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 quarter ended June 28, 2002
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: 33-96858-01	Commission File Number: 33-96858
COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION	COMMUNICATIONS & POWER INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)	(Exact name of registrant as specified in its charter)
Delaware (State of Incorporation)	Delaware (State of Incorporation)
77-0407395 (I.R.S. employer identification number)	77-0405693 (I.R.S. employer identification number)
811 Hansen Way Palo Alto, California 94303-1110 (650) 846-2900 (Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)	811 Hansen Way Palo Alto, California 94303-1110 (650) 846-2900 (Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:	Securities registered pursuant to Section 12(b) of the Act:
None	None
Securities registered pursuant to Section 12(g) of the Act:	Securities registered pursuant to Section 12(g) of the Act:
None	None

Indicate by check mark whether each 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 [   ].

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding for each of the Registrant’s classes of Common Stock, as of the latest practicable date: Communications & Power Industries Holding Corporation: 4,908,172 shares of Common Stock, $.01 par value, at July 31, 2002. Communications & Power Industries, Inc.: 1 share of Common Stock, $.01 par value, at July 31, 2002.

TABLE OF CONTENTS

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
	Consolidated Condensed Balance Sheets, June 28, 2002 and September 28, 2001
	Consolidated Condensed Statements of Operations for the 13-week periods ended June 28, 2002 and June 29, 2001
	Consolidated Condensed Statements of Operations for the 39-week periods ended June 28, 2002 and June 29, 2001
	Consolidated Condensed Statements of Cash Flows for the 39-week periods June 28, 2002 and June 29, 2001
COMMUNICATIONS & POWER INDUSTRIES, INC.
	Consolidated Condensed Balance Sheets, June 28, 2002 and September 28, 2001
	Consolidated Condensed Statements of Operations for the 13-week periods ended June 28, 2002 and June 29, 2001
	Consolidated Condensed Statements of Operations for the 39-week periods ended June 28, 2002 and June 29, 2001
	Consolidated Condensed Statements of Cash Flows for the 39-week periods June 28, 2002 and June 29, 2001
	Notes to Consolidated Condensed Financial Statements
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PART II: OTHER INFORMATION
SIGNATURES
EXHIBIT 10.11.1
EXHIBIT 10.12.1
EXHIBIT 10.13.1
EXHIBIT 10.14.1
EXHIBIT 99.1
EXHIBIT 99.2
EXHIBIT 99.3
EXHIBIT 99.4

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

PART I: FINANCIAL INFORMATION
ITEM 1: CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
	COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
		Consolidated Condensed Balance Sheets, June 28, 2002 and September 28, 2001	2
		Consolidated Condensed Statements of Operations for the 13-week periods ended June 28, 2002 and June 29, 2001	3
		Consolidated Condensed Statements of Operations for the 39-week periods ended June 28, 2002 and June 29, 2001	4
		Consolidated Condensed Statements of Cash Flows for the 39-week periods June 28, 2002 and June 29, 2001	5
		Notes to Consolidated Condensed Financial Statements	10
	COMMUNICATIONS & POWER INDUSTRIES, INC.
		Consolidated Condensed Balance Sheets, June 28, 2002 and September 28, 2001	6
		Consolidated Condensed Statements of Operations for the 13-week periods ended June 28, 2002 and June 29, 2001	7
		Consolidated Condensed Statements of Operations for the 39-week periods ended June 28, 2002 and June 29, 2001	8
		Consolidated Condensed Statements of Cash Flows for the 39-week periods June 28, 2002 and June 29, 2001	9
		Notes to Consolidated Condensed Financial Statements	10
ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			13
PART II: OTHER INFORMATION			21
SIGNATURES			22

-1-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands-unaudited)

		June 28,			September 28,
		2002			2001
ASSETS
Current Assets
	Cash and cash equivalents	$	2,459		$	2,903
	Accounts receivable, net		36,686			46,738
	Inventories		43,959			57,678
	Deferred taxes		876			3,500
	Other current assets		2,192			2,241
Total current assets			86,172			113,060
Property, plant, and equipment, net			57,267			62,698
Goodwill and other intangibles, net			23,132			23,452
Debt issue costs, net			3,649			4,857
Total assets		$	170,220		$	204,067
LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
Current Liabilities
	Revolving credit facility	$	7,685		$	21,293
	Current portion of capital leases		151			919
	Mortgage financing		17,750			18,000
	Senior term loan		—			20,000
	Accounts payable		13,274			14,729
	Accrued expenses		20,778			17,859
	Product warranty		4,467			4,225
	Income taxes payable		3,034			407
	Accrued dividends payable		8,183			4,387
	Advance payments from customers		9,567			9,193
Total current liabilities			84,889			111,012
Senior subordinated notes			100,000			100,000
Obligations under capital leases			—			90
Total liabilities			184,889			211,102
Senior Redeemable Preferred Stock of Subsidiary			28,640			28,479
Junior Preferred Stock of Subsidiary			24,567			22,094
Commitments and contingencies
Stockholders’ Deficit
	Common stock		49			49
	Additional paid-in capital		19,111			19,111
	Accumulated deficit		(85,823	)		(75,587	)
	Stockholder loans		(1,213	)		(1,181	)
Net stockholders’ deficit			(67,876	)		(57,608	)
Total liabilities, preferred stock and stockholders’ deficit		$	170,220		$	204,067

See accompanying notes to the unaudited consolidated condensed financial statements.

