UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                             -----------------------

                                    FORM 10-K
(Mark One)
        |X|  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004
                                       OR

       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

           FOR THE TRANSITION PERIOD FROM ___________ TO _____________

                        Commission File Number: 001-31258
                             -----------------------

                        ANTEON INTERNATIONAL CORPORATION
             (Exact Name of Registrant as Specified in Its Charter)

               Delaware                                         13-3880755
    (State or Other Jurisdiction of                          (I.R.S. Employer
    Incorporation or Organization)                         Identification No.)

                              3211 Jermantown Road
                             Fairfax, VA 22030-2801
                    (Address of Principal Executive Offices)

                                 (703) 246-0200
              (Registrant's telephone number, including area code)

           Securities registered pursuant to Section 12(b) of the Act:
                     Common Stock, $0.01 par value per share

    Name of each exchange on which registered: New York Stock Exchange (NYSE)

           Securities registered pursuant to Section 12(g) of the Act:
                                      None
                             -----------------------

     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  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No | |

     Indicate by check mark whether the registrant  (1) is an accelerated  filer
(as defined in Rule 12b-2 of the Act). Yes |X| No | |

     The aggregate  market value of the voting stock held by  non-affiliates  of
the registrant as of June 30, 2004 was $895,852,976  (based on the closing price
of  $32.62  per  share on June  30,  2004,  as  reported  by the New York  Stock
Exchange- Corporate Transactions). For this computation, the registrant excluded
the market  value of all shares of its common  stock  reported  as  beneficially
owned  by  named  executive  officers  and  directors  of the  registrant;  such
exclusion shall not be deemed to constitute an admission that any such person is
an "affiliate" of the registrant.

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained,  to the best of registrant's knowledge, in definitive
proxy or information  statements  incorporated  by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. | |

    There were  36,279,355  shares of common  stock  outstanding  as of March 2,
2005.


                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the proxy statement for the 2005 Annual Meeting of
Shareholders                                                            Part III



<PAGE>



                           FORWARD-LOOKING STATEMENTS

         This Form 10-K includes and  incorporates by reference  forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements relate to future events or our future financial
performance. These statements involve known and unknown risks, uncertainties and
other factors that may cause our or our  industry's  actual  results,  levels of
activity,  performance  or  achievements  to be  materially  different  from any
results, levels of activity, performance or achievements expressed or implied by
these forward-looking statements.

     These  forward-looking  statements are identified by their use of terms and
phrases  such  as  "anticipate,"   "believe,"  "could,"  "estimate,"   "expect,"
"intend,"  "may,"  "plan,"  "predict,"  "project,"  "will" and similar terms and
phrases,  and may also include  references to assumptions.  These statements are
contained  in the sections  entitled  "Management's  Discussion  and Analysis of
Financial Condition and Results of Operations," "Business" and other sections of
this Form 10-K.

         Such forward-looking statements include, but are not limited to:

          o    funded backlog;

          o    estimated remaining contract value;

          o    our  expectations   regarding  the  U.S.   federal   government's
               procurement budgets and reliance on outsourcing of services; and

          o    our  financial  condition and  liquidity,  as well as future cash
               flows and earnings.

     Although we believe that the expectations  reflected in the forward-looking
statements  are  reasonable,  we  cannot  guarantee  future  results,  levels of
activity, performance or achievements. Moreover, neither we nor any other person
assumes  responsibility  for the accuracy and completeness of these  statements.
These  statements  are only  predictions.  Actual  events or results  may differ
materially.  In evaluating these statements,  you should  specifically  consider
various factors, including the following:

          o    changes in U.S. federal government procurement laws, regulations,
               policies and budgets;

          o    the number and type of contracts and task orders awarded to us;

          o    the integration of acquisitions  without  disruption to our other
               business activities;

          o    changes in general economic and business conditions;

          o    technological changes;

          o    the ability to attract and retain qualified personnel;

          o    competition;

          o    our ability to retain our contracts during any rebidding process;
               and

          o    the other factors outlined under "Risk Factors."

     If  one  or  more  of  these  risks  or  uncertainties  materialize,  or if
underlying assumptions prove incorrect,  actual results may vary materially from
those  expected,  estimated  or  projected.  We do not  undertake  to update our
forward-looking   statements  or  risk  factors  to  reflect  future  events  or
circumstances.

                                       1
<PAGE>



                                  RISK FACTORS

Risks related to our business

U.S. Federal  Government  Contracting  Risks--Our  business  could be adversely
      affected by significant  changes in the  contracting or fiscal policies of
      the U.S. federal government.

     We derive  substantially  all of our revenues from  contracts with the U.S.
federal   government  and  subcontracts  under  U.S.  federal  government  prime
contracts,  and we believe that the success and development of our business will
continue to depend on our successful  participation in U.S.  federal  government
programs.  Accordingly,  changes in U.S. federal government contracting policies
could directly  affect our financial  performance.  Among the factors that could
materially  adversely affect our U.S. federal  government  contracting  business
are:

     o    budgetary  constraints  affecting  U.S.  federal  government  spending
          generally,  or specific  departments  or agencies in  particular,  and
          changes in fiscal policies or available funding;

     o    changes in U.S. federal government programs or requirements;

     o    curtailment  of  the  U.S.  federal  government's  use  of  technology
          services firms;

     o    the adoption of new laws or regulations;

     o    technological developments;

     o    U.S. federal governmental  shutdowns and other potential delays in the
          government appropriations process;

     o    delays in the payment of our invoices by  government  payment  offices
          due to problems with, or upgrades to, government  information systems,
          or for other reasons;

     o    competition and consolidation in the information  technology industry;
          and

     o    general economic conditions.

     These or other factors could cause U.S. federal governmental  agencies,  or
prime  contractors  where we are  acting as a  subcontractor,  to  reduce  their
purchases under contracts, to exercise their right to terminate contracts or not
to  exercise  options  to renew  contracts,  any of which  could have a material
adverse  effect on our financial  condition and operating  results.  Many of our
U.S.   federal   government   customers  are  subject  to  stringent   budgetary
constraints.  We have  substantial  contracts  in place  with many U.S.  federal
departments and agencies,  and our continued  performance under these contracts,
or award of  additional  contracts  from  these  agencies,  could be  materially
adversely affected by spending reductions or budget cutbacks at these agencies.

Early Termination of Contracts-- Our U.S.  federal  government  contracts may be
      terminated by the government at any time prior to their completion, and if
      we do not replace them, our operating results may be harmed.

     We derive  substantially  all of our revenues from U.S. federal  government
contracts and subcontracts  under U.S.  federal  government prime contracts that
typically are awarded  through  competitive  processes and span one or more base
years and one or more option years. The option periods typically cover more than
half of the contract's  potential  duration.  U.S. federal  government  agencies
generally have the right not to exercise these option periods. In addition,  our
contracts typically also contain provisions  permitting a government customer to
terminate the contract on short notice, with or without cause. A decision not to
exercise option periods or to terminate contracts would reduce the profitability
of these contracts to us.


                                       2
<PAGE>


     Upon contract expiration,  if the customer requires further services of the
type  provided by the  contract,  there is  frequently a  competitive  rebidding
process and there can be no assurance  that we will win any  particular  bid, or
that we will be able to replace business lost upon expiration or completion of a
contract. The unexpected termination of one or more of our significant contracts
could result in significant revenue shortfalls. The termination or nonrenewal of
any of our significant contracts,  short-term revenue shortfalls, the imposition
of fines or damages or our  suspension  or debarment  from bidding on additional
contracts could harm operating results for those periods.

     Most U.S.  federal  government  contract  awards are  subject to protest by
competitors.  If specified  legal  requirements  are  satisfied,  these protests
require the U.S. federal agency to suspend the  contractor's  performance of the
newly awarded contract pending the outcome of the protest.  These protests could
also  result  in a  requirement  to  resubmit  bids for the  contract  or in the
termination, reduction or modification of the awarded contract.

Contracts  Subject to  Audit--Our  business  could be  adversely  affected  by a
      negative audit by the Defense Contract Audit Agency.  We could be required
      to reimburse the U.S.  federal  government for costs that we have expended
      on our  contracts  and our  ability  to  compete  successfully  for future
      contracts could be materially impaired.

     The Defense  Contract  Audit  Agency,  or the "DCAA," and other  government
agencies routinely audit and investigate  government  contracts.  These agencies
review a contractor's performance on its contract, cost structure and compliance
with  applicable  laws,  regulations  and  standards.  The DCAA also reviews the
adequacy of, and a contractor's  compliance  with, its internal  control systems
and  policies,  including the  contractor's  purchasing,  property,  estimating,
compensation  and  management   information  systems.  Any  costs  found  to  be
improperly  allocated to a specific contract will not be reimbursed,  while such
costs  already  reimbursed  must be  refunded.  Therefore,  a DCAA  audit  could
materially  affect  our  competitive   position  and  result  in  a  substantial
adjustment to our revenues.  If a government audit uncovers  improper or illegal
activities, we may be subject to civil and criminal penalties and administrative
sanctions,   including   termination  of  contracts,   forfeitures  of  profits,
suspension of payments,  fines and  suspension or debarment  from doing business
with  the  U.S.  federal  government.  In  addition,  we  could  suffer  serious
reputational harm if allegations of impropriety were made against us. If we were
suspended  or  debarred  from  contracting  with  the  U.S.  federal  government
generally, or any significant agency in the intelligence community or Department
of Defense,  if our reputation or  relationship  with  government  agencies were
impaired,  or if the  government  otherwise  ceased  doing  business  with us or
significantly  decreased  the amount of business it does with us, our  operating
results would be materially harmed.

Contract Types and  Risks--Our  estimates  of the time,  resources  and expenses
      required to complete our contractual commitments may not be accurate.

     We enter into three  principal  types of  contracts  with the U.S.  federal
government:  time and materials,  cost-plus, and fixed price. For the year ended
December 31, 2004,  approximately  39% were time and materials,  34% of our U.S.
federal  contracts  were  cost-plus,  and 27% were  fixed  price (a  substantial
majority of which were fixed price level of effort  contracts,  which have lower
risk than  other  types of fixed  price  contracts).  Under  time and  materials
contracts,  we are paid for labor at  negotiated  hourly  billing  rates and for
certain expenses. There is financial risk to us should our costs to perform time
and materials  contracts  exceed the  negotiated  hourly  billing  rates.  Under
cost-plus type contracts, which are subject to a contract ceiling amount, we are
reimbursed for allowable costs and paid a fee, which may be fixed or performance
based.  However, if our costs exceed the contract ceiling,  funding has not been
received or costs are not  allowable  under the  provisions  of the  contract or
applicable regulations,  we may not be able to obtain reimbursement for all such
costs.  Under fixed price  contracts,  we are  required to perform the  contract
tasks  at a  fixed  price  irrespective  of  the  actual  costs  we  incur,  and
consequently,  any costs in excess of the fixed price are  absorbed by us. Fixed
price contracts,  in comparison to cost-plus  contracts,  typically offer higher
profit  opportunities  because we bear the risk of cost-overruns and receive the
benefit of cost savings.  For all contract types,  there is risk associated with
the  assumptions  we use to  formulate  our  pricing of the  proposed  work.  In
addition,  when we serve as a subcontractor under our contracts,  we are exposed
to the risks of delays in payment from the prime  contractor for the services we
provide.

                                       3
<PAGE>


Risks under Multiple Award Indefinite  Delivery/Indefinite  Quantity  Contracts,
      GSA Schedule  contracts and  GWACs--Many  of our U.S.  federal  government
      customers  spend  their   procurement   budgets  through   multiple  award
      Indefinite  Delivery/Indefinite Quantity Contracts, GSA Schedule contracts
      and GWACs under which we are required to compete for post-award orders.

     Budgetary pressures and reforms in the procurement process have caused many
U.S. federal  government  customers to increasingly  purchase goods and services
through  multiple award  Indefinite  Delivery/Indefinite  Quantity,  or "ID/IQ,"
contracts,  General Services  Administration,  or "GSA," Schedule  contracts and
other multiple award and/or  Government Wide Acquisition  Contracts,  or "GWAC,"
vehicles.  These contract  vehicles have resulted in increased  competition  and
pricing pressure requiring that we make sustained  post-award efforts to realize
revenues  under the relevant  contract.  There can be no assurance  that we will
continue  to  increase  revenues  or  otherwise  sell  successfully  under these
contract  vehicles.  Our  failure to  compete  effectively  in this  procurement
environment could harm our operating results.

Government Regulations--We may be liable for penalties under various procurement
     rules and  regulations.  Changes in government  regulations  could harm our
     operating results.

     Our defense and U.S.  federal civil agency  businesses must comply with and
are  affected  by various  government  regulations.  Among the most  significant
regulations are:

     o    the   Federal   Acquisition   Regulations,   and  agency   regulations
          supplemental   to   the   Federal   Acquisition   Regulations,   which
          comprehensively regulate the formation, administration and performance
          of government contracts;

     o    the  Truth in  Negotiations  Act,  which  requires  certification  and
          disclosure  of all cost and pricing  data in  connection  with certain
          contract negotiations;

     o    the Cost Accounting  Standards,  which impose accounting  requirements
          that  govern  our  right to  reimbursement  under  certain  cost-based
          government contracts; and

     o    laws,  regulations  and  executive  orders  restricting  the  use  and
          dissemination of information classified for national security purposes
          and the export of certain products and technical data.

     These  regulations  affect how our customers and we can do business and, in
some  instances,  impose  added costs on our  businesses.  In  addition,  we are
subject to  industrial  security  regulations  of the  Department of Defense and
other U.S. federal agencies that are designed to safeguard against  unauthorized
persons', including foreigners', access to classified information. If we were to
come under foreign ownership,  control or influence, our U.S. federal government
customers  could  terminate  or decide not to renew our  contracts,  which could
impair our ability to obtain new contracts.  Any changes in applicable  laws and
regulations  could also harm our operating  results.  Any failure to comply with
applicable laws and regulations could result in contract  termination,  price or
fee reductions or suspension or debarment from contracting with the U.S. federal
government.

Risks Relating  to  Reductions   or  Changes  in  Military  and   Department  of
      Defense-related  Intelligence Agency  Expenditures--A  decline in the U.S.
      defense budget may adversely affect our operations.

     Sales under contracts with the U.S. Department of Defense,  including sales
under subcontracts  having the Department of Defense as the ultimate  purchaser,
represented  approximately  89% and 88% of our sales for the year ended December
31,  2004 and for the year  ended  December  31,  2003,  respectively.  The U.S.
defense budget declined from time to time in the late 1980s and the early 1990s,
resulting  in a slowing  of new  program  starts,  program  delays  and  program
cancellations.   These  reductions   caused  most   defense-related   government
contractors to experience  declining  revenues,  increased pressure on operating
margins  and,  in some cases,  net losses.  While  spending  authorizations  for
defense-related  programs by the government have increased in recent years,  and
in particular  after the September 11, 2001  terrorist  attacks,  these spending
levels  may  not  be  sustainable,   and  future  levels  of  expenditures   and
authorizations  for those  programs may  decrease,  remain  constant or shift to
programs in areas where we currently provide limited or no services. A change in
the U.S.  Presidential  Administration  or in the  composition of Congress could
also materially  affect levels of support for military  expenditures.  A general
significant decline in military expenditures could harm our operating results.

                                       4
<PAGE>


We are not able to guarantee  that contract  orders  included in our estimated
     remaining  contract value will result in actual  revenues in any particular
     fiscal period or that the actual  revenues from such  contracts  will equal
     our estimated remaining contract value.

     There can be no  assurance  that any  contracts  included in our  estimated
remaining contract value presented in this filing will result in actual revenues
in any  particular  period or that the actual  revenues from such contracts will
equal our estimated remaining contract value. Further, there can be no assurance
that any  contract  included  in our  estimated  remaining  contract  value that
generates  revenue will be profitable.  Our estimated  remaining  contract value
consists of funded backlog, which is based upon amounts actually appropriated by
a customer for payment of goods and services, and unfunded contract value, which
is based upon  management's  estimate of the future  potential  of our  existing
contracts (including contract options) to generate revenues. These estimates are
based on our  experience  under such  contracts  and similar  contracts,  and we
believe such  estimates to be  reasonable.  However,  there can be no assurances
that all of such  estimated  remaining  contract  value  will be  recognized  as
revenue.

     In  addition,  the U.S.  federal  government's  ability to select  multiple
winners  under  ID/IQ  contracts  and  GWACs,  as well as its  right to  compete
subsequent  task  orders  among such  multiple  winners,  means that there is no
assurance  that certain of our existing  contracts will result in actual orders.
Further,  the U.S. federal government enjoys broad rights to unilaterally modify
or terminate such contracts and task orders, including the right not to exercise
options to extend multi-year contracts through the end of their potential terms.
Accordingly,  most of our  existing  contracts  and task  orders are  subject to
modification and termination at the U.S.  federal  government's  discretion.  In
addition,  funding for orders  from the U.S.  federal  government  is subject to
approval on an annual basis by Congress pursuant to the appropriations process.

Government  Intent to Replace  Legacy  Systems--Our  business  will be harmed if
     government agencies are unwilling to replace or supplement expensive legacy
     systems.

     Government  agencies  have spent  substantial  resources  over an  extended
period of time to develop  computer  systems and to train their personnel to use
them.  These  agencies may be reluctant  to abandon or  supplement  these legacy
systems with Internet and other advanced  technology systems because of the cost
of developing them or the additional cost of re-training  their personnel.  Such
reluctance  would make it more difficult to acquire new  contracts,  which would
harm our business prospects.

Reliance on  Subcontractors--We  regularly employ subcontractors to assist us in
     satisfying our contractual  obligations.  If these  subcontractors  fail to
     adequately  perform  their  contractual  obligations,  our  prime  contract
     performance  and our ability to obtain future  business could be materially
     and adversely impacted.

     Our  performance  of  government  contracts  may  involve  the  issuance of
subcontracts  to other  companies upon which we rely to perform all or a portion
of the work we are obligated to deliver to our  customers.  There is a risk that
we may have disputes with subcontractors concerning a number of issues including
the quality and  timeliness  of work  performed by the  subcontractor,  customer
concerns  about the  subcontractor,  our  decision not to extend  existing  task
orders or issue new task  orders  under a  subcontract,  or our hiring of former
personnel of a subcontractor.  A failure by one or more of our subcontractors to
satisfactorily deliver on a timely basis the agreed-upon supplies and/or perform
the  agreed-upon  services may  materially  and adversely  impact our ability to
perform our obligations as a prime contractor.  Further,  there is a risk that a
subcontractor's  technology  solution on which certain of our contracts and task
orders are dependent  could become obsolete or fall out of favor with customers.
In extreme cases, such  subcontractor  performance  deficiencies could result in
the government terminating our contract for default. A default termination could
expose us to liability for excess costs of  reprocurement  by the government and
have a material  adverse  effect on our ability to compete for future  contracts
and task orders.

                                       5
<PAGE>


Dependence on Key Personnel  --If we lose our technical  personnel or members of
     senior management, our business may be adversely affected.

     Our continued  success  depends in large part on our ability to recruit and
retain the technical  personnel  necessary to serve our  customers  effectively.
Competition  for skilled  personnel in the  information  technology  and systems
engineering  services industry is intense and technology service companies often
experience high attrition  among their skilled  employees.  Excessive  attrition
among  our  technical  personnel  could  increase  our costs of  performing  our
contractual   obligations,   reduce  our  ability  to  efficiently  satisfy  our
customers'  needs and constrain our future  growth.  In addition,  we must often
comply  with  provisions  in U.S.  federal  government  contracts  that  require
employment of persons with specified  levels of education,  work  experience and
security  clearances.  The loss of any  significant  number of our  existing key
technical  personnel  or the  inability  to attract  and  retain  key  technical
employees in the future could have a material  adverse  effect on our ability to
win new business and could harm our operating results. There is also a risk that
our efforts to hire  personnel of our  competitors  or  subcontractors  or other
persons  could lead to claims  being  asserted  against us that our  recruitment
efforts violate contractual arrangements or are otherwise wrongful.

     In addition,  we believe that the success of our business  strategy and our
ability to operate profitably depends on the continued  employment of our senior
management team, led by Joseph M. Kampf.  None of our senior management team has
an  employment  contract  with us. If Mr.  Kampf or other  members of our senior
management  team  become  unable  or  unwilling  to  continue  in their  present
positions,  our business and financial  results  could be  materially  adversely
affected.

Security Clearance--If we cannot obtain the necessary  security  clearances,  we
      may not be able to  perform  classified  work for the  government  and our
      revenues may suffer.

     Certain  government  contracts  require  our  facilities  and  some  of our
employees to maintain  security  clearances.  If we lose or are unable to obtain
required security clearances,  the customer can terminate the contract or decide
not to renew it upon its expiration. As a result, to the extent we cannot obtain
the  required  security  clearances  for our  employees  working on a particular
contract, we may not derive the revenue anticipated from the contract, which, if
not  replaced  with  revenue  from other  contracts,  could  seriously  harm our
operating results.

Security Issues--Security  breaches in sensitive government systems could result
     in the loss of customers and negative publicity.

     Many of the systems we develop involve managing and protecting  information
involved  in national  security  and other  sensitive  government  functions.  A
security  breach  in one of  these  systems  could  cause  serious  harm  to our
business,  could result in negative  publicity  and could prevent us from having
further access to such critically sensitive systems or other similarly sensitive
areas for other governmental customers.

Customer  Expectations--We  could lose  revenues  and  customers  and expose our
     company to liability if we fail to meet customer expectations.

     We create,  implement  and  maintain  technology  solutions  that are often
critical to our  customers'  operations.  If our  technology  solutions or other
applications  have significant  defects or errors or fail to meet our customers'
expectations, we may:

     o    lose  future  contract  opportunities  due to  receipt  of  poor  past
          performance evaluations from our customers;

     o    have  contracts  terminated for default and be liable to our customers
          for reprocurement costs and other damages;

     o    receive  negative  publicity,  which could damage our  reputation  and
          adversely affect our ability to attract or retain customers; and

     o    suffer claims for substantial  damages  against us,  regardless of our
          responsibility for the failure.

                                       6
<PAGE>


     While many of our contracts  limit our liability for damages that may arise
from negligent acts, errors,  mistakes or omissions in rendering services to our
customers,  we cannot be sure that these contractual  provisions will protect us
from liability for damages if we are sued.  Furthermore,  our general  liability
insurance  coverage may not continue to be available on  reasonable  terms or in
sufficient  amounts  to cover  one or more  large  claims,  or the  insurer  may
disclaim coverage as to any future claim. The successful  assertion of any large
claim against us could seriously harm our business. Even if not successful, such
claims  could  result  in  significant  legal  and  other  costs  and  may  be a
distraction to management.

Acquisition  Strategy--We   intend  to  pursue  future  acquisitions  which  may
      adversely affect our business if we cannot effectively integrate these new
      operations.

     We have completed and integrated eight strategic  acquisitions  since 1997.
The  U.S.  federal  government  information  technology  solutions  and  systems
engineering   services  industry  remains   fragmented,   and  we  believe  that
acquisition and consolidation  opportunities will continue to present themselves
periodically. We intend to continue to selectively review acquisition candidates
with a focus on  companies  with  complementary  skills  or  market  focus.  Our
continued success may depend upon our ability to integrate any businesses we may
acquire in the future.  The  integration of such  businesses into our operations
may  result  in  unforeseen  operating  difficulties,   may  absorb  significant
management attention and may require significant  financial resources that would
otherwise be available for the ongoing development or expansion of our business.
Such  difficulties of integration may include the coordination of geographically
dispersed  organizations,  the integration of personnel with disparate  business
backgrounds and the reconciliation of different corporate cultures. In addition,
in certain acquisitions,  U.S. federal acquisition regulations may require us to
enter  into  contract  novation  agreements  with the  government,  a  routinely
time-consuming  process.  Government agencies may delay in recognizing us as the
successor  contractor  in these  situations,  thereby  possibly  preventing  our
realization of some of the anticipated benefits of such acquisitions.  There can
be no assurance  that acquired  entities will operate  profitably,  that we will
realize  anticipated  synergies  or  that  these  acquisitions  will  cause  our
operating performance to improve.

     Although  management  regularly  engages in  discussions  with and  submits
acquisition  proposals to  acquisition  targets,  there can be no assurance that
suitable  acquisition  targets  will be  available  in the future on  reasonable
terms. In addition, to the extent that we complete any additional  acquisitions,
no  assurance  can be given that  acquisition  financing  will be  available  on
reasonable  terms or at all, that any new businesses  will generate  revenues or
net income comparable to our existing businesses or that such businesses will be
integrated successfully or operated profitably.

Potential Undisclosed  Liabilities  Associated  with  Acquisitions--We  may  be
      subject to certain liabilities assumed in connection with our acquisitions
      that could harm our operating results.

     We conduct due diligence in connection  with each of our  acquisitions.  In
connection with any of our  acquisitions,  there may be liabilities that we fail
to discover or that we  inadequately  assess in our due  diligence  efforts.  In
particular,  to the  extent  that prior  owners of any  acquired  businesses  or
properties  failed to  comply  with or  otherwise  violated  applicable  laws or
regulations,  or failed to fulfill  their  contractual  obligations  to the U.S.
federal  government  or other  customers,  we, as the  successor  owner,  may be
financially  responsible  for  these  violations  and  failures  and may  suffer
reputational  harm or  otherwise  be adversely  affected.  The  discovery of any
material  liabilities  associated with our acquisitions could harm our operating
results.

Our Employees may Engage in Improper  Activities with Adverse  Consequences to
      our Business.

                                       7
<PAGE>


     As with other  government  contractors,  we are faced with the  possibility
that our employees may engage in misconduct,  fraud or other improper activities
that may have adverse  consequences  to our prospects and results of operations.
Misconduct  by  employees  could  include  failures to comply with U.S.  federal
government procurement regulations, violation of federal requirements concerning
the  protection of classified  information,  improper labor and cost charging to
contracts  and  misappropriation  of  government  or third  party  property  and
information.  The occurrence of any such employee activities could result in our
suspension or debarment from contracting with the U.S.  federal  government,  as
well as the imposition of fines and  penalties,  which would cause material harm
to our business.

Risks Associated  with  International   Operations--Our  international  business
      exposes us to additional  risks  including  legal  regulations and social,
      political or economic instability that could harm our operating results.

     In connection with our international  operations  (including  international
operations under U.S. government contracts),  we are subject to risks associated
with operating in and selling to foreign countries, including:

     o    compliance with the laws of the countries in which we operate;

     o    hyperinflation or political instability in foreign countries;

     o    potential  personal  injury to our  personnel  who may be  exposed  to
          military conflict or other hostile situations in foreign countries;

     o    fluctuation in currency conversion to the U.S. dollar;

     o    imposition  or  increase  of  investment  and  other  restrictions  or
          requirements by foreign governments; and

     o    compliance  with U.S. arms export  control  regulations  and policies,
          which govern our ability to supply foreign affiliates and customers.

     Although our international operations are not currently substantial, to the
extent we expand our international operations,  these and other risks associated
with international  operations are likely to increase.  Although such risks have
not harmed our  operating  results in the past,  no assurance  can be given that
such risks will not harm our operating results in the future.

Risks related to our capital structure

Leverage--Our debt could adversely affect our financial health.

     As of December 31, 2004, our debt which includes capital lease  obligations
was $185.0 million. This level of debt could have important consequences. Below,
we have identified some of the material  potential  consequences  resulting from
this amount of debt.

     o    We may be unable to obtain  additional  financing for working capital,
          capital expenditures, acquisitions and general corporate purposes.

     o    Over time, a significant portion of our cash flow from operations must
          be dedicated to the repayment of  indebtedness,  thereby  reducing the
          amount of cash we have available for other purposes.

     o    Our ability to adjust to changing  market  conditions may be hampered.
          We may be more vulnerable in a volatile market.

Additional Borrowings  Available--Despite  current  debt  levels,  we  and  our
      subsidiaries  may still be able to incur  substantially  more  debt.  This
      could further increase the risks described above.

     We and our subsidiaries may be able to incur additional indebtedness in the
future. The terms of our Amended and Restated Credit Agreement,  as amended,  or
"Credit  Facility," limit, but do not prohibit us or our subsidiaries from doing
so. As of December 31, 2004, our Credit Facility would have permitted additional
borrowings  of up  to  $292.1  million.  If  new  debt  is  added  by us or  our
subsidiaries, the related risks that we and they now face could increase.

                                       8
<PAGE>


Ability to Service  Debt--To  service our debt,  we will  require a  significant
      amount of cash.  Our  ability to  generate  cash  depends on many  factors
      beyond our control.

     You should be aware that our ability to repay or refinance our debt depends
on our successful financial and operating performance. We cannot assure you that
our  business  strategy  will  succeed or that we will  achieve our  anticipated
financial  results.  Our financial and  operational  performance  depends upon a
number of factors, many of which are beyond our control. These factors include:

     o    the current  economic and  competitive  conditions in the  information
          technology industry;

     o    budgetary constraints affecting U.S. federal government spending,  and
          changes in fiscal policies or available funding;

     o    U.S.  federal  government  shutdowns and other potential delays in the
          government appropriations process;

     o    delays in the payment of our invoices by  government  payment  offices
          due to problems with, or upgrades to, government  information systems,
          or for other reasons;

     o    any operating  difficulties,  operating costs or pricing  pressures we
          may experience;

     o    the  passage of  legislation  or other  regulatory  developments  that
          affect us adversely; and

     o    delays in implementing any strategic projects we may have.

     If our financial  performance  declines and we are unable to pay our debts,
we will be  required  to  pursue  one or more  alternative  strategies,  such as
selling  assets,  refinancing  or  restructuring  our  indebtedness  or  selling
additional equity capital.  Also, certain  alternative  strategies would require
the consent of our senior secured lenders before we engage in any such strategy.

Restrictive Debt Covenants--The  terms of our Credit Facility impose significant
      restrictions  on our ability and that of our  subsidiaries to take certain
      actions  which may have an impact on our business,  operating  results and
      financial condition.

     Our  Credit   Facility   imposes   significant   operating   and  financial
restrictions  on us  and  our  subsidiaries  and  requires  us to  meet  certain
financial tests. These restrictions may significantly  limit or prohibit us from
engaging in certain transactions, including the following:

     o    incurring or guaranteeing additional debt;

     o    paying  dividends  or  other  distributions  to  our  stockholders  or
          redeeming,  repurchasing or retiring our capital stock or subordinated
          obligations;

     o    making investments, loans and advances;

     o    making capital expenditures;

     o    creating liens on our assets;

     o    issuing or selling capital stock of our subsidiaries;

     o    transforming  or selling assets  currently held by us,  including sale
          and lease-back transactions;

     o    modifying certain agreements, including those related to indebtedness;

     o    engaging in transactions with affiliates; and

     o    engaging in mergers, consolidations or acquisitions.

                                       9
<PAGE>


     The  failure to comply  with any of these  covenants  would cause a default
under  our  Credit  Facility.   A  default,  if  not  waived,  could  result  in
acceleration  of our debt, in which case the debt would become  immediately  due
and  payable.  If this  occurs,  we may not be able to repay  our debt or borrow
sufficient funds to refinance it. Even if new financing is available, it may not
be on terms that are acceptable to us.

Item 1. BUSINESS

General

     We are a leading provider of information  technology  solutions and systems
engineering  and  integration  services to  government  customers as measured by
revenue. We design, integrate, maintain and upgrade state-of-the-art information
systems for national defense,  intelligence,  emergency  response and other high
priority government  missions.  We also provide many of our government customers
with the systems analysis,  integration and program  management skills necessary
to manage  their  mission  systems  development  and  operations.  We have broad
service competencies that include strengths in intelligence  systems,  emergency
response management,  logistics modernization,  secure identification and access
management  solutions,   training,  platform  and  weapons  systems  engineering
support,   ballistic  missile  defense,   healthcare   services  and  government
enterprise solutions.

     We currently  serve over 1,000 U.S.  federal  government  customers in more
than 50 government agencies,  as well as state and foreign governments.  For the
year ended  December 31, 2004,  approximately  89% of our revenues  were derived
from the Department of Defense, or "DOD," and DOD-related intelligence agencies,
and approximately 10% from civilian agencies of the U.S. federal government,  of
which approximately 37% is derived from the Department of Homeland Security,  or
"DHS". For the year ended December 31, 2004,  approximately  88% of our revenues
were  from  contracts  where we were the lead,  or  "prime,"  contractor  on our
projects. We provide our services under long-term contracts that have a weighted
average  term of 6  years,  assuming  the  exercise  of all  potential  contract
options.  Additionally,  we had contracts with an estimated  remaining  contract
value of $6.3  billion as of December 31, 2004,  of which  approximately  $830.9
million is funded backlog.

     From January 1996 to December 31, 2004,  we increased  revenues from $141.8
million to $1.268  billion,  at a compound  annual growth rate of  approximately
32%. Our  revenues  grew  organically  by 14.2% from 2003 to 2004 and 16.2% from
2002 to 2003. We define organic growth as the increase in revenues excluding the
revenues  associated with acquisitions,  divestitures and closures of businesses
in comparable periods.

