<PAGE>

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

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

                                   FORM 10-Q

          [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

               FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 16, 2001

                                       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  1-12385

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

                         NEWPORT NEWS SHIPBUILDING INC.
             (Exact name of registrant as specified in its charter)


Delaware                                               74-1541566
--------                                               ----------
State or Other Jurisdiction of                         IRS Employer
Incorporation or Organization                          Identification No.

4101 Washington Avenue, Newport News, Virginia         23607-2770
----------------------------------------------         ----------
Address of Principal Executive Offices                 Zip Code

                                 (757) 380-2000
               Registrant's Telephone Number, Including Area Code

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

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 the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.

Common Stock, par value $.01 per share: 35,397,728 shares outstanding and
associated preferred stock purchase rights as of October 15, 2001.
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>


                                                                                              PAGE
                                                                                              ----
<S>                                                                                           <C>
Part I--Financial Information
  Newport News Shipbuilding Inc.
     Consolidated Statements of Earnings....................................................     2
     Consolidated Balance Sheets............................................................     4
     Consolidated Statements of Cash Flows..................................................     5
     Notes to Consolidated Financial Statements.............................................     6
     Management's Discussion and Analysis of Financial Condition and Results of Operations..     9

Part II--Other Information
  Item 1. Legal Proceedings.................................................................    12
  Item 2. Changes in Securities and Use of Proceeds.........................................     *
  Item 3. Defaults Upon Senior Securities...................................................     *
  Item 4. Submission of Matters to a Vote of Security Holders...............................     *
  Item 5. Other Matters.....................................................................    12
  Item 6. Exhibits and Reports on Form 8-K..................................................    13

</TABLE>


*No response to this item is included herein for the reason that it is
inapplicable or the answer to such item is negative.


THIS QUARTERLY REPORT ON FORM 10-Q SHOULD BE READ IN CONJUNCTION WITH THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2000.


                                       1
<PAGE>

                                     PART I

                             FINANCIAL INFORMATION

                         NEWPORT NEWS SHIPBUILDING INC.

                      CONSOLIDATED STATEMENTS OF EARNINGS
                                  (UNAUDITED)
<TABLE>
<CAPTION>


                                                             Quarter Ended
                                                      ------------------------------
                                                      September 16,    September 17,
                                                           2001            2000
                                                      -------------    -------------
<S>                                               <C>             <C>
Millions (Except Shares and Per Share Amounts)

Revenues........................................     $      578      $      493
Operating Costs and Expenses....................           (522)           (445)
Other Income (Expense), net.....................              1               2
                                                     ----------      ----------
Operating Earnings..............................             57              50
Interest Expense, net of interest capitalized...            (13)            (13)
                                                     ----------      ----------
Earnings Before Income Taxes....................             44              37
Provision for Income Taxes......................            (17)            (16)
                                                     ----------      ----------
Net Earnings....................................     $       27      $       21
                                                     ==========      ==========

Weighted Average Number of Common Shares Outstanding

    Basic ......................................     29,531,632      30,359,834
                                                     ==========      ==========
    Diluted ....................................     31,330,147      32,143,996
                                                     ==========      ==========


Net Earnings Per Common Share

    Basic.......................................     $      .90      $      .71
                                                     ==========      ==========
    Diluted.....................................     $      .85      $      .67
                                                     ==========      ==========
Dividends Declared Per Common Share.............     $      .04      $      .04
                                                     ==========      ==========

</TABLE>



The accompanying notes are an integral part of these consolidated statements of
                                   earnings.

                                       2
<PAGE>

                                     PART I

                             FINANCIAL INFORMATION

                         NEWPORT NEWS SHIPBUILDING INC.