-2-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS
(in thousands — unaudited)

				13-Week			13-Week
				period ended			period ended
				June 28,			June 29,
				2002			2001
	Sales			$	64,792		$	72,724
	Cost of sales				48,128			57,071
	Gross profit				16,664			15,653
	Operating costs and expenses:
			Research and development		1,584			1,466
			Selling and marketing		4,097			4,648
			General and administrative		4,807			5,954
	Total operating costs and expenses				10,488			12,068
	Operating income				6,176			3,585
	Interest expense				(4,228	)		(5,208	)
	Income (loss) before taxes				1,948			(1,623	)
	Income tax expense				2,987			250
	Net loss				(1,039	)		(1,873	)
Preferred dividends:
		Senior redeemable preferred stock			1,310			1,115
		Junior preferred stock			853			743
Net loss attributable to common stock				$	(3,202	)	$	(3,731	)

See accompanying notes to the unaudited consolidated condensed financial statements.

-3-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS
(in thousands — unaudited)

				39-Week			39-Week
				period ended			period ended
				June 28,			June 29,
				2002			2001
	Sales			$	191,632		$	199,670
	Cost of sales				147,863			158,596
	Gross profit				43,769			41,074
	Operating costs and expenses:
			Research and development		4,356			4,395
			Selling and marketing		11,682			12,975
			General and administrative		13,950			16,216
	Total operating costs and expenses				29,988			33,586
	Operating income				13,781			7,488
	Gain on sale of property, plant and equipment				—			887
	Interest expense				(12,767	)		(15,739	)
	Income (loss) before taxes				1,014			(7,364	)
	Income tax expense				4,820			750
	Net loss				(3,806	)		(8,114	)
Preferred dividends:
		Senior redeemable preferred stock			3,796			3,233
		Junior preferred stock			2,473			2,155
Net loss attributable to common stock				$	(10,075	)	$	(13,502	)

See accompanying notes to the unaudited consolidated condensed financial statements.

-4-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS
(in thousands — unaudited)

		39-Week			39-Week
		period ended			period ended
		June 28,			June 29,
		2002			2001
OPERATING ACTIVITIES
	Net cash provided by (used in) operating activities	$	36,517		$	(3,984	)
INVESTING ACTIVITIES
	Proceeds from sale of property, plant and equipment		—			1,922
	Purchase of property, plant and equipment		(2,144	)		(3,784	)
	Net cash used in investing activities		(2,144	)		(1,862	)
FINANCING ACTIVITIES
	Repayments on capital leases		(858	)		(595	)
	Payment of debt issue costs		(101	)		(2,368	)
	Repayment of terminated revolving credit facility		—			(40,000	)
	Net (repayment) proceeds from revolving credit facility		(13,608	)		25,580
	Repayments on terminated senior term loans		—			(16,049	)
	(Repayment) proceeds from senior term loan		(20,000	)		20,000
	(Repayment) proceeds from mortgage financing		(250	)		18,000
	Net cash (used in) provided by financing activities		(34,817	)		4,568
NET DECREASE IN CASH AND CASH EQUIVALENTS			(444	)		(1,278	)
Cash and cash equivalents at beginning of period			2,903			4,766
Cash and cash equivalents at end of period		$	2,459		$	3,488

See accompanying notes to the unaudited consolidated condensed financial statements.

-5-

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands-unaudited)

		June 28,			September 28,
		2002			2001
ASSETS
Current Assets
	Cash and cash equivalents	$	2,459		$	2,903
	Accounts receivable, net		36,686			46,738
	Inventories		43,959			57,678
	Deferred taxes		876			3,500
	Other current assets		2,192			2,241
Total current assets			86,172			113,060
Property, plant, and equipment, net			43,725			48,672
Goodwill and other intangibles, net			23,132			23,452
Debt issue costs, net			3,558			4,715
Note receivable from parent			5,750			5,750
Total assets		$	162,337		$	195,649
LIABILITIES, REDEEMABLE PREFERRED STOCK AND DEFICIT
Current Liabilities
	Revolving credit facility	$	7,685		$	21,293
	Current portion of capital leases		151			919
	Senior term loan		—			20,000
	Accounts payable		13,274			15,175
	Accrued expenses		21,690			18,196
	Product warranty		4,467			4,225
	Income taxes payable		3,197			407
	Accrued dividends payable		8,183			4,387
	Advance payments from customers		9,567			9,193
Total current liabilities			68,214			93,795
Senior subordinated notes			100,000			100,000
Deferred income on sale-leaseback			7,417			7,735
Obligations under capital leases			—			90
Total liabilities			175,631			201,620
Senior Redeemable Preferred Stock			28,640			28,479
Commitments and contingencies
Stockholders’ Deficit:
	Junior preferred stock		2			2
	Common stock		—			—
	Additional paid-in capital		43,724			41,252
	Accumulated deficit		(84,447	)		(74,523	)
	Stockholder loans		(1,213	)		(1,181	)
Net stockholders’ deficit			(41,934	)		(34,450	)
Total liabilities, senior redeemable preferred stock and stockholders’ deficit		$	162,337		$	195,649

See accompanying notes to the unaudited consolidated condensed financial statements.

