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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, 2002

1-8931Commission File Number

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CUBIC CORPORATIONExact Name of Registrant as Specified in its Charter

|Delaware               |  | 95-1678055                     
|---------------------- |  | -------------------------------
|State of Incorporation |  | IRS 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
ý No o

As
of January 30, 2003, Registrant had only one class of common stock of which there were 26,719,845 shares outstanding (after deducting 8,944,884 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 |                                
|                                              | 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,
2002 |         | September 30,
2002 |  
|------------------------------------ | ---------------------------------------------- | ----------------- | ------- | ------------------ | -
|
|ASSETS                               |                                                |                   |         |                    |  
|Current assets:                      |                                                |                   |         |                    |  
|                                     | Cash and cash equivalents                      |                   | $       | 38,550             |  
|                                     | Marketable securities, available-for-sale      |                   |         | 408                |  
|                                     | Accounts receivable                            |                   |         | 209,590            |  
|                                     | Inventories                                    |                   |         | 40,501             |  
|                                     | Deferred income taxes and other current assets |                   |         | 25,521             |  
|                                     |                                                |                   |         |                    |  
|Total current assets                 |                                                |                   | 314,570 |                    |  
|                                     |                                                |                   |         |                    |  
|Property, plant and equipmentnet    |                                                |                   | 43,366  |                    |  
|Goodwill, less amortization          |                                                |                   | 19,967  |                    |  
|Other assets                         |                                                |                   | 15,472  |                    |  
|                                     |                                                |                   |         |                    |  
|                                     |                                                | $                 | 393,375 |                    | $
|                                     |                                                |                   |         |                    |  
|LIABILITIES AND SHAREHOLDERS' EQUITY |                                                |                   |         |                    |  
|Current liabilities:                 |                                                |                   |         |                    |  
|                                     | Short-term borrowings                          |                   | $       | 7,124              |  
|                                     | Trade accounts payable                         |                   |         | 15,667             |  
|                                     | Customer advances                              |                   |         | 30,946             |  
|                                     | Other current liabilities                      |                   |         | 35,723             |  
|                                     | Accrued pension liability                      |                   |         | 22,251             |  
|                                     | Income taxes payable                           |                   |         | 4,506              |  
|                                     | Current maturities of long-term debt           |                   |         | 1,429              |  
|                                     |                                                |                   |         |                    |  
|Total current liabilities            |                                                |                   | 117,646 |                    |  
|                                     |                                                |                   |         |                    |  
|Long-term debt                       |                                                |                   | 47,142  |                    |  
|Deferred compensation                |                                                |                   | 6,842   |                    |  
|Shareholders' equity:                |                                                |                   |         |                    |  
|                                     | Common stock                                   |                   |         | 234                |  
|                                     | Additional paid-in capital                     |                   |         | 12,123             |  
|                                     | Retained earnings                              |                   |         | 253,638            |  
|                                     | Accumulated other comprehensive loss           |                   |         | (8,184             | )
|                                     | Treasury stock at cost                         |                   |         | (36,066            | )
|                                     |                                                |                   |         |                    |  
|                                     |                                                |                   | 221,745 |                    |  
|                                     |                                                |                   |         |                    |  
|                                     |                                                | $                 | 393,375 |                    | $
|                                     |                                                |                   |         |                    |  

