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, 2003
                                       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 [x]

         The aggregate  market value of the voting stock held by  non-affiliates
    of the registrant as of June 30, 2003 was $549,497,718 (based on the closing
    price of $27.91  per share on June 30,  2003,  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.
    |X|

         There were 35,441,075 shares of common stock outstanding as of February
         23, 2004.


                       DOCUMENTS INCORPORATED BY REFERENCE

              Portions of the proxy statement for the 2004 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 or 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  client 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.

         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.

                                       2
<PAGE>

         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, 2003,  approximately  38% were time and materials,  32% of our U.S.
federal  contracts  were  cost-plus,  and 30% were  fixed  price (a  substantial
majority of which were fixed price  level of effort).  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  Indefinite  Delivery/Indefinite  Quantity  Contracts,  GSA Schedule
      contracts and GWACs--Many of our U.S. federal  government  customers spend
      their procurement budgets through 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 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 88% and 78% of our sales for the year ended
December 31, 2003 and for the year ended  December 31, 2002,  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
      contract  value will result in actual  revenues in any  particular  fiscal
      period or that the  actual  revenues  from such  contracts  will equal our
      estimated contract value.

         There can be no assurance that any contracts included in our estimated
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 contract value.  Further,  there can be no assurance that any contract
included  in our  estimated  contract  value  that  generates  revenue  will  be
profitable.  Our estimated  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  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 clients  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 clients'
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 client 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 clients 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 clients.

Client  Expectations--We  could lose revenues and clients and expose our company
      to liability if we fail to meet client expectations.

         We create,  implement and maintain technology  solutions that are often
critical  to our  clients'  operations.  If our  technology  solutions  or other
applications  have  significant  defects or errors or fail to meet our  clients'
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 clients;
                  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 clients, 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   substantially   integrated   six  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.

         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.

                                       7
<PAGE>


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        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, 2003, our debt was $158.8  million.  You should be aware
that  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 of December
19,  2003,  or  "Credit  Facility,"  limit,  but  do  not  prohibit  us  or  our
subsidiaries  from doing so. As of December 31, 2003, our Credit  Facility would
have permitted  additional  borrowings of up to $203.7  million.  If new debt is
added by us or our  subsidiaries,  the  related  risks that we and they now face
could intensify.

                                       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;

         o        creating liens on our assets;

         o        issuing or selling capital stock of our subsidiaries;

         o        transforming or selling assets currently held by us;

         o        engaging in transactions with affiliates; and

         o        engaging in mergers or consolidations.

                                       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 clients 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
clients 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  clients in more
than 50 government agencies,  as well as state and foreign governments.  For the
year ended  December 31, 2003,  approximately  88% 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 3% is derived from the Department of Homeland Security,  or
"DHS". For the year ended December 31, 2003,  approximately  89% 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 seven years,  assuming  the exercise of all  potential  contract
options.  Additionally,  we have contracts with an estimated  remaining contract
value of $5.6  billion as of December 31, 2003,  of which  approximately  $661.1
million is funded backlog.

         From  January 1996 to December 31,  2003,  we increased  revenues  from
$141.8  million  to  $1.0  billion,   at  a  compound  annual  growth  rate,  of
approximately  33%. Our revenues grew organically by approximately 16% from 2002
to 2003 and approximately 17% from 2001 to 2002. 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. The U.S. federal government  technology services market,  which includes
information  technology solutions and system engineering  services, is large and
growing,  with total  estimated  expenditures of more than $121.7 billion in the
U.S.  federal  government's  fiscal year ending  September 30, 2004.  Government
agency budgets for these  technology  services are forecast to grow more than 5%
annually through government fiscal year 2005.

         Additionally,  it is anticipated that technology services spending will
grow more  than  $4.5  billion  annually  over the next four  years 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 $375.0 billion in government
fiscal  year  2004,  a  3%  increase  over  government  fiscal  year  2003.  The
President's  proposed  budget for government  fiscal year 2005 includes  defense
spending of $401.7 billion,  a 7% increase over government fiscal year 2004, and
the largest Department of Defense budget in history in actual dollars.  The 2005
Department  of  Defense  spending  plan  submitted  to  Congress  includes a 30%
increase over the next six years.

                                       10
<PAGE>


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 ID/IQ contracts.

         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.

         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
                  2003, 83% of the U.S. federal  government's  total information
                  technology  solutions  spending  flowed  to  contractors.   By
                  government  fiscal  year  2008,  this rate of  outsourcing  is
                  projected to increase to 87% 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.

                                       11
<PAGE>


         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.

         o        Increased  Spending  on  National  Defense.   After  years  of
                  spending  declines,  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
                  $375.0 billion in government  fiscal year 2004, an increase of
                  almost 13% over  government  fiscal year 2003. The President's
                  proposed budget for 2005 defense spending is $401.7 billion, a
                  7% increase  over the  government  fiscal year 2004 budget and
                  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 its  GWAC  and  Schedule  contracts  will
                  average 6% annually over the next four years.

Our Capabilities and Services

         We are a  leading  provider  of  information  technology  solutions  to
government clients. 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  clients'  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 client 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 client'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.

                                       12
<PAGE>


         We also are a leading  provider of systems  engineering and integration
services to  government  clients,  primarily  within the defense  community.  We
provide these defense clients 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  client'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.

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.

                                       13
<PAGE>


         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        U.S. Air Force Cargo Movement  Operations System or "CMOS." We designed
         and developed this system and have maintained it since 1989. It is used
         by the  Department  of  Defense  Traffic  Management  Office to provide
         in-transit  visibility  of cargo from the  shipment  originator  to its
         final  destination.  CMOS allows our client to automate  the process of
         cargo movement  throughout DOD bases  worldwide.  We continue to design
         and  develop  enhancements  to the  system  to  take  advantage  of new
         technology  including  web-enablement  and electronic data  interchange
         applications.

o        Joint  Logistics  Warfighting  Initiative  or "JLWI." In March 2000, we
         entered into 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 are providing process re-engineering,  system
         design,  and  database  integration  as we  conduct a variety of client
         directed process and technology experiments and demonstrations. 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.

         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
         provided 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.


                                       14
<PAGE>


o        Coalition,  Joint and Service Training  Exercise Support  Commands.  We
         have provided 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 Operations Iraqi Freedom and DHS missions.

         Modeling,  Simulation and Training.  We provide a comprehensive  set of
information  technology  solutions  and  services  to  our  clients,   including
computer-based  training,  web-based  training,  distant  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 700 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.

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, or "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.

         Secure Identification and Access Management Solutions.  Our acquisition
of ISI enhances our position in this market and 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 20 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.

                                       15
<PAGE>


         Healthcare  Services We deliver  information  technology  solutions  in
healthcare  programs for the  Department of Defense,  Army,  Navy, Air Force and
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 Air Force weapon systems.

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  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,  the aircraft  carrier  program,  all  submarine
         programs and the 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 the acquisition
         offices and  industry,  we provide  support for the ships  during their
         in-service  phase of the 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
         Air Force Research  Laboratory's  Laser Facilities and conduct material
         testing  on  their  behalf.  We  operate  special  test  facilities  in
         Annapolis, MD that are nationally unique and include a deep diving test
         facility.  We support  almost  every U.S.  Navy R&D facility and have a
         significant presence in the Office of Naval Research.


                                       16
<PAGE>

         Missile  Defense.  We have more than a decade of  experience in 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
         Navy's future ballistic  missile defense systems.  Due to our Navy TBMD
         System  experience,  we were selected to provide similar support to the
         National  Missile Defense  program.  We believe  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
objective is to continue to profitably  grow our business as a premier  provider
of  comprehensive   technology  solutions  and  services  to  the  U.S.  federal
government   market.  Our  strategy  to  achieve  this  objective  includes  the
following:

o        Continue to Increase Market Penetration. In the past 10 years, the U.S.
         federal  government's shift 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
         $375.0 billion in government fiscal year 2004, an increase of almost 3%
         over  government  fiscal year 2003,  and is  expected  to reach  $401.7
         billion in government  fiscal year 2005, a 7% increase  over  projected
         government  fiscal year 2003 spending.  Defense budgets are expected to
         grow by 30% 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.

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 acquisition of
         ISI  enhances  our  position in this market and provides us with a full
         range of capabilities to meet our customers'  requirements.  ISI brings
         us 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.

                                       17
<PAGE>


o        Continue our Disciplined  Acquisition Strategy. We employ a disciplined
         methodology  to evaluate  and select  acquisition  candidates.  We have
         completed six 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  six strategic  acquisitions.  Each of these  acquired
businesses  has been accretive to earnings,  exceeded our synergy  expectations,
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.
<TABLE>
<CAPTION>

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

--------------------------------------------------------

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

                                       18
<PAGE>


         In August 1997,  we purchased  Vector Data  Systems,  Inc.,  or "Vector
Data," 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 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  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  system.  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.

Existing Contract Profiles

         We currently  have a portfolio of more than 500 active  contracts.  Our
contract  mix for the year ended  December  31, 2003 was 38% time and  materials
contracts,  32% cost-plus contracts and 30% 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.

         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. In addition, 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         1999     2000    2001     2002     2003
--------------------------------------------------------------------------------
  Cost-Plus.............................  37%      41%     37%      35%      32%
  Time and Materials....................  38%      31%     34%      37%      38%
  Fixed Price...........................  25%      28%     29%      28%      30%

         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.

         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  3,600
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 2003 revenue.

                                       19
<PAGE>


         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
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 560 task orders to date,
with an annualized  revenue run rate as of the fourth  quarter of fiscal 2003 of
approximately $150 million. Our total estimated contract value for this contract
is  approximately  $1.6 billion for the period  January  1999 to December  2008.
Listed below are the four largest GWACs.


                                                     Contract
                       Owning       Period of        Ceiling
Contract Name          Agency      Performance        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


         Listed below are our top  programs by 2003  revenue,  including  single
award and multiple award  contracts.  We are a prime contractor on each of these
programs.
<TABLE>
<CAPTION>

                          Top Programs by 2003 Revenue
                                 ($ in millions)

                                                                                              Estimated
                                                      Period of                               Remaining        Contract
     Contract                Customer                Performance         2003 Revenue       Contract Value       Type
----------------------------------------------------------------------------------------------------------------------------
<S>                             <C>                <C>                    <C>                <C>               <C>
ANSWER                          GSA                1/1/99-12/31/08        $    158.3         $    818.5        T&M/FFP

GSA SCHEDULE & BPAs             GSA               10/30/96-10/09/07            102.6              469.8        T&M/FFP

SAFTAS                    U.S. Air Force          01/01/01-12/31/15             42.8              436.1           CP

GSA PES Contract                GSA               01/06/00-01/05/05             33.1              381.5           CP

CENTRIX/LOCE           Department of Defense      12/01/02-05/31/04             26.4               22.6           CP

Millenia Lite-Area              GSA               07/06/00-07/05/10
2                                                                               24.7              272.5           CP

GSA-PES                         GSA               05/01/00-02/08/06             24.5               10.3          FFP

GSA-MOBIS                       GSA               11/21/97-09/30/07             21.6               58.1           CP

Carrier BPA                  U.S. Navy            03/10/97-12/31/03             19.2                0.7        T&M/FFP

MOUT-IS                Army/STRICOM/Training      07/03/97-08/31/05             17.0                7.5          FFP

</TABLE>


                                       20
<PAGE>

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,
2003,  approximately 22% of our total direct costs result 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.

Estimated Remaining Contract Value and New Business Development

         On December 31, 2003, our estimated  remaining  contract value was $5.6
billion,  of which $661.1 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


                                                 Unfunded          Estimated
                              Funded             Contract          Remaining
As of December 31,            Backlog             Value          Contract Value
--------------------------------------------------------------------------------
                                       (in millions)
2003                       $     661           $   4,948          $    5,609
2002                             418               3,868               4,286
2001                             309               3,217               3,526
2000                             308               2,560               2,868
1999                             195               1,926               2,121


         From December 31, 1999 to December 31, 2003,  our  estimated  remaining
contract value  increased at a 28% 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, 2003, the U.S. federal  government  accounted for approximately 99%
of our total revenues.  International and state and local  governments  provided
the remaining 1%. The DOD accounted for  approximately 88% 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 management believes accounted for
approximately  44% of revenues during the year ended December 31, 2003,  through
30 different Navy organizations.

                                       21
<PAGE>


         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 or interest
must be paid.

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  clients  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 client 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  clients  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, 2003, we employed approximately 7,600 employees, 97%
of whom were billable and 69% 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 is represented by any 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  1.3 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.


                                       22
<PAGE>


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.

Item 4. Submission of Matters to a Vote of Security Holders

         No matter was submitted to a vote of security holders during the fourth
quarter of our fiscal year ended December 31, 2003,  through the solicitation of
proxies or otherwise.


                                       23
<PAGE>


                                     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, 2003 and 2002 as reported by
the NYSE.



                                             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


                  2002
         Quarter Ended               High              Low
         ---------------------     ----------      ------------
         March 31 *               $    21.85      $      19.25
         June 30                  $    26.75      $      20.10
         September 30             $    28.26      $      18.90
         December 31              $    29.35      $      19.40

         *Trading commenced on March 11, 2002


         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.

         As of February 23, 2004,  the number of  stockholders  of record of our
common stock was approximately 402.

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, 2003,  2002, 2001, 2000 and 1999. 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 1999, 2000, 2001, and 2003. 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,

                                                   1999 (a)           2000          2001 (a)        2002 (a)            2003
                                                   --------          ------        ----------      ----------         -------
                                                             (in thousands, except per share data and percentages)
                                                             -----------------------------------------------------
Statements of operations data:
<S>                                             <C>             <C>                <C>           <C>               <C>
Revenues........................................$    400,850    $      542,807     $  715,023    $      825,826    $    1,042,474
Costs of revenues...............................     353,245           474,924        627,342           711,328           897,264
                                                ------------    --------------   ------------    --------------    --------------


Gross profit....................................      47,605            67,883         87,681           114,498           145,210
General and administrative expenses,
  including acquisition related costs...........      27,926            38,592         51,442            48,197            58,647
Amortization of non-compete agreements..........         909               866            349                --               101
Goodwill amortization...........................       3,440             4,714          6,704                --                --
Other intangibles amortization..................          --             2,673          2,321             1,907             2,349
                                                ------------    --------------     ----------      ------------    --------------

Operating income ...............................      15,330            21,038         26,865            64,394            84,113
Other Income....................................          --                --             --               417                --
Gains on sales and closures of business.........          --                --          4,046                --                --
Gains on sales of investments and other,
  net...........................................       2,585                --             --                --                --
Secondary offering expenses.....................          --                --             --                --               852
Interest expense, net of interest
  income........................................      19,002            26,513         26,353            21,626            24,244
Minority interest in (earnings) losses of
  subsidiaries..................................        (39)                32           (38)              (18)              (54)
                                                ------------    --------------   ------------    --------------    --------------

Income (loss) before provision for (benefit
  from) income taxes............................     (1,126)           (5,443)          4,520            43,167            58,963
Provision for (benefit from) income
  taxes.........................................         401             (153)          4,602            16,723            22,773
                                                ------------    --------------   ------------    --------------    --------------


     Net income (loss)..........................$    (1,527)    $      (5,290)     $     (82)    $       26,444    $       36,190
                                                ============    ==============   ============    ==============    ==============

Basic earnings (loss) per  common share         $     (0.06)    $       (0.22)     $   (0.01)    $         0.82    $         1.04
                                                ============    ==============   ============    ==============    ==============

     Weighted average shares outstanding........      23,785            23,787         23,787            32,163            34,851

Diluted earnings (loss) per  common share.......$     (0.06)      $     (0.22)     $   (0.01)      $       0.78    $        0.98
                                                ============    ==============   ============    ==============    ==============

     Weighted average shares outstanding........      23,785            23,787         23,787            34,022            36,925

Other data:
EBITDA (b)......................................$     25,978    $       36,347   $     47,357    $       70,994    $      90,097
EBITDA margin  (c)..............................        6.5%              6.7%           6.6%              8.6%              8.6%
Cash flow from (used in) operating
  activities....................................$     11,767    $       17,101   $     37,879    $      (1,722)    $       37,443
Cash flow from (used in) investing
  activities....................................   (111,672)          (28,912)        (1,707)           (1,423)          (95,431)
Cash flow from (used in) financing
  activities....................................     100,957            12,036       (35,676)             5,481            55,810
Capital expenditures............................       4,761             6,584          2,181             3,225             3,049
Balance sheet data (as of December 31):
Current assets..................................$    118,583    $      148,420   $    144,418    $      208,396    $      244,591
Working capital (d).............................      48,818            56,841         27,559            80,390           105,287
Total assets....................................     278,691           324,423        306,651           364,692           479,280
Long-term debt, including current
  portion.......................................     212,301           237,695        202,905           105,701           158,776
Stockholders' equity (deficit)..................       3,672           (1,576)        (3,442)           128,829           174,492
</TABLE>

(a)      On  January  1,  2003,  we  adopted  SFAS  No.  145,  and as a  result,
         reclassified $4.2 million ($2.6 million net of tax) of losses, $519,000
         ($330,000  net of tax) of gains and $772,000  ($463,000  net of tax) of
         loss previously recorded as extraordinary items in 2002, 2001 and 1999,
         respectively,   to   interest   expense,   net  of   interest   income.
         Additionally,  the tax impact as a result of the  reclassifications has
         been adjusted in the tax provision amounts shown.

