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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

QUARTERLY REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarter Ended December 31, 2001

1-8931
Commission File Number

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CUBIC CORPORATIONExact Name of Registrant as Specified in its Charter

DelawareState of Incorporation

95-1678055IRS Employer Identification No.


9333 Balboa Avenue
San Diego, California 92123
Telephone (858) 277-6780

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes /x/    No / /

As
of February 1, 2002, Registrant had only one class of common stock of which there were 8,906,664 shares outstanding (after deducting 2,981,579 shares held as treasury stock).

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PART IFINANCIAL INFORMATION        ITEM 1FINANCIAL STATEMENTS        CUBIC CORPORATION        CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
      (amounts in thousands, except per share data)

|                                              |                                              | Three Months Ended
December 31,
|--------------------------------------------- | -------------------------------------------- | -------------------------------
|
|Revenues:                                     |                                              |                                
|                                              | Sales                                        |                                
|                                              | Other income                                 |                                
|                                              |                                              |                                
|                                              |                                              |                                
|                                              |                                              |                                
|Costs and expenses:                           |                                              |                                
|                                              | Cost of sales                                |                                
|                                              | Selling, general and administrative expenses |                                
|                                              | Research and development                     |                                
|                                              | Interest                                     |                                
|                                              |                                              |                                
|                                              |                                              |                                
|                                              |                                              |                                
|Income before income taxes                    |                                              |                                
|Income taxes                                  |                                              |                                
|                                              |                                              |                                
|Net income                                    |                                              | $                              
|                                              |                                              |                                
|Basic and diluted net income per common share |                                              | $                              
|                                              |                                              |                                
|Average shares of common stock outstanding    |                                              |                                
|                                              |                                              |                                

See accompanying notes.

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CUBIC CORPORATION        CONSOLIDATED CONDENSED BALANCE SHEETS        (in thousands)

|                                     |                                                | December 31,
2001 |         | September 30,
2001 |  
|------------------------------------ | ---------------------------------------------- | ----------------- | ------- | ------------------ | -
|
|ASSETS                               |                                                |                   |         |                    |  
|Current assets:                      |                                                |                   |         |                    |  
|                                     | Cash and cash equivalents                      |                   | $       | 83,198             |  
|                                     | Marketable securities, available-for-sale      |                   |         | 604                |  
|                                     | Accounts receivable                            |                   |         | 133,888            |  
|                                     | Inventories                                    |                   |         | 38,613             |  
|                                     | Deferred income taxes and other current assets |                   |         | 26,172             |  
|                                     |                                                |                   |         |                    |  
|Total current assets                 |                                                |                   | 282,475 |                    |  
|                                     |                                                |                   |         |                    |  
|Property, plant and equipmentnet    |                                                |                   | 33,149  |                    |  
|Goodwill, less amortization          |                                                |                   | 18,836  |                    |  
|Other assets                         |                                                |                   | 12,723  |                    |  
|                                     |                                                |                   |         |                    |  
|                                     |                                                | $                 | 347,183 |                    | $
|                                     |                                                |                   |         |                    |  
|LIABILITIES AND SHAREHOLDERS' EQUITY |                                                |                   |         |                    |  
|Current liabilities:                 |                                                |                   |         |                    |  
|                                     | Trade accounts payable                         |                   | $       | 11,057             |  
|                                     | Customer advances                              |                   |         | 29,181             |  
|                                     | Other current liabilities                      |                   |         | 43,921             |  
|                                     | Income taxes payable                           |                   |         | 10,314             |  
|                                     |                                                |                   |         |                    |  
|Total current liabilities            |                                                |                   | 94,473  |                    |  
|                                     |                                                |                   |         |                    |  
|Long-term debt                       |                                                |                   | 50,000  |                    |  
|Deferred compensation                |                                                |                   | 6,219   |                    |  
|Shareholders' equity:                |                                                |                   |         |                    |  
|                                     | Common stock                                   |                   |         | 234                |  
|                                     | Additional paid-in capital                     |                   |         | 12,123             |  
|                                     | Retained earnings                              |                   |         | 226,786            |  
|                                     | Accumulated other comprehensive loss           |                   |         | (6,589             | )
|                                     | Treasury stock at cost                         |                   |         | (36,063            | )
|                                     |                                                |                   |         |                    |  
|                                     |                                                |                   | 196,491 |                    |  
|                                     |                                                |                   |         |                    |  
|                                     |                                                | $                 | 347,183 |                    | $
|                                     |                                                |                   |         |                    |  

Note: The balance sheet at September 30, 2001 has been derived from the audited financial statements at that date.