                      CONSOLIDATED STATEMENTS OF EARNINGS
                                  (UNAUDITED)
<TABLE>
<CAPTION>


                                                               Nine Months Ended
                                                           ----------------------------
                                                           September 16,  September 17,
                                                               2001           2000
                                                           -------------  -------------
<S>                                               <C>                 <C>
Millions (Except Shares and Per Share Amounts)

Revenues........................................         $    1,639      $    1,494
Operating Costs and Expenses....................             (1,481)         (1,346)
Other Income (Expense), net.....................                 (1)              3
                                                         ----------      ----------

Operating Earnings..............................                157             151
Interest Expense, net of interest capitalized...                (37)            (38)
                                                         ----------      ----------

Earnings Before Income Taxes....................                120             113
Provision for Income Taxes......................                (48)            (47)
                                                         ----------      ----------
Net Earnings....................................         $       72      $       66
                                                         ==========      ==========

Weighted Average Number of Common Shares Outstanding

   Basic .......................................         29,569,044      31,124,574
                                                         ==========      ==========
   Diluted  ....................................         31,364,229      32,539,751
                                                         ==========      ==========

Net Earnings Per Common Share

   Basic........................................         $     2.43      $     2.12
                                                         ==========      ==========
   Diluted......................................         $     2.29      $     2.03
                                                         ==========      ==========

Dividends Declared Per Common Share.............         $      .12      $      .12
                                                         ==========      ==========

</TABLE>



The accompanying notes are an integral part of these consolidated statements of
                                   earnings.

                                       3
<PAGE>

                         NEWPORT NEWS SHIPBUILDING INC.

                          CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>


                                                                       September 16,   December 31,
                                                                            2001           2000
                                                                       -------------   ------------
                                                                        (Unaudited)     (Audited)
<S>                                                                <C>             <C>
Millions (Except Share Amounts)
ASSETS
Current Assets
Cash and Cash Equivalents........................................         $   66         $    3
Accounts Receivable..............................................            131            135
Contracts in Process.............................................            359            265
Inventory........................................................             50             50
Deferred Income Taxes............................................            110             90
Other Current Assets.............................................             19             13
                                                                          ------         ------

Total Current Assets.............................................            735            556
                                                                          ------         ------

Noncurrent Assets
Property, Plant and Equipment, net...............................            666            692
Other Assets.....................................................            237            228
                                                                          ------         ------

Total Noncurrent Assets..........................................            903            920
                                                                          ------         ------

                                                                          $1,638         $1,476
                                                                          ======         ======

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Trade Accounts Payable...........................................         $   87         $   51
Short-Term Debt..................................................             46             29
Postretirement Benefits..........................................            138            134
Other Accrued Liabilities........................................            346            223
                                                                          ------         ------

Total Current Liabilities........................................            617            437
                                                                          ------         ------

Noncurrent Liabilities
Long-Term Debt...................................................            432            498
Deferred Income Taxes............................................            247            245
Other Long-Term Liabilities......................................             38             38
                                                                          ------         ------

Total Noncurrent Liabilities.....................................            717            781
                                                                          ------         ------

Commitments and Contingencies (See Note 3)


Stockholders' Equity
Common Stock, $.01 par value -
  authorized 70,000,000 shares; issued 35,399,967 shares at
  September 16, 2001 and 35,352,730 shares at December 31, 2000..              1              1
Paid-In Capital..................................................            452            384
Retained Earnings................................................            236            168
Unearned Compensation............................................             (1)            (1)
Stock Employee Compensation Trust (SECT)  - shares held of
  5,866,096 and 5,655,695 at September 16, 2001 and
  December 31, 2000, respectively................................           (384)          (294)
                                                                          ------         ------
Total Stockholders' Equity.......................................            304            258
                                                                          ------         ------
                                                                          $1,638         $1,476
                                                                          ======         ======
</TABLE>
   The accompanying notes are an integral part of these consolidated balance
                                    sheets.