(b)      "EBITDA",  as defined,  represents  income before  income  taxes,  plus
         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  accounting  principles  generally
         accepted in the United  States of  America,  "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:

                                       25
<PAGE>

<TABLE>
<CAPTION>

                                                                               Year ended December 31,

                                                               1999         2000        2001         2002         2003
                                                               ----         ----        ----         ----         ----
                                                                                  ($ in thousands)
<S>                                                         <C>          <C>         <C>          <C>          <C>
       Net income (loss).............................       $   (1,527)  $  (5,290)  $      (82)  $   26,444   $   36,190
       Provision for (benefit from) income tax                      401       (153)        4,602      16,723       22,773
       Interest expense, net of interest income......            19,002      26,513       26,353      21,626       24,244
       Depreciation..................................             3,753       7,024        7,110       4,294        4,440
       Amortization..................................             4,349       8,253        9,374       1,907        2,450
                                                            -----------  ----------  ----------   ----------   ----------

       EBITDA........................................       $    25,978  $   36,347  $    47,357  $   70,994   $   90,097
       Secondary offering expenses...................                --          --           --          --          852
                                                            -----------  ----------  -----------  ----------   ----------
       Adjusted EBITDA (e)...........................       $    25,978  $   36,347  $    47,357  $   70,994   $   90,949
                                                            ===========  ==========  ===========  ==========   ==========

       Net income (loss).............................            (0.3%)      (1.0%)       (0.1%)       3.2%         3.5%
       EBITDA margin (c).............................             6.5%        6.7%         6.6%        8.6%         8.6%
       Adjusted EBITDA margin (f)....................             6.5%        6.7%         6.6%        8.6%         8.7%
</TABLE>

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

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

(e)      Adjusted  EBITDA is presented  herein  because we believe it to also be
         relevant and useful to our investors. Adjusted EBITDA represents EBITDA
         plus the additional costs associated with the secondary offering.

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


                                       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 clients 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
clients with the systems  analysis,  integration and program  management  skills
necessary to manage their mission systems development and operations.

         We have a broad client and contract base and a diverse contract mix. We
currently  serve  over  1,000 U.S.  federal  government  clients in more than 50
government  agencies,  as well as state and  foreign  governments.  For the year
ended  December  31,  2003,  approximately  88% 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, 2003,  approximately 89% of our revenue was from contracts where we were the
lead, or "prime,"  contractor.  Our diverse contract base has  approximately 500
active  contracts  and more than 3,600  active task  orders.  For the year ended
December  31,  2003,   our  largest   contract  or  task  order   accounted  for
approximately 7% of our revenues.  We have a diverse mix of contract types, with
approximately  38%, 32%, and 30% of our revenues for the year ended December 31,
2003  derived  from time and  materials,  cost-plus  and fixed price  contracts,
respectively.  In addition,  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 $5.6  billion as of
December 31, 2003, of which $661.1 million is funded backlog. Our contracts have
a weighted-average  term of approximately seven years. From December 31, 1999 to
December 31, 2003, our estimated  remaining  contract  value  increased at a 28%
compound annual growth rate.

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  and  other  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, 2003, 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.  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 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 and communications with the customer regarding our performance,
including any interim performance evaluations rendered by the customer. Revenues
are  recognized  under  substantially  all fixed  price  contracts  based on the
percentage-of-completion  basis, 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  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.

         We recognize revenues under our 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.  We may be exposed to variations
in profitability,  including  potential  losses, if we encounter  variances from
estimated fees earned under award fee contracts and estimated  costs under fixed
price contracts.

         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 involving our services.
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 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  38% time and  materials,  32%  cost-plus  and 30% fixed  price (a
substantial  majority of which are firm fixed price level of effort)  during the
year ended December 31, 2003. The contract mix can change over time depending on
contract awards and  acquisitions.  For example,  ISI has a higher proportion of
cost plus contracts which we believe provides us with an opportunity, over time,
to migrate those  contracts to higher margin time and materials and  fixed-price
labor  work.  Under  cost-plus  contracts  with  the  U.S.  federal  government,
operating profits are statutorily  limited to 15% but typically range from 5% 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 goodwill (prior to the adoption of
SFAS No. 142 in January 2002),  amortization  expense for separately  identified
intangibles from acquisitions,  certain general and administrative expenses and,
prior to our initial  public  offering,  management  fees paid to  Caxton-Iseman
Capital, Inc., an affiliate of our principal stockholders.  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  $212.2 million and
$138.6 million as of December 31, 2003 and 2002,  respectively.  The majority of
the increase in goodwill is related to the  acquisition  of ISI in May 2003. For
acquisitions completed prior to July 1, 2001, and until the adoption of SFAS No.
142 on January 1, 2002,  goodwill was  amortized on a  straight-line  basis over
periods ranging from twenty to thirty years.  Determination  of the amortization
period was dependent on the nature of the operations acquired. Effective January
1, 2002, we adopted SFAS No. 142, and no longer  amortize  goodwill,  but rather
test for  impairment  of our  goodwill  at  least  annually  using a fair  value
approach.

         We completed our transition  analysis under SFAS No. 142 as of June 30,
2002 and our annual  impairment  analyses  as of  September  30,  2002 and 2003,
noting no  indications  of  impairment  for any of our  reporting  units.  As of
December  31,  2003,  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, 2004.

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

         The carrying amount of long-lived  assets and  identifiable  intangible
assets was  approximately  $17.9  million and $12.7 million at December 31, 2003
and 2002, respectively. Of the $17.9 million at December 31, 2003, approximately
$7.3  million of the assets are related to our  acquisition  of ISI.  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, 2003. 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 the 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.

         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  $91.6  million,  excluding  transaction  costs  of  approximately
$737,000.  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. 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.

         The total purchase  price paid,  including  transaction  and other deal
related  costs,  of $92.4  million  was  allocated  to the assets  acquired  and
liabilities assumed as follows (in thousands):

    Accounts receivable                            $    22,792
    Prepaid and other current assets                       764
    Property and equipment                               3,312
    Other assets                                           120
    Current income tax receivable                          655
    Accounts payable and accrued expenses             (11,186)
    Deferred income tax, net                             (458)
    Deferred revenue                                   (2,645)
    Other liabilities                                    (558)
    Contracts and customer relationships                 4,751
    Goodwill                                            74,335
    Non-compete agreement                                  500
                                                    ----------

         Total consideration                       $    92,382
                                                    ==========


Statements of Operations

         The  following  is  a  description  of  certain  line  items  from  our
consolidated statements of operations.

         Revenues for the year ended December 31, 2003 include the operations of
ISI for the period beginning May 23, 2003, the date of the acquisition.

                                       30
<PAGE>


         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  goodwill
(prior to our adoption of SFAS No. 142 on January 1, 2002) and intangible assets
from our acquisitions. These intangible assets represent the fair value assigned
to employee  workforce as part of our acquisitions of A&T and Sherikon (prior to
our adoption of SFAS No. 141 on January 1, 2002) and contract backlog as part of
our  acquisitions  of A&T,  Sherikon,  SIGCOM  Training,  and ISI.  Amortization
expenses  also include  costs  associated  with certain  non-compete  agreements
related to the ISI acquisition.

         Interest expense is primarily related to our Senior  Subordinated Notes
due 2009, or the "12% Notes," our term loans and revolving Credit Facility,  our
subordinated  debt and  subordinated  convertible  promissory  notes held by our
stockholders  prior to their repayment or conversion in connection with our IPO,
and other miscellaneous interest costs. In addition,  approximately $1.9 million
of  interest  expense  for the year  ended  December  31,  2002  relates  to the
recognition  of  previously   unrecognized   losses  from  the   termination  of
approximately  $30.0  million  in  interest  rate  swaps.  During the year ended
December 31, 2003, in  conjunction  with our tender offer for our 12% Notes,  we
incurred approximately $7.2 million of interest expense for the bond premium and
consent payment.

         Other income is from non-core business items such as gains on the sales
and closures of businesses and investments.

Funded Backlog and Estimated Remaining Contract Value

         Each year a significant portion of our revenue is derived from existing
contracts with our government  clients,  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  $1.3 billion,  from $4.3
billion as of December 31, 2002,  to $5.6 billion at December 31, 2003, of which
approximately  $66.1 million was funded backlog as of December 31, 2003.  Funded
backlog increased approximately $242.9 million to $661.1 million at December 31,
2003, from $418.2 million as of December 31, 2002.

         Our  estimated   remaining  contract  value  represents  the  aggregate
contract  revenue we estimate  will be earned at a given time 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.

         In  addition,  we are  periodically  asked to work at-risk on projects.
At-risk means that the customer has asked us to work, or to continue working, on
a project even though there are no funds  obligated  and released for payment by
the  customer.  In most cases,  the  government is in the process of funding the
contract or tasks and requests that we continue work to avoid disruptions to the
project.  Historically,  we have not recorded any significant write-offs because
funding was not ultimately received.


                                       31
<PAGE>


Acquisitions, Divestitures and Business Closures

         The following  table  summarizes  our  acquisitions,  divestitures  and
business closures.
<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>
   Vector Data Systems...........      Acquired        August 1997              $    35,600
   Techmatics....................      Acquired          May 1998                    56,700
   Analysis & Technology.........      Acquired         June 1999                   170,400
   Sherikon......................      Acquired        October 2000                  62,700
   SIGCOM Training...............      Acquired          July 2001                   12,500
   ISI...........................      Acquired           May 2003                  130,500



                 Name                   Status        Divestiture/Closure      Revenues for the twelve
                                                                                months ended prior to
                                                             Date                divestiture/closure
------------------------------------------------------------------------------------------------------------
                                                                                       (in thousands)
DIVESTITURES/CLOSURES
   CITE..........................          Sold            June 2001            $     2,411
   IMC...........................          Sold            July 2001                 21,710
   DisplayCheck..................          Sold           April 2002                    270
   STSR..........................        Closed          December 2001                3,427
</TABLE>


Acquisitions

         In 1996,  we were  formed by  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."  On  April  1,  1996,  we  acquired  all  of  the
outstanding stock of Anteon Virginia (then known as Ogden Professional  Services
Corporation) from Ogden Corporation in a leveraged transaction.  Anteon Virginia
provided  information  technology and network system  services  primarily to the
U.S.  government  and  its  agencies.  We  paid an  aggregate  consideration  of
approximately  $40.4  million  to  Ogden,   including   transaction  costs.  The
acquisition was accounted for using the purchase method of accounting.

         Vector  Data  Systems--On  August  29,  1997,  we  acquired  all of the
outstanding  stock of Vector Data including  Vector Data's eighty percent equity
interest in Vector Data Systems (UK)  Limited,  collectively,  "Vector."  Vector
supplied  specialized  information  systems  and  services  for the  collection,
analysis  and  distribution  of  military   intelligence   data.  The  aggregate
consideration paid by us was approximately $19.0 million,  including transaction
costs.   The  acquisition  was  accounted  for  using  the  purchase  method  of
accounting.

         Techmatics--On  May 29, 1998, we acquired all of the outstanding  stock
of  Techmatics,  an  established  provider  of systems  engineering  and program
management services for large-scale  military system development,  including the
Navy's surface ship fleet,  on-ship combat systems and missile defense programs.
The  aggregate  consideration  paid  by  us  was  approximately  $45.9  million,
including  transaction  costs.  The  acquisition  was  accounted  for  using the
purchase method of accounting.

         Analysis  &  Technology--On  June  23,  1999,  we  acquired  all of the
outstanding  stock of A&T a provider  of systems and  engineering  technologies,
technology-based  training  systems,  and  information  technologies to the U.S.
government and commercial customers, for an aggregate  consideration,  including
transaction  costs,  of  approximately   $115.6  million.  The  acquisition  was
accounted for using the purchase method of accounting.

                                       32
<PAGE>


         Sherikon--On  October 20,  2000,  we purchased  all of the  outstanding
stock of Sherikon,  a technology  solutions and services  firm, for an aggregate
consideration,  including transaction costs, of approximately $34.8 million. The
acquisition was accounted for using the purchase method of accounting.

         SIGCOM  Training--On  July 20, 2001, we acquired the assets,  contracts
and personnel of the training systems division of SIGCOM, Inc., for an aggregate
consideration  of $11.4  million,  including  transaction  costs.  The  training
systems  division  of SIGCOM,  Inc. is a provider  of  sophisticated  simulation
systems used by the most advanced military and government  organizations  around
the world,  including the U.S. Army, U. S. Marine Corps,  U. S. Navy Seals,  the
FBI,  SWAT teams,  British  Special  Forces and NATO troops,  to help  acclimate
members of the armed forces to combat conditions in urban areas. The acquisition
was accounted for using the purchase method of accounting.

         Information  Spectrum,  Inc. - On May 23, 2003, we purchased all of the
outstanding  stock of ISI,  a  provider  of  secure  identification  and  access
management  solutions  and military  logistics  and training  systems,  based in
Annandale,  Virginia, for a total purchase price of approximately $92.4 million,
including  transaction  costs of  approximately  $737,000.  The  acquisition was
accounted for using the purchase method of accounting.

Divestitures/Closures

         In June 2001,  our  management  made a strategic  decision to focus our
resources on our core services  business.  As a result,  we have sold, closed or
substantially curtailed several small businesses.

         Center for Information Technology Education--We  established the Center
for Information Technology Education, or "CITE," in 1999 to conduct training for
adults  in the  metropolitan  Washington,  D.C.  area  who  were  interested  in
information technology as a second career. CITE offered ORACLE database and JAVA
training. While initially profitable,  the business was impacted by the slowdown
of the general economy. On June 29, 2001, we sold the business for $100,000,  of
which  $50,000  was paid in cash and the  remainder  was  required to be paid in
equal monthly  installments of approximately $8,300 beginning August 1, 2001. In
addition,  we retained the tuition from courses that were already underway prior
to the sale on June 29, 2001. CITE's losses from operations totaled $1.0 million
for the year ended  December 31, 2001 on revenue of $1.2 million.  CITE's income
from  operations  totaled  $414,000  for the year  ended  December  31,  2000 on
revenues of $2.5 million.

         CITI-SIUSS  LLC--We   established  a  joint  venture,   CITI-SIUSS  LLC
(formerly known as  Anteon-CITI-LLC),  with Criminal  Investigative  Technology,
Inc. in 1999 to  participate in the law  enforcement  software  development  and
services  market.  After  two  years of  investment  in  software  and  business
development expenses,  the joint venture had not generated a sufficient customer
base to create a  self-supporting  business.  In June 2001,  we decided to cease
software  development  operations but to continue to support existing customers.
For the year ended  December 31, 2001,  the joint  venture  generated  operating
losses of $2.6 million on revenues of approximately $1.5 million,  compared with
operating  losses of $2.5  million on revenues  of  $879,000  for the year ended
December  31,  2000.  We do not  intend  to make any  additional  investment  in
developing or enhancing the existing software.

         Interactive  Media Corp.--On July 20, 2001, we sold all of our stock in
Interactive  Media  Corp.,  or "IMC,"  for $13.5  million  in cash,  subject  to
adjustment  based on the  amount of working  capital as of the day of sale.  IMC
specializes  in  providing  training  services  to  customers  primarily  in the
commercial  marketplace.  Prior to the sale, IMC transferred to us the assets of
the government division of IMC, which specializes in training services primarily
for the  government  marketplace.  For the  commercial  division,  revenues were
approximately $11.7 million for the year ended December 31, 2001, as compared to
$18.1  million  for the  year  ended  December  31,  2000.  Operating  loss  was
approximately  $41,000  for the year ended  December  31,  2001,  as compared to
operating  income of $686,000 for the year ended  December  31, 2000.  The total
gain  from  the  sale  recorded  for the  year  ended  December  31,  2001,  was
approximately $3.5 million.


                                       33
<PAGE>


         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  principally  all of the assets and  transferred
certain liabilities of the business for an aggregate purchase price of $200,000.

         South Texas Ship Repair--Through our acquisition of Sherikon in October
2000,  we acquired  South Texas Ship  Repair,  or "STSR".  STSR  specialized  in
performing  ship  repair   projects  for  government,   commercial  and  private
customers.   The  market   conditions   for  this  type  of  work   deteriorated
significantly  in late  2000 and early  2001.  Management  decided  to cease the
operations of STSR in December 2001. During the year ended December 31, 2001, we
incurred  operating losses of $2.1 million on revenues of $3.3 million.  For the
year ended  December 31, 2001, we also wrote off  approximately  $1.0 million in
goodwill, which was part of the original goodwill from the Sherikon acquisition.

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.  In addition, our operating results from period to period may not
be  comparable  with future  results  because of the  incurrence  of a number of
expenses as discussed  below and the impact of the  amortization  principles  of
SFAS No. 142.


                                       34
<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,
                                   -------------------------------------------------------------------------------------
                                                    2003                       2002 (1)                    2001 (1)
                                   -------------------------------------------------------------------------------------
                                                              (in thousands, except percentages)
<S>                                  <C>                  <C>        <C>               <C>       <C>                <C>
Revenues                             $   1,042,474        100.0%     $  825,826        100.0%    $   715,023        100.0%
   Costs of Revenues..........             897,264         86.1         711,328         86.1         627,342         87.7
                                     -------------   -----------   ------------- ------------    ------------ ------------
   Gross Profit...............             145,210         13.9         114,498         13.9          87,681         12.3
   Costs and expenses..........
   General and administrative.              58,647          5.6          48,197          5.8          51,442          7.2
   Amortization(2)............               2,450          0.2           1,907          0.3           9,374          1.3
                                     -------------   -----------   ------------- ------------    ------------ ------------
Total Operating Expenses.........           61,097          5.8          50,104          6.1          60,816          8.5
                                     -------------   -----------   ------------- ------------    ------------ ------------
Operating income..............              84,113          8.1          64,394          7.8          26,865          3.8
Secondary offering expenses                    852          0.1              --           --              --           --
Interest expense, net.........              24,244          2.3          21,626          2.6          26,353          3.7
Minority interest.............                (54)           --            (18)           --            (38)           --
Other (income) expense, net...                  --           --           (417)           --         (4,046)         (0.6)
                                     -------------   -----------   ------------- ------------    ------------ ------------
Income before provision for
     income taxes.............              58,963          5.7          43,167          5.2           4,520          0.7
Provision for income taxes....              22,773          2.2          16,723          2.0           4,602          0.7
                                     -------------   -----------   ------------- ------------    ------------ ------------
Net income (loss).............       $      36,190          3.5%  $      26,444         3.2%     $      (82)          0.0%
                                     =============   ===========   ============  ============    ============ ============

</TABLE>

(1)      On  January  1,  2003,  we  adopted  SFAS  No.  145,  and as a  result,
         reclassified  $4.2  million  ($2.6  million  net of tax) of losses  and
         $519,000  ($330,000  net  of  tax)  of  gains  previously  recorded  as
         extraordinary  items  in  2002  and  2001,  respectively,  to  interest
         expense,  net of  interest  income.  Additionally,  the tax impact as a
         result  of  these  reclassifications  has  been  adjusted  in  the  tax
         provision amounts shown.