See accompanying notes

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CUBIC CORPORATION        CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)        (in thousands)

|                                                         |                                                                                             | Three Months Ended
December 31,             |       
|-------------------------------------------------------- | ------------------------------------------------------------------------------------------- | ------------------------------------------- | ------
|
|Operating Activities:                                    |                                                                                             |                                             |       
|                                                         | Net income                                                                                  |                                             | $     
|                                                         | Adjustments to reconcile net income to net cash provided by (used in) operating activities: |                                             |       
|                                                         |                                                                                             | Depreciation and amortization               |       
|                                                         |                                                                                             | Changes in operating assets and liabilities |       
|                                                         |                                                                                             |                                             |       
|NET CASH PROVIDED BY (USED IN)                           |                                                                                             |                                             |       
|OPERATING ACTIVITIES                                     |                                                                                             |                                             | 8,192 
|                                                         |                                                                                             |                                             |       
|Investing Activities:                                    |                                                                                             |                                             |       
|                                                         | Net additions to property, plant and equipment                                              |                                             |       
|                                                         | Proceeds from sale of marketable securities                                                 |                                             |       
|                                                         | Other itemsnet                                                                             |                                             |       
|                                                         |                                                                                             |                                             |       
|NET CASH USED IN INVESTING ACTIVITIES                    |                                                                                             |                                             | (1,622
|                                                         |                                                                                             |                                             |       
|Effect of exchange rates on cash                         |                                                                                             |                                             | (209  
|                                                         |                                                                                             |                                             |       
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS     |                                                                                             |                                             | 6,361 
|Cash and cash equivalents at the beginning of the period |                                                                                             |                                             | 76,837
|                                                         |                                                                                             |                                             |       
|CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD       |                                                                                             | $                                           | 83,198
|                                                         |                                                                                             |                                             |       

See accompanying notes

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CUBIC CORPORATION        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS        (UNAUDITED)        December 31, 2001

Note 1Basis for Presentation

The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and
footnotes required by accounting principles generally accepted in the United States for complete financial statements.

In
the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the quarter
are not necessarily indicative of the results that may be expected for the year ending September 30, 2002. For further information, refer to the consolidated financial statements and footnotes
thereto included in the Company's annual report on Form 10-K for the year ended September 30, 2001.

The
preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Note 2Per Share Amounts

Per share amounts are based upon the weighted average number of shares of common stock outstanding.

Note 3Inventories

Inventories consist of the following (in thousands):

December 31,
2001

September 30,
2001Finished products

$
1,532

$
1,528Work in process


27,624


19,020Raw material and purchased parts


9,457


9,838$
38,613

$
30,386


Note 4Change in Accounting

In June 2001, the Financial Accounting Standards board issued Statements of Financial Accounting Standards No. 141,Business
Combinationsand No. 142,Goodwill and Other Intangible Assets, effective for fiscal years beginning after
December 15, 2001. Under the new rules, goodwill will no longer be amortized but will be subject to annual impairment tests in accordance with the Statements.

As
allowed by early adoption provisions, the Company began applying the new rules on accounting for goodwill and other intangible assets effective October 1, 2001. The following
table presents a

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reconciliation of net income and per share data to what would have been reported had the new rules been in effect in the quarter ended December 31, 2000 (in thousands, except per share data):

Three Months Ended
December 31,2001

2000Reported net income

$
5,691

$
4,669Add back goodwill amortization, net of tax of $225,000





436Adjusted net income

$
5,691

$
5,105Basic and diluted net income per common share:Reported net income

$
0.64

$
0.52Add back goodwill amortization, net of tax





0.05Adjusted net income

$
0.64

$
0.57


Note 5New Accounting Pronouncement

In October 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 144 (FAS 144), Accounting for the
Impairment or Disposal of Long-Lived Assets. FAS 144 establishes a single model to account for impairment of
assets to be held or disposed, incorporating guidelines for accounting and disclosure of discontinued operations. FAS 144 is effective for fiscal years beginning after December 15, 2001
and, generally, its provisions are to be applied prospectively. Management believes the impact on the financial statements of the Company will be immaterial.

Note 6Comprehensive Income

Comprehensive income is as follows (in thousands):

Three Months Ended
December 31,2001

2000Net income

$
5,691

$
4,669Foreign currency translation adjustments


(108
)

570Unrealized gains on marketable securities:Unrealized holding gain during the period


13


445Reclassification adjustment for (gain) loss included in net income





(909
)$
5,596

$
4,775


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Note 7Segment Information

Business segment financial data is as follows (in millions):

Three Months Ended
December 31,2001

2000Revenues:Transportation systems

$
43.7

$
50.3Defense


76.4


66.3Total for reportable segments


120.1


116.6Other revenues


5.1


7.1$
125.2

$
123.7Operating profit:Transportation systems

$
4.2

$
4.5Defense


3.7


0.6Total for reportable segments


7.9


5.1Other profit


1.3


2.9Interest expense


(0.9
)