                                       4
<PAGE>

                         NEWPORT NEWS SHIPBUILDING INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)
<TABLE>
<CAPTION>

                                                                  Nine Months Ended
                                                            ------------------------------
                                                            September 16,    September 17,
                                                                 2001            2000
                                                            -------------    -------------
<S>                                                 <C>                 <C>
Millions
Cash Flows from Operating Activities:
Net Earnings......................................              $  72           $  66
Adjustments to Reconcile Net Earnings to
  Net Cash Provided by Operating Activities -
     Depreciation and Amortization................                 41              41
     Deferred Income Taxes........................                (18)             (2)
     Loss on Asset Disposition....................                  3               6
     Equity Income................................                 (4)             (4)
     Changes in Components of Working Capital -
      Decrease (Increase) in -
       Accounts Receivable........................                  5             (50)
       Contracts in Process.......................                (94)             46
       Inventory .................................                  -              (2)
       Other Current Assets.......................                 (6)              3
      Increase (Decrease) in -
       Trade Accounts Payable.....................                 36             (22)
       Accrued Liabilities and Other..............                130              49
     Other, net...................................                  4              (3)
                                                                -----           -----
Net Cash Provided by Operating Activities.........                169             128
                                                                -----           -----

Cash Flows from Investing Activities:
Capital Expenditures..............................                (18)            (13)
Other.............................................                  1              (4)
                                                                -----           -----
Net Cash Used by Investing Activities.............                (17)            (17)
                                                                -----           -----

Cash Flows from Financing Activities:
Decrease in Revolving Credit Facility.............                (34)             (2)
Payments on Short-Term Debt.......................                (15)            (15)
Purchase of Common Stock..........................                (10)            (73)
Stock Options Exercised...........................                (24)            (16)
Dividends Paid....................................                 (4)             (4)
Other.............................................                 (2)             (1)
                                                                -----           -----

Net Cash Used by Financing Activities.............                (89)           (111)
                                                                -----           -----

Net Increase in Cash and Cash Equivalents.........                 63               -
Cash and Cash Equivalents at Beginning of Period..                  3               2
                                                                -----           -----

Cash and Cash Equivalents at End of Period........              $  66           $   2
                                                                =====           =====

Cash Paid During the Period for Income Taxes......              $   1           $  41
                                                                =====           =====

Cash Paid During the Period for Interest..........              $  28           $  32
                                                                =====           =====
</TABLE>
The accompanying notes are an integral part of these consolidated statements of
                                  cash flows.

                                       5
<PAGE>

                         NEWPORT NEWS SHIPBUILDING INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

1. BASIS OF PREPARATION

Unless the context otherwise requires, the term "Company" refers to Newport News
Shipbuilding Inc. ("NNS") and its consolidated subsidiaries.  Although certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to SEC rules and regulations, the Company believes
that the disclosures included herein are adequate to make the information
presented not misleading.  Operating results for the three and nine month
periods ended September 16, 2001 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2001. These unaudited
financial statements should be read in conjunction with the audited financial
statements and notes thereto included in the Company's Annual Report on Form 10-
K for the year ended December 31, 2000.

2. EARNINGS PER SHARE

Basic earnings per common share is computed by dividing net earnings by the
weighted average number of shares of common stock outstanding during the period.
Diluted earnings per common share is computed assuming the terms and conditions
for the contingent shares and common stock options were met and converted on
September 16, 2001 and September 17, 2000, respectively.

The Company established a Stock Employee Compensation Trust ("SECT") in 1997 to
fund a portion of its obligations arising from various employee compensation
plans. The Company issued shares to the SECT from treasury stock and the SECT
engages in open market purchases. As of September 16, 2001, the SECT held 5.9
million shares of the Company's common stock, which are not considered
outstanding in computing earnings per share.

3. COMMITMENTS AND CONTINGENCIES

Government Contracting

As a general practice in the defense industry, the Defense Contract Audit Agency
("DCAA") and other government agencies continually review the cost accounting
and other practices of government contractors, including the Company, conduct
other investigations, and make specific inquiries.  In the course of those
reviews and investigations, cost accounting and other issues are identified,
discussed and settled, or resolved through legal proceedings.  In some cases,
recognition of the inherent uncertainties and costs of litigation may cause
management to decide to settle a matter.