-6-

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS
(in thousands — unaudited)

				13-Week			13-Week
				period ended			period ended
				June 28,			June 29,
				2002			2001
	Sales			$	64,792		$	72,724
	Cost of sales				48,128			57,071
	Gross profit				16,664			15,653
	Operating costs and expenses:
			Research and development		1,584			1,466
			Selling and marketing		4,097			4,648
			General and administrative		5,154			6,359
	Total operating costs and expenses				10,835			12,473
	Operating income				5,829			3,180
	Interest expense				(3,731	)		(4,530	)
	Income (loss) before taxes				2,098			(1,350	)
	Income tax expense				3,150			250
	Net loss				(1,052	)		(1,600	)
Preferred dividends:
		Senior redeemable preferred stock			1,310			1,115
		Junior preferred stock			853			743
Net loss attributable to common stock				$	(3,215	)	$	(3,458	)

See accompanying notes to the unaudited consolidated condensed financial statements.

-7-

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS
(in thousands — unaudited)

				39-Week			39-Week
				period ended			period ended
				June 28,			June 29,
				2002			2001
	Sales			$	191,632		$	199,670
	Cost of sales				147,863			158,596
	Gross profit				43,769			41,074
	Operating costs and expenses:
			Research and development		4,356			4,395
			Selling and marketing		11,682			12,975
			General and administrative		14,985			16,896
	Total operating costs and expenses				31,023			34,266
	Operating income				12,746			6,808
	Gain on sale of property, plant and equipment				—			887
	Interest expense				(11,257	)		(14,253	)
	Income (loss) before taxes				1,489			(6,558	)
	Income tax expense				4,983			750
	Net loss				(3,494	)		(7,308	)
Preferred dividends:
		Senior redeemable preferred stock			3,796			3,233
		Junior preferred stock			2,473			2,155
Net loss attributable to common stock				$	(9,763	)	$	(12,696	)

See accompanying notes to the unaudited consolidated condensed financial statements.

-8-

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS
(in thousands — unaudited)

		39-Week			39-Week
		period ended			period ended
		June 28,			June 29,
		2002			2001
OPERATING ACTIVITIES
	Net cash provided by (used in) operating activities	$	36,166		$	(3,708	)
INVESTING ACTIVITIES
	Proceeds from sale of property to parent		—			17,250
	Proceeds from sale of property, plant and equipment					1,922
	Purchase of property, plant and equipment		(2,144	)		(3,784	)
	Net cash (used in) provided by investing activities		(2,144	)		15,388
FINANCING ACTIVITIES
	Repayments on capital leases		(858	)		(595	)
	Payment of debt issue costs		—			(1,894	)
	Repayments of terminated revolving credit facility		—			(40,000	)
	Net (repayments) proceeds from revolving credit facility		(13,608	)		25,580
	Repayments of terminated senior term loans		—			(16,049	)
	(Repayments) proceeds from senior term loan		(20,000	)		20,000
	Net cash used by financing activities		(34,466	)		(12,958	)
NET DECREASE IN CASH AND CASH EQUIVALENTS			(444	)		(1,278	)
Cash and cash equivalents at beginning of period			2,903			4,766
Cash and cash equivalents at end of period		$	2,459		$	3,488

See accompanying notes to the unaudited consolidated condensed financial statements.

-9-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

NOTES TO CONSOLIDATED
CONDENSED FINANCIAL STATEMENTS
(unaudited)

1. Basis of Presentation

The accompanying unaudited consolidated condensed financial statements of Communications & Power Industries Holding Corporation (“Holding”) and Communications & Power Industries, Inc. (“CPI”, both companies together referred to as the “Company”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted and, accordingly, these financial statements should be read in conjunction with the financial statements and the notes thereto contained in the Company’s September 28, 2001 Annual Report on Form 10-K. Management believes that these unaudited interim condensed financial statements contain all adjustments, all of which are of a normal recurring nature, necessary to present fairly the financial position of the Company, and its results of operations and cash flows for the interim period presented. The results for the interim periods reported are not necessarily indicative of the results for the complete fiscal year 2002.

2. Inventories

Inventories are stated at the lower of average cost or market (net realizable value). The main components of inventories are as follows:

	June 28,		September 28,
	2002		2001
	(In thousands)
Raw materials and parts	$	32,339	$	40,776
Work in process		8,004		14,874
Finished goods		3,616		2,028
Total inventories	$	43,959	$	57,678

3. Supplemental Cash Flow Information

	Holding				CPI
	39-Week Period Ended				39-Week Period Ended
	June 28,		June 29,		June 28,		June 29,
	2002		2001		2002		2001
	(In millions)
Cash Payments
Interest payments	$	9.0	$	11.6	$	8.3	$	10.9
Tax payments	$	0.7	$	0.6	$	0.7	$	0.6
Non-cash Financing
Unpaid cash dividends on senior preferred stock	$	8.2	$	3.2	$	8.2	$	3.2

-10-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

4. Segments and Related Information

The Company has two reportable segments: vacuum electronic devices (“VEDs”) and satcom equipment. The CEO, identified as the Chief Operating Decision Maker, evaluates performance and allocates resources based on the Company’s principal performance measure: earnings before income taxes, interest, depreciation and amortization (“EBITDA”).

