UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
Date of Report: October 15, 2008
SAIC, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
| 001-33072 | 20-3562868 | |
| (Commission File Number) | (I.R.S. Employer Identification No.) |
10260 Campus Point Drive, San Diego, CA 92121
(Address of Principal Executive Offices) (Zip Code)
(858) 826-6000
(Registrant’s Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
FORM 8-K
| Item 7.01 | Regulation FD Disclosure. |
SAIC Institutional Investor Conference
SAIC, Inc. (Company) will hold its second Institutional Investor Conference (Conference) in McLean, Virginia today, October 15, 2008. At the Conference, several senior executives of the Company will make presentations and discuss the Company’s current performance and strategies for the future. Interested parties can listen to the presentations through a live audio webcast on the Company’s web site, www.saic.com, beginning at 8:00 a.m. Eastern time today, October 15, 2008.
Charts to be used in the presentations made by the Company’s senior executives at the Conference are attached to this Current Report on Form 8-K as Exhibit 99.1.
Certain statements made in the charts attached to this Current Report on Form 8-K as Exhibit 99.1 or by executives at the Conference contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (Securities Act). Forward-looking statements involve a number of risks and uncertainties. A number of factors could cause the Company’s actual results, performance, achievements, or industry results to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. Some of these factors include, but are not limited to, the risk factors set forth in the Company’s Annual Report on Form 10-K for the year ended January 31, 2008, and other filings that the Company makes with the SEC from time to time. Due to these uncertainties and risks, readers of this Current Report on Form 8-K and persons who view these presentations are cautioned not to place undue reliance on such forward-looking statements, which speak only as of October 15, 2008. The Company disclaims any duty to update guidance or any other forward-looking statement provided in the Exhibit to this Current Report on Form 8-K or in the presentations made by Company executives at the Conference to reflect subsequent events, actual results or changes in the Company’s expectations.
The information contained in this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liabilities of that section of the Exchange Act. Furthermore, the information contained in this Current Report on Form 8-K, including the Exhibit attached hereto, shall not be deemed to be incorporated by reference into any registration statement of the Company or other document filed by the Company pursuant to the Securities Act or the Exchange Act.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits |
| Exhibit 99.1* | Charts used in senior executive presentations made on October 15, 2008 at the SAIC Institutional Investor Conference. |
| * | This Exhibit shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section of the Exchange Act, nor shall it be incorporated by reference into any filing under the Securities Act or the Exchange Act. |
2
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 hereunto duly authorized.
| (Registrant) | SAIC, INC. | |||||||
| Date: October 15, 2008 | By: | /s/ DOUGLAS E. SCOTT | ||||||
| Douglas E. Scott | ||||||||
| Its: | Executive Vice President | |||||||
| General Counsel and Secretary | ||||||||
3
 Welcome and Introduction Stuart Davis SVP, Investor and Employee Owner Relations Exhibit 99.1 |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 2 Energy | Environment | National Security | Health | Critical Infrastructure LUNCH 12:00 PM Charles Koontz IT and Network Solutions Group and Health Campaign 11:35 AM Joe Craver Infrastructure, Logistics and Product Solutions Group and Energy Campaign 11:10 AM Larry Cox Cyber Campaign 10:50 AM Stu Shea Intelligence, Security and Technology Group and Space Superiority Campaign 10:25 AM Deb Alderson Defense Solutions Group and C4ISR Campaign 10:00 AM BREAK 9:45 AM Corporate Q&A 9:15 AM Mark Sopp Financial Overview 8:55 AM Larry Prior Operational Perspectives 8:25 AM Ken Dahlberg Enterprise Overview 8:05 AM Stuart Davis Welcome 8:00 AM Agenda |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 3 Energy | Environment | National Security | Health | Critical Infrastructure SAIC Investor Relations Website http://investors.saic.com Replay and presentation materials available |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 4 Energy | Environment | National Security | Health | Critical Infrastructure Certain statements in these presentations contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended. The forward-looking statements involve a number of risks and uncertainties. A number of factors could cause our actual results, performance, achievements, or industry results to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. Some of these factors include, but are not limited to, the risk factors set forth in the Company’s Annual Report on Form 10-K for the year ended January 31, 2008, and other filings that the Company makes with the SEC from time to time. Due to these uncertainties and risks, persons who view these presentations are cautioned not to place undue reliance on such forward-looking statements, which speak only as of October 15, 2008. The Company disclaims any duty to update guidance or any other forward-looking statement provided in these presentations to reflect subsequent events, actual results or changes in the Company's expectations. Forward Looking Statements This presentation describes financial results through 7/31/08 (FY2009 Q2)
|
 Enterprise Overview Ken Dahlberg Chairman and Chief Executive Officer |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 6 Energy | Environment | National Security | Health | Critical Infrastructure Company Update • Gaining momentum in transformation efforts – 8 quarters as a public company—met or exceeded expectations every quarter
– Organizational clarity with 4 Groups and 19 Business Units – Costpoint implementation about half completed – Project Alignment well underway with the stand up of our Shared Services Center
• Investing to pursue large opportunities and create technical discriminators – Won 58 $100M+ programs since IPO, with 137 more in pipeline – Increasing IR&D in ISR, security products, C2, and precision strike • Developing strategies for breakout growth opportunities – Energy management and efficiency – Health data records management • Managing our portfolio to fuel long-term EPS growth – Exit non-core commodity/low margin businesses – Emphasize more “noble work” in system integration and some products – Don’t forsake our core technical services business – Cyber – Cargo inspection |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 7 Energy | Environment | National Security | Health | Critical Infrastructure Smart People Solving Hard Problems 09-1844-ID-01 National Security • Co-Lead Systems Integrator on Army’s #1 program • Prime contractor for DoD network infrastructure • ~$2B in Intelligence (mission support, IT, R&D) • Leading integrated supplier for DLA Critical Infrastructure • #1 provider of non-intrusive inspection systems • Selected for 8 of 9 Secure Freight Initiative ports • #1 CBRN services provider (trained >400K first responders) • #1 provider of DHS data center solutions • Driving effectiveness of oil recovery for BP • Design/build more energy-efficient facilities for GM • Leading provider of climate and environmental data services to NOAA and USGS Energy and the Environment • Operate the National Cancer Institute • Support IT for military clinical systems worldwide • Leading biosurveillance efforts for CDC and DHS • Leading VA/DoD data sharing effort Health |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 8 Energy | Environment | National Security | Health | Critical Infrastructure 8 Company Transformation 09-1844-ID-02 Transformation expected to be substantially complete in FY11 Implement Strategic Planning Incentivize Collaboration Create Margin Expansion Course Stand up Shared Service Center Bring in New Line Leadership Revise Equity Programs Roll out Costpoint Pilots Lay out Real Estate Strategy Step up IR&D Spending Develop Business ConOps Reinvigorate Bus Dev Roll out Targets to All Levels Step up Recruiting Programs Implement Branding Campaign Sell Telcordia Complete IPO Focus Commercial Achieve SOx compliance Reorganize AMSEC FY05 FY06 FY07 FY08 FY09 Foundational Issues New Growth Model More Competitive Posture Revenue $6.91B Revenue $7.52B Revenue $8.06B Revenue $8.94B Revenue $9.70B-9.98B Organic Growth 17% Organic Growth 3% Organic Growth 4% Organic Growth 7% Organic Growth 6%-9%+ Operating Income 6.7% Operating Income 6.3% Operating Income 7.1% Operating Income 7.5% Operating Income 7.7%-7.8% Roll out Costpoint Wave 1 Increase B&P Spending Roll out Second Campaigns Roll out First Campaigns Evaluate Capital Structure Realign Businesses Revise BoD Composition, Size, Committee Structure Instill Culture of Discipline Move Discretionary Resources to Higher Levels Change Incentive Structure |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 9 Energy | Environment | National Security | Health | Critical Infrastructure SAIC Core Values and Purpose |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 10 Energy | Environment | National Security | Health | Critical Infrastructure © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 1 09-1844-ID-03 SAIC Organization Mark Sopp Technology Amy Alving Business Development Greg Henson Human Resources Brian Keenan Government Affairs, Arnold Punaro Communication and Support Operations Legal and Audit Doug Scott Strategic Initiatives Joe Walkush and Investments Defense Solutions Infrastructure, Logistics and Product Solutions Information Technology and Network Solutions Intelligence, Security and Technology Ken Dahlberg Chairman and CEO Larry Prior COO CFO Deb Alderson Joe Craver Charles Koontz Stu Shea |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 11 Energy | Environment | National Security | Health | Critical