As with other government contractors, the U.S. Government has from time to time
recommended that certain of the Company's contract prices be reduced, or costs
allocated to its government contracts be disallowed.  Some of these
recommendations involve substantial amounts.  In the past, as a result of such
audits and other investigations and inquiries, the Company has on occasion
agreed to adjustments to its contract prices and the costs allocated to its
government contracts.  The Company is currently involved in several such audits
and other investigative proceedings with the U.S. Government.  The Company is
also engaged in settlement discussions on certain matters and has filed a
lawsuit concerning specific cost accounting issues.

As previously reported, the DCAA conducted a post-award audit of the contract to
build the aircraft carrier Ronald Reagan.  In April 1998, the DCAA issued its
official audit report ("Audit Report") in which it concluded that the cost or
pricing data supplied by the Company to the U.S. Navy was not current, accurate,
and complete and, therefore, projected labor and overhead costs were overstated
for the Reagan contract.  Accordingly, the DCAA recommended to the U.S. Navy's
contracting officer that the contract price for Reagan be reduced by
approximately $135 million.  After giving consideration to the cost sharing
provisions in the contract, the proposed price reduction could generate an
operating income adjustment of approximately $47 million over the life of the
contract.

                                       6
<PAGE>

The Company disagrees with the conclusions of the Audit Report and the DCAA's
recommendation to the contracting officer.  Management believes that the Company
has substantial and meritorious grounds on which to contest any action by the
U.S. Navy seeking to reduce the Reagan contract price and intends to pursue its
defenses in response to any attempt by the U.S. Navy to make such a reduction.
Management believes that the final resolution of this matter will not have a
material impact on the financial position, results of operations, or cash flows
of the Company.

In addition to the DCAA audit, a civil investigation, also focused on the cost
or pricing data that the Company supplied to the U.S. Navy in connection with
the Reagan contract, is being conducted jointly by the Department of Defense,
the Department of Justice, the U.S. Attorney's Office for the Eastern District
of Virginia, and the Naval Criminal Investigative Service.  Management believes
the Company complied with all applicable laws.

During the first quarter of 1999, the Company received a letter from the U.S.
Navy Supervisor of Shipbuilding forwarding a DCAA final audit report questioning
approximately $83 million of costs allocated to U.S. Government contracts as
Independent Research and Development ("IR&D").  The letter requested additional
comments regarding why NNS considers its existing cost accounting practice to be
compliant with the Cost Accounting Standards.  The Company provided such
comments in the second quarter of 1999.  In September 2000, the Department of
Defense Inspector General's Office issued a subpoena to the Company for certain
records pertaining to this matter.  The Company is in the process of responding
to that subpoena.  Management believes that the final resolution of this matter
will not have a material impact on the financial position, results of
operations, or cash flows of the Company.

Litigation

The Company is both a plaintiff and defendant in matters of a varying nature
related to the normal conduct of its business. In the opinion of management, the
outcome of these proceedings will not have a material adverse effect on the
financial position, results of operations, or cash flows of the Company.

4. REPORTABLE SEGMENTS

The Company's reportable operating segments represent strategic initiatives
supporting the entire lifecycle of U.S. Navy ships - Construction, Fleet
Services, and Engineering, as well as a logical linking of similar contracts
based on funding provisions.  Engineering contracts generally receive funding on
an annual basis, Fleet Services contracts typically span one month to three
years, and Construction contracts generally span a period of three or more
years.  The reportable segments are managed separately because each business has
different customer requirements based on the nature of the services provided.
The Company evaluates performance based on profit or loss from operations before
interest and income taxes, not including nonrecurring gains and losses.

Information about Revenues and Operating Earnings
For the Quarters Ended September 16, 2001 and September 17, 2000, respectively
(in millions)
<TABLE>
<CAPTION>

                                                            Fleet                   All
                                             Construction  Services  Engineering  Others (2)  Total
                                             ------------  --------  -----------  ----------  -----
<S>                                          <C>           <C>       <C>          <C>         <C>
2001
----
Revenues...................................        $300      $189          $84         $5    $578
Segment Operating Earnings - reported......          33        18            5          1      57
Segment Operating Earnings - adjusted (1)..          35        20            5          1      61

2000
----
Revenues...................................        $222      $188          $80         $3    $493
Segment Operating Earnings.................          27        17            5          1      50

</TABLE>
1.  Adjusted segment operating earnings exclude the transaction costs associated
    with the proposed acquisition of the Company by General Dynamics
    Corporation.