Summarized financial information concerning the Company’s reportable segments is shown in the following table. Included in the “Other” column is financial information for the Company’s Solid State Products Division, which did not meet the quantitative thresholds, and certain unallocated corporate-level operating expenses. Intersegment product transfers are recorded at cost.

			Satcom
(In thousands)	VED”s		Equipment			Other			Total
For the 13-Week Period Ended June 28, 2002:
Revenues from external customers	$	54,103	$	10,015		$	674		$	64,792
Intersegment product transfers		3,531		—			229			3,760
EBITDA — Holding		11,535		541			(3,135	)		8,941
EBITDA — CPI		11,535		541			(3,642	)		8,434
For the 13-Week Period Ended June 29, 2001:
Revenues from external customers	$	52,775	$	17,124		$	2,825		$	72,724
Intersegment product transfers		6,196		—			480			6,676
EBITDA — Holding		9,108		(260	)		(1,929	)		6,919
EBITDA — CPI		9,108		(260	)		(2,495	)		6,353
For the 39-Week Period Ended June 28, 2002:
Revenues from external customers	$	152,962	$	36,920		$	1,750		$	191,632
Intersegment product transfers		8,400		—			855			9,255
EBITDA — Holding		27,724		768			(5,890	)		22,602
EBITDA — CPI		27,724		768			(7,409	)		21,083
For the 39-Week Period Ended June 29, 2001:
Revenues from external customers	$	148,819	$	44,191		$	6,660		$	199,670
Intersegment product transfers		14,936		—			1,178			16,114
EBITDA — Holding		24,189		(921	)		(4,897	)		18,371
EBITDA — CPI		24,189		(921	)		(5,911	)		17,357

-11-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

A reconciliation of EBITDA from reportable segments to Income (Loss) before Taxes is as follows:

	Holding					CPI
	13-Week Period Ended					13-Week Period Ended
(In thousands)	June 28, 2002		June 29, 2001			June 28, 2002		June 29, 2001
Segment EBITDA	$	8,941	$	6,919		$	8,434	$	6,353
Less:
Depreciation and amortization		2,765		3,334			2,605		3,173
Interest expense		4,228		5,208			3,731		4,530
Income (loss) before taxes	$	1,948	$	(1,623	)		2,098	$	(1,350	)

	Holding					CPI
	39-Week Period Ended					39-Week Period Ended
(In thousands)	June 28, 2002		June 29, 2001			June 28, 2002		June 29, 2001
Segment EBITDA	$	22,602	$	18,371		$	21,083	$	17,357
Less:
Depreciation and amortization		8,821		9,996			8,337		9,662
Interest expense		12,767		15,739			11,257		14,253
Income (loss) before taxes	$	1,014	$	(7,364	)	$	1,489	$	(6,558	)

Sales by geographic area to unaffiliated customers (based on the location of customer) are as follows:

	13-Week Period Ended				39-Week Period Ended
(In thousands)	June 28, 2002		June 29, 2001		June 28, 2002		June 29, 2001
United States	$	42,289	$	46,318	$	135,078	$	134,989
All foreign countries		22,503		26,406		56,554		64,681
Total Sales	$	64,792	$	72,724	$	191,632	$	199,670

CPI has a single customer that accounts for 10% or more of consolidated sales. Sales to this customer were $14.2 million and $11.2 million of the Company’s consolidated sales for the 13-week period ended June 28, 2002 and June 29, 2001, respectively. Sales to this customer were $34.4 million and $32.3 million of the Company’s consolidated sales for the 39-week period ended June 28, 2002 and June 29, 2001, respectively. A substantial majority of these sales were VED segment products, but this customer also purchased satcom equipment products.

5. Mortgage Refinancing

On June 1, 2002, Holding’s mortgage financing of $18.0M was refinanced. Under the terms of the refinancing, the loan was extended until June 1, 2003 and the Company agreed to pay two principal installments of $250,000 on June 1, 2002 and December 1, 2002. The mortgage bears interest at a rate of LIBOR plus 4.25%.

-12-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

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

The following discussion reflects the condensed consolidated results of Communications & Power Industries Holding Corporation, which are materially consistent with those of CPI except as identified below and should be read in conjunction with the condensed consolidated financial statements and notes thereto:

CRITICAL ACCOUNTING POLICIES

Management is required to make judgements, assumptions and estimates in preparing its financial statements and related disclosures in conformity with accounting principles generally accepted in the United States. The Company’s significant accounting policies are described in Note 2 to the Consolidated Financial Statements in the Annual Report on Form 10-K for the fiscal year ended September 28, 2001. The following critical accounting policies are those policies that management believes can affect its financial statements materially and involves subjective assumptions, judgements, or estimates.