The U.S. Federal Government Technology Services Market

     The U.S. federal  government is the largest single customer for information
technology  solutions and systems engineering  services in the United States. It
is  anticipated  that  technology  services  spending  will  grow  in the  areas
emphasized  by the  U.S.  government's  evolving  military  strategy,  including
homeland security, missile defense,  information security, logistics management,
systems modernization, weapon systems design improvements and military personnel
training.  Defense  spending is projected to exceed $400.1 billion in government
fiscal  year 2005,  a 6.5%  increase  over  government  fiscal  year  2004.  The
President's  proposed  budget for government  fiscal year 2006 includes  defense
spending of $419.3 million, a 4.8% increase over government fiscal year 2005, if
adopted,  would be the largest Department of Defense budget in history in actual
dollars.  The 2006  Department of Defense  spending  plan  submitted to Congress
includes a 25.5% increase over the next six years.

Government Contracts and Contracting

     The federal  technology  services  procurement  environment  has evolved in
recent years due to statutory and regulatory  changes resulting from procurement
reform initiatives. U.S. federal government agencies traditionally have procured
technology solutions and services through agency-specific contracts awarded to a
single  contractor.  However,  the  number of  procurement  contracting  methods
available to U.S.  federal  government  customers for services  procurements has
increased substantially.  Today, there are three predominant contracting methods
through which  government  agencies  procure  technology  services:  traditional
single award contracts,  GSA Schedule  contracts,  and single and multiple award
ID/IQ contracts.

                                       10
<PAGE>


     Traditional  single award contracts specify the scope of services that will
be delivered and the contractor that will provide the specified  service.  These
contracts have been the traditional  method for procurement by the U.S.  federal
government.  When  an  agency  has a  requirement,  interested  contractors  are
solicited,  qualified,  and then  provided  with a request for a  proposal.  The
process of qualification,  request for proposals and evaluation of bids requires
the agency to maintain a large,  professional  procurement  staff and can take a
year or more to complete.

     GSA Schedule  contracts  are  listings of services,  products and prices of
contractors   maintained  by  the  GSA  for  use  throughout  the  U.S.  federal
government.  In order for a company to  provide  services  under a GSA  Schedule
contract,  the company must be pre-qualified and awarded a contract by GSA. When
an agency uses a GSA Schedule contract to meet its requirements,  the agency, or
the GSA on behalf of the agency,  conducts the procurement.  The user agency, or
the GSA on its behalf,  evaluates the user agency's  services  requirements  and
initiates a competition  limited to GSA Schedule qualified  contractors.  Use of
GSA  Schedule  contracts  is expected  to provide  the user agency with  reduced
procurement time and lower procurement costs.

     Single and multiple award ID/IQ  contracts are contract forms through which
the U.S.  federal  government  creates  preferred  provider  relationships  with
contractors.  These  umbrella  contracts  outline the basic terms and conditions
under which the government may order services. An umbrella contract typically is
managed by one agency,  the sponsoring  agency,  and is available for use by any
agency of the U.S.  federal  government.  The  umbrella  contracts  are competed
within the  industry  and one or more  contractors  are awarded  contracts to be
qualified to perform the work. The  competitive  process for procurement of work
to be  performed  under the  contract,  called  task  orders,  is limited to the
pre-selected contractor(s). If the ID/IQ contract has a single prime contractor,
the award of task orders is limited to that single  party.  If the  contract has
multiple  prime  contractors,  the  award  of the task  order  is  competitively
determined. Multiple-contractor ID/IQ contracts that are open for any government
agency to use for the procurement of services are commonly referred to as GWACs.
Due to the lower cost,  reduced  procurement time, and increased  flexibility of
GWACs,  there has been greater use of GWACs among many agencies for  large-scale
procurements of technology services.

Key Factors Driving Growth

     There are several key factors  which we believe will  continue to drive the
growth of the U.S. federal technology services market and our business:

     o    Increased  Outsourcing.  The downsizing of the U.S. federal government
          workforce, declining availability of information technology management
          skills among government  personnel,  and a corresponding growth in the
          backlog of software  maintenance tasks at many government agencies are
          contributing  to an increase in technology  outsourcing.  According to
          the  Office  of   Management   and  Budget,   spending  on  outsourced
          information  technology  solutions  is  projected  to  grow  at a rate
          substantially faster than overall U.S. federal government  information
          technology expenditures.  In government fiscal year 2004, 82.5% of the
          U.S.  federal  government's  total  information  technology  solutions
          spending flowed to contractors.  By government  fiscal year 2009, this
          rate of  outsourcing  is  projected  to  increase  to  85.2%  of total
          information technology spending.

     o    Government Efficiency  Initiatives.  Political pressures and budgetary
          constraints are forcing government agencies to improve their processes
          and  services  and  to  operate  in  a  manner  more  consistent  with
          commercial enterprises. To meet these challenges,  government agencies
          are   investing   heavily  in   information   technology   to  improve
          effectiveness, enhance productivity and deliver new services.

     o    Continued   Dependence  on  Commercial   Off-the-Shelf   Hardware  and
          Software.  The U.S. federal  government has increased its use of lower
          cost, open  architecture  systems using commercial  off-the-shelf,  or
          "COTS," hardware and software, which are rapidly displacing the single
          purpose,  custom  systems  historically  favored  by the U.S.  federal
          government.  The need for COTS products and COTS integration  services
          is expected to increase as the  government  seeks to ensure the future
          compatibility  of  its  systems  across  agencies.  In  addition,  the
          continued  shortening  of  software  upgrade  cycles  is  expected  to
          increase the demand for the integration of new COTS products.

                                       11
<PAGE>


     o    Increased  Spending on National Defense.  National defense spending is
          projected to grow substantially over the next five years with the U.S.
          federal  government   increasing  its  commitment  to  strengthen  the
          nation's  security,  defense and intelligence  capabilities.  The U.S.
          federal government is investing in improved homeland security, greater
          information systems security, more effective intelligence  operations,
          and new approaches to warfare simulation training. Defense spending is
          projected to exceed $400.1 billion in government  fiscal year 2005, an
          increase  of  almost  6.5%  over  government  fiscal  year  2004.  The
          President's  proposed  budget  for 2006  defense  spending  is  $419.3
          billion,  a 4.8% increase over the government  fiscal year 2005 budget
          and, if adopted,  would be the  largest  defense  budget in history in
          actual dollars.

     o    Emphasis  on  System  Modernization.  To  balance  the  costs  of  new
          initiatives like homeland  security with the costs of ongoing military
          operations,   the  Department  of  Defense  is  emphasizing  upgrading
          existing  platforms  to  next  generation   technologies  rather  than
          procuring completely new systems. For example,  rather than replace an
          entire  generation  of aircraft and ships,  the U.S. Air Force and the
          U.S.  Navy  have  decided  to  invest in  upgrades,  using the  latest
          information  technology and weapons systems.  To accomplish this in an
          environment of military personnel  reductions,  the armed services are
          increasingly  dependent on highly skilled contractors that can provide
          the  full  spectrum  of  services  needed  to  support   modernization
          activities.

     o    Continuing  Impact  of  Procurement  Reform.  Recent  changes  in U.S.
          federal  procurement  regulations have incorporated  commercial buying
          practices,  including preferred supplier  relationships in the form of
          GWACs, into the government's  procurement process.  These changes have
          produced lower acquisition  costs,  faster  acquisition  cycles,  more
          flexible   contract   terms,   and   more   stable   supplier/customer
          relationships.  U.S.  federal  expenditures  through  GWACs  has grown
          significantly  over the past three years,  and the GSA projects growth
          in Schedule  contracts  will average 13.4% annually over the next four
          years.

Our Capabilities and Services

     We are a leading provider of information technology solutions to government
customers.  We  design,   integrate,   maintain  and  upgrade  state-of-the  art
information systems for national defense,  intelligence,  emergency response and
other high priority  government  missions.  As a total  solutions  provider,  we
maintain the  comprehensive  information  technology skills necessary to support
the entire  lifecycle of our customers'  systems,  from  conceptual  development
through operational  support. We provide  requirements  definition and analysis,
process design or re-engineering, systems engineering and design, networking and
communications  design,  COTS hardware and software  evaluation and procurement,
custom software and middleware development,  system integration and testing, and
software  maintenance and training  services.  Depending upon customer needs, we
may provide total system solutions  employing our full set of skills on a single
project,  or we may provide more targeted,  or "bundled,"  services  designed to
meet  the  customer's  specific   requirements.   For  example,  we  built,  and
continuously maintain and upgrade, the National Emergency Management Information
System, or "NEMIS," an enterprise-wide  management  information  system, for the
U.S.  Federal  Emergency  Management  Agency,  or "FEMA."  This  system has been
procured in three phases:  system definition and design, base system development
and deployment, and upgrades to incorporate current web technology.

     We also are a leading  provider  of  systems  engineering  and  integration
services to government  customers,  primarily within the defense  community.  We
provide these  defense  customers  with the systems  analysis,  integration  and
program  management  skills  necessary to manage the  continuing  development of
their mission systems,  including ships,  aircraft,  weapons and  communications
systems.  As  a  solutions  provider  in  this  market,  we  also  maintain  the
comprehensive  skills to manage  the  customer's  system  lifecycle.  We provide
mission area and threat analyses,  research and development management,  systems
engineering and design acquisition management,  systems integration and testing,
operations concept planning,  systems maintenance and training.  For example, we
provide threat analysis, operations concept planning and systems integration and
testing for certain U.S. Navy systems,  including the radar, missile and command
and  control  systems,  employed  to protect  its fleet from  ballistic  missile
attack. Like information technology solutions, these skills may be procured as a
comprehensive  mission solution, or they may be procured as specially prescribed
tasks.

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<PAGE>


Our Service Competencies and Contract Examples

     The key to our success in both our  information  technology  solutions  and
systems  engineering  services  businesses is a combination of in-depth customer
and mission knowledge, or domain expertise,  and comprehensive technical skills.
We  believe  this  combination  provides  long-term,   sustainable   competitive
advantage,  performance  excellence and customer satisfaction.  Accordingly,  we
have focused our growth strategy on several  business areas where the mix of our
domain  expertise and our end-to-end  technical skills provides us with a strong
competitive  advantage  and the  opportunity  to  cross-sell  our  solutions and
services.

     The following  paragraphs briefly describe our service  competencies in our
information   technology  and  systems  engineering  and  integration   services
businesses,  and provide examples of selected programs in which we utilize these
competencies.

INFORMATION TECHNOLOGY SOLUTIONS

     Intelligence  Systems.  We have  more  than  ten  years  of  experience  in
designing,  developing and operating  information  systems used for intelligence
missions.  These  missions  focus on data  and  imagery  collection,  as well as
information  analysis and  dissemination of information to the  battlefield.  An
example of our working in this area includes:

     o    Coalition Enterprise Regional Information Exchange System CENTRIXS and
          CENTRIXS N.A.T.O.  Since 1993, through a series of contracts,  we have
          provided  services to the U.S.,  N.A.T.O.,  and other allied  military
          forces with  near-real-time  correlated  situation and order of battle
          information for threat analysis,  target recommendations,  indications
          and  warnings.  CENTRIXS  is  one  of the  most  widely-used  command,
          control, computers,  communication and intelligence systems within the
          international  intelligence  community. We provide systems engineering
          and  technical   assistance,   software   development,   configuration
          management,  operational  support  and  user  training.  This  program
          recently has been expanded to include the deployment of new systems to
          Central  Asia  and  additional  system  deployments  to the  coalition
          countries in the war on terrorism and Operation Iraqi Freedom.

     Emergency  Response  Management.  We have unique  experience  in developing
information   technology  systems  to  support  emergency  response   management
requirements.  Our expertise includes  large-scale  system design,  development,
testing, implementation, training and operational support. Our work in this area
includes:

     o    National Emergency Management Information System. Since early 1996, we
          have supported the  development of the NEMIS system for FEMA through a
          series of contracts  and task  orders.  We believe our support to FEMA
          will continue to grow with FEMA's increased  responsibility as a first
          responder to disasters and terrorist  attacks and as FEMA supports its
          mission within DHS. NEMIS provides mission critical  functionality for
          FEMA's  core  mission  of  disaster   response  and   recovery.   This
          enterprise-wide   management   information   system  connects  several
          thousand desktop and mobile terminals/handsets,  providing FEMA with a
          fully mobile,  nationwide,  rapid  response  disaster  assessment  and
          mitigation system. We continue to provide  enhancements to the current
          system,  and we are in the  process of  expanding  our support to this
          mission  area  to  include  an  internet-based  capability  that  will
          integrate with the DHS technology infrastructure.

     Logistics  Modernization.  We provide a wide range of logistics  management
information  technology solutions,  including process design and re-engineering,
technology  demonstrations,  proof-of-concept  systems development,  new systems
development and existing systems upgrades.  Our working logistics  modernization
includes:

     o    Joint Logistics Warfighting Initiative or "JLWI." Since March 2000, we
          have been providing process re-engineering system design, and database
          integration as we conduct a variety of customer  directed  process and
          technology  experiments  and  demonstrations  on the  Joint  Logistics
          Warfighting  Initiative  contract.  JLWI  represents the DOD's efforts
          focused on facilitating the military's  logistics  transformation  and
          improving military readiness through business process improvements and
          the implementation of new and emerging technologies. We have developed
          a  proof-of-concept  for web enabling the military's  legacy logistics
          systems  in  order  to  provide  real-time   visibility  of  logistics
          information on the battlefield, or the "JLWI Shared Data Environment."
          Third party independent validation and verification of the JLWI Shared
          Data  Environment  reflects  that it has  already  gained  significant
          support through its use by units in the U.S. and in overseas locations
          like Afghanistan and Kuwait.

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<PAGE>


     Government  Enterprise  Solutions.  Our supply chain  management,  software
engineering  and  integration   experience  allows  us  to  develop  large-scale
e-commerce  applications  tailored  for the specific  needs of the U.S.  federal
government environment.  These applications provide end-users with significantly
decreased transaction costs, increased accuracy, reduced cycle times, item price
savings, real-time order status and visibility of spending patterns.

     o   U.S.  Postal  Service E-Buy System.  We have been  providing  lifecycle
         information  technology services to the U.S. Postal Service since 1983.
         We have developed and implemented an electronic commerce application to
         serve an estimated 80,000 to 100,000 U.S. Postal Service  employees who
         purchase a wide range of products on the U.S.  Postal Service  intranet
         web site.  Pre-negotiated  supplier  catalogs are hosted on an intranet
         for security and  performance.  Web-based  purchasing  provides catalog
         management capability,  multi-catalog searching, self-service ordering,
         workflow  and  approval  processing  and  other  status  and  receiving
         functions. Fulfilling the U.S. Postal Service's requirement to serve up
         to  100,000  employees  required  the  development  of  a  very  robust
         transaction processing application.

     o    Joint and Service Enterprise  Information  Technology Support. We have
          been providing Enterprise  Information Technology support for numerous
          Joint and Service  Commands,  or the  "Commands," for the past decade,
          both  in the  U.S.  and in  numerous  locations  abroad.  Our  support
          comprises    all    functions    of    the    Enterprise,    including
          telecommunications   engineering,   planning  and  operation,  network
          development,   administration  and  management,   software  life-cycle
          support, and business process  engineering.  Our employees deploy with
          the Commands  during both peacetime  operations and war and are making
          vital contributions to the Commands'  capabilities to accomplish their
          missions.  The supported Commands include U.S. Central Command and its
          Army,  Third U.S.  Army/ARCENT,  and the U.S. Air Force,  9th U.S. Air
          Force/CENTAF,  component commands,  U.S. Army Forces Command, the U.S.
          Army  Reserve  Command,  and the U.S.  Army  Network  Engineering  and
          Technology Command.

     o    Coalition,  Joint and Service Training Exercise Support  Commands.  We
          have  been  providing   mission  Exercise  Program  Support  from  the
          individual unit to multi-national coalition level. We plan events that
          prepare  commanders and their staff to measure  training  proficiency,
          correct  deficiencies,  and prepare for wartime missions. We are adept
          at planning,  implementing, and critiquing all aspects of these events
          to include augmentation with senior mentor and subject matter experts.
          We have  planned  every  facet of the  events  to  include  logistical
          support,  communications  system planning and provisioning,  and other
          support  functions.  These  exercises  have  played  a  major  part in
          preparation  of United States and Coalition  Forces to meet the global
          war on terrorism, and Operation Iraqi Freedom and DHS missions.

     Modeling,  Simulation  and  Training.  We  provide a  comprehensive  set of
information  technology  solutions  and  services  to our  customers,  including
computer-based  training,  web-based  training,  distance learning,  interactive
electronic  technical  manuals,  performance  support systems and organizational
assessment methods. We provide service to the following programs:

     o    Program Executive Office Simulation Training and  Instrumentation,  or
          "PEO STRI." Since  January  2000,  we have provided life cycle support
          for  constructive  training  at  fourteen  U.S.  Army  Simulation  and
          Training Command Simulation centers worldwide. We have more than 1,000
          personnel supporting this program at more than 50 sites throughout the
          United States,  Germany,  Italy and South Korea.  We provide  exercise
          support for computer-driven  and manual battle simulations,  including
          planning,   coordination,   personnel   support,   instructional   aid
          development,  simulation  training,  database and scenario development
          and  system  integrity.  We  support a  variety  of  mission  specific
          simulations,   providing  highly  qualified   professionals   who  are
          certified in all aspects of  simulation  support,  to each of the U.S.
          Army's Battle Simulation Centers.

                                       14
<PAGE>


     o    Military Operations on Urban Terrain, or "MOUT." We have supported the
          U.S.  Army's  MOUT  program  since  July  1997.  Our  support  to MOUT
          primarily  focuses  on the  design  and  instrumentation  of the  most
          advanced  MOUT  site  in the  world  located  at the  Joint  Readiness
          Training Center, Fort Polk, LA, as well as other sites worldwide.  The
          site allows trainers to  continuously  observe,  control,  monitor and
          record the conduct of training.  The system captures every second of a
          training  exercise  through  the  use of  nearly  1,000  cameras  tied
          together via a fiber optic backbone and high-speed  local area network
          to the control room.  The system is also designed to control  targetry
          and multiple  battlefield  effects and has the  flexibility to support
          both simulated fire and live fire exercises.  We have also developed a
          mobile  version  of MOUT to  facilitate  training  in the  theater  of
          operation.  For  example,  two  Mobile  MOUT sites  were  ordered  and
          delivered for use in Kuwait and  Afghanistan  in early 2003 to support
          operations in the global war on terrorism. During 2004, we delivered a
          Mobile MOUT site to the U.S. National Guard.

     Secure Identification and Access Management Solutions. Our position in this
market provides us with capabilities in optical memory card technology, which is
used primarily for high-capacity portable secure data storage and authentication
through multiple  biometrics.  This  capability,  combined with our expertise in
integrated  circuit card technology,  which is used primarily for access control
and related  transaction  processing,  positions us to capitalize on the growing
demand in this  market.  Both of the secure  identification  and access  control
technologies  are gaining  significant and increased  support with U.S.  federal
agencies, including the DOD, DHS and foreign governments.

     o    Integrated Card  Production  System.  We are the prime  contractor for
          secure  identification and border control card solutions for the DHS's
          Bureau of Citizenship and Immigration  Services,  or "BCIS." Through a
          contract  with the  BCIS,  we  provide  the  Permanent  Resident  Card
          solution,   as  well  as  the  Department  of  State  Border  Crossing
          "LaserVisa" Card solution.  To date, the U.S.  federal  government has
          procured  over 23 million  secure  identification  cards  through this
          contract.  We are positioned to grow from the expanding budget of DHS,
          as secure identification and credential card technologies  proliferate
          within DHS and other U.S. federal government agencies.

     Healthcare  Services.  We  deliver  information   technology  solutions  in
healthcare  programs for the Department of Defense,  U.S. Army,  U.S. Navy, U.S.
Air Force and U.S.  Marine  Corps.  Our support for  medical  research  includes
statistical  analysis,  data  mining of  complex  medical  databases  and health
surveillance.   Our  solutions  for  patient  care  include  diagnostics,  image
processing, and medical records management.

     o    U.S. Army Medical  Department We provide  technical,  scientific,  and
          administrative  support to the Office of the Surgeon General, the U.S.
          Army Medical  Research and Material  Command and the U.S. Army Medical
          Command  and its  subordinate  activities,  laboratories  and  medical
          facilities.  We have been  providing  this  support  since  1989 under
          several contracts. We support the research,  development,  acquisition
          and/or fielding of medical  equipment and supplies,  drugs,  vaccines,
          diagnostics and advanced information technology. We assist with policy
          development and implementation,  strategic planning,  decision-making,
          information  systems design and development,  information  management,
          studies and analyses,  logistics planning and medical research.  These
          services  entered into areas of homeland  security,  domestic  medical
          preparedness  and Chemical  Biological  Radiological  Nuclear  Defense
          programs.

SYSTEMS ENGINEERING AND INTEGRATION SERVICES

     Platform  and Weapons  Systems  Engineering  Support.  We have more than 10
years  experience  in providing  critical  systems  engineering  and  technology
management  services in support of defense platform and weapon systems programs.
Our experience  encompasses  systems  engineering and  development,  mission and
threat  analysis and  acquisition  management  for the majority of U.S. Navy and
U.S. Air Force weapon systems. We provide core systems  engineering  disciplines
in  support  of most  major  surface  ship  and  submarine  programs  as well as
virtually all U.S. Air Force weapon systems.


                                       15
<PAGE>


     o    Secretary  of the Air  Force  Technical  and  Analytical  Support,  or
          "SAFTAS." In December  2000,  we entered into a 15-year  contract with
          the U.S. Air Force to provide technical and analytical  support to the
          Headquarters  Air Force and Secretary of the Air Force  organizations.
          The contract  includes  support to the Assistant  Secretary of the Air
          Force for  Acquisition,  the Joint Strike Fighter Program Office,  the
          Under Secretary for Space,  and all of the Program  Executive  Offices
          which oversee all  aircraft,  munitions,  space and Command,  Control,
          Computer,    Communications,     Intelligence,     Surveillance    and
          Reconnaissance  systems.  We provide  program,  budgetary,  policy and
          legislative  analysis,   information   technology  services,   systems
          engineering and technical  management  services for all major U.S. Air
          Force acquisition  programs.  We believe that this program, as well as
          similar programs for the U.S. Navy, will continue to experience growth
          as the  Department  of Defense plans for billions of dollars of system
          upgrades over the next decade.

     o    Shipbuilding  Engineering  Support.  For over  twenty  years,  we have
          provided  acquisition  management and engineering  support to the U.S.
          Navy's  shipbuilding  program offices.  Today, this includes the AEGIS
          shipbuilding program, aircraft carrier program, all submarine programs
          and  developmental  programs  such as the new  DDX  destroyer  and the
          Littoral  Combatant Ship. We also develop  software serving the global
          ship design industry.  In addition to support for customer acquisition
          offices and  industry,  we provide  support  for the ships  during the
          in-service phase of their life cycle through multiple contracts.  This
          includes   installation   support,   refurbishment  of  equipment  and
          provision of new software.

     o    Research, Development, Test and Evaluation Support. We support various
          DOD  laboratories and field activities in the provision of technology,
          testing, operation of facilities and general research and development,
          or "R&D,"  support.  Our  technologies  range  from the  provision  of
          advanced  algorithms for the Virginia class  submarines,  software for
          decision support systems, video compression algorithms, advanced sonar
          concepts and unique software for technology assessment. We operate the
          U.S. Air Force  Research  Laboratory's  Laser  Facilities  and conduct
          material testing on their behalf.

     Ballistic  Missile  Defense.  We have more than a decade of  experience  in
ballistic  missile defense  programs.  We provide  long-range  planning,  threat
assessment,  systems  engineering and integration,  acquisition support services
and program management services.

     o    Theater-Wide  Ballistic Missile Defense or "TBMD." Since January 1999,
          we have  supported  the U.S.  Navy by  providing  management,  systems
          engineering  and technical  support to the TBMD program.  We provide a
          broad range of support to  develop,  test,  evaluate,  and produce the
          U.S. Navy's future ballistic missile defense systems.  Due to our U.S.
          Navy TBMD  System  experience,  we were  selected  to provide  similar
          support to the National Missile Defense program.  We believe ballistic
          missile programs will experience  near-and-long-term growth as the DOD
          moves  forward to meet the U.S.  federal  government's  mandate  for a
          national missile defense system.

Our Growth Strategy

     Our goal is to become the first pure-play technology services company to be
included  in the top  tier  of  government  technology  service  providers.  Our
strategy to achieve this objective includes the following:

     o    Continue to Increase Market Penetration. The U.S. federal government's
          continued   movement   towards  using   significantly   larger,   more
          comprehensive  contracts,  such as GWACs, has favored companies with a
          broad range of technical  capabilities and proven track records.  As a
          prime  contractor on three of the four largest  GWACs for  information
          technology  services based on overall  contract ceiling value, we have
          benefited from these changes. We will continue to expand our role with
          current  customers  on  existing  programs  while  also  pursuing  new
          opportunities only available through these larger contracts.

     o    Capitalize on Increased  Emphasis on  Information  Security,  Homeland
          Security  and  Intelligence.  Defense  spending is projected to exceed
          $400.1  billion in government  fiscal year 2005, an increase of almost
          6.5% over government fiscal year 2004, and is expected to reach $419.3
          billion in government fiscal year 2006, a 4.8% increase over projected
          government fiscal year 2005 spending.  Defense budgets are expected to
          grow by 25.5%  over the next six  years,  based on the  Department  of
          Defense  spending plan submitted to Congress.  We believe that many of
          the key operational  goals of the U.S.  federal  government  correlate
          with our expertise,  including  developing a national  missile defense
          system,  increasing homeland security,  protecting information systems
          from attack,  conducting  effective  intelligence  homeland  security,
          protecting  information  systems  from  attack,  conducting  effective
          intelligence  operations,  and training for new  approaches to warfare
          through simulation.

                                       16
<PAGE>


     o    Capitalize on Growing Demand in the Secure  Identification  and Access
          Management  Solutions Market.  The use of credential card technologies
          for secure  identification  and access  control  solutions  is rapidly
          gaining  momentum  with U.S.  federal  agencies,  the DOD and  foreign
          governments.  These  cards  are  used for  cardholder  authentication,
          physical  access control and logical access  control.  Our position in
          this market  provides us with a full range of capabilities to meet our
          customers'  requirements.  We have extensive  experience  with optical
          storage card  technology,  which is used primarily for  authentication
          using  biometrics  and  physical  access  control.   This  capability,
          combined  with our expertise in  integrated  circuit card  technology,
          used primarily for logical access  control,  uniquely  positions us to
          capitalize  on the  growing  demand in this market  regardless  of the
          application or credential card technology selected by customers.

     o    Cross-Sell our Full Range of Services to Existing  Customers.  We plan
          to continue expanding the scope of existing customer  relationships by
          marketing and  delivering the full range of our  capabilities  to each
          customer.  Having developed a high level of customer  satisfaction and
          critical   domain   knowledge  as  the  incumbent  on  many  long-term
          contracts,  we have a unique  advantage and  opportunity to cross-sell
          our  services  and  capture  additional  contract  opportunities.  For
          example,  we  believe  our  strong  performance  record  and  detailed
          understanding of customer requirements developed on the U.S. Air Force
          Cargo Movement  Operations  System led directly to our being awarded a
          contract relating to the Joint Logistics Warfighting Initiative.

     o    Continue our Disciplined Acquisition Strategy. We employ a disciplined
          methodology  to evaluate and select  acquisition  candidates.  We have
          completed  eight  strategic  acquisitions  since  1997.  Our  industry
          remains  highly  fragmented  and we believe  the  changing  government
          procurement   environment   will   continue   to  provide   additional
          opportunities  for  industry   consolidation.   We  will  continue  to
          selectively review acquisition candidates with complementary skills or
          market focus.

History and Organization

     In April 1996,  we acquired  all of the  outstanding  capital  stock of our
predecessor corporation,  Anteon International  Corporation (then known as Ogden
Professional Services Corporation), a Virginia corporation, which we refer to in
this filing as "Anteon  Virginia." In connection with the acquisition we changed
the name of Anteon Virginia to Anteon Corporation. Anteon Virginia then acquired
several companies and businesses, including Techmatics, Inc. On January 1, 2001,
Anteon  Virginia was renamed Anteon  International  Corporation  and transferred
most of its operations  into  Techmatics,  which became its principal  operating
subsidiary,  and was in turn renamed Anteon  Corporation.  As a result,  we then
owned  approximately  99% of Anteon  Virginia and Anteon  Virginia owned 100% of
Anteon Corporation (formerly Techmatics).

     On March 15, 2002, we entered into certain  reorganization  transactions in
connection  with our initial  public  offering,  including  the merger of Anteon
Virginia  into  us.  Following  the  merger,  the  name  "Anteon   International
Corporation"  is borne  solely by a single  Delaware  corporation,  which is the
direct 100% parent company of Anteon Corporation (formerly Techmatics).

Acquisitions

     We employ a highly disciplined methodology to evaluate acquisitions.  Since
1997 we have evaluated several hundred targets and have  successfully  completed
and integrated eight strategic  acquisitions.  Each of these acquired businesses
has been accretive to earnings, added to our technical capabilities and expanded
our customer reach.  The acquired  businesses and their roles within our service
offerings are summarized in the table below.

                                       17
<PAGE>

<TABLE>
<CAPTION>

                                                                                                 Revenues prior to
  Year   Acquired Business                        Business Description                            acquisition(1)
 ------ -------------------  --------------------------------------------------------------  ---------------------
                                                                                                  ($ in millions)
<S>                                                                                               <C>
1997        Vector Data    Intelligence collection, exploitation, and dissemination systems
              Systems                                                                             $      35.6
1998        Techmatics     Surface ship and combat systems and ballistic missile defense
                           program management                                                            56.7
1999        Analysis &     Undersea ship and combat systems, acoustical signal processing,
            Technology     modeling and simulation, information technology systems and
                           software design                                                              170.4
2000         Sherikon      Military healthcare services systems, networking and
                           communications systems                                                        62.7
2001      SIGCOM Training  Training simulation systems and services
                                                                                                         12.5
2003            ISI        Secure identification and access management solutions and military
                           logistics and training                                                       130.5
2004            STI        Modeling and simulation software solutions and services                       20.7
2004           IMSI        Information security and assurance, infrastructure security and
                           enterprise IT architecture                                                    31.7

--------------------------------------------------------
(1) Consolidated  revenue of acquired  business for its most recently  completed
fiscal year ended prior to the acquisition date.
</TABLE>


     In August  1997,  we  purchased  Vector Data  Systems,  Inc., a supplier of
specialized  information  systems and services for the collection,  analysis and
distribution of military intelligence data. In May 1998, we acquired Techmatics,
Inc., an  established  provider of systems  engineering  and program  management
services for large-scale military system development,  including the U.S. Navy's
surface ship fleet,  on-ship combat systems and missile defense  programs.  With
the  acquisition  of Analysis &  Technology,  Inc.,  or "A&T," in June 1999,  we
expanded  our  customer  base for systems  engineering  and  program  management
services  to the U.S.  Navy's  undersea  systems and added  important  technical
expertise in computer-based training,  modeling,  simulation and advanced signal
processing.  In October  2000,  we  purchased  Sherikon,  Inc.,  or  "Sherikon,"
extending  the  reach  of  our  information  technology  solutions  to  military
healthcare  delivery systems. In July 2001, we acquired the training division of
SIGCOM,  Inc.  and  increased  the range of our  information  technology-enabled
training solutions to include the realistic simulation of urban environments for
the planning and preparation of overseas  military  operations.  In May 2003, we
purchased  ISI,  a  provider  of secure  identification  and  access  management
solutions and military  logistics  and training to primarily  the  Department of
Defense. In July 2004, we purchased Simulation  Technologies,  Inc., or "STI", a
provider of modeling and simulation  software solutions and services.  In August
2004, we purchased Integrated  Management Services,  Inc., or "IMSI", a provider
of  information  security and assurance  services,  infrastructure  security and
enterprise IT architecture.

Existing Contract Profiles

     We  currently  have a  portfolio  of more than 800  active  contracts.  Our
contract  mix for the year ended  December  31, 2004 was 39% time and  materials
contracts,  34% cost-plus contracts and 27% fixed price contracts (a substantial
majority of which were firm fixed price level of effort).

     Under a time and materials contract,  the contractor is paid a fixed hourly
rate for each direct labor hour expended and is reimbursed for direct costs.  To
the extent that actual labor hour costs vary  significantly  from the negotiated
rates under a time and materials contract, we may generate more or less than the
targeted amount of profit.

     Cost-plus  contracts  provide for  reimbursement of allowable costs and the
payment of a fee which is the contractor's profit. Cost-plus fixed fee contracts
specify the  contract  fee in dollars or as a  percentage  of  allowable  costs.
Cost-plus  incentive fee and cost-plus award fee contracts provide for increases
or decreases in the contract fee,  within  specified  limits,  based upon actual
results as compared to  contractual  targets for factors such as cost,  quality,
schedule and performance.

                                       18
<PAGE>


     Under  a fixed  price  contract,  the  contractor  agrees  to  perform  the
specified work for a firm fixed price. To the extent that actual costs vary from
the price  negotiated we may generate  more or less than the targeted  amount of
profit or even incur a loss.  We generally  do not pursue  fixed price  software
development  work that may  create  material  financial  risk.  We do,  however,
execute  some fixed price  labor hour and fixed price level of effort  contracts
which  represent  similar  levels of risk as time and materials  contracts.  The
substantial  majority of these fixed price contracts involve a defined number of
hours or a defined  category of personnel.  We refer to such contracts as "level
of  effort"  contracts.  Fixed  price  percentages  in the table  below  include
predominantly  fixed price labor hour and fixed price level of effort contracts.
Our historical contract mix is summarized in the table below.

