounts of assets and liabilities and disclosures ofcontingent assets and liabilities at the date of the financialstatements and the reported amounts of revenues and expenses duringthe reporting period.  Actual results could differ from thoseestimates.  Specifically, management must make estimates inthe following areas:

      *Allowancefor doubtful accounts.*  We provide a reserve againstour receivables for estimated losses that may result from ourcustomers' inability to pay.  These reserves are based onpotential uncollectible accounts, aged receivables, historicallosses, our customers' credit-worthiness, changes in governmentfunding on certain of our contracts and adjustments that may arisefrom audits by the Defense Contract Audit Agency ("DCAA") ofcertain of our government contracts. Should a customer's accountbecome past due, we generally will place a hold on the account anddiscontinue further shipments and/or services provided to thatcustomer, minimizing further risk of loss.  The likelihood ofa material loss to Titan on an uncollectible account in ourdiscontinued operations would be principally dependent on adeterioration in economic and/or political conditions in aparticular country, such as Benin, Africa, in which our receivablesdue from the government controlled phone company of Benin may beimpacted by such an event, or in the Middle East, in which ourreceivables due from a government agency in the Middle East, may beimpacted by political conditions. 

      Our accountsreceivable balances include unbilled receivables which arecomprised of work-in-process which will be billed in accordancewith contract terms and delivery schedules, as well as amountsbillable upon final execution of contracts, contract completion,milestones or completion of rate negotiations.  Payments to usfor performance on certain of our U.S. Government contracts aresubject to audit by the DCAA, and are subject to governmentfunding.  We provide a reserve against our receivables forestimated losses that may result from rate negotiations, auditadjustments, and/or government funding availability.  To theextent that actual adjustments due to rate negotiations, auditadjustments, or government funding availability differ from ourestimates, our provisions for doubtful accounts may beimpacted.  Due to a high degree of diversification in ourgovernment business, where any one contract accounts for no morethan 1.9 percent of our total annual revenues, the likelihood of amaterial loss to Titan on an uncollectible account from thisactivity is not probable.

      *Revenuerecognition.*  We recognize a portion of our revenueusing the percentage-of-completion method, which includes revenuesrecognized as units are delivered, in accordance with Statement ofPosition (SOP) 81-1.  Total estimated costs are based onmanagement's assessment of costs to complete the project based uponevaluation of the level of work achieved and costs expended todate.  To the extent that our estimated costs materiallychange, our revenues recorded under such contracts could materiallybe affected and could have a material adverse effect on ouroperations in the future periods.  In 2002, approximately21.1% of our revenues were generated by fixed-price contracts,which are generally recognized using the percentage-of-completionmethod.  The remaining 78.9% of our revenues in 2002 weregenerated by cost reimbursement contracts and time and materialcontracts, for which percentage-of-completion is not used, andrevenues are generally recognized as work is performed and billedto the customer.

      Titancontracts with its government customers using various cost-typecontracts.  They include cost-plus fixed fee, cost-plus awardfee, cost-plus incentive fee with incentives based upon both costand/or performance, cost-with no fee, and cost sharingcontracts.  Revenues and profits are recognized in accordancewith Accounting Research Bulletin No. 45 and SOP 81‐1. For award and incentive fee type contracts, we recognize theexpected fee to be awarded by the customer at the time such fee canbe reasonably estimated, based on factors such as our prior awardexperience and communications with the customer regarding ourperformance, including any interim performance evaluations renderedby the customer.  Revenues are recognized under fixed pricecontracts based on the percentage-of-completion basis, using thecost-to-cost or units-of-delivery methods.

**Forward LookingInformation: Certain Cautionary Statements: "Safe Harbor" Statementunder the Private Securities Litigation Reform Act of1995:**