(2)      Includes  amortization  of  non-compete  agreements,   amortization  of
         contract backlog  intangibles and 2001, before the adoption of SFAS No.
         142,  goodwill  amortization  and  amortization  of employee  workforce
         intangibles.

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. 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,  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:  Secretary of the Air Force Technical and
Analytical Support,  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.


                                       35
<PAGE>


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.

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 acquired  operations
and  their,   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  is 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 is 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 is
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 Amended and Restated Credit Agreement of December 19, 2003 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

         On  September  22, 2003,  certain of our  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 a contribution to additional
paid-in capital.


                                       36
<PAGE>

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.

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.

2002 compared with 2001

Revenues

         For the year ended  December  31,  2002,  revenues  increased to $825.8
million, or 15.5%, from $715.0 million for the year ended December 31, 2001. The
increase in revenues was  attributable  to organic growth and the full year 2002
impact of the  acquisition of SIGCOM  Training in July 2001,  which  contributed
revenues of approximately  $23.1 million in 2002 and approximately  $7.9 million
in 2001. This increase was offset in part by the sale of the commercial business
of Interactive  Media Corp., or "IMC," on July 20, 2001, which contributed $11.7
million  in  revenue  through  the sale  date and the sale or  closure  of other
businesses in 2001, which  contributed  revenues of approximately  $6.7 million.
For the  year  ended  December  31,  2002,  our  revenues  grew  organically  by
approximately  16.5% to $802.7  million  from $688.7  million for the year ended
December  31,  2001.  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.  Our organic growth
was  primarily  attributable  to  growth in  contracts  for the  development  of
information  technology,  communications systems for the intelligence community,
training,  modeling and  simulation  across our  Department of Defense  customer
base,  support for U.S. Navy programs and support for U.S. Air Force acquisition
and operations.

Costs of Revenues

         For the year ended  December 31, 2002,  costs of revenues  increased by
$84.0  million,  or 13.4%,  to $711.3  million from $627.3  million for the year
ended December 31, 2001. For the year ended December 31, 2002, costs of revenues
as a  percentage  of revenues  decreased  to 86.1% from 87.7% for the year ended
December  31,  2001.  The costs of revenues  increase  was due  primarily to the
corresponding   growth  in  revenues  resulting  from  organic  growth  and  our
acquisition of SIGCOM  Training.  The gross margin  increased from 12.3% for the
year ended  December  31, 2001 to 13.9% for the year ended  December  31,  2002,
primarily due to reductions in overhead expenses and depreciation.  Depreciation
decreased  from  $7.1  million  in 2001 to $4.3  million  in  2002.  Most of the
decrease was due to the  curtailment of operations of CITI-SIUSS LLC in 2001 and
completion of the remaining software depreciation during the first half of 2001.

General and Administrative Expenses

         For the year  ended  December  31,  2002,  general  and  administrative
expenses  decreased  $3.2 million,  or 6.3%, to $48.2 million from $51.4 million
for the year ended December 31, 2001.  General and  administrative  expenses for
the year ended December 31, 2002, as a percentage of revenues, decreased to 5.8%
from 7.2%.  Certain  items  totaling $6.6 million that were incurred in the year
ended  December 31, 2001,  but were not incurred in the year ended  December 31,
2002,  included a $3.6  million fee payable to  Caxton-Iseman  Capital,  Inc. in
connection  with the  termination of our management fee agreement as of December
31, 2001, management fees of $1.0 million paid to Caxton-Iseman Capital, Inc., a
$750,000  write-down of the carrying value of our North Stonington,  Connecticut
facility (a building held-for-sale), a $600,000 settlement and $497,000 in legal
fees  incurred in the first  quarter of 2001 for  matters  relating to a dispute
with a former  subcontractor,  and a $181,000  severance  charge relating to the
termination of a former A&T executive.  General and administrative  expenses for
the year  ended  December  31,  2001 also  included  costs  related  to  several
businesses  which were either sold or closed during 2001,  including  IMC, CITE,
DisplayCheck and STSR.


                                       37
<PAGE>



Amortization

         For the year ended December 31, 2002,  amortization  expenses decreased
$7.5  million,  or 79.7%,  to $1.9  million from $9.4 million for the year ended
December 31,  2001.  Amortization  as a percentage  of revenues was 1.3% for the
year ended  December  31,  2001.  The  decrease  in  amortization  expenses  was
primarily  attributable  to the  adoption of SFAS No. 142 as of January 1, 2002,
which eliminated  further  amortization of goodwill.  In addition,  for the year
ended December 30, 2001, we wrote off $1.0 million in goodwill  associated  with
the  closure  of STSR in  2001.  See the  notes  to our  consolidated  financial
statements included elsewhere in this prospectus.

Operating Income

         For the year ended December 31, 2002,  operating income increased $37.5
million,  or 139.7%,  to $64.4  million  from $26.9  million  for the year ended
December 31, 2001.  Operating  income as a percentage  of revenues  increased to
7.8% for the year ended  December 31, 2002 from 3.8% for the year ended December
31, 2001.

Interest Expense, Net

         For the year ended December 31, 2002, interest expense, net of interest
income,  decreased $4.7 million,  or 17.9%,  to $21.6 million from $26.4 million
for the year ended December 31, 2001.  The decrease in interest  expense was due
primarily to a reduction in our debt as a result of our initial public  offering
in March 2002,  which generated $75.2 million in net cash, and the conversion of
our $22.5 million subordinated convertible promissory note held by Azimuth Tech.
II  LLC,  one of our  principal  stockholders.  In  addition,  interest  expense
decreased  as a result of lower  borrowing  rates in 2002  compared  with  2001.
Interest expense in 2002 includes $1.9 million of previously unrecognized losses
related to the  termination  of  approximately  $30.0  million in interest  rate
swaps.  Also  included in the 2002 amount is $4.2 million  related to prepayment
penalties and write-off of deferred financing costs

Other Income

         For the year ended  December 31,  2002,  other  income  decreased  $3.6
million to $417,000  from $4.0  million for the year ended  December  31,  2001.
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.  Other  income  for the  year  ended
December  31,  2001 was  primarily  comprised  of gains on sales and  closure of
businesses of $4.0 million.  Gains on sales and closure of businesses  consisted
of a $100,000  gain on the sale of CITE's assets and $487,000  representing  the
remaining  minority  interest as of the date of  curtailment  of  operations  of
CITI-SIUSS,  LLC. In addition, for the year ended December 31, 2001, we sold IMC
as discussed above, resulting in a gain of $3.5 million.

Provision for Income Taxes

         Our effective tax rate for the year ended  December 31, 2002 was 38.8%,
compared  with 101.8% for the year ended  December 31, 2001,  primarily due to a
reduction in  non-deductible  goodwill  amortization  expense as a result of the
implementation of SFAS No. 142 as of January 1, 2002.

Liquidity and Capital Resources

Cash Flow for the Years Ended December 31, 2003 and 2002

         We generated  $37.4 million in cash from  operations for the year ended
December 31, 2003. By comparison,  we used $1.7 million in cash from  operations
for the year ended  December 31, 2002.  Compared to the year ended  December 31,
2002, the collection of contract receivables in 2003 improved seven days from 78
to 71 days  sales  outstanding,  or  "DSO."  The  improvement  in total DSO from
December 31, 2002 to December 31, 2003 was  attributable to our improved billing
and  collection  processes  and an  improvement  in government  payment  cycles.
Contract  receivables  increased  $33.8  million to $222.9  million for the year
ended  December  31,  2003 as  compared  to  $189.1  million  in 2002.  Accounts
receivable at December 31, 2003 represented  46.5% of total assets at that date.
As a  result  of our  acquisition  of  ISI,  accounts  receivable  increased  by
approximately  $22.8  million.  The remaining  increase is  attributable  to the
overall  growth of our business.  For the year ended December 31, 2003, net cash
used in investing activities was $95.4 million, which was attributable primarily
to our  acquisition  of ISI.  Cash  provided by financing  activities  was $55.8
million for the year ended December 31, 2003, due to additional borrowings under
the revolving portion of our Credit Facility to finance the acquisition of ISI.


                                       38
<PAGE>

         On December 19, 2003, we amended and restated our Credit Facility. This
amendment and restatement  provided for, among other things,  a new term loan of
$150.0 million, or "Term Loan B," with a maturity date of December 31, 2010, the
extension  of the  maturity  date of the  revolving  loan  portion of our Credit
Facility to December 31,  2008, a revolving  loan  commitment  in the  aggregate
principal amount of $200.0 million,  the repayment of our existing term loan, or
the  "Term  Loan  A,"  and  the  financing  of  our  tender  offer  and  consent
solicitation  completed  on December  23,  2003 in respect of our 12% Notes.  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.  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.  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.

         The  proceeds of the $150.0  million Term Loan B were used to repay the
balance  of our Term Loan A,  together  with  interest  of  approximately  $18.5
million, finance the tender offer and consent solicitation for our 12% Notes, as
described  below,  in the amount of  approximately  $81.2 million,  pay fees and
expenses  incurred in connection with these  transactions of approximately  $1.5
million,  and repay  outstanding  revolving  loans  together  with  interest  of
approximately $38.2 million.

         On December 23, 2003, we repurchased $73.1 million aggregate  principal
amount, or approximately 97%, of our outstanding 12% Notes. As of the expiration
date of the tender offer and as of December 31, 2003, approximately $1.9 million
in  aggregate  principal  amount  of the 12%  Notes  remained  outstanding.  The
repurchase  price for our 12% Notes was $1,110.95 per $1,000 principal amount of
the 12% Notes,  which included  accrued and unpaid interest of $12.67 per $1,000
in  principal  amount of the 12% Notes up to, but not  including,  December  23,
2003,  the payment date,  and a consent  payment of $20.00 per $1,000  principal
amount of the 12% Notes  tendered  prior to December 5, 2003,  the consent date.
The  repurchase  price for those 12% Notes  tendered  after the consent date was
$1,090.95 per $1,000 principal  amount of 12% Notes,  which excludes the consent
payment of $20.00 per $1,000  principal  amount of the 12% Notes.  The aggregate
repurchase price for all of the 12% Notes validly surrendered for repurchase and
not withdrawn was  approximately  $81.2  million,  which includes a $7.2 million
bond premium and consent payment and approximately $900,000 of accrued interest.

         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. The Credit Facility contains affirmative and negative covenants
customary for such financings. For the year ended December 31, 2003, we were not
in  compliance  with  one of the  financial  covenants  required  by our  Credit
Facility.  We  subsequently  obtained a waiver for compliance with this covenant
for the year ended  December  31,  2003.  We were in  compliance  with all other
financial covenants required by our Credit Facility. At December 31, 2003, total
debt  outstanding  under our Credit Facility was  approximately  $154.4 million,
consisting of $150.0 million of Term Loan B, and $4.4 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,
2003 were $112.7  million.  As of December 31, 2003,  our Credit  Facility would
have permitted additional borrowings of up to $203.7 million. Beginning with our
fiscal year 2004, we are required to prepay,  in amounts specified in our Credit
Facility,  borrowings under the Term Loan B under certain  conditions related to
excess annual cash flow and the receipt of proceeds from certain asset sales and
debt or equity  issuances.  In addition,  beginning  on March 31,  2004,  we are
scheduled to pay quarterly  principal  installments  of  approximately  $375,000
against the Term Loan B until it matures on December  31, 2010 at which time the
remaining  balance  will be due. As of December  31,  2003,  we did not have any
capital commitments greater than $1.5 million.

         Our principal working capital need is for funding accounts  receivable,
which has increased  with the growth of our business.  Our principal  sources of
cash to fund our working  capital needs are cash generated  from  operations and
borrowings under our Credit Facility.


                                       39
<PAGE>


         We  have  relatively  low  capital  investment  requirements.   Capital
expenditures were $3.0 million and $3.2 million for the years ended December 31,
2003 and 2002,  respectively,  primarily for leasehold  improvements  and office
equipment.

         Our  business  acquisition  expenditures  relating  to ISI  were  $92.4
million in 2003.  The  acquisition  was 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, 2003,  we financed  equipment  with an original
cost of approximately  $13.4 million through operating  leases.  Had we not used
operating  leases,  we would have used our existing  Credit Facility to purchase
these assets.  Other than the operating  leases  described above, and facilities
leases,  we do not have any other  off-balance  sheet  financing.  The following
table provides  information (in thousands) as of December 31, 2003 regarding our
off-balance sheet arrangements and contractual obligations.

<TABLE>
<CAPTION>

                                                              Payments due by period
                                 ---------------------------------------------------------------------------


                                                  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                 $   158,776    $     4,000    $     3,000      $    7,400   $   144,376
  Capital lease obligations              977            421            343             213            --
  Operating leases                   151,573         29,991         44,585          31,693        45,304
  Purchase obligations                    --             --             --              --            --
  Other long-term liabilities             --             --             --              --            --
                                 -----------    -----------    ------------     ----------   -----------

  Total                          $   311,326    $    34,412    $    47,928      $   39,306   $   189,680
                                 ===========    ===========    ============     ==========   ===========

</TABLE>

                                       40
<PAGE>


Inflation

         We do not  believe  that  inflation  has had a  material  effect on our
business in 2003, 2002, or 2001.

Recent Accounting Pronouncements

         In December 2002, the Emerging  Issue Task Force,  or "EITF",  issued a
consensus on Issue 00-21, or "EITF 00-21,"  Accounting for Revenue  Arrangements
with Multiple  Deliverables.  EITF 00-21  addresses how to determine  whether an
arrangement  involving  multiple  deliverables  contains  more  than one unit of
accounting.  It also addresses how arrangement  consideration should be measured
and allocated to the separate units of accounting in an arrangement.  EITF 00-21
does not apply to  deliverables in arrangements to the extent the accounting for
such   deliverables   is  within  the  scope  of  other  existing   higher-level
authoritative  accounting  literature.  The effective date of EITF 00-21 for the
Company was July 1, 2003.  The adoption of EITF 00-21 did not have a significant
impact on our consolidated financial statements.

         In April 2003, the FASB issued SFAS No. 149, Amendment to Statement 133
on  Derivative  Instruments  and  Hedging  Activities.  SFAS No.  149 amends and
clarifies  accounting for derivative  instruments,  including certain derivative
instruments  embedded in other contracts,  and for hedging activities under SFAS
No. 133. SFAS No. 149 is effective for contracts  entered into or modified after
June 30, 2003,  and hedging  relationships  designated  after June 30, 2003. The
adoption of SFAS No. 149 did not have a significant  impact on our  consolidated
financial statements.

         In May 2003,  the FASB  issued  SFAS No.  150,  Accounting  for Certain
Financial  Instruments with Characteristics of both Liabilities and Equity. SFAS
No.  150  establishes   standards  for  how  certain  free  standing   financial
instruments with  characteristics  of both liabilities and equity are classified
and  measured.  Financial  instruments  within  the  scope of SFAS  No.  150 are
required  to be  recorded as  liabilities  (or assets in certain  circumstances)
which may require  reclassification  of amounts  previously  reported in equity.
SFAS No. 150 is effective  for  financial  instruments  entered into or modified
after May 31, 2003,  and  otherwise  is effective at the  beginning of the first
interim period beginning after June 15, 2003. The cumulative  effect of a change
in accounting  principle  should be reported for financial  instruments  created
before the issuance of this Statement and still existing at the beginning of the
period of  adoption.  The  adoption  of SFAS No. 150 did not have a  significant
impact on our consolidated financial statements.

         In  December  2003,  the  FASB  issued  Interpretation  No.  46(R),  or
"Interpretation  No. 46(R),"  Consolidation of Variable  Interest  Entities,  an
interpretation  of ARB No. 51.  Interpretation  No. 46(R) provides  guidance for
identifying  a controlling  interest in a Variable  Interest  Entity,  or "VIE,"
established by means other than voting interests.  Interpretation No. 46(R) also
requires  consolidation  of a VIE by an enterprise that holds such a controlling
interest.  The effective  date for interests  qualifying as VIEs is December 31,
2003. We do not have any interests  qualifying as VIEs, including residual value
guarantees or fixed purchase  options under leases as of December 31, 2003. As a
result,  Interpretation  No.  46(R)  does not have a  significant  impact on our
consolidated financial statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

         We have  interest  rate  exposure  relating to certain of our long-term
obligations.  The remaining  $1.9 million of our 12% Notes have a fixed interest
rate of 12%. 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  in part  through  interest  rate  swaps that are
currently in place. In addition, we have a cash flow management plan focusing on
billing and collecting receivables to pay down debt.

         A 1% change in interest rates on variable rate debt would have resulted
in our interest expense  fluctuating by $514,000 and $249,000 for the year ended
December 31, 2003 and 2002, respectively.

         On January  29,  2002,  we  cancelled  approximately  $30.0  million of
interest swap agreements and recognized  previously  unrecognized losses of $1.9
million in interest expense for the quarter ended March 31, 2002. As of December
31, 2003, the fair value of our remaining  interest rate swap  agreements with a
notional amount of $10.0 million resulted in a net liability of $230,000 and has
been included in other current liabilities.


                                       41
<PAGE>


Item 8.   Financial Statements and Supplementary Data

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

Item  9.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure

         We had no disagreements with our independent  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

         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,  2003.  Based on this  evaluation,  our chief
executive officer and chief financial officer concluded that, as of December 31,
2003,  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.