Revenue is recognized on a sale to a customer when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable, and collectibility is reasonably assured. The Company monitors the creditworthiness of its customers and does not record revenue on sales if collection is not reasonably assured. The Company’s products are generally subject to warranties, and the Company provides for the estimated future costs of repair, replacement or customer accommodation at the time of sale as an additional cost of product.

Inventories are stated at the lower of average cost or market. The carrying value of inventory is reduced for estimated obsolescence or unmarketable inventory based upon assumptions about future demand and market conditions. If actual demand were to be substantially lower than estimated, further write-downs could be required. While these estimates require management to make assumptions and judgements, management believes its understanding of the markets and customers the Company serves as well as the mature nature of many of the products the Company manufactures provides it with the ability to make reliable estimates. Management also evaluates the carrying value of inventory for lower of cost or market on an individual product or contract basis. Analyses are performed based on the estimated costs at completion and if necessary, a provision is recorded to properly reflect the product or contract at the lower of cost or net realizable value (selling price less estimated cost of disposal). If actual contract costs were to be substantially higher than estimated, further provisions could be required.

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets is measured by comparison of its carrying amount to future net cash flows expected to be generated from the operation and sale of long-lived assets. If such assets are considered to be impaired, the Company’s carrying value is reduced to its estimated fair value. Adverse changes in the customers and markets served by the Company could result in future impairments of long-lived assets.

-13-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

Goodwill represents the excess of the purchase price over the fair value of the net assets acquired. The Company assesses the recoverability of the carrying amount of goodwill by determining whether the carrying amount of goodwill can be recovered through undiscounted net cash flows of the acquired operation over the remaining amortization period. If determined to be impaired, the carrying amount is reduced to its estimated fair value which is based on an estimate of discounted future net cash flows. Adverse changes in the industries served by the Company, customer demand or other market conditions could result in future impairments of goodwill.

RESULTS OF OPERATIONS

The Company serves the communications, radar, electronic countermeasures, industrial, medical and scientific markets. In addition, the Company divides the communications market into applications for ground-based satellite uplinks for military and commercial uses (“satcom”) and broadcast sectors. The Company defines and discusses its orders and sales trends by the end markets to more clearly relate its business to outside investors. Internally, however, the Company is organized into six operating units that are differentiated based on products. Four of these operating units comprise the Company’s vacuum electronic device (“VED”) segment. The Company also has a satellite communications equipment unit, which is a separate segment, and a solid state products unit, which is not reported as a separate segment. Segment data for VED and satcom equipment segments are included in Note 4 of the Notes to Consolidated Condensed Financial Statements.

Orders during the third quarter of Fiscal 2002 were $55.2 million as compared to $57.5 million for the third quarter of Fiscal 2001. This decrease of $2.3 million for the quarter primarily reflects continued weakness in the commercial communications market (down $ 11.6 million) offset in part by fluctuations in the timing of order receipts in other non-communication markets, particularly radar, when compared to the third quarter of Fiscal 2001.

Orders for the first nine months of Fiscal 2002 of $191.9 million have declined approximately $11.5 million or 5.7% from the $203.3 million in the same period of Fiscal 2001. The decrease from Fiscal 2001 levels was expected and can be attributed primarily to the decrease in orders in the commercial communications market which were down $20.5 million from the first nine months of Fiscal 2001, as communications companies continue to delay capital spending. This situation is expected to continue into Fiscal 2003. Orders in the electronic countermeasures market decreased by $2.5 million from the comparable period last year due primarily to the timing of order releases from quarter to quarter. Industrial orders decreased $2.2 million from the first nine months of Fiscal 2001 primarily as a result of weak economic conditions. Offsetting these decreases somewhat are orders in the radar, medical and scientific markets. There is strong demand in radar market at this time; orders for the first nine months of Fiscal 2002 exceed the comparable period of Fiscal 2001 by $4.5 million and the trend is expected to continue into the fourth quarter. Medical orders are $6.5 million higher than the prior year due to the receipt of large orders for VED’s used in the treatment of cancer. Although these orders reoccur annually, their timing was accelerated and their value has increased from the prior year. Medical orders on an annual basis are expected to be consistent with Fiscal 2001. Scientific orders have increased by $2.7 million on a year-to-date basis compared to Fiscal 2001 due primarily to the receipt of the final phase on an order from a government research laboratory. Excluding this order, orders in the scientific

-14-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

market are expected to be fairly consistent with Fiscal 2001 levels. Overall, incoming order levels fluctuate significantly on a quarterly basis and a particular quarter’s order rate may not be indicative of future order levels. In addition, the Company’s sales are highly dependent upon manufacturing scheduling, performance and shipments and, accordingly, it is not possible to accurately predict when these orders will be recognized as sales.

As of June 28, 2002, the Company had order backlog of $149.0 million, representing approximately seven months of sales, compared to order backlog of $160.7 million, or approximately seven-and-a-half months of sales, as of June 29, 2001. Order backlog at the end of the third quarter also decreased slightly from $151.5 million at the end of Fiscal 2001.