      Statementscontained in this Management's Discussion and Analysis of FinancialCondition and Results of Operations and otherwise which are nothistorical facts are forward looking statements within the meaningof Section 27A of the Securities Act of 1933 andSection 21E of the Securities Exchange Act of 1934. Examples of such forward looking statements include ourexpectations regarding our continuing funding for the advancementof our strategic goals, including the intent to pay downindebtedness, acquisitions, the Company’s expectationsregarding the operations of Titan Wireless, that it believes thatit will be able to complete planned exit actions in Titan Wireless,that it will collect remaining receivable balances and sellGlobalNet in Titan Wireless, that the Company will be able to sellor dispose of any assets which are not material to its corebusiness, and management’s belief as to the outcome ofpending litigation or claims and any other expressions of belief,expectation, anticipation, plan, strategies, intention,possibilities or elections, including statements of events orcontingencies that may or could occur or similarstatements.  Actual results may differ materially fromthose stated or implied in the forward looking statements. Further, certain forward looking statements are based uponassumptions of future events which may not prove to beaccurate and are subject to risks and uncertainties that couldcause actual results to differ materially from those set forth orimplied by forward looking statements.  These risks anduncertainties include but are not limited to those referred to inthe Company's Annual Report on Form 10-K for the year endedDecember 31, 2002, including its ability to access the capitalmarkets, dependence on continued funding of U.S. Department ofDefense and federal civilian agency programs, that the Governmentwill fund, continue to make awards or exercise options, and issuetask orders against the potential funding ceiling of contracts,contract termination risks, risks associated with acquiring othercompanies, including integration risks, risks associated withdivesting its discontinued commercial businesses, and other risksdescribed in the Company's Securities and Exchange Commissionfilings.

**Item 4.  Controls andProcedures.**

      Evaluation ofDisclosure Controls and Procedures.

      Under thesupervision and with the participation of our executive management,including our Chief Executive Officer and Chief Financial Officer,we performed an evaluation of the effectiveness and design of ourdisclosure controls and procedures as of the end of the quartercovered by this quarterly report.  Based on that evaluation,our executive management, including our Chief Executive Officer andour Chief Financial Officer, concluded that our disclosure controlsand procedures are effective as of June 30, 2003.

      Ourmanagement, including our chief executive officer and chieffinancial officer, also supervised and participated in anevaluation of any changes in internal controls over financialreporting that occurred during the last fiscal quarter and thathave materially, or are reasonably likely to materially affect, ourinternal controls over financial reporting.  That evaluationdid not identify any such changes to our internal control overfinancial reporting.

**PARTII—OTHER INFORMATIONTHE TITAN CORPORATION**

**Item 1.  LegalProceedings.**

      See Note 7 ofthe Notes to Consolidated Financial Statements.

**Item 4. Submission of Matters to aVote of Security Holders.**

     At the AnnualMeeting of Stockholders held on June 3, 2003, the following matterswere submitted and approved by shareholders:

| 1. |       | Election of Directors. Theholders of proxies solicited by the Board cast the following votes(no other votes were cast): |
|----|--------------------------------|-------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                                                                                                 | Affirmative | Negative/Abstaining |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------|---------------------|
|                                                                                                                                                                                                                                                                                                                      |             |                     |
| Michael B. Alexander                                                 | 60,679,123  | 12,483,408          |
| Edward H. Bersoff,Ph.D.                                                                                                                                                                                                                                                                                              | 60,707,187  | 12,455,344          |
| Joseph F.Caliguiri                                                                                                                                                                                                                                                                                                   | 72,133,220  | 1,029,311           |
| Peter A. Cohen                                                                                                                                                                                                                                                                                                       | 71,741,928  | 1,420,603           |
| Daniel J. Fink                                                                                                                                                                                                                                                                                                       | 71,705,407  | 1,457,124           |
| Susan Golding                                                                                                                                                                                                                                                                                                        | 71,738,268  | 1,424,263           |
| Robert M.Hanisee                                                                                                                                                                                                                                                                                                     | 71,743,889  | 1,418,642           |
| Robert E. LaBlanc                                                                                                                                                                                                                                                                                                    | 72,137,246  | 1,025,285           |
| Gene W. Ray,Ph.D.                                                                                                                                                                                                                                                                                                    | 71,299,965  | 1,862,566           |
| James Roth                                                                                                                                                                                                                                                                                                           | 72,137,210  | 1,025,321           |
| Joseph R. Wright.Jr.                                                                                                                                                                                                                                                                                                 | 72,166,446  | 996,085             |

| 2. |       |   | Ratification of Selectionof KPMG LLP as the Company's Auditors. |
|----|--------------------------------|--------|-----------------------------------------------------------------|

| Affirmative Votes                                                                                         | 71,260,817 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------|
| Negative Votes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 1,608,401  |   |
| Abstaining and brokernon-votes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 293,313    |   |

