Fourth Quarter Results
- Revenues: $2.49 billion; $2.85 billion excluding the CityTime loss provision
- Operating Income: $(111) million; $197 million excluding the CityTime loss provision
- Diluted EPS from Continuing Operations: $(0.49); $0.31 excluding the CityTime loss provision
- Initiation of Quarterly Cash Dividend: $0.12 per share payable on April 30, 2012

MCLEAN, Va., March 20, 2012 /PRNewswire via COMTEX/ --SAIC, Inc. (NYSE: SAI), a scientific, engineering, and technology applications company, today announced financial results for the fourth quarter and fiscal year 2012, which ended January 31, 2012.

In addition, the Company announced the initiation of a quarterly dividend at $0.12 per share, the first payment of which will be on April 30, 2012 for stockholders of record on April 15, 2012.

"Our decision to initiate a quarterly dividend reflects our confidence in SAIC's financial strength and our commitment to deploying capital to maximize shareholder value for the long-term. The dividend will augment our capital deployment strategy, which will continue to include strategic acquisitions and share repurchases while retaining an attractive credit rating profile," said John P. Jumper, president and chief executive officer.

Summary Results

As a result of the previously announced CityTime settlement, the Company recorded an additional $308 million loss provision during the fourth quarter of fiscal 2012. Estimates made in the third quarter ended October 31, 2011 were adjusted during the fourth quarter to reflect the final settlement. Fourth quarter revenues and selling, general and administrative expenses were reduced by $358 million and $50 million, respectively, to reflect the final settlement for the fiscal year ended January 31, 2012. For the full fiscal year, the CityTime loss provision totaled $540 million, which was reflected as a $410 million reduction in revenue and a $130 million charge to selling, general and administrative expenses.

Revenues for the fourth quarter of fiscal 2012 were $2.49 billion. Full fiscal year revenues were $10.59 billion. Revenues excluding the CityTime loss provision were $2.85 billion for the fourth quarter, reflecting 3 percent internal revenue growth, and $11.00 billion for the fiscal year.

Diluted earnings per share from continuing operations for the quarter were $(0.49). Diluted earnings per share from continuing operations for the quarter excluding the CityTime loss provision were $0.31 compared to $0.34 in the fourth quarter of fiscal year 2011. The diluted share count for the quarter was 329 million, down 9 percent from 360 million in the fourth quarter of fiscal year 2011, due to share repurchases over the past year.

Diluted earnings per share from continuing operations for the fiscal year were $(0.02). Full fiscal year diluted earnings per share from continuing operations excluding the CityTime loss provision were $1.34 compared to $1.48 in fiscal year 2011.

"With the CityTime settlement behind us, our full attention is now focused on growing the business. SAIC's strategic advantage is our ability to rapidly develop and deploy technical solutions, and we are focused on leveraging those innovative solutions across and beyond our customer base," said John P. Jumper. "We plan to directly contribute to our strategic growth through leveraging these differentiating capabilities into adjacent markets by ensuring we have sufficient credibility, mass, and momentum in these areas, including health IT and energy."

"With our management team in place, a strong balance sheet, and capabilities well established and aligned with the more attractive areas of the markets we serve, SAIC is well-positioned to be a leader in the marketplace," Jumper said.

Supplemental Operating Results

Operating loss for the quarter was $111 million (-4.5 percent of revenue). Operating income for the quarter excluding the CityTime loss provision was $197 million (6.9 percent of revenue) compared to $217 million (8.0 percent of revenue) in the fourth quarter of fiscal year 2011. The results for the current year quarter were impacted by a $10 million loss provision recorded in connection with a data privacy litigation matter and higher investments in research and development spending.

Full fiscal year operating income was $311 million (2.9 percent of revenue). Full fiscal year operating income excluding the CityTime loss provision was $851 million (7.7 percent of revenue), compared to $947 million (8.7 percent of revenue) in fiscal year 2011.