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Note: The balance sheet at September 30, 2002 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      |                                                                                             |                                             | (43,569
|                                                         |                                                                                             |                                             |        
|Investing Activities:                                    |                                                                                             |                                             |        
|                                                         | Net additions to property, plant and equipment                                              |                                             |        
|                                                         | Other itemsnet                                                                             |                                             |        
|                                                         |                                                                                             |                                             |        
|NET CASH USED IN INVESTING ACTIVITIES                    |                                                                                             |                                             | (2,204 
|                                                         |                                                                                             |                                             |        
|Financing Activities:                                    |                                                                                             |                                             |        
|                                                         | Change in short-term borrowings                                                             |                                             |        
|                                                         | Change in long-term borrowings                                                              |                                             |        
|                                                         |                                                                                             |                                             |        
|NET CASH USED IN FINANCING ACTIVITIES                    |                                                                                             |                                             | 5,546  
|                                                         |                                                                                             |                                             |        
|Effect of exchange rates on cash                         |                                                                                             |                                             | 121    
|                                                         |                                                                                             |                                             |        
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS     |                                                                                             |                                             | (40,106
|Cash and cash equivalents at the beginning of the period |                                                                                             |                                             | 78,656 
|                                                         |                                                                                             |                                             |        
|CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD       |                                                                                             | $                                           | 38,550 
|                                                         |                                                                                             |                                             |        

See
accompanying notes.

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CUBIC CORPORATION        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS        (UNAUDITED)        December 31, 2002

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, 2003. 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, 2002.

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, after retroactive adjustments to reflect a
3-for-1 stock split which occurred in April 2002.

Note 3Inventories

Inventories consist of the following (in thousands):

|                                 |  | December 31,
2002 |        | September 30,
2002
|-------------------------------- |  | ----------------- | ------ | ------------------
|Finished products                |  | $                 | 623    |                   
|Work in process                  |  |                   | 26,016 |                   
|Raw material and purchased parts |  |                   | 13,862 |                   
|                                 |  |                   |        |                   
|                                 |  | $                 | 40,501 |                   
|                                 |  |                   |        |                   

Note 4New Accounting Pronouncement

In July 2002, the FASB issued Statement of Financial Accounting Standards No. 146 (FAS 146),Accounting for Costs
Associated with Exit or Disposal Activities. The standard requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than
at the date of a commitment to an exit or disposal plan. Examples of costs covered by the standard include lease termination costs and certain employee severance costs that are associated with a
restructuring, discontinued operation, plant closing, or other exit or disposal activity. The principal effect of applying FAS 146 will be on the timing of recognition of these costs. Had the
statement been in effect during the
first quarter of fiscal 2003 and fiscal year 2002, the Company's net income for the quarter ended December 31, 2001 would have been higher by approximately $600,000 ($.02 per share). The new

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standard is effective as of December 31, 2002 and will be applied prospectively to exit or disposal activities initiated after that date.

Note 5Comprehensive Income

Comprehensive income is as follows (in thousands):

|                                           |                                           | Three Months Ended
December 31, |      
|------------------------------------------ | ----------------------------------------- | ------------------------------- | -----
|
|Net income                                 |                                           | $                               | 6,670
|Foreign currency translation adjustments   |                                           |                                 | 1,910
|Unrealized gains on marketable securities: |                                           |                                 |      
|                                           | Unrealized holding gain during the period |                                 |      
|                                           |                                           |                                 |      
|                                           |                                           | $                               | 8,582
|                                           |                                           |                                 |      

Note 6Segment Information

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

|                           |                               | Three Months Ended
December 31, |      
|-------------------------- | ----------------------------- | ------------------------------- | -----
|
|Revenues:                  |                               |                                 |      
|Transportation systems     |                               | $                               | 62.2 
|Defense                    |                               |                                 | 82.2 
|                           |                               |                                 |      
|                           | Total for reportable segments |                                 |      
|Other revenues             |                               |                                 | 4.6  
|                           |                               |                                 |      
|                           |                               | $                               | 149.0
|                           |                               |                                 |      
|Operating profit:          |                               |                                 |      
|Transportation systems     |                               | $                               | 5.9  
|Defense                    |                               |                                 | 4.5  
|                           |                               |                                 |      
|                           | Total for reportable segments |                                 |      
|Other profit               |                               |                                 | 0.5  
|Interest expense           |                               |                                 | (0.9 
|                           |                               |                                 |      
|Income before income taxes |                               | $                               | 10.0 
|                           |                               |                                 |      