         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, 2003 that has  materially  affected,  or is  reasonably
likely to materially affect, our internal control over financial reporting.


                                       42
<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.


                                       43
<PAGE>

<TABLE>
<CAPTION>


                                     PART IV


Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

                                                                                                    Page Number
                                                                                                      in 2003
                                                                                                   Annual Report
<S>                                                                                                       <C>
         (a) 1. Financial Statements

                Independent Auditors' Report                                                            F-1

                Consolidated Balance Sheets as of December 31, 2003 and 2002                            F-2

                Consolidated  Statements  of  Operations  for  Each  of  the  Years  in  the
                Three-Year Period Ended December 31, 2003                                               F-3

                Consolidated    Statements   of    Stockholders'    Equity   and
                Comprehensive  Income  for Each of the  Years in the  Three-Year
                Period Ended December 31, 2003                                                          F-4

                Consolidated  Statements  of Cash Flows for Each of the Years in
                the Three-Year Period Ended December 31, 2003                                        F-5 - F-6

                Notes to Consolidated Financial Statements                                           F-7 - F-41

   (a) 2.       Financial Statement Schedules

                Independent Auditors' Report                                                            S-1
                Valuation and Qualifying Accounts                                                       S-2

   (a) 3.       Exhibits
                See Exhibit Index beginning on page 46
</TABLE>

         (b)

                Reports on Form 8-K On October 29, 2003,  the Company  furnished
                in a Current  Report on Form 8-K under  Item 12  thereof a press
                release  and  financial  supplement  relating  to the  Company's
                financial results for the quarter ended September 30, 2003.

                On November 20, 2003, the Company  furnished in a Current Report
                on Form 8-K under Item 9 thereof a press release relating to the
                Company's   commencement   of  a  tender   offer   and   consent
                solicitation   with  respect  to  its   outstanding  12%  Senior
                Subordinated Notes due 2009.

                On December 23, 2003, the Company filed a Current Report on Form
                8-K  under  Item  5  thereof  a  press  release  announcing  the
                completion  of its tender  offer and consent  solicitation  with
                respect to its  outstanding  12% Senior  Subordinated  Notes due
                2009 and the  closing  of  certain  amendments  to its  existing
                credit agreement.


                                       44
<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

                                     By: /s/: Joseph M. Kampf
                                        ----------------------------------------
                                        Joseph M. Kampf
                                        President and Chief Executive Officer
Date: March 4, 2003
-------------------

         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.
<TABLE>
<CAPTION>

             Name                                              Title                                     Date
       ------------------------------------               ----------------                         -----------------
<S>                                                                                                  <C>
       /s/:  Joseph M. Kampf                                                                         March 4, 2003
       ------------------------------------                                                        -----------------
             Joseph M. Kampf                          President and Chief Executive Officer
                                                      and Director  (Principal Executive Officer)

       /s/:  Charles S. Ream                                                                         March 4, 2003
       ------------------------------------                                                        -----------------
             Charles S. Ream                          Executive Vice President and Chief
                                                      Financial Officer (Principal Financial and
                                                      Accounting Officer)

       /s/:  Frederick J. Iseman
       ------------------------------------
             Frederick J. Iseman                      Chairman of the Board and Director              March 4, 2003
                                                                                                   -----------------

       /s/:  Gilbert F. Decker
       ------------------------------------
             Gilbert F. Decker                        Director                                        March 4, 2003
                                                                                                   -----------------

       /s/:  Robert A. Ferris
       ------------------------------------
             Robert A. Ferris                         Director                                        March 4, 2003
                                                                                                   -----------------

       /s/:  Paul G. Kaminski
       ------------------------------------
             Paul G. Kaminski                         Director                                        March 4, 2003
                                                                                                   -----------------

       /s/:  Steven M. Lefkowitz
       ------------------------------------
             Steven M. Lefkowitz                      Director                                        March 4, 2003
                                                                                                   -----------------

       /s/:  Thomas J. Tisch
       ------------------------------------
             Thomas J. Tisch                          Director                                        March 4, 2003
                                                                                                   -----------------

       /s/:  General Henry Hugh Shelton
       ------------------------------------
             General Henry Hugh Shelton               Director                                        March 4, 2003
                                                                                                   -----------------

       /s/:  William J. Perry
       ------------------------------------
             William J. Perry                         Director                                        March 4, 2003
                                                                                                   -----------------
</TABLE>


                                       45
<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).

                                       46
<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.

         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.

         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).

         10.4     Credit  Agreement,  dated as of June 23,  1999,  among  Anteon
                  Corporation,  Credit Suisse First Boston,  Mellon Bank,  N.A.,
                  Deutsche Bank AG and the lenders  named therein  (incorporated
                  by  reference   to  Exhibit   10.4  to  Anteon   International
                  Corporation's  Registration  Statement  on Form  S-4  filed on
                  August 9, 1999 (Commission File No. 333-84835)).

         10.5     Amendment  No. 1, dated as of January 13, 2000,  to the Credit
                  Agreement,   dated  as  of  June  23,   1999,   among   Anteon
                  Corporation,  Credit Suisse First Boston,  Mellon Bank,  N.A.,
                  Deutsche Bank AG and the lenders  named therein  (incorporated
                  by  reference  to  Exhibit   10.17  of  Anteon   Corporation's
                  Quarterly Report on Form 10-Q/A filed on June 15, 2001).

         10.6     Amendment  No. 2,  dated as of March 29,  2000,  to the Credit
                  Agreement,   dated  as  of  June  23,   1999,   among   Anteon
                  Corporation,  Credit Suisse First Boston,  Mellon Bank,  N.A.,
                  Deutsche Bank AG and the lenders  named therein  (incorporated
                  by  reference  to  Exhibit   10.18  of  Anteon   Corporation's
                  Quarterly Report on Form 10-Q/A filed on June 15, 2001).

         10.7     Amendment  No. 3,  dated as of June 30,  2000,  to the  Credit
                  Agreement,   dated  as  of  June  23,   1999,   among   Anteon
                  Corporation,  Credit Suisse First Boston,  Mellon Bank,  N.A.,
                  Deutsche Bank AG and the lenders  named therein  (incorporated
                  by  reference  to  Exhibit   10.19  of  Anteon   Corporation's
                  Quarterly Report on Form 10-Q/A filed on June 15, 2001).

         10.8     Amendment  No. 4, dated as of October 19, 2000,  to the Credit
                  Agreement,   dated  as  of  June  23,   1999,   among   Anteon
                  Corporation,  Credit Suisse First Boston,  Mellon Bank,  N.A.,
                  Deutsche Bank AG and the lenders  named therein  (incorporated
                  by  reference  to  Exhibit   10.20  of  Anteon   Corporation's
                  Quarterly Report on Form 10-Q/A filed on June 15, 2001).

         10.9     Amendment  No. 5, dated as of December 31, 2000, to the Credit
                  Agreement,   dated  as  of  June  23,   1999,   among   Anteon
                  Corporation,  Credit Suisse First Boston,  Mellon Bank,  N.A.,
                  Deutsche Bank AG and the lenders  named therein  (incorporated
                  by  reference  to  Exhibit   10.25  of  Anteon   Corporation's
                  Quarterly Report on Form 10-Q/A filed on June 15, 2001).

         10.10    Amendment  No. 6, dated as of February 1, 2002,  to the Credit
                  Agreement,   dated  as  of  June  23,   1999,   among   Anteon
                  Corporation,  Credit Suisse First Boston,  Mellon Bank,  N.A.,
                  Deutsche Bank AG and the lenders  named therein  (incorporated
                  by  reference  to  Exhibit   10.10  to  Anteon   International
                  Corporation's   Amendment   No.1  to  Form  S-1   Registration
                  Statement  filed on  February  5,  2002  (Commission  File No.
                  333-75884)).

                                       47
<PAGE>


         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  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.

         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)).

         10.18    Stock  Purchase  Agreement,  by and among Anteon  Corporation,
                  Sherikon,  Inc. and the stockholders of Sherikon,  Inc., dated
                  as of October 20, 2000 (incorporated by reference to Exhibit 2
                  to Anteon International  Corporation's  Current Report on Form
                  8-K filed on November 6, 2000).

         10.19    Asset Purchase  Agreement,  dated as of July 20, 2001, between
                  Anteon Corporation and SIGCOM, Inc. (incorporated by reference
                  to Anteon International  Corporation's  Current Report on Form
                  8-K filed on August 3, 2001).

         10.20    Stock  Purchase  Agreement,  dated July 20, 2001, by and among
                  Anteon    International    Corporation,    Interactive   Media
                  Corporation and FTK Knowledge (Holdings) Inc. (incorporated by
                  reference to Anteon International Corporation's Current Report
                  on Form 8-K filed on August 3, 2001).

         10.21    Stock Purchase  Agreement,  dated as of April 22, 2003, by and
                  among Anteon International Corporation,  Information Spectrum,
                  Inc., the Shareholders of Information Spectrum,  Inc. and Mark
                  Green  as   Shareholder's   Representative   (incorporated  by
                  reference to Exhibit 2.1 to Anteon International Corporation's
                  Current Report on Form 8-K filed on May 29, 2003).

         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.

         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).


                                       48
<PAGE>


                          Independent Auditors' Report

The Board of Directors
Anteon International Corporation and subsidiaries:

We  have  audited  the  accompanying   consolidated  balance  sheets  of  Anteon
International  Corporation  (a  Delaware  Corporation)  and  subsidiaries  as of
December  31,  2003  and  2002,  and  the  related  consolidated  statements  of
operations,  stockholders' equity (deficit) and comprehensive income (loss), and
cash flows for each of the years in the  three-year  period  ended  December 31,
2003. 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 auditing standards generally accepted
in the  United  States of  America.  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 Anteon International
Corporation and  subsidiaries,  as of December 31, 2003 and 2002 and the results
of their operations and their cash flows for each of the years in the three-year
period  ended  December 31,  2003,  in  conformity  with  accounting  principles
generally accepted in the United States of America.

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.

As discussed in note 2(f) to the consolidated  financial  statements,  effective
January 1, 2002,  the Company  adopted the provisions of Statements of Financial
Accounting Standards ("SFAS") No. 142, Goodwill and Other Intangible Assets.

As discussed in note 2(r) to the consolidated  financial  statements,  effective
January 1, 2003, the Company adopted SFAS No. 145, Rescission of FASB Statements
No. 4, 44, and 64, Amendment to FASB Statement 13 and Technical Corrections.





McLean, Virginia                                                        KPMG LLP
February 17, 2004



                                       F-1
<PAGE>

<TABLE>
<CAPTION>


                                          ANTEON INTERNATIONAL CORPORATION AND SUBSIDIARIES
                                                      (a Delaware Corporation)
                                                     Consolidated Balance Sheets
                                                     December 31, 2003 and 2002
                                           (in thousands, except share and per share data)

                                           Assets                                              2003                 2002
                                                                                         ------------------   -----------------
     Current assets:
<S>                                                                                         <C>                   <C>
          Cash and cash equivalents                                                         $      2,088          $     4,266
          Accounts receivable, net                                                               222,937              189,059
          Prepaid expenses and other current assets                                               17,925               15,071
          Deferred tax assets, net                                                                 1,641                   --
                                                                                         ------------------   -----------------
     Total current assets                                                                        244,591              208,396

     Property and equipment, at cost, net of accumulated depreciation and amortization
       of $22,489 and $18,971, respectively                                                       12,759                9,992
     Goodwill, net of accumulated amortization of $17,376 and $17,376, respectively              212,205              138,619
     Intangible and other assets, net of accumulated amortization of $11,729 and
       $9,279, respectively                                                                        9,725                7,685
                                                                                         ------------------   -----------------
     Total assets                                                                           $    479,280          $   364,692
                                                                                         ==================   =================

                            Liabilities and Stockholders' Equity
     Current liabilities:
          Term Loan A, current portion                                                      $         --          $     3,798
          Term Loan B, current portion                                                             1,500                   --
          Subordinated notes payable, current portion                                              2,500                2,500
          Obligations under capital leases, current portion                                          341                   --
          Accounts payable                                                                        36,793               47,630
          Due to related party                                                                        48                   --
          Accrued expenses                                                                        85,468               57,603
          Income tax payable                                                                         641                7,738
          Other current liabilities                                                                  230                  806
          Deferred tax liability                                                                      --                2,230
          Deferred revenue                                                                        11,783                5,701
                                                                                         ------------------   -----------------
     Total current liabilities                                                                   139,304              128,006

     Term Loan A, less current portion                                                                --               17,403
     Term Loan B, less current portion                                                           148,500                   --
     Revolving credit facility                                                                     4,400                7,000
     Senior subordinated notes payable                                                             1,876               75,000
     Obligations under capital leases, less current portion                                          465                   --
     Noncurrent deferred tax liabilities, net                                                     10,017                7,808
     Other long term liabilities                                                                      16                  490
                                                                                         ------------------   -----------------
     Total liabilities                                                                           304,578              235,707
                                                                                         ------------------   -----------------

     Minority interest in subsidiaries                                                               210                  156
     Stockholders' equity:
     Preferred stock, $0.01 par value, 15,000,000 shares authorized, zero issued and
       outstanding as of December 31, 2003 and 2002                                                   --                   --
     Common stock, $0.01 par value, 175,000,000 shares authorized and 35,354,996  and
       34,419,049 shares issued and outstanding as of December 31, 2003 and 2002,
       respectively                                                                                  354                  344
     Common stock, Class B, voting, $0.01 par value, 3,000 shares authorized, zero
       issued and outstanding as of December 31, 2003 and 2002                                        --                   --
     Common stock, Class A, voting, $0.01 par value, 30,000,000 shares authorized, zero
       issued and outstanding as of December 31, 2003 and 2002                                        --                   --
     Common stock, non voting, $0.01 par value, 7,500,000 shares authorized, zero
       issued and outstanding as of December 31, 2003 and 2002                                        --                   --
     Stock subscription receivable                                                                    --                 (12)
     Additional paid-in capital                                                                  115,863              106,849
     Accumulated other comprehensive loss                                                           (72)                (509)
     Retained earnings                                                                            58,347               22,157
                                                                                         ------------------   -----------------
     Total stockholders' equity                                                                  174,492              128,829
                                                                                         ------------------   -----------------
     Commitments and contingencies
     Total liabilities and stockholders' equity                                             $    479,280          $   364,692
                                                                                         ==================   =================

                                          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, 2003, 2002 and 2001
                                           (in thousands, except share and per share data)


                                                                     2003               2002               2001
                                                               -----------------    --------------     --------------
                                                                                      (reclassified-see note 2(r))
<S>                                                            <C>                   <C>               <C>
          Revenues                                             $      1,042,474      $    825,826      $     715,023
          Costs of revenues                                             897,264           711,328            627,342
                                                               -----------------    --------------     --------------

                            Gross profit                                145,210           114,498             87,681
                                                               -----------------    --------------     --------------

          Operating Expenses:
                General and administrative expenses                      58,647            48,197             51,442
                Amortization of noncompete agreements                       101                --                349
                Goodwill amortization                                        --                --              6,704
                Other intangibles amortization                            2,349             1,907              2,321
                                                               -----------------    --------------     --------------

                            Total operating expenses                     61,097            50,104             60,816
                                                               -----------------    --------------     --------------

                            Operating income                             84,113            64,394             26,865
          Other income                                                       --               417                 --
          Gains on sales and closures of businesses                          --                --              4,046
          Secondary offering expenses                                       852                --                 --
          Interest expense, net of interest income of $239,
             $289, and $344, respectively                                24,244            21,626             26,353
          Minority interest in (earnings) losses of
             subsidiaries                                                  (54)              (18)               (38)
                                                               -----------------    --------------     --------------

          Income before provision for income taxes                       58,963            43,167              4,520

          Provision for income taxes                                     22,773            16,723              4,602
                                                               -----------------    --------------     --------------

                            Net income (loss)                  $         36,190      $     26,444      $        (82)
                                                               =================    ==============     ==============

          Basic earnings (loss) per common share               $           1.04      $       0.82      $      (0.01)
                                                               =================    ==============     ==============
          Basic weighted average shares outstanding                  34,851,281        32,163,150         23,786,565

          Diluted earnings (loss) per common share             $           0.98      $       0.78      $      (0.01)
                                                               =================    ==============     ==============
          Diluted weighted average shares outstanding                36,925,488        34,021,597         23,786,565

                                    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, 2003, 2002 and 2001
                                                  (in thousands, except share data)

                                                                                           Accumulated      Retained      Total
                                                                      Stock    Additional    other          earnings   stockholders'
                                                   All series     subscription  paid-in    comprehensive  (accumulated    equity
                                                  common stock     receivable   capital     income (loss)   deficit)     (deficit)
                                               Shares    Amount
                                             ---------- ---------- ----------- ----------  ------------   ------------- ----------

<S>                                          <C>         <C>        <C>          <C>        <C>           <C>           <C>
Balance, December 31, 2000                   23,786,565  $  238     $   (12)     $  2,366   $       37    $   (4,205)   $ (1,576)
Transition adjustment-interest rate
   swaps (net of tax of $419)                        --      --           --           --        (629)             --       (629)
Comprehensive income (loss):
   Interest rate swaps (net of
    tax of $717)                                     --      --           --           --      (1,075)             --     (1,075)
   Freign currency translation                       --      --           --           --         (80)             --        (80)
   Net loss                                          --      --           --           --           --           (82)        (82)
                                             ---------- --------    ----------- ---------- ------------   ------------ -----------
Comprehensive income (loss)                          --      --           --           --      (1,155)           (82)     (1,237)
                                             ---------- -------    ----------- ---------- ------------   ------------ -----------
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  stockholder 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
                                             ---------- -------    ----------- ---------- ------------   ------------ -----------
            See accompanying notes to consolidated financial statements.
</TABLE>