Infrastructure Market Outlook • Addressable market growth will flatten, but market remains large – Budgets less predictable with increasing deficit pressure – Competition more fierce—industry will experience margin pressure – Lowering of prices, strong cash generation will promote more consolidation • Industry must navigate increasingly hostile environment – Wartime Commission – Congressional hearings – Organizational Conflicts of Interest • Companies will distinguish themselves based on positioning or execution – Desire to “in-source” – Populist rhetoric – Anti-contractor bias 09-1844-ID-36 Faster Growing Markets • Intelligence • Energy • Cyber • C4ISR • Logistics • Health Market Share Capture • Platform Independent SE&I Agent • Logistics Integration • Task Order Pursuit |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 12 Energy | Environment | National Security | Health | Critical Infrastructure Impact of National Elections 12 Current Views on National Security • Increase military end strength 150,000 • Support surge with no timetable for withdrawal of forces • Move supplemental funding into DoD appropriation • Fund theater ballistic missile defense • Increase investment in new technologies • Minimize cost-plus contracting • Increase oversight and eliminate earmarks • Increase military end strength 92,000 • Phased withdrawal from Iraq; shift mission to counter-terrorism operations, protection of U.S. citizens, and training of Iraqi forces • Reduce supplementals as a funding source • Closely monitor funding for missile defense • Increase basic research • Increase reliance on diplomacy and humanitarian aid • Increase military presence in Afghanistan Manpower entitlements limit funds available for contractors; major platforms, including FCS, come under pressure |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 13 Energy | Environment | National Security | Health | Critical Infrastructure Impact of National Elections 13 Current Views on Critical Infrastructure • Implement 9-11 commission recommendations • Increase spending on border and port security • Fund technologies for integrated communications for first responders • Increase spending beyond aviation safety, e.g., mass transit, chemical/nuclear plants • Increase investment in transportation infrastructure • Implement 9-11 commission recommendations • Increase spending on border and port security • Fund first responders with additional $.5-$1.7 billion • Increase spending beyond aviation safety, e.g., mass transit, chemical/nuclear plants • Increase investment in transportation infrastructure Continued funding of DHS priorities above future year budget request levels |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 14 Energy | Environment | National Security | Health | Critical Infrastructure Impact of National Elections 14 Current Views on Energy and the Environment • Implement market-based carbon cap-and- trade system • End the moratorium on offshore drilling • No windfall profit tax on oil companies • Ban drilling for oil in ANWR • Build 45 nuclear power plants by 2030 • Cut greenhouse gas emissions 60 percent below 1990 levels by 2050 • Stricter regulation of the oil futures market • Implement market-based carbon cap-and- trade system • Enhance and use clean coal technology to reduce dependence on foreign oil in 10 years • Impose windfall profit tax on multi-national oil companies • Ban drilling for oil in ANWR • Keep nuclear power option open • Cut greenhouse gas emissions 80 percent below 1990 levels by 2050 Economic incentives for energy efficiency and increased R&D in energy alternatives and understanding climate change |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 15 Energy | Environment | National Security | Health | Critical Infrastructure Impact of National Elections 15 Current Views on Health • Rely on market-based health care as opposed to universal healthcare • Incentives and tax credits for individuals and families to purchase health insurance • Consolidate billing across care providers • Deploy health information technology to improve chronic disease care • Create National Health Insurance Exchange– coverage with both private and public options • Provide coverage for all children • Accelerate pay-for-performance initiatives • Invest $50B toward adoption of electronic medical records Increased spending in government health IT |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 16 Energy | Environment | National Security | Health | Critical Infrastructure Impact of National Elections 16 Current Views on Government Services Industry • Increase R&D funding • Expand the use of fixed-price contracts • Limit sole-source awards • Control costs by reorganizing the bureaucracy and changing procurement methods • Promote open trade and responsible bilateral and multilateral trade agreements • Would not give lobbyists special access • Increase R&D funding • Competitively bid all federal contracts >$25K except those deemed to be emergencies • Reduce spending on contractors by 10% • Does not promote open trade and responsible bilateral and multilateral trade agreements • No political appointees allowed to work on contracts or regulations related to their prior employer for 2 years after employment Increased industry oversight and regulation |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 17 Energy | Environment | National Security | Health | Critical Infrastructure Strategic Actions • Deploy our capital wisely – Repurchase stock at an attractive return to stockholders – Complete mid-size acquisitions in key growth markets – Target larger acquisition candidates (>$500M) opportunistically • Focus on high-growth markets – Execute campaigns around energy, health, cyber, and space superiority – Divest non-core commodity/low-margin business • Shape our mix of business – Mature capabilities in light touch production and LRIP development – Improve ability to develop, deliver, and support total solutions – Build our capabilities and reputation as a prime – Explore different business models – Invest more in our people and discriminating technologies • Create a more competitive cost structure – Reduce corporate overhead and invest in internal growth |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 18 Energy | Environment | National Security | Health | Critical Infrastructure Enterprise Summary • Two years after IPO, our investment thesis is unchanged – SAIC can deliver strong returns by maintaining internal revenue growth, expanding
margins, and deploying capital wisely • Company is executing according to IPO plan – 8% internal revenue growth rate and improving operating margin since IPO – Divested non-core businesses—AMSEC and ANX – Won large competitive programs—GPS, POL-Chem, NATO BMD – Deployed ~$600M on acquisitions: AMTI, Benham, AETC, Scicom, Icon, SMC – Executed share repurchase plan to deploy excess capital and manage dilution – Changed incentive programs to address option overhang • Long-term market drivers remain in place, but budget challenges are real – Agility and innovation are critical—and key SAIC differentiators – Cost structure enhancements will make us even more competitive
|
 Operational Perspectives Larry Prior Chief Operating Officer |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 20 Energy | Environment | National Security | Health | Critical Infrastructure Agenda • Growth Drivers – Business Development – Our People – Technology Discriminators • Operational Efficiency – IT Modernization – Project Alignment • Operations Summary |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 21 Energy | Environment | National Security | Health | Critical Infrastructure Business Development Strategy • Maintain entrepreneurial approach to small jobs – Division and program managers staying close to their customers – Network resiliency and strong core in National Security • Focus corporate resources on large SE&I jobs – Aggressively targeting strategic markets • Position for market breakout inflection points – Secure Freight Initiative, Carbon Cap-and-Trade, Health • Stress (and reward) cross-company collaboration – Attack the market as “One SAIC” • Invest more Bid & Proposal and Internal R&D funds in high-growth areas
– Strategic plan drives campaigns which drive Business Development priorities • Treat each recompete like a new capture – Leverage customer intimacy and start the process early • Balance support for the customer with returns to shareholder – Be willing to walk away from lower margin work (e.g., EROS Data Center)
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 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 22 Energy | Environment | National Security | Health | Critical Infrastructure Business Development Capture Metrics • Traditional metrics show increasing traction and support growth goals • Expect to generate another ~$27B in revenue from future task orders on existing IDIQs 15.1 9.7 5.4 1.1 2.5 Q1 15.9 10.5 5.4 1.3 3.3 Q2 15.9 15.0 15.0 15.8 14.1 14.4 14.9 Total Backlog 10.5 9.9 9.9 10.4 9.6 9.7 10.3 Unfunded Backlog 5.4 5.1 5.1 5.4 4.5 4.7 4.6 Funded Backlog 1.2 1.0 0.6 1.6 0.9 0.7 1.1 Book-to-Bill 5.8 8.8 1.5 3.9 1.9 1.5 8.9 Bookings Contract Awards Only FYTD FY Q4 Q3 Q2 Q1 FY FY09 FY08 FY07 Metric |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 23 Energy | Environment | National Security | Health | Critical Infrastructure Business Development Major Recent Wins • 23 wins >$100M YTD (11 IDIQ/12 Contract Awards) – 10 wins so far in Q3 (3 IDIQ/7 Contract Awards) ENCORE II ($500M, Multiple) • Full life-cycle IT solutions for DISA Guardian ($250M, Single) • CBRN services and solutions for Army C5ISR ($222M, Single) • Tactical vehicle integration for SPAWAR Warfighter Focus ($200M, Single) • Life-cycle integrated training support PM Support ($200M, Multiple) • Technical and analytic support to DoJ agency FAST II ($800M, Multiple) • Logistics support for AF weapons systems Classified ($170M, Single) • Cyber support for Intell customer AITS ($454M) • IT support for Guard/Reserve Classified ($309M) • Intelligence operations support Classified ($161M) • Consolidated contract with Intell customer HRC ITSO ($410M) • IT support for Army HR Command NASA UNITeS ($218M extension) • IT support for Marshall Space Center COCOM IT Support ($226M) • IT support for COCOM C4 Directorate NMEC OCONUS Support ($253M) • Linguist/media exploitation support for DIA Contract Awards IDIQs |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 24 Energy | Environment | National Security | Health | Critical Infrastructure Business Development Pipeline Metrics Total FY12+ FY11 FY10 FY09 EXPO GSM (DGS) AMPS ETS II NEP II NASA UNITeS GWOT IDIQ CIO-SP3 TIPSS 4 IATS ICE ITESS STOC II CECOM R2 Major Recompetes 70,267 4,795 2,968 63 8,061 92 26,060 566 33,178 4,074 Total 24,224 4,658 374 61 1,025 80 6,476 509 16,349 4,008 <$100M 46,043 137 2,594 2 7,036 12 19,584 57 16,829 66 $100M+ Total 34,012 500 475 5 3,679 11 15,313 111 14,545 373 Total 6,907 432 175 4 129 7 1,992 78 4,611 343 <$100M 27,105 68 300 1 3,550 4 13,321 33 9,934 30 $100M+ IDIQ Master Agreements 36,255 4,295 2,493 58 4,382 81 10,747 455 18,633 3,701 Total 17,317 4,226 199 57 896 73 4,484 431 11,738 3,665 <$100M 18,938 69 2,294 1 3,486 8 6,263 24 6,895 36 $100M+ Standard Contract and Task Order $ # $ # $ # $ # $ # Opportunity Type • Point-in-time estimate (Q2 end) of continually evolving picture • Reported pipeline shows fully qualified opportunities – $14B in proposals awaiting government decision—29 opportunities >$100M