                           Contract Mix

                                                             Year End
------------------------------------------  ------------------------------------
                 Contract Type               2000    2001   2002   2003   2004
------------------------------------------  ------  -----  ------ ------ -------
Cost-Plus (CP)............................    41%     37%   35%    32%    34%
Time and Materials (T&M)..................    31%     34%   37%    38%    39%
Fixed Price (FFP).........................    28%     29%   28%    30%    27%

     Our contract mix changes from year to year depending on the contract mix of
companies we acquire,  as well as our efforts to obtain more time and  materials
and fixed price work. As a result of recent  acquisitions,  our contract mix has
been more weighted towards cost-plus contracts.

     In addition to a wide range of single award contracts with defense,  civil,
state and local  government  customers,  we also hold a number of multiple award
omnibus contracts and GWACs that currently support more than 4,000 separate task
orders. The broad distribution of contract work is demonstrated by the fact that
no single award  contract or task order  accounted for more than 8% of our total
2004 revenue.

     Government Wide Acquisition Contracts.  We are one of the leading suppliers
of information technology services under GWACs, and a prime contractor for three
of the four largest  GWACs for  information  technology  services as measured by
overall  contract  ceiling value.  These contract  vehicles are available to any
government  customer  and provide a faster,  more-effective  means of  procuring
contract services.  For example, in December 1998, we were awarded  Applications
and Support for  Widely-diverse End User  Requirements,  or "ANSWER",  a 10-year
multiple  award contract with the GSA to provide  highly  technical  information
technology  and  systems   engineering   program   support  and   infrastructure
management. We have been awarded over 477 task orders to date under ANSWER, with
an  annualized  revenue  run rate as of the  fourth  quarter  of fiscal  2004 of
approximately $189.6 million.  Currently, our total estimated remaining contract
value for this contract is  approximately  $1.1 billion  through  December 2008.
Listed below are the four largest GWACs.


                        Owning     Period of        Contract
Contract Name           Agency    Performance     Ceiling Value         Role
---------------------  -------- --------------- -----------------  -------------
ANSWER                   GSA      1998 - 2008     $25 billion          Prime
Millenia                 GSA      1999 - 2009     $25 billion      Subcontractor
Millenia Lite            GSA      2000 - 2010     $20 billion          Prime
CIO-SP II                NIH      2000 - 2010     $20 billion          Prime



                                       19
<PAGE>




     Listed below are our top programs by 2004 revenue,  including  single award
and  multiple  award  contracts.  We are a prime  contractor  on  each of  these
programs.
<TABLE>
<CAPTION>

                          Top Programs by 2004 Revenue
                                 ($ in millions)

                                                                                              Estimated
                                                      Period of                               Remaining
      Programs                Customer               Performance         2004 Revenue       Contract Value    Contract Type
--------------------  -------------------  --------------------------  -----------------  ------------------  -----------------
<S>                              <C>               <C>                    <C>                <C>                   <C>
ANSWER
(Multiple
Award Contract)                  GSA               1/1/99-12/31/08        $    189.6         $  1,107.7            T&M/FFP

GSA SCHEDULE
& BPAs                           GSA              10/30/96-09/21/08             92.0              402.9            T&M/FFP

SAFTAS                     U.S. Air Force         01/01/01-12/31/15             48.0              388.1              CP

STOC                          U.S. Army           12/21/00-12/20/08             42.6              263.5          CP/FFP/T&M

GSA PES Contract                 GSA              01/06/00-01/26/08             40.9              315.3            T&M/FFP

GSA-MOBIS                        GSA              11/21/97-09/30/07             40.2              258.0            T&M/FFP

Engineering and
Technical Services            U.S. Navy           07/16/02-01/15/08             28.6               77.0              CP

Naval Sea Systems
Command
(Multiple Award
Contract)                    U.S. Navy           04/02/01-03/31/16              28.3              478.2              CP

Foreign Military
Sales Logistic
Support                       U.S. Navy           03/25/98-03/24/08             27.3               21.8              CP

CENTRIX/LOCE            Department of Defense     12/01/02-09/27/09             23.8              149.9              CP

</TABLE>

Subcontractors

     In fulfilling  our contract  obligations  to customers,  we may utilize the
services of one or more  subcontractors.  The use of  subcontractors  to support
bidding for and the subsequent  performance  of awarded  contacts is a customary
aspect of U.S. federal government  contracting.  Subcontractors may be tasked by
us with  performing  work elements of the contract  similar to or different from
those performed by us or other  subcontractors.  For the year ended December 31,
2004,  approximately  26% of our total direct costs resulted from work performed
by subcontractors. As discussed further in "Risk Factors," if our subcontractors
fail to satisfy their contractual  obligations,  our prime contract  performance
could be materially and adversely  affected.  To the extent  subcontractor costs
increase or decrease in the future,  our operating  profit margin  percentage on
contracts could be affected.


                                       20
<PAGE>


Estimated Remaining Contract Value and New Business Development

     On December 31,  2004,  our  estimated  remaining  contract  value was $6.3
billion,  of which $830.9 million was funded backlog.  In determining  estimated
remaining contract value, we do not include any provision for an increased level
of work likely to be awarded under our GWACs. The estimated  remaining  contract
value is calculated as current  revenue run rate over the remaining  term of the
contract.  Our estimated  remaining  contract  value  consists of funded backlog
which is based upon amounts  actually  appropriated by a customer for payment of
goods and services and unfunded  contract value which is based upon management's
estimate of the future potential of our existing  contracts to generate revenues
for us. These  estimates are based on our  experience  under such  contracts and
similar  contracts,  and we believe such  estimates to be  reasonable.  However,
there can be no assurance  that the unfunded  contract value will be realized as
contract revenue or earnings. In addition,  almost all of the contracts included
in estimated remaining contract value are subject to termination at the election
of the customer.

                               ESTIMATED REMAINING CONTRACT VALUE
                                                                Estimated
  As of December 31,      Funded       Unfunded Contract        Remaining
                          Backlog           Value             Contract Value
--------------------  --------------  --------------------  ------------------
                                          (in millions)
2004 ..............     $     831         $    5,466          $      6,297
2003 ..............           661              4,948                 5,609
2002 ..............           418              3,868                 4,286
2001 ..............           309              3,217                 3,526
2000 ..............           308              2,560                 2,868


     From  December  31, 1999 to December  31,  2004,  our  estimated  remaining
contract  value,  including  IMSI and STI,  increased at a 24%  compound  annual
growth  rate.  We believe  this growth  demonstrates  the  effectiveness  of our
two-tiered business development process that management has developed to respond
to the strategic and tactical opportunities arising from the evolving government
procurement environment. New task order contract vehicles and major high-profile
programs are designated strategic opportunities, and their pursuit and execution
are  managed  centrally.  A core team  comprised  of senior  management  and our
strategic  business  unit heads makes all  opportunity  selection  and  resource
allocation  decisions.  Work that can be performed  under our many existing task
order  contract  vehicles is  designated a tactical  opportunity,  which is then
managed and  performed  at the  business  unit level with support as needed from
other  company  resources.  All  managers  and senior  technical  personnel  are
encouraged to source new work, and  incentives are weighted to ensure  corporate
objectives are given primary consideration.

Customers

     We provide information  technology and systems  engineering  solutions to a
highly diverse group of U.S. federal, state, local and international  government
organizations worldwide. Domestically, we service more than 50 agencies, bureaus
and divisions of the U.S. federal government, including nearly all cabinet-level
agencies and all branches of the military. For the year ended December 31, 2004,
the  U.S.  federal  government  accounted  for  approximately  98% of our  total
revenues.  International and state and local governments  provided the remaining
2%. The DOD accounted for  approximately  89% of our total revenues and services
to U.S.  federal  civilian  organizations  were  approximately  10%. Our largest
customer  group is the U.S.  Navy,  which  accounted  for  approximately  45% of
revenues during the year ended December 31, 2004, through 84 different U.S. Navy
organizations.

     An account  receivable  from a U.S.  federal  government  agency enjoys the
overall credit worthiness of the U.S. federal government,  even though each such
agency has its own budget.  Pursuant to the Prompt  Payment Act,  payments  from
government  agencies must be made within 30 days of final invoice  acceptance or
interest must be paid.

                                       21
<PAGE>


Competition

     The  federal  information   technology  and  systems  engineering  services
industries  are comprised of a large number of  enterprises  ranging from small,
niche-oriented  companies  to  multi-billion  dollar  corporations  with a major
presence  throughout  the  U.S.  federal  government.  Because  of  the  diverse
requirements of U.S.  federal  government  customers and the highly  competitive
nature of large U.S. federal contracting  initiatives,  corporations  frequently
form teams to pursue contract  opportunities.  Prime  contractors  leading large
proposal efforts select team members on the basis of their relevant capabilities
and  experience   particular  to  each   opportunity.   As  a  result  of  these
circumstances,  companies that are  competitors  for one opportunity may be team
members for another opportunity.

     We frequently  compete against  well-known firms in our industry as a prime
contractor.  Obtaining a position as either a prime  contractor or subcontractor
on  government-wide  contracting  vehicles  is only the first step to ensuring a
secure  competitive  position.  Competition  then takes  place at the task order
level,  where  knowledge of the customer and its  procurement  requirements  and
environment  are keys to  winning  the  business.  We have  been  successful  in
ensuring our presence on GWACs and GSA Schedule contracts,  and in competing for
work under those contracts.  Through the variety of contractual  vehicles at our
disposal, as either a prime contractor or subcontractor,  we have the ability to
market our services to any federal agency.  Because of our extensive  experience
in providing services to a diverse array of federal departments and agencies, we
have  first-hand  knowledge  of our  customers  and their  goals,  problems  and
challenges.  We believe  this  knowledge  gives us a  competitive  advantage  in
competing for tasks and positions us well for future growth.

Employees

     As of December 31, 2004, we employed approximately 8,800 employees,  88% of
whom were  billable and 66% of whom held security  clearances.  Our workforce is
well  educated  and  experienced  in  the  defense  and  intelligence   sectors.
Functional areas of expertise  include systems  engineering,  computer  science,
business   process   reengineering,    logistics,   transportation,    materials
technologies,  avionics  and finance  and  acquisition  management.  None of our
employees are represented by collective bargaining agreements.

Available Information

     Our internet  address is  www.anteon.com.  We make available free of charge
through our internet  site, via a hyperlink to the  10KWizard.com  web site, our
annual reports on Form 10-K;  quarterly reports on Form 10-Q; current reports on
Form 8-K; and any amendments to those reports filed or furnished pursuant to the
Securities  Exchange Act of 1934, or the  "Exchange  Act," as soon as reasonably
practicable after such material is  electronically  filed with, or furnished to,
the SEC.

ITEM 2. PROPERTIES

     Our headquarters are located in leased facilities in Fairfax,  Virginia. In
total,  we lease  approximately  1.4  million  square  feet of office,  shop and
warehouse  space in over 100 facilities  across the United States,  Canada,  the
United Kingdom and  Australia.  We own an office  building in North  Stonington,
Connecticut,  which  occupies  63,578  square feet of office  space and which is
currently being held for sale. We also have employees  working at customer sites
throughout the United States and in other countries.

ITEM 3. LEGAL PROCEEDINGS

     We are involved in various  legal  proceedings  in the  ordinary  course of
business.

     We cannot predict the ultimate outcome of these matters, but do not believe
that they will have a material  impact on our  financial  position or results of
operations.


                                       22
<PAGE>



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On October 22, 2004, a special  meeting of our  stockholders  was held. The sole
matter  voted upon at the meeting was the  approval  and  adoption of the Anteon
International  Corporation Employee Stock Purchase Plan. The voting results were
as follows:

                  Votes For                        29,384,892
                  Votes Against                       230,050
                  Votes Abstaining                      4,564

Part II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Our common stock has been publicly  traded on the New York Stock  Exchange,
or the "NYSE," since March 11, 2002.

     The following table sets forth the high and low sale price per share of our
common stock during the year ended December 31, 2004 and 2003 as reported by the
NYSE.

                    2004
           Quarter Ended               High              Low
           ---------------------     ----------      ------------
           March 31                   $   37.00        $   27.01
           June 30                    $   33.62        $   28.75
           September 30               $   37.29        $   28.25
           December 31                $   43.16        $   35.70


                    2003
           Quarter Ended               High              Low
           ---------------------     ----------      ------------
           March 31                   $   25.85        $   20.00
           June 30                    $   29.50        $   21.86
           September 30               $   35.10        $   27.30
           December 31                $   38.95        $   30.71


     We have not in the past paid, and do not expect for the foreseeable  future
to pay,  dividends on our common stock.  Instead,  we anticipate that all of our
future  earnings,  if any,  will be used in the  operation  and expansion of our
business,  for working capital, and other general corporate purposes.  Our board
will determine  whether to pay dividends in the future based on conditions  then
existing,  including our earnings, financial condition and capital requirements,
as well as economic  and other  conditions  as the board may deem  relevant.  In
addition,  our  ability  to declare  and pay  dividends  on our common  stock is
restricted  by the  provisions  of  Delaware  law and  covenants  in our  Credit
Facility.

     The Company has filed a Registration  Statement on Form S-8 with the SEC to
register  1.2 million  shares of the  Company's  common stock under the Employee
Stock Purchase Plan ("ESPP"),  which was implemented on April 1, 2004. The table
below details the shares purchased under the ESPP during certain periods:

<TABLE>
<CAPTION>

                                                        Total Number of
                                                      Shares Purchased as      Maximum Number  of
                                         Average        Part of Publicly      Shared that May Yet Be
                   Total Number of     Prices Paid         Announced                Purchased
Period             Shares Purchased     per Share             Plan                Under the Plan
----------------  --------------------------------- ---------------------- --------------------------
<S>  <C>                 <C>              <C>                  <C>                     <C>
July 1, 2004             14,668           $32.29               14,668                  1,185,332
October 1, 2004          16,262           $37.20               16,262                  1,169,070
                    -----------                           -----------            ---------------
2004 Total               30,930                                30,930                  1,169,070
                    ===========                           ===========            ===============
</TABLE>

                                       23
<PAGE>



     As of March 2,  2005,  the number of  stockholders  of record of our common
stock was approximately 371.

ITEM 6.  SELECTED FINANCIAL DATA

     The selected consolidated  financial data set forth below have been derived
from our audited consolidated financial statements as of and for the years ended
December 31, 2004,  2003, 2002, 2001 and 2000. These results are not necessarily
indicative of the results that may be expected for any future period and are not
comparable   between  prior  periods  as  a  result  of  business   acquisitions
consummated  in 2000,  2001,  2003,  and 2004.  Results of  operations  of these
acquired  businesses are included in our consolidated  financial  statements for
the periods subsequent to the respective dates of acquisition.

     You should read the selected consolidated financial data presented below in
conjunction  with Item 7.  "Management's  Discussion  and  Analysis of Financial
Condition and Results of Operations,"  Item 1.  "Business" and our  consolidated
financial  statements and the related notes thereto appearing  elsewhere in this
filing.


                                       24
<PAGE>




<TABLE>
<CAPTION>



                                                                            Year ended December 31,

                                                     2000               2001            2002            2003              2004
                                                    ------             ------          ------          ------            ------
                                                             (in thousands, except per share data and percentages)
Statements of operations data:
<S>                                              <C>               <C>              <C>             <C>              <C>
Revenues..................................       $    542,807      $    715,023     $  825,826      $  1,042,474     $   1,268,139
Costs of revenues.........................            474,924           627,342        711,328           897,264         1,093,470
                                                 --------------    --------------   ------------    -------------    --------------


Gross profit..............................             67,883            87,681        114,498           145,210           174,669
General and administrative expenses,
  including acquisition related costs.....             38,592            51,442         48,197            58,647            65,964
Amortization of non-compete agreements ...                866               349             --               101               167
Goodwill amortization.....................              4,714             6,704             --                --                --
Other intangibles amortization............              2,673             2,321          1,907             2,349             2,509
                                                 ------------      ------------     ----------      ------------     -------------

Operating income .........................             21,038            26,865         64,394            84,113           106,029
Other Income..............................                 --                --            417                --               973
Gains on sales and closures of business...                 --             4,046             --                --                --
Secondary offering expenses...............                 --                --             --               852               240
Interest expense, net of interest
  income..................................             26,513            26,353         21,626            24,244             7,769
Minority interest in (earnings) losses of
  subsidiaries.... .......................                 32              (38)           (18)              (54)              (72)
                                                 --------------    --------------   ------------    -------------    --------------

Income (loss) before provision for (benefit
  from) income taxes .....................            (5,443)             4,520         43,167            58,963            98,921
Provision for (benefit from) income
  taxes...................................              (153)             4,602         16,723            22,773            37,116
                                                 --------------    --------------   ------------    -------------    --------------


     Net income (loss)....................       $    (5,290)      $       (82)     $   26,444      $     36,190     $      61,805
                                                 ==============    ==============   ============    =============    ==============

Basic earnings (loss) per  common share          $     (0.22)      $     (0.01)     $     0.82      $       1.04     $        1.73
                                                 ==============    ==============   ============    =============    ==============

     Weighted average shares outstanding..             23,787            23,787         32,163            34,851            35,717

Diluted earnings (loss) per  common share        $     (0.22)      $     (0.01)     $     0.78      $       0.98     $        1.66
                                                 ==============    ==============   ============    =============    ==============

     Weighted average shares outstanding..             23,787            23,787         34,022            36,925            37,267

Other data:
EBITDA (a)................................       $     36,347      $     47,357     $   70,994      $     90,097     $     113,382
EBITDA margin (b).........................               6.7%              6.6%           8.6%              8.6%              8.9%
Cash flow from (used in) operating
  activities..........                           $     17,101      $     37,879     $  (1,722)      $     37,443     $      18,244
Cash flow used in investing activities....           (28,912)           (1,707)        (1,423)          (95,431)          (47,878)
Cash flow from (used in) financing
  activities..........                                  12,036          (35,676)          5,481            55,810            31,649
Capital expenditures......................              6,584             2,181          3,225             3,049             3,963
Balance sheet data (as of December 31):
Current assets............................       $    148,420      $    144,418     $  208,396      $    244,591     $     338,604
Working capital (c).......................             56,841            27,559         80,390           105,287           169,160
Total assets..............................            324,423           306,651        364,692           479,280           613,426
Long-term debt, including current
  portion.............                                237,695           202,905        105,701           158,776           184,388
Stockholders' equity (deficit)............            (1,576)           (3,442)        128,829           174,492           247,276

(a)  "EBITDA", as defined,  represents income before income taxes, depreciation,  amortization and net interest expense. EBITDA is a
     supplemental  financial  measure but should not be construed as an alternative to operating income or cash flows from operating
     activities (as determined in accordance with U. S. generally accepted accounting  principles "GAAP"). We believe that EBITDA is
     a useful  supplement to net income and other income  statement data because it is used by some investors in  understanding  and
     measuring a company's cash flows generated from operations that are available for taxes, debt service and capital expenditures.
     However,  all companies do not calculate EBITDA in the same manner,  and as a result,  the EBITDA measures presented may not be
     comparable to similarly titled measures of other companies. The computations of EBITDA are as follows:
</TABLE>


                                       25
<PAGE>

<TABLE>
<CAPTION>



                                                                               Year ended December 31,

                                                                 2000         2001        2002         2003         2004
                                                                ------       ------      ------       ------       ------
                                                                                  ($ in thousands)
<S>                                                         <C>          <C>         <C>          <C>          <C>
       Net income (loss)..........................          $   (5,290)  $     (82)  $    26,444  $   36,190   $   61,805
       Provision for (benefit from) income tax                    (153)       4,602       16,723      22,773       37,116
       Interest expense, net of interest income...               26,513      26,353       21,626       24,244       7,769
       Depreciation...............................                7,024       7,110        4,294        4,440       4,016
       Amortization...............................                8,253       9,374       1,907        2,450        2,676
                                                            -----------  ----------  ----------   ----------   ----------
       EBITDA.....................................          $    36,347  $   47,357  $    70,994  $   90,097   $  113,382
                                                            ===========  ==========  ===========  ==========   ==========

       Net income (loss) margin (d)...............               (1.0%)      (0.1%)         3.2%        3.5%         4.9%
       EBITDA margin (b)..........................                 6.7%        6.6%         8.6%        8.6%         8.9%

(b)  EBITDA margin represents EBITDA calculated as a percentage of total revenues.

(c) Working Capital is equal to current assets minus current liabilities.

(d)  Net income margin represents net income calculated as a percentage of total revenues.
</TABLE>


                                       26
<PAGE>


ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     You  should  read the  following  discussion  in  conjunction  with Item 6.
"Selected Consolidated Financial Data" and our consolidated financial statements
and related notes included  elsewhere in this filing.  Some of the statements in
the following  discussion are forward-looking  statements.  See "Forward-Looking
Statements."

General

     We are a leading provider of information  technology  solutions and systems
engineering  and  integration  services to  government  customers as measured by
revenue. We design, integrate, maintain and upgrade state-of-the-art information
systems for national defense,  intelligence,  emergency  response and other high
priority government  missions.  We also provide many of our government customers
with the systems analysis,  integration and program  management skills necessary
to manage their mission systems development and operations.

     We have a broad  customer and contract base and a diverse  contract mix. We
currently  serve over 1,000 U.S.  federal  government  customers in more than 50
government  agencies,  as well as state and  foreign  governments.  For the year
ended  December  31,  2004,  approximately  89% of our revenue was derived  from
contracts with the DOD and intelligence  agencies,  and  approximately  10% from
civilian  agencies of the U.S. federal  government.  For the year ended December
31, 2004,  approximately 88% of our revenue was from contracts where we were the
lead, or "prime,"  contractor.  Our diverse contract base has  approximately 800
active  contracts  and more than 4,000  active task  orders.  For the year ended
December  31,  2004,   our  largest   contract  or  task  order   accounted  for
approximately 8% of our revenues.  We have a diverse mix of contract types, with
approximately  39%, 34%, and 27% of our revenues for the year ended December 31,
2004  derived  from time and  materials,  cost-plus  and fixed price  contracts,
respectively.  We  generally  do not pursue  fixed  price  software  development
contracts that may create financial risk.  Additionally,  we have contracts with
an estimated  remaining  contract value of $6.3 billion as of December 31, 2004,
of which $830.9 million is funded backlog. Our contracts have a weighted-average
term of approximately 6 years.  From December 31, 1999 to December 31, 2004, our
estimated remaining contract value increased at a 25.2% compounded annual growth
rate, including the effect of acquisitions.

Description of Critical Accounting Policies

     Management's  Discussion and Analysis of Financial Condition and Results of
Operations  discusses our  consolidated  financial  statements,  which have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United  States of  America.  The  preparation  of these  consolidated  financial
statements  requires  management to make estimates and judgments that affect the
reported  amount of assets and  liabilities  and the  disclosure  of  contingent
assets and liabilities at the date of the consolidated  financial statements and
the reported amounts of revenues and expenses during the reporting period. On an
ongoing basis,  management  evaluates its estimates  including  those related to
uncollected accounts receivable,  contingent  liabilities,  revenue recognition,
goodwill  and  other  intangible  assets.  Management  bases  its  estimates  on
historical  experience  and on various  other  factors  that are  believed to be
reasonable at the time the estimates  are made.  Actual  results may differ from
these estimates under different  assumptions or conditions.  Management believes
that our critical accounting  policies which require more significant  judgments
and estimates in the preparation of our  consolidated  financial  statements are
revenue recognition,  costs of revenues, goodwill impairment,  long-lived assets
and identifiable intangible asset impairment and business combinations.

Revenue Recognition

     During the year ended December 31, 2004, we estimate that approximately 98%
of our revenues  were derived from  services and  approximately  2% from product
sales. Services are performed under contracts that may be categorized into three
primary types: time and materials, cost-plus reimbursement and firm fixed price.
Revenue  for time and  materials  contracts  is  recognized  as time is spent at
hourly  rates,  which  are  negotiated  with the  customer  plus the cost of any
allowable  material  costs  and  out-of-pocket   expenses.  Time  and  materials
contracts are typically more profitable than cost-plus  contracts because of our
ability to  negotiate  rates and  manage  costs on those  contracts.  Revenue is
recognized  under cost-plus  contracts on the basis of direct and indirect costs
incurred  plus a negotiated  profit  calculated  as a percentage  of costs or as
performance-based  award fee.  Cost-plus type contracts provide  relatively less
risk than other  contract  types because we are  reimbursed for all direct costs
and certain  indirect  costs,  such as overhead  and general and  administrative
expenses,  and are paid a fee for work  performed.  For  certain  cost plus type
contracts,  which are  referred to as  cost-plus  award fee type  contracts,  we
recognize  the  expected  fee to be awarded by the customer at the time such fee
can  be  reasonably  estimated,  based  on  factors  such  as  our  prior  award
experience,   communications   with  the  customer  regarding  our  performance,
including any interim  performance  evaluations  rendered by the customer or our
average historical award fee rate for the company.  For the years ended December
31, 2004 and 2003, revenue for award fees accrued under cost-plus award fee type
contracts was $5.6 million and $2.5 million,  respectively.  Under substantially
all fixed price contracts,  which are  predominantly  level of effort contracts,
revenues are recognized using the cost-to-cost method for all services provided.
For non-service related fixed price contracts,  revenues are recognized as units
are  delivered  (the  units-of-delivery  method).  In addition,  we evaluate our
contracts for multiple  deliverables  which may require the segmentation of each
deliverable into separate accounting units for proper revenue recognition.

                                       27
<PAGE>


     We recognize  revenues under our U.S. federal  government  contracts when a
contract is executed, the contract price is fixed and determinable,  delivery of
the services or products has occurred, the contract is funded and collectibility
of the contract price is considered probable. Our contracts with agencies of the
U.S.  federal  government  are  subject to  periodic  funding by the  respective
contracting agency.  Funding for a contract may be provided in full at inception
of the contract or ratably  throughout  the term of the contract as the services
are provided.  From time to time, we may proceed with work on unfunded  portions
of existing  contracts  based on customer  direction  pending  finalization  and
signing of  contractual  funding  documents.  We have an  internal  process  for
approving any such work. All revenue  recognition is deferred  during periods in
which funding is not received.  Costs incurred  during such periods are deferred
if the receipt of funding is assessed as probable. In evaluating the probability
of funding  being  received,  we  consider  our  previous  experiences  with the
customer,  communications  with the customer  regarding funding status,  and our
knowledge  of available  funding for the contract or program.  If funding is not
assessed as probable, costs are expensed as they are incurred.  Historically, we
have not recorded any significant  write-offs because funding was not ultimately
received.

     We  recognize  revenues  under  our  cost  based  U.S.  federal  government
contracts based on allowable  contract  costs,  as mandated by the U.S.  federal
government's  cost accounting  standards.  The costs we incur under U.S. federal
government  contracts are subject to regulation and audit by certain agencies of
the U.S. federal government. Historically, contract cost disallowances resulting
from government  audits have not  historically  been  significant.  Our incurred
costs have been audited through 2002.

     Contract revenue recognition  inherently involves  estimation.  Examples of
such estimates  include the level of effort needed to accomplish the tasks under
the  contract,  the cost of those  efforts,  and a continual  assessment  of our
progress toward the completion of the contract. From time to time, circumstances
may arise  which  require us to revise  our  estimated  total  revenue or costs.
Typically,  these revisions relate to contractual  changes. To the extent that a
revised estimate affects contract revenue or profit  previously  recognized,  we
record the  cumulative  effect of the revision in the period in which it becomes
known.  In  addition,  the full  amount  of an  anticipated  loss on any type of
contract  is  recognized  in the  period in which it  becomes  known.  We may be
exposed to variations in profitability if we encounter  variances from estimated
fees earned  under award fee  contracts  and  estimated  costs under fixed price
contracts.

     We generally do not pursue fixed price software  development  work that may
create material  financial risk. We do,  however,  provide  services under fixed
price  labor hour and fixed  price level of effort  contracts,  which  represent
similar  levels of risk as time and  materials  contracts.  Our contract mix was
approximately  39% time and  materials,  34%  cost-plus  and 27% fixed  price (a
substantial  majority of which are firm fixed price level of effort)  during the
year ended December 31, 2004. The contract mix can change over time depending on
contract  awards  and  acquisitions.  Under  cost-plus  contracts  with the U.S.
federal  government,  operating  profits  are  statutorily  limited  to 10%  but
typically  range  from 3% to 7%.  Under  fixed  price  and  time  and  materials
contracts,  margins  are not  subject to  statutory  limits.  However,  the U.S.
federal government's  objective in negotiating such contracts is to seldom allow
for  operating  profits  in excess  of 15% and,  due to  competitive  pressures,
operating profits on such contracts are often less than 10%.

     We maintain reserves for uncollectible  accounts receivable which may arise
in the normal  course of  business.  Historically,  we have not had  significant
write-offs of uncollectible accounts receivable.  However, we do perform work on
many contracts and task orders,  where on occasion issues may arise, which would
lead to accounts receivable not being fully collected.


                                       28
<PAGE>


Costs of Revenues
-----------------

     Our costs are categorized as either direct or indirect costs.  Direct costs
are those that can be identified  with and  allocated to specific  contracts and
tasks.  They include labor,  fringe  (vacation time,  medical/dental,  401K plan
matching   contribution,   tuition   assistance,   employee  welfare,   worker's
compensation and other benefits),  subcontractor costs,  consultant fees, travel
expenses  and  materials.  Indirect  costs are either  overhead  or general  and
administrative  expenses.  Indirect  costs cannot be  identified  with  specific
contracts  or  tasks,  and to the  extent  that  they  are  allowable,  they are
allocated  to  contracts   and  tasks  using   appropriate   government-approved
methodologies.  Costs determined to be unallowable under the Federal Acquisition
Regulations cannot be allocated to projects. Our principal unallowable costs are
interest expense,  amortization  expense for separately  identified  intangibles
from acquisitions and certain general and administrative expenses. A key element
to our success has been our ability to control  indirect and unallowable  costs,
enabling us to profitably  execute our existing  contracts and  successfully bid
for new contracts.  In addition,  with the acquisition of new companies, we have
been  able to manage  our  indirect  costs  and  improve  operating  margins  by
integrating  the indirect cost structures and realizing  opportunities  for cost
synergies.  Costs of revenues are considered to be a critical  accounting policy
because of the direct relationship to revenue recognized.

Goodwill Impairment
-------------------

     Goodwill  relating to our  acquisitions  represents the excess of cost over
the fair value of net tangible and  separately  identifiable  intangible  assets
acquired,  and has a carrying amount of approximately  $242.1 million and $212.2
million as of December  31,  2004 and 2003,  respectively.  The  majority of the
increase in goodwill in 2004 was related to the  acquisitions of STI and IMSI in
July and August 2004, respectively.

     We completed  our annual  impairment  analyses as of September 30, 2004 and
2003,  noting no indications of impairment for any of our reporting units. As of
December  31,  2004,  there  have  been no events or  circumstances  that  would
indicate an impairment  test should be performed  sooner than our planned annual
test as of September 30, 2005.

Long-Lived Assets and Identifiable Intangible Asset Impairment
--------------------------------------------------------------

     The carrying amount of long-lived assets and identifiable intangible assets
was approximately $24.1 million and $17.9 million at December 31, 2004 and 2003,
respectively.  Of the $24.1  million at December  31, 2004,  approximately  $8.0
million of the assets are  related to our recent  acquisitions  of STI and IMSI.
Long-lived assets and identifiable  intangible assets,  excluding goodwill,  are
evaluated for impairment  when events occur that suggest that such assets may be
impaired.  Such  events  could  include,  but are not  limited to, the loss of a
significant   customer  or  contract,   decreases  in  U.S.  federal  government
appropriations or funding of certain programs,  or other similar events. None of
these events  occurred for the year ended  December 31, 2004. We determine if an
impairment  has occurred  based on a comparison  of the carrying  amount of such
assets  to the  future  undiscounted  net  cash  flows,  excluding  charges  for
interest.  If considered  impaired,  the impairment is measured as the amount by
which the carrying  value of the assets exceeds their  estimated fair value,  as
determined by an analysis of discounted  cash flows using a discounted  interest
rate  based on our cost of  capital  and the  related  risks of  recoverability.
During the year ended  December 31, 2003, we recognized an impairment  charge of
approximately  $135,000,  included in general and administrative expenses in the
accompanying  consolidated  statement of operations,  to write-down the carrying
value of a building held for sale to its estimated fair market value.

     In evaluating impairment,  we consider,  among other things, our ability to
sustain our current financial  performance on contracts and tasks, our access to
and  penetration of new markets and customers and the duration of, and estimated
amounts from, our contracts.  Any uncertainty of future financial performance is
dependent on our ability to maintain our customers and the continued  funding of
our contracts  and tasks by the  government.  Over the past four years,  we have
been able to win the majority of our  contracts  that have been  recompeted.  In
addition,  we have been able to sustain financial  performance  through indirect
cost  savings from our  acquisitions,  which have  generally  resulted in either
maintaining or improving  margins on our contracts and tasks. If we are required
to record an impairment charge in the future, it would have an adverse impact on
our results of operations.