                                                                 F-4
<PAGE>

<TABLE>
<CAPTION>


                                          ANTEON INTERNATIONAL CORPORATION AND SUBSIDIARIES
                                                      (a Delaware Corporation)

                                                Consolidated Statements of Cash Flows

                                            Years ended December 31, 2003, 2002 and 2001
                                                           (in thousands)


                                                                                   2003               2002                2001
                                                                              ---------------    ----------------    ---------------
Cash flows from operating activities:
<S>                                                                              <C>                <C>                 <C>
      Net income (loss)                                                          $    36,190        $     26,444        $      (82)
      Adjustments to reconcile net income (loss) to net cash
        provided by (used in) operating activities:
             Gains on sales and closures of businesses                                    --                  --            (4,046)
             Interest rate swap termination                                               --             (1,903)                 --
             Depreciation and amortization of property and equipment                   4,440               4,294              7,110
             Goodwill amortization                                                        --                  --              6,704
             Amortization of noncompete agreements                                       101                  --                349
             Other intangibles amortization                                            2,349               1,907              2,321
             Amortization of deferred financing costs                                  4,014               2,442                697
             Loss on disposals of property and equipment                                 190                  25                791
             Deferred income taxes                                                   (1,742)               4,090              3,512
             Minority interest in earnings (losses) of subsidiaries                       54                  18                 38
             Changes in assets and liabilities, net of acquired assets
             and liabilities:
                (Increase) decrease in accounts receivable                          (12,477)            (57,715)              1,268
                Decrease in prepaid expenses and other current assets                (1,245)             (8,059)                727
                (Increase) decrease in other assets                                      142                 105                178
                Increase in accounts payable and accrued expenses                      5,592              22,601             15,744
                Increase (decrease) in income tax payable                            (2,998)               7,229               (22)
                (Decrease) increase in deferred revenue                                3,306             (3,042)              2,254
                (Decrease) increase in other liabilities                               (473)               (158)                336
                                                                              ---------------    ----------------    ---------------
                   Net cash provided (used in) by operating activities                37,443             (1,722)             37,879
                                                                              ---------------    ----------------    ---------------

Cash flows from investing activities:
      Purchases of property and equipment and other assets                           (3,049)             (3,225)            (2,181)
      Acquisition of Sherikon, Inc., net of cash acquired                                 --                  --               (21)
      Acquisition of SIGCOM, net of cash acquired                                         --                  --           (10,975)
      Acquisition of Information Spectrum, Inc., net of cash acquired               (92,382)                  --                 --
      Proceeds from sales of businesses, net                                              --                  --             11,464
      Proceeds from sale of building                                                      --               1,802                 --
      Other, net                                                                          --                  --                  6
                                                                              ---------------    ----------------    ---------------
                   Net cash used in investing activities                            (95,431)             (1,423)            (1,707)
                                                                              ---------------    ----------------    ---------------

Cash flows from financing activities:
      Principal payments on bank and other notes payable                                (43)                (47)              (185)
      Payment on subordinated notes payable                                               --               (567)            (5,000)
      Payments on business purchase consideration payable                                 --                  --            (1,185)
      Payments on note payable to Ogden                                                   --                  --            (3,212)
      Deferred financing costs                                                       (2,728)             (1,292)                 --
      Principal payments on Term Loan A                                             (21,202)            (25,853)           (12,946)
      Proceeds from Term Loan B                                                      150,000                  --                 --
      Proceeds from certain stockholders related to secondary offering                   852                  --                 --
      Proceeds from revolving credit facility                                      1,009,500             862,600            771,200
      Principal payments on revolving credit facility                            (1,012,100)           (874,300)          (784,500)
      Redemption of senior subordinated notes payable                               (73,124)            (25,000)                 --
      Proceeds from issuance of common stock, net of expenses                          4,902              81,808                 --
      Principal payments under capital lease obligations                               (247)                  --                 --
      Principal payments on subordinated notes payable to stockholders                    --             (7,499)                 --
      Payment of subordinated notes payable-related party                                 --             (4,369)                 --
      Proceeds from minority interest, net                                                --                  --                152
                                                                              ---------------    ----------------    ---------------
                   Net cash provided by (used in) financing activities                55,810               5,481           (35,676)
                                                                              ---------------    ----------------    ---------------

                   Net increase (decrease) in cash and cash equivalents              (2,178)               2,336                496

Cash and cash equivalents, beginning of year                                           4,266               1,930              1,434
                                                                              ---------------    ----------------    ---------------
Cash and cash equivalents, end of year                                           $     2,088        $      4,266        $     1,930
                                                                              ===============    ================    ===============

                                                                                                                         (continued)
</TABLE>


                                                                 F-5
<PAGE>

<TABLE>
<CAPTION>


                                          ANTEON INTERNATIONAL CORPORATION AND SUBSIDIARIES
                                                      (a Delaware Corporation)

                                          Consolidated Statements of Cash Flows, continued

                                            Years Ended December 31, 2003, 2002 and 2001



                                                                                    2003              2002                2001
                                                                                -------------    ----------------    ---------------

Supplemental disclosure of cash flow information (in thousands): Interest paid:
<S>                                                                              <C>              <C>                 <C>
      Tender offer of senior subordinated notes payable                          $     7,177      $           --      $           --
      Other                                                                           14,199              18,971              23,396
                                                                                 -----------        ------------       -------------
    Total interest paid                                                          $    21,376      $       18,971      $       23,396
                                                                                 ===========        ============       =============

    Income taxes paid (refunds received), net                                    $    27,410      $        2,634      $         (52)
                                                                                 ===========        ============       =============
</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.

         During 2001, the Company finalized the allocation of the purchase price
         of  Sherikon,  Inc.,  resulting  in an  increase of $100,000 in accrued
         liabilities and in the goodwill from the acquisition for  contingencies
         identified at the date of acquisition (see note 4(a)).

         In  accordance  with SFAS No. 133, the changes in the fair value of the
         interest  rate swaps are  reported,  net of tax, in  accumulated  other
         comprehensive  income.  For the years ended December 31, 2003 and 2002,
         the change in the fair value of the  interest  rate swaps  generated  a
         deferred tax liability of $209,000 and $838,000, respectively.

         During  2003,  the  Company  recorded  approximately  $1.0  million  of
         equipment utilizing capitalized leases.


See accompanying notes to consolidated financial statements.


                                       F-6
<PAGE>

                ANTEON INTERNATIONAL CORPORATION AND SUBSIDIARIES
                            (a Delaware Corporation)

                   Notes to Consolidated Financial Statements

                           December 31, 2003 and 2002


(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
         advanced  systems  engineering  services  to  government  clients.  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 clients 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:

         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

(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

         SFAS No.  144  requires  the  Company to review  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. The
         Company  adopted SFAS No. 144 as of January 1, 2002,  with no impact on
         the Company's consolidated financial statements.

         During 2003 and 2001,  the Company  recognized an impairment  charge of
         approximately $135,000 and $750,000, respectively,  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  adopted the provisions of SFAS No. 141 and SFAS No. 142 as
         of January 1, 2002,  except for  acquisitions  occurring after June 30,
         2001,  for which the  provisions  of SFAS No. 141 and SFAS No. 142 were
         applicable.   SFAS  No.  141  requires  that  the  purchase  method  of
         accounting  be  used  for  all  business  combinations.  SFAS  No.  141
         specifies the criteria that  intangible  assets  acquired in a business
         combination  must meet to be recognized  and reported  separately  from
         goodwill.  SFAS No. 142 requires  that goodwill and  intangible  assets
         with indefinite useful lives no longer be amortized, but instead tested
         for impairment at least  annually in accordance  with the provisions of
         SFAS No. 142. SFAS No. 142 also requires  that  intangible  assets with
         estimable  useful lives be amortized  over their  respective  estimated
         useful  lives to their  estimated  residual  values,  and  reviewed for
         impairment in accordance with SFAS No. 121 and, subsequently,  SFAS No.
         144 after its adoption.

         As of January 1, 2002,  the  Company  reclassified  approximately  $1.9
         million of  intangible  assets  associated  with an  acquired  employee
         workforce from intangible assets to goodwill,  which in accordance with
         SFAS No. 142, are no longer separately identifiable from goodwill.

         Upon  adoption of SFAS No.  142,  the Company  evaluated  its  existing
         intangible  assets and goodwill that were acquired in purchase business
         combinations,  and made  any  necessary  reclassifications  in order to
         conform  with  the new  classification  criteria  in SFAS  No.  141 for
         recognition of intangible  assets  separate from goodwill.  The Company
         also   reassessed   the  useful  lives  and  residual   values  of  all
         definite-lived intangible assets acquired.

         In connection with SFAS No. 142's goodwill impairment  evaluation,  the
         Company is required  to perform an  assessment  of whether  there is an
         indication  that  goodwill is impaired as of the date of  adoption.  To
         accomplish  this,  the  Company  identified  its  reporting  units  and
         determined  the carrying  value of each reporting unit by assigning the
         assets and liabilities,  including the existing goodwill and intangible
         assets,  to these  reporting  units as of January 1, 2002.  The Company
         determined the estimated fair value of each reporting unit and compared
         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, 2003 and 2002,  the Company  performed  its annual
         goodwill  impairment  analysis required under SFAS No. 142. The Company
         applied the same  methodology  described above in performing its annual
         impairment  test  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.


                                       F-8
<PAGE>


         Had the  amortization  provisions  of SFAS No.  142 been  applied as of
         January 1, 2001, for all of the Company's  acquisitions,  the Company's
         loss,  net income and  earnings  per  common  share  would have been as
         follows (unaudited) (in thousands, except per share data):


                                                            Year ended
                                                           December 31,
                                                               2001
                                                         -----------------

           Loss                                              $     (82)
           Add back:  Goodwill amortization                       5,663
           Add back:  Workforce amortization                        545
                                                         -----------------
           Adjusted net income                               $    6,126
                                                         =================

           Basic earnings per share:
               Loss                                          $   (0.01)
               Goodwill amortization                               0.24
               Workforce amortization                              0.02
                                                         -----------------
               Adjusted net income                           $     0.25
                                                         =================

            Diluted earnings per share:
               Loss                                          $   (0.01)
               Goodwill amortization                               0.24
               Workforce amortization                              0.02
                                                         -----------------
               Adjusted net income                           $     0.25
                                                         =================

(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.  Other acquired
         intangibles  related to  workforce  (prior to the  adoption of SFAS No.
         142) and acquired  contracts  are  amortized  straight-line  based upon
         expected employment and contract periods, respectively.

         Upon the  adoption  of SFAS No.  141,  on January  1, 2002,  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
         January 1, 2002, the Company  reclassified  approximately $1.9 million,
         net of accumulated  amortization,  of intangible assets associated with
         acquired employee  workforce from intangible assets to goodwill,  which
         in accordance with SFAS No. 142, are no longer separately  identifiable
         from goodwill.  As of December 31, 2003, the Company has  approximately
         $13.3  million of intangible  assets ($5.2  million 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

         Software  development costs represent  expenditures for the development
         of software  products that have been  capitalized  in  accordance  with
         Statement of Financial  Accounting Standards No. 86, Accounting for the
         Costs of Computer Software to be Sold,  Leased, or Otherwise  Marketed.
         Amortization  is computed  on an  individual  product  basis and is the
         greater of (a) the ratio of current gross revenues for a product to the
         total of current and anticipated future gross revenues for that product
         or (b) the amount  computed  using the  straight-line  method  over the
         remaining  estimated  economic useful life of the product.  The Company
         uses economic lives ranging from one to three years for all capitalized
         software development costs.  Amortization of software development costs
         begins when the software  product is available  for general  release to
         customers. As of December 31, 2001, approximately $4.8 million had been
         capitalized for software development,  all of which had been amortized.
         There  were  no  capitalized  software  costs  after  2001  due  to the
         curtailment of operations of CITI-SIUSS.

                                       F-9
<PAGE>


(h)      Revenue Recognition

         For each of the years ended December 31, 2003, 2002 and 2001, in excess
         of 95% 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  reimbursement  and firm fixed price. For the
         year  ended  December  31,  2003,  approximately  38% of the  Company's
         contracts were time and material,  32% cost-plus and 30% fixed price (a
         substantial  majority  of which are firm fixed  price level of effort.)
         Revenue for time and materials contracts is recognized as time is spent
         at hourly rates,  which are  negotiated  with the customer.  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 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 our prior  award  experience  and
         communications  with the customer regarding the Company's  performance,
         including any interim performance evaluations rendered by the customer.
         Revenues are recognized under  substantially  all fixed price contracts
         based on the  percentage-of-completion  basis,  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 its 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 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 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 they are incurred.

         The Company recognizes revenues under its 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.   The  Company  may  be  exposed  to  variations  in
         profitability,  including  potential losses, if the Company  encounters
         variances  from  estimated  fees earned under award fee  contracts  and
         estimated costs under fixed price contracts.

         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 the
         Company's estimated total revenue or costs. Typically,  these revisions
         relate to  contractual  changes  involving its services.  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.

                                       F-10
<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. Subsequent to the curtailment of operations of
         CITI-SIUSS  in 2001 (see note 3(b)),  there have been no new product or
         license  sales.  All  software  revenue  recognized  in 2002 relates to
         maintenance services provided on existing software arrangements.  There
         were no CITI-SIUSS software revenues in 2003.

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

(i)      Costs of Acquisitions

         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.  Costs
         incurred on probable acquisitions are deferred.

(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  would be  recognized  in income in the period that
         includes the enactment date.

(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 (loss) in stockholders'  equity (deficit).  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, 2003,
         2002 and 2001.

(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.  Through  2001,  the
         Company  recognized an  insignificant  amount of  compensation  expense
         associated with the stock appreciation  rights equal to the excess fair
         value of the  underlying  stock at each reporting  period.  The Company
         discloses  the pro  forma  effect on net  income  (loss) 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-11
<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 (loss) and
         earnings  (loss) per share if the  Company  had  applied the fair value
         recognition  provisions  of  SFAS  No.  123,  to  stock-based  employee
         compensation:

<TABLE>
<CAPTION>

                                                                                   2003             2002               2001
                                                                                ------------    ------------       ------------
                                                                                  (in thousands, except per share data)

<S>                                                                              <C>              <C>               <C>
                  Net income (loss), as reported                                 $    36,190      $   26,444        $      (82)
                  Add: Stock based compensation recorded                                   3              --                 --
                  Deduct: Total stock-based compensation expense
                  determined under fair value method, net of tax                     (3,749)         (3,477)            (1,206)
                                                                                 -----------      ----------        -----------
                  Pro forma net income (loss)                                    $    32,444      $   22,967        $    (1,288)

                      Earnings (loss) per share:
                      Basic-as reported                                          $      1.04      $     0.82        $    (0.01)
                                                                                 ===========       =========        ===========
                      Basic-pro forma                                            $      0.93      $     0.71        $    (0.05)
                                                                                 ===========      ==========        ===========
                      Diluted-as reported                                        $      0.98      $     0.78        $    (0.01)
                                                                                 ===========      ==========        ===========
                      Diluted-pro forma                                          $      0.88      $     0.68       $     (0.05)
                                                                                 ===========      ==========        ===========
</TABLE>


(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,
         2003 and 2002, 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,
         2003 and 2002, as they bear interest rates that approximate the market.
         The fair value of the senior  subordinated  notes  payable on principal
         amounts  of $1.9  million  and $75.0  million,  based on quoted  market
         value, was approximately  $2.1 million and $81.0 million as of December
         31, 2003 and 2002, respectively.

(n)      Derivative Instruments and Hedging Activities

         The  Company  accounts  for  derivatives  and  hedging   activities  in
         accordance  with  Statement of Financial  Accounting  Standards No. 133
         ("SFAS No. 133"),  Accounting  for Derivative  Instruments  and Hedging
         Activities,  as amended,  which requires that derivative instruments be
         recognized at fair value in the balance sheet.  The Company has entered
         into certain  interest  rate swap  agreements,  which are accounted for
         under SFAS No. 133. 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-12
<PAGE>

(o)      Earnings (Loss) Per Common Share

         The Company  computes  earnings  (loss) per common share in  accordance
         with  Statement of Financial  Accounting  Standards  No. 128 ("SFAS No.
         128"),  Earnings Per Share. Under the provisions of SFAS No. 128, basic
         earnings  (loss) per  common  share is  computed  by  dividing  the net
         earnings (loss) available to common  stockholders for the period by the
         weighted average number of common shares outstanding during the period.
         Diluted  earnings  (loss) per common  share is computed by dividing net
         earnings (loss) 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  and  shares  associated  with  the
         Company's subordinated  convertible note payable prior to the Company's
         IPO.

(p)      Use of Estimates

         The preparation of consolidated financial statements in conformity with
         accounting  principles  generally  accepted  in the  United  States  of
         America  requires  management to make  estimates and  assumptions  that
         affect  the  carrying  amounts  of  reported  assets  and  liabilities,
         including  property,  plant,  and  equipment,   intangible  assets  and
         goodwill,  valuations 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)      Stock Split

         Effective  February  19,  2002,  the Company  increased  the  aggregate
         authorized  shares  of its  common  stock  to  37,503,000  shares,  and
         authorized a  2,449.95-for-1  common stock split. All references to the
         number and per share amounts  relating to the  Company's  common shares
         have been retroactively restated for the stock split.

