Leidos (LDOS) 8-K Regulation FD Disclosure

Welcome and Introduction

Welcome and Introduction

Stuart Davis

SVP, Investor and Employee Owner Relations

Exhibit 99.1

2

Agenda

Agenda

Welcome

Stuart Davis

Enterprise Overview

Ken Dahlberg

Operational Perspectives

Larry Prior

Financial Overview

Mark Sopp

Corporate Q&A

Security and Transportation Security

Alex Preston

Closing Remarks

Ken Dahlberg

Final Q&A

Break

Defense Solutions

Deb Alderson

Future Combat Systems

John Gully

Lunch and Future Combat Systems Demonstration

Intelligence, Security & Technology

Stu

Shea

IT & Network Solutions

Charles Koontz

Infrastructure, Logistics & Product Solutions

Joe Craver

Break

3

Forward Looking Statements

Forward Looking Statements

This

presentation

describes

financial

results

through

7/31/07

(FY2008

Q2)

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,

2007,

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

9,

2007.

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.

Enterprise Overview

Enterprise Overview

Ken Dahlberg

Chairman and CEO

2

Who Are We?

Who Are We?

Leading science/technology services & solutions provider

–

Platform independence creates “honest broker”

–

Broad capabilities to win and execute bundled procurements

$8B+ revenue—38 years of organic growth and profitability

Focused on important national and global problems

–

National security

–

Intelligence

“Go-to”

provider for government’s most difficult problems

–

Leadership positions on important national and global programs

–

Deeply embedded in our customers’

missions

Highly skilled and innovative workforce

Entrepreneurial culture that motivates our people

–

Built around customer/mission success and technical excellence

–

Most employees own stock, driving performance for all stockholders

–

Homeland security

–

Energy

–

Logistics

–

Health care

3

SAIC Core Values & Purpose

SAIC Core Values & Purpose

4

SAIC Organization

SAIC Organization

Mark Sopp

CFO

Greg Henson

Business Development

Brian Keenan

Human Resources

Arnold Punaro

Gov’t

Affairs,

Communication

and Support Ops

Doug Scott

Legal and Audit

Joe Walkush

Strategic Initiatives &

Investments

Deb Alderson

Defense Solutions

Joe Craver

Infrastructure, Logistics

& Product Solutions

Charles Koontz

Information Technology

& Network Solutions

Stu

Shea

Intelligence, Security

& Technology

Ken Dahlberg

Chairman and CEO

Lawrence Prior

COO

5

SAIC Fundamental

Guiding Principles

SAIC Fundamental

Guiding Principles

Live our core values

–

Open, honest, and straightforward with all our constituencies

(customers, employees, stockholders, the public)

Build long-term value, per share, for our stockholders

–

Balance short-term and long-term objectives

Pursue business in our “circle of competency”

–

Expand into adjacent areas when it makes sense

Increase capability to serve our customers and drive growth

Allocate capital on a rational, disciplined basis

6

Corporate Transformation

Corporate Transformation

Formal planning discipline informs

investment allocations

“No Grand Plan”

Strategy

IPO completed: ~130M share float

$1.1B in cash; $0.1B in net debt

100% owned by employees/retirees

$2.2B

in cash; $1.0B

in net cash

Capital

Structure

Significant progress on past issues; no

new major problem contracts

High-profile issues: Greece, Trilogy,

Trailblazer

Problem

Contracts

Talent Management Review w/ training,

succession, and redeployment programs

Individuals responsible for their own

coverage and career development

People

Management

Committed $100M to complete top-to-

bottom refresh of all IT systems

Legacy systems requiring extensive

maintenance and work around

IT Systems

One SAIC promoted through alignment

and incentives

Entrepreneurial Darwinism promotes

internal competition

Collaboration

Focused on high-growth markets through

acquisitions/divestitures

Amalgam including declining markets

with no strategic value

Business Mix

4 Groups, 20 Business Units

Aligned by Customers/Capabilities

15 Sectors, 55 Business Units

No “Swim Lanes”