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ITEM 2MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION AND RESULTS OF OPERATIONS        December 31, 2002

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, 2002 increased by 20 percent compared to the same quarter in the previous year as sales in both the
transportation and defense segments were higher. Net income increased 17 percent, due to improved operating profits from both segments. Operating profits for the two segments increased from
$7.9 million in the first quarter of last year to $10.4 million in the first quarter of this year, a 32 percent increase. Last year's first quarter had included a
$0.9 million provision for a facility closing in the transportation segment. Excluding that cost, operating profits increased from $8.8 million to $10.4 million, an
18 percent increase.

Transportation
segment sales increased by 42 percent compared to last year's first quarter due to an increased level of activity on the Prestige contract in London and the
start-up of work on new contracts
in North America which were awarded to the Company in fiscal 2002. Additionally, milestones on the Prestige contract were met during the quarter and the Company was awarded new tasks under the
contract, as the scope of work on this system continues to expand. The Company began work on contracts in Los Angeles and San Diego, contributing to the increase in sales volume in the first quarter
of this fiscal year.

Operating
profits for the quarter in the transportation segment were up by 40 percent; however, as mentioned above, last year's operating profits were impacted by an accrual of
$0.9 million for severance costs related to a facility closing. Without this provision last year, operating profits would have been $5.1 million in the quarter ended December 31,
2001 and the increase year over year would have been 16 percent. Therefore, on a comparable basis, operating margins did not increase in proportion to sales in the quarter, partially because
the new contracts which contributed to the increase in sales are in an early stage of completion and the Company' policy is to not recognize profits until significant progress has been made or
contract milestones reached. In addition, margins being recorded on the Prestige contract are not as high as the Company expects ultimately to achieve, primarily due to work being performed by the
Company in place of a subcontractor that was terminated in fiscal 2002. The Company expects to ultimately recover its additional costs incurred from the subcontractor, but cannot anticipate recovery
in its calculation of profits on the contract because the amount cannot be determined at this time.

The
defense segment generated an 8 percent increase in sales in the first quarter compared to last year. Sales in both its government services and training systems businesses
increased, while communications and electronics sales were down somewhat from last year. The Company is continuing to pursue new communications related business and expects sales growth in future
quarters if these efforts are successful. Training systems sales were up due to increased sales of MILES products and due to increased sales generated by air combat training system contracts won last
year. Government

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services sales increased as the company's battlefield simulation business continued to grow, while revenues from the operations and maintenance business were flat.

Despite
lower sales volume, operating profit improvement came from the communications and electronics product line due to increased margins from the Company's JSTARS products. Training
systems profits were flat as new contracts won last year were in the early stages of completion, while operating profits from government services were down somewhat despite the increase in sales. The
decrease in government services profits came primarily from the operations and maintenance business which experienced cost growth on two of its trainer maintenance contracts.

Selling,
general and administrative (S, G&A) expenses were up slightly in the first quarter compared to last year but were down from 16.2 percent of sales to 13.7 percent.
A decrease in legal costs reduced S, G&A spending in the defense segment, while transportation systems S, G&A increased somewhat in support of the increased sales volume.

Other
revenues and profits were lower in the quarter ended December 31, 2002 than in the same quarter of the previous year, as lower interest rates and a decrease in cash reduced
interest income. In addition, the Company lost its tenant from a rental property in San Diego County which reduced rental income in the quarter. The Company is currently working toward the disposal of
this property in the second or third quarter of this fiscal year.

Total
backlog, including un-funded customer orders, was $1,163,000,000 at December 31, 2002, compared to $1,165,000,000 at September 30, 2002 and $1,102,000,000
at December 31, 2001. Included in the above amounts was funded backlog of $782,000,000 at December 31, 2002, $777,000,000 at September 30, 2002 and $762,000,000 at
December 31, 2001.