Sales for the third quarter of Fiscal 2002 were $64.8 million, a decrease of $7.9 million, or 10.9%, from the same period in Fiscal 2001. This decrease was driven primarily by lower sales in the commercial communications market. Sales for the first nine months of Fiscal 2002 were $191.6 million, down $8.1 million from $199.7 million in the comparable period of Fiscal 2001. This decrease can be attributed to lower demand in the commercial communications and industrial markets with sales down $11.1 million and $4.4 million, respectively, from the comparable period of Fiscal 2001. Offsetting this decrease are sales to the radar, medical and scientific markets which have increased by $2.9 million, $1.4 million and $4.0 million, respectively from the first nine months of Fiscal 2001. Sales in the radar and scientific markets have benefited from increased military and research spending. Sales in the electronic countermeasures market were down $0.9 million from the first nine months of Fiscal 2001.

Gross margin increased 4.2% to 25.7% for the third quarter of Fiscal 2002, compared with the third quarter of Fiscal 2001. The gross margin also increased for the nine-month period from 20.6% of sales in Fiscal 2001 to 22.8% of sales in Fiscal 2002. Gross margins were negatively effected in Fiscal 2001 by start-up costs on several new satcom products. In addition, margin fluctuations are expected due to the mix of products sold during any period.

Operating costs and expenses were $10.5 million, or 16.2% of sales, for the third quarter of Fiscal 2002 as compared to $12.1 million, or 16.6 % of sales, for the third quarter of Fiscal 2001. For the nine months ended June 28, 2002, operating costs and expenses decreased $3.6 million compared with a year ago from $33.6 million, or 16.8 % of sales, in Fiscal 2001 to $30.0 million, or 15.7% of sales, in Fiscal 2002. A portion of this decrease reflects a $1.3 million reduction in costs for the first nine months of Fiscal 2002 as compared to the comparable period of Fiscal 2001 which was associated with the relocation of the Satcom Division’s production from Palo Alto, California to the Company’s facility in Ontario, Canada. Fiscal 2001 operating costs also include $0.4 million for the consolidation of the Company’s administrative offices into a single building in Palo Alto. The remainder of the decrease reflects the Company’s continuing efforts to reduce costs and improve operating efficiency.

Earnings before interest, income taxes, depreciation and amortization (“EBITDA”)¹ for the third quarter of Fiscal 2002 were $8.9 million, or 13.7% of sales, compared to $6.9 million, or 9.5% of sales, for the

¹ EBITDA is presented because some investors may use it as a financial indicator of the ability to service or incur indebtedness. EBITDA should not be considered as an alternative to net earnings (loss), as a measure of operating results, cash flows or liquidity.

-15-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

third quarter of Fiscal 2001. EBITDA for the first nine months of Fiscal 2002 were $22.6 million, or 11.8% of sales, compared to $18.4 million, or 9.2% of sales, for the first nine months of Fiscal 2001. This increase in EBITDA can be attributed to the improved margins coupled with the impact of lower operating costs.

Income tax expense for the third quarter of Fiscal 2002 was $3.0 million compared to $0.3 million for the third quarter of Fiscal 2001. For the nine months ended June 28, 2002, the income tax expense was $4.8 million compared to $0.8 million for the corresponding period of Fiscal 2001. The increase in income tax expense relates primarily to taxable income resulting from a timing difference in conjunction with the Satcom relocation to Canada.

Net loss was $1.0 million for the third quarter of Fiscal 2002 compared to a net loss of $1.9 million for the third quarter of Fiscal 2001. For the nine months ended June 28, 2002, the net loss was $3.8 million compared to a net loss of $8.1 million for the corresponding period of Fiscal 2001. The decrease in the net loss for both periods resulted from improved gross margins, decreased operating and interest expenses partially offset by the increase in income tax expense. Interest expense has decreased due to a reduction in outstanding debt as well as lower interest rates.

CPI’s operating results differ slightly from Holding due to a sale-leaseback transaction between CPI and Holding which took place in December 2000. In the first nine months of Fiscal 2002, CPI’s net income before taxes was $1.5 million, which was approximately $0.5 million higher than Holdings’ net income before taxes of $1.0 million. As a result of this transaction, operating costs for CPI were approximately $1.0 million higher than those of Holding due to rental payments paid by CPI to Holding for use of the San Carlos facility offset by amortization of the deferred gain on the sales-leaseback and additional depreciation on the San Carlos facility. Interest expense, net, for CPI was approximately $1.5 million lower than that of Holding. The decrease primarily relates to the fact that Holding’s interest expense includes interest paid on the mortgage financing of the San Carlos facility combined with CPI’s interest income on a note receivable with Holding. All other operations data for CPI is consistent with Holding’s for the third quarter of Fiscal 2002.

FINANCIAL CONDITION

Cash flows provided by operating activities for the first nine months of Fiscal 2002 were $36.5 million, compared with cash used in operating activities of $4.0 million during the first nine months of Fiscal 2001. The positive cash flow was generated primarily from reductions in accounts receivable and inventories from Fiscal 2001 balances. The Company began the year with significant amounts of accounts receivable and inventory and has made substantial progress in reducing the balances by $10.1 million and $13.7 million, respectively, contributing to improved cash performance.