                                       7
<PAGE>

2. Other business activities include valve and pump repair and technical
   services, equity investments, and corporate activities.


Information about Revenues and Operating Earnings
For the Nine Months Ended September 16, 2001 and September 17, 2000,
respectively (in millions)
<TABLE>
<CAPTION>

                                                            Fleet                    All
                                             Construction  Services  Engineering  Others (2)  Total
                                             ------------  --------  -----------  ----------  ------
<S>                                          <C>           <C>       <C>          <C>         <C>
2001
----
Revenues...................................       $804      $586         $238        $11     $1,639
Segment Operating Earnings - reported......         88        56           14         (1)       157
Segment Operating Earnings - adjusted (1)..         94        60           14          2        170

2000
----
Revenues...................................       $655      $599         $228        $12     $1,494
Segment Operating Earnings.................         78        56           14          3        151

</TABLE>
1.  Adjusted segment operating earnings exclude the transaction costs associated
    with the proposed acquisition of the Company by General Dynamics
    Corporation.

2.  Other business activities include valve and pump repair and technical
    services, equity investments, and corporate activities.

A reconciliation of the totals reported for the operating segments to the
applicable line items in the consolidated financial statements is as follows:

Reconciliation of Segment Revenues and Operating Earnings to Consolidated
Amounts
For the Quarters Ended September 16, 2001 and September 17, 2000, respectively
(in millions)
<TABLE>
<CAPTION>
                                                     2001   2000
                                                    -----  -----
<S>                                                 <C>    <C>
Revenues
--------
Total revenues for reportable segments............  $ 573  $ 490
Other revenues....................................      5      3
                                                    -----  -----
     Total consolidated revenues..................  $ 578  $ 493
                                                    =====  =====

Operating Earnings
------------------
Total operating earnings for reportable segments..  $  56  $  49
Other operating earnings..........................      1      1
                                                    -----  -----
     Total consolidated operating earnings........  $  57  $  50
                                                    =====  =====
</TABLE>

Reconciliation of Segment Revenues and Operating Earnings to Consolidated
Amounts
For the Nine Months Ended September 16, 2001 and September 17, 2000,
respectively (in millions)
<TABLE>
<CAPTION>
                                                            2001         2000
                                                       -----------   --------
<S>                                                         <C>           <C>
Revenues
--------
Total revenues for reportable segments............          $1,628      $1,482
Other revenues....................................              11          12
                                                       -----------   ---------
 Total consolidated revenues......................          $1,639      $1,494
                                                       ===========   =========

Operating Earnings
-----------------
Total operating earnings for reportable segments..          $  158      $  148
Other operating earnings..........................              (1)          3
                                                       -----------   ---------
 Total consolidated operating earnings............          $  157      $  151
                                                       ===========   =========
</TABLE>

                                       8
<PAGE>

Information about Assets (in millions)
<TABLE>
<CAPTION>

                                                                   Fleet                     All
                                                    Construction  Services  Engineering   Others (1)  Total
                                                    ------------  --------  -----------   ---------   -----
<S><C>
September 16, 2001................................         $ 297      $132       $   52      $    9    $490

December 31, 2000.................................           236       122           30          12     400

</TABLE>

1.  As the Company has a fully integrated production facility, its fixed assets
are commingled and not identified with specific profit centers.  Therefore,
segment assets consist only of accounts receivable ("A/R") and contracts in
process ("CIP") balances applicable to identified segments.