                                       29
<PAGE>


Business Combinations
---------------------

     We apply the provisions of SFAS No. 141, Business Combinations, whereby the
net  tangible  and  separately   identifiable  intangible  assets  acquired  and
liabilities  assumed are recognized at their estimated fair market values at the
acquisition  date.  The purchase  price in excess of the  estimated  fair market
value of the net tangible and separately identifiable intangible assets acquired
represents  goodwill.  The  allocation  of the  purchase  price  related  to our
business  combinations  involves significant  estimates and management judgement
that may be adjusted  during the  allocation  period,  but in no case beyond one
year from the acquisition  date. Costs incurred  related to successful  business
combinations  are  capitalized  as costs of business  combinations,  while costs
incurred by us for  unsuccessful  or terminated  acquisition  opportunities  are
expensed when we determine  that such  opportunities  will no longer be pursued.
Costs incurred related to probable business combinations are deferred.

Statements of Operations
------------------------

     The  following  is a  description  of certain  line items from our  audited
consolidated  statements of operations,  which include the acquisitions of IMSI,
STI and ISI since the dates of the acquisitions.

     Costs of  revenues  include  direct  labor and  fringe  costs  for  program
personnel and direct  expenses  incurred to complete  contracts and task orders.
Costs of revenues also include depreciation, overhead, and other direct contract
costs, which include subcontract work, consultant fees, and materials.  Overhead
consists of indirect costs relating to  operational  managers,  rent/facilities,
administration, travel and other expenses.

     General and administrative  expenses are primarily for corporate  functions
such as management, legal, finance and accounting, contracts and administration,
human resources,  company management  information systems and depreciation,  and
also include other unallowable  costs such as marketing,  certain legal fees and
reserves.

     Amortization expenses relate to the costs associated with intangible assets
from our acquisitions. These intangible assets represent the fair value assigned
to contract  backlog and  customer  relationships  as part of our  acquisitions.
Amortization  expenses also include costs  associated  with certain  non-compete
agreements related to the ISI acquisition.

     Other income is from non-core  business items such as gains on the sales of
businesses,  fair market value adjustments to the retirement  savings plan and a
settlement  agreement we entered into with the former owners of Sherikon,  which
resulted in our paying a reduced amount of the subordinated note payable.

     Secondary  offering expenses relate to costs associated with the selling of
our common stock in underwritten  offerings  during the years ended December 31,
2003 and 2004.  The  Company  sold no shares and  received  no proceeds in these
offerings.  Therefore,  we were  required  to  classify  the  related  costs  as
expenses.

     Interest  expense is  primarily  related  to our term  loans and  revolving
Credit Facility,  our subordinated debt, our 12% senior subordinated notes which
were due in 2009, or the "12% Notes",  interest rate swaps and  amortization  of
deferred financing costs. None of our 12% Notes remained  outstanding after June
2004.

Funded Backlog and Estimated Remaining Contract Value
-----------------------------------------------------

     Each year a  significant  portion of our revenue is derived  from  existing
contracts with our government customers, and a portion of the revenue represents
work related to  maintenance,  upgrade or replacement of systems under contracts
or  projects  for which we are the  incumbent  provider.  Proper  management  of
contracts  is  critical  to our overall  financial  success and we believe  that
effective  management of costs makes us competitive on price.  Historically,  we
believe that our  demonstrated  performance  record and service  excellence have
enabled us to maintain  our position as an  incumbent  service  provider on more
than 90% of our  contracts  that have been  recompeted.  We have  increased  our
estimated  remaining  contract value by  approximately  $688 million,  from $5.6
billion as of December 31, 2003,  to $6.3 billion at December 31, 2004, of which
approximately  $830.9 million was funded backlog as of December 31, 2004. Funded
backlog increased approximately $169.8 million to $830.9 million at December 31,
2004, from $661.1 million as of December 31, 2003.

                                       30
<PAGE>


     Our estimated  remaining  contract value represents the aggregate  contract
revenue we estimate  will be earned over the  remaining  life of our  contracts.
When more than one company is awarded a contract  for a given work  requirement,
we include in  estimated  remaining  contract  value  only our  estimate  of the
contract  revenue  we expect to earn over the  remaining  term of the  contract.
Funded  backlog is based upon amounts  actually  appropriated  by a customer for
payment for goods and services.  Because the U.S.  federal  government  operates
under annual  appropriations,  agencies of the U.S. federal government typically
fund  contracts  on an  incremental  basis.  Accordingly,  the  majority  of the
estimated  remaining  contract  value  is  not  funded  backlog.  Our  estimated
remaining  contract  value is based on our  experience  under  contracts  and we
believe our estimates are  reasonable.  However,  there can be no assurance that
our existing  contracts will result in actual revenues in any particular  period
or at all.  These  amounts  could vary  depending  upon  government  budgets and
appropriations.

         Acquisitions, Divestitures and Business Closures

     The following table summarizes our acquisitions,  divestitures and business
closures since January 2002.
<TABLE>
<CAPTION>

                                                                                          Revenues for the most
                                                                                        recently completed twelve
                                                                                         month period ended prior
                 Name                          Status           Acquisition Date             to acquisition
------------------------------------------ ------------  ---------------------------  --------------------------------
                                                                                             (in thousands)
ACQUISITIONS
<S>                                                                     <C>                 <C>
   ISI...................................     Acquired              May 2003                $    130,500
   STI...................................     Acquired              July 2004               $     20,686
   IMSI..................................     Acquired             August 2004              $     31,715
</TABLE>

<TABLE>
<CAPTION>

                                                                                        Revenues for the twelve
                                                                                         months ended prior to
                 Name                         Status       Divestiture/Closure Date     divestiture/closure
------------------------------------------ ------------  ---------------------------  --------------------------------
                                                                                             (in thousands)
DIVESTITURES/CLOSURES
<S>                                                                     <C>                  <C>
   DisplayCheck..........................      Sold               April 2002                 $       270

</TABLE>

Acquisitions

     We have completed and integrated eight strategic  acquisitions  since 1997.
Since January 2002, we have acquired  three  businesses:  Information  Spectrum,
Inc., Simulation Technologies Inc., and Integrated Management Services, Inc.

     Information  Spectrum,  Inc. - On May 23,  2003,  we  purchased  all of the
outstanding  stock of ISI,  a  provider  of  credential  card  technologies  and
military  logistics and training systems,  based in Annandale,  Virginia,  for a
total purchase price of approximately $92.4 million including transaction costs.
The  transaction  was accounted for in  accordance  with SFAS No. 141,  Business
Combinations,  whereby  the net  tangible  and  identifiable  intangible  assets
acquired and liabilities  assumed were recognized at their estimated fair market
values at the date of acquisition.  The identifiable intangible assets consisted
of $4.8 million of contracts and related customer relationships and $500,000 for
the value of a  non-compete  agreement.  The value of the  contracts and related
customer  relationships is based, in part, on an independent appraisal and other
studies  performed  by  us.  Goodwill   recognized  from  this  acquisition  was
approximately $74.3 million and was not deductible for tax purposes. At the time
of the  acquisition,  the contracts and related  customer  relationships  had an
expected useful life of approximately  5.3 years.  The non-compete  agreement is
being  amortized  straight-line  over the three year term of the  agreement.  In
accordance with SFAS No. 142,  Goodwill and Other  Intangible  Assets,  goodwill
arising from the transaction is not being amortized.

     Simulation  Technologies,  Inc. - On July 27, 2004, we purchased all of the
outstanding  stock of  Simulation  Technology  Inc.,  or "STI",  a  provider  of
modeling and simulation  software solutions and services,  based in San Antonio,
Texas,  for a total  purchase  price of $15.1  million  (net of cash  acquired),
including  transaction  costs.  We financed the acquisition  through  borrowings
under our  existing  Credit  Facility.  The  transaction  was  accounted  for in
accordance with SFAS No. 141,  Business  Combinations,  whereby the net tangible
and  identifiable  intangible  assets  acquired  and  liabilities  assumed  were
recognized at their estimated fair market values at the date of acquisition. The
identifiable  intangible  assets  consisted  of $2.6  million of  contracts  and
related customer  relationships with an expected weighted average useful life of
5 years.  The value of the contracts  and customer  relationships  is based,  in
part, on an independent  appraisal and other studies  performed by us.  Goodwill
recognized  from this  acquisition  was  approximately  $9.5  million and is not
deductible for tax purposes. In accordance with SFAS No. 142, Goodwill and Other
Intangible Assets, goodwill arising from the transaction is not being amortized.
Pursuant to the requirements of SFAS No. 141, Business Combinations,  the effect
of the acquisition did not meet the criteria of a significant  acquisition,  and
therefore,  pro forma disclosures are not presented in the audited  consolidated
financial statements.

                                       31
<PAGE>


     Integrated Management Services, Inc. - On August 11, 2004, we purchased all
of the outstanding stock of Integrated  Management Services,  Inc., or "IMSI", a
provider of high end,  mission  critical  information and securities  solutions,
based in  Arlington,  Virginia,  for a total  purchase  price of $29.1  million,
including  transaction  costs.  We financed the acquisition  through  borrowings
under our  existing  Credit  Facility.  Under  the  terms of the stock  purchase
agreement,  we  may  be  obligated  to  pay up to  $2.0  million  of  additional
consideration  if certain  milestones are met by June 30, 2005. The  transaction
was  accounted  for in  accordance  with SFAS No.  141,  Business  Combinations,
whereby  the net  tangible  and  identifiable  intangible  assets  acquired  and
liabilities assumed were recognized at their estimated fair market values at the
date of  acquisition.  The  identifiable  intangible  assets  consisted  of $5.9
million  of  contracts  and  related  customer  relationships  with an  expected
weighted average useful life of 5 years. The value of the contracts and customer
relationships  is based, in part, on an independent  appraisal and other studies
performed by us.  Goodwill  recognized from this  acquisition was  approximately
$20.7 million and is deductible for tax purposes due to a tax code election made
at the time of the  acquisition.  In accordance with SFAS No. 142,  Goodwill and
Other  Intangible  Assets,  goodwill  arising from the  transaction is not being
amortized.  Pursuant to the requirements of SFAS No. 141, Business Combinations,
the  effect  of the  acquisition  did not meet  the  criteria  of a  significant
acquisition,  and  therefore,  pro forma  disclosures  are not  presented in the
audited consolidated financial statements.

Divestitures/Closures

     DisplayCheck--Through  our  acquisition  of A&T in June 1999,  we  acquired
expertise  in  electronic   testing  of  liquid   crystal   displays  and  other
microdisplay products that utilize liquid crystal on silicon technologies.  This
newly emergent market was pursued to determine  business  feasibility.  While we
were  successful  in  generating  a  limited  amount  of  revenue  from our test
equipment  products,  we decided  not to make any  further  investments  in this
market.  Operations  ceased in August  2001.  Operating  losses of  $407,000  on
revenues  of  $664,000  were  incurred  in the year  ended  December  31,  2001.
DisplayCheck  generated an  operating  loss of $15,000 on revenue of $703,000 in
2000.  On April 3,  2002,  we sold all of the  assets  and  transferred  certain
liabilities of the business for an aggregate sale price of $200,000.

Results of Operations

     Our  historical  consolidated  financial  statements  do  not  reflect  the
full-year  impact of the  operating  results  of a number  of our  acquisitions,
divestitures  and closures,  since their operating  results are only included or
excluded from our results from the date of acquisition,  divestiture or closure,
as applicable.


                                       32
<PAGE>


     The following table sets forth our consolidated results of operations based
on the  amounts  and  percentage  relationship  of the items  listed to revenues
during the period shown:
<TABLE>
<CAPTION>

                                                                          Years Ended
                                     ------------------------------------------------------------------------------------
                                                                         December 31,
                                                 2004                         2003                        2002
                                     ----------------------------  --------------------------  --------------------------
                                                              (in thousands, except percentages)
<S>                                  <C>                  <C>        <C>              <C>        <C>               <C>
Revenues                             $   1,268,139        100.0%     $1,042,474       100.0%     $   825,826       100.0%
Costs of revenues.............           1,093,470          86.2        897,264         86.1         711,328         86.1
                                     -------------   -----------  ------------- ------------   ------------- ------------
   Gross profit...............             174,669          13.8        145,210         13.9         114,498         13.9
Costs and expenses:..........
   General and administrative.              65,964           5.2         58,647          5.6          48,197          5.8
   Amortization...............               2,676           0.2          2,450          0.2           1,907          0.3
                                     -------------   -----------  ------------- ------------   ------------- ------------
Total operating expenses.........           68,639           5.4         61,097          5.8          50,104          6.1
                                     -------------   -----------  ------------- ------------   ------------- ------------
Operating income..............             106,029           8.4         84,113          8.1          64,394          7.8
Other income, net.............                 973            --           --             --             417           --
Secondary offering expenses                    240            --            852          0.1              --           --
Interest expense, net.........               7,769           0.7         24,244          2.3          21,626          2.6
Minority interest.............                (72)            --           (54)           --            (18)           --
                                     -------------   -----------  ------------- ------------   ------------- ------------

Income before provision for
     income taxes.............              98,921           7.8         58,963          5.7          43,167          5.2
Provision for income taxes....              37,116           2.9         22,773          2.2          16,723          2.0
                                     -------------   -----------  ------------- ------------   ------------- ------------
Net income ...................       $      61,805          4.9%  $      36,190         3.5%   $      26,444         3.2%
                                     =============   ===========   ============ ============    ============ ============
</TABLE>


2004 COMPARED WITH 2003

Revenues

     For the year ended December 31, 2004, revenues increased by $225.7 million,
or 21.6%,  to $1.268 billion from $1.042 billion for the year ended December 31,
2003.  The  increase  in revenues  was  attributable  to organic  growth and the
acquisitions  of STI and IMSI.  We define  organic  growth  as the  increase  in
revenues excluding the revenues  associated with acquisitions,  divestitures and
closures of businesses in comparable  periods.  We believe  organic  growth is a
useful supplemental  measure to revenue.  Management uses organic growth as part
of its evaluation of core operating results and underlying  trends. For the year
ended December 31, 2004, our organic growth was 14.2%,  or $146.3  million.  The
acquisitions  of STI and IMSI accounted for  approximately  $20.8 million of the
revenue  growth for the year ended  December 31, 2004.  The increase in revenues
attributable  to organic growth was primarily  driven by growth in the following
business  areas:  task  orders in support of a wide range of federal  government
agencies  under our GSA ANSWER and  Management  and  Business  Services  (MOBIS)
contracts;   Engineering   and  Technical   Services  for   Deploying   Enabling
Technologies  with the U.S. Navy;  engineering and technical support to the U.S.
Army's "Program Executive Office for Simulation,  Training and Instrumentation";
Foreign  Military Sales Logistics  support;  and task orders under our Naval Sea
Systems Command (NAVSEA) Multiple Award Contract.

Costs of Revenues

     For the year ended December 31, 2004, costs of revenues increased by $196.2
million, or 21.9%, to $1.093 billion from $897.3 million for year ended December
31, 2003. The increase in costs of revenues was due in part to the corresponding
growth in revenues  resulting from organic growth and the acquisition of STI and
IMSI and the  increase in employee  headcount.  The  majority of the increase in
costs of revenues  for the year ended  December 31, 2004 was due to increases of
$78.1 million and $76.5 million in direct labor and other direct contract costs,
respectively.

                                       33
<PAGE>


Gross Profit

     For the year ended  December  31,  2004,  gross  profit  increased by $29.5
million,  or 20.3%,  to $174.7  million  from $145.2  million for the year ended
December 31,  2003.  Gross  profit for the year ended  December  31, 2004,  as a
percentage of revenues remained relatively consistent.

General and Administrative Expenses

     For the year ended December 31, 2004, general and  administrative  expenses
increased  $7.3 million,  or 12.5%,  to $66.0 million from $58.6 million for the
year ended December 31, 2003. General and  administrative  expenses for the year
ended  December 31, 2004,  as a percentage  of revenues,  decreased to 5.2% from
5.6%.  This  decline in the  percentage  of  revenues  was driven  primarily  by
operational cost efficiencies achieved in connection with acquisitions and their
successful  integration.  The dollar increase was primarily  attributable to the
corresponding  growth in revenues and additional  expenses related to compliance
with provisions of, and rules promulgated in connection with, Section 404 of the
Sarbanes-Oxley Act of 2002.

Amortization

     For the year ended  December  31,  2004,  amortization  expenses  increased
$226,000, or 9.2%, to $2.7 million from $2.5 million for the year ended December
31,  2003.  The  increase in  amortization  expense  was a result of  additional
amortization  related to  intangible  assets  acquired  in  connection  with the
purchase of STI and IMSI.

Operating Income

     For the year ended  December 31, 2004,  operating  income  increased  $21.9
million,  or 26.1%,  to $106.0  million  from $84.1  million  for the year ended
December 31, 2003.  The increase in operating  income was  primarily a result of
the  corresponding  increase in revenues.  Operating  income as a percentage  of
revenues  increased  to 8.4% for the year ended  December 31, 2004 from 8.1% for
the year ended December 31, 2003. The increase in the percentage of revenues was
driven by the decline in the general and administrative expenses as a percentage
of revenues.

Other Income

     For the year ended December 31, 2004, other income was $973,000 as compared
to zero for the year ended  December 31, 2003.  The increase in other income was
primarily  related to a  settlement  agreement we entered into in July 2004 with
the former owners of Sherikon,  a company we acquired in October 2000. Under the
provisions of the settlement agreement, the principal amount of the subordinated
note  payable was reduced from $2.5  million to $1.35  million,  and we paid the
reduced  note  amount,  without  interest.  This  resulted  in other  income  of
approximately $899,000, net of legal expenses.

Interest Expense, Net

     For the year ended  December 31, 2004,  interest  expense,  net of interest
income,  decreased  $16.5 million,  or 68.0%, to $7.7 million from $24.2 million
for the year ended  December  31,  2003.  The  decrease in interest  expense was
primarily  due to the  repurchase  of our 12% Notes and the  refinancing  of our
Credit  Facility.  In December  2003, we reduced the balance on our 12% Notes to
approximately $1.9 million from $75.0 million by utilizing the proceeds from the
$150.0 million in Term Loan B borrowings made under the Credit Facility. In June
2004, we repurchased the remaining $1.9 million principal amount  outstanding of
our 12% Notes.  In  conjunction  with the  repurchase  in 2004, we paid a tender
premium of  $113,000  which was  included  in  interest  for 2004.  In 2003,  we
incurred a $7.2 million bond premium and consent  payment,  $300,000 of fees and
wrote off $2.6 million of deferred financing fees to interest expense.


                                       34
<PAGE>


Secondary Offering Expenses

     On October 29, 2004,  affiliates of and companies  managed by Caxton-Iseman
Capital,  Inc.,  including Azimuth  Technologies,  L.P., Azimuth Tech II LLC and
Frederick  J.  Iseman,  which  we refer to  collectively  as the  "Caxton-Iseman
Stockholders",  sold  3,600,000  shares of our common  stock in an  underwritten
offering pursuant to a shelf  registration  statement on Form S-3 filed with the
SEC  (Commission  File  No.  333-111249).  Neither  we nor any of our  executive
officers participated in the sale of shares in this offering. In connection with
this offering,  we incurred $240,000 of expenses for the year ended December 31,
2004,  for  which we were not  reimbursed  in  accordance  with the terms of our
registration rights agreement with certain of our stockholders, as amended.

     On September 22, 2003, certain of our stockholders, including Caxton-Iseman
stockholders,  sold  6,600,000  shares of our  common  stock in an  underwritten
offering  pursuant to a  registration  statement  on Form S-3 filed with the SEC
(Commission File Nos. 333-108147 and 333-108858). In the fourth quarter of 2003,
the  underwriters  of this offering  partially  exercised  their  over-allotment
option with respect to additional shares held by the selling stockholders.  As a
result,  on October  16,  2003,  certain  of the  selling  stockholders  sold an
additional  297,229 shares of our common stock in a second  closing  pursuant to
the same underwritten  offering.  In connection with this offering,  we incurred
approximately  $852,000 of expenses for the year ended December 31, 2003,  which
amounts were reimbursed by certain of the selling  stockholders  and recorded by
us as an expense and a contribution to additional paid-in capital.

Provision For Income Taxes

     Our  effective  tax rate for the year ended  December  31,  2004 was 37.5%,
compared with 38.6% for the year ended December 31, 2003. The 2004 effective tax
rate reflects a benefit for federal  research and  experimentation  credits from
amending prior years tax returns,  state legislative changes and a non-recurring
benefit from  nontaxable  other income  resulting from the  settlement  with the
former owners of Sherikon, which resulted in a stock basis difference, for which
a deferred tax liability was not required to be recorded.

2003 COMPARED WITH 2002

Revenues

     For the year ended December 31, 2003, revenues increased by $216.6 million,
or 26.2%,  to $1.0 billion from $825.8  million for the year ended  December 31,
2002.  The  increase  in revenues  was  attributable  to organic  growth and the
acquisition of ISI. For the year ended December 31, 2003, our organic growth was
16.2%,  or $134.2 million.  The  acquisition of ISI accounted for  approximately
$82.5 million of the growth for the year ended  December 31, 2003.  The increase
in revenue was primarily  driven by growth in the following  contracts:  SAFTAS,
Battlefield Information Collection Exploitation Systems, contracts with the U.S.
Army  for  military  operations  on  urban  terrain,  ANSWER,  our  Professional
Engineering Services schedule contract,  our other GSA contracts,  and contracts
with DHS. In 2003,  approximately  3% of our revenues  were derived from DHS. In
addition, our revenues derived from DOD increased from approximately 78% in 2002
to 88% in 2003.

Costs of Revenues

     For the year ended December 31, 2003, costs of revenues increased by $186.0
million, or 26.1%, to $897.3 million from $711.3 million for year ended December
31, 2002. The increase in costs of revenues was due in part to the corresponding
growth in the revenues resulting from organic growth and the acquisition of ISI.
The majority of the  increase in costs of revenues  for the year ended  December
31, 2003 was due to increases of $68.9 million, $20.7 million, and $86.9 million
in direct labor,  fringe costs,  and other direct contract costs,  respectively.
The increases in direct labor, fringe costs and other direct contract costs were
offset in part by reductions in certain overhead expenses.


                                       35
<PAGE>


General and Administrative Expenses

     For the year ended December 31, 2003, general and  administrative  expenses
increased  $10.4 million,  or 21.6%, to $58.6 million from $48.2 million for the
year ended December 31, 2002. General and  administrative  expenses for the year
ended  December 31, 2003,  as a percentage  of revenues,  decreased to 5.6% from
5.8%.  This  decline in the  percentage  of  revenues  was driven  primarily  by
operational  cost  efficiencies  achieved in connection with the ISI acquisition
and its successful  integration.  The dollar increase was primarily attributable
to the corresponding growth in revenues.

Amortization

     For the year ended  December  31,  2003,  amortization  expenses  increased
$500,000,  or 28.5 %, to $2.4  million  from  $1.9  million  for the year  ended
December  31,  2002.  The  increase  in  amortization  expense  was a result  of
additional amortization related to intangible assets acquired in connection with
the  purchase  of ISI and a related  non-compete  agreement.  As a result of the
increase  in  revenues,   amortization  expense  as  a  percentage  of  revenues
decreased.

Operating Income

     For the year ended  December 31, 2003,  operating  income  increased  $19.7
million,  or 30.6%,  to $84.1  million  from  $64.4  million  for the year ended
December 31, 2002.  The increase in operating  income was  primarily a result of
the  corresponding  increase in revenues.  Operating  income as a percentage  of
revenues  increased  to 8.1% for the year ended  December 31, 2003 from 7.8% for
the year ended December 31, 2002. The increase in the percentage of revenues was
driven by the decline in the percentage of general and  administrative  expenses
as a percentage of revenues.

Interest Expense, Net

     For the year ended  December 31, 2003,  interest  expense,  net of interest
income,  increased $2.6 million,  or 12.1%,  to $24.2 million from $21.6 million
for the year ended  December  31,  2002.  The  increase in interest  expense was
primarily  a result of a $7.2  million  bond  premium  and  consent  payment  we
incurred in connection with our tender offer in December 2003 for our 12% Notes.
Excluding the interest  expense  related to our  refinancing  including the $7.2
million  bond  premium and consent  payment for our 12% Notes,  the write off of
$2.6 million of deferred financing fees, and $300,000 of fees,  interest expense
for the year  ended  December  31,  2003  would  have been  approximately  $14.1
million, which would have represented a 35% decrease from 2002. Our debt balance
as of December 31, 2003  exceeds the debt  balance as of December 31, 2002.  The
debt balance  increased due to $150.0 million in new term loan  borrowings  made
under the Credit  Facility  offset,  in part, by the repayment of  approximately
$18.4 million in existing  term loans and $73.1  million in our 12% Notes.  This
amendment  and  restatement  is  discussed  further in  "Liquidity  and  Capital
Resources".

Secondary Offering Expenses

     In connection  with an  underwritten  offering of  approximately  6,900,000
shares  of our  common  stock by  certain  of our  stock  holders,  we  incurred
approximately  $852,000 of expenses for the year ended December 31, 2003,  which
amounts were reimbursed by certain of the selling  stockholders  and recorded by
us as a contribution to additional paid-in capital.

Other Income

     We did not have any other  income for the year  ended  December  31,  2003.
Other income for the year ended December 31, 2002 included a gain on the sale of
DisplayCheck  assets  and  receipt of  insurance  proceeds  for  misappropriated
equipment previously recorded as a loss.


                                       36
<PAGE>


Provision For Income Taxes

     As a result of certain non-deductible  secondary offering expenses referred
to above,  state  legislative  changes and other  federal and state  credits and
incentives,  our  effective  tax rate for the year ended  December  31, 2003 was
38.6%, compared with 38.8% for the year ended December 31, 2002.

Liquidity and Capital Resources

Cash Flow for the Years Ended December 31, 2004 and 2003

     We  generated  $18.2  million  in cash from  operations  for the year ended
December 31,  2004.  By  comparison,  we  generated  $37.4  million in cash from
operations for the year ended December 31, 2003.  Accounts receivable Days Sales
Outstanding, or "DSO", increased to 82 days for the year ended December 31, 2004
from 71 days for the year ended December 31, 2003. The 11 day increase in DSO is
largely  the  result of payment  delays  related to  customer  process  changes.
Contract  receivables  increased  $94.4  million to $317.3  million for the year
ended  December  31,  2004 as  compared  to $222.9  million  for the year  ended
December 31, 2003. Accounts receivable at December 31, 2004 represented 51.7% of
total  assets at that  date.  As a result of our  acquisitions  of STI and IMSI,
accounts  receivable  increased by  approximately  $10.9 million.  The remaining
increase was attributable to the overall growth of our business and the increase
in DSO.  For the year  ended  December  31,  2004,  net cash  used in  investing
activities  was  $47.9  million,   which  was  attributable   primarily  to  our
acquisitions  of STI and IMSI.  Cash provided by financing  activities was $31.7
million  for  the  year  ended  December  31,  2004,  primarily  related  to the
borrowings under our existing Credit Facility.

     Prior to September  30, 2004,  our Credit  Facility  provided,  among other
things,  a Term Loan B in the amount of $150.0  million with a maturity  date of
December 31, 2010,  and the extension of the maturity date of the revolving loan
portion of our Credit  Facility to December  31, 2008.  In addition,  the Credit
Facility permits us to raise up to $200.0 million of additional debt in the form
of  additional  term loans,  subordinated  debt or revolving  loans with certain
restrictions on the amount of revolving  loans.  All borrowings under our Credit
Facility  are subject to  financial  covenants  customary  for such  financings,
including,  but not limited to:  maximum ratio of net debt to EBITDA and maximum
ratio of senior debt to EBITDA, as defined in the Credit Facility.  For the year
ended  December  31,  2004,  we complied  with all of the  financial  covenants.
Additionally,  as a result of changes  made in the  amendment  and  restatement,
revolving  loans  are now  based  upon an  asset  test or  maximum  ratio of net
eligible  accounts  receivable  to revolving  loans.  Historically,  our primary
liquidity  requirements have been for debt service under our Credit Facility and
12% Notes and for acquisitions and working capital requirements.  We have funded
these requirements  primarily through internally  generated  operating cash flow
and funds borrowed under our existing Credit Facility.

     On  September  30, 2004,  we entered into a second  amendment to our Credit
Facility.  This amendment  provided an additional  $16.1 million of borrowing by
increasing our Term Loan B to $165.0 million,  and lowered the interest rates on
Term Loan B borrowings by 0.25%.  The additional $16.1 million in borrowings did
not reduce  the $200.0  million in  potential  additional  borrowings  described
below.  As of December  31, 2004,  total debt  outstanding  was $184.4  million,
consisting of $164.6 million of Term Loan B, and $19.8 million outstanding under
the revolving loan portion of our Credit Facility.  The total funds available to
us under the  revolving  loan portion of our Credit  Facility as of December 31,
2004 were $173.9 million. Under certain conditions related to excess annual cash
flow,  as defined in our  Credit  Facility,  and the  receipt of  proceeds  from
certain asset sales and debt or equity issuances,  we are required to prepay, in
amounts specified in our Credit Facility, borrowings under the Term Loan B.

     Our  principal  working  capital need is for funding  accounts  receivable,
which has increased with the growth of our business. For the year ended December
31, 2004,  working  capital  increased by $63.9  million to $169.2  million from
$105.3  million for the year ended  December 31,  2003.  The increase in working
capital was primarily the result of the increase in DSO  referenced  above.  Our
principal  sources of cash to fund our working  capital needs are cash generated
from operations and borrowings  under our Credit Facility.  In addition,  we are
scheduled to pay quarterly  installments of $412,500 under the Term Loan B until
the Credit  Facility  matures on December 31, 2010.  As of December 31, 2004, we
did not have any capital commitments greater than $1.0 million.

                                       37
<PAGE>


     We  have   relatively   low  capital   investment   requirements.   Capital
expenditures were $4.0 million and $3.0 million for the years ended December 31,
2004 and 2003,  respectively,  primarily for leasehold  improvements  and office
equipment.

     Our business acquisition  expenditures  relating to STI and IMSI were $44.2
million in 2004. The  acquisitions  were financed  through  borrowings under our
Credit Facility.  In the past, we have engaged in acquisition  activity,  and we
intend to do so in the future.  Historically,  we have financed our acquisitions
through a combination of bank debt,  subordinated debt,  subordinated public and
private debt and equity investments.  We expect to be able to finance any future
acquisitions  either with cash provided from  operations,  borrowings  under our
Credit  Facility,  bank loans,  equity  offerings,  or some  combination  of the
foregoing.

     We intend to, and expect  over the next  twelve  months to be able to, fund
our operating cash, capital  expenditure and debt service  requirements  through
cash flow from  operations and borrowings  under our Credit  Facility.  Over the
longer term,  our ability to generate  sufficient  cash flow from  operations to
make  scheduled  payments  on our debt  obligations  will  depend on our  future
financial  performance,   which  will  be  affected  by  a  range  of  economic,
competitive and business factors, many of which are outside our control.

Off-Balance Sheet Arrangements and Aggregate Contractual Obligation

     We use off-balance  sheet  financing,  primarily to finance certain capital
items. Operating leases are used primarily to finance computers,  servers, phone
systems, and to a lesser extent, other fixed assets, such as furnishings.  As of
December 31, 2004, we financed  equipment with an original cost of approximately
$17.8 million through  operating  leases.  Had we not used operating  leases, we
would have used our  existing  Credit  Facility to  purchase  these  assets.  In
addition,  our offices,  warehouse  and shop  facilities  are  obtained  through
operating  leases.  Other than the operating  leases  described above, we do not
have any  other  off-balance  sheet  financing.  The  following  table  provides
information  (in  thousands) as of December 31, 2004  regarding our  off-balance
sheet arrangements and contractual obligations.

<TABLE>
<CAPTION>

                                                              Payments due by period (in thousands)
                                           -----------------------------------------------------------------------------

                                                             Less than                                       More than
         Contractual Obligations              Total            1 year         1-3 year       3-5 years        5 years
         ------------------------------       -----            ------         --------       ---------        -------

<S>                                        <C>               <C>            <C>             <C>            <C>
         Long-term debt                    $  184,388        $    1,650     $    3,300      $  23,100      $  156,338
         Capital lease obligations                596               222            277             97              --
         Operating leases                     158,563            32,451         52,484         37,103          36,525
         Other long-term liabilities            4,915                --             --          1,930           2,985
                                           -------------     -----------    ------------    -----------    ------------

         Total                             $  348,462        $   34,323     $   56,061      $   62,230     $  195,848
                                           =============     ===========    ============    ===========    ============
</TABLE>

Inflation

     We do not believe that inflation has had a material  effect on our business
in 2004,  2003,  or 2002 as we are able to build  escalation  into our  contract
rates each year.

                                       38
<PAGE>


Recent Accounting Pronouncements

         In December  2004,  the  Financial  Accounting  Standards  Board (FASB)
issued SFAS No. 153,  Exchanges of Nonmonetary  Assets.  This  statement  amends
Accounting  Principles Board (APB) Opinion No. 29 to improve financial reporting
by  eliminating   certain  narrow   differences   between  the  FASB's  and  the
International  Accounting Standards Board's (IASB) existing accounting standards
for nonmonetary  exchanges of similar  productive assets. The provisions of this
statement shall be prospectively applied and are effective for nonmonetary asset
exchanges  occurring  in fiscal  periods  beginning  after  June 15,  2005.  The
adoption  of SFAS No. 153 is not  expected to have a  significant  impact on our
consolidated financial statements.