Line Structure

11 Members (1 internal); 6 committees

19 members (10 internal); 19 committees

Board

October 2007

November 2003

Element

7

Focus on Execution

Focus on Execution

Accelerate organic growth

–

Improving toward 6-9%

–

Greater collaboration on growing pipeline of major opportunities

Improve margins sustainably

–

20-30 bps improvement planned for FY08

–

Provided best practices training; initiated review of corporate

structure/spending

Instill culture of discipline

–

SOX 404 implementation complete

–

No new major problem programs

Improve ability to plan/forecast

–

Implemented integrated planning process, 6 quarter rolling forecast

–

More detailed bottoms up and top down tests of reasonableness

Invest in people

–

New training courses implemented, including for every new hire

–

Recruiting and retention improving through attention at all levels

Build technology base

–

Increasing IR&D investment linked to business thrusts

–

33 communities of practice link technical contributors across company

8

3-5 Year Outlook

3-5 Year Outlook

Addressable market growth will flatten

–

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

Sources of Revenue–about 90% federal/10% commercial

–

Continue our focus in federal markets

–

Commercial business provides growth and leverages synergies

Increased capability and recognition as major prime contractor for larger bids

–

Government losing ability to supervise acquisition of big systems

–

SAIC must be able to provide total solutions for our customers

Increased ability to handle different business models

–

Requires business savvy and risk mitigation (e.g., performance based contracting)

–

More product business to provide total solutions and better margins

Improved financial performance

–

Revenue–grow 6% to 9% organically

–

Add

2%-4%

from

midsized

strategic

acquisitions;

opportunistic

on

larger

ones

–

Operating Margins–expand at least 100 bps

–

EPS—grow 15% on average

9

Near-Term Strategic Actions

Near-Term Strategic Actions

Repurchase our stock when the purchase price yields an

attractive return to stockholders

Target larger acquisition opportunities (>$500M)

opportunistically–

when the fit and price are right

Mature capabilities to develop light touch production and LRIP

products from our technology base

Improve ability to develop, deliver, and support total solutions

over the program life cycle

Build our capabilities (large program management, system

engineering, team-building) and reputation as a prime

Execute corporate campaigns around energy, health, cyber

security, and space superiority

Reduce corporate overhead and invest in organic growth

10

Enterprise Summary

Enterprise Summary

One year later after IPO, investment thesis is unchanged

–

Market expected to grow for years to come

–

SAIC has the ability to deliver strong returns by accelerating organic

growth, expanding margins, and deploying capital

Company is executing according to IPO plan

–

6% organic growth rate and improving operating margin since IPO

Demonstrated progress since IPO

–

Divested non-core businesses—AMSEC and ANX

–

Restructured leadership team

–

Built pipeline of major opportunities

–

Won large competitive programs—GPS, POL-Chem, NATO BMD

–

Deployed $400M+

on acquisitions: AMTI, Benham, AETC, Scicom

–

Initiated share repurchase plan to managed dilution

–

Changed incentive programs to address option overhang

Operational Perspectives

Operational Perspectives

Larry Prior

COO

2

CEO and COO

Areas of Focus

CEO and COO

Areas of Focus

CEO

COO

Execute via the Line

Board/Legal

Strategy/M&A

Investor Relations

Gov’t Affairs

CFO (IT)

Talent Management

Shared       Focus

Operational Performance

Program Management/SE

Risk Management

Contracts/Procurement

Technology & Science

Corporate Services Review

Customer Focus and Interface

Top Line Creation/Business Development

Retention and Recruiting

10-Year

Outlook

3-Year

Strategy

Annual

Operating Plan

Quarterly

Earnings

Monthly

Operational

Performance

Weekly

Action Plans

Daily

Issues

3

Top Line Creation

Top Line Creation

Drivers of top-line growth

–

Employee-owners and entrepreneurs

–

Operations and division managers

–

Group presidents and business unit GM’s

–

Greg Henson and the corporate team

Key metrics:

–

Backlog: $14.1B (Q2)

–

Book to bill: 0.8 H1, 0.9 Q2 –

trending up

–

Conservative bookings and backlog definitions do not include ID/IQ

master agreement values

–

Submitted pipeline awaiting award: ~$15B (Q2) same as Q1

–

Significant wins since Q2; 6 wins >$100M each

Greg Henson

4

Top Line Creation

Top Line Creation

YOY win expected value is up $2.9B

YOY $ win rate is up 11% (now 72%)

YOY $ win rate for >$100M up 43% (now 83%)

YTD 15 wins >$100M

Pursuing 102 opportunities >$100M

Customer intimacy and recompetes

Increase % of large SE&I pursuits

Business process and tool refinement

Adjacent market exploration

Cross-company collaboration

Growing the workforce (e.g. TMR, Gallup

survey, training)