New Accounting Pronouncement

In July 2002, the FASB issued Statement of Financial Accounting Standards No. 146 (FAS 146),Accounting for Costs
Associated with Exit or Disposal Activities. The standard requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than
at the date of a commitment to an exit or disposal plan. Examples of costs covered by the standard include lease termination costs and certain employee severance costs that are associated with a
restructuring, discontinued operation, plant closing, or other exit or disposal activity. The principal effect of applying FAS 146 will be on the timing of recognition of these costs. Had the
statement been in effect during the first quarter of fiscal 2003 and fiscal year 2002, the Company's net income for the quarter ended December 31, 2001 would have been higher by approximately
$600,000 ($.02 per share). The new standard is effective as of December 31, 2002 and will be applied prospectively to exit or disposal activities initiated after that date.

Liquidity and Capital Resources

The Prestige contract in London was the largest contributor to increased accounts receivable and inventories, resulting in negative operating cash flows for the
first quarter of fiscal 2003, partly due to work performed by the Company in place of a subcontractor, as described above. Unfavorable contract payment terms on another transportation systems contract
and start up activity on contracts won in fiscal 2002 contributed to the growth in accounts receivable. In addition, delays in funding authorization on certain defense service contracts added to this
receivables growth, but this has since been resolved. The increase in work in process inventory was related primarily to the building of various devices for the Prestige project, and is expected to
decrease in the second quarter as the equipment is delivered and costs are transferred to the project. We expect positive cash flows from both segments for the remainder of the year. However, we
anticipate that cash flows for the year are likely to be somewhat negative due to the Prestige contract situation and overall growth in sales volume.

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Cash
was used to purchase fixed assets, including the outfitting of the Company's new European transportation systems headquarters south of London. In addition, the Company made a
scheduled debt payment and borrowed approximately $7 million under its short-term borrowing arrangement in the United Kingdom to meet working capital requirements in that country.

The
Company's financial condition remains strong with working capital of $197 million and a current ratio of 2.7 to 1 at December 31, 2002. The Company expects that cash on
hand and its ability to access the debt markets will be adequate to meet its working capital requirements for the foreseeable future.

Critical Accounting Policies, Estimates and Judgments

The Company's financial statements are prepared in accordance with accounting principles that are generally accepted in the United States. The preparation of
these financial statements requires management to make estimates and judgments 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. Management continually evaluates its estimates and judgments, the most critical of which
are those related to revenue recognition, costs to complete contracts, pension costs, valuation of goodwill and income taxes. Management bases its estimates and judgments on historical experience and
other factors that are believed to be reasonable under the circumstances. Eventual results may differ from these estimates.

ITEM 4STATEMENT ON DISCLOSURE CONTROLS AND PROCEDURES.

As of December 31, 2002, an evaluation was performed under the supervision and with the participation of the Company's management, including the CEO and
CFO, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on that evaluation, the Company's management, including the CEO and CFO, concluded that
the Company's disclosure controls and procedures were effective as of December 31, 2002. There have been no significant changes in the Company's internal controls or in other factors that could
significantly affect internal controls subsequent to December 31, 2002.

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PART IIOTHER INFORMATION

ITEM 6EXHIBITS AND REPORTS ON FORM 8-K



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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 January 30, 2003 |  | /s/ W. W. BoyleW. W. Boyle
Vice President and CFO   
|Date January 30, 2003 |  | /s/ T. A. BazT. A. Baz
Vice President and Controller

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CERTIFICATION of CEO

I, Walter J. Zable, certify that:





January 30,
2003

|/S/ W. J. ZableW. J. Zable
President and Chief Executive Officer |  | 
|---------------------------------------------------------------- |  | 

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CERTIFICATION of CFO

I, William W. Boyle, certify that:





January 30,
2003

|/S/ W. W. BoyleW. W. Boyle
Chief Financial Officer |  | 
|-------------------------------------------------- |  | 

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