(r)      Reclassification Pursuant to SFAS 145

         In  April  2002,  the  Financial   Accounting  Standards  Board  issued
         Statement 145 ("SFAS No. 145"),  Rescission of FASB  Statements  No. 4,
         44, and 64, Amendment to FASB Statement 13, and Technical  Corrections.
         SFAS  No.  145  addresses  the  reporting  of  gains  and  losses  from
         extinguishment of debt and rescinds FASB Statements 4 and 64. Under the
         new standard,  only gains and losses from  extinguishments  meeting the
         criteria  of  Accounting  Principles  Board  Opinion  No.  30  would be
         classified as extraordinary  items.  Thus, gains or losses arising from
         extinguishments  of  debt  that  are  part of the  Company's  recurring
         operations would not be reported as extraordinary items. Upon adoption,
         previously  reported  extraordinary  gains or losses  not  meeting  the
         requirements for  classification  as such in accordance with Accounting
         Principles  Board Opinion No. 30 were required to be  reclassified  for
         all periods  presented.  The Company adopted SFAS No. 145 as of January
         1, 2003, and as a result,  the Company  reclassified $4.2 million ($2.6
         million  net of tax) of losses and  $519,000  ($330,000  net of tax) of
         gains  previously  recorded as  extraordinary  items for the year ended
         December  31,  2002  and  2001,  respectively,   to  interest  expense.
         Additionally, the tax impact as a result of these reclassifications has
         been adjusted in the tax provision amounts shown.

(s)      Recently Issued Accounting Pronouncements

         In December 2002, the Emerging Issue Task Force, or ("EITF"),  issued a
         consensus  on Issue 00-21,  Accounting  for Revenue  Arrangements  with
         Multiple Deliverables. EITF 00-21 addresses how to determine whether an
         arrangement involving multiple deliverables contains more than one unit
         of accounting.  It also addresses how arrangement  consideration should
         be measured and  allocated to the separate  units of  accounting  in an
         arrangement.  EITF 00-21 does not apply to deliverables in arrangements
         to the extent the accounting for such  deliverables is within the scope
         of other existing higher-level authoritative accounting literature. The
         effective  date of EITF  00-21 for the  Company  is July 1,  2003.  The
         adoption  of  EITF  00-21  did not  have a  significant  impact  on the
         Company's consolidated financial statements.

                                       F-13
<PAGE>


         In April 2003, the FASB issued SFAS No. 149, Amendment to Statement 133
         on Derivative  Instruments and Hedging Activities.  SFAS No. 149 amends
         and clarifies accounting for derivative instruments,  including certain
         derivative  instruments  embedded in other  contracts,  and for hedging
         activities  under SFAS No. 133. SFAS No. 149 is effective for contracts
         entered into or modified after June 30, 2003, and hedging relationships
         designated  after June 30,  2003.  The adoption of SFAS No. 149 did not
         have a material  impact on the  financial  condition  or the  operating
         results of the Company.

         In May 2003,  the FASB  issued  SFAS No.  150,  Accounting  for Certain
         Financial  Instruments  with  Characteristics  of both  Liabilities and
         Equity.  SFAS  No.  150  establishes  standards  for how  certain  free
         standing financial instruments with characteristics of both liabilities
         and equity are classified and measured.  Financial  instruments  within
         the scope of SFAS No. 150 are  required to be  recorded as  liabilities
         (or assets in certain circumstances) which may require reclassification
         of amounts previously reported in equity. SFAS No. 150 is effective for
         financial  instruments entered into or modified after May 31, 2003, and
         otherwise  is effective at the  beginning of the first  interim  period
         beginning  after June 15, 2003.  The  cumulative  effect of a change in
         accounting  principle  should be  reported  for  financial  instruments
         created before the issuance of this Statement and still existing at the
         beginning of the period of  adoption.  The adoption of SFAS No. 150 did
         not have an impact on the financial  condition or the operating results
         of the Company.

         In  December   2003,   the  FASB  issued   Interpretation   No.  46(R),
         ("Interpretation  No.  46(R)"),   Consolidation  of  Variable  Interest
         Entities,  an  interpretation of ARB No. 51.  Interpretation  No. 46(R)
         provides guidance for identifying a controlling  interest in a Variable
         Interest  Entity,  or "VIE,"  established  by means  other than  voting
         interests.  Interpretation  No. 46(R) also requires  consolidation of a
         VIE by an  enterprise  that  holds  such a  controlling  interest.  The
         effective  date for interests  qualifying as VIEs is December 31, 2003.
         The Company does not have any interests  qualifying as VIEs,  including
         residual value  guarantees or fixed purchase options under leases as of
         December 31, 2003. As a result,  Interpretation No. 46(R) does not have
         an impact on its consolidated financial statements.

(3)      Sales and Closure of Businesses

         (a)      Sale of CITE

                  On June 29, 2001, the Company sold its Center for  Information
                  Technology  Education  ("CITE")  business to a  subsidiary  of
                  Pinnacle Software  Solutions,  Inc. for a total purchase price
                  of $100,000, of which $50,000 was paid on the date of closing,
                  with the remainder due and paid in six equal, monthly payments
                  of  approximately  $8,300  beginning  on August 1, 2001.  CITE
                  provided  evening  and weekend  training  for  individuals  to
                  attain  certification in Oracle  developer and Java.  Revenues
                  generated by CITE were approximately $1.2 million for the year
                  ended  December 31, 2001. As of the date of sale, the carrying
                  value  of the net  assets  of  CITE  was  approximately  zero,
                  resulting   in  a  gain  on  the  sale  of  the   business  of
                  approximately $100,000.

         (b)      Curtailment of Operations of CITI-SIUSS LLC

                  During   1999,   the   Company  and   Criminal   Investigative
                  Technology,   Inc.  ("CITI")  entered  into  a  joint  venture
                  ("CITI-SIUSS  LLC"),  formerly known as  Anteon-CITI  LLC (the
                  "Venture").   The  Venture   developed  and  marketed  certain
                  investigative  support  products and services.  At the date of
                  formation, CITI contributed certain assets to the Venture. The
                  Company  has the sole  ability to control the  management  and
                  operations of CITI-SIUSS  LLC and,  accordingly,  consolidated
                  its results.  Under the joint venture  agreement,  the Company
                  was  allocated  98% of the  profits  and losses of  CITI-SIUSS
                  until its  investment in the Venture was  recovered,  at which
                  time  profits and losses were shared  based on the  respective
                  ownership interests of the joint venturers. As the Company had
                  not yet recovered its investment,  98% of the Venture's losses
                  had  been  allocated  to  the  Company  and 2%  recognized  as
                  minority interest in losses in the consolidated  statements of
                  operations. Upon the occurrence of certain events, the Company
                  had the option to purchase the 50% interest  owned by CITI, at
                  a formula price as included in the joint venture agreement.

                                       F-14
<PAGE>


                  On June 22,  2001,  the  Company  decided  to  cease  software
                  development  operations  of the Venture  because it  concluded
                  that the Venture was not likely to establish a self-supporting
                  business without significant capital  contributions.  Revenues
                  generated by the Venture were  approximately  $1.5 million for
                  the year  ended  December  31,  2001.  Operating  losses  were
                  approximately $2.6 million for the year December 31, 2001. The
                  Venture  was  obligated  to provide  maintenance  and  support
                  services on existing contracts through June 30, 2002. Upon the
                  completion of this obligation, the Company anticipated that no
                  excess  proceeds  would be  available  to the  Company  or the
                  minority  interest  party  in the  Venture.  Accordingly,  the
                  remaining  minority  interest of  approximately  $487,000  was
                  reversed  during  the  quarter  ended June 30,  2001,  and the
                  resulting  gain was included in gains on sales and closures of
                  businesses  in  the  accompanying  consolidated  statement  of
                  operations.

         (c)      Sale of Interactive Media Corporation

                  On July  20,  2001,  the  Company  sold  all of the  stock  in
                  Interactive  Media  Corporation  ("IMC") for $13.5  million in
                  cash,  subject  to  adjustment  based on the amount of working
                  capital (as defined in the sale  agreement)  as of the date of
                  sale.  In  addition,  the  Company had a  contingent  right to
                  receive  an  additional   $500,000  in  cash  based  on  IMC's
                  performance  from  the  date  of  closing  through  the end of
                  calendar year 2001.  Prior to the sale, IMC transferred to the
                  Company the assets of the  government  division of IMC,  which
                  specializes in training  services  primarily to the government
                  marketplace.  Accordingly,  at the date of sale,  IMC provided
                  training  services to customers  primarily  in the  commercial
                  marketplace.   For  the  commercial  division,  revenues  were
                  approximately  $11.7  million for the year ended  December 31,
                  2001. Operating loss was approximately  $(41,000) for the year
                  ended December 31, 2001.  With respect to the working  capital
                  adjustment, the Company had reserved approximately $550,000 of
                  the gain on the sale at the time of closing. Subsequently, the
                  Company  reached an  agreement  with the  purchaser  of IMC to
                  settle the adjustment in the amount of $475,000 as a result of
                  working   capital   deficiencies   at  the   closing   of  the
                  transaction.  The Company paid this amount to the purchaser on
                  June 14, 2002.  The  remaining  $75,000  reserve  related to a
                  retention bonus which was paid to a key employee of IMC during
                  the year ended December 31, 2002. The total gain recognized on
                  the sale of IMC in 2001 was approximately $3.5 million.

                  As a result of the sale of IMC, the Company realized an income
                  tax  benefit  of   approximately   $1.6  million  relating  to
                  differences  between  the income tax and  financial  statement
                  carrying   amounts  of  the   Company's   investment  in  IMC.
                  Approximately   $760,000  of  this   benefit   resulted   from
                  differences  that  existed  as of the  date  of the  Company's
                  acquisition   of  A&T,   of  which   IMC  was  a   subsidiary.
                  Accordingly,  during the third  quarter of 2001,  the  Company
                  recognized   the   income   tax   benefit   related   to   the
                  pre-acquisition difference as a reduction of goodwill from the
                  acquisition  of A&T, and  recognized the remaining tax benefit
                  of $790,000 as a reduction of income tax expense.

         (d)      Closure of South Texas Ship Repair

                  On December 19, 2001,  the Company  decided to close the South
                  Texas Ship Repair  ("STSR")  business,  which was  acquired as
                  part  of  the  Sherikon  acquisition  in  October  2000.  STSR
                  specialized  in the  repair of ships for both  government  and
                  commercial customers. Revenues were $3.3 million and operating
                  loss was $(2.1)  million for the year ended December 31, 2001.
                  In   conjunction   with  the  closure  of  STSR,  the  Company
                  recognized  a charge of  approximately  $1.0  million  for the
                  write-down  of goodwill from the Sherikon  acquisition,  which
                  was  attributable to STSR. This charge is included in goodwill
                  amortization  in the  accompanying  consolidated  statement of
                  operations,   for  the  year  ended  December  31,  2001.  The
                  remaining   expected  costs  of  fulfilling   STSR's  existing
                  contracts of  approximately  $169,000  have been accrued as of
                  December 31, 2003.

                                       F-15
<PAGE>


(4)      Acquisitions

         (a)      The Training Division of SIGCOM, Inc.

                  On July 20, 2001, the Company  acquired the assets,  contracts
                  and  personnel  of  the  training  division  of  SIGCOM,  Inc.
                  ("SIGCOM"). The principal business of the training division of
                  SIGCOM's   is  the  design,   construction,   instrumentation,
                  training  and  maintenance  of  simulated  live-fire  training
                  facilities  to help  acclimate  members of the armed forces to
                  combat conditions for mobile operations on urban terrain.  The
                  company's   primary  reason  for  acquiring   SIGCOM  was  the
                  significant  capabilities of SIGCOM that augment the Company's
                  defense  training  capabilities.  The total purchase price was
                  $11.0 million,  excluding  $409,000 of transaction  costs,  of
                  which  $10.0  million  was paid in cash to the seller and $1.0
                  million of which was  placed in escrow to secure the  seller's
                  obligations  to  indemnify  the Company for certain  potential
                  liabilities which were not assumed. Transaction costs included
                  a  $100,000  fee  paid  to  Caxton-Iseman  Capital,  Inc.,  an
                  affiliate of and advisor to the Company.  The  transaction was
                  accounted  for  using the  purchase  method,  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  Company
                  allocated  approximately $4.1 million of the purchase price to
                  accounts  receivable,  approximately  $1.5 million to acquired
                  accounts payable and accrued  liabilities,  and $440,000 to an
                  intangible  asset  related  to  contract  backlog,  which  was
                  amortized over a two-year period,  in accordance with SFAS No.
                  142.  Approximately  $8.1  million has been  allocated  to tax
                  deductible  goodwill  arising from the  acquisition,  which in
                  accordance with SFAS No. 142, is not being amortized (see note
                  2(f)).

         (b)      Information Spectrum, Inc.

                  On May 23, 2003, the Company  purchased all of the outstanding
                  stock of Information  Spectrum,  Inc.  ("ISI"),  a provider of
                  credential card technologies,  military logistics and training
                  systems,  based in Annandale,  Virginia,  for a total purchase
                  price of approximately $91.6 million,  excluding  transactions
                  costs of approximately $737,000. 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, 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.  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. In accordance with SFAS No. 142, Goodwill and Other
                  Intangible  Assets,  goodwill  arising from the transaction is
                  not being amortized.

                                       F-16
<PAGE>

                  The total purchase price paid, including transaction costs, of
                  $92.4  million  was  allocated  to  the  assets  acquired  and
                  liabilities assumed as follows (in thousands):
<TABLE>
<CAPTION>

<S>                                                                           <C>
                           Accounts receivable                                $      22,792
                           Prepaid and other current assets                             764
                           Property and equipment                                     3,312
                           Other assets                                                 120
                           Current income tax receivable                                655
                           Accounts payable and accrued expenses                   (11,186)
                           Deferred income tax, net                                   (458)
                           Deferred revenue                                         (2,645)
                           Other liabilities                                          (558)
                           Contracts and customer relationships                       4,751
                           Goodwill                                                  74,335
                           Non-compete agreement                                        500
                                                                                -----------

                                Total consideration                           $      92,382
                                                                                ===========
</TABLE>

                  Unaudited Pro Forma Data

                  The   following   unaudited   pro   forma   summary   presents
                  consolidated  information  as if the  acquisition  of ISI  and
                  SIGCOM had  occurred  as of  January  1,  2001.  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):

<TABLE>
<CAPTION>

                                                                        2003            2002             2001
                                                                  ----------------  -------------  ----------------
<S>                                                               <C>               <C>              <C>
                           Total revenues                         $      1,096,152  $     955,590    $      826,298
                           Total expenses                                1,059,467        927,976           823,395
                                                                  ----------------  -------------  ----------------

                           Net income                             $         36,685  $      27,614    $        2,903
                                                                  ================  =============  ================

                           Basic earnings per common share        $           1.05  $        0.86    $         0.12
                                                                  ================  =============  ================

                           Diluted earning per common share       $           0.99  $        0.81    $         0.12
                                                                  ================  =============  ================
</TABLE>

(5)      Accounts Receivable

         The components of accounts receivable as of December 31, 2003 and 2002,
         are as follows (in thousands):


                                                       2003            2002
                                                   -------------  -------------

         Billed and billable                       $   198,144    $    179,216
         Unbilled                                       22,210           8,929
         Retainages due upon contract completion         6,705           5,162
         Allowance for doubtful accounts               (4,122)         (4,248)
                                                   ------------    ------------
                          Total                    $   222,937    $    189,059
                                                   ============    ============

         In excess of 95% of the Company's  revenues for each of 2003,  2002 and
         2001 have been earned, and accounts  receivable as of December 31, 2003
         and  2002 are  due,  from  agencies  of the  U.S.  federal  government.
         Unbilled  costs and fees and  retainages  billable  upon  completion of
         contracts are amounts due primarily  within one year and will be billed
         on the basis of contract terms and delivery schedules.

                                       F-17
<PAGE>

         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  2001.  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
         would not have a material  adverse  impact on the  Company's  financial
         condition or results of operations.

(6)      Property and Equipment

         Property  and  equipment  consists of the  following as of December 31,
         2003 and 2002 (in thousands):
<TABLE>
<CAPTION>

                                                                   2003             2002
                                                               ------------     ------------

<S>                                                            <C>                      <C>
         Land                                                  $        393     $        393
         Buildings                                                    1,581            1,717
         Computer hardware and software                              19,686           13,348
         Furniture and equipment                                      6,732            8,697
         Leasehold improvements                                       6,856            4,808
                                                               ------------      -----------
                                                                     35,248           28,963
         Less - accumulated depreciation and amortization           22,489)         (18,971)
                                                               ------------      -----------

         Total                                                 $     12,759     $      9,992
                                                               ============      ===========
</TABLE>

(7)      Accrued Expenses

         The components of accrued expenses as of December 31, 2003 and 2002 are
         as follows (in thousands):
<TABLE>
<CAPTION>

                                                                   2003            2002
                                                               ------------     ------------

<S>                                                            <C>              <C>
         Accrued payroll and related benefits                  $     52,602     $    38,819
         Accrued subcontractor costs                                 25,987          13,396
         Accrued interest                                               153           1,138
         Other accrued expenses                                       6,726           4,250
                                                               ------------     ------------

         Total                                                 $     85,468     $    57,603
                                                               ============     ============
</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") with principal payments
                  due quarterly  commencing  June 30, 2001, and $15.0 million at
                  maturity on June 23, 2005.  However,  under certain conditions
                  related  to  excess  annual  cash  flow,  as  defined  in  the
                  agreement,  and the receipt of  proceeds  from  certain  asset
                  sales, and debt or equity issuances,  the Company was required
                  to prepay, in amounts  specified in the agreement,  borrowings
                  under the Term Loan.  Due to excess  cash  flows,  as defined,
                  generated in 2001,  an additional  principal  payment of $10.7
                  million  was paid  under the term loan on March  14,  2002.  A
                  portion of the net proceeds  from the IPO were used to make an
                  additional  principal  payment of $11.4 million in March 2002.
                  As a result of the  permanent  reduction  of a portion  of its
                  debt  under  the  term   loan,   the   Company   wrote  off  a
                  proportionate  amount of the  unamortized  deferred  financing
                  fees  related to the portion of the term loan that was repaid.
                  The  write-off  of  $304,000  has been  reflected  as interest
                  expense  in  the   accompanying   Consolidated   Statement  of
                  Operations  for the year ended  December 31,  2002.  Effective
                  October 21,  2002,  this Credit  Facility  was  replaced by an
                  Amended and Restated Credit Agreement, as discussed below.