($8B) – Another $93B of potential opportunities in “track” status |
 25 Energy | Environment | National Security | Health | Critical Infrastructure Our People Retention and Recruiting FY07 FY08 FY09 Number of Hires FY07 FY08 FY09 Voluntary Turnover Rate • YTD vol turnover is 13.0%, down 50 bps • Vol turnover is well below industry average and nearing aggressive goal of 12.6% • >50% of at-risk employees redeployed YTD • 8% above our hiring rate from last year • On pace for >9,500 hires for FY09 • Net adds of almost 2,100 employees YTD Internal Acquisitions © 2008 Science Applications International Corporation. All rights reserved. SAIC and the
SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 26 Energy | Environment | National Security | Health | Critical Infrastructure 26 09-1844-ID-05 Our People FY08 People Breakout Other 30% Master 29% PhD 4% Other 21% IT 36% DC Metro 39% San Diego 10% Inter- national 5% Hunts- ville 5% Other US 42% • 55% have >3 years tenure with SAIC; 38% have >5 years tenure with SAIC • 22% ethnic
minority; 33% female • >22,000 possess a security clearance Bachelor 46% Education Location Specialty Science/ Eng 14% Finance 6% PM 6% Analysis 9% |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 27 Energy | Environment | National Security | Health | Critical Infrastructure Our People Human Capital Initiatives • Employee Engagement – Focused on improving communication, people management skills, recognition programs, and learning & development – Achieved greater retention and increased engagement among new hire population
• Diversity and Inclusion – Defined metrics measuring diversity impact and improvement within operating units
– Improved awareness through employee networks/affinity groups and identity programs • Professional and Career Development – Developed succession plans for key positions and development plans for high potentials at all levels – Created Chairman’s Program to grow our future leaders – Implemented formal career paths for program managers, intelligence analysts,
scientists, engineers, systems engineers, and front-line managers
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 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 28 Energy | Environment | National Security | Health | Critical Infrastructure Technology Discriminators Key Enablers • Technology is at the heart of SAIC • Highly skilled and innovative workforce with passion for mission • Build on our science and technology legacy with new or enhanced initiatives – IR&D investment and execution – S&T career paths – SAIC Technical Fellows Council – Internship program SAIC Core Value #1 Technical and Professional Excellence SAIC Purpose Statement #1 To solve important national and global problems through science, engineering and innovation SAIC Vision Be the leading systems, solutions, and technical services company, solving our customers' most important business and mission-critical problems through innovative applications of technology and domain knowledge. “From Science to Solutions” – PhD new hire program – University alliances – Enterprise-wide knowledge flow – Technical collaboration |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 29 Energy | Environment | National Security | Health | Critical Infrastructure Technology Discriminators SAIC’s Technology-Based Capabilities Today Physics-Based Modeling Advanced Simulators Non-Intrusive Inspection Advanced Image Analysis Advanced Materials Advanced Guidance and Navigation Advanced Electronics Marine Mammals Neuro- Science Cryptology Advanced Sensors Advanced Power Management |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 30 Energy | Environment | National Security | Health | Critical Infrastructure Wave 2 Wave 3 IOC Wave 1 IT Modernization Costpoint Update • System deployment is on schedule and business operations are uninterrupted – Completed systems engineering to improve scalability and performance – Simplified accounting structure and financial processes % of Government Business on Costpoint FY08 Q3 100% 75% 50% 25% 0% Q3 Q2 Q4 FY09 FY10 FY10 |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 31 Energy | Environment | National Security | Health | Critical Infrastructure IT Modernization Strategic View Corporate Focused Line/Customer Focused Bus Dev, Contracts, and Corp Support Line IT Support Services (End Point Computing) Group Operations and Project Execution Finance Human Resources • Standardized • Secure • Scalable • Reliable • Defined Architecture • Process Focused • Compliance Based • Access Controlled • Leading Edge • Dynamic • Reconfigurable • Responsive • Flexible • Collaborative Adding a “virtual grid” provides aggressive market engagement |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 32 Energy | Environment | National Security | Health | Critical Infrastructure Project Alignment Overview • Multi-year effort to redesign and improve internal business support services
– Top-to-bottom review of the Company – Disciplined engineering and program management approach – Extensive line and corporate participation • Program objectives – Reduce hassle—simplify and standardize business processes – Consolidate business support functions where it makes sense – Generate additional internal investment funds to drive internal growth – Improve competitiveness • Efforts to date have focused on: – Evaluating each functional discipline and developing an end-state vision – Implementing improvements in Corporate functions – Establishing Shared Service Center to house transactional support functions – Building the roadmap to modernize the IT infrastructure Savings target: $100M annually |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 33 Energy | Environment | National Security | Health | Critical Infrastructure Project Alignment Shared Services Center • Consolidating Accounts Payable, Corporate Purchasing, and HR Service Centers – Simplified and standardized service delivery models – Lower cost area with wages expected to be >12% below current levels • Space scheduled for occupancy by mid-November – Demolition began on August 18; construction began on September 2 • 20,000 sq ft in SAIC-owned facility – Improve existing density with open architecture design • Limited investment required – Consolidated buying power to fit our standard facility and IT architecture – Internal SAIC capabilities for architecture and engineering design • Run as a “business within the business” focused on customer satisfaction and continuous process improvement |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 34 Energy | Environment | National Security | Health | Critical Infrastructure Project Alignment Major Accomplishments • Moved key IT functions to existing customer-facing operations – Transitioned security monitoring to SAIC’s IS&T Security Operations Services
• Leverage knowledge of global cyber threats and prevention/remediation services
• Improved monitoring, event correlation, event management, and diagnostics – Transitioned network operations and service to SAIC’s IT&NS Network
Services • Leverage commercial network management services • Consolidate data, voice, and audio/video network support in anticipation of future
convergence – Transitioned service desk operations to SAIC’s IT&NS Service Management
Center • Leverage SAIC’s ISO 20000 certified service • Improve call handling, resolution, and hours of operation • Other accomplishments – Evaluated and reduced corporate staff – Cut facility footprint by 150K sq ft by terminating or consolidating 21 leases
– Outsourced employment verification, background investigations, and utility vendor
payments – Consolidated data and voice contract – Implemented and enforced new policy on Common Operating Environment – Eliminated millions of hardcopy pages with digital workflows and data stores Project is gaining momentum and delivering early results |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 35 Energy | Environment | National Security | Health | Critical Infrastructure Project Alignment FY10 Plans • Mature operations of Shared Service Center • Continue populating Shared Service Center with highly transactional services – Move services from high cost locations to low cost location – Primarily focusing first on less complex and relatively self-contained
services • Streamline corporate operations and facilities – Continue to consolidate departments and drive operating efficiencies – Close at least two mid to large size buildings • Simplify and standardize processes – Eliminate hassle and inefficiencies – Leverage the company’s buying power by using e-catalog services – Digitize records/forms; significantly reduce the processing and storage of paper
– Start capturing savings associated with implementation of Costpoint
