For the Quarter Ended June 30, 2002

Commission file number 1-16411

DELAWARE		95-4840775
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

Yes x

No ¨

Common stock outstanding		112,964,781 shares
Preferred stock outstanding		3,500,000 shares

$ in millions		(Unaudited) June 30, 2002			December 31, 2001
Assets:
Cash and cash equivalents		$    196			$    464
Accounts receivable, net of progress payments of $16,188 in 2002 and $13,609 in 2001		2,696			2,735
Inventoried costs, net of progress payments of $1,005 in 2002 and $900 in 2001		1,163			1,226
Deferred income taxes		57			36
Prepaid expenses and other current assets		141			128
Total current assets		4,253			4,589
Property, plant and equipment		4,356			3,940
Accumulated depreciation		(1,356	)		(1,173	)
Net property, plant and equipment		3,000			2,767
Goodwill, net of accumulated amortization of $774 in 2002 and 2001		8,840			8,668
Other purchased intangibles, net of accumulated amortization of $696 in 2002 and $606 in 2001		1,661			1,139
Prepaid retiree benefits cost and intangible pension asset		3,175			3,075
Benefit trust funds		270			433
Miscellaneous other assets, including deferred income taxes of $11 in 2002 and $2 in 2001		185			179
Total other assets		14,131			13,494
Total Assets		$21,384			$20,850

$ in millions		(Unaudited) June 30, 2002			December 31, 2001
Liabilities and Shareholders’ Equity:
Notes payable to banks		$    146			$       38
Current portion of long-term debt		104			420
Trade accounts payable		867			1,019
Accrued employees’ compensation		669			847
Advances on contracts		540			656
Contract loss provisions		888			843
Income taxes payable and current deferred income taxes		722			481
Other current liabilities		847			828
Total current liabilities		4,783			5,132
Long-term debt		4,915			5,039
Accrued retiree benefits		2,237			1,931
Deferred income taxes		753			669
Other long-term liabilities		307			216
Minority interest		17			122
Mandatorily redeemable preferred stock		350			350
Paid-in capital
Preferred stock, 10,000,000 shares authorized; 3,500,000 shares issued and outstanding, reported above
Common stock, 800,000,000 shares authorized; issued and outstanding:
2002—113,011,735; 2001—108,556,081		4,849			4,451
Retained earnings		3,240			3,011
Unearned compensation		(15	)		(18	)
Accumulated other comprehensive loss		(52	)		(53	)
Total shareholders’ equity		8,022			7,391
Total Liabilities and Shareholders’ Equity		$21,384			$20,850

		Three months ended June 30,								Six months ended June 30,
$ in millions, except per share		2002				2001				2002				2001
Product sales and service revenues		$	4,396			$	3,663			$	8,482			$	5,649
Cost of product sales and service revenues
Operating costs			3,587				3,019				6,973				4,567
Administrative and general expenses			453				369				840				617
Operating margin			356				275				669				465
Interest expense			(105	)			(114	)			(214	)			(161	)
Other, net			13				31				25				48
Income before income taxes			264				192				480				352
Federal and foreign income taxes			82				78				149				135
Net income		$	182			$	114			$	331			$	217
Weighted average common shares outstanding, in millions			112.84				83.41				112.12				77.67
Basic earnings per common share		$	1.56			$	1.29			$	2.85			$	2.72
Diluted earnings per common share		$	1.53			$	1.28			$	2.80			$	2.69
Dividends per common share		$	.40			$	.40			$	.80			$	.80
Dividends per mandatorily redeemable preferred share		$	1.75			$	1.69			$	3.50			$	1.69

		Six months ended June 30,
$ in millions		2002			2001
Paid-in Capital
At beginning of year		$4,451			$1,200
Stock issued in purchase of businesses		308			1,123
Employee stock awards and options exercised		90			53
		4,849			2,376
Retained Earnings
At beginning of year		3,011			2,742
Net income		331			217
Cash dividends		(102	)		(69	)
		3,240			2,890
Unearned Compensation
At beginning of year		(18	)
Issuance of unvested stock options					(33	)
Amortization of unearned compensation		3			2
		(15	)		(31	)
Accumulated Other Comprehensive Loss
At beginning of year		(53	)		(23	)
Change in cumulative translation adjustment		1			(1	)
		(52	)		(24	)
Total shareholders’ equity		$8,022			$5,211

		Six months ended June 30,
$ in millions		2002			2001
Operating Activities
Sources of Cash
Cash received from customers
Progress payments		$2,903			$   756
Other collections		5,634			5,151
Interest received		62			14
Income tax refunds received		53			4
Other cash receipts		21			9
Cash provided by operating activities		8,673			5,934
Uses of Cash
Cash paid to suppliers and employees		7,909			5,792
Interest paid		200			104
Income taxes paid		88			50
Other cash payments		3			2
Cash used in operating activities		8,200			5,948
Net cash provided by (used in) operating activities		473			(14	)
Investing Activities
Payment for businesses purchased, net of cash acquired		(166	)		(2,303	)
Additions to property, plant and equipment		(214	)		(132	)
Proceeds from sale of property, plant and equipment		15			52
Other investing activities		(7	)		16
Net cash used in investing activities		(372	)		(2,367	)
Financing Activities
Proceeds from issuance of long-term debt					1,491
Borrowings under line of credit		508			1,172
Repayments of borrowings under line of credit		(400	)		(253	)
Principal payments of long-term debt/capital leases		(440	)		(10	)
Proceeds from issuance of stock		65			19
Dividends paid		(102	)