                                       F-18
<PAGE>


                  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 is 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. Interest was payable on
                  the last day of each quarter.  During the years ended December
                  31,  2002  and  2001,  the  interest  rates  on the  Revolving
                  Facility  and Term  Loan  ranged  from  3.53  percent  to 6.00
                  percent and 4.61 percent to 11.75 percent, respectively.

         (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.  The  Company  incurred  approximately  $626,000 in
                  expenses   related  to  this  Amended  and   Restated   Credit
                  Agreement.  These expenses have been capitalized as additional
                  deferred  financing  fees  and are  being  amortized  over the
                  remaining term of the Revolving Credit Facility.

                  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 our ratio of net
                  debt to EBITDA (as defined in the Amended and Restated  Credit
                  Agreement). In certain cases, the Company was required to make
                  excess cash  payments  (as defined in the Amended and Restated
                  Credit Agreement) to the extent certain  conditions and ratios
                  are met.  From January 1, 2003  through  December 18, 2003 and
                  from the date of the amendment  through December 31, 2002, the
                  interest  rates for the Term Loan  Facility and the  Revolving
                  Credit  Facility  ranged  from 3.35  percent  to 5.25 and 3.63
                  percent to 5.75 percent, respectively.  Effective December 19,
                  2003,  this credit  facility  was  replaced  by an  additional
                  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  our  Credit  Facility.  This
                  current   amendment  and  restatement,   among  other  things,
                  provides  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
                  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  permits 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  are
                  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  Company  was  not  in
                  compliance with one of the financial covenants required by its
                  2003  Amended  and  Restated  Credit  Agreement.  The  Company
                  subsequently  obtained  a  waiver  for  compliance  with  this
                  covenant for the year ended December 31, 2003. The Company was
                  in compliance with all other financial  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 are 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-19
<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 has been 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  guarantee the  repayment of amounts  borrowed
                  under the 2003 Amended and Restated Credit Agreement. The 2003
                  Amended  and   Restated   Credit   Agreement   is  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 permits
                  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 it
                  share of net cash proceeds of issuances of equity securities.

                  The  2003  Amended  and  Restated  Credit  Agreement  contains
                  customary events of default,  certain of which allow for grace
                  periods.

                  As of December  31,  2003 and 2002,  the  outstanding  amounts
                  under the 2002 and 2003 Amended and Restated Credit  Agreement
                  were as follows (in thousands):

<TABLE>
<CAPTION>

                                                                                   2003             2002
                                                                               ------------     -----------

                           <S>                                                <C>              <C>
                           Revolving Credit Facility                           $      4,400     $     7,000
                           Term Loan A                                                   --          21,201
                           Term Loan B                                               50,000              --
                                                                               ------------     -----------
                           Total debt                                               154,400          28,201
                           Less current installments                                (1,500)         (3,798)
                                                                               ------------     -----------

                           Long-term debt, excluding current installments      $    152,900     $    24,403
                                                                               ============     ===========
</TABLE>


                  The remaining available  borrowings under the Revolving Credit
                  Facility as of December  31, 2003 were $112.7  million.  As of
                  December  31,  2003,  the 2003  Amended  and  Restated  Credit
                  Agreement would have permitted additional  borrowings of up to
                  $203.7 million.

                  For the years ended  December 31, 2003,  2002 and 2001,  total
                  interest expense incurred on the Revolving Credit Facility was
                  approximately  $1.9 million,  $1.1 million,  and $2.7 million,
                  respectively.  For the years ended December 31, 2003, 2002 and
                  2001,  total interest  expense incurred on the Term Loan A was
                  approximately   $700,000,  $1.2  million,  and  $4.1  million,
                  respectively.  For the year ended  December  31,  2003,  total
                  interest expense incurred on the Term Loan B was approximately
                  $156,000.

                                       F-20
<PAGE>


         (d)      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 are  subordinate  to the Company's  2003 Amended
                  and  Restated  Credit  Facility  but rank  senior to any other
                  subordinated  indebtedness.  The 12% Notes mature May 15, 2009
                  and interest is 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,  have  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
                  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 is
                  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 have been  reflected as
                  interest expense in the accompanying Consolidated Statement of
                  Operations for the year ended December 31, 2003.

                  Total interest expense for the 12% Notes incurred during 2003,
                  2002 and 2001was approximately $8.8 million, $9.9 million, and
                  $12.0 million, respectively.

         (e)      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  shareholders  of
                  Sherikon,  Inc.  in an  aggregate  amount  exceeding  the $2.5
                  million  promissory  note.  The Company has not made this $2.5
                  million   scheduled   payment   pending   resolution   of  the
                  indemnification claim; however,  $124,000 of interest has been
                  accrued and  outstanding  as of December 31, 2003.  During the
                  year ended  December 31, 2003,  2002 and 2001,  total interest
                  expense  on  the   subordinated   promissory  notes  with  the
                  Sherikon,   Inc.  shareholders  was  approximately   $124,000,
                  $232,000, and $665,000, respectively.

                                       F-21
<PAGE>

         (f)      Subordinated Note Payable to Ogden

                  As  partial   consideration  for  the  acquisition  of  Anteon
                  Virginia,  the Company entered into a subordinated  promissory
                  note  with  Ogden in the  principal  amount  of $8.5  million,
                  bearing  interest  at 12%  payable  quarterly.  The  principal
                  amount of the note was due in April 2004, but could be prepaid
                  without  penalty  at any time prior to  maturity.  On June 29,
                  2001,   Anteon   Virginia   purchased   from  Ogden  the  then
                  outstanding  principal amount of the subordinated note payable
                  to Ogden  due  from  the  Company  for  $3.2  million  in full
                  settlement of the Company's obligation to Ogden. In connection
                  with the payment,  the Company  recognized  interest income of
                  $519,000,  on the retirement of the subordinated  note payable
                  to  Ogden,  which is  included  in  interest  expense,  net of
                  interest income, on the accompanying Consolidated Statement of
                  Operations for the year ended December 31, 2001.

                  Total  interest  expense  incurred  on the  subordinated  note
                  payable  to Ogden for the year  ended  December  31,  2001 was
                  approximately $86,000, respectively.

         (g)      Subordinated Notes Payable to Stockholders

                  Concurrent  with  the  acquisition  of  Anteon  Virginia,  the
                  Company and its  majority  stockholder  at that time,  Azimuth
                  Technologies,  L.P., and three other stockholders entered into
                  subordinated  promissory  note  agreements  in  the  aggregate
                  principal amount of $7.5 million,  all bearing interest at 6%,
                  which were  payable  quarterly.  The  principal  amount of the
                  notes  was due in April  2004,  but could be  prepaid  without
                  penalty  at any time prior to  maturity.  In March  2002,  the
                  Company  used a portion  of the net  proceeds  from its IPO to
                  repay in full this subordinated promissory note.

                  Total  interest  expense  incurred on the  subordinated  notes
                  payable  for the years  ended  December  31, 2002 and 2001 was
                  approximately $90,000 and $450,000, respectively.

         (h)      Subordinated Convertible Note Payable - Related Party

                  On June 23,  1999,  the Company and Azimuth  Tech.  II LLC, an
                  affiliate  of  Azimuth   Technologies,   L.P.,  the  Company's
                  majority stockholder at that time, and Caxton-Iseman  Capital,
                  Inc., entered into a subordinated  convertible promissory note
                  agreement  for $22.5  million.  The note bore interest at 12%,
                  with interest payable  semi-annually each June 30 and December
                  31,  through  maturity on June 23, 2010. The Company could not
                  prepay the note prior to December 23, 2001, unless there was a
                  sale of the  Company  or an  initial  public  offering  of the
                  Company's  common stock.  On or after  December 23, 2001,  the
                  note could be prepaid by the Company without penalty. The note
                  was convertible into the Company's  non-voting common stock at
                  the option of the holder at any time at the  conversion  price
                  of $4.86 per share,  subject to  adjustment  for stock splits,
                  dividends  and  certain  issuances  of  common  stock.  At the
                  Company's option, accrued interest on the note could have been
                  paid either in cash or additional notes which are identical to
                  the above  note,  except  that the  additional  notes were not
                  convertible  into shares of the  Company's  common  stock.  In
                  March 2002, in connection  with the Company's IPO, the Company
                  repaid $4.4 million in accrued  interest  related to the note,
                  and  the   $22.5   million   principal   amount   subordinated
                  convertible  promissory  note 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.

                  During the years ended December 31, 2002 and 2001, the Company
                  incurred    approximately    $667,000,   and   $3.2   million,
                  respectively, of interest expense on these notes.

                                       F-22
<PAGE>

         (i)      Future Maturities

                  Scheduled future maturities under the Company's  indebtedness,
                  excluding the $2.5 million  Subordinated Notes Payable, are as
                  follows (in thousands):

                           Year ending December 31,

                           2004                       $         1,500
                           2005                                 1,500
                           2006                                 1,500
                           2007                                 1,500
                           2008                                 5,900
                           Thereafter                         144,376
                                                         --------------
                                                      $       156,276
                                                         ==============


         (j)      Interest Rate Swap Agreements

                  OBJECTIVES AND CONTEXT

                  The Company uses  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 is  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.

                  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.

                                       F-23
<PAGE>

                  Upon adoption of SFAS No. 133, the fair value of interest rate
                  swaps was recorded as a transition  adjustment to  accumulated
                  other  comprehensive  income.  This  resulted in a decrease of
                  $629,000,  net of  tax,  to  accumulated  other  comprehensive
                  income as of January 1, 2001. 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.

                  Over the next twelve months,  approximately $230,000 of losses
                  in  accumulated  other   comprehensive  loss  related  to  the
                  interest  rate  swaps are  expected  to be  reclassified  into
                  interest  expense as a yield  adjustment  of the  hedged  debt
                  obligation.  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.  The  Company's  interest  rate  swap  agreements
                  effectively  changed the Company's  interest rate exposure for
                  the  following  amounts,  as of  December  31,  2003,  to  the
                  following fixed rates:

<TABLE>
<CAPTION>

                                                                            Fair Value as
                                                                 Effective      of
                   Date of Swap    Notional     Maturity of     Fixed Rate  December 31,
                    Agreement       Amount     Swap Agreement  of Interest (in thousands)
                  --------------- ------------ --------------- ------------ -------------
<S>                      <C>      <C>                <C>         <C>            <C>
                    June 2001     $10 million   June 30, 2004     5.78%          $(230)
                  --------------- ------------ --------------- ------------ -------------
</TABLE>

                  The fair value of interest rate swaps is the estimated amount,
                  based on quoted market  prices,  that the  counterparty  would
                  (receive) pay to terminate the swap agreements at December 31,
                  2003.

(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  registration  statement  on Form S-3 filed with the SEC.
         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 other than in connection  with the rights  distribution
         described below.

                                       F-24
<PAGE>

         Depending  upon the rights of such  preferred  stock,  the  issuance of
         preferred  stock  could  have  an  adverse  effect  on  holders  of the
         Company's  common stock by delaying or  preventing a change in control,
         adversely  affecting  the voting power of the holders of common  stock,
         including the loss of voting  control to others,  making removal of the
         present  management more difficult,  or resulting in restrictions  upon
         the  payment of  dividends  and other  distributions  to the holders of
         common stock.

         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, 2003,
         2002 and 2001, consist of the following (in thousands), respectively:
<TABLE>
<CAPTION>

                                                                                      Years ended December 31,
                                                                           -----------------------------------------------
                                                                              2003             2002              2001
                                                                           -----------      ------------     -------------

         Current provision:
<S>                                                                     <C>                     <C>                <C>
               Federal                                                  $     21,718            10,245             1,321
               State                                                           2,305             1,431               810
               Foreign                                                           121               119                62
                                                                           -----------      ------------     -------------

                           Total current provision                            24,144            11,795             2,193
                                                                           -----------      ------------     -------------

         Deferred provision:
               Federal                                                       (1,145)             4,331             1,501
               State                                                           (226)               597               853
               Foreign                                                            --                --                55
                                                                           -----------      ------------     -------------

                           Total deferred provision                          (1,371)             4,928             2,409
                                                                           -----------      ------------     -------------

                           Total income tax provision                   $     22,773            16,723             4,602
                                                                           ===========      ============     =============
</TABLE>


                                       F-25
<PAGE>

         The income tax provisions  for the years ended December 31, 2003,  2002
         and 2001,  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,
                                                                             -----------------------------------------------
                                                                                2003             2002              2001
                                                                             -----------      ------------     -------------

<S>                                                                       <C>                     <C>                <C>
          Expected tax expense, computed at statutory rate                $      20,637           15,108             1,582
          State taxes, net of federal expense                                     1,501            1,259             1,259
          Nondeductible expenses                                                    332              330               304
          Goodwill amortization                                                      --               --             1,804
          Secondary offering expenses                                               265               --                --
          Increase in marginal federal rate                                          --               --               200
          Stock basis difference on sale of subsidiary                               --               --             (790)
          Foreign rate differences                                                 (15)               53              (21)
          Other                                                                      53             (27)               264
                                                                             -----------      ------------     -------------
                                                                          $      22,773           16,723             4,602
                                                                             ===========      ============     =============
</TABLE>


         The tax effect of temporary  differences that give rise to the deferred
         tax assets and  deferred  tax  liabilities  as of December 31, 2003 and
         2002 is presented below (in thousands):
<TABLE>
<CAPTION>

                                                                                    2003            2002
                                                                                --------------  -------------

         Deferred tax assets:
<S>                                                                            <C>              <C>
              Accrued expenses                                                 $         8,505  $       6,244
              Intangible assets, due to differences in amortization                      2,399          2,492
              Interest rate swaps                                                           89            298
              Accounts receivable allowances                                             1,607            706
              Property and equipment, due to differences in depreciation                 1,334            831
              Net operating loss and credit carryforwards                                  540            356
                                                                                --------------  -------------

                           Total gross deferred tax assets                              14,474         10,927
                           Less:  valuation allowance                                    (295)          (295)
                                                                                --------------  -------------
                           Net deferred tax assets                                      14,179         10,632
                                                                                --------------  -------------
         Deferred tax liabilities:
              Deductible goodwill, due to differences in amortization                    9,087          7,502
              Revenue recognition differences                                            5,536          6,616
              Accrued expenses                                                           6,630          5,741
              Property and equipment, due to differences in depreciation                 1,302            811
                                                                                --------------  -------------
                           Total deferred tax liabilities                               22,555         20,670
                                                                                --------------  -------------
                           Deferred tax liabilities, net                       $       (8,376)  $    (10,038)
                                                                                ==============  =============
</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.   Based  upon  the  level  of  historical  taxable  income,
         scheduled  reversal of deferred tax  liabilities,  and  projections  of
         future   taxable  income  over  the  periods  in  which  the  temporary
         differences   become   deductible   based  on  available  tax  planning
         strategies,  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 Company has
         established  a valuation  allowance as of December 31, 2003 and 2002 of
         $295,000 and $295,000, respectively against certain state net operating
         loss  carryforwards.  At December 31, 2003, the Company had federal and
         state net operating loss  carryforwards  of  approximately  $69,000 and
         $6.8 million, respectively. Carryforwards have various expiration dates
         beginning in 2004.

                                       F-26
<PAGE>

(11)     Employee Benefit Plans

         Employees of the Company may participate in 401(k)  retirement  savings
         plans, whereby employees may elect to make contributions  pursuant to a
         salary  reduction  agreement  upon  meeting  eligibility  requirements.
         Participants  may contribute up to 22 percent of salary in any calendar
         year to these  plans,  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  these  plans  of
         approximately  $8.3  million,  $7.1  million,  and $5.6 million for the
         years ended December 31, 2003, 2002, and 2001  respectively.  Employees
         vest immediately in the Company's contributions.

         ISI had a 401(k)  and a  profit-sharing  plan  ("ISI  Plan")  in effect
         covering all  employees at least 18 years of age. The ISI Plan provided
         for  both  employee  and  employer   contributions.   Employees  vested
         immediately in their own contributions. The Company's contributions are
         discretionary as determined by management. Employees become 100 percent
         vested in these contributions after five years of service.  The Company
         did not contribute to the ISI plan in 2003.  Profit-sharing expense for
         the year ended  December  31, 2003 was $1.8  million.  As of January 1,
         2004, the ISI Plan terminated and the ISI Plan assets were  transferred
         to the Company's 401(k) Plan.

(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,  2003,  an  aggregate of
                  383,540 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-27
<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, 2000        4,286,000   $   0.84-6.49     $     4.27       1,489,516
                           Granted                                 64,000            8.10           8.10
                           Exercised                             (82,680)       0.84-6.41           1.84
                           Cancelled or expired                 (250,480)       0.84-8.10           5.64
                                                              ------------  --------------   -------------

                        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 as of December 31, 2003     3,607,161    $ 0.84-33.75     $    13.59       1,520,301
                                                              ============  ==============   =============
</TABLE>


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

                                                          Shares outstanding                    Exercisable shares
                                              -------------------------------------------  ------------------------------
                                                Number        Weighted        Weighted      Number of        Weighted
                                                               average        average
                                                              exercise       remaining                       average
                                               of shares        price           life          shares      exercise price
                                              ------------  --------------  -------------  -------------  ---------------

                 December 31, 2003:
<S>                   <C>                         <C>          <C>                  <C>       <C>              <C>
                      $0.84                       411,618      $   0.84             0.8       411,618          $    0.84
                      $2.30 to $3.36               14,400      $   2.53             1.8        14,400          $    2.53
                      $4.02 to $4.66              336,000      $   4.61             2.7       336,000          $    4.61
                      $4.86 to $5.25              457,266      $   5.20             3.6       281,706          $    5.20
                      $6.25 to $6.49              531,600      $   6.30             3.5       257,200          $    6.30
                      $8.10                        19,800      $   8.10             5.3         1,200          $    8.10
                      $18.00 to $27.25          1,194,977      $  19.18             5.8       218,177          $   19.18
                      $23.30 to $33.75            641,500      $  28.54             7.5            --
                                              ------------                                 -------------
                                                3,607,161                                   1,520,301
                                              ============                                 =============
</TABLE>

         (b)      Directors' Deferred Compensation Plan

                  Under a plan established during 2000, certain of the Company's
                  directors  are  compensated  on a deferred  basis.  In lieu of
                  their annual  director fees,  each director under the plan has
                  the  choice of  receiving  deferred  compensation,  payable in
                  either:  (1) cash upon the  completion  of their  service as a
                  director,  equal to the  annual  fees due them  plus  interest
                  accruing  at an annual  rate equal to the  Company's  one-year
                  borrowing  cost in effect at the beginning of each quarter and
                  the end of each quarter,  (2) a stock appreciation right based
                  on  the   number  of  shares   that  could  be   acquired   in
                  consideration of the annual fees, or (3) a combination of each
                  of the above. The Company  recognized  approximately  $144,000
                  during  the  year  ended  December  31,  2001 as  compensation
                  expense.  The plan was terminated by the board effective as of
                  December 31, 2001.