IDIQ-Single Award (expected value):

–

ISEA Services Blue Velvet: ~$470M

–

Tactical C2 Integration Services: ~$460M

–

Expeditionary Combat Support System: ~$275M

IDIQ-Multiple Award (expected value):

–

Alliant: ~$3B

–

HHS Enterprise Systems Development: ~$330M

Non-IDIQ (expected value):

–

Automatic Dependent Surveillance Broadcast: ~$100M

Backlog

$14.1B

~$2.7B

Expected

Value not

in Backlog

~$0.1B

Multi IDIQs

~$2.6B

Single IDIQs

>$100M Wins (since end of Q2)

Business Development Thrusts

Performance

Factors

–

through

9/7/2007

Healthy Book of Business –

As of Q2

FY08 IDIQ Wins

Also not in backlog: remaining

expected value from IDIQ master

agreements won prior years

+

+

5

Retention and Recruiting

Retention and Recruiting

Retention and Redeployment

–

Voluntary turnover -

14.3% (11.5% for scientists and engineers)

–

Redeployment reducing turnover (500 employees redeployed YTD)

Recruiting: >5K YTD hires

–

Average time to fill a vacancy is 40 days

Talent Management Review

–

Focused on succession planning, developing High Potentials

Professional and Career Development

–

Foundation courses: leadership, program management, systems engineering, BD

–

Career Paths: program management fully rolled out; intelligence analysts, systems

engineering, and line management in development for pilot in FY08

Employee Survey

–

Launched in July with annual follow-on to track progress

–

Confirmed strong customer focus and entrepreneurial culture

–

Identified areas for improving frontline people management and communication

Brian Keenan

6

Execution

Execution

Strong line management

–

Group presidents make markets

–

Business unit GMs have customer focus

Program management, controls and SE

Monthly reviews

–

Financial performance vs. plan and forecast

•

Revenue, PBT, fee, operating margin, rates,

unallowable, timesold, DWC, AR

–

Business development

•

Submits, awards

–

Program management and performance

–

Retention and recruiting

Joe Craver

Deb Alderson

Charles Koontz

Stu Shea

Financial Overview

Financial Overview

Mark Sopp

EVP and CFO

2

Agenda

Agenda

Income Statement

Cash Flow

Balance Sheet

$450 or greater

Cash flow from operations (millions)

$0.83 -

$0.88

Diluted EPS from continuing operations

$8.70 -

$9.00

Revenue (billions)

FY08 Guidance

Measure

Income Statement

Cash Flow

Balance Sheet

3

Revenue Trends

Revenue Trends

Internal Revenue Growth

20%

15%

10%

5%

0%

FY05

FY06

FY07

FY08*

Revenue

$9.0

$8.0

$7.0

$6.0

FY05

FY06

FY07

FY08*

*  FY08 reflects disclosed guidance range

Uninterrupted growth since 1969

Internal growth beginning to accelerate

–

Recovery from cessation or leveling of large contracts (GIG-BE,

Trailblazer, FCS) and lost recompetes

(AF IPV, DNI CIO)