Loss from continuing operations for the quarter was $160 million. Income from continuing operations for the quarter excluding the CityTime loss provision was $107 million compared to $126 million in the fourth quarter of fiscal year 2011. Full fiscal year loss from continuing operations was $8 million. Full fiscal year income from continuing operations excluding the CityTime loss provision was $468 million compared to $558 million in fiscal year 2011.

Defense Solutions

Defense Solutions revenues for the quarter were $852 million. The CityTime loss provision was recorded within the Defense Solutions segment. Defense Solutions revenues excluding the revenue portion of the loss provision were $1.21 billion, and increased 3 percent, substantially all of which was attributable to internal growth, from the fourth quarter of fiscal year 2011. This growth was attributable to increased activity on systems integration and logistics programs for tactical and mine resistant ambush protected vehicles; the ramp up of a program to operate the network IT infrastructure for the U.S. Department of State; and increased activity on a systems and software maintenance upgrade program for the U.S. Army. These increases were partially offset by the termination of the U.S. Army Brigade Combat Team Modernization contract, the June 2011 completion and delivery of the CityTime system, and reductions in various analytic studies and policy analysis operations.

Defense Solutions revenues for the fiscal year were $4.19 billion. Defense Solutions revenues excluding the revenue portion of the CityTime loss provision were $4.60 billion, and decreased 1 percent from fiscal year 2011. This decline was attributable to the termination of the U.S. Army Brigade Combat Team Modernization contract, reductions in various analytic studies and policy analysis operations, and the June 2011 completion and delivery of the CityTime system. These declines were partially offset by increased activity on a systems and software maintenance/upgrade program for the U.S. Army, the ramp up of a program to operate and maintain the enterprise network IT infrastructure for the U.S. Department of State, and increased activity on systems integration and logistics programs for tactical and mine resistant ambush protected vehicles.

Defense Solutions operating loss for the quarter was $216 million (-25.4 percent of revenue). Defense Solutions operating income excluding the CityTime loss provision was 7.6 percent of revenue, down from 7.7 percent of revenue in the fourth quarter of fiscal 2011 due to the conclusion of certain contracts having relatively higher profit levels.

Defense Solutions operating loss for the fiscal year was $171 million (-4.1 percent of revenue). Defense Solutions operating income excluding the CityTime loss provision was 8.0 percent of revenue, down from 8.2 percent of revenue in fiscal 2011 due to the conclusion of certain contracts having relatively higher profit levels.

Health, Energy and Civil Solutions

Health, Energy and Civil Solutions revenues for the quarter increased 10 percent from the fourth quarter of fiscal year 2011. Internal revenues increased 4 percent due to new design-build programs for renewable energy plant construction, increased deliveries of non-intrusive cargo inspection systems, and increased healthcare IT consulting services. These increases were partially offset by reduced deliveries of checked baggage explosive detection systems.

Health, Energy and Civil Solutions revenues for the fiscal year increased 2 percent from fiscal year 2011. Internal revenue contracted 2 percent due to reduced deliveries of checked baggage explosive detection systems and reduced activity on certain U.S. federal civilian agency programs, including various programs in support of NASA.

Health, Energy and Civil Solutions operating income for the quarter was 8.0 percent of revenue, down from 9.9 percent of revenue in the fourth quarter of fiscal year 2011, driven by a loss provision related to a data privacy litigation matter and increased investment in research and development spending.

Health, Energy and Civil Solutions operating income for the fiscal year was 9.0 percent of revenue, down from 9.2 percent of revenue in fiscal year 2011.

Intelligence and Cybersecurity Solutions

Intelligence and Cybersecurity Solutions revenues for the quarter increased 2 percent, substantially all of which was attributable to internal growth, from the fourth quarter of fiscal year 2011, due to increased activity on airborne surveillance programs and an increase in cybersecurity program activity. These increases were partially offset by declines in certain intelligence processing, exploitation and dissemination contracts.