         (c)      Pro Forma Disclosures

                  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.

                                       F-28
<PAGE>

                  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, 2003,
                  2002 and 2001 would approximate $32.4 million,  $23.0 million,
                  and $(1.3  million),  respectively,  using an expected  option
                  life of 5, 5, and 7 years,  respectively,  dividend yield rate
                  of  0%  and  volatility  rates  of  43.3%,   47.8%,  and  70%,
                  respectively,  and risk-free  interest rates of 3.28%,  2.78%,
                  and  4.84% for 2003,  2002 and  2001,  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 (Loss)

         Comprehensive  income (loss) includes the accumulated  foreign currency
         translation  adjustment and changes in the fair values of interest rate
         swaps. The Company presents  comprehensive income (loss) as a component
         of the accompanying  consolidated  statements of  stockholders'  equity
         (deficit).  The  amount of  accumulated  foreign  currency  translation
         adjustment was approximately  $69,000,  $(44,000) and $(43,000),  as of
         December  31,  2003,  2002  and  2001,  respectively.   The  amount  of
         accumulated other  comprehensive  income related to interest rate swaps
         was $230,000  ($141,000 net of tax) and $763,000  ($465,000 net of tax)
         as of December 31, 2003 and December 31, 2002, respectively.

(14)     Earnings (Loss) Per Common Share

         The  computations  of basic and diluted  income (loss) per common share
         are as follows:
<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>

<TABLE>
<CAPTION>

                                       F-29
<PAGE>

                                                      For the year ended
                                                      December 31, 2001

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

<S>                                   <C>                  <C>           <C>
         Basic losses per share       $         (82)       23,786,565    $    (0.01)
                                      ==============                     ===========
         Stock options                                             --
         Diluted losses per share     $         (82)       23,786,565    $    (0.01)
                                      ==============                     ===========
</TABLE>


(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,  2003 and 2002,  the gross
                  amount of  property  and  equipment  and  related  accumulated
                  amortization recorded under capital leases were as follows:

<TABLE>
<CAPTION>
                                                                  2003               2002
                                                              -------------     -------------
<S>                                                           <C>               <C>
                           Property and equipment             $    1,037        $       --
                           Less accumulated amortization           (265)                --
                                                              -------------     -------------
                                                              $      772        $       --
                                                              =============     =============
</TABLE>

                  Amortization  of assets held under capital  leases is included
                  in  depreciation  expense  in  the  accompanying  Consolidated
                  Statements of Operations.

                  The Company also leases facilities and certain equipment under
                  operating lease  agreements  expiring at various dates through
                  2010.  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,  2003,  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>
                           2004                                               $       421       $        29,991
                           2005                                                       212                23,785
                           2006                                                       132                20,800
                           2007                                                       121                17,173
                           2008                                                        91                14,520
                           Thereafter                                                  --                45,304
                                                                               -----------     ----------------
                                    Total minimum lease payments              $       977       $       151,573
                                                                                                ================
                           Less estimated executory costs (at 7.25%)                 (71)
                                                                               -----------
                           Net minimum lease payments                                 906
                           Less amount representing interest
                              (at rates ranging from 5.88% to 10.50%)                 100
                                                                               -----------
                           Present value of net minimum capital                       806
                           lease payments
                           Less current installments of obligations
                           under capital leases                                       341
                                                                               -----------
                           Obligations under capital leases,
                           excluding current installments                     $       465
                                                                                ===========

</TABLE>

                                       F-30
<PAGE>

                  Rent expense  under all  operating  leases for the years ended
                  December  31,  2003,  2002 and 2001  was  approximately  $25.4
                  million, $24.2 million, and $23.1 million, respectively.

         (b)      Management Fees

                  Effective   June  1,  1999,   the  Company   entered  into  an
                  arrangement with Caxton-Iseman Capital, Inc., an affiliate and
                  advisor to the  Company,  whereby the Company was  required to
                  pay  $1.0  million  to  Caxton-Iseman   Capital,   Inc.  as  a
                  management fee.

                  Effective  December 31, 2001,  the Company  entered into a new
                  agreement with Caxton-Iseman Capital, Inc. that terminated the
                  management  fee  agreement.   Under  the  terms  of  this  new
                  agreement,  the Company  was  obligated  to pay  Caxton-Iseman
                  Capital,  Inc.  a  one-time,   $3.6  million  fee,  which  was
                  recognized as general and  administrative  expense in 2001 and
                  is  reflected  as due to  related  party  in the  accompanying
                  consolidated  balance  sheet as of  December  31,  2001.  As a
                  result,  Caxton-Iseman no longer provides  management advisory
                  services to the Company. Any further services requested by the
                  Company that are provided by  Caxton-Iseman,  if any,  will be
                  paid for by the  Company  at rates  negotiated  at that  time.
                  During the year ended December 31, 2001, the Company  incurred
                  $1.0 million of management  fees with  Caxton-Iseman  Capital,
                  Inc.

         (c)      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.

(16)     Secondary Offering Expenses

         On  September  22, 2003,  certain of the  Company's  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.  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 a contribution to 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-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                 303        29,484             115     (10,336)         19,566
             assets
           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 current
             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 and other expense (income), net          14,461         9,805            (22)           --         24,244
         Minority interests in (earnings) losses
           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)

<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:
             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
             Loss on disposals of property and
             equipment                                               --           170              20             190
             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
             obligations                                             --         (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>


                                                                       As of December 31, 2002
                                              ---------------------------------------------------------------------------

                                                                                                          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         $        (17)  $     3,659  $        624    $         --    $      4,266
           Accounts receivable, net                     --      188,466           593              --         189,059
           Prepaid expenses and other                1,288       13,365           418              --          15,071
             current assets
           Property and equipment, net               2,364        7,505           123              --           9,992
           Due from Parent                         (22,607)      22,746         (139)              --              --
           Investment in and advances to            23,898                                                         --
             subsidiaries                                       (2,630)            --        (21,268)
           Goodwill, net                            94,946       43,673            --              --         138,619
           Intangible and other assets, net         65,863        1,621           201        (60,000)           7,685
                                             -------------  -----------  ------------    ------------     -----------

             Total assets                    $     165,735  $   278,405  $      1,820    $   (81,268)     $   364,692
                                             =============   =========== ============    ============     ===========

           Indebtedness                         $   98,701  $    67,000  $        --     $   (60,000)     $   105,701
           Accounts payable                            526       46,804           300              --          47,630
           Accrued expenses and other                2,582       65,401           394              --          68,377
             liabilities
           Deferred revenue                                       5,512           189              --           5,701
                                                        --
           Other long-term liabilities                            8,069           229              --           8,298
                                             -------------   ----------  ------------    ------------     -----------

             Total liabilities                     101,809      192,786         1,112        (60,000)         235,707
           Minority interest in subsidiaries            --           --           156              --             156
           Total stockholders' equity
            (deficit)                               63,926       85,619           552        (21,268)         128,829
                                             -------------   ----------  ------------     -----------     -----------

           Total liabilities and
             stockholders' equity (deficit)  $     165,735  $   278,405  $      1,820    $   (81,268)     $   364,692
                                             =============   ==========  ============    ============     ===========

</TABLE>


                                                                 F-35
<PAGE>

<TABLE>
<CAPTION>



                                                                     For the Year Ended December 31, 2002
                                                  ----------------------------------------------------------------------------
                                                                         (reclassified-see note 2(r))
                                                                                                              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 (income), net               13,791         7,850         (15)              --            21,626
       Minority interest in (earnings) losses
         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-36
<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
       ----------------------------------------------------------------------------------------------------------------------
                                                                                   (in thousands)

<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
           equipment                                                 632          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 (losses) 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 sale of building                              --          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)
          Payment 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-37
<PAGE>

<TABLE>
<CAPTION>


                                                                       For the Year Ended December 31, 2001
                                                     --------------------------------------------------------------------------
                                                                           (reclassified-see note 2(r))
                                                                                                                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                                 $          --  $    716,616   $       8,662    $  (10,255)    $    715,023
           Costs of revenues                                   --       629,729           7,868       (10,255)         627,342
                                                    --------------  -------------   -------------    -----------    -----------

             Gross profit                                      --        86,887             794             --          87,681

           Total operating expenses                         4,123        56,262             431             --          60,816
                                                    --------------  -------------   -------------    -----------    -----------

             Operating income                             (4,123)        30,625             363             --          26,865

           Other income                                        --         4,046              --             --           4,046
           Interest expense (income), net                  16,863         9,507            (17)             --          26,353
           Minority interest in (earnings) losses
             of subsidiaries                                 (14)            32            (56)             --            (38)
                                                    --------------  -------------   -------------    -----------    -----------

            Income (loss) before provision for
              income taxes                               (21,000)        25,196             324             --           4,520
           Provision (benefit) for income taxes           (8,070)        12,555             117             --           4,602
                                                    --------------  -------------   -------------    -----------    -----------

           Net income (loss)                        $    (12,930)  $     12,641   $         207    $        --    $       (82)
                                                    ==============  =============   =============    ===========    ===========

</TABLE>


                                                                 F-38
<PAGE>

<TABLE>
<CAPTION>

                                                                      For the Year Ended December 31, 2001
                                                      ---------------------------------------------------------------------------
                                                                                                                     Consolidated
                                                            Anteon                         Non-                         Anteon
                   Condensed Consolidated                 International    Guarantor     Guarantor    Elimination    International
                   Statements of Cash Flows                Corporation    Subsidiaries  Subsidiaries    Entries      Corporation
          -----------------------------------------------------------------------------------------------------------------------
                                                                                 (in thousands)

<S>                                                       <C>             <C>          <C>                          <C>
          Net income (loss)                               $    (12,930)   $    12,641  $       207             --   $      (82)
          Adjustments  to reconcile net income (loss)
             to  net  cash   provided  by  (used  in)
             operating activities:
             Gain on sales and closures of business                  --       (4,046)           --             --       (4,046)
             Depreciation    and    amortization   of
              property and equipment                                885         6,182           43             --        7,110
             Goodwill amortization                                5,334         1,370           --             --        6,704
             Other intangibles amortization                       2,223            98           --             --        2,321
             Amortization of noncompete agreements                   --           349           --             --          349
             Amortization of deferred financing costs               697            --           --             --          697
             Loss  on   disposals   of  property  and
              equipment                                              --           791           --             --          791
             Deferred income taxes                                (476)         3,988           --             --        3,512
             Minority  interest in earnings  (losses)
              of subsidiaries                                        14          (32)           56             --           38
             Changes in assets and  liabilities,  net
              of acquired assets and liabilities                 43,401      (20,973)        (278)        (1,665)       20,485
                                                          -------------   -----------  -------------  -----------   -----------

           Net cash  provided by (used in)  operating
            activities                                           39,148           368           28        (1,665)       37,879
                                                          -------------   -----------  -------------  -----------   -----------

          Cash flows from investing activities:
             Purchases of property and  equipment and
              other assets                                        (314)       (1,774)         (93)             --      (2,181)
             Acquisition  of  Sherikon  Inc.,  net of
              cash acquired                                        (21)            --           --             --         (21)
             Acquisition  of  SIGCOM,   net  of  cash
              acquired                                               --      (10,975)           --             --     (10,975)
              Proceeds from sales of businesses                      --        11,464           --             --       11,464
              Other, net                                             --             6           --             --            6
              Intercompany transfers                              (338)           121          217             --           --
                                                          -------------   -----------  -------------  -----------   -----------

           Net cash  provided by (used in)  investing
            activities                                            (673)       (1,158)          124             --      (1,707)
                                                          -------------   -----------  -------------  -----------   -----------

          Cash flows from financing activities:
             Principal  payments  on bank  and  other
              notes payable                                          --         (185)           --             --        (185)
             Payments    on     business     purchase
              consideration  payable and subordinated
              notes payable                                     (5,000)       (1,185)           --             --      (6,185)
             Payments on note payable to Ogden                  (3,212)            --           --             --      (3,212)
             Principal payments on Term Loan A                 (12,946)            --           --             --     (12,946)
             Proceeds from revolving credit facility            771,200            --           --             --      771,200
             Principal  payments on revolving  credit
              facility                                        (784,500)            --           --             --    (784,500)
             Distribution to parent for debt service            (1,665)            --           --          1,665           --
             Proceeds from minority interest, net                   152            --           --             --          152
                                                          -------------   -----------  -------------  -----------   -----------
             Net   cash   provided   by   (used   in)
              financing activities                             (35,971)       (1,370)           --          1,665     (35,676)
                                                          -------------   -----------  -------------  -----------   ----------

          Net  increase  (decrease)  in cash and cash
            equivalents                                           2,504       (2,160)          152             --          496

          Cash and  cash  equivalents,  beginning  of
            year                                                    844           491           99             --        1,434
                                                          -------------   -----------  -------------  -----------   -----------
          Cash and cash equivalents, end of year          $       3,348   $   (1,669)  $       251    $        --   $    1,930
                                                          =============   ===========  =============  ===========   ===========
</TABLE>


                                                                 F-39
<PAGE>


(18)     Quarterly Results of Operations (Unaudited)

         The following  summarizes the unaudited quarterly results of operations
         for the years ended  December 31, 2003 and 2002 (in  thousands,  except
         per share data):
<TABLE>
<CAPTION>


          Quarter ended:                        March 31        June 30      September 30      December 31       Total
                                              --------------  ------------  ---------------   ---------------  -----------
          2003
<S>                                         <C>                   <C>              <C>               <C>        <C>
              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

          2002
              Revenues                      $       192,629       201,938          214,314           216,945      825,826
              Operating income                       14,517        16,021           16,549            17,307       64,394
              Net income                              4,134         5,509            8,166             8,635       26,444
              Basic earnings per common
               share                                   0.16          0.16             0.24              0.25         0.82
              Diluted earnings per common
               share:                                  0.14          0.15             0.22              0.24         0.78
</TABLE>

         During the second  quarter of 2003,  the Company  acquired  Information
         Spectrum, Inc. (note 4(b)).

(19)     Segment Reporting

         Based on the Company's  organization through July 20, 2001, the Company
         reported two business segments:  the Company's  government  contracting
         business and the Company's commercial,  custom training and performance
         solutions  group  (collectively,  "IMC",  which was sold by the Company
         during  the third  quarter of fiscal  2001).  Although  the  Company is
         organized by strategic business unit, 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  the  Company  with  Vector  Data  Systems,   Inc.,
         Techmatics,  Inc., Analysis & Technology, Inc., Sherikon, Inc., SIGCOM,
         and ISI. These prior  acquisitions  were  consolidated  and merged into
         Anteon  Corporation,  a wholly owned  subsidiary  of the  Company.  The
         amounts shown below reflect both IMC Commercial,  the unit sold on July
         20, 2001 (see note 3(c)), and IMC Government.  Immediately prior to the
         sale of IMC Commercial,  the Company integrated the IMC Government unit
         into the government contracting business.

         The Company's chief operating  decision maker utilized both revenue and
         earnings before interest and taxes in assessing  performance and making
         overall operating decisions and resource allocations.  Certain indirect
         costs  such  as  corporate  overhead  and  general  and  administrative
         expenses were  allocated to the segments.  Allocation of overhead costs
         to  segments  was  based  on  measures  such as  revenue  and  employee
         headcount.  General and administrative  costs was allocated to segments
         based  on the  government-required  three-factor  formula,  which  used
         measures of revenue, labor and net book value of fixed assets. Interest
         expense,  investment income,  gains on sales and closures of businesses
         and income taxes was not allocated to the Company's segments.


                                       F-40
<PAGE>


         The following tables present  information about the Company's  segments
         as of and for the year ended December 31, 2001 (in thousands).
<TABLE>
<CAPTION>

                   As of and for the year ended               Government     Interactive
                        December 31, 2001                     Contracting       Media         Eliminations    Consolidated
          -----------------------------------------------    --------------  -------------   ---------------  --------------


<S>                                                        <C>                                                      <C>
          Total assets                                     $       306,651             --                --         306,651
                                                             ==============  =============   ===============  ==============

          Sales to unaffiliated customers                  $       696,420         18,603                --         715,023

          Intersegment sales                                            36             15              (51)              --
                                                             --------------  -------------   ---------------  --------------

                                                                   696,456         18,618              (51)         715,023
                                                             ==============  =============   ===============  ==============

          Operating income, net                            $        25,839          1,026                --   $      26,865

              Gains on sales and closures of businesses                                                               4,046
              Interest expense, net                                                                                  26,353
              Minority interest in earnings of                                                                         (38)
              subsidiaries
                                                                                                              --------------

              Income before provision for income taxes                                                                4,520

              Provision for income taxes                                                                              4,602
                                                                                                              --------------

              Net loss                                                                                        $        (82)
                                                                                                              ==============
</TABLE>

                                                                 F-41
<PAGE>