–

FY08 internal growth rate projected at 5-6%

4

FY07 Revenue Breakout

FY07 Revenue Breakout

Group

Customer

Contract Source

CP

48%

T&M

36%

FFP

16%

Multiple

Award

IDIQ

24%

Single

Award

IDIQ

26%

Standard

Contract

34%

GSA

Schedule

16%

Contract Type

A1957-ID-02

Defense

Solutions

30%

Intelligence,

Security &

Technology

30%

Infrastructure,

Logistics &

Product

Solutions

22%

IT & Network

Solutions

18%

Army

18%

Navy/Marines

13%

Commercial

& State/Local

12%

NASA

5%

Air Force

9%

Fed Civil

14%

Intell/

Other DoD

29%

5

Revenue Acceleration

Revenue Acceleration

Next 3 Years

Increased IR&D

Collaborating on Larger

Contracts

Acquisition Synergies

Aggressive Pipeline

Post IPO to Q208

Focus on Recompetes

BD Leadership Team

Higher Growth Markets

Organizational Alignment

CRM Phase I

Pre-IPO

IPO

FY07

Q2

FY08

Internal

Growth Rate

3%

6%

Target

6-9%

Internal

Revenue

Growth

6

Operating Margin Trend

Operating Margin Trend

* FY08 reflects mid-point

of disclosed range of 20-

30 bp improvement

5.5%

6.0%

6.5%

7.0%

7.5%

FY05

FY06

FY07

FY08*

Improving operating margin 20-30 bps per year

–

Despite 40 bps of FAS 123R expense in FY07 and FY08

–

FY06 margin lower because of $83M loss on the Greek contract

7

0

10

20

30

40

50

60

70

80

FY08

FY09

FY10

Option

Vesting Stock

Option Expense Converted to

Vesting Stock Expense

Option Expense Converted to

Vesting Stock Expense

FAS 123R expense builds to “normalized”

state in FY10

Redirected many FY08 options to vesting stock (3:1)

–

Vesting stock expense is allowable; option expense is unallowable

–

Prior option program would have eroded annual margins 60-70 bps

–

Current option programs erode margins 30-40 bps in long term state

Pre-Option Reduction

Post-Option Reduction

$41

$56

$73

0

10

20

30

40

50

60

70

80

FY08

FY09

FY10

Option

$29

$36

$44

$12

$21

$29

Level

Beyond

8

Strategic Investment Areas

Strategic Investment Areas

$0

$20

$40

$60

$80

$100

$120

$140

$160

FY05

FY06

FY07

FY08 Q2

0.0%

0.5%

1.0%

1.5%

2.0%

Bid & Proposal and Corp BD

1.7%

1.9%

1.8%

$129

$77

$126

1.8%

$157

$0

$5

$10

$15

$20

$25

$30

$35

FY05

FY06

FY07

FY08 Q2

0.0%

0.1%

0.2%

0.3%

0.4%

0.5%

IR&D

0.4%

0.4%

0.5%

$27

$34

$21

$25

0.4%

$0

$20

$40

$60

$80

$100

FY05

FY06

FY07

FY08 Q2

0.0%

0.5%

1.0%

1.5%

Corp IT

1.0%

1.2%

1.2%

$79

$96

$51

$60

0.9%

Growing our key investments

Focused on delivering either top line

growth or operational efficiencies

Expect IT spend reductions FY10

9

Margin Expansion –

Key Steps

Margin Expansion –

Key Steps

Cultural

Awareness

Profit

Motivation

Manager

Training

Greater

Collaboration

Reduce Corporate

Spending

More Effective

IT Systems

Aggressive Fee

Negotiation on Subs

and Materials

Avoid or

Recover Rate

Varience

Channel

Investments to High

Margin Business

Higher Contract Fees

Lower Costs

Margin

Expansion

Improve

Retention

10

Margin Expansion –

End State

Margin Expansion –

End State

Ultimate margins with current business base should be 8%-9%

–

Improve 20-30 bps per year

Changes in business base could change end margins

–

Greater relative acceleration of logistics business (down)

–

Contractor reform actions: fee limits, holdbacks, investigations

(down)

–

Customer shifts in contract mix (

FP/T&M up, 

CP down)

–

Greater relative acceleration of products business (up)

Total

40-80 bps

Fast growth in high-margin areas

10-20 bps

More internal collaboration

10-20 bps

Enhanced fee on M&S

20-40 bps

Improve Contract Fees

Total

45-95 bps

Better rate/unallowable management

10-30 bps

Return to normal IT spend

15-25 bps

Cut overhead

20-40 bps

Reduce Indirect Costs

11

Share Count

Share Count

Share count held in check with share repurchase program

–

Future repurchases subject to market conditions, stock price, and other cash uses

Reworked equity programs—retirement plan contributions and vested bonus stock

replaced with cash

Option overhang should continue to fall as larger prior year grants mature

Average Quarterly Diluted Shares

250

300

350

400

450

FY07 Q1

FY07 Q2

FY07 Q3

FY07 Q4

FY08 Q1

FY08 Q2

Preferred Shares

Common Shares

Option CSEs

Vesting CSEs

Option Overhang

10%

15%

20%

FY07

Q1

FY07

Q2

FY07

Q3

FY07

Q4

FY08

Q1

FY08

Q2

12

Income Statement Takeaways

Income Statement Takeaways

Revenue

Diverse contract base mitigates risk

Tracking to almost double pre-IPO internal growth rate

Operating Profit/Margins

G&A costs contained; increased BD and IR&D

Tracking to deliver 20 –

30 bps YoY

improvement

Share Count

Option overhang significantly reduced

Repurchases have kept share creep in check

EPS

All EPS growth model elements on track

Targeting 15% long term growth

13

Operating Cash Flow Trends

Operating Cash Flow Trends

DSO continues to improve year over year (FY08 Q2 was exceptional)