**Item 6.  Exhibits and Reports on Form8-K.**

| a.                                                              |        | List ofexhibits:                                                                                                           |
|--------------------------------------------------------------------------------|--------------------------------------|----------------------------------------------------------------------------------------------------------------------------|
|                                                                           |
|               | 31.1                                 |                                                                                              | Certification of ChiefExecutive Officer pursuant to Section 302 of the Sarbanes-Oxley Actof 2002. |
|                                                                           |
|               | 31.2                                 |                                                                                              | Certification of ChiefFinancial Officer pursuant to Section 302 of the Sarbanes-Oxley Actof 2002. |
|                                                                           |
|               | 32.1                                 |                                                                                              | Certification of PeriodicFinancial Reports pursuant to 18 U.S.C. Section 1350, as adoptedpursuant to Section 906 of the Sarbanes-Oxley Act of2002. |
|                                                                                |                                      |                        |
| b.                                                                             |                                 | During the three monthsended June 30, 2003, and through the date of this filing, theCompany filed the following Forms 8-K: |
|                                                                           |
|                                                                           | (1)                                  |                                                                                                                       | Current Report on Form 8-Kdated and filed on July 9, 2003 to furnish certain financialinformation under “Item 5. Other Events and Required FDDisclosure”. |
|                                                                           |
|                                                                                | (2)                                  |                                                                                                                            | Current Report on Form 8-Kdated July 24, 2003, and filed on August 11, 2003, to furnishRegulation FD Disclosure pursuant to “Item 12. Results ofOperations and Financial Condition” on Form 8-K in accordancewith the Securities and Exchange Commission’s Release Nos.33-8216 and 34-47583. |

**THE TITAN CORPORATIONSIGNATURES**

      Pursuant tothe requirements of the Securities Exchange Act of 1934, theRegistrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized.

| Dated:  August11, 2003 |   | THE TITANCORPORATION |
|----------------------------------|--------|----------------------|
|                             |   | By:                  | /s/ GENE W. RAY |
|                                  |        |                      |  |
|                                  |        |                      | Gene W.Ray*Chief Executive Officer, Chairman of the Board* |
|                             |   | By:                  | /s/ MARK W. SOPP |
|                                  |        |                      |  |
|                                  |        |                      | Mark W.Sopp*Senior Vice President, Chief Financial Officer* |
|                             |   | By:                  | /s/ DEANNA J. HOM |
|                                  |        |                      |  |
|                                  |        |                      | Deanna J.Hom*Vice President, Corporate Controller (Principal Accounting Officer)* |

QuickLinks

Part I — FinancialInformation

        Item1.  Financial Statements

                  Consolidated Statements ofOperations                  Consolidated Balance Sheets                  Consolidated Statements of CashFlows                  Consolidated Statements ofStockholders' Equity

                  NotesTo Consolidated Financial Statements                          Note (1) Basis of Financial StatementPreparation                          Note (2) Exit and Restructuring Charges andOther                          Note (3) Cumulative Effect of Change inAccounting Principle                          Note (4) Discontinued Operations                          Note (5) Debt                          Note (6) Other Financial Information                           Note (7) Commitments andContingencies                          Note (8) Related Party Transactions                          Note 9.  Guarantor Condensed ConsolidatingFinancial Statements

        Item 2.  Management's Discussion AndAnalysis Of Financial Condition And Results ofOperations.        Item 4.  Controls andProcedures.

Part II — OtherInformation

        Item 1.  LegalProceedings.        Item 4.  Submission ofMatters to a Vote of Security Holders.        Item 6.  Exhibits andReports on Form 8-K.

Signatures

Exhibits

|           | 31.1   | Certification of ChiefExecutive Officer pursuant to Section 302 of the Sarbanes-Oxley Actof 2002.                                                  |
|--------------------------------------------------------|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------|
|           | 31.2   | Certification of ChiefFinancial Officer pursuant to Section 302 of the Sarbanes-Oxley Actof 2002.                                                  |
|           | 32.1   | Certification of PeriodicFinancial Reports pursuant to 18 U.S.C. Section 1350, as adoptedpursuant to Section 906 of the Sarbanes-Oxley Act of2002. |