     In December 2004, the FASB issued SFAS No. 123 (Revised 2004),  Share Based
Payment.  (SFAS No. 123R), which amends SFAS No. 123, Accounting for Stock-Based
Compensation  and SFAS No. 95,  Statement of Cash Flows.  SFAS 123R requires all
companies  to measure  compensation  cost for all  share-based  payments at fair
value, and will be effective for public companies for interim and annual periods
beginning  after June 15,  2005.  This new standard may be adopted in one of two
ways - the modified prospective  transition method or the modified retrospective
transition  method.  The Company is currently  assessing  the impact of SFAS No.
123R on its operating results and financial condition.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     We have  interest  rate  exposure  relating  to  certain  of our  long-term
obligations.  The interest  rates on both the Term Loan B and the revolving loan
portion of our Credit Facility are affected by changes in market interest rates.
We manage these  fluctuations by reducing the amount of outstanding debt through
cash flow by focusing on billing and collecting our accounts receivable.

     During the year ended December 31, 2004, the last of our interest rate swap
agreements,  with a  notional  value  of  $10.0  million,  matured.  We are  not
currently  contemplating any future interest rate swap agreements.  However,  as
market conditions change, we will reevaluate our position.

     A 1% change in interest  rates on variable rate debt would have resulted in
our interest expense fluctuating by $1.6 million and $514,000 for the year ended
December 31, 2004 and 2003, respectively.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Our consolidated  financial  statements are provided in Part IV, Item 15 of
this filing.


                                       39
<PAGE>


ITEM  9.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE

     We had no disagreements with our independent  registered public accountants
on accounting principles, practices or financial statement disclosure during the
two years prior to the date of our most recent consolidated financial statements
included elsewhere in this report.

ITEM 9A.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

     Our management,  with the  participation of our chief executive officer and
chief financial officer (our principal executive officer and principal financial
officer,  respectively),  evaluated the effectiveness of our disclosure controls
and procedures (as defined in Rules  13a-15(e) and 15d-15(e)  under the Exchange
Act) as of December  31, 2004.  Based on this  evaluation,  our chief  executive
officer and chief financial officer concluded that, as of December 31, 2004, our
disclosure  controls and  procedures  were (1) designed to ensure that  material
information  relating to us,  including our consolidated  subsidiaries,  is made
known to our chief  executive  officer  and chief  financial  officer  by others
within those entities,  particularly  during the period in which this report was
being prepared and (2) effective, in that they provide reasonable assurance that
information required to be disclosed by us in the reports that we file or submit
under the Exchange Act is recorded,  processed,  summarized and reported  within
the time periods  specified  in the U.S.  Securities  and Exchange  Commission's
rules and forms.

Changes in Internal Control over Financial Reporting

     No change in our internal  control over financial  reporting (as defined in
Rules  13a-15(f) and 15d-15(f)  under the Exchange Act) occurred during the year
ended December 31, 2004 that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.

Management's Report on Internal Control over Financial Reporting

     Our management is responsible for  establishing  and  maintaining  adequate
internal control over financial  reporting,  as defined in Rule 13a-15(f) of the
Exchange. Our management,  with the participation of our chief executive officer
and chief  financial  officer (our  principal  executive  officer and  principal
financial  officer,  respectively),  assessed the  effectiveness of our internal
control over financial  reporting  based on the framework in Internal  Control -
Integrated Framework, issued by the Committee of Sponsoring Organizations of the
Treadway Commission ("COSO Framework").  Management excluded from its assessment
of the effectiveness of the Company's internal control over financial  reporting
as of December  31,  2004,  STI's and IMSI's  internal  control  over  financial
reporting  associated  with  total  assets  of $4.4  million  and $7.9  million,
respectively,   and  total   revenues  of  $9.4   million  and  $11.4   million,
respectively,  included in the consolidated  financial statements of the Company
as of and for the year ended December 31, 2004.  Based on our  assessment  under
the COSO  Framework,  our management  concluded  that our internal  control over
financial  reporting  was  effective as of December 31, 2004. It should be noted
that any system of controls,  however well  designed and  operated,  can provide
only reasonable,  and not absolute,  assurance that the objectives of the system
will be met. In addition, the design of any control system is based in part upon
certain assumptions about the likelihood of certain events. Because of these and
other  inherent  limitations  of  control  systems,  there  is  only  reasonable
assurance  that our controls  will  succeed in  achieving  their goals under all
potential future conditions.

     Our  independent  registered  public  accounting  firm, KPMG LLP, issued an
attestation  report on our management's  assessment of the  effectiveness of our
internal control over financial reporting as of December 31, 2004, which appears
below.


                                       40
<PAGE>


Report of Independent Registered Public Accounting Firm
-------------------------------------------------------

The Board of Directors and Stockholders
Anteon International Corporation:

We  have  audited   management's   assessment,   included  in  the  accompanying
Management's  Report on Internal  Controls over Financial  Reporting that Anteon
International  Corporation and subsidiaries (the "Company") maintained effective
internal control over financial  reporting as of December 31, 2004, based on the
criteria  established in Internal  Control--Integrated  Framework  issued by the
Committee of Sponsoring  Organizations of the Treadway Commission  (COSO)".  The
Company's  management is responsible for maintaining  effective internal control
over financial reporting and for its assessment of the effectiveness of internal
control over financial reporting. Our responsibility is to express an opinion on
management's  assessment  and an opinion on the  effectiveness  of the Company's
internal control over financial reporting based on our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain  reasonable  assurance  about whether  effective
internal  control  over  financial  reporting  was  maintained  in all  material
respects. Our audit included obtaining an understanding of internal control over
financial reporting,  evaluating management's assessment, testing and evaluating
the design and operating  effectiveness of internal control, and performing such
other  procedures as we considered  necessary in the  circumstances.  We believe
that our audit provides a reasonable basis for our opinion.

A company's  internal control over financial  reporting is a process designed to
provide reasonable  assurance  regarding the reliability of financial  reporting
and the preparation of financial  statements for external purposes in accordance
with U.S. generally accepted accounting principles. A company's internal control
over financial reporting includes those policies and procedures that (1) pertain
to the maintenance of records that, in reasonable detail,  accurately and fairly
reflect the  transactions  and  dispositions  of the assets of the company;  (2)
provide  reasonable  assurance  that  transactions  are recorded as necessary to
permit  preparation of financial  statements in accordance  with U.S.  generally
accepted  accounting  principles,  and that  receipts  and  expenditures  of the
company are being made only in accordance with  authorizations of management and
directors  of the  company;  and  (3)  provide  reasonable  assurance  regarding
prevention or timely detection of unauthorized acquisition,  use, or disposition
of the  company's  assets  that could have a  material  effect on the  financial
statements.

Because of its inherent  limitations,  internal control over financial reporting
may not prevent or detect misstatements.  Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate  because of changes in  conditions,  or that the degree of compliance
with the policies or procedures may deteriorate.

In our opinion,  management's  assessment that the Company maintained  effective
internal  control over  financial  reporting as of December 31, 2004,  is fairly
stated, in all material respects,  based on the criteria established in Internal
Control--Integrated   Framework   issued   by  the   Committee   of   Sponsoring
Organizations  of the Treadway  Commission  (COSO).  Also,  in our opinion,  the
Company  maintained,  in all material respects,  effective internal control over
financial  reporting as of December 31, 2004, based on the criteria  established
in Internal Control--Integrated  Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).

The Company  acquired  Simulation  Technologies,  Inc.  ("STI")  and  Integrated
Management Services, Inc. ("IMSI") during 2004, and management excluded from its
assessment of the effectiveness of the Company's internal control over financial
reporting  as of December  31,  2004,  STI's and IMSI's  internal  control  over
financial  reporting  associated  with  total  assets of $4.4  million  and $7.9
million,  respectively,  and total  revenues of $9.4 million and $11.4  million,
respectively,  included in the consolidated  financial statements of the Company
as of and for the year ended  December 31, 2004.  Our audit of internal  control
over  financial  reporting of the Company  also  excluded an  evaluation  of the
internal control over financial reporting of STI and IMSI

We also have  audited,  in accordance  with the standards of the Public  Company
Accounting  Oversight Board (United States),  the consolidated balance sheets of
the Company as of  December  31,  2004 and 2003,  and the  related  consolidated
statements of operations,  stockholders'  equity and comprehensive  income,  and
cash flows for each of the years in the  three-year  period  ended  December 31,
2004,  and our report dated March 4, 2005  expressed an  unqualified  opinion on
those consolidated financial statements.

KPMG LLP

McLean, Virginia
March 4, 2005


                                       41
<PAGE>


                                    PART III

                                   MANAGEMENT

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The information required by this item is incorporated by reference from our
definitive  proxy statement to be filed not later than 120 days after the end of
the  fiscal  year  covered  by this  Annual  Report  on Form  10-K  pursuant  to
Regulation 14A.

ITEM 11. EXECUTIVE COMPENSATION

     The information required by this item is incorporated by reference from our
definitive  proxy statement to be filed not later than 120 days after the end of
the  fiscal  year  covered  by this  Annual  Report  on Form  10-K  pursuant  to
Regulation 14A.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information required by this item is incorporated by reference from our
definitive  proxy statement to be filed not later than 120 days after the end of
the  fiscal  year  covered  by this  Annual  Report  on Form  10-K  pursuant  to
Regulation 14A.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information required by this item is incorporated by reference from our
definitive  proxy statement to be filed not later than 120 days after the end of
the  fiscal  year  covered  by this  Annual  Report  on Form  10-K  pursuant  to
Regulation 14A.

ITEM 14. PRINCIPAL ACCOUNTANTS FEES AND SERVICES

     The information required by this item is incorporated by reference from our
definitive  proxy statement to be filed not later than 120 days after the end of
the  fiscal  year  covered  by this  Annual  Report  on Form  10-K  pursuant  to
Regulation 14A.


                                       42
<PAGE>

<TABLE>
<CAPTION>


                                     PART IV


ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

                                                                                                    Page Number
                                                                                                      in 2004
                                                                                                   Annual Report

   (a) 1.       Financial Statements

<S>                                                                                                       <C>
                Report of Independent Registered Public Accounting Firm                                  F-1

                Consolidated Balance Sheets as of December 31, 2004 and 2003                             F-2

                Consolidated  Statements  of  Operations  for  Each  of  the  Years  in  the
                Three-Year Period Ended December 31, 2004                                                F-3

                Consolidated    Statements   of    Stockholders'    Equity   and
                Comprehensive  Income  for Each of the  Years in the  Three-Year
                Period Ended December 31, 2004                                                           F-4

                Consolidated  Statements  of Cash Flows for Each of the Years in
                the Three-Year Period Ended December 31, 2004                                      F-5 - F-6

                Notes to Consolidated Financial Statements                                        F-7 - F-37

   (a) 2.       Financial Statement Schedules

                Valuation and Qualifying Accounts                                                        S-2

   (a) 3.       Exhibits
                See Exhibit Index beginning on page 46

</TABLE>


                                       43
<PAGE>


                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) 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.

                                            ANTEON INTERNATIONAL CORPORATION

Date: February 25, 2005                     By: /s/: Joseph M. Kampf
-----------------------                        ----------------------
                                               Joseph M. Kampf
                                               President and Chief Executive
                                               Officer
<TABLE>
<CAPTION>

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the date indicated.

                      Name                                           Title                               Date
<S>                                                                                             <C>
/s/:  JOSEPH M. KAMPF                                                                           February 25, 2005
---------------------------------                                                               -----------------
     Joseph M. Kampf                              President and Chief Executive Officer
                                                  and Director  (Principal Executive Officer)

/s/:  CHARLES S. REAM                                                                           February 25, 2005
---------------------------------                                                               -----------------
     Charles S. Ream                              Executive Vice President and Chief
                                                  Financial Officer (Principal Financial and
                                                  Accounting Officer)

/s/:  FREDERICK J. ISEMAN                                                                       February 25, 2005
---------------------------------                                                               -----------------
     Frederick J. Iseman                          Chairman of the Board and Director

/s/:  GILBERT F. DECKER                                                                         February 25, 2005
---------------------------------                                                               -----------------
     Gilbert F. Decker                            Director

/s/:
---------------------------------
     Robert A. Ferris                             Director

/s/:  PAUL G. KAMINSKI                                                                          February 25, 2005
---------------------------------                                                               -----------------
     Paul G. Kaminski                             Director

/s/:  STEVEN M. LEFKOWITZ                                                                       February 25, 2005
---------------------------------                                                               -----------------
     Steven M. Lefkowitz                          Director

/s/: THOMAS J. TISCH                                                                            February 25, 2005
---------------------------------                                                               -----------------
     Thomas J. Tisch                              Director

/s/:  GENERAL HENRY HUGH SHELTON                                                                February 25, 2005
---------------------------------                                                               -----------------
     General Henry Hugh Shelton                   Director

/s/:  WILLIAM J. PERRY                                                                          February 25, 2005
---------------------------------                                                               -----------------
     William J. Perry                             Director

/s/:  PAUL DAVID MILLER                                                                         February 25, 2005
---------------------------------                                                               -----------------
     Paul David Miller                            Director

/s/:  PAUL J. KERN                                                                              February 25, 2005
---------------------------------                                                               -----------------
     Paul J. Kern                                 Director

</TABLE>

                                       44
<PAGE>


                                  EXHIBIT INDEX


      2.1      Agreement  and Plan of Merger,  dated as of March 7, 1999, by and
               among Anteon  Corporation,  Buffalo  Acquisition  Corporation and
               Analysis & Technology, Inc. (incorporated by reference to Exhibit
               Z to Analysis &  Technologies,  Inc.'s Current Report on Form 8-K
               filed on March 9, 1999).

      2.2      Agreement  and  Plan  of  Merger  between  Anteon   International
               Corporation,   a  Virginia   corporation,   and  the   Registrant
               (incorporated by reference to Exhibit 2.2 to Anteon International
               Corporation's Amendment No. 1 to Form S-1 Registration Statement,
               filed on February 5, 2002 (Commission File No. 333-75884)).

      3.1      Amended  and  Restated  Certificate  of  Incorporation  of Anteon
               International  Corporation  (incorporated by reference to Exhibit
               3.1 of Anteon  International  Corporation's  Quarterly  Report on
               Form 10-Q filed on May 14, 2002).
      3.2      Certificate of Designations of Series A Preferred Stock of Anteon
               International  Corporation  (incorporated by reference to Exhibit
               3.2 of Anteon  International  Corporation's  Quarterly  Report on
               Form 10-Q filed on May 14, 2002).

      3.3      Amended and Restated By-laws of Anteon International  Corporation
               (incorporated by reference to Exhibit 3.3 of Anteon International
               Corporation's  Quarterly  Report  on Form  10-Q  filed on May 14,
               2002).

      4.1      Indenture,  dated  as of  May  11,  1999,  by  and  among  Anteon
               Corporation,  Vector Data Systems, Inc., Techmatics, Inc. and IBJ
               Whitehall  Bank & Trust  Company,  as  trustee  (incorporated  by
               reference  to Exhibit 4.1 to Anteon  International  Corporation's
               Registration  Statement  on Form S-4  filed  on  August  9,  1999
               (Commission File No. 333-84835)).

      4.2      First  Supplemental  Indenture,  effective  as of June 23,  1999,
               among   Anteon   Corporation,   Analysis  &   Technology,   Inc.,
               Interactive  Media Corp.  and IBJ Whitehall Bank & Trust Company,
               as trustee  (incorporated  by  reference to Exhibit 4.2 to Anteon
               International  Corporation's  Annual  Report on Form 10-K for the
               fiscal year ended December 31, 2000).

      4.3      Second Supplemental Indenture,  effective as of October 14, 1999,
               among Anteon Corporation,  Anteon-CITI LLC and IBJ Whitehall Bank
               & Trust Company, as trustee (incorporated by reference to Exhibit
               4.3 to Anteon  International  Corporation's Annual Report on Form
               10-K for the fiscal year ended December 31, 2000).

      4.4      Third Supplemental Indenture, dated as of October 20, 2000, among
               Anteon Corporation,  Sherikon,  Inc. and The Bank of New York, as
               trustee  (incorporated  by  reference  to  Exhibit  4.4 to Anteon
               International  Corporation's  Annual  Report on Form 10-K for the
               fiscal year ended December 31, 2000).

      4.5      Fourth  Supplemental  Indenture,  dated  January 1,  2001,  among
               Anteon International  Corporation  (formerly Anteon Corporation),
               Anteon Corporation  (formerly  Techmatics,  Inc.) and The Bank of
               New York,  as  successor  trustee of IBJ  Whitehall  Bank & Trust
               Company  (incorporated  by  reference  to  Exhibit  4.5 to Anteon
               International  Corporation's  Annual  Report on Form 10-K for the
               fiscal year ended December 31, 2000).

      4.6      Fifth Supplemental  Indenture between the Registrant and The Bank
               of New York, as trustee (incorporated by reference to Exhibit 4.1
               of Anteon  International  Corporation's  Quarterly Report on Form
               10-Q filed on May 14, 2002).

      4.7      Sixth Supplemental  Indenture,  dated as of March 15, 2002, among
               Anteon International  Corporation (formerly Azimuth Technologies,
               Inc.), a Delaware corporation,  Anteon International  Corporation
               (formerly Anteon Corporation),  a Virginia  corporation,  and The
               Bank of New  York,  as  trustee  (incorporated  by  reference  to
               Exhibit  4.2  of  Anteon  International  Corporation's  Quarterly
               Report on Form 10-Q filed on May 14, 2002).

                                       45
<PAGE>

      4.8      Seventh Supplemental  Indenture,  dated as of May 23, 2003, among
               Anteon International  Corporation (formerly Azimuth Technologies,
               Inc.)  and The Bank of New York,  as  trustee.  (incorporated  by
               reference  to Exhibit 4.8 to Anteon  International  Corporation's
               Annual Report on Form 10-K for the fiscal year ended December 31,
               2003 filed on March 8, 2004).

      4.9      Eighth  Supplemental  Indenture,  dated as of  December  5, 2003,
               among  Anteon  International  Corporation,   Anteon  Corporation,
               Information Spectrum,  Inc. and The Bank of New York, as trustee.
               (incorporated by reference to Exhibit 4.9 to Anteon International
               Corporation's  Annual  Report  on Form 10-K for the  fiscal  year
               ended December 31, 2003 filed on March 8, 2004).

     4.10      Registration  Rights  Agreement  dated March 11, 2002,  among the
               Registrant,  Azimuth  Technologies,  L.P.,  Azimuth Tech. II LLC,
               Frederick J. Iseman,  Joseph M. Kampf and the other parties named
               therein  (incorporated  by  reference  to  Exhibit  4.8 to Anteon
               International   Corporation's   Amendment   No.  1  to  Form  S-1
               Registration Statement filed on February 5, 2002 (Commission File
               No. 333-75884)).

     4.11      Amendment   No.  1,  dated  as  of  September  3,  2003,  to  the
               Registration  Rights  Agreement,  dated March 11, 2002, among the
               Registrant,  Azimuth  Technologies,  L.P.,  Azimuth Tech. II LLC,
               Frederick J. Iseman,  Joseph M. Kampf and the other parties named
               therein  (incorporated  by  reference  to  Exhibit  4.5 to Anteon
               International Corporation's Form S-3 Registration Statement filed
               on December 17, 2003 (Commission File No. 333-111249)).

     4.12      Rights Agreement, dated March 15, 2002 (incorporated by reference
               to  Exhibit  4.1 to Anteon  International  Corporation's  Current
               Report on Form 8-K, filed on April 5, 2002).

     10.1      Second Amendment,  dated as of September 30, 2004, to the Amended
               and  Restated  Credit  Agreement,  dated as of December  19, 2003
               among Anteon International  Corporation,  Bank of America,  N.A.,
               and Citizens Bank of Pennsylvania  (incorporated  by reference to
               Exhibit  10.1 to  Anteon  International  Corporation's  Quarterly
               Report on Form 10-Q filed on November 3, 2004).

    10.11      Amended and Restated  Credit  Agreement,  dated as of October 21,
               2002, to the Credit  Agreement,  dated as of June 23, 1999, among
               Anteon  International  Corporation,  Credit  Suisse First Boston,
               Mellon Bank, N.A., Duetsche Bank AG and the lenders named therein
               (incorporated   by   reference   to   Exhibit   10.11  to  Anteon
               International  Corporation's  Annual  Report on Form 10-K for the
               fiscal year ended December 31, 2002 filed on March 11, 2003).
    10.12      Amendment Agreement, dated as of December 19, 2003 to the Amended
               and  Restated  Credit  Agreement,  dated as of October 21,  2002,
               among  Anteon  International  Corporation,   Anteon  Corporation,
               Credit  Suisse First Boston and  Citizens  Bank of  Pennsylvania.
               (incorporated   by   reference   to   Exhibit   10.12  to  Anteon
               International  Corporation's  Annual  Report on Form 10-K for the
               fiscal year ended December 31, 2003 filed on March 8, 2004).

    10.15      Security  Agreement,  dated as of June  23,  1999,  among  Anteon
               Corporation,  Analysis  &  Technology,  Inc.,  Interactive  Media
               Corp.,  Techmatics,  Inc.,  Vector Data Systems,  Inc. and Mellon
               Bank, N.A.  (incorporated  by reference to Exhibit 10.8 to Anteon
               International  Corporation's  Registration  Statement on Form S-4
               filed on August 9, 1999 (Commission File No. 333-84835)).

    10.16      Amended  and  Restated   Omnibus  Stock  Plan   (incorporated  by
               reference to Exhibit 10.2 to Anteon  International  Corporation's
               Quarterly Report on Form 10-Q filed May 14, 2002).

    10.17      Stock  Option  Agreement  (incorporated  by  reference to Exhibit
               10.17 to Anteon  International  Corporation's  Amendment No. 2 to
               Form S-1  Registration  Statement  filed  on  February  19,  2002
               (Commission File No. 333-75884)).

    10.22      Retention  Agreement  (incorporated by reference to Exhibit 10.22
               to Anteon International Corporation's Amendment No. 1 to Form S-1
               Registration Statement filed on February 5, 2002 (Commission File
               No. 333-75884)).

     21.1      Subsidiaries of the Registrant.

     23.1      Consent of KPMG LLP.

                                       46
<PAGE>

     31.1      Certification  of the Chief  Executive  Officer  pursuant to Rule
               13a-14 of the Exchange Act, as adopted pursuant to Section 302 of
               the Sarbanes-Oxley Act of 2002 (filed herewith).

     31.2      Certification  of the Chief  Financial  Officer  pursuant to Rule
               13a-14 of the Exchange Act, as adopted pursuant to Section 302 of
               the Sarbanes-Oxley Act of 2002 (filed herewith).

     32.1      Certification  of the Chief  Executive  Officer  pursuant to Rule
               13a-14(b)  of the  Exchange Act and 18 U.S.C.  Section  1350,  as
               adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
               (furnished herewith).

     32.2      Certification  of the Chief  Financial  Officer  pursuant to Rule
               13a-14(b)  of the  Exchange Act and 18 U.S.C.  Section  1350,  as
               adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
               (furnished herewith).


                                       47
<PAGE>


             Report of Independent Registered Public Accounting Firm
             -------------------------------------------------------

The Board of Directors and Stockholders
Anteon International Corporation:

We  have  audited  the  accompanying   consolidated  balance  sheets  of  Anteon
International  Corporation and  subsidiaries  (the "Company") as of December 31,
2004  and  2003,  and  the  related   consolidated   statements  of  operations,
stockholders'  equity and comprehensive  income,  and cash flows for each of the
years in the  three-year  period ended  December 31,  2004.  These  consolidated
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial  position of the Company as of
December 31, 2004 and 2003, and the results of its operations and its cash flows
for each of the years in the  three-year  period ended  December  31,  2004,  in
conformity with U.S. generally accepted accounting principles.

Our audits  were  performed  for the  purpose of forming an opinion on the basic
consolidated   financial   statements  taken  as  a  whole.  The   supplementary
information  included in Schedule II is  presented  for  purposes of  additional
analysis  and  is  not a  required  part  of the  basic  consolidated  financial
statements.  Such  information  has been  subjected to the  auditing  procedures
applied in the audits of the basic consolidated financial statements and, in our
opinion,  is fairly  stated in all  material  respects  in relation to the basic
consolidated financial statements taken as a whole

We also have  audited,  in accordance  with the standards of the Public  Company
Accounting  Oversight Board (United States),  the effectiveness of the Company's
internal control over financial  reporting as of December 31, 2004, based on the
criteria  established in Internal  Control--Integrated  Framework  issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our
report dated March 4, 2005,  expressed an  unqualified  opinion on  management's
assessment of, and the effective  operation of, internal  control over financial
reporting.

KPMG LLP

McLean, Virginia
March 4, 2005



                                       F-1
<PAGE>

<TABLE>
<CAPTION>


                                          ANTEON INTERNATIONAL CORPORATION AND SUBSIDIARIES

                                                      (a Delaware Corporation)
                                                     Consolidated Balance Sheets
                                                     December 31, 2004 and 2003
                                           (in thousands, except share and per share data)

             Assets                                                               2004               2003
                                                                            -----------------   ---------------
     Current assets:
<S>                                                                            <C>                 <C>
          Cash and cash equivalents                                            $      4,103        $     2,088
          Accounts receivable, net                                                  317,296            222,937
          Prepaid expenses and other current assets                                  17,205             17,925
          Deferred tax assets, net                                                       --              1,641
                                                                            -----------------   ---------------
     Total current assets                                                           338,604            244,591

     Property and equipment                                                          12,920             12,759
     Goodwill                                                                       242,066            212,205
     Intangible and other assets, net of accumulated amortization of
       $10,902 and $8,226, respectively                                              19,836              9,725
                                                                            -----------------   ---------------
     Total assets                                                              $    613,426        $   479,280
                                                                            =================   ===============

             Liabilities and Stockholders' Equity
     Current liabilities:
          Term Loan B, current portion                                                1,650              1,500
          Subordinated notes payable, current portion                                    --              2,500
          Obligations under capital leases, current portion                             196                341
          Accounts payable                                                           46,430             36,793
          Due to related party                                                           --                 48
          Accrued expenses                                                          102,593             85,468
          Income tax payable                                                          1,556                641
          Other current liabilities                                                     808                230
          Deferred tax liability                                                      2,448                 --
          Deferred revenue                                                           13,764             11,783
                                                                            -----------------   ---------------
     Total current liabilities                                                      169,445            139,304

     Term Loan B, less current portion                                              162,938            148,500
     Revolving credit facility                                                       19,800              4,400
     Senior subordinated notes payable                                                   --              1,876
     Obligations under capital leases, less current portion                             310                465
     Noncurrent deferred tax liabilities, net                                         8,460             10,017
     Other long term liabilities                                                      4,915                 16
                                                                            -----------------   ---------------
     Total liabilities                                                              365,868            304,578
                                                                            -----------------   ---------------

     Minority interest in subsidiaries                                                  282                210
     Stockholders' equity:
     Preferred stock, $0.01 par value, 15,000,000 shares authorized, zero
       issued and outstanding as of December 31, 2004 and 2003                           --                 --
     Common stock, $0.01 par value, 175,000,000 shares authorized and
       36,218,476 and 35,354,996 shares issued and outstanding as of
       December 31, 2004 and 2003, respectively                                         362                354
     Additional paid-in capital                                                     126,508            115,863
     Accumulated other comprehensive income (loss)                                      254               (72)
     Retained earnings                                                              120,152             58,347
                                                                            -----------------   ---------------
     Total stockholders' equity                                                     247,276            174,492
                                                                            -----------------   ---------------
     Commitments and contingencies
     Total liabilities and stockholders' equity                                $   613,426         $   479,280
                                                                            =================   ===============

                                     See  accompanying   notes  to  consolidated financial statements.
</TABLE>


                                       F-2
<PAGE>

<TABLE>
<CAPTION>


                                          ANTEON INTERNATIONAL CORPORATION AND SUBSIDIARIES
                                                      (a Delaware Corporation)
                                                Consolidated Statements of Operations
                                            Years ended December 31, 2004, 2003 and 2002
                                           (in thousands, except share and per share data)


                                                                     2004                2003               2002
                                                               -----------------    --------------     --------------

<S>                                                            <C>                  <C>                <C>
          Revenues                                             $     1,268,139      $   1,042,474      $     825,826
          Costs of revenues                                           1,093,470           897,264            711,328
                                                               -----------------    --------------     --------------
                            Gross profit                                174,669           145,210            114,498
                                                               -----------------    --------------     --------------

          Operating Expenses:
                General and administrative expenses                      65,964            58,647             48,197
                Amortization of noncompete agreements                       167               101                 --
                Other intangibles amortization                            2,509             2,349              1,907
                                                               -----------------    --------------     --------------

                            Total operating expenses                     68,640            61,097             50,104
                                                               -----------------    --------------     --------------

                            Operating income                            106,029            84,113             64,394
          Other income                                                      973                --                417
          Secondary offering expenses                                       240               852                 --
          Interest expense, net of interest income of $277,
            $239, and $289, respectively                                  7,769            24,244             21,626
          Minority interest in earnings of subsidiaries                    (72)              (54)               (18)
                                                               -----------------    --------------     --------------

          Income before provision for income taxes                       98,921            58,963             43,167

          Provision for income taxes                                     37,116            22,773             16,723
                                                               -----------------    --------------     --------------

                            Net income                         $        61,805      $      36,190      $      26,444
                                                               =================    ==============     ==============

          Basic earnings per common share                      $          1.73      $        1.04      $        0.82
                                                               =================    ==============     ==============
          Basic weighted average shares outstanding                  35,716,669        34,851,281         32,163,150

          Diluted earnings per common share                    $          1.66      $        0.98      $        0.78
                                                               =================    ==============     ==============
          Diluted weighted average shares outstanding               37,267,375         36,925,488         34,021,597

                                    See accompanying notes to consolidated financial statements.
</TABLE>


                                       F-3
<PAGE>


<TABLE>
<CAPTION>


                                          ANTEON INTERNATIONAL CORPORATION AND SUBSIDIARIES
                                                      (a Delaware Corporation)

                      Consolidated Statements of Stockholders' Equity (Deficit) and Comprehensive Income (Loss)

                                            Years ended December 31, 2004, 2003 and 2002
                                                  (in thousands, except share data)


                                                                                            Accumulated     Retained       Total
                                                  All series         Stock       Additiona     Other        Earnings    Stockholders
                                                  ommon stock     Subscription    Paid-In   Comprehensive (Accumulated     Equity
                                              Shares    Amount     Receivable     Capital   Income (Loss)   Deficit)      (Deficit)
                                              ------    ------     -----------   ---------- ------------- ------------- ------------

<S>                                         <C>          <C>           <C>        <C>        <C>             <C>             <C>
 Balance, December 31, 2001                 23,786,565   238           (12)       2,366      (1,747)         (4,287)         (3,442)
 Issuance of common stock, net               4,687,500    47             --      75,130           --              --          75,177
 Conversion of minority interest to
 common stock                                  180,120     2             --         279           --              --             281
 Exercise of stock options                   1,135,632    11             --       3,954           --              --           3,965
 Conversion of subordinated promissory
 note                                        4,629,232    46             --      22,454           --              --          22,500
 Tax benefit from exercise of
 stock options                                      --    --             --       2,666           --              --           2,666
 Comprehensive income (loss):
    Interest rate swaps (net of tax of
    $838)                                           --    --             --          --        1,239              --           1,239
    Foreign currency translation                    --    --             --          --          (1)              --             (1)
    Net income                                      --    --             --          --           --          26,444          26,444
                                            ----------  ------    ----------  ----------  ------------    -----------     ----------
 Comprehensive income                               --    --             --          --        1,238          26,444          27,682
                                            ----------  ------    ----------  ----------  ------------    -----------     ----------

 Balance, December 31, 2002                 34,419,049   344           (12)     106,849        (509)          22,157         128,829
 Exercise of stock options                     935,947    10             --       4,878           --              --           4,888
 Tax benefit from exercise of stock
 options                                            --    --             --       3,281           --              --           3,281
 Stock based compensation expense                   --    --             --           3           --              --               3
 Proceeds from certain stockholders
 related to secondary offering                      --    --             --         852           --              --             852
 Write-off uncollectible stock
 subscription                                       --    --             12          --           --              --              12
 Comprehensive income :
   Interest rate swaps (net of tax
   of $209)                                         --    --             --          --          324              --             324
   Foreign currency translation                     --    --             --          --          113              --             113
   Net income                                       --    --             --          --           --          36,190          36,190
                                            ----------  ------    ----------  ----------  ------------    ----------       ---------
 Comprehensive income                               --    --             --          --          437          36,190          36,627
                                            ----------  ------    ----------  ----------  ------------    ----------       ---------
 Balance, December 31, 2003                 35,354,996   354         $   --    $115,863     $   (72)       $  58,347       $ 174,492
                                            ----------  ------    ----------  ----------  ------------    ----------       ---------