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 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 36 Energy | Environment | National Security | Health | Critical Infrastructure Operations Summary • People First • Driving Growth Today – Resilient network of SAIC entrepreneurs close to the customer – Focused investment on large SE&I jobs – Position for breakout opportunities – Expand our technical talent and discriminators • Building Cost Structure for Tomorrow • Executing with a Culture of Discipline • Actively Managing our Risk Profile |
 Financial Overview Mark Sopp Chief Financial Officer |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 38 Energy | Environment | National Security | Health | Critical Infrastructure Agenda • Guidance • Income Statement – Revenue Growth Trend – Revenue Breakout – Forward Revenue Visibility – Operating Margin Expansion • Equity Programs • Cash Flow • Capital Deployment and Liquidity • Cash Investments • Financial Summary |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 39 Energy | Environment | National Security | Health | Critical Infrastructure Guidance • Long-term guidance model intact—in place since the IPO – 6%-9% internal revenue growth – 20-30 bps operating margin expansion – 2%-4% growth from acquisitions – 11%-18% EPS growth with target of 15% – Assuming share count held constant through share repurchase program and no material below the line changes • On 9/3 earnings conference call, we reaffirmed that we expect to meet these long-term goals for FY09 – Also indicated that if M&S demand is high in Q4, revenue range may be exceeded
and margin expansion target would be tougher to meet • Since then, DoD, DHS, and MilCon/VA have full-year budgets with healthy increases and all other departments have Continuing Resolutions in place • Today we reaffirm this guidance for FY09 |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 40 Energy | Environment | National Security | Health | Critical Infrastructure Revenue Growth Trend Key Growth Drivers • Renewed BD focus: bookings targets, more B&P $, improved account management • Greater emphasis on and more collaborative approach to larger pursuits ($100M+)
• Customer domain expertise—expanding scope on existing contracts and accounts
4% 7% 12% 3% 4% 4% 0% 5% 10% 15% 20% FY07 FY08 FY09 H1 Internal Acquisitions |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 41 Energy | Environment | National Security | Health | Critical Infrastructure Revenue Breakout 13% Commercial, International & State/Local 12% Other Federal Civil 5% NASA 27% Intell/Other DoD 8% Air Force 14% Navy/Marines 21% Army Customer 14% GSA Schedule 26% Multiple-Award IDIQ TO 24% Single-Award IDIQ TO 36% Standard Contract Contract Source 18% Fixed Price 35% Time and Materials 47% Cost-Reimbursement Contract Type 39% Material and Subcontract 61% Labor-Related Revenue Type 17% IT & Network Solutions 22% Infrastructure, Logistics and Product Solutions 29% Defense Solutions 32% Intelligence, Security and Technology Organization FY08 Revenue Attribute |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 42 Energy | Environment | National Security | Health | Critical Infrastructure Forward Revenue Visibility • Bookings momentum and funding strength throughout business – TTM and H1 FY09 Book-to-Bill of 1.2x • Needle moving new wins (estimated annual revenue) – POL-Chem ($75-100M), AITS ($75-100M), Classified Intell ($50-60M), Classified
Cyber ($10-20M) • Some holes in the base to be filled – MRAP C3 Integration wind down ~$125M – EROS and FASI recompete losses ~$30M • Strong IDIQ book of business and task order generation capability Total FY12+ FY11 FY10 FY09 15.9 3.7 3.1 5.0 4.1 Total 10.5 3.2 2.6 3.8 0.9 Negotiated Unfunded 5.4 0.5 0.5 1.2 3.2 Funded Backlog |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 43 Energy | Environment | National Security | Health | Critical Infrastructure Operating Margin Expansion High-Level Framework • COGS: +30 to 110 bps – Contract fees: business mix, collaboration, higher M&S loads, technology
discriminators – Overhead efficiencies: facilities consolidation, IT modernization, rate management,
scale – Unallowable: control/reduce, re-evaluate policies • SG&A: +30 to 50 bps – Corporate costs: process streamlining, IT modernization, scale – Other: option reductions, amortization – Some cost savings assumed reinvested in B&P and IR&D 9.0% 8.5% 8.0% 7.5% 7.1% Op Margin 5.9% 6.0% 6.1% 6.4% 6.4 % – SG&A 14.9% 14.5% 14.1% 13.8% 13.5 % Gross Margin 85.1% 85.5% 85.9% 86.2% 86.5% – COGS 100% 100% 100% 100% 100% Revenue Future State FY08 FY07 Measure |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 44 Energy | Environment | National Security | Health | Critical Infrastructure Total Reduce Rates/Increase Competitiveness (CR Contracts) Reinvest in B&P and IR&D Option Reduction (to Recoverable Vesting Stock) Corporate Efficiency/Economies of Scale Unallowable Control/Reduction IT Modernization Facilities Consolidation Faster Growth in Higher Margin Areas Contract Fee Improvements (Collaboration, M&S) FY12 FY11 FY10 FY09 Margin Expansion Initiative Operating Margin Expansion Estimated Impact and Time Phasing of Key Elements 10–50 bps 10–30 bps 10–20 bps 10–20 bps 10–20 bps 20–40 bps 10–20 bps (20)–(40) bps (20)–(30) bps 50–150 bps We have well-identified drivers to reach 8%-9% operating margin 10–20 bps |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 45 Energy | Environment | National Security | Health | Critical Infrastructure Equity Programs Issuance and Option Trends Option Overhang Estimated Annualized Share Dilution • Significantly reduced equity compensation programs after the IPO – Replaced ~$75M of equity compensation with cash (~3.5M shares) – Reduced ESPP discount rate from 15% to 5% and used savings to offset medical plan increases – Reduced option grant rate; converted ~50% of grant value to recoverable vesting stock FY07 Q1 Q2 Q3 Q4 FY08 Q1 Q2 Q3 Q4 FY09 Q1 Q2 20% 15% 10% 5% 4% 3% 2% 1% 0% Q4 Q4 Q1 Q1 FY07 Q1 Q2 Q3 FY08 Q2 Q3 FY09 Q2 Annualized Dilution ESPP Discount Change Equity to Cash |
 ©-2008-Science-Applications-International-Corporation. -All-rights-reserved.-SAIC-and-the-SAIC-logo-are-registered-trademarks-of-Science-Applications-International-Corporation-in-the-U.S.-and/or-other-countries. Energy | Environment | National Security | Health | Critical Infrastructure Share Repurchases (M) Quarterly Diluted Shares (M) Equity Programs Diluted Shares Outstanding & Repurchases • Substantial cash deployment towards repurchases since IPO; > than share creep
• Pace of preferred to common conversions continues – Common float increasing – Added-to-the-S&P-MidCap-400-Index FY07 FY08 FY09 FY07 FY08 FY09 46 |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 47 Energy | Environment | National Security | Health | Critical Infrastructure Cash Flow Forward Cash Flow Model w/o Acquisitions 345 Operating Cash Flow 0.75% to 1.0% of revenues 0.75% to 1.0% of revenues (61) Capital Expenditures 284 Free Cash Flow ~5% of internal revenue growth ~5% of internal revenue growth plus special items: -$125M for extra payroll and +75M for 3-day DSO reduction (214) Working Capital Increase faster than internal revenue growth (as increased vesting stock is amortized) Consistent with FY08; increase in vesting stock amortization is offset by the elimination of the non-cash ESPP expense 93 Non-Cash Employee Stock Transactions Based on current intangible run-off schedule on 10Q Based on current intangible run-off schedule on 10Q 28 Amortization Increase at long-term internal revenue growth rate of 6% to 9% Increase at long-term internal revenue growth rate of 6% to 9% 52 Depreciation Increase at long-term growth rate without acquisitions of from 9% to 14% Increase at long-term growth rate without acquisitions of 9% to 14% 386 Income from Continuing Operations FY10 FY09 FY08 (A) Measure |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 48 Energy | Environment | National Security | Health | Critical Infrastructure Capital Deployment and Liquidity • Business model generates significant operating cash flow • Deploy capital on a rational, disciplined basis to build long-term value for our
stockholders – Internal growth initiatives – Strategic acquisitions – Share repurchases • Conservative liquidity posture • Maintain "A-" credit
rating
in this market 692 1,096 Ending Cash Position (408) (15) Cash From Continuing Ops 56 71 Other (110) (10) Change In Debt (368) (215) Public Stock Repurchases (203) (145) Acquisitions (25) (61) Capital Expenditures 242 345 Operating Cash Flow FY09 H1 FY08 Capital Deployment ($M) |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 49 Energy | Environment | National Security | Health | Critical Infrastructure Cash Investments • Strong governance with investment policy approved by BOD – Investment objectives – Eligible investment instruments – Minimum credit quality (credit ratings) – Maximum single issue/issuer concentration and maturity restrictions • Investment objectives (in order) – Preservation of capital – Liquidity – After-tax total returns • Current investments – Substantially all domestic cash held in “U.S Treasuries” money market funds • Diversified among four funds (NTE $250M each) • All rated AAA (S&P) and Aaa (Moody’s) • “Net Asset Value” or “Market Value” determined daily per SEC 2a-7 rules – ~$60M in conservative overseas money market funds and bank deposits relating to
foreign operations |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 50 Energy | Environment | National Security | Health | Critical Infrastructure Financial Summary • Sustainable shareholder value creation • Consistent, demonstrated progress on all financial fronts • Market strength—robust internal revenue growth • Expanding operating margins and overall profitability • Low asset intensity – Predictable and growing free cash flow • Disciplined deployment of capital • Realistic, achievable path with identified enablers – Culture of discipline and collaboration – Building pipeline of large opportunities – Margin expansion ingrained throughout organization – Multiple enablers for greater cost efficiencies |