(0.9
)Income before income taxes

$
8.3

$
7.1


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ITEM 2MANAGEMENT'S DISCUSSION AND ANALYSIS OF  FINANCIAL CONDITION AND RESULTS OF OPERATIONS    December 31, 2001

Forward-Looking Statements

In addition to historical matters, this report contains forward-looking statements. They can be identified by words such asmay,
likely,anticipate, hope, estimate, plan, potential, promising, feel, expect, should, and confident. These forward-looking
statements are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. Investors
are cautioned that forward-looking statements involve risks and uncertainties which may affect the Company's business and prospects. These include the effects of politics on negotiations and business
dealings with government entities, reductions in defense budgets, economic conditions in the various countries in which the Company does or hopes to do business, competition and technology changes in
the defense and transportation industries, and other competitive and technological factors.

Results of Operations

Sales for the quarter ended December 31, 2001 increased approximately 3% compared to the same quarter in the previous year due to higher sales from the
company's defense segment. At the same time, net income increased approximately 22%, due to improved operating profits from the defense segment. While the profit improvements came from the defense
segment, the transportation segment continued to provide more than half of total operating profits. Operating profits for the two segments increased from $5.1 million in the first quarter of
last year to $7.9 million this year. Of this increase, $661 thousand resulted from a change in accounting for goodwill, as described below. Therefore, on a comparable basis, operating
profits increased by 36% from last year.

The
defense segment generated increased sales in the quarter, compared to last year, primarily from its data link and training systems product lines. Operating profit improvement came
from air and ground combat training systems, most significantly because operating profits in the first quarter of last year had been reduced by costs incurred related to a cancelled purchase request
for an air combat training
program in Australia. In addition, operating profits in the battlefield simulations business also improved from last year.

Transportation
segment sales were lower primarily due to an expected lower level of activity on the Prestige contract in London and due to lower revenues from contracts in the Far East,
which are nearing completion. Operating profits for the quarter in the transportation segment were down about $300 thousand from the previous year due to an accrual of $900 thousand for
severance costs related to the planned closing of a remote facility in western England. During the quarter, management notified employees of its plans to consolidate facilities in the London area and
subsequent to the end of the quarter the Company has acquired a new facility south of London. These events do not reflect a decline in business prospects, but rather a move to gain greater efficiency
by bringing operations together into one facility and in closer proximity to key customers. The acquisition of this building is indicative of management's optimistic view of the long-term
prospects for transportation systems business in Europe.

Other
revenues and profits were lower in the quarter ended December 31, 2001 than in the same quarter of the previous year, primarily due to a one-time gain of
$1.4 million from the sale of marketable securities last year. In addition, investment income was lower than last year due to lower interest rates earned on the Company's investments in cash
and cash equivalents.

Total
backlog, including un-funded customer orders, was $1,102,000,000 at December 31, 2001, compared to $1,095,000,000 at September 30, 2001 and $1,029,000,000
at December 31, 2000. Included

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in the above amounts was funded backlog of $762,000,000 at December 31, 2001, $737,000,000 at September 30, 2001 and $760,000,000 at December 31, 2000.

In
June 2001, the Financial Accounting Standards board issued Statements of Financial Accounting Standards No. 141,Business
Combinationsand No. 142,Goodwill and Other Intangible Assets, effective for fiscal years beginning after
December 15, 2001. Under the new rules, goodwill will no longer be amortized but will be subject to annual impairment tests in accordance with the Statements.

As
allowed by early adoption provisions, the Company began applying the new rules on accounting for goodwill and other intangible assets effective October 1, 2001. Application of
the nonamortization provisions of the Statement resulted in an increase in net income for the quarter ended December 31, 2001 of approximately $400 thousand after applicable income taxes
($.05 per share).

Liquidity and Capital Resources

Cash flows from operating activities were positive in the quarter ended December 31, 2001, due primarily to the net income earned in the quarter. Work in
process inventory increased during the quarter, related primarily to the building of various devices for the Prestige project, and is expected to decrease to a more normal level later in the year as
the equipment is delivered. Accounts receivable decreased by a comparable amount, offsetting this increase in inventory. The Company expects cash flow from operations to continue to be positive for
the fiscal year.

The
Company's financial condition remains quite strong with working capital of $188 million and a current ratio of 3.0 to 1 at December 31, 2001. The Company expects that
cash on hand and its unused debt capacity will be adequate to meet its working capital requirements for the foreseeable future.

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PART IIOTHER INFORMATION

ITEM 6EXHIBITS AND REPORTS ON FORM 8-K





SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

|                      | CUBIC CORPORATION                                  
|--------------------- | ---------------------------------------------------
|Date February 5, 2002 | /s/W. W. BOYLEW. W. Boyle Vice President and CFO   
|Date February 5, 2002 | /s/T. A. BAZT. A. Baz Vice President and Controller

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