 Exercise of stock options                     863,480     8             --       5,571           --              --           5,579
 Tax benefit from exercise of stock
 options                                            --    --             --       5,127           --              --           5,127
 Stock based compensation expense                   --    --             --           5           --              --               5
 Purchase of  treasury stock
 under ESPP                                         --    --             --     (1,079)           --              --         (1,079)
 Reissuance of treasury stock
 under ESPP                                         --    --             --       1,021           --              --           1,021
 Comprehensive income :
   Interest rate swaps (net of tax
   of $89)                                          --    --             --          --          141              --             141
   Foreign currency translation                     --    --             --          --          185              --             185
   Net income                                       --    --             --          --           --          61,805          61,805
                                            ----------  ------    ----------  ----------  ------------    ----------       ---------
 Comprehensive income                               --    --             --          --          326          61,805          62,131
                                            ----------  ------    ----------  ----------  ------------    ----------       ---------
 Balance, December 31, 2004                 36,218,476   362         $   --    $126,508     $    254       $ 120,152       $ 247,276
                                            ----------   -------  ----------  ----------  ------------    ----------       ---------

</TABLE>

                                       F-4
<PAGE>


<TABLE>
<CAPTION>


                                          ANTEON INTERNATIONAL CORPORATION AND SUBSIDIARIES
                                                      (a Delaware Corporation)

                                                Consolidated Statements of Cash Flows

                                            Years ended December 31, 2004, 2003 and 2002
                                                           (in thousands)



                                                                               2004              2003              2002
                                                                           --------------    --------------    -------------
Cash flows from operating activities:
<S>                                                                          <C>                <C>              <C>
      Net income                                                             $  61,805          $  36,190        $   26,444
      Adjustments to reconcile net income  to net cash
        provided by (used in) operating activities:
             Gain on settlement of subordinated notes payable                  (1,327)                 --                --
             Interest rate swap termination                                         --                 --           (1,903)
             Depreciation and amortization of property and equipment             4,016              4,440             4,294
             Amortization of noncompete agreements                                 167                101                --
             Other intangibles amortization                                      2,509              2,349             1,907
             Amortization of deferred financing costs                              685              4,014             2,442
             Loss on disposals of property and equipment                             8                190                25
             Deferred income taxes                                               3,102            (1,742)             4,090
             Minority interest in earnings of subsidiaries                          72                 54                18
             Changes in assets and liabilities, net of acquired assets
             and liabilities:
                Increase in accounts receivable                               (84,343)           (12,477)          (57,715)
                (Increase) decrease in prepaid expenses and other                1,014            (1,245)           (8,059)
                current assets
                Decrease in other assets                                           254                142               105
                Increase in accounts payable and accrued expenses               23,745              5,592            22,601
                Increase (decrease) in income tax payable                        4,650            (2,998)             7,229
                (Decrease) increase in deferred revenue                          1,916              3,306           (3,042)
                Decrease in other liabilities                                     (29)              (473)             (158)
                                                                           -----------       ------------      ------------
                   Net cash provided (used in) by operating activities          18,244             37,443           (1,722)
                                                                           -----------       ------------      ------------

Cash flows from investing activities:
      Purchases of property and equipment and other assets                     (3,963)            (3,049)           (3,225)
      Acquisition of Information Spectrum, Inc., net of cash acquired               --           (92,382)                --
      Acquisition of Simulated Technologies Inc., net of cash acquired        (15,063)                 --             1,802
      Acquisition of Integrated Management Services Inc., net of cash
      acquired                                                                (29,119)                 --                --
      Other, net                                                                   267                 --                --
                                                                           -----------       ------------      ------------
                   Net cash used in investing activities                      (47,878)           (95,431)           (1,423)
                                                                           -----------       ------------      ------------

Cash flows from financing activities:
      Principal payments on bank and other notes payable                            --               (43)              (47)
      Payment on subordinated notes payable                                    (1,350)                 --             (567)
      Deferred financing costs                                                   (297)            (2,728)           (1,292)
      Principal payments on Term Loan A                                             --           (21,202)          (25,853)
      Proceeds from Term Loan B                                                 16,125            150,000                --
      Principal payments on Term Loan B                                        (1,538)                 --                --
      Proceeds from certain stockholders related to secondary offering              --                852                --
      Proceeds from revolving credit facility                                1,224,000          1,009,500           862,600
      Principal payments on revolving credit facility                      (1,208,600)        (1,012,100)         (874,300)
      Redemption of senior subordinated notes payable                          (1,876)           (73,124)          (25,000)
      Proceeds from issuance of common stock, net of expenses                    5,526              4,902            81,808
      Principal payments under capital lease obligations                         (341)              (247)                --
      Principal payments on subordinated notes payable to stockholders              --                 --           (7,499)
      Payment of subordinated notes payable-related party                           --                 --           (4,369)
                                                                           -----------       ------------      ------------
                   Net cash provided by financing activities                    31,649             55,810             5,481
                                                                           -----------       ------------      ------------

                   Net increase (decrease) in cash and cash equivalents          2,015            (2,178)             2,336

Cash and cash equivalents, beginning of year                                     2,088              4,266             1,930
                                                                           -----------       ------------      ------------
Cash and cash equivalents, end of year                                       $   4,103          $   2,088        $    4,266
                                                                           ===========       ============      ============

                                                                                                                     (continued)
</TABLE>


                                       F-5
<PAGE>

<TABLE>


                                          ANTEON INTERNATIONAL CORPORATION AND SUBSIDIARIES
                                                      (a Delaware Corporation)

                                          Consolidated Statements of Cash Flows, continued

                                            Years Ended December 31, 2004, 2003 and 2002




                                                                             2004                2003             2002
                                                                        ----------------     -------------    --------------

Supplemental disclosure of cash flow information (in thousands):
Interest paid:
<S>                                                                         <C>                 <C>              <C>
      Tender offer of senior subordinated notes payable                     $       --          $   7,177        $       --
      Credit Facility, 12% Notes and other                                       7,448             14,199            18,971
                                                                        --------------       ------------     -------------
    Total interest paid                                                     $    7,448          $  21,376        $   18,971
                                                                        ==============       ============     =============

    Income taxes paid, net                                                  $   28,515          $  27,410        $    2,634
                                                                        ==============       ============     =============
</TABLE>

Supplemental disclosure of noncash investing and financing activities:

      In March 2002, in connection  with the Company's  initial public  offering
      ("IPO") of shares of its common stock,  a $22.5 million  principal  amount
      subordinated  convertible  promissory  note of the Company held by Azimuth
      Tech. II LLC, one of the Company's principal  stockholders,  was converted
      pursuant to its terms into 4,629,232  shares of the Company's common stock
      at a conversion price of $4.86 per share.

      In March 2002, the Company exchanged  approximately  90,060 shares held by
      minority  interest  holders in Anteon  Virginia at December  31, 2001 into
      180,120 shares of the Company.

      The changes in the fair value of the interest rate swaps are reported, net
      of tax, in accumulated other comprehensive  income.  During the year ended
      December  31,  2004,  the  last  of  the  Company's   interest  rate  swap
      agreements, with a notional value of $10.0 million, matured. For the years
      ended  December  31,  2004 and 2003,  the  change in the fair value of the
      interest  rate  swaps  generated  a  deferred  tax  liability  of zero and
      $209,000, respectively.

      For the years  ended  December  31, 2004 and 2003,  the  Company  recorded
      approximately $134,000 and $1.0 million of equipment utilizing capitalized
      leases, respectively.


      See accompanying notes to consolidated financial statements.


                                       F-6
<PAGE>


(1)  Organization and Business

         Anteon International  Corporation,  a Delaware Corporation ("Anteon" or
         the "Company") (formerly Azimuth Technologies,  Inc.), was incorporated
         on March 15, 1996 for the purpose of acquiring  all of the  outstanding
         stock of  Ogden  Professional  Services  Corporation,  a  wholly  owned
         subsidiary of Ogden Technology  Services  Corporation and an indirectly
         wholly owned subsidiary of Ogden  Corporation  (collectively  "Ogden").
         Upon  completion of the  acquisition  effective  April 22, 1996,  Ogden
         Professional  Services  Corporation was renamed Anteon  Corporation,  a
         Virginia   corporation,   and  later   renamed   Anteon   International
         Corporation, a Virginia corporation.

         The Company provides professional  information technology solutions and
         systems engineering and integration  services to government  customers.
         The Company  designs,  integrates,  maintains and upgrades  information
         systems for  national  defense,  intelligence,  emergency  response and
         other  government  missions.  The  Company  also  provides  many of its
         government customers with the systems analysis, integration and program
         management skills necessary to manage their mission systems development
         and operations.  The Company is subject to all of the risks  associated
         with conducting  business with the U.S. federal  government,  including
         the risk of contract termination for the convenience of the government.
         In  addition,   government   funding   continues  to  be  dependent  on
         congressional  approval of program  level  funding  and on  contracting
         agency  approval  for the  Company's  work.  The  extent  to which  the
         Company's  existing  contracts  will be funded in the future  cannot be
         determined.

(2)  Summary of Significant Accounting Policies

     (a)  Basis of Presentation and Principles of Consolidation

          The  consolidated  financial  statements  include the  accounts of the
          Company and its directly and indirectly,  majority-owned subsidiaries.
          All  material   intercompany   transactions  and  accounts  have  been
          eliminated in consolidation.

     (b)  Cash and Cash Equivalents

          Cash and cash equivalents  include all cash balances and highly liquid
          investments that have original maturities of three months or less.

     (c)  Property and Equipment

          Property and equipment is stated at cost, or fair value at the date of
          acquisition  if  acquired  through a  purchase  business  combination.
          Property and equipment  under capital leases are stated at the present
          value of minimum lease  payments.  For financial  reporting  purposes,
          depreciation  and  amortization  is recorded  using the  straight-line
          method over the estimated useful lives of the assets as follows:
<TABLE>
<CAPTION>

<S>                                                               <C>
          Computer hardware and software                          3 to 7 years
          Furniture and equipment                                 5 to 12 years
          Leasehold and building improvements                     shorter of estimated useful life or lease term
          Buildings                                               31.5 years
          Property and equipment under capital leases             shorter of estimated useful life or lease term
</TABLE>

     (d)  Deferred Financing Costs

          Costs associated with obtaining the Company's  financing  arrangements
          are deferred and amortized over the term of the financing arrangements
          using a method that  approximates the effective  interest method,  and
          are  included  in  intangible  and other  assets  in the  accompanying
          Consolidated Balance Sheets.



                                       F-7
<PAGE>



     (e)  Impairment or Disposal of Long Lived Assets

          The Company  reviews its  long-lived  assets for  impairment  whenever
          events or changes in  circumstances  indicate that the carrying amount
          of an asset may not be recoverable  from its  undiscounted  cash flows
          and measure an impairment loss as the difference  between the carrying
          amount and fair value of the asset

          During  2003,   the  Company   recognized  an  impairment   charge  of
          approximately $135,000 included in general and administrative expenses
          in the  accompanying  Consolidated  Statement of Operations,  to write
          down the carrying value of a building held for sale to its fair market
          value.

     (f)  Goodwill

          The Company uses the purchase  method of  accounting  for all business
          combinations. Intangible assets acquired in a business combination are
          recognized  and  reported  separately  from  goodwill.   Goodwill  and
          intangible assets with indefinite useful lives are not amortized,  but
          instead tested for  impairment at least  annually.  Intangible  assets
          with  estimable  useful  lives are  amortized  over  their  respective
          estimated  useful  lives  to  their  estimated  residual  values,  and
          reviewed for impairment.

          In connection with the Company's goodwill impairment  evaluation,  the
          Company  identifies  its reporting  units and  determines the carrying
          value of each reporting unit by assigning the assets and  liabilities,
          including  the  existing  goodwill  and  intangible  assets,  to these
          reporting  units.  The Company  determines the estimated fair value of
          each  reporting  unit and  compares it to the  carrying  amount of the
          reporting unit. As a result of this comparison, no indication that the
          reporting  units' fair values were less than their carrying values was
          noted. In the future, to the extent the carrying amount of a reporting
          unit exceeds the fair value of a reporting  unit, an indication  would
          exist  that a  reporting  unit's  goodwill  may be  impaired,  and the
          Company would be required to perform the second step of the impairment
          test.  In the second  step,  the Company must compare the implied fair
          value of the reporting  unit goodwill with the carrying  amount of the
          reporting  unit  goodwill.  The  implied  fair  value of  goodwill  is
          determined by allocating  the fair value of the reporting  unit to all
          of the assets  (recognized  and  unrecognized)  and liabilities of the
          reporting unit in a manner similar to a purchase price allocation,  in
          accordance  with SFAS No.  141.  The  residual  fair value  after this
          allocation is the implied fair value of the reporting unit goodwill.

          As of September  30, 2004 and 2003,  the Company  performed its annual
          goodwill  impairment  analysis.  The Company  applied the  methodology
          described  above  and did not  identify  any  indication  of  goodwill
          impairment for any reporting unit. The Company will perform the annual
          impairment test as of September 30 each year unless  circumstances  or
          events indicate that an impairment test should be performed sooner.

     (g)  Other Intangible Assets

          The Company  amortizes  the allocated  cost of  noncompete  agreements
          entered  into  in   connection   with  business   combinations   on  a
          straight-line basis over the terms of the agreements

          Intangible  assets  acquired in a business  combination are recognized
          only if such assets arise from a contractual  or other legal right and
          are separable, that is, capable of being sold, transferred,  licensed,
          rented,  or  exchanged.  Intangible  assets  acquired  in  a  business
          combination  that do not meet this criteria are considered a component
          of goodwill.  As of December 31, 2004,  the Company has  approximately
          $11.1 million of intangible assets,  net of accumulated  amortization,
          related to contracts  and related  customer  relationships  intangible
          assets, which are being amortized  straight-line over periods of up to
          5.3 years


                                       F-8
<PAGE>


     (h)  Revenue Recognition

          For each of the years  ended  December  31,  2004,  2003 and 2002,  in
          excess of 98% of the  Company's  revenues  were derived from  services
          performed under  contracts that may be categorized  into three primary
          types:  time and  materials,  cost-plus and fixed price.  For the year
          ended December 31, 2004,  approximately 39% of the Company's contracts
          were  time  and  material,  34%  cost-plus  and  27%  fixed  price  (a
          substantial  majority  of  which  are  fixed  price  level  of  effort
          contracts).  Revenue for time and materials contracts is recognized as
          time is spent at hourly rates,  which are negotiated with the customer
          plus  the  cost of any  allowable  material  costs  and  out-of-pocket
          expenses. Revenue is recognized under cost-plus contracts on the basis
          of  direct  and  indirect  costs  incurred  plus a  negotiated  profit
          calculated as a percentage of costs or as performance-based award fee.
          For certain  cost-plus  contracts,  which are referred to as cost-plus
          award  fee type  contracts,  the  expected  fee to be  awarded  by the
          customer  is  recognized  at the  time  such  fee  can  be  reasonably
          estimated,  based  on  factors  such  as  the  Company's  prior  award
          experience  and   communications   with  the  customer  regarding  the
          Company's performance,  including any interim performance  evaluations
          rendered by the customer and the Company's  average  historical  award
          fee rate.  Revenues are recognized under substantially all fixed price
          contracts,  which are predominantly  level of effort contracts,  using
          the  cost-to-cost  method for all services  provided.  For non-service
          related fixed price  contracts,  revenues are  recognized as units are
          delivered (the  units-of-delivery  method).  In addition,  the Company
          evaluates its contracts  for multiple  deliverables  which may require
          the segmentation of each  deliverable  into separate  accounting units
          for proper revenue recognition.

          The Company  recognizes  revenues  under the U.S.  federal  government
          contracts when a contract is executed, the contract price is fixed and
          determinable,  funding has been received,  delivery of the services or
          products  has  occurred and  collectibility  of the contract  price is
          considered  probable.  The  Company's  contracts  with agencies of the
          federal  government are subject to periodic  funding by the respective
          contracting agency.  Funding for a contract may be provided in full at
          inception  of the  contract  or  ratably  throughout  the  term of the
          contract as the services are  provided.  From time to time the Company
          may proceed with work on unfunded portions of existing contracts based
          on  customer  direction  pending  finalization  and  signing of formal
          funding  documents.  The Company has an internal process for approving
          any such work. All revenue  recognition is deferred  during periods in
          which  funding is not  received.  Allowable  contract  costs  incurred
          during such periods are deferred if the receipt of funding is assessed
          as probable.  In evaluating the probability of funding being received,
          the Company  considers  its  previous  experience  with the  customer,
          communications  with the customer  regarding  funding status,  and the
          Company's  knowledge of available funding for the contract or program.
          If  funding  is not  assessed  as  probable,  costs  are  expensed  as
          incurred.

          The  Company  recognizes  revenues  under its cost based U.S.  federal
          government contracts based on allowable contract costs, as mandated by
          the federal  government's  cost  accounting  standards.  The costs the
          Company  incurs  under  federal  government  contracts  are subject to
          regulation  and audit by certain  agencies of the federal  government.
          Contract cost  disallowances,  resulting from government audits,  have
          not historically been significant.

          Contract revenue recognition inherently involves estimation.  Examples
          of such estimates include the level of effort needed to accomplish the
          tasks under the contract,  the cost of those efforts,  and a continual
          assessment  of the  Company's  progress  toward the  completion of the
          contract. From time to time,  circumstances may arise which require us
          to revise  its  estimated  total  revenue or costs.  Typically,  these
          revisions relate to contractual  changes. To the extent that a revised
          estimate affects contract revenue or profit previously recognized, the
          Company records the cumulative effect of the revision in the period in
          which it becomes known. In addition, the full amount of an anticipated
          loss on any type of contract is  recognized  in the period in which it
          becomes   known.   The  Company  may  be  exposed  to   variations  in
          profitability if the Company encounters  variances from estimated fees
          earned under award fee contracts and estimated costs under fixed price
          contracts.

                                       F-9
<PAGE>

          Software  revenue is generated from  licensing  software and providing
          services, including maintenance and technical support, and consulting.
          The Company  recognizes  the revenue  when the  license  agreement  is
          signed,  the  license fee is fixed and  determinable,  delivery of the
          software has  occurred,  and  collectibility  of the fee is considered
          probable.  The Company's software license sales including  maintenance
          and  consulting  services are recognized at their fair values when all
          other  recognition  criteria  are met.  Service  revenues  consists of
          maintenance and technical  support and is recognized  ratably over the
          service period.  Other service  revenues are recognized as the related
          services are  provided.  Revenues from sales of products are generally
          recognized upon acceptance by the customer,  which is typically within
          thirty days of shipment.

          Amounts  collected  in  advance  of being  earned  are  recognized  as
          deferred revenues.

     (i)  Costs of Acquisitions

          Costs incurred on probable  acquisitions are deferred.  Costs incurred
          on  successful   acquisitions   are  capitalized  as  a  cost  of  the
          acquisition,  while costs incurred by the Company for  unsuccessful or
          terminated  acquisition  opportunities  are expensed  when the Company
          determines that the opportunity will no longer be pursued.

     (j)  Income Taxes

          The Company  calculates  its income tax provision  using the asset and
          liability  method.  Under  the asset and  liability  method,  deferred
          income  taxes  are   recognized   for  the  future  tax   consequences
          attributable to differences  between the financial  statement carrying
          amounts and the tax bases of existing assets and liabilities. Deferred
          tax  assets and  liabilities  are  measured  using  enacted  tax rates
          expected  to apply  to  taxable  income  in the  years in which  those
          temporary  differences  are expected to be  recovered or settled.  The
          effect on deferred  taxes of a change in tax rates are  recognized  in
          income in the period that includes the enactment date.

          The  Company  has  not   recognized  a  deferred   tax   liability  of
          approximately  $423,000  for  undistributed  earnings  of its  foreign
          operations that arose in 2004 and prior years because the Company does
          not expect those unremitted  earnings to reverse and become taxable to
          the Company in the foreseeable  future.  A deferred tax liability will
          be recognized  when the Company is no longer able to demonstrate  that
          it plans to permanently reinvest undistributed earnings. For the years
          ended December 31, 2004 and 2003 the  undistributed  earnings of these
          subsidiaries was approximately $1,128,000 and $718,000, respectively.

     (k)  Foreign Currency Translation and Transactions

          The  balance  sheets  of  the  Company's   foreign   subsidiaries  are
          translated  to  U.S.  dollars  for  consolidated  financial  statement
          purposes using the current  exchange rates in effect as of the balance
          sheet date. The revenue and expense  accounts of foreign  subsidiaries
          are  converted  using the weighted  average  exchange  rate during the
          period.  Gains or losses resulting from such translations are included
          in accumulated comprehensive income in stockholders' equity. Gains and
          losses  from  transactions   denominated  in  foreign  currencies  are
          included in current period income.  Foreign currency transaction gains
          and losses were not significant for the years ended December 31, 2004,
          2003 and 2002.

     (l)  Accounting for Stock-Based Compensation

          The Company accounts for employee stock-based compensation plans using
          the  intrinsic  value based  method of  accounting  prescribed  by APB
          Opinion  No.  25 ("APB  No.  25").  Accounting  for  Stock  Issued  to
          Employees,  and Related  Interpretations.  The Company has an employee
          stock option plan.  Compensation  expense for stock options granted to
          employees is recognized  based on the difference,  if any, between the
          fair value of the Company's common stock and the exercise price of the
          option  at the date of  grant.  The  Company  has also  granted  stock
          appreciation rights to certain of its directors. The Company discloses
          the pro forma  effect on net income as if the fair value based  method
          of  accounting  as  defined  in  Statement  of  Financial   Accounting
          Standards  No.  123  ("SFAS  No.  123"),  Accounting  for Stock  Based
          Compensation had been applied.

                                       F-10
<PAGE>

          The Company accounts for stock options granted to non-employees  using
          the fair value method of  accounting  as  prescribed  by SFAS No. 123.
          Compensation expense related to stock options granted to non-employees
          is not significant.

          The following table  illustrates the effect on net income and earnings
          per  share if the  Company  had  applied  the fair  value  recognition
          provisions of SFAS No. 123, to stock-based employee compensation:


<TABLE>
<CAPTION>

                                                                                   2004           2003 (1)       2002 (1)
                                                                                -----------      -----------    -----------
                                                                                  (in thousands, except per share data)

<S>                                                                             <C>              <C>            <C>
                  Net income, as reported                                       $   61,805       $  36,190      $   26,444
                  Add: Stock based compensation recorded, net of tax                     3               2              --
                  Deduct: Total stock-based compensation expense
                  determined under fair value method, net of tax                   (3,776)         (3,240)         (2,232)
                                                                                -----------      -----------    -----------
                  Pro forma net income                                          $   58,032       $  32,952      $   24,212

                      Earnings per share:
                      Basic-as reported                                         $     1.73       $    1.04      $     0.82
                                                                                ===========      ===========    ===========
                      Basic-pro forma                                           $     1.62       $    0.95      $     0.75

                                                                                ===========      ===========    ===========
                      Diluted-as reported                                       $     1.66       $    0.98      $     0.78
                                                                                ===========      ===========    ===========
                      Diluted-pro forma                                         $     1.56       $    0.89      $     0.71
                                                                                ===========      ===========    ===========
</TABLE>

          (1) The pro forma data and stock based  compensation  expense for 2003
          and 2002 have been  adjusted  to  reflect a  correction  from  amounts
          previously  reported.  The stock based compensation expense determined
          under the fair value,  net of tax, for 2003 and 2002 was overstated by
          approximately $509,000 and $1.2 million, respectively.

     (m)  Fair Value of Financial Instruments

          The  carrying  amounts of accounts  receivable,  accounts  payable and
          accrued  liabilities  approximate their fair values as of December 31,
          2004 and 2003, due to the relatively short duration of these financial
          instruments.  Except for the senior subordinated notes payable and the
          subordinated  notes payable to  stockholders,  the carrying amounts of
          the  Company's  indebtedness  approximate  their  fair  values  as  of
          December  31,  2004  and  2003,  as  they  bear  interest  rates  that
          approximate  market rates.  In June 2004, the Company  repurchased the
          remaining  $1.9 million  principal  amount of the senior  subordinated
          notes payable. The fair value of the senior subordinated notes payable
          on principal amounts $75.0 million,  based on quoted market value, was
          approximately $81.0 million as of December 31, 2003.

     (n)  Derivative Instruments and Hedging Activities

          Derivative  instruments  are  recognized  at fair value in the balance
          sheet.  Changes  in the fair  value  of  derivative  instruments  that
          qualify  as  effective  hedges  of  cash  flows  are  recognized  as a
          component of other  comprehensive  income (loss).  Changes in the fair
          value of  derivative  instruments  for all other  hedging  activities,
          including the ineffective  portion of cash flow hedges, are recognized
          in current period earnings.


                                       F-11
<PAGE>


     (o)  Earnings Per Common Share

          Basic  earnings  per common  share is  computed  by  dividing  the net
          earnings  available  to  common  stockholders  for the  period  by the
          weighted  average  number  of common  shares  outstanding  during  the
          period.  Diluted earnings per common share is computed by dividing net
          earnings for the period by the weighted  average  number of common and
          dilutive  common  equivalent  shares  outstanding  during the  period.
          Potentially  dilutive  common  equivalent  shares are comprised of the
          Company's employee stock options.

     (p)  Use of Estimates

          The  preparation of  consolidated  financial  statements in conformity
          with U.S. generally accepted accounting principles requires management
          to make estimates and assumptions  that affect the carrying amounts of
          reported  assets and  liabilities,  including  the  recoverability  of
          property,  plant,  and  equipment,  intangible  assets  and  goodwill,
          valuation allowances for income taxes and accounts receivable, and the
          valuation of  derivative  instruments  and  disclosure  of  contingent
          assets  and  liabilities  at the  date of the  consolidated  financial
          statements  and the reported  amounts of revenues and expenses  during
          the  reporting   period.   Actual  results  could  differ  from  those
          estimates.

     (q)  Recently Issued Accounting Pronouncements

          In December  2004,  the Financial  Accounting  Standards  Board (FASB)
          issued SFAS No. 153, Exchanges of Nonmonetary  Assets.  This statement
          amends  Accounting  Principles  Board (APB)  Opinion No. 29 to improve
          financial  reporting by eliminating certain narrow differences between
          the FASB's and the International  Accounting  Standards Board's (IASB)
          existing  accounting  standards for  nonmonetary  exchanges of similar
          productive   assets.   The  provisions  of  this  statement  shall  be
          prospectively   applied  and  are  effective  for  nonmonetary   asset
          exchanges  occurring  after July 1, 2005. The adoption of SFAS No. 153
          is  not  expected  to  have a  significant  impact  on  the  Company's
          consolidated financial statements.

          In December 2004, the FASB issued SFAS No. 123 (Revised  2004),  Share
          Based Payment.  (SFAS No. 123R), which amends SFAS No. 123, Accounting
          for Stock-Based Compensation and SFAS No. 95, Statement of Cash Flows.
          SFAS 123R requires all companies to measure  compensation cost for all
          share-based  payments at fair  value,  and will be  effective  July 1,
          2005.  This  new  standard  may be  adopted  in one of two  ways - the
          modified prospective  transition method or the modified  retrospective
          transition  method.  The Company is currently  assessing the impact of
          SFAS No. 123R.

(3)  Sale of DisplayCheck

          On April 3, 2002,  the Company sold all of the assets and  transferred
          certain  liabilities  of the business  for an aggregate  sale price of
          $200,000.

                                       F-12
<PAGE>

(4)  Acquisitions

     (a)  Information Spectrum, Inc.

          On May 23, 2003, the Company purchased all of the outstanding stock of
          Information  Spectrum,  Inc., or "ISI", a provider of credential  card
          technologies  and military  logistics and training  systems,  based in
          Annandale, Virginia, for a total purchase price of approximately $92.4
          million   including   transactions   costs.   The  net   tangible  and
          identifiable  intangible assets acquired and liabilities  assumed were
          recognized  at  their  estimated  fair  market  values  at the date of
          acquisition,  based on estimates made by management.  The identifiable
          intangible  assets  consisted of $4.8 million of contracts and related
          customer  relationships  and $500,000  for the value of a  non-compete
          agreement.   The  value  of  the   contracts   and  related   customer
          relationships is based, in part, on an independent appraisal and other
          studies  performed  by the  Company.  Goodwill  recognized  from  this
          acquisition was approximately $74.3 million and not deductible for tax
          purposes.  The contracts and related customer  relationships are being
          amortized straight-line over its expected useful life of approximately
          5.3  years.   The  non-compete   agreement  value  was  based  on  the
          consideration   paid  for  the  agreement   and  is  being   amortized
          straight-line over the three year term of the agreement.

          Unaudited Pro Forma Data

          The  following  unaudited  pro  forma  summary  presents  consolidated
          information as if the acquisition of ISI had occurred as of January 1,
          2003.  The pro forma  summary is provided for  informational  purposes
          only and is based on historical  information that does not necessarily
          reflect  actual results that would have occurred nor is it necessarily
          indicative of future  results of  operations of the combined  entities
          (in thousands, except per share data):

                                                              2003
                                                         ---------------

                 Total revenues                          $   1,096,152
                 Total expenses                              1,059,467
                                                         ---------------

                 Net income                              $      36,685
                                                         ===============

                 Basic earnings per common share         $        1.05
                                                         ===============

                 Diluted earning per common share        $        0.99
                                                         ===============

     (b)  Simulation Technologies, Inc

          On July 27, 2004, the Company  purchased all of the outstanding  stock
          of Simulation  Technology  Inc., or "STI",  a provider of modeling and
          simulation  software  solutions  and  services,  based in San Antonio,
          Texas,  for a total  purchase  price  of  $15.1  million  (net of cash
          acquired),  including  transaction  costs.  The Company  financed  the
          acquisition through borrowings under its existing Credit Facility. The
          net  tangible  and   identifiable   intangible   assets  acquired  and
          liabilities  assumed were  recognized at their  estimated  fair market
          values at the date of acquisition.  The identifiable intangible assets
          consisted  of  $2.6  million  of   contracts   and  related   customer
          relationships  with an  expected  weighted  average  useful  life of 5
          years. The value of the contracts and customer relationships is based,
          in part, on an  independent  appraisal and other studies  performed by
          us. Goodwill  recognized from this acquisition was approximately  $9.5
          million and is not deductible for tax purpose. The acquisition did not
          meet the  criteria  of a material  and  significant  acquisition,  and
          therefore,  pro forma  disclosures  are not  presented  in the audited
          consolidated financial statements.

     (c)  Integrated Management Services, Inc.

          On August 11, 2004, the Company purchased all of the outstanding stock
          of Integrated Management Services, Inc., or "IMSI", a provider of high
          end, mission critical information and securities  solutions,  based in
          Arlington,  Virginia,  for a total  purchase  price of $29.1  million,
          including  transaction  costs.  The Company  financed the  acquisition
          through borrowings under its existing Credit Facility. Under the terms
          of the stock purchase  agreement,  consideration of up to $2.0 million
          of additional purchase price may be paid if certain milestones are met
          by June 30, 2005. The net tangible and identifiable  intangible assets
          acquired and  liabilities  assumed were  recognized at their estimated
          fair  market  values  at the  date of  acquisition.  The  identifiable
          intangible  assets  consisted of $5.9 million of contracts and related
          customer  relationships  with an expected weighted average useful life
          of 5 years.  The value of the contracts and customer  relationships is
          based,  in  part,  on  an  independent  appraisal  and  other  studies
          performed  by  us.  Goodwill  recognized  from  this  acquisition  was
          approximately  $20.7 million and is deductible for tax purposes due to
          the tax  code  election  made  at the  time  of the  acquisition.  The
          acquisition  did not meet the criteria of a material  and  significant
          acquisition, and therefore, pro forma disclosures are not presented in
          the audited consolidated financial statements.


                                       F-13
<PAGE>


(5)  Accounts Receivable

          The  components  of accounts  receivable  as of December  31, 2004 and
          2003, are as follows (in thousands):
<TABLE>
<CAPTION>

                                                             2004             2003
                                                         --------------   --------------

<S>                                                      <C>              <C>
           Billed and billable                           $    265,359     $    198,144
           Unbilled                                            48,103           22,210
           Retainages due upon contract completion              8,369            6,705
           Allowance for doubtful accounts                    (4,535)          (4,122)
                                                         --------------   --------------

                             Total                       $    317,296     $    222,937
                                                         ==============   ==============
</TABLE>

         In excess of 98% of the Company's  revenues for each of 2004,  2003 and
         2002 have been earned, and accounts  receivable as of December 31, 2004
         and  2003 are  due,  from  agencies  of the  U.S.  federal  government.
         Unbilled  costs and fees and  retainages  billable  upon  completion of
         contracts are amounts due generally  within one year and will be billed
         on the basis of contract terms and delivery schedules.

         The accuracy and  appropriateness  of the Company's direct and indirect
         costs and expenses under its government  contracts and, therefore,  its
         accounts receivable recorded pursuant to such contracts, are subject to
         extensive regulation and audit,  including by the U.S. Defense Contract
         Audit  Agency  ("DCAA")  or by other  appropriate  agencies of the U.S.
         government.  Such  agencies  have the right to challenge  the Company's
         cost estimates or allocations with respect to any government  contract.
         Additionally,  a  substantial  portion of the  payments  to the Company
         under government contracts are provisional payments that are subject to
         potential adjustment upon audit by such agencies.  Incurred cost audits
         have been  completed by DCAA through  2002.  Historically,  such audits
         have not resulted in any  significant  disallowed  costs.  Although the
         Company  can give no  assurances,  in the  opinion of  management,  any
         adjustments  likely to result from inquiries or audits of its contracts
         will not have a  material  adverse  impact on the  Company's  financial
         condition or results of operations.