 Defense Solutions Group and C4ISR Campaign Deb Alderson Group President |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 52 Energy | Environment | National Security | Health | Critical Infrastructure 09-1844-ID-08 Defense Solutions Group Enterprise and Mission Solutions Systems and Technology Solutions Analysis, Simulations, Systems Engineering and Training C4IT Defense and Maritime Solutions Bill Gurley $670M Peter Dube $570M Bev Seay $560M Debbie James $380M Tom Baybrook $700M System Integration and Enterprise Life-Cycle Management – Missile Defense Systems Enterprise and Complex Network Services Modeling, Simulation and Training; Management Systems C4 Engineering and Network Centric Integration Technical and Engineering Services – Software and Hardware Major provider for Combatant Commanders; Air Force and Army # 1 contractor to Navy SPAWAR System Centers; MRAP #1 DISA Contractor Key provider to Naval Surface / Under Sea Warfare Centers FCS; Major support of Army and Missile Defense Agency Deb Alderson Group President $3.0B Revenue Group Structure and Focus |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications
International Corporation in the U.S. and/or other countries. 53 Energy | Environment | National Security | Health | Critical Infrastructure C4 Systems Engineering & Integration 43% Modeling, Simulation & Training 7% Engineering & Technical Services 21% Enterprise IT Solutions & Services 29% 09-1844-ID-19 Key Solutions and Customers DoD, DHS DoD DoD Engineering Design Professional Engineering Services Test and Evaluation Engineering and Technical Services Modeling and Simulation Live, Virtual, and Constructive Training Knowledge Management Distance Learning Army, Air Force Army DoD DoD Modeling, Simulation, and Training Operational Command and Control Integrated System Design and Implementation Joint Mission Planning Life Cycle Capability Management AF, Army Army, Navy, AF AF Army C4 Systems Engineering and Integration Enterprise Network Design and Solutions Network Operations and Management Network Security DISA, DoD DoD, National Guard DoD Enterprise IT Solutions and Services |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications
International Corporation in the U.S. and/or other countries. 54 Energy | Environment | National Security | Health | Critical Infrastructure Major Growth Drivers • Corporate campaigns: Cyber, C4ISR • Major group focus areas – Ground Systems Integration – Training, modeling, and simulation • Constrained budgets and growing O&M costs – Legacy upgrades/reset and new construction • Network enabled capability…life cycle support – MRAP and JLI • Platform Independent Integration – FCS and JLTV – CONUS and International • Technology driving realistic immersive training • Simulation needed for operational C3 – Decision support and adaptive planning, integrated training – Deep Green DARPA • Icon Systems–live, virtual, and constructive training • OneSAF/SE Core and Ground Vehicle Trainers • Army Aviation and Missile Research Command |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 55 Energy | Environment | National Security | Health | Critical Infrastructure C4ISR Campaign Where DoD is Heading |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 56 Energy | Environment | National Security | Health | Critical Infrastructure 09-1844-ID-11 C4ISR Campaign What They Are Buying $17 Billion SAIC Addressable Market Command and Control Netcentric Communications Battlespace Awareness Integrated C4ISR • NATO ALT BMD • SEIC • DARPA Deep Green • DISA DSN • NCES • MRAP • Predator Ops Center (POC) • P-ISR (Angel Fire) • DCGS-A Enterprise • FCS • AOC WSI • BETSS-C |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 57 Energy | Environment | National Security | Health | Critical Infrastructure 09-1844-ID-12 C4ISR Campaign Evolution to Network Enabled Capability Building it Different Buying it Different Using it Different • Interoperability paramount • Fusion of C2 and intelligence • Decision cycle time reduction • Rapid response to emerging threats • Logistics effectiveness • Lead Systems Integrator ? • IDIQ contracting • Capability based versus platform based • Integrated solutions • Integrated Solutions versus Stovepipes • SOA based systems • Coalition and expanded user base • Fusion of C3 and Situational Awareness • Strong Enterprise Governance • Fast, accurate, interoperable, secure • Integrated legacy components • SOA standards • Discoverable, accessible and understandable data • Virtualization • Network seen as key capability in challenging threat environment Network Enabled Capability Change Vectors |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 58 Energy | Environment | National Security | Health | Critical Infrastructure 09-1844-ID-13 C4ISR Campaign Addressable Market and Opportunities Opportunities • CENTCOM J6 C4IT • SPAWAR SSC OCONUS C4ISR Support Opportunities • Prophet OAP • Big Safari WASS • AFRL RV IROSS Opportunities • JLTV • NBSC Truck Opportunities • Net Enabled Comm and Capability • Cyber Control System • DCGS Marine Corps • GSM Recompete Computers, IT Services and Technical Support Command and Control $2.3 B Battlespace Awareness $5.3 B Related Services $4.4 B Netcentric Communications $1.0 B Strategic and Operational Command and Control Strategic and Tactical Communications Systems ISR Capability and Integration; Intel Systems and Analysis • Ground Soldier System • BETSS-C • FCS Spinouts • AOC WSI Integrated C4ISR Solutions $4.0 B Opportunities |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 59 Energy | Environment | National Security | Health | Critical Infrastructure 09-1844-ID-14 C4ISR Campaign Near-Term International Opportunities Opportunities • KorCom HQ Design • Maritime Surveillance Systems (MSS) Opportunities • Forza NEC • Scorpion • FRES Opportunities • NATO Territorial MD • NATO Air C2IS Opportunities • SNEP II SE&I • SNEP II C4ISR • Establish SAIC as technical partner of choice • Mature strategic partnerships with BAE, EADS and Finmeccanica • Integrate SAIC personnel into standards group’s efforts • Multiple opportunities leveraging net enabled solutions • Leverage SAI JV • SE&I Solutions • Build upon Guam and Korea base • Maritime Domain Awareness efforts in concert with PACOM • RoK ground forces netcentric initiative • Commitment to Net Centric Integration • Building upon present business customer knowledge • Ballistic Missile Defense Europe Asia-Pacific NATO SAIC Quals Capabilities Middle East Focus on Strategic Partnerships |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 60 Energy | Environment | National Security | Health | Critical Infrastructure C4ISR Campaign Path to C4ISR Integrated Solutions 09-1844-ID-33 FY08 and Before FY09 FY12 and Beyond FY10 FY11 JMPS SEIC Investments Existing Contracts Big Bang Opportunities AOC WSI SPAWAR C4 Integration and Engineering Services MRAP $3M Ground Soldier Systems JLTV BETSS-C FCS NATO ALTBMD $1M NECC GSM Recompete NATO AIR C2 $1M GIG BE Prior Saudi Naval Work NATO ALTBMD Follow On Opportunities SNEP $2M |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 61 Energy | Environment | National Security | Health | Critical Infrastructure C4ISR Campaign Market Approach • Follow the Money – CONUS – OCONUS • Take SAIC to market… execute C4ISR campaign – DSG… C2 and netcentric communications – ISTG… Battlespace awareness, ISR – Collaborative… Integrated C4ISR solutions • Leverage discriminators – Platform independence – Operational expertise – Customer knowledge • Shape the market – Execute call plan – Target new leadership Agile, Aggressive, Adaptable |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 62 Energy | Environment | National Security | Health | Critical Infrastructure 09-1844-ID-15 DSG Vision and Strategic Intent “The leader in defense solutions and services, whose people provide thought leadership, customer knowledge, technical skill and flawless execution to deliver outstanding mission performance.” Science to Solutions Thought Leadership/ Customer Knowledge Flawless Execution People First Outstanding Customer Mission Performance |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 63 Energy | Environment | National Security | Health | Critical Infrastructure President’s Summary • Strong financial performance by all BUs executing on existing contracts – MRAP – FCS – AMCOM Express • New wins provide continued growth opportunities Contract Awards: – AITS ($454M) – HRC ITSO ($410M) – COCOM IT ($226M) – NAVSEA ERP ($120M) • Pipeline of new opportunities in strategic campaigns – C4ISR – Ground Systems Integrator – Modeling and Simulation – DGS – SeaPort-e IDIQs: – Encore II ($500M) – SPAWAR C5ISR ($222M) – Warfighter Focus ($200M) Executing Our Strategy/Delivering on Our Promises |
 Intelligence, Security and Technology Group and Space Superiority Campaign Stu Shea President |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 65 Energy | Environment | National Security | Health | Critical Infrastructure 09-1844-ID-16 Group Structure and Focus Group Structure and Focus Intelligence, Security, and Technology Group Technology and Advanced Systems Intelligence and Information Solutions Mission Integration Space and Geospatial Intelligence Operations, Intelligence and Security Larry Cox $525M John Fratamico $710M John Hynes $500M Tony Moraco $550M John Thomas $835M Signals Intelligence, Cyber Security Ops, and Information Assurance S&T for Analysis, Design, Prototyping and Implementation of ISR systems National Intelligence National Security Space SE&I and Sensor Integration, GEOINT Production Defense Intelligence and Operations Support Leading Provider of Technical and Language Services to ODNI and Other Intelligence Organizations # 1 provider of Geospatial Products to NGA Leading Science and Technology provider at DARPA and Military Services Research Labs Leading Provider of Operational Intelligence, Analysis and Biometrics Tools to Deployed Forces Leading development and technical services provider for NSA and related SIGINT and Cyber customers Stu Shea Group President $3.1B Revenue |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. Energy | Environment | National Security | Health | Critical Infrastructure 66 Key Solutions and Customers Biometrics Joint Intelligence Operations and Intel Analysis Signature Technologies NGA, USAF, DARPA NRO, DARPA, USAF USAF, NSA USA NSA, NGA Counter-Terrorism Analysis Technical Collection Architecture Translation Services Geospatial Production Signal and S&T Analysis USA DARPA, Mil Svcs Mil Svcs, SAR ISR Systems Integration Surveillance & Reconnaissance Payloads Ground Control & Operations Centers Ground Based Collection Systems Exploitation Tools / Systems CTC, NCTC NSA, NRO, NGA ODNI NGA NRO Intelligence Intelligence, Surveillance and Reconnaissance Cyber Intelligence 32% Cyber 8% ISR 24% Space Superiority 10% Science & Technology 8% Operational Intelligence 16% Computer Network Attack, Defense, Exploitation Managed Security Services Information Assurance, Penetration Testing IC, DoD Commercial Federal & Commercial Specialized Satellite Payloads Large-Scale Systems Engineering & Integration NRO, DARPA, USAF USAF Chemical, Biological, Radiological, Nuclear, Explosive Directed Energy & High Energy Lasers RF/EO/IR Sensor Technology & Optical Communications OSD, DHS, Srvc Labs USA, USAF USN, USMC Space Superiority 09-1844-ID-16 Science and Technology Operational Intelligence |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 67 Energy | Environment | National Security | Health | Critical Infrastructure Major Growth Drivers • Corporate campaigns: Cyber, C4ISR, Space Superiority