Reconciliation of Segment Assets to Consolidated Amounts (in millions)
<TABLE>
<CAPTION>

                                             September 16,  December 31,
<S>                                          <C>            <C>
                                                     2001           2000
                                                  ----------    -----------
Assets
------
Total A/R and CIP for reportable segments..         $  481        $  388
Other unallocated A/R and CIP..............              9            12
Other unallocated amounts..................          1,148         1,076
                                                    ------        ------
     Total consolidated assets.............         $1,638        $1,476
                                                    ======        ======
</TABLE>

5. SUBSEQUENT EVENT

Partial Sale of Equity Investment

Subsequent to the close of the accounting quarter, the Company sold 25% of its
equity investment in Abu Dhabi Ship Building.  The transaction will not have a
material impact on the Company's 2001 financial position, results of operations,
or cash flows.


          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS

BUSINESS OVERVIEW

The Company's primary business is the design, construction, repair, overhaul and
refueling of nuclear-powered aircraft carriers and submarines for the U.S. Navy.
The Company also provides ongoing fleet services for other U.S. Navy vessels
through work in overhauling, lifecycle engineering, and repair. The U.S.
Government accounted for approximately 99% and 98% of the Company's revenues for
the quarterly periods ended September 16, 2001 and September 17, 2000,
respectively.
<TABLE>
<CAPTION>

Results of Operations

                                               For the Third Quarter Ended
--------------------------------------------------------------------------------
                                                  2001           2000
--------------------------------------------------------------------------------
<S><C>
Millions

Revenues....................................     $ 578          $ 493
Operating Earnings..........................        57             50

</TABLE>

Revenues for the third quarter of 2001 increased $85 million to $578 million
compared with the same period in 2000.   The revenue improvement was primarily
attributable to gains in the Construction segment due to increased activity on
the Virginia-class submarine program and the Nimitz-class aircraft carrier CVN
77.

                                       9
<PAGE>

Third quarter 2001 operating earnings of $57 million included $4 million of
transaction costs associated with the proposed acquisition of the Company by
General Dynamics Corporation.  Excluding these one-time items, operating
earnings were $61 million and reflected an increase of 22% over 2000 third
quarter operating earnings of $50 million.  The increase was primarily
attributable to Construction volume gains and improved Fleet Services margins.
<TABLE>
<CAPTION>

                                             For the Nine Months Ended
--------------------------------------------------------------------------------
                                               2001           2000
--------------------------------------------------------------------------------
<S><C>
Millions

Revenues...................................   $1,639        $1,494
Operating Earnings.........................      157           151

</TABLE>

Revenues for the first nine months of 2001 increased $145 million to $1,639
million compared with the same period in 2000.   The increased revenue was
primarily due to Construction volume gains on the Virginia-class submarine
program and the Nimitz-class aircraft carrier CVN 77.

Operating earnings of $157 million for the first nine months of 2001 included
$13 million of transaction costs associated with the proposed acquisition of the
Company by General Dynamics Corporation.  Excluding these one-time items,
operating earnings were $170 million and reflected an increase of 13% over the
same period in 2000.  This increase was primarily driven by Construction volume
gains and improved Fleet Services margins, partially offset by lower Fleet
Services volume.  In addition, the Company reached a final agreement with the
Navy regarding the simplification of its overhead allocation system.  The final
agreement amends a preliminary understanding reached between the parties during
the third quarter of 2000 which resulted in increased operating earnings in the
Fleet Services segment of $9 million with a corresponding $6 million decrease in
the Construction segment.  The final reallocation of costs between programs in
2001 resulted in increased operating earnings in the Fleet Services segment of
approximately $3 million, with a corresponding decrease in the Construction
segment.  Overall, there was no material impact on year-to-date revenues,
operating earnings, or cash flows of the Company.


The Company's funded backlog was $5.9 billion at September 16, 2001,
substantially all of which was U.S. Navy-related.

LIQUIDITY AND CAPITAL RESOURCES

CASH FLOWS

The following table reflects the summarized components of the Company's cash
flows for the periods indicated:
<TABLE>
<CAPTION>

                                                For the Nine Months Ended
--------------------------------------------------------------------------------
                                                 2001              2000
--------------------------------------------------------------------------------
<S><C>
Millions

Net cash provided by operating activities.....  $ 169             $ 128
Capital expenditures..........................    (18)              (13)
Other investing cash flows....................      1                (4)
                                                 -----            -----
Subtotal......................................    152               111
Financing activities..........................    (89)             (111)
                                                 -----            -----

Net increase in cash and cash equivalents.....  $  63            $   -
                                                 =====            =====

</TABLE>

NET CASH PROVIDED BY OPERATING ACTIVITIES

The $41 million increase in 2001's comparative cash flows from operating
activities was primarily due to increased operating earnings, as well as lower
income tax and interest payments.