Investing activities were comprised of investment in property, plant and equipment totaling $2.1 million for the first nine months of Fiscal 2002. Purchases of property, plant and equipment decreased approximately $1.7 million from the comparable period of Fiscal 2001 of which approximately $1.0 million can be attributed to the relocation of the Company’s satcom operations to its facility in Ontario, Canada. The remaining decrease is a result of the Company’s continued focus on cash management. The Company currently anticipates that capital expenditure requirements for Fiscal 2002 will be down

-16-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

significantly from the $5.8 million spent in Fiscal 2001 of which $4.4 million related to ongoing capital improvement requirements.

Financing activities during the first nine months of Fiscal 2002 were related primarily to repayment of the Company’s $20.0 million senior term loan and repayments on the Company’s secured credit facility (“Credit Facility”) of $13.6 million. The $20.0 million senior term loan was repaid in June 2002 using approximately $9.3 million in available cash and drawing $10.7 million from its line of credit.

As of June 28, 2002, the Company had $23.5 million available under its revolving line of credit that expires December 22, 2004. The following is a summary of certain obligations and commitments of the Company as of June 28, 2002:

		Due in Fiscal Years
												2007 and
(In thousands)		2002		2003		2004		2005		2006		Thereafter		Total
Debt obligations, including capital lease obligations		$	7,805	$	17,781	$	—	$	100,000	$	—	$	—	$	125,586
Noncancellable operating leases			288		593		430		294		9		—		1,614
Senior Redeemable Preferred Stock			—		—		—		—		—		28,640		28,640
	Total cash obligations	$	8,093	$	18,374	$	430	$	100,294	$	9	$	28,640	$	155,840
Standby letters of credit		$	349	$	4,528	$	18	$	—	$	—	$	—	$	4,895

The Company’s debt obligations include mortgage financing of $17.8 million which was refinanced in June 2002. Under the terms of the refinancing, the loan was extended until June 1, 2003 and the Company agreed to pay two principal installments of $250,000 on June 1, 2002 and December 1, 2002. Management expects that cash to be generated by operations and borrowing under its Credit Facility in conjunction with either extending or finding alternative financing will allow it to meet this obligation. However, there can be no assurance that the combination of cash generated by operations, borrowing availability from the Company’s Credit Facility and additional collateral-based financing will be sufficient to meet the Company’s cash requirements. If the Company is unable to satisfy such cash requirements from these sources, the Company will adopt one or more alternatives, such as reducing or delaying capital expenditures, reducing discretionary costs, negotiating an increase to the Company’s borrowing capacity under its line of credit, and selling and leasing back its facility in San Carlos, California in a transaction with an outside party.

-17-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

Market Risk

The Company’s market risk disclosures set forth in its Annual Report on Form 10-K for the fiscal year ended September 28, 2001, have not changed significantly.

Recent Accounting Pronouncements

In July 2001, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 142, “Goodwill and Other Intangible Assets.” SFAS No. 142 addresses financial accounting and reporting for acquired goodwill and other intangible assets. SFAS No. 142 changes the accounting for goodwill from an amortization method to an impairment-only approach. Goodwill will be tested annually and whenever events or circumstances occur indicating that goodwill might be impaired. Upon adoption of SFAS No. 142, amortization of goodwill recorded for business combinations will cease. Companies are required to adopt SFAS No. 142 for fiscal years beginning after December 15, 2001, but early adoption is permitted. The Company plans to adopt this Statement beginning in the first quarter of Fiscal 2003 and therefore has not yet determined the impact on its consolidated financial position or results of operations. At the beginning of Fiscal 2003, the goodwill balance, net of amortization, is expected to be $21.7 million.

The FASB issued SFAS No. 143, “Accounting for Asset Retirement Obligations,” in August 2001, and SFAS No. 144, “Accounting for the Impairment or Disposal of Long-lived Assets,” in October 2001. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002 and will require that the fair value of an asset retirement obligation be recorded as a liability in the period in which it incurs the obligation. SFAS No. 144 is effective for fiscal years beginning after December 15, 2001. It provides a single accounting model for long-lived assets to be disposed of and replaces SFAS No. 121 “Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of.” The Company does not expect the adoption of these statements to have a material effect on the Company’s consolidated financial position or results of operations. The Company will adopt these Statements beginning in the first quarter of Fiscal 2003

In May 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections.” This Statement rescinds FASB Statement No. 4, “Reporting Gains and Losses from Extinguishment of Debt,” and an amendment of that Statement, FASB Statement No. 64, “Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements.” This Statement amends FASB Statement No. 13, “Accounting for Leases,” to eliminate an inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions. This Statement also amends other existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their applicability under changed conditions. The provisions of SFAS No. 145 are effective in fiscal years beginning after May 15, 2002, with early adoption permitted and, in general, are to be applied prospectively. The Company is currently assessing the impact of SFAS No. 145 on its financial position, results of operations and cash flows as well as timing of its adoption.