                                       F-14
<PAGE>

(6)  Property and Equipment

          Property and  equipment  consists of the  following as of December 31,
          2004 and 2003 (in thousands):
<TABLE>
<CAPTION>

                                                                          2004              2003
                                                                      --------------    --------------

<S>                                                                   <C>                <C>
           Land                                                       $       393        $       393
           Buildings                                                        1,581              1,581
           Computer hardware and software                                  20,605             19,686
           Furniture and equipment                                          8,487              6,732
           Leasehold improvements                                           8,384              6,856
                                                                       ------------       ------------
                                                                           39,450             35,248
           Less - accumulated depreciation and amortization              (26,530)           (22,489)
                                                                       ------------       ------------

           Total                                                      $    12,920        $    12,759
                                                                       ============       ============
</TABLE>



<PAGE>



(7)  Accrued Expenses

          The  components  of accrued  expenses as of December 31, 2004 and 2003
          are as follows (in thousands):
<TABLE>
<CAPTION>

                                                              2004               2003
                                                          --------------    --------------

<S>                                                       <C>               <C>
            Accrued payroll and related benefits          $     48,791      $     52,602
            Accrued subcontractor costs                         47,446            25,987
            Accrued interest                                        22               153
            Other accrued expenses                               6,334             6,726
                                                          --------------    --------------

            Total                                         $    102,593      $     85,468
                                                          ==============    ==============
</TABLE>

(8)  Indebtedness

     (a)  Credit Agreement

          On June 23, 1999, the Company entered into a Credit Agreement ("Credit
          Facility") with a syndicate of nine commercial banks.  Under the terms
          of the Credit Facility, the Company entered into promissory notes with
          aggregate available financing facilities of $180.0 million. The Credit
          Facility was  comprised of a revolving  credit  facility for aggregate
          borrowings  of  up  to  $120.0  million  ("Revolving  Facility"),   as
          determined  based on a portion of eligible billed accounts  receivable
          and a portion of eligible unbilled  accounts  receivable and the ratio
          of net debt to  earnings  before  interest,  taxes,  depreciation  and
          amortization  ("EBITDA"),  as  defined  in the  Credit  Facility,  and
          maturing on June 23,  2005;  and a $60.0  million note ("Term Loan A")
          with principal  payments due quarterly  commencing  June 30, 2001, and
          $15.0  million at maturity  on June 23,  2005.  Effective  October 21,
          2002,  this Credit  Facility  was  replaced by an Amended and Restated
          Credit Agreement, as discussed below.

          Under the Credit  Facility,  the interest  rate on both the  Revolving
          Facility and the Term Loan was at a floating  rate based upon,  at the
          Company's option, LIBOR, or the Alternate Base Rate ("ABR"), which was
          the higher of Credit Suisse First  Boston's  ("CSFB") prime rate (less
          one quarter of one percent) and the Federal Funds Effective Rate, plus
          one half of one percent,  in each case plus a margin  determined based
          on the Company's ratio of net debt to EBITDA.

                                       F-15
<PAGE>


     (b)  Amended and Restated Credit Agreement of October 21, 2002

          On October  21,  2002,  the  Company  entered  into an  amendment  and
          restatement  of its existing  Credit  Agreement (the "2002 Amended and
          Restated Credit Agreement").  Pursuant to the terms of the Amended and
          Restated  Credit  Agreement,  the Credit Facility was amended to allow
          for the  following:  (1) a $200.0  million  senior  secured  revolving
          credit facility (the  "Revolving  Credit  Facility");  and (2) a $22.3
          million  three-year  senior secured term loan facility (the "Term Loan
          Facility").  The aggregate  amount  available for borrowing  under the
          Revolving  Credit  Facility  was  determined  based  on a  portion  of
          eligible  accounts  receivable.  In general,  the Company's  borrowing
          availability  under the Revolving  Credit  Facility was subject to its
          borrowing  base  (defined as portions of eligible  billed and unbilled
          accounts receivable) and the Company's ratio of net debt to EBITDA and
          net senior  debt to EBITDA,  as defined in the  Amended  and  Restated
          Credit Agreement.

          Borrowings  under  the Term Loan  Facility  and the  Revolving  Credit
          Facility  would have  matured on June 30, 2005.  Borrowings  under the
          Revolving  Credit  Facility and Term Loan  Facility bore interest at a
          floating rate based upon, at the Company's option,  LIBOR, or the ABR,
          which is the  higher  of CSFB  prime  rate  (less one  quarter  of one
          percent) and the Federal Funds  Effective  Rate,  plus one half of one
          percent,  in  each  case  plus a  margin  determined  based  upon  the
          Company's  ratio of net debt to EBITDA (as  defined in the Amended and
          Restated Credit  Agreement).  Effective December 19, 2003, this credit
          facility  was  replaced  by a  further  Amended  and  Restated  Credit
          Agreement, as discussed below.

     (c)  Amended and Restated Credit Agreement of December 19, 2003

          On December 19, 2003, the Company entered into an amended and restated
          credit  agreement (the "2003 Amended and Restated  Credit  Agreement")
          related to its Credit Facility. This amendment and restatement,  among
          other things, provided for the following:  (1) a new Term Loan B under
          the Term Loan Facility in the amount of $150.0 million with a maturity
          date of December 31, 2010;  (2) the extension of the Revolving  Credit
          Facility's  maturity  date to December 31, 2008;  (3) the repayment of
          the  outstanding  balance of  approximately  $18.4 million of the Term
          Loan  A;  and  (4) the  financing  of the  tender  offer  and  consent
          solicitation  made on November  23, 2003,  related to the  outstanding
          Senior  Subordinated Notes (see below). In addition,  the 2003 Amended
          and Restated  Credit  Agreement  permitted  the Company to raise up to
          $200.0  million  of  additional  debt in the form of  additional  term
          loans, subordinated debt or revolving loans, with certain restrictions
          on the  amount  of  revolving  loans.  All  borrowings  under the 2003
          Amended  and  Restated  Credit  Agreement  were  subject to  financial
          covenants  customary for such financings,  including,  but not limited
          to:  maximum  ratio  of net debt to  EBITDA  (as  defined  in the 2003
          Amended and Restated  Credit  Agreement)  and maximum  ratio of senior
          debt to EBITDA.  For the year ended  December 31, 2003,  the aggregate
          fees the Company paid to  non-officer  directors  exceeded the ceiling
          limitation set forth in its 2003 Amended and Restated Credit Agreement
          by approximately  $20,000,  principally  because of the timing of such
          payments.   The  Company's  lenders  determined  that  this  limit  on
          aggregate annual  non-officer  director fees, which originated several
          years  before the Company  completed  its initial  public  offering of
          common  stock in March 2002,  was not  typical  for a publicly  traded
          company.  Consequently, the Company's lenders granted a waiver for its
          compliance  with this covenant  provision for the year ended  December
          31, 2003 and eliminated  this limitation for the remaining term of the
          2003  Amended  and  Restated  Credit  Agreement.  For the  year  ended
          December  31,  2003,  the  Company  was in  compliance  with all other
          covenants  required by its 2003 Amended and Restated Credit Agreement.
          Additionally,  as a result of the changes made in this  amendment  and
          restatement,  revolving loans were based upon an asset test or maximum
          ratio of net eligible accounts receivable to revolving loans. From the
          date of the amendment  through  December 31, 2003,  the interest rates
          for the Term Loan Facility and the Revolving  Credit  Facility  ranged
          from 3.16 percent to 5.00 percent.

                                       F-16
<PAGE>

          In connection with the repayment of the Term A Loan, the Company wrote
          off the related unamortized  deferred financing fees. The write-off of
          $485,000  is  reflected  as  interest   expense  in  the  accompanying
          Consolidated  Statement of Operations  for the year ended December 31,
          2003.

          All  of  the  Company's  existing  and  future  domestic  subsidiaries
          unconditionally guaranteed the repayment of amounts borrowed under the
          2003  Amended and  Restated  Credit  Agreement.  The 2003  Amended and
          Restated  Credit  Agreement  was secured by  substantially  all of the
          Company's  and its  domestic  subsidiaries'  tangible  and  intangible
          assets,  including  substantially  all of  the  capital  stock  of the
          Company's subsidiaries.

          The 2003 Amended and Restated  Credit  Agreement  also  permitted  the
          Company to elect from time to time to (i) repurchase  certain  amounts
          of its subordinated  debt and outstanding  common stock from its share
          of excess  cash flow (as  defined  in the 2003  Amended  and  Restated
          Credit  Agreement);   and  (ii)  repurchase  certain  amounts  of  its
          subordinated  debt from its share of net cash proceeds of issuances of
          equity securities.

          The 2003 Amended and Restated  Credit  Agreement  contained  customary
          events of default, certain of which allow for grace periods. Effective
          September  30, 2004,  this credit  facility was amended,  as discussed
          below.

     (d)  Amended Credit Agreement of September 30, 2004

          On September 30, 2004, the Company entered into a second  amendment to
          the  2003  Amended  and  Restated  Credit  Agreement.  This  amendment
          provided an additional  $16.1 million of borrowings by increasing  the
          Term Loan B to $165.0 million,  and lowered the interest rates on Term
          B borrowings by 0.25  percent.  Under  certain  conditions  related to
          excess  annual cash flow, as defined in its Credit  Facility,  and the
          receipt  of  proceeds  from  certain  asset  sales  and debt or equity
          issuances,  the Company is required to prepay, in amounts specified in
          the Credit  Facility,  borrowings  under the Term Loan B. In addition,
          the Company is scheduled  to pay  quarterly  installments  of $412,500
          under the Term Loan B until the Credit  Facility  matures on  December
          31, 2010. From January 1, 2004 through December 31, 2004, the interest
          rates for the Term Loan B Facility and the Revolving  Credit  Facility
          ranged  from 3.11  percent to 4.31  percent  and 4.75  percent to 6.00
          percent, respectively.

          As of December 31, 2004 and 2003,  the  outstanding  amounts under the
          Credit Facility were as follows (in thousands):
<TABLE>
<CAPTION>

                                                                    2004               2003
                                                                --------------     --------------

<S>                                                             <C>                <C>
            Revolving Credit Facility                           $     19,800       $      4,400
            Term Loan B                                              164,588            150,000
                                                                --------------     --------------
            Total debt                                               184,388            154,400
            Less current installments                                (1,650)            (1,500)
                                                                --------------     --------------

            Long-term debt, excluding current installments      $    182,738       $    152,900
                                                                ==============     ==============
</TABLE>

          The remaining available borrowings under the Revolving Credit Facility
          as of December 31, 2004 were $173.9 million.  As of December 31, 2004,
          the Credit Facility would have permitted  additional  borrowings of up
          to $292.1 million.

          For the years ended December 31, 2004,  2003 and 2002,  total interest
          expense  incurred on the Revolving  Credit Facility was  approximately
          $1.1 million,  $1.9 million, and $1.1 million,  respectively.  For the
          years  ended  December  31,  2003 and  2002,  total  interest  expense
          incurred  on the  Term  Loan A was  approximately  $700,000,  and $1.2
          million,  respectively.  For the year ended  December 31, 2004,  total
          interest  expense incurred on the Term Loan B was  approximately  $5.3
          million.

                                       F-17
<PAGE>


     (e)  Senior Subordinated Notes Payable

          On May  11,  1999,  the  Company  sold  $100.0  million  in  aggregate
          principal  amount of 12% senior  subordinated  notes due 2009, or "12%
          Notes." The proceeds of the issuance of the 12% Notes were principally
          used to  purchase  Analysis  &  Technology,  Inc.  The 12% Notes  were
          subordinate to the Company's  Credit Facility but ranked senior to any
          other  subordinated  indebtedness.  The 12% Notes  were  scheduled  to
          mature May 15, 2009 and interest was payable  semi-annually  on May 15
          and November 15. The Company used net proceeds from its initial public
          offering  ("IPO") to redeem $25.0 million  principal amount of its 12%
          Notes on April 15, 2002. In addition, as a result of the redemption of
          the $25.0 million  principal  amount of the  Company's 12% Notes,  the
          Company  incurred a $3.0 million  prepayment  premium and  wrote-off a
          proportionate  amount of  approximately  $928,000  of the  unamortized
          deferred  financing  fees related to the portion of the 12% Notes that
          were  repaid.   The  prepayment  premium  and  write-off  of  deferred
          financing  fees for both the term loan and the 12% Notes totaling $4.2
          million,  has been reflected as interest  expense in the  accompanying
          Consolidated  Statement of Operations  for the year ended December 31,
          2002.

          On  December  23,  2003,  the  Company  repurchased  $73.1  million in
          aggregate   principal   amount,  or  approximately  97%  of  the  then
          outstanding  12% Notes.  As of the expiration date of the tender offer
          and  December  31,  2003,  approximately  $1.9  million  in  aggregate
          principal amount remained  outstanding,  which was callable on May 15,
          2004. The repurchase  price for the 12% Notes was $1,110.95 per $1,000
          principal  amount of Notes  tendered  prior to December  5, 2003,  the
          Consent Date.  The  repurchase  price for those Notes  tendered  after
          December 5, 2003 was $1,090.95 per $1,000  principal amount of the 12%
          Notes,  which  excludes  the  consent  payment  of  $20.0  per  $1,000
          principal  amount.  The aggregate  repurchase price for all of the 12%
          Notes  validly  surrendered  for  repurchase  and  not  withdrawn  was
          approximately  $81.2 million.  In addition,  as a result of the tender
          offer,  the Company  incurred a $7.2  million bond premium and consent
          payment and wrote-off  approximately  $2.1 million of the  unamortized
          deferred  financing  fees related to the portion of the 12% Notes that
          were repurchased. The tender premium, consent payment and write-off of
          deferred  financing fees has been reflected as interest expense in the
          accompanying  Consolidated  Statement of Operations for the year ended
          December 31, 2003.

          In June 2004,  the Company  repurchased  the  remaining  $1.9  million
          principal amount of the outstanding 12% Notes. In conjunction with the
          repurchase,  the  Company  paid  a  tender  premium  of  approximately
          $113,000 which was included in interest expense.

          Total interest  expense for the 12% Notes incurred  during 2004,  2003
          and 2002 was approximately  $113,000,  $8.8 million, and $9.9 million,
          respectively.

     (f)  Subordinated Notes Payable

          In connection with the purchase of Sherikon, Inc. in 2000, the Company
          entered into  subordinated  promissory  notes with the Sherikon,  Inc.
          shareholders as of the date of acquisition in the aggregate  principal
          amount of $7.5  million,  discounted  to  approximately  $6.5 million.
          During 2001, $5.0 million of the  subordinated  promissory  notes were
          repaid.  The remaining $2.5 million of subordinated  promissory  notes
          were due on  October  20,  2002.  On October  18,  2002,  the  Company
          asserted  an  indemnification  claim  against  the  former  owners  of
          Sherikon,  Inc. in an  aggregate  amount  exceeding  the $2.5  million
          promissory note. The Company had not made this $2.5 million  scheduled
          payment  pending  resolution of the  indemnification  claim;  however,
          $124,000 of interest  was accrued and  outstanding  as of December 31,
          2003.  On  July  26,  2004,  the  Company  entered  into a  settlement
          agreement with the former owners of Sherikon,  Inc.  resolving,  among
          other items, the Company's  indemnification claim submitted in October
          2002. Under the provisions of the settlement agreement,  the principal
          amount of the note was reduced from $2.5 million to $1.35 million, and
          the Company  paid the  reduced  note  amount,  without  interest.  The
          Company  recognized  $899,000 in other income  consisting of the $1.15
          million  reduction  in the  promissory  note  amount  plus  previously
          accrued interest net of legal expenses.

          During the years  ended  December  31, 2003 and 2002,  total  interest
          expense on the subordinated  promissory notes with the Sherikon,  Inc.
          shareholders was approximately $124,000 and $232,000, respectively.


                                       F-18
<PAGE>


     (g)  Future Maturities

          Scheduled future  maturities  under the Company's  indebtedness are as
          follows (in thousands):

                             Year Ending December
                             31,

                             2005                   $      1,650
                             2006                          1,650
                             2007                          1,650
                             2008                         21,450
                             2009                          1,650
                             Thereafter                  156,338
                                                    ---------------

                                                    $    184,388
                                                    ===============

     (h)  Interest Rate Swap Agreements

          OBJECTIVES AND CONTEXT

          The Company used  variable-rate debt to finance its operations through
          its Revolving  Facility and Term Loan B. These debt obligations expose
          the  Company to  variability  in interest  payments  due to changes in
          interest  rates.  If  interest  rates   increase,   interest   expense
          increases.  Conversely,  if interest rates decrease,  interest expense
          also decreases.

          Management  believes  it is  prudent  to limit  the  variability  of a
          portion of its interest  payments.  It was the Company's  objective to
          hedge a portion of its longer-term  variable interest payments for the
          2003 Amended and Restated Credit Agreement.

          STRATEGIES

          To meet this objective,  management  enters into various interest rate
          swap  derivative   contracts  to  manage  fluctuations  in  cash  flow
          resulting from fluctuations in interest rates.

          The interest rate swaps change the variable-rate cash flow exposure on
          the Company's  long-term debt  obligations to fixed-rate cash flows by
          entering into  receive-variable,  pay-fixed interest rate swaps. Under
          the interest rate swaps, the Company receives  variable  interest rate
          payments and makes fixed  interest  rate  payments,  thereby  creating
          fixed-rate long-term debt.

          The Company does not enter into derivative instruments for any purpose
          other than cash flow hedging  purposes.  That is, the Company does not
          speculate using derivative instruments.

          RISK MANAGEMENT POLICIES

          The  Company  assesses  interest  rate cash  flow risk by  continually
          identifying and monitoring changes in interest rate exposures that may
          adversely impact expected future cash flows and by evaluating  hedging
          opportunities.

                                       F-19
<PAGE>

          The Company monitors interest rate cash flow risk attributable to both
          the Company's  outstanding or forecasted  debt  obligations as well as
          the Company's  offsetting  hedge  positions and estimates the expected
          impact of changes  in  interest  rates on the  Company's  future  cash
          flows. All interest rate swaps were qualifying  cash-flow hedges under
          SFAS No. 133.

          Changes  subsequent  to January 1, 2001 in the fair value of  interest
          rate swaps designed as hedging  instruments of the variability of cash
          flows  associated with  floating-rate,  long-term debt obligations are
          reported in  accumulated  other  comprehensive  income  (loss).  These
          amounts subsequently are reclassified into interest expense as a yield
          adjustment  in the same  period in which the  related  interest on the
          floating-rate debt obligations affects earnings.

          During the year ended  December 31, 2002,  the Company  exercised  its
          cancellation  rights under certain  interest rate swap  agreements and
          cancelled  $30.0 million  notional  amount of such  agreements.  These
          interest  rate  swap  agreements   related   primarily  to  term  loan
          obligations  that had been permanently  reduced.  Interest expense for
          the year ended  December  31,  2002  included  losses of $1.9  million
          associated with these cancellations.

          As of December 31, 2003, the fair value of the Company's interest swap
          agreements  resulted  in a net  liability  of  $230,000  and has  been
          included in other current  liabilities with an offsetting,  net of tax
          amount  of   $141,000,   which  is  included  in   accumulated   other
          comprehensive income.

          During the year ended  December  31, 2004,  the last of the  Company's
          interest rate swap agreements, with a notional value of $10.0 million,
          matured. The Company recognized $230,000 of losses related to interest
          rate swaps which was reflected in interest  expense for the year ended
          December 31, 2004.

(9)  Capital Stock

          The  Company's   authorized   capital  stock  currently   consists  of
          175,000,000  shares of common stock and 15,000,000 shares of preferred
          stock.

          The holders of the Company's common stock are entitled to one vote per
          share on all matters  submitted to a vote of  stockholders,  including
          the election of directors.  The common stock does not have  cumulative
          voting  rights,  which  means that the  holders  of a majority  of the
          outstanding  common stock  voting for the  election of  directors  can
          elect all directors then being  elected.  The holders of the Company's
          common stock are entitled to receive dividends,  when, and if declared
          by the  Company's  board  out of  legally  available  funds.  Upon the
          Company's liquidation or dissolution, the holders of common stock will
          be entitled to share ratably in the Company's assets legally available
          for  distribution  to  stockholders  after payment of liabilities  and
          subject to the prior  rights of any  holders of  preferred  stock then
          outstanding.  The rights,  preferences  and  privileges  of holders of
          common stock are subject to the rights of the holders of shares of any
          series of preferred stock, which may be issued in the future.

          On December  17,  2003,  the  Company  registered  approximately  11.1
          million  shares  of its  common  stock  for  sale  in an  underwritten
          offering pursuant to a shelf registration  statement on Form S-3 filed
          with the SEC which was declared  effective.  These  securities  may be
          offered on a delayed or  continuous  basis  pursuant to Rule 415 under
          the Securities Act of 1933, as amended.

          Preferred Stock

          The Company's  preferred  stock may be issued from time to time in one
          or more series.  The Company's board is authorized to fix the dividend
          rights,  dividend rates,  any conversion  rights or right of exchange,
          any voting  rights,  rights and terms of  redemption,  the  redemption
          price or prices,  the  payments in the event of  liquidation,  and any
          other rights, preferences,  privileges, and restrictions of any series
          of preferred stock and the number of shares  constituting  such series
          and their  designation.  The Company has no present plans to issue any
          shares of preferred stock.


                                       F-20
<PAGE>


          Rights Agreement

          In connection  with the  Company's  IPO, the Company  distributed  one
          preferred  share purchase right for each  outstanding  share of common
          stock  to the  stockholders  of  record  on  that  date  (the  "Rights
          Agreement"). Under the Company's Rights Agreement, each right entitles
          the registered holder to purchase from the Company one  one-thousandth
          of a share of Series A Preferred  Stock, par value $0.01 per share, at
          a price of $76.50 per one  one-thousandth  of a share,  under  certain
          circumstances provided for in the Rights Agreement.

          Until a "separation date" (as defined in the Rights Agreement) occurs,
          the rights will: o Not be exercisable;  o Be evidenced by certificates
          that represent  shares of the Company's common stock; and o Trade with
          the Company's common stock.

          The  rights  will  expire at the  close of  business  on the  ten-year
          anniversary  of the  Rights  Agreement,  unless  earlier  redeemed  or
          exchanged by the Company.

(10) Income Taxes

          The provisions for income taxes for the years ended December 31, 2004,
          2003 and 2002, consist of the following (in thousands), respectively:

<TABLE>
<CAPTION>


                                                                  Years ended December 31,
                                                        ----------------------------------------------
                                                            2004            2003             2002
                                                        -------------    ------------     ------------

           Current provision:
<S>                                                     <C>              <C>              <C>
                 Federal                                $   29,320       $   21,718       $   10,245
                 State                                       4,653            2,305            1,431
                 Foreign                                        66              121              119
                                                        -------------    ------------     ------------

                      Total current provision               34,039           24,144           11,795
                                                        -------------    ------------     ------------

           Deferred provision:
                 Federal                                     2,823          (1,145)            4,331
                 State                                         254            (226)              597
                 Foreign                                        --               --               --
                                                        -------------    ------------     ------------

                      Total deferred provision               3,077          (1,371)            4,928
                                                        -------------    ------------     ------------

                      Total income tax provision        $   37,116       $   22,773       $   16,723
                                                        =============    ============     ============

</TABLE>


                                       F-21
<PAGE>


          The income tax provisions for the years ended December 31, 2004,  2003
          and 2002,  respectively,  are different  from those computed using the
          statutory  U.S.  federal income tax rate of 35% as set forth below (in
          thousands):
<TABLE>
<CAPTION>

                                                                         Years ended December 31,
                                                                --------------------------------------------
                                                                   2004            2003            2002
                                                                ------------    ------------    ------------

<S>                                                             <C>             <C>             <C>
          Expected tax expense, computed at statutory rate      $   34,623      $   20,637      $    15,108
          State taxes, net of federal expense                        3,190           1,501            1,259
          Non-deductible expenses                                      511             332              330
          Secondary offering expenses                                   84             265               --
          Sherikon settlement                                        (403)              --               --
          Federal and state credits                                  (855)              --               --
          Foreign rate differences                                    (34)            (15)               53
          Other                                                         --              53             (27)
                                                                ------------    ------------    ------------
                                                                $   37,116      $   22,773      $    16,723
                                                                ============    ============    ============
</TABLE>

          The tax effect of temporary differences that give rise to the deferred
          tax assets and  deferred tax  liabilities  as of December 31, 2004 and
          2003 is presented below (in thousands):
<TABLE>
<CAPTION>

                                                                 2004              2003
                                                             -------------    --------------

Deferred tax assets:
<S>                                                          <C>              <C>
   Accrued expenses                                          $     9,728      $     8,505
   Intangible assets, due to differences in amortization           2,346            2,399
   Interest rate swaps                                                --               89
   Accounts receivable allowances                                  1,786            1,607
   Property and equipment, due to differences in                   1,313            1,334
   depreciation
   Net operating loss and credit carryforwards                       641              540
                                                             -------------    --------------

                  Total gross deferred tax assets                 15,814           14,474
                                                             -------------    --------------
                  Less:  valuation allowance                        (295)            (295)
                                                             -------------    --------------
                  Net deferred tax assets                         15,519           14,179
                                                             -------------    --------------
Deferred tax liabilities:

Deductible goodwill, due to differences in amortization           10,690            9,087
Revenue recognition differences                                   10,140            5,536
Prepaid expenses                                                   4,044            6,630
Property and equipment, due to differences in depreciation         1,553            1,302
                                                             -------------    --------------

                  Total deferred tax liabilities                  26,427           22,555
                                                             -------------    --------------

                  Deferred tax liabilities, net              $  (10,908)      $   (8,376)
                                                             =============    ==============
</TABLE>

          In assessing  the  realizability  of deferred  tax assets,  management
          considers  whether it is more likely than not that some portion or all
          of the deferred tax asset will be realized.  The ultimate  realization
          of the deferred tax asset is dependent  upon the  generation of future
          taxable  income  during  the  periods in which  temporary  differences
          become  deductible.   Management   considers  scheduled  reversals  of
          deferred tax  liabilities,  projected  future taxable income,  and tax
          planning  strategies  that can be implemented by the Company in making
          this assessment.  Management presently believes that it is more likely
          than not that the Company  will realize the portion of the benefits of
          these deductible differences related to federal income taxes. The 2004
          effective  tax rate  reflects  a  benefit  for  federal  research  and
          experimentation  credits from amending prior years tax returns,  state
          legislative changes and a non-recurring  benefit from nontaxable other
          income  resulting  from the  settlement  with  the  former  owners  of
          Sherikon, Inc., which resulted in a stock basis difference,  for which
          a deferred tax liability was not required to be recorded.  The Company
          has established a valuation allowance as of December 31, 2004 and 2003
          of $295,000 against certain state net operating loss carryforwards. At
          December  31,  2004,  the Company had federal and state net  operating
          loss   carryforwards   of   approximately   $45,000  and   $5,323,000,
          respectively. Carryforwards have various expiration dates beginning in
          2005. The Company also has various state tax credit  carryforwards  of
          approximately  $300,000 and $151,000 as of December 31, 2004 and 2003,
          respectively,  which are available to reduce future state income taxes
          through 2014.

                                       F-22
<PAGE>

(11) Employee Benefit Plans

          Employees  of the  Company  may  participate  in a  401(k)  retirement
          savings  plan,  whereby  employees  may  elect  to make  contributions
          pursuant to a salary  reduction  agreement  upon  meeting  eligibility
          requirements. Participants may contribute up to 100% percent of salary
          in any calendar  year to this plan,  provided that amounts in total do
          not exceed  certain  statutory  limits.  The Company  matches up to 50
          percent  of the  first 6  percent  of a  participant's  contributions,
          subject to certain limitations,  and participants  immediately vest in
          the Company's  contributions.  The Company made  contributions to this
          plan of approximately  $11.7 million,  $8.3 million,  and $7.1 million
          for the years ended December 31, 2004, 2003, and 2002 respectively.

(12) Stock Option and Other Compensation Plans

     (a)  Stock Option Plan

          In  January  1997,  the  Company's  Board of  Directors  approved  the
          adoption of the Anteon  Virginia  Corporation  Omnibus Stock Plan (the
          "Stock Option Plan"). At the discretion of the Board of Directors, the
          stock  option  plan  permits  the  granting  of stock  options,  stock
          appreciation rights,  restricted or unrestricted stock awards,  and/or
          phantom stock to employees or directors of the Company. As of December
          31, 2004,  an aggregate of 1,529,340  shares of the  Company's  common
          stock were reserved for issuance under the stock option plan.

          The exercise price of stock options granted is the market value of the
          common  stock at the  grant  date.  Prior to the  Company's  IPO,  the
          exercise  price  of  stock  options  granted  was  determined  by  the
          Company's  Board  of  Directors  but was not to be less  than the fair
          value of the underlying shares of common stock at the grant date.

          For stock options  granted to employees,  20% of the shares subject to
          the  options  vest on the first  anniversary  of the grant date and an
          additional 20% vest on each succeeding  anniversary of the grant date.
          For options  granted  from the date of the  adoption of the  Company's
          stock option plan until September 21, 2000, employees have a period of
          three years from the vesting  date to exercise  the option to purchase
          shares of the Company's  common stock. In 1997, the Company's Board of
          Directors approved that 20 percent of the options issued on the August
          1, 1997 grant date vested  immediately.  On September  21,  2000,  the
          Company's  Board of  Directors  approved  that,  with respect to stock
          options granted from that date forward, each grantee has a period of 8
          years from the date of grant in which to exercise  options which vest.
          On March 11, 2002,  the Company's  Board of Directors  approved  that,
          with respect to stock  options  granted from that date  forward,  each
          grantee  has a period  of 10 years  from the date of grant in which to
          exercise options which vest.


                                       F-23
<PAGE>



          The following tables summarize information regarding options under the
          Company's stock option plan:
<TABLE>
<CAPTION>

                                                                                            Weighted
                                                                                             Average       Outstanding
                                                              Number      Option Price      Exercise           and
                                                             of Shares      Per Share         Price        Exercisable
                                                            ------------  --------------  --------------  --------------
<S>                                                           <C>         <C>      <C>     <C>               <C>
                        Outstanding at December 31, 2001      4,016,840   $   0.84-8.10    $     4.21        2,178,960
                           Granted                            1,417,000     18.00-27.25         19.04
                           Exercised                        (1,135,632)       0.84-8.10          3.49
                           Cancelled or expired               (175,000)      2.30-18.00          6.24
                                                            ------------  --------------  --------------

                        Outstanding at December 31, 2002      4,123,208   $  0.84-27.25    $     8.98        1,647,368
                             Granted                            641,500     23.30-33.75         28.53
                             Exercised                        (935,947)      0.84-27.25          5.23
                             Cancelled or expired             (221,600)      4.66-27.25         14.39
                                                            ------------  --------------  --------------

                        Outstanding at December 31, 2003      3,607,161   $  0.84-33.75    $    13.59        1,520,301
                           Granted                              554,000     29.25-41.42         35.74
                           Exercised                          (863,480)      0.84-32.80          6.46
                           Cancelled or expired               (212,999)      4.66-31.88         18.41
                                                            ------------  --------------  --------------

                        Outstanding as of December 31, 2004   3,084,682    $ 0.84-41.42    $    19.22        1,337,282
                                                            ============  ==============  ==============
</TABLE>

          Option and weighted  average  price  information  by price group is as
          follows:
<TABLE>
<CAPTION>

                                                        Shares Outstanding                    Exercisable Shares
                                            -------------------------------------------  ------------------------------
                                                            Weighted       Weighted
                                                             Average        Average                       Weighted
                                              Number        Exercise       Remaining      Number of        Average
                                             of Shares        Price          Life           Shares      Exercise price
                                            ------------  -------------- --------------  -------------  ---------------

                   December 31, 2004:
<S>                     <C>      <C>           <C>            <C>               <C>         <C>              <C>
                        $0.84 to 8.10          991,489        $  4.42           2.2         855,489          $   4.09
                        $18.00 to $25.25     1,146,744        $ 19.77           7.5         393,444          $  19.59
                        $27.25 to $33.75       661,449        $ 30.94           8.9          88,349          $  31.05
                        $41.26 to $41.42       285,000        $ 41.27           9.8              --          $     --
                                            ------------                                 -------------
                                             3,084,682                                    1,337,282
                                            ============                                 =============
</TABLE>

     (b)  Employee Stock Purchase Plan

          Effective  April 1, 2004,  the Company  implemented  an Employee Stock
          Purchase Plan ("ESPP") to offer eligible  employees the opportunity to
          purchase  the  Company's  common  stock at a discount  from the market
          price as reported on the New York Stock Exchange.  Eligible  employees
          may  authorize  the  Company  to deduct a  specified  portion of their
          compensation  each payroll period for each quarterly  offering period.
          The  accumulated  payroll  deductions  will be used by the  Company to
          provide for the purchase by the ESPP  administrator  of Company common
          stock on the open market for delivery to ESPP  participants.  The ESPP
          provides that the per share purchase price discount established by the
          Compensation  Committee of the Board may be no greater than 15% of the
          fair market  value of a share of Company  common stock on the last day
          of each quarterly  offering  period.  The  Compensation  Committee has
          initially set the purchase price discount at 5% of the Company stock's
          fair  market  value.  Under the ESPP,  employees  are  limited  to the
          purchase of shares of the Company's  common stock having a fair market
          value no greater than $25,000  during any calendar year, as determined
          on the  date  of  purchase.  The  Company  has  filed  a  Registration
          Statement on Form S-8 with the SEC to register  1.2 million  shares of
          the Company's common stock under the ESPP.