• Major group focus areas – Special Operations Forces – Counter-Terrorism • Political pressure for a reduced military presence overseas • Emphasis on indirect approach versus conventional forces • Major requirement is to transform legacy, stove-piped C4ISR systems into flexible, net-centric, open systems • We offer unmatched domain and technology expertise across space, manned aircraft, unmanned systems, surface ships, submarines, fixed and mobile land systems, and man-portable systems • Al-Qaida remains intent to attack the U.S. homeland again • The War on Terror will transcend administrations • We will focus on 5 major areas: – Identity management (biometrics, credentialing, immigration enforcement) – Information Sharing (networks, systems, and fusion centers), – CBRN detection (chemical, biological, radiological, and nuclear detection) – Emergency Preparedness (crisis management, warning) – IED Defeat (improvised explosive devices) |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. Energy | Environment | National Security | Health | Critical Infrastructure 68 09-1844-ID-15 Cyber Campaign Group Vision and Position “A leader in the integration of technology, systems and operational solutions across cyberspace in all its domains…air, land, sea, space…
to deliver full spectrum mission performance.” Computer Network Operations (Exploitation, Defense, Attack) Managed Security Services (Network and Security Ops) Training and Education, Regulatory Compliance, Forensics Design and Build of Enterprise IT Solutions Integration for Full Spectrum Cyber Mission Performance |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. Energy | Environment | National Security | Health | Critical Infrastructure 69 09-1844-ID-15 ISR Campaign Group Vision and Position “A leader in the integration of technology, systems and operational solutions across air, land, sea, and space to deliver full spectrum ISR mission performance.” Surveillance and Reconnaissance Payloads for Air, Ocean and Space Platforms Ground Based Collection Systems Ground Control Stations and Operations Centers Exploitation Systems and Tools Integration for Full Spectrum ISR Mission Performance Angel-Fire |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 70 Energy | Environment | National Security | Health | Critical Infrastructure Space Superiority Campaign The Space Superiority Imperative • Our nation depends on satellites for navigation, communications and global trade, which could be broadly damaged by disruptions of space assets • Space threats range from traditional ground-based jamming to more catastrophic orbital attacks • Space is a future battleground – D/NRO acknowledged Chinese laser tracking of electro-optical, low earth orbit satellite in 2006 – On 1/11/07, China destroyed a Low Earth Orbit satellite w/ a Direct Ascent Anti-Satellite missile • One year later, NORAD had catalogued 2,377 of the 150,000 pieces of debris – Intelligence Estimates project Chinese satellite- to-satellite capability in 2009 View of LEO Satellites (green) and Debris Ring (red) from Chinese ASAT Test Irregular Challenges Catastrophic Challenges Space Superiority is achieved through space situational awareness and defensive and offensive counter-space operations LEO DA LEO DA ASAT Event ASAT Event 2007 2007 •Direct Ascent Threat •Denial of Capability •Ground Jamming •Ground Station • Threats •Deception •Localized •Terrorism •Orbital •Threats GBL Tracking GBL Tracking 2006 2006 Traditional Challenges Disruptive Challenges |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 71 Energy | Environment | National Security | Health | Critical Infrastructure 09-1844-ID-42 Space Superiority is that ability to conduct space operations at a given time and place without prohibitive interference by opposing forces Space Superiority Campaign What Is Space Superiority? |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 72 Energy | Environment | National Security | Health | Critical Infrastructure 09-1844-ID-15 Space Superiority Campaign Group Vision and Position “A leader in the integration of technology, systems and operational solutions across space to deliver full spectrum Space mission performance.” Active and Passive Micro Satellite Imaging Payloads for Surveillance Systems Engineering for Complex and Integrated Space Programs Ground Control Stations and Operations Centers Visualization and Analysis Tools for Satellite Operations Integration for Full Spectrum Space Mission Performance |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 73 Energy | Environment | National Security | Health | Critical Infrastructure 09-1844-ID-11 Space Superiority Campaign The Market and Bridging the Gap The Space Superiority Landscape Customers Trends and Drivers SAIC Strengths Programs • National Reconnaissance Office (NRO) • Defense Advanced Research Projects Agency (DARPA) • US Air Force (USAF) • Boeing, Lockheed, Northrop Grumman, Orbital, Raytheon • IR and multispectral payloads • Special comms hardware • M&S capabilities • Real-time software • Mission analysis • SE&I • GPS SE&I • P-417 • P-805 • RR-AIRSS • CHIRP • Other SETA and Logistics work • Evolving Threat • Cost Overruns • Space Protection Program • Alternative Acquisition Models • Community Assessments |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 74 Energy | Environment | National Security | Health | Critical Infrastructure Space Superiority Campaign Future Positioning • Transition from primarily SETA services to a full compliment of SE&I • Expand role in design, development and limited rate production – More responsive than the large aerospace primes • Develop technologies to tie existing capabilities together and address larger markets: – Hardware in the loop modeling and simulation, data processing algorithms, special purpose communications and processing hardware, multi-spectral
sensors • Become an integrated payload developer providing capable people, unique science, reliable systems, and affordable space and ground hardware to enable or enhance space operations |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 75 Energy | Environment | National Security | Health | Critical Infrastructure President’s Summary • Execute our campaigns Corporate: – Cyber – Space Superiority – C4ISR • Execute group imperatives – People first! – Thought leadership – Mission focus – Technology-leveraged • Maintain business development momentum – Won 93% of all re-competes and 72% of all new programs – Non-IDIQ Awards of $2.2B – Q2 backlog of $5.1B (22.5% YoY Growth) Executing Our Strategy/Delivering on Our Promises Group: – Intelligence, Surveillance, Reconnaissance (ISR) – Special Operations Forces – Counter-Terrorism – Science-enabled – Execution excellence – Value creation |
 Cyber Campaign Larry Cox Business Unit General Manager |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 77 Energy | Environment | National Security | Health | Critical Infrastructure The Cyber Imperative • Recent events highlight the urgency of cyber threats – Massive penetration of federal agencies and defense contractors resulting in theft
of terabytes of data by China and other nation states – Potent viruses distributed by electronic picture frames, USB thumb drives, and
GPS systems being manufactured overseas – Denial of service attacks in Estonia and Georgia shut down essential operations for
days at a time • The nation is vulnerable to disruptive attacks on our vital cyber assets – U.S. and global trade and financial systems – Critical infrastructure – Industrial base – Government operations • Pervasive computing and increasing connectivity lowers the barriers for terrorists and hostile nation states |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 78 Energy | Environment | National Security | Health | Critical Infrastructure Market Overview • Cyber market is driven by three major factors: – NSPD 54/HSPD 23 Comprehensive National Cybersecurity Initiative – Creation of new organizations and new authorities – Massive shifts in funding • GFY08 reprogramming of $200M in Intelligence Community (IC) • FYDP increases of $20B across entire Federal government • Cyber market has four primary customer sets: – U.S. Military Services • Funded through existing military service budgets • Budgeted at $20B+ per year (GFY08-GFY13) – Department of Defense • Funded mostly through existing budgets plus some new • Estimated at $20B+ over the next five years – Federal Agencies • Funded primarily through new national cyber initiative • Estimated at $20B+ over the next five years – Private Sector Corporations • Internally funded by individual corporations driven by Federal requirements • Independent research estimates $20B+ per year (CY08-CY13) Competitive Landscape • Large systems firms with end-to-end capability – CSC – Northrop Grumman – Lockheed Martin – Booz Allen Hamilton – Boeing – General Dynamics • Niche providers of point solutions • Hardware components • Software tools • Specialized expertise |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 79 Energy | Environment | National Security | Health | Critical Infrastructure Cyber Realm 09-1844-ID-17 The Cyber business environment exists across air, and, sea and space domains, from unclassified to highly compartmented programs
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 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 80 Energy | Environment | National Security | Health | Critical Infrastructure Cyber Market Segments • Cyber touches every feature of modern communications • Solutions require use of a wide variety of capabilities – High-performance computing – Information Storage – Network Optimization Information Security Intrusion Detection Certification and Accreditation Network Monitoring Log Analysis VPN Vulnerability Assessments Incident Response Information Assurance Information Warfare Spam Filtering Surf Control Data Protection Worms Enterprise Architecture FISMA Information Sharing Viruses HIPPA Netcentric Operations Communications Security Firewalls Cybersecurity Passwords Forensics Phishing Insider Threat Infrastructure Protection COOP Network Security PKI Web Blocking – Virtualization – Data Life Cycle Management |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 81 Energy | Environment | National Security | Health | Critical Infrastructure SAIC Positioning and Capabilities • Broad technical expertise engineering solutions across all cyber disciplines • Long history of Informance Assurance, Network, and IT business with all major cyber customers – Prime positions on core programs • Deep expertise in Managed Security Services, security awareness and training, penetration testing, certification and accreditation, and compliance
• Considerable work force already operating in multi-discipline programs requiring engineering, computer science, analysis and operations skills • Proven ability in software and hardware development, delivery, and operations – Long history of successful technical services support • Platform and vendor agnostic integrator of the best solutions for customers • Patenting and licensing of key technologies and solutions |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 82 Energy | Environment | National Security | Health | Critical Infrastructure Thrusts and Pursuits • We are aggressively developing cyber solutions – Modern architecture solutions for DHS and IC – Tool/services suite for Defense Industrial Base to comply with future DFAR mandates on data protection – Supply chain assurance solutions • We are pursuing numerous cyber opportunities – DHS National Cybersecurity and Protection Program (~$5B) – DHS/DoD Supply Chain assurance (~$200M) – Defense Industrial Base Initiative (~$300M) – Numerous Intelligence Community opportunities (~$1B) |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 83 Energy | Environment | National Security | Health | Critical Infrastructure Foundation For Success • Structure – Full support from Corporate and Groups – Cyber Program Management Office – Program and customer engagement by Business Units • People – Recruiting and training the cyber workforce from inside and outside – Training and competency certifications – Thought leaders and mentors – Developing and training the Gen X/Y workforce • Technology – Competency and Research & Development across all areas of cyber – Partnerships with academia • Facilities – Excellent working conditions with tools, systems and communications – Connectivity among SAIC and customers |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 84 Energy | Environment | National Security | Health | Critical Infrastructure Campaign Summary • Cyber market is real and immediately addressable – Broad bipartisan support with rapidly growing, multi-year funding streams
• Firms must have a solid cyber base to succeed – Existing vehicles and relationships to capture new cyber funds – New important beachhead contracts are being bid now • End-to-end solutions are required – Cyber problems cannot be solved with just niche solutions • Solutions will be eternally dynamic – Substance is a barrier to entry – Escalating performance is the price to retain customer trust • Qualified people are a limiting factor in this growing market – National challenges are required to attract this high-intellect worker – Freedom to create innovative solutions is required to retain this worker SAIC has the people, capabilities, and approach to succeed |
 Infrastructure, Logistics and Product Solutions Group Joe Craver President |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 86 Energy | Environment | National Security | Health | Critical Infrastructure Group Structure and Focus 09-1844-ID-18 Infrastructure, Logistics and Product Solutions Group Security and Transportation Technology Homeland Protection and Preparedness Energy, Environment and Infrastructure Logistics and Engineering Solutions Science and Systems Engineering Solutions John Ferriter $420M Alex Preston $200M J.T. Grumski $580M Jim Cuff $680M Chuck Zang $450M CBRN and Preparedness Services and Solutions Non-Intrusive Inspection and Radiation Detection Products Energy, Environmental, and Engineering Services Logistics and Support Solutions Systems Engineering, Mission Support, and OT&E Top Integrated Energy and Environmental Solutions Provider # 1 Non-OEM Sustainment Provider to DLA #1 Provider of Security Products for Ports and Borders #1 OT&E Provider for DoD Top 3 Integrator of Earth Sciences/ Climate Change Data-Research and National Policy #1 Provider of CBRN/ All-Hazards Preparedness Systems and Services in U.S. Joe Craver Group President $2.3B Revenue |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 87 Energy | Environment | National Security | Health | Critical Infrastructure Homeland Security and Defense 27% NASA, Global Climate Change and Other 19% Energy, Environment and Infrastructure 25% Logistics and Product Support 29% 09-1844-ID-19 Key Solutions and Customers Non-Intrusive Imaging Systems Integrated Container Inspection Radiation Detection CBRN and Preparedness Services and Systems Transportation Automation Commercial DoD DOE Supply Chain Management Asset Visibility Logistics Systems Product Support Integration DHS DoD International Ports Energy Management Environmental Services Design/Build of Tech-Intensive Infrastructure DLA DoD Safety and Mission Assurance Earth Sciences Data Integration Operational Test and Evaluation NASA NOAA USGS FAA Logistics and Product Support Homeland Security and Defense Energy, Environment and Infrastructure NASA, Global Climate Change and Other |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 88 Energy | Environment | National Security | Health | Critical Infrastructure Solving Problems of Vital Importance • Save lives by deploying and supporting MRAPs in Iraq and Afghanistan • Detecting car bombs and weapons with VACIS in Iraq and Afghanistan • Capturing illegal drugs – Including some of the largest cocaine seizures ever • Address challenges to the planet by – Helping companies and the government save energy and money – Assessing and predicting the impact of climate change policy – Managing huge amounts of critical scientific data on the state of our planet • Training and equipping our nations’ First Responders – Over 400,000 trained to date • Helping to keep Space Shuttle flight operations safe |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 89 Energy | Environment | National Security | Health | Critical Infrastructure Major Growth Drivers • Corporate Campaigns: Energy • Major Group Focus Areas – Homeland Security Products – Logistics and Sustainment • Growth market aspects – On-going global war on terrorism – Legislative mandates continue to drive needs (i.e., Secure Freight Initiative)
– Potential for CBRNE type events; DoD Force Protection • SAIC Offerings: – Non-Intrusion Detection Products – CBRNE Solution Integration and Preparedness Training • Growth market aspects – Reset – Proliferation of “non programs of record” fielded systems – Defense budget funding constraints for new program starts • SAIC Offerings: – Performance and Capabilities Based Logistics Solutions and Services – Supply Chain Integration |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 90 Energy | Environment | National Security | Health | Critical Infrastructure Energy Campaign The Global Energy Challenge Production Consumption 120 90 60 30 0 72 102 Fossil Fuels Fossil Fuels Renewable Nuclear Renewable Nuclear US Production and Consumption, 2007 Source: Energy Information Administration / Annual Energy Review 2007 EIA - International Energy Outlook 2008 - Highlights Section http://www.eia.doe.gov/oiaf/ieo/highlights.html Global Consumption (Actual and Forecast) 09-1844-ID-34 120 90 60 30 0 1980 1990 2000 2010 2020 2030 Liquids (Oil) Natural Gas Renewables Nuclear 2008 Coal • Rising energy consumption and cost – Driven by developing countries, consumption will increase by 50% by 2030 – Traditional reserves (Oil/Gas) are shrinking – Renewable/Alternative energy production will NOT impact supply in near-term
– Looming security and environmental issues due to production deficit, distribution
constraints, and Climate Change concerns |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 91 Energy | Environment | National Security | Health | Critical Infrastructure 09-1844-ID-24 Energy Campaign SAIC Energy Portfolio Utilities Federal Industrial Oil and Gas Generation / T&D IT Upstream IT Downstream IT Environmental Refinery Engineering Energy Efficiency Consulting Energy Efficiency SI and Process Automation Consulting Refinery Engineering Alternative Fuels Plant Design Global Climate Change IT Infrastructure Outsourcing Customers • Upstream Oil and Gas: (Majors and NOC’s) • Utilities (Large and Mid-Tier, Nuclear) Customers • Refineries (Mid-Tier and Small) • Industrial Enterprises • Government agencies IT Transformation and Applications and Data Analytics Renewables T&D Engineering Refinery Engineering Energy Management Services SAIC – Delivering Integrated Energy Management |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 92 Energy | Environment | National Security | Health | Critical Infrastructure 09-1844-ID-25 Energy Campaign SAIC Focus Areas Generation Trading Transmission Distribution Fuel Production Energy Use Global Climate Change / Energy Consulting Digital Oil Field Coal and Renewables Exploration and Appraisal Production Refining/ Processing Primary and Secondary Distribution Energy Use Development Customer Service/ Retail |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 93 Energy | Environment | National Security | Health | Critical Infrastructure Energy Campaign Energy Management Services Defined * DesignBuild is a registered service mark of the Benham Companies, LLC, an SAIC