FY08 operating cash flow reduction from FY07 driven primarily by:

–

Cash partially replacing equity compensation (~$50M)

–

Reclassification

of

excess

option

tax

benefits

to

financing

cash

flow

(~$30M)

–

Income tax refund/payment timing (~$50M)

–

Extra payroll tax payment in FY08 (~$40M)

(guidance)

FY06

FY07

FY08

Operating Cash Flow

FY06

FY07

FY08 Q2

DSO

0

100

200

300

400

500

600

700

40

50

60

70

14

0

(25)

Net Cash & Shares After Repurchases

(11)

(200)

Public & Private Repurchases to Keep Share Count Constant

11

175

Net Cash & Shares Before Repurchases

3

Price Appreciation

(15)

Stock Repurchased to Pay for Vesting Stock Taxes

5

Option Tax Benefits Net of Shares Repurchased for Tax

25

FAS 123R Non-Cash Option Expense

3

50

Vesting Stock Non-Cash Amortization Expense

2

30

Cash Option Exercise

4

80

ESPP Gross

Share Count

(Million Shares)

Cash Flow

(Million $)

Notional FY08 Share and

Cash Flows

Notional FY08 Share and

Cash Flows

Annual equity programs increase cash flow by ~$175M

–

Real cash inflows from ESPP, option exercise are ~$110M

–

Non-cash expense from vesting stock & option programs are ~75M

Repurchases of ~$200M needed to keep share count constant

Annual equity grants running at ~7M options and ~5M vesting shares

–

~25% of grants are forfeited

15

Cash Flow Takeaways

Cash Flow Takeaways

Investing Cash Flow

Capex at $70 –

$80M; figure 1% of revenue

Expect acquisitions to require $300M-$400M cash per year

Financing Cash Flow

Option tax benefit ($60 -

$70M/year) is real cash flow

Repurchases

are

an

“option”

based

on

markets/pecking

order

“All In”

Net annual cash generation provides for internal growth,

acquisitions, capex, and share dilution management repurchases

Operating Cash Flow

Still exceeds net income by ~ 1.2x

More frugal with equity compensation; using ~$50M cash to offset

$60 -

$70M of option tax benefit moved to financing per FAS 123R

16

Balance Sheet Trends

Balance Sheet Trends

Net working

capital

excludes

cash, debt,

income

taxes, and

disc. ops.

After-tax EBIT

(Shareholder Equity + Net Debt)

ROIC =

-$500

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

FY06

FY07

FY08 Q2

NWC

Annual Percent Revenue

0%

10%

20%

30%

FY06

FY07

FY08 Q2

ROIC

Cash and Net Cash/Debt

Cash

Net Cash/Debt

(Annualized)

Debt/EBITDA

(Annualized)

FY06

FY07

FY08 Q2

0.0

0.5

1.0

1.5

2.0

2.5

0

100

200

300

400

FY06

FY07

FY08 Q2

0%

1%

2%

3%

4%

5%

6%

Net Working Capital

17

Maturity of Notes (LT Debt)

Maturity of Notes (LT Debt)

Average

Interest

Rate

Libor +

350 bps

6.72%

6.52%

6.53%

5.78%

$0

$200

$400

$600

$800

$1,000

$1,200

$100 M

$300 M

$550 M

$250 M

9.00%

9.00%

6.50%

7.43%

5.78%

Interest Rate

Debt is in long-

term notes at low,

fixed rates

18

Debt Capacity

Debt Capacity

Initial capacity analysis indicates $2B in additional borrowings

possible while still

maintaining solid investment grade rating (BBB)

Investment

Grade

Actual S&P 500

Median

Theoretical S&P 500

Optimum

ACN

BA

SAIC

CSC

GD

LMT

NOC

RTN

BAE

L3

CAI

1.4%

0.2%

1.9%

1.7%

5.8%

12.3%

10.4%

12.5%

16.9%

8.7%

4.3%

2.9%

2.2%

2.7%

1.4%

0.0%

14.7%

0%

5%

10%

15%

20%

AAA

AA+

AA

AA-

A+

A

A-

BBB+

BBB

BBB-

BB+

BB

BB-

B+

B

B-

NR

S&P 500 Sr. Bond Rating Distribution (Excluding Financials)