                                       F-24
<PAGE>

<TABLE>
<CAPTION>




                                                                               Total Number of
                                                                             Shares Purchased as       Maximum Number of
                                          Total Number                         Part of Publicly      Shared that May Yet
                                            of Shares      Average Prices     Announced Plans for        Be Purchased
                       Period               Purchased      Paid per Share          Programs             Under the Plans
                       ------               ---------      --------------    --------------------    --------------------
<S>                                             <C>              <C>                    <C>                   <C>
                     July 1, 2004               14,668           $32.29                 14,668                1,185,332
                     October 1, 2004            16,262           $37.20                 16,262                1,169,070
                                          ------------                          -----------------    --------------------
                     Total                      30,930                                  30,930                1,169,070
                                          ============                          =================    ====================
</TABLE>


     (c)  Supplemental Retirement Savings Plan

          Effective  January 1, 2004,  the Company  implemented  a  Supplemental
          Retirement  Savings Plan (the "Plan") that permits eligible  employees
          and  directors  to  defer  all  or a  portion  of  their  annual  cash
          compensation.  The Company also filed a Registration Statement on Form
          S-8 with the  Securities and Exchange  Commission  ("SEC") to register
          the participation interests under the Plan. The assets of the Plan are
          held in a trust to which  contributions  are made by the Company based
          on amounts elected to be deferred by the Plan  participants.  The Plan
          is treated as unfunded  for tax purposes and its assets are subject to
          the general claims of the Company's creditors. In order to provide for
          an  accumulation of assets  comparable to the contractual  liabilities
          accruing  under the Plan,  the  Company  may direct the trustee of the
          Plan to invest the assets to correspond to the hypothetical investment
          choices made by the Plan participants.

          The Company records both the assets and obligations related to amounts
          deferred under the Plan. Each reporting period, the assets, which have
          been classified as trading securities,  and obligations,  are adjusted
          to fair market value,  with gains  (losses) on the assets  included in
          other  income   (expense)  and   corresponding   adjustments   to  the
          obligations recorded as compensation expense. As of December 31, 2004,
          the deferred compensation  obligation was approximately  $808,000. For
          year ended  December 31, 2004,  the  adjustments  to fair market value
          were not significant.

     (d)  Pro Forma Disclosure

          The  Company  applies  APB  No.  25  and  related  interpretations  in
          accounting  for the Company  stock option  plan.  Adoption of the fair
          market value  provisions  prescribed  in SFAS No. 123 is optional with
          respect to stock-based  compensation to employees;  however, pro forma
          disclosures  are  required  as if the  Company  adopted the fair value
          recognition requirements under SFAS No. 123.

          Had  compensation  cost for the grants under the Company  stock option
          plan been determined  consistent with the fair market value provisions
          prescribed  in SFAS No. 123, the Company's pro forma net income (loss)
          for the years ended December 31, 2004, 2003 and 2002 would approximate
          $58.0 million, $32.9 million, and $24.2 million,  respectively,  using
          an expected option life of 5, 5, and 5 years,  respectively,  dividend
          yield  rate of 0% and  weighted  average  volatility  rates of  33.8%,
          45.8%,  and  47.8%,  respectively,   and  weighted  average  risk-free
          interest  rates of 3.33%,  3.03%,  and 2.78% for 2004,  2003 and 2002,
          respectively  (see note 2(l)). The effects of applying SFAS No. 123 in
          this pro forma disclosure are not indicative of future amounts.

(13) Comprehensive Income

          Comprehensive   income  includes  the  accumulated   foreign  currency
          translation adjustment and changes in the fair values of interest rate
          swaps. The Company presents comprehensive income as a component of the
          accompanying   Consolidated   Statements   of   Stockholders'   Equity
          (Deficit).  The amount of  accumulated  foreign  currency  translation
          adjustment was approximately,  $254,000 and $69,000 as of December 31,
          2004,   2003,   respectively.   The   amount  of   accumulated   other
          comprehensive  income  related  to  interest  rate  swaps was zero and
          $230,000  ($141,000  net of tax) as of December  31, 2004 and December
          31, 2003, respectively.


                                       F-25
<PAGE>


(14) Earnings Per Common Share

          The  computations  of basic and diluted income per common share are as
          follows:
<TABLE>
<CAPTION>

                                                         For the Year Ended
                                                          December 31, 2004

                                                        Weighted Average
                                      Income                 Shares               Per Share
                                   (Numerator)            (Denominator)            Amount
                                 ------------------     ----------------        -------------
                                           (in thousands, except share and per share data)

<S>                                   <C>                  <C>                 <C>
 Basic earnings per share             $  61,805            35,716,669           $     1.73
                                 ==================                             =============
 Stock options                                              1,550,706
 Diluted earnings per share           $  61,805            37,267,375           $     1.66
                                 ==================                             =============
</TABLE>
<TABLE>
<CAPTION>


                                                         For the year ended
                                                          December 31, 2003

                                                        Weighted Average
                                        Income              Shares                Per Share
                                       (Numerator)        (Denominator)             Amount
                                 ------------------     ----------------        -------------
                                          (in thousands, except share and per share data)

<S>                                   <C>                  <C>                  <C>
   Basic earnings per share           $  36,190            34,851,281           $     1.04
                                 ==================                             =============
   Stock options                                            2,074,207
   Diluted earnings per share         $  36,190            36,925,488           $     0.98
                                 ==================                             =============
</TABLE>
<TABLE>
<CAPTION>


                                                         For the year ended
                                                          December 31, 2002

                                                        Weighted Average
                                         Income              Shares               Per Share
                                       (Numerator)          (Denominator)          Amount
                                 ------------------     ----------------        -------------
                                          (in thousands, except share and per share data)

<S>                                   <C>                  <C>                  <C>
   Basic earnings per share           $  26,444            32,163,150           $     0.82
                                 ==================                             =============
   Stock options                                            1,858,447
   Diluted earnings per share         $  26,444            34,021,597           $     0.78
                                 ==================                             =============
</TABLE>



                                       F-26
<PAGE>


(15) Commitments and Contingencies

     (a)  Leases

          The  Company  is  obligated  under  capital  leases  covering  certain
          property and  equipment  that expire at various  dates during the next
          five  years.  At  December  31,  2004 and 2003,  the  gross  amount of
          property and equipment and related accumulated  amortization  recorded
          under capital leases were as follows (in thousands):

                                                     2004              2003
                                                --------------     ------------
             Property and equipment             $     1,044         $     1,037
             Less Accumulated amortization            (580)               (265)
                                                --------------     ------------
                                                $       464         $       772
                                                ==============     ============

          Amortization  of assets  held  under  capital  leases is  included  in
          general and administrative  expenses in the accompanying  Consolidated
          Statements of Operations.

          The  Company  also  leases  facilities  and  certain  equipment  under
          operating  lease  agreements  expiring at various  dates through 2013.
          These leases  generally  contain  renewal  options for periods ranging
          from 3 to 5 years,  and require the Company to pay all executory costs
          such as maintenance,  taxes,  and insurance.  As of December 31, 2004,
          the aggregate minimum annual rental  commitments  under  noncancelable
          operating leases are as follows (in thousands):
<TABLE>
<CAPTION>

                        Year  ending December 31                                        Capital          Operating
                        ------------------------
                                                                                        Leases            Leases
                                                                                    ---------------    -------------

<S>                     <C>                                                          <C>                <C>
                        2005                                                         $      222         $   32,451
                        2006                                                                153             28,941
                        2007                                                                124             23,543
                        2008                                                                 82             19,996
                        2009                                                                 15             17,107
                        Thereafter                                                           --             36,525
                                                                                    ---------------    -------------
                                 Total minimum lease payments                        $      596         $  158,563
                                                                                                       =============
                        Less estimated executory costs (at 7.25%)                          (31)
                                                                                    ---------------
                        Net minimum lease payments                                          565
                        Less amount representing interest
                           (at rates ranging from 1.79% to 10.50%)                         (59)
                                                                                    ---------------
                        Present value of net minimum capital lease payments                 506
                        Less current installments of obligations under capital
                        leases                                                              196
                                                                                    ---------------
                        Obligations under capital leases, excluding current          $      310
                        installments                                                ===============
</TABLE>

          Rent expense under all operating  leases for the years ended  December
          31,  2004,  2003 and  2002  was  approximately  $33.1  million,  $25.4
          million, and $24.2 million, respectively.

     (b)  Legal Proceedings

          The Company is involved in various legal  proceedings  in the ordinary
          course of business.  Management  of the Company and its legal  counsel
          cannot currently predict the ultimate outcome of these matters, but do
          not  believe  that they will have a material  impact on the  Company's
          financial position or results of operations.


                                       F-27
<PAGE>


(16) Secondary Offering Expenses

          On  October  29,  2004,   affiliates  of  and  companies   managed  by
          Caxton-Iseman  Capital,  Inc.  including  Azimuth  Technologies,  L.P.
          Azimuth  Tech.  II LLC and  Frederick  J.  Iseman,  which  we refer to
          collectively  as  the  "Caxton-Iseman  Stockholders",  sold  3,600,000
          shares  of the  Company's  common  stock in an  underwritten  offering
          pursuant to a shelf registration  statement on Form S-3 filed with the
          SEC (Commission File No.  333-111249).  Neither the Company nor any of
          its  executive  officers  participated  in the sale of  shares in this
          offering.  In  connection  with this  offering,  the Company  incurred
          $240,000 of expenses for the year ended  December 31, 2004,  for which
          the Company was not  reimbursed  in  accordance  with the terms of the
          registrations  rights agreement with certain of its  stockholders,  as
          amended.

          On  September  22,  2003,  certain  of  the  Company's   stockholders,
          including  Caxton-Iseman  stockholders,  sold 6,600,000  shares of the
          Company's  common  stock in an  underwritten  offering  pursuant  to a
          registration statement on Form S-3 filed with the SEC (Commission File
          No.s  333-108147 and  333-108858).  In the fourth quarter of 2003, the
          underwriters of this offering partially exercised their over-allotment
          option  with  respect  to  additional   shares  held  by  the  selling
          stockholders. As a result, on October 16, 2003, certain of the selling
          stockholders sold an additional 297,229 shares of the Company's common
          stock in a second closing pursuant to the same underwritten  offering.
          In connection with this offering,  the Company incurred  approximately
          $852,000 of  expenses  for the year ended  December  31,  2003.  These
          expenses were  reimbursed by certain of the selling  stockholders  and
          the  reimbursement  was recorded by the Company as an expense and as a
          contribution to additional paid-in-capital.

(17) Domestic Subsidiaries Summarized Financial Information

          Under the terms of the Company's Credit Facility, the Company's wholly
          owned  domestic   subsidiaries  (the  "Guarantor   Subsidiaries")  are
          guarantors of the Company's Credit Facility. Such guarantees are full,
          unconditional,   joint  and  several.   Separate  unaudited  condensed
          financial  statements of the Guarantor  Subsidiaries are not presented
          because the Company's management has determined that they would not be
          material  to  investors.   Non-guarantor   subsidiaries   include  the
          Company's foreign subsidiaries.  The following  supplemental financial
          information sets forth, on a combined basis, condensed balance sheets,
          statements of operations and statements of cash flows  information for
          the Guarantor Subsidiaries,  the Company's non-guarantor  subsidiaries
          and for the Company.


                                       F-28
<PAGE>


<TABLE>
<CAPTION>


                                                                            As of December 31, 2004
                                                    ------------------------------------------------------------------------
                                                                                                              Consolidated
                                                        Anteon                         Non-                      Anteon
                    Condensed Consolidated          International    Guarantor      Guarantor    Elimination  International
                        Balance Sheets               Corporation    Subsidiaries   Subsidiaries    Entries     Corporation
           -----------------------------------------------------------------------------------------------------------------
                                                                                (in thousands)

<S>                                                    <C>           <C>             <C>           <C>           <C>
           Cash and cash equivalents                   $      (9)    $    1,695      $    2,417    $      --     $   4,103
           Accounts receivable, net                            --       316,909             387           --       317,296
           Prepaid expenses and other current
             assets                                           669        25,484           2,328     (11,276)        17,205
           Property and equipment, net                      1,540        11,196             184           --        12,920
           Due from parent                              (185,388)       186,403         (1,015)           --            --
           Investment in and advances to
             subsidiaries                                  33,222      (36,696)              --        3,474            --
           Goodwill, net                                  177,732        64,334              --           --       242,066
           Intangible and other assets, net                73,669        14,167              --     (68,000)        19,836
                                                    -------------  ------------   -------------  -----------  ------------

             Total assets                              $  101,435    $  583,492     $     4,301    $(75,802)    $  613,426
                                                    -------------  ------------   -------------  -----------  ------------

           Indebtedness                                $       --    $  252,388      $       --  $  (68,000)     $ 184,388
           Accounts payable                                   450        44,522           1,458           --        46,430
           Accrued expenses and other current
             liabilities                                    4,639       102,549             412           --       107,600
           Deferred revenue                                11,276        13,074             690     (11,276)        13,764
           Other long-term liabilities                         --        13,686              --           --        13,686
                                                    -------------  ------------   -------------  -----------  ------------

             Total liabilities                             16,365       426,219           2,560     (79,276)       365,868
           Minority interest in subsidiaries                   --            --             282           --           282
           Total stockholders' equity  (deficit)           85,070       157,273           1,459        3,474       247,276
                                                    -------------  ------------   -------------  -----------  ------------

             Total liabilities and stockholders'
               equity (deficit)                        $  101,435    $  583,492      $    4,301    $(75,802)     $ 613,426
                                                    =============  ============   =============  ===========  ============
</TABLE>



                                       F-29
<PAGE>

<TABLE>
<CAPTION>



                                                                      For the Year Ended December 31, 2004
                                                  ------------------------------------------------------------------------------
                                                                                                                 Consolidated
                                                      Anteon                           Non-                         Anteon
                  Condensed Consolidated          International     Guarantor       Guarantor     Elimination   International
                 Statements of Operations          Corporation     Subsidiaries    Subsidiaries     Entries      Corporation
         -----------------------------------------------------------------------------------------------------------------------
                                                                                 (in thousands)

<S>                                                   <C>        <C>              <C>            <C>           <C>
         Revenues                                     $    (2)   $    1,262,847   $        9,263  $   (3,969)  $    1,268,139
         Costs of revenues                                 (2)        1,088,672            8,769      (3,969)       1,093,470
                                                  ------------   --------------   -------------- ------------  --------------

           Gross profit                                      --         174,175              494           --         174,669

         Total operating expenses                         4,621         104,189               87     (40,257)          68,640
                                                  -------------  --------------   -------------- ------------  --------------

           Operating income                             (4,621)          69,986              407       40,257         106,029

         Other income                                    13,887          27,344               --     (40,257)             973
         Secondary offering expenses                        240              --               --           --             240
         Interest expense, net of interest income       (2,074)           9,873             (29)           --           7,769
         Minority interests in earnings of
           subsidiaries                                      --              --             (72)           --            (72)
                                                  -------------  --------------   -------------- ------------  --------------

         Income before provision for income taxes        11,100          87,457              364           --          98,921
         Provision for income taxes                       4,358          32,692               66           --          37,116
                                                  -------------  --------------   -------------- ------------  --------------

         Net income                                   $   6,742  $       54,765   $          298  $        --  $       61,805
                                                  =============  ==============   ============== ============  ==============
</TABLE>



                                       F-30
<PAGE>

<TABLE>
<CAPTION>



                                                                                For the Year Ended December 31, 2004
                                                                      --------------------------------------------------------
                                                                                                               Consolidated
                                                                         Anteon                      Non-         Anteon
                     Condensed Consolidated                           International  Guarantor    Guarantor    International
                    Statements of Cash Flows                           Corporation  Subsidiaries Subsidiaries   Corporation
                 -------------------------------------------------------------------------------------------------------------
                                                                                          (in thousands)
                 Cash flows from operating activities:
<S>                                                                      <C>        <C>          <C>             <C>
                 Net income                                              $  6,739   $     54,769 $       297     $    61,805
                 Adjustments to reconcile net income  to net cash
                    provided by (used in) operating activities:
                    Gain on settlement of subordinated notes payable      (1,327)             --          --         (1,327)
                    Depreciation and amortization of property and
                      equipment                                               881          3,085          50           4,016
                    Amortization of noncompete agreements                     167             --          --             167
                    Other intangibles amortization                          1,884            625          --           2,509
                    Amortization of deferred financing costs                   62            623          --             685
                    Loss on disposals of property and equipment                --              8          --               8
                    Deferred income taxes                                                  3,102          --           3,102
                    Minority interest in earnings  of subsidiaries             --             --         72               72
                    Changes in assets and liabilities, net of
                      acquired assets and liabilities                       4,537       (57,813)         483        (52,793)
                                                                      -----------   ------------ -----------  --------------

                    Net cash provided by operating activities              12,943          4,399         902          18,244
                                                                      -----------   ------------ -----------  --------------

                 Cash flows from investing activities:
                    Purchases of property and equipment and other
                      assets                                                (397)        (3,421)       (145)         (3,963)
                    Acquisition of Simulated Technologies Inc., net
                    of  cash acquired                                    (15,201)            138          --        (15,063)
                    Acquisition of Integrated Management Services
                    Inc., net of cash acquired                                 --       (29,119)          --        (29,119)
                    Other                                                     267             --          --             267
                                                                      -----------   ------------ -----------  --------------

                    Net cash used in investing activities                (15,331)       (32,402)       (145)        (47,878)
                                                                      -----------   ------------ -----------  --------------

                 Cash flows from financing activities:
                    Payment on subordinated notes payable                 (1,350)             --          --         (1,350)
                    Deferred financing costs                                   88          (385)          --           (297)
                    Proceeds from Term Loan B                                  --         16,125          --          16,125
                    Payments on Term Loan B                                    --        (1,537)          --         (1,538)
                    Proceeds from revolving credit facility                    --      1,224,000          --       1,224,000
                    Principal payments on revolving credit facility            --    (1,208,600)          --     (1,208,600)
                    Redemption of senior subordinated notes payable       (1,876)             --          --         (1,876)
                    Proceeds from issuance of common stock, net of
                    expenses                                                5,526             --          --           5,526
                    Principal payments under capital lease
                    obligations                                                --          (341)          --           (341)
                                                                      -----------   ------------ -----------  --------------

                    Net cash provided by financing activities               2,388         29,261          --          31,649
                                                                      -----------   ------------ -----------  --------------

                 Net increase in cash and cash equivalents                     --          1,258         757           2,015
                 Cash and cash equivalents, beginning of year                 (9)            437       1,660           2,088
                                                                      -----------   ------------ -----------  --------------

                 Cash and cash equivalents, end of year                  $    (9)   $      1,695 $     2,417     $     4,103
                                                                      ===========   ============ ===========  ==============
</TABLE>



                                       F-31
<PAGE>

<TABLE>
<CAPTION>



                                                                             As of December 31, 2003
                                                   ----------------------------------------------------------------------------
                                                                                                               Consolidated
                                                       Anteon                         Non-                        Anteon
                     Condensed Consolidated        International    Guarantor      Guarantor    Elimination    International
                        Balance Sheets              Corporation    Subsidiaries   Subsidiaries    Entries       Corporation
           --------------------------------------------------------------------------------------------------------------------
                                                           (in thousands)

<S>                                                  <C>          <C>            <C>            <C>             <C>
           Cash and cash equivalents                 $       (9)  $        437   $       1,660  $        --     $     2,088
           Accounts receivable, net                          --        222,511             426           --         222,937
           Prepaid expenses and other current
             assets                                         303         29,484             115     (10,336)          19,566
           Property and equipment, net                    2,024         10,646              89           --          12,759
           Due from parent                             (188,718)       188,911           (193)           --              --
           Investment in and advances to
             subsidiaries                                30,780       (21,730)              --      (9,050)              --
           Goodwill, net                                168,532         43,673              --           --         212,205
           Intangible and other assets, net              73,230          4,495              --     (68,000)           9,725
                                                   ------------   ------------   -------------  -----------  --------------

             Total assets                            $   86,142   $    478,427   $       2,097  $  (87,386)     $   479,280
                                                   ============   ============   =============  ===========  ==============

           Indebtedness                              $    4,376   $    222,400   $          --  $  (68,000)     $   158,776
           Accounts payable                                 405         36,212             176           --          36,793
           Due to related party                              48             --              --           --              48
           Accrued expenses and other liabilities         3,267         82,917             496           --          86,680
           Deferred revenue                              10,336         11,372             411     (10,336)          11,783
           Other long-term liabilities                       --         10,498              --           --          10,498
                                                   -------------- ------------   -------------  -----------  --------------

             Total liabilities                           18,432        363,399           1,083     (78,336)         304,578
           Minority interest in subsidiaries                 --             --             210           --             210
           Total stockholders' equity  (deficit)         67,710        115,028             804      (9,050)         174,492
                                                   ------------   ------------   -------------  -----------  --------------

           Total liabilities and stockholders'
             equity (deficit)                        $   86,142   $    478,427   $       2,097  $  (87,386)    $    479,280
                                                   ============   ============   =============  ===========  ==============

</TABLE>



                                       F-32
<PAGE>

<TABLE>
<CAPTION>



                                                                    For the Year Ended December 31, 2003
                                                 ---------------------------------------------------------------------------
                                                                                                             Consolidated
                                                     Anteon                        Non-                         Anteon
                Condensed Consolidated           International    Guarantor      Guarantor    Elimination   International
               Statements of Operations           Corporation   Subsidiaries   Subsidiaries     Entries      Corporation
       ---------------------------------------------------------------------------------------------------------------------
                                                           (in thousands)

<S>                                                <C>          <C>           <C>             <C>            <C>
       Revenues                                    $         2  $  1,033,596  $       9,521   $     (645)    $  1,042,474
       Costs of revenues                                    --       889,424          8,485         (645)         897,264
                                                 -------------  ------------  -------------   -----------  --------------

         Gross profit                                        2       144,172          1,036            --         145,210

       Total operating expenses                          3,418        87,412            744      (30,477)          61,097
                                                 -------------  ------------  -------------   -----------  --------------

         Operating income                              (3,416)        56,760            292        30,477          84,113

       Other income                                      9,595        20,882             --      (30,477)              --
       Secondary offering expenses                         852            --             --            --             852
       Interest expense, net of interest income         14,461         9,805           (22)            --          24,244
       Minority interest in earnings of
         subsidiaries                                       --            --           (54)            --            (54)
                                                 -------------  ------------  -------------   -----------  --------------

        Income (loss) before provision for
        income taxes                                   (9,134)        67,837            260            --          58,963
       Provision (benefit) for income taxes            (3,589)        26,241            121            --          22,773
                                                 -------------  ------------  -------------   -----------  --------------

       Net income (loss)                           $   (5,545)  $     41,596  $         139   $        --  $       36,190
                                                 =============  ============  =============   ===========  ==============
</TABLE>



                                      F-33
<PAGE>

<TABLE>
<CAPTION>



                                                                        For the Year Ended December 31, 2003
                                                           ---------------------------------------------------------------
                                                                                                             Consolidated
                                                              Anteon                          Non-             Anteon
          Condensed Consolidated                           International    Guarantor       Guarantor       International
          Statements of Cash Flows                          Corporation    Subsidiaries    Subsidiaries      Corporation
       -------------------------------------------------------------------------------------------------------------------
                                                           (in thousands)
       Cash flows from operating activities:
<S>                                                           <C>            <C>             <C>             <C>
       Net income (loss)                                      $  (5,545)     $   41,596      $      139      $ (36,190)
       Adjustments to reconcile net income (loss) to net
          cash provided by (used in) operating activities:
          Loss on disposals of property and equipment                 --            170              20             190
          Depreciation and amortization of property and
           equipment                                                 782          3,589              69           4,440
          Amortization of noncompete agreements                       --            101              --             101
          Other intangibles amortization                           2,227            122              --           2,349
          Amortization of deferred financing costs                 3,896            118              --           4,014
          Deferred income taxes                                       --        (1,742)              --         (1,742)
          Minority interest in earnings (losses) of
           subsidiaries                                               --             --              54              54
          Changes in assets and liabilities, net of
           acquired assets and liabilities                       179,518      (188,480)             809         (8,153)
                                                           -------------  -------------   -------------   -------------

          Net cash provided by (used in) operating
           activities                                            180,878      (144,526)           1,091          37,443
                                                           -------------  -------------   -------------   -------------

       Cash flows from investing activities:
          Purchases of property and equipment and other
           assets                                                  (442)        (2,552)            (55)         (3,049)
          Acquisition of ISI, net of cash acquired              (92,164)         (218))              --        (92,382)
                                                           -------------  -------------   -------------   -------------

          Net cash used in investing activities                 (92,606)        (2,770)            (55)        (95,431)
                                                           -------------  -------------   -------------   -------------

       Cash flows from financing activities:
          Principal payments on bank and other notes
          payable                                                     --           (43)              --            (43)
          Deferred financing costs                                   308        (3,036)              --         (2,728)
          Principal payments on Term Loan A                     (21,202)             --              --        (21,202)
          Proceeds from Term Loan B                                   --        150,000              --         150,000
          Proceeds from certain selling  stockholders
          related to our secondary offering                          852             --              --             852
          Proceeds from revolving credit facility                     --      1,009,500              --       1,009,500
          Principal payments on revolving credit facility             --     (1,012,100)             --      (1,012,100)
          Redemption of senior subordinated notes payable       (73,124)             --              --        (73,124)
          Proceeds from issuance of common stock, net of
            expenses                                               4,902             --              --           4,902
          Principal payments under capital lease
          obligation                                                  --          (247)              --           (247)
                                                           -------------  -------------   -------------   -------------

          Net cash provided by (used in) financing
          activities                                            (88,264)        144,074              --          55,810
                                                           -------------  -------------   -------------   -------------

       Net increase (decrease) in cash and cash
         equivalents                                                   8        (3,222)           1,036         (2,178)
       Cash and cash equivalents, beginning of year                 (17)          3,659             624           4,266
                                                           -------------  -------------   -------------   -------------
       Cash and cash equivalents, end of year              $         (9)  $         437   $       1,660   $       2,088
                                                           =============  =============   =============   =============
</TABLE>


                                     F- 34
<PAGE>

<TABLE>
<CAPTION>



                                                                           For the Year Ended December 31, 2002
                                                         --------------------------------------------------------------------------
                                                                                                                     Consolidated
                                                             Anteon                         Non-                        Anteon
                      Condensed Consolidated              International    Guarantor     Guarantor     Elimination  International
                     Statements of Operations              Corporation   Subsidiaries   Subsidiaries     Entries     Corporation
           ------------------------------------------------------------------------------------------------------------------------
                                                                                      (in thousands)

<S>                                                      <C>             <C>           <C>            <C>           <C>
           Revenues                                      $         --    $   826,640   $     5,252    $   (6,066)   $    825,826
           Costs of revenues                                        2        712,725         4,667        (6,066)       711,328
                                                         ------------    -----------   -----------    -----------   -----------

             Gross profit                                         (2)        113,915           585             --       114,498

           Total operating expenses                             1,699         63,136           368       (15,099)        50,104
                                                         ------------    -----------   -----------    -----------   -----------

             Operating income                                 (1,701)         50,779           217         15,099        64,394

           Other income                                         7,181          8.335            --       (15,099)           417
           Interest expense, net of interest income            13,791          7,850          (15)             --        21,626
           Minority interest in earnings of subsidiaries           --             --          (18)             --          (18)
                                                         ------------    -----------   -----------    -----------   -----------

            Income (loss) before provision for income
              taxes                                           (8,311)         51,264           214             --        43,167
           Provision (benefit) for income taxes               (3,232)         19,835           120             --        16,723
                                                         ------------    -----------   -----------    -----------   -----------

           Net income (loss)                             $    (5,079)    $    31,429   $        94    $        --   $     26,444
                                                         ============    ===========   ===========    ===========   ============

</TABLE>


                                       F-35
<PAGE>

<TABLE>
<CAPTION>



                                                                           For the Year Ended December 31, 2002
                                                                                                             Consolidated
                                                                     Anteon                       Non-          Anteon
             Condensed Consolidated                              International    Guarantor     Guarantor   International
             Statements of Cash Flows                             Corporation   Subsidiaries  Subsidiaries   Corporation
          -------------------------------------------------------------------------------------------------------------------------

          Cash flows from operating activities:
<S>                                                                 <C>         <C>           <C>           <C>
          Net income (loss)                                         $  (5,079)  $    31,429   $        94   $      26,444
          Adjustments  to  reconcile  net  income  (loss) to net
             cash provided by (used in) operating activities:
             Loss  on disposals of property and equipment                   --           24             1              25
             Interest rate swap termination                            (1,903)           --            --         (1,903)
             Depreciation   and  amortization  of  property  and           632
              equipment                                                               3,613            49           4,294
             Other intangibles amortization                              1,687          220            --           1,907
             Amortization of deferred financing costs                    2,442           --            --           2,442
             Deferred income taxes                                       2,537        1,553            --           4,090
             Minority interest in earnings of subsidiaries                  --           --            18              18
             Changes in assets and liabilities,  net of acquired
              assets and liabilities                                   (2,256)     (37,041)           258        (39,039)
                                                                 -------------  -----------   -----------   -------------

           Net cash provided by (used in) operating activities         (1,940)        (202)           420         (1,722)
                                                                 -------------  -----------   -----------   -------------

          Cash flows from investing activities:
             Purchases  of  property  and  equipment  and  other
              assets                                                   (1,169)      (2,009)          (47)         (3,225)
              Proceeds from sales of businesses                             --        1,802            --           1,802
                                                                 -------------  -----------   -----------   -------------

           Net cash used in investing activities                       (1,169)        (207)          (47)         (1,423)
                                                                 -------------  -----------   -----------   -------------

          Cash flows from financing activities:
             Principal payments on bank and other notes payable             --         (47)            --            (47)
             Deferred financing costs                                    (642)        (650)            --         (1,292)
             Payments on subordinated notes payable                         --        (567)            --           (567)
             Principal payments on Term Loan A                        (25,853)           --            --        (25,853)
             Proceeds from revolving credit facility                        --      862,600            --         862,600
             Principal payments on revolving credit facility          (18,700)    (855,600)            --       (874,300)
             Redemption of senior subordinated notes payable          (25,000)           --            --        (25,000)
             Proceeds  from  issuance  of common  stock,  net of
              expenses                                                 81,808)           --            --          81,808
             Principal  payments on  subordinated  notes payable
              to stockholders                                          (7,499)           --            --         (7,499)
             Payment of subordinated notes payable-related party       (4,369)                         --         (4,369)
                                                                 -------------  -----------   -----------   -------------
             Net cash provided by (used in) financing activities         (255)        5,736            --           5,481
                                                                 -------------  -----------   -----------   -------------

          Net increase (decrease) in cash and cash equivalents         (3,364)        5,327           373           2,336
          Cash and cash equivalents, beginning of year                   3,347      (1,668)           251           1,930
                                                                 -------------  -----------   -----------   -------------
          Cash and cash equivalents, end of year                    $     (17)  $     3,659   $       624   $       4,266
                                                                 =============  ===========   ===========   =============
</TABLE>


                                       F-36
<PAGE>


(18) Quarterly Results of Operations (Unaudited)

          The following summarizes the unaudited quarterly results of operations
          for the years ended December 31, 2004 and 2003 (in  thousands,  except
          per share data):
<TABLE>
<CAPTION>

          Quarter ended:                           March 31       June 30      September 30      December 31       Total
                                                 -------------  ------------  ----------------  ---------------  -----------
          2004
<S>                                              <C>                <C>               <C>              <C>        <C>
              Revenues                           $    288,150       304,161           325,581          350,247    1,268,139
              Operating income                         23,537        24,914            27,668           29,910      106,029
              Net income                               13,334        14,665            16,849           16,957       61,805
              Basic earnings per common share            0.38          0.41              0.47             0.47         1.73
              Diluted earnings per common
               share                                     0.36          0.39              0.45             0.45         1.66

          2003
              Revenues                           $    228,591       254,093           279,080          280,710    1,042,474
              Operating income                         17,966        20,254            22,699           23,194       84,113
              Net income                                9,075        10,309            10,943            5,863       36,190
              Basic earnings per common share            0.26          0.30              0.31             0.17         1.04
              Diluted earnings per common
               share                                     0.25          0.28              0.30             0.16         0.98
</TABLE>

(19) Segment Reporting

          Although the Company is organized by  strategic  business  units,  the
          Company  considers  each of its government  contracting  units to have
          similar economic  characteristics,  provide similar types of services,
          and  have  a  similar  customer  base.   Accordingly,   the  Company's
          government contracting segment aggregates the operations of all of the
          Company's government contracting units.


                                       F-37
<PAGE>