company, in the United States and other countries. Efficient Operations Clean Technologies Sustainability Climate Change Green IT Risk Management Energy Procurement Education and Training Facility Assessments Facility Modeling LEED ® Certification DesignBuildSM Performance Contracting Systems Integration AMI and Smart Grid Demand Response Project Management Quality Assurance Metering and Verification Modeling and Forecasting * LEED(R) is a registered trademark of the U.S. Green Building Council (USGBC) in the
United States and other countries. |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 94 Energy | Environment | National Security | Health | Critical Infrastructure President’s Summary • Group provides products, services, and solutions across entire customer set • To succeed, we have invested to build a strong foundation – Developing the next generation leaders • Through the Group’s SAIL leadership development program, we have built a large,
cohesive, and capable talent pool that is driving our growth today
– Implementing new business models – Integrating game-changing acquisitions • Standing integration team managed at Group level • Successfully integrated 3 $200M+ companies over the last four years • Well-positioned to deliver growth and profitability by providing distinctive
capabilities and solutions to our customers – Energy Management Services and engineering capabilities – Homeland protection through CBRN, Preparedness, and Trade Security solutions – Logistics and product sustainment solutions – Climate Change research and policy program – Supporting NASA in its human spaceflight and exploration missions
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 Information Technology and Network Solutions Group and Health Campaign Charles Koontz Group President |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 96 Energy | Environment | National Security | Health | Critical Infrastructure 09-1844-ID-27 IT&NS Structure and Focus Technology Development and Science Discovery for Diagnosis and Treatment of Cancer and AIDS Health IT, Military Health and Public Health and Biomedical Research Global Energy and Life Sciences Solutions and Integration Services Charles Koontz Group President Information Technology and Network Solutions Group Doug Charles $490M Bob McCord $360M Homeland and Civilian Solutions Business Unit Managed IT, Infrastructure Services and Software Development to DHS, NASA and Civilian Agencies • Top Provider of DHS Data Center Migration, Consolidation, and Managed IT Infrastructure Solutions • Top Tier Provider for IT Services in Energy • Sole Source Contractor for the National Cancer Institute • Top 3 Provider of IT Services to the Department of Health and Human Services Doug Wagoner $600M Health Solutions Business Unit Commercial Business Services Business Unit SAIC NCI / Frederick $1.5B Revenue Larry Arthur $10M |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 97 Energy | Environment | National Security | Health | Critical Infrastructure 09-1844-ID-29 Key Customers and Capabilities Federal, DoD, & Commercial Health 30% Federal Civil 43% Commercial Energy 27% Full-Service IT Provider Enterprise and Business Strategy Solutions Infrastructure and Applications Infrastructure Services Management Information Content and Data Mgmt Solutions Mission-specific application and system support Department of Veterans Affairs CDC FDA NCI-Frederick TRICARE Digital Oil Field Solutions Refinery of the Future Solutions Advanced Metering Infrastructure Application Development & Maintenance Enterprise Architecture Global Data Management Managed Network Services Infrastructure Outsourcing DHS NASA Treasury, IRS Dept of Energy World-wide deployment and support of IT Health Solutions VA/DoD Sharing Disease Surveillance and Bioterrorism Public Health Emergency Preparedness Online Access to Health Information BP Shell Chevron Scottish Power Entergy Maersk INEOS Alyeska Federal Civil Federal, DoD, and Commercial Health Commercial Energy |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 98 Energy | Environment | National Security | Health | Critical Infrastructure Major Growth Drivers • Corporate Campaigns: Health, Energy • Digital Oil Field Upstream Production Optimization ROI 1-3 years 1-3 years 10-30 years 1-2 years Drilling “Green Field” “Mature” “Brown Field” Downstream • Major market drivers – Increased percentage of production coming from mature oil fields – Growth opportunity in reservoir management – Major Oil companies outsourcing technology solutions & services – New willingness of NOCs to use service companies rather than MOCs Key Offerings • Post-Drilling Seismic Analytics • Reservoir Management • Field Engineering Services • Real-Time Data Management • Collaboration Environments • Hydrocarbon Accounting Digital Oil Field Enhanced Oil Recovery Refining/ Processing Production Exploration and Appraisal Development Primary and Secondary Distribution Retail |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 99 Energy | Environment | National Security | Health | Critical Infrastructure 2008 2017 $5.0 $4.0 $3.0 $2.0 $1.0 $0.0 U.S. Health Costs Unsustainable Cost Escalation 20.0% 19.0% 18.0% 17.0% 16.0% 15.0% U.S. Health Expenditure Health Spends as % of GDP Health Campaign Health Industry Faces Dramatic Challenges • Cost – Health costs growing at 6.1% CAGR vs. 4.4% for GDP – 20% health spend as a % of GDP is not sustainable • Access – Increasing access to affordable care will expand Federal budgets in 2009+ • Quality – Lack of reporting and transparency – IT under spend (<2% of health spend) • Public Safety – Bio-hazard and bio-terror threat mitigation – Pandemic mitigation/continuity of operations (Gov & Commercial) Sources: IDC and Insights, preliminary, 2008 and Centers for Medicare and Medicaid
Services, National Health Expenditure Survey, 2008 U.S. Health Expenditure, $2.5 U.S. Health Expenditure, $4.3 16.8% 19.8% Unsustainable healthcare cost growth will drive change and opportunity |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 100 Energy | Environment | National Security | Health | Critical Infrastructure Health Campaign Health Market Segments / Value Chain Cardinal Health, Pfizer, Quest, Labcorp, GE Medical Blue Cross/Blue Shield, Wellpoint, United Healthcare, Aetna Kaiser Permanente, Hospitals, provider associations, IDNs Commercial Providers Patient-Focused Healthcare Population Health Government Providers DOD and VA, state agencies CMS, state Medicaid agencies NIH, NCI CDC, FDA, NIH, HRSA, SAMHSA, DOD, DHS, State agencies CMS, FDA, ONCHIT, AHRQ, CBO Major Competitors HP, NOC HP, LMT NOC NOC, LMT, SRA HP, LMT Where SAIC Plays today MHS, VA, SHIN (Canada), IHS CMS NIH and Commercial Pharma NIH, CDC, FDA, HRSA, SAMHSA No big play to date Healthcare Payers Healthcare Providers Public Health and Preparedness Healthcare Producers Healthcare Policy and Regulation |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 101 Energy | Environment | National Security | Health | Critical Infrastructure Health Campaign Emerging HIE Market Opportunity • Health information exchanges (HIEs) – Electronic movement of health-related information among organizations according to
nationally-recognized standards • Challenges for HIE’s – Standardization of the data – Sustainable business model – Accessibility of data by the patient • Fast growing market segment – IDC estimates the current market to be ~$150M, growing to $500M by 2012 and >$3B by
2018 Hospitals/ Physicians Laboratory Pharmacy Public Health Imaging Centers Payors Health Information Exchange (HIE) 09-1844-ID-32 |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 102 Energy | Environment | National Security | Health | Critical Infrastructure Health Campaign Campaign Summary FY09 – Where we are today • Completed an independent scan of the entire Health sector • Evaluating our opportunity beyond Government Health FY08 – How we responded • Electronic health record development standards • Medicare modernization / fraud and abuse detection • Contain healthcare costs • Meet needs of aging population • Meet DoD’s wartime health needs • Protect public health from pandemics and bio-terror threats • Improve patient care quality and reduce care disparities • Establish health data policy Market Requirements • Surveillance/detection; preparedness; pandemic flu planning and support • Biomedical research; adverse events reporting; disparity tracking • VA/DoD health information sharing • Investing in new solutions (health and clinical research information exchanges, medical terminology service, identity management) |
 © 2008 Science Applications International Corporation. All rights reserved. SAIC and the SAIC logo are registered trademarks of Science Applications International Corporation in the U.S. and/or other countries. 103 Energy | Environment | National Security | Health | Critical Infrastructure President’s Summary • Position of strength in Public, Civilian, and Military Health – MHS—Wounded Warrior – CDC—Bio-surveillance – VA/DoD—Medical records sharing • Federal Civil market will strengthen with Administration change – Protect the homeland—DHS (CBP, FEMA, ICE) – Protect our food supply—USDA – Protect our environment—EPA – Implement tax changes—IRS • Positive trend with our Commercial Business – Double-digit segment operating income run rate – Focus on upstream production (Digital Oil Field) producing results • Key contract awards support our strategic direction – NASA UNITeS ($214M) – NCI Support Contract ($105M) – Administrative Office of the Courts ($90M) – VA VistA Repositories ($56M) – CMS—Information systems modernization – NCI—Valued and differentiated relationship |