19

Capital Deployment

Capital Deployment

Deploy “excess capital”

wisely according to ROIC analysis

Internal growth through IR&D, strategic campaigns

Acquisitions to build out capabilities and customers

–

Typically deploy $300M-$400M at about 1x revenue

–

Not interested in buying simply to bulk up or deploy capital

–

Focus on mid-sized deals but ready for larger

Stock buybacks through open market transaction

–

40M share authorization (~30M shares remaining)

20

Balance Sheet Takeaways

Balance Sheet Takeaways

Assets

$1.1 billion cash on hand

Strong

A/R

management;

DSO

65

–

70

days

Liabilities

Unfunded, 5 year credit facility $750 million

$100 million of $1.2 billion Notes due 2/1/2008

Remaining

balance

fixed

at

6.5%

Capacity

~$750 million of cash that can be redeployed

Credit rating A–; should be able to borrow an additional $2B and still

maintain investment grade rating

21

Financial Summary

Financial Summary

Sustainable growth in shareholder value

–

Accelerating

internal

growth

–

Expanding

operating

margins

–

Deploying capital

Consistent, demonstrated progress on all fronts

Realistic, achievable path with identified enablers

–

IT

systems

modernization

expected

to

enable

cost

efficiencies

–

Building pipeline of large opportunities

–

Margin expansion training completed across the organization

–

Improving cost discipline

Defense Solutions Group

Defense Solutions Group

Deb Alderson

President

2

Group Structure and Focus

Group Structure and Focus

DEFENSE

SOLUTIONS GROUP

Revenue $2.5B

Group President

Deborah Alderson

Tactical Systems & Solutions

J. Gully

$300

Systems & Tech. Solutions

B. Gurley

$250

Defense & Maritime Solutions

T. Baybrook

$600M

Federal Comm. Solutions

P. Dube

$500M

C4IT

D. James

$250M

Analysis, Simulation,

Systems Eng. & Training

B. Seay

$500M

System Integration &

Enterprise Life-Cycle

Management

Technical & Software

Development –

Missile

Defense Systems

Technical & Engineering

Services -

Software &

Hardware

Enterprise & Complex

Network Services

C4 Engineering &

Network Centric

Integration

Modeling, Simulation &

Training; Management

Systems

Major provider for

Combatant

Commanders;

Air Force & Army

# 1 contractor to

Navy SPAWAR

System Center

San Diego

#1

DISA

Contractor

Key provider to Naval

Surface/ Under Sea

Warfare Centers

Major support of

Army & Missile

Defense Agency

#1

integrator

for

Future Combat

System

3

Key Customers and Capabilities

Key Customers and Capabilities

`

A1957-ID_06

Army

28%

Navy

26%

DISA

16%

Other

DoD

10%

Other

11%

Marines

4%

Air Force

5%

AOC –

WSI

ACC CAAS III

SPAWAR System Centers

Naval Surface Warfare Centers

SEAPORT-e

MRAP

USMC SysCom

Future Combat Systems

Army Aviation & Missile Command

Human Resources Command

GIG-BE

DGS

NexGen

MDA

CoComs

Joint

Coast Guard/DHS

Fed Civil

State/Local

Modeling and simulation

Command, control and

communications

Technical and engineering

services

Enterprise and network-

centric mission related

systems

Systems engineering and

integration

4

Vision and Strategic Intent

Vision and Strategic Intent

The preferred thought leader and value-driven implementer of

complex integrated enterprise and defense solutions that improve

our

national

security

and

our

customers’

mission

success

Increase large systems business…SE&I/Engineering agent

Lead in interoperable, SOA solutions for joint C2 & C4

Build Cyber Related Business & Solutions

Expand modeling, simulation, and training footprint

Grow missile defense business

Leverage FCS capabilities

5

Major Growth Drivers

Major Growth Drivers

People First –

We hire the right people at the right time and treat them

as our number one asset

Integrated focus; no longer constrained by individual business units

focused on a customer

–

Broad focus across the entire defense spectrum

–

Integrated systems