-18-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

In July 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit and Disposal Activities.” This statement revises the accounting for exit and disposal activities under EITF Issue 94-3, “Liability Recognition for Certain Employee Termination Benefits and other Costs to Exit an Activity,” by spreading out the reporting of expenses related to restructuring activities. Commitment to a plan to exit an activity or dispose of long-lived assets will no longer be sufficient to record a one-time charge for most anticipated costs. Instead, companies will record exit or disposal costs when they are “incurred” and can be measured at fair value, and they will subsequently adjust the recorded liability for changes in estimated cash flows. The provisions of SFAS No. 146 are effective prospectively for exit or disposal activities initiated after December 31, 2002. Earlier adoption is encouraged. Companies may not restate previously issued financial statements for the effect of the provisions of SFAS No. 146 and liabilities that a Company previously recorded under EITF Issue 94-3 are grandfathered. The Company is currently assessing the impact of SFAS No. 146 on its financial position, results of operations and cash flows as well as timing of its adoption.

Forward-Looking Statements

This document contains forward-looking statements that relate to future events or the Company’s future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither the Company nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. All written and oral forward-looking statements made in connection with this report which are attributable to the Company or persons acting on the Company’s behalf are expressly qualified in their entirety by the “risk factors” and other cautionary statements included herein. The Company is under no duty to update any of the forward-looking statements after the date of this report to conform such statements to actual results or to changes in the Company’s expectations.

The information in this report is not a complete description of the Company’s business or the risks associated with an investment in the Company’s securities. We urge you to carefully review and consider the various disclosures made by the Company in this report and in the Company’s other reports filed with the SEC.

Risk Factors

You should carefully consider the various risks and uncertainties that impact the Company’s business and the other information in this report and the Company’s other filings with the SEC before you decide to invest in the Company or to maintain or increase your investment. Such risks and uncertainties include, but are not limited to, the following: product demand and market acceptance risks; the effect of general economic conditions; the impact of competitive products and pricing; new product development and commercialization; technological difficulties and the ability to increase margins; production

-19-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

interruptions due to power shutdowns and volatility in energy costs; U.S. Government export policies; changes in Governmental appropriations, national defense policies and availability of Government funds; changes in environmental regulation and legislation; availability of certain critical materials and raw material price fluctuations; the Company’s ability to generate the significant amount of cash needed to service its debt; and the Company’s ability to obtain financing in the future. Any of the foregoing factors could cause the Company’s business, results of operations, or financial condition to suffer and actual results could differ materially from those expected.

-20-

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
and subsidiaries

COMMUNICATIONS & POWER INDUSTRIES, INC.,
and subsidiaries
(A wholly owned subsidiary of Communications & Power Industries Holding Corporation)

PART II: OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None.

ITEM 2: CHANGES IN SECURITIES

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

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

None.

ITEM 5. OTHER INFORMATION.

None.

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

(a)  The following exhibits are being filed as part of this report:

Exhibit No.	Description
10.11.1	Modification Agreement of Secured Loan between Holding and Wells Fargo Bank, National Association, dated June 1, 2002
10.12.1	Amended and Restated Promissory Note Secured by Deed of Trust by Holding in favor of Wells Fargo Bank, National Association, dated June 1, 2002
10.13.1	Memorandum of Modification Agreement Amending Deed of Trust by Holding in favor of Wells Fargo Bank, National Association, dated June 1, 2002
10.14.1	Junior Lienor’s Consent and Subordination Agreement by CPI in favor of Wells Fargo Bank, National Association, dated June 1, 2002
99.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.3	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.4	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(b)  Reports on Form 8-K:

     No reports were filed on Form 8-K during the quarter ended June 28, 2002.

-21-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

COMMUNICATIONS & POWER INDUSTRIES HOLDING CORPORATION
By:	/s/ O. Joe Caldarelli
	O. Joe Caldarelli Chief Executive Officer Date: August 8, 2002

By:	/s/ Joel Littman
	Joel Littman Chief Financial Officer, Treasurer and Secretary (Principal Financial and Accounting Officer) Date: August 8, 2002

-22-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

COMMUNICATIONS & POWER INDUSTRIES, INC.
By:	/s/ O. Joe Caldarelli
	O. Joe Caldarelli Chief Executive Officer Date: August 8, 2002

By:	/s/ Joel Littman
	Joel Littman Chief Financial Officer, Treasurer and Secretary (Principal Financial and Accounting Officer) Date: August 8, 2002

-23-

EXHIBIT INDEX

Exhibit No.	Description
10.11.1	Modification Agreement of Secured Loan between Holding and Wells Fargo Bank, National Association, dated June 1, 2002
10.12.1	Amended and Restated Promissory Note Secured by Deed of Trust by Holding in favor of Wells Fargo Bank, National Association, dated June 1, 2002
10.13.1	Memorandum of Modification Agreement Amending Deed of Trust by Holding in favor of Wells Fargo Bank, National Association, dated June 1, 2002
10.14.1	Junior Lienor’s Consent and Subordination Agreement by CPI in favor of Wells Fargo Bank, National Association, dated June 1, 2002
99.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.3	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.4	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002