Intelligence and Cybersecurity Solutions revenues for the fiscal year increased 3 percent, substantially all of which was internal revenue growth, from fiscal year 2011, due to increased activity on airborne surveillance and intelligence analysis contracts; increased material deliveries and services under intelligence processing, exploitation and dissemination contracts; and an increase in cybersecurity program activity. These increases were partially mitigated by the conclusion of a forward operating base integrated security equipment supply contract.

Intelligence and Cybersecurity Solutions operating income for the quarter was 7.3 percent of revenue, down from 9.2 percent of revenue in the fourth quarter of fiscal year 2011, due to particularly strong program performance in the prior year quarter and an increase in internal research and development spending.

Intelligence and Cybersecurity Solutions operating income for the fiscal year was 7.8 percent of revenue, down from 8.4 percent of revenue in fiscal year 2011 due to the impairment of certain intangible assets, increased research and development spending, and increased bid and proposal costs, partially offset by increased sales of higher margin proprietary products.

Corporate and Other

Corporate and Other segment operating income during the quarter was consistent with the fourth quarter of fiscal year 2011.

Cash Generation and Capital Deployment

Cash flow provided by operations for fiscal year 2012 was $772 million, compared to $725 million in fiscal year 2011. As of January 31, 2012, the Company had $1.59 billion in cash and cash equivalents and $1.85 billion in long-term debt.

New Business Awards

Net business bookings totaled $2.1 billion in the fourth quarter and $11.8 billion for the fiscal year, representing a book-to-bill ratio of 0.7 and 1.1 for the fourth quarter and fiscal year, respectively. Notable awards received during the quarter include:

• Plainfield Renewable Energy Biomass Contract and Financing. The Company is providing engineering, procurement and construction services for the Plainfield Renewable Energy biomass project in Connecticut under a two-year, $215.97 million contract. The Company and the Carlyle Energy Mezzanine Opportunities Group are providing financing for the project. The project is owned by a subsidiary of Enova Energy Group and will generate clean energy to power the equivalent of 37,000 homes.
• U.S. Patent and Trademark Office (USPTO) Automated Information Systems Support. The Company received a multiple award ID/IQ contract to provide software development integration and testing services in support of USPTO's Automated Information Systems. The five-year contract has a ceiling value of $525 million for all awardees.
• Centers for Medicare & Medicaid Services Identity Proofing Support. Under a five-year, $78 million contract, the Company will deliver an integrated enterprise remote identity proofing and multi-factor authentication cloud services solution designed to securely enable more than 35 million U.S. citizens access to the State and Federal Health Insurance Exchange.
• Joint Improvised Explosive Device Defeat Organization Support. The Company received a multiple award ID/IQ contract from the U.S. General Services Administration Federal Systems Integration and Management Center. The Company will provide analysis, combat planning and training, information technology sustainment and operations support for the Joint Improvised Explosive Device Defeat Organization Counter-IED Operations/Intelligence Integration Center. The five-year contract has a ceiling value of $900 million for all awardees.

The Company's backlog of signed business orders at the end of the fiscal year 2012 was $18.0 billion, of which $5.5 billion was funded. As compared to the end of fiscal year 2011, total backlog increased 5 percent while funded backlog increased 3 percent. The negotiated unfunded backlog of $12.5 billion is the estimated amount of revenue to be earned in the future from negotiated contracts for which funding has not been authorized and unexercised priced contract options. Negotiated unfunded backlog does not include any estimate of future task orders expected to be awarded under ID/IQ, GSA Schedule or other master agreement contract vehicles.

Forward Guidance

The Company's outlook for fiscal year 2013, which began on February 1, 2012, is as follows:

• Revenues of $10.7 billion to $11.2 billion;
• Diluted earnings per share from continuing operations of $1.26 to $1.36; and
• Cash flows from continuing operations at or above $150 million, after payment of the CityTime settlement amount.

Fiscal year 2013 guidance excludes the impact of potential future acquisitions and other non-ordinary course items.

Quarterly Cash Dividend and New Share Repurchase Program

SAIC's Board of Directors has approved the initiation of a quarterly dividend and declared a dividend of $0.12 per share payable on April 30, 2012 to stockholders of record on April 15, 2012. The Board also approved a share repurchase authorization of up to 40 million shares.