                                       10
<PAGE>

OTHER INVESTING CASH FLOWS


The 2001 other investing cash flow activities relate to a $1 million dividend
received from AMSEC LLC.

Other investing cash flow activities in 2000 primarily relate to a $5 million
equity investment in AMSEC LLC, partially offset by a $1 million dividend
received from Abu Dhabi Ship Building.

FINANCING ACTIVITIES


The financing activities for the period ended September 16, 2001 reflect the
purchase of Company stock on the open market, pay-down of  revolver debt,
payments on short-term debt, outlays for exercised stock options, and the
payment of three quarterly dividends of four cents per share.  The 2000
financing activities relate primarily to the purchase of Company stock,
decreased revolver borrowings, payments on short-term debt, outlays for
exercised stock options, and the payment of three quarterly dividends of four
cents per share.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There were no material changes with respect to this item from the disclosure
included in the Company's Annual Report on Form 10-K for the year ended December
31, 2000.

RECENTLY ISSUED STANDARDS

In June 2001, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards ("SFAS") No. 141, "Business Combinations", SFAS
No. 142, "Goodwill and Other Intangible Assets," and SFAS No. 143, "Accounting
for Asset Retirement Obligations".  SFAS 141 requires all business combinations
initiated after June 30, 2001, to be accounted for using the purchase method.
The provisions of SFAS 142 eliminate the amortization of goodwill and
identifiable intangible assets with indefinite lives and require an impairment
assessment at least annually by applying a fair-value-based test.  The Company
is required to adopt SFAS 142 on January 1, 2002.  Management does not expect
the elimination of goodwill amortization or the other provisions of the
statement to have a material impact on the Company's financial position, results
of operations, or cash flows.  SFAS 143 requires that the fair value of a
liability for an asset retirement obligation be recognized in the period in
which it is incurred if a reasonable estimate of fair value can be made.  The
Company is required to adopt SFAS 143 on January 1, 2002.   Management believes
the adoption of SFAS 143 will not have a material impact on the Company's
financial position, results of operations, or cash flows.


CAUTIONARY STATEMENT FOR PURPOSES OF "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

This Quarterly Report on Form 10-Q contains forward-looking statements
concerning, among other things, the Company's prospects, developments and
business strategies.  These forward-looking statements are identified by terms
such as "projections," "intends," "estimates," "expects," "projects,"
"anticipates," "goal," "plan," "should," "could,"  "believes," "assumed," and
"scheduled."  The Company's actual results may differ materially from the
results discussed in the forward-looking statements.  Factors that might cause
such a difference include (i) the factors discussed in Note 3 to the Company's
Consolidated Financial Statements, (ii) the factors addressed in Management's
Discussion and Analysis of Financial Condition and Results of Operations, and
(iii) the following factors:  (a) general U. S. and international political,
economic and competitive conditions; (b) initiatives to reduce the federal
budget, including reductions in defense spending, or the failure of anticipated
increases in defense spending to materialize in whole or in part; (c) reductions
in the number or size of U.S. Navy contracts awarded to the Company; and (d)
unanticipated events affecting delivery and production schedules or design and
manufacturing processes, which could impair the Company's efforts to deliver its
products on time or to reduce production costs and cycle time or realize in a
timely manner some or all of the benefits, if any, of such reductions.


                                       11
<PAGE>

                                    PART II

                               OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS.

Reference is made to Note 3, "Commitments and Contingencies" to the Company's
Consolidated Financial Statements contained herein, which is incorporated in
this Item 1 of Part II by reference.

ITEM 5.  OTHER MATTERS.

Proposed Acquisition of  Newport News Shipbuilding Inc. by General Dynamics
Corporation and the Subsequent Northrop Grumman Corporation Offer to Newport
News Shipbuilding Inc.

In April 2001, the Boards of Directors of Newport News Shipbuilding Inc. and
General Dynamics Corporation ("General Dynamics") approved and each company
executed a definitive agreement that provides for the acquisition of Newport
News Shipbuilding by General Dynamics. The acquisition is to be accomplished
through a cash tender offer for all of Newport News Shipbuilding's publicly held
outstanding shares at a price of $67.50 per share. The tender offer is subject
to the tendering of a majority of the Newport News Shipbuilding shares, U.S.
regulatory clearance, and other customary closing conditions.

In May 2001, Northrop Grumman Corporation ("Northrop Grumman") commenced an
offer to acquire the entire common equity interest in Newport News Shipbuilding
for Northrop Grumman common stock and cash. That offer, which is more fully
described in a prospectus that accompanied the offer, is designed to have a
value of $67.50 per share subject to the limitations on the amount of Northrop
Grumman stock and cash to be issued, and provides that each Newport News
Shipbuilding stockholder will be able to elect to receive, for all his or her
Newport News Shipbuilding shares, cash or Northrop Grumman shares subject to the
election and proration procedures and limitations described in the prospectus.
This offer is subject to a number of conditions, including Newport News
Shipbuilding terminating the agreement with General Dynamics and entering into
an agreement with Northrop Grumman and U.S. regulatory clearance.

In June 2001, the Board of Directors of Newport News Shipbuilding considered
both the General Dynamics and Northrop Grumman offers.  The Board unanimously
affirmed its prior recommendation that the shareholders of Newport News
Shipbuilding accept the General Dynamics offer and stated that it was unable to
take a position with respect to the Northrop Grumman offer until it had obtained
additional information regarding the position of the Department of Defense and
the Department of Justice with respect to both the General Dynamics offer and
the Northrop Grumman offer.

In October 2001, the Board of Directors of Newport News Shipbuilding initiated
discussions with Northrop Grumman concerning a possible acquisition based upon
the price of Northrop Grumman's common stock and other factors. The Board
reaffirmed its recommendation of the General Dynamics offer because it is
uncertain whether Newport News Shipbuilding and Northrop Grumman will be able to
reach a satisfactory agreement.

On October 23, 2001, the Department of Defense ("DoD") recommended to the
Department of Justice ("DoJ") that it approve a merger between Newport News
Shipbuilding and Northrop Grumman and not approve a merger between Newport News
Shipbuilding and General Dynamics. DoJ filed an antitrust lawsuit seeking to
prevent the potential General Dynamics and Newport News Shipbuilding merger. DoJ
continues to review the details of the potential Newport News Shipbuilding and
Northrop Grumman merger. Any merger agreement between Newport News Shipbuilding
and Northrop Grumman would require the approval of the Board of Directors of


                                       12
<PAGE>

Newport News Shipbuilding. Newport News Shipbuilding can give no assurances as
to whether such a final agreement will be reached.

Partial Sale of Equity Investment

Subsequent to the close of the accounting quarter, the Company sold 25% of its
equity investment in Abu Dhabi Ship Building.  The transaction will not have a
material impact on the Company's 2001 financial position, results of operations,
or cash flows.

Share Repurchase Programs

On February 1, 2001, the Company announced a $100 million share repurchase
program.  The new plan is a follow-on to previous programs under which the
Company purchased 5.7 million shares at a cost of $187 million since the middle
of 1999.  The Company has suspended any share purchases under the new plan in
light of the agreement with General Dynamics.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

Exhibit Number:

Exhibit 10.1   Amendment to the Amended and Restated Stock
               Employee Compensation Trust Agreement.


Reports on Form 8-K:

None

                                       13
<PAGE>

SIGNATURE

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.

                         Newport News Shipbuilding Inc.


                              By:         /s/ Charles S. Ream
                                      -----------------------

                                         Senior Vice President and
                                         Chief Financial Officer

Date:  October 24, 2001