The Company expects to fund the quarterly dividend and any share repurchases using cash on hand and cash generated from the business. On an annualized basis, the cash dividend is expected to be $0.48 per share. The Company intends to continue paying dividends on a quarterly basis, although the declaration of any future dividends will be determined by the Company's Board of Directors each quarter and will depend on earnings, financial condition, capital requirements and other factors.

About SAIC

SAIC is a FORTUNE 500® scientific, engineering, and technology applications company that uses its deep domain knowledge to solve problems of vital importance to the nation and the world, in national security, energy and the environment, critical infrastructure, and health. The Company's approximately 41,000 employees serve customers in the U.S. Department of Defense, the intelligence community, the U.S. Department of Homeland Security, other U.S. Government civil agencies and selected commercial markets. Headquartered in McLean, Va., SAIC had annual revenues of approximately $10.6 billion for its fiscal year ended January 31, 2012. For more information, visit http://www.saic.com/. SAIC: From Science to Solutions®

Forward-Looking Statements

Certain statements in this release contain or are based on "forward-looking" information within the meaning of the Private Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by words such as "expects," "intends," "plans," "anticipates," "believes," "estimates," "guidance," and similar words or phrases. Forward-looking statements in this release include, among others, estimates of future revenues, operating income, earnings, earnings per share, charges, backlog, outstanding shares and cash flows, as well as statements about future dividends, share repurchases and acquisitions. These statements reflect our belief and assumptions as to future events that may not prove to be accurate. Actual performance and results may differ materially from the guidance and other forward-looking statements made in this release depending on a variety of factors, including: our ability to declare future dividends based on our earnings, financial condition, capital requirements and other factors, including compliance with applicable law and agreements of the company; uncertainties related to the CityTime settlement; developments in the U.S. Government defense budget, including budget reductions, implementation of spending caps or changes in budgetary priorities, or delays in the U.S. Government budget process; delays in the U.S. Government contract procurement process or the award of contracts and delays or loss of contracts as a result of competitor protests; changes in U.S. Government procurement rules, regulations and practices; our compliance with various U.S. Government and other government procurement rules and regulations; governmental reviews, audits and investigations of our company; our ability to effectively compete and win contracts with the U.S. Government and other customers; our ability to attract, train and retain skilled employees, including our management team, and to obtain security clearances for our employees; our ability to accurately estimate costs associated with our firm-fixed-price and other contracts; cyber or other security threats, systems failures or other disruptions of our business; resolution of legal and other disputes with our customers and others or legal or regulatory compliance issues; our ability to effectively acquire businesses and make investments; our ability to maintain relationships with prime contractors, subcontractors and joint venture partners; the failure of our inspection or detection systems to detect threats; the adequacy of our insurance programs designed to protect us from significant product or other liability claims; our ability to manage risks associated with our international business; and our ability to execute our business plan and long-term management initiatives effectively and to overcome these and other known and unknown risks that we face. These are only some of the factors that may affect the forward-looking statements contained in this release. For further information concerning risks and uncertainties associated with our business, please refer to the filings we make from time to time with the U.S. Securities and Exchange Commission, including the "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Legal Proceedings" sections of our latest annual report on Form 10-K and quarterly reports on Form 10-Q and our Registration Statement on Form S-4 (File No. 333-176896), as amended, filed on October 4, 2011, all of which may be viewed or obtained through the Investor Relations section of our web site at http://www.saic.com/.

All information in this release is as of March 20, 2012. The Company expressly disclaims any duty to update the guidance or any other forward-looking statement provided in this release to reflect subsequent events, actual results or changes in the Company's expectations. The Company also disclaims any duty to comment upon or correct information that may be contained in reports published by investment analysts or others.

CONTACTS:

Investor Relations: Paul Levi 703-676-2283 Paul.E.Levi@saic.com

Media Relations: Melissa Koskovich (703)676-6762 koskovichm@saic.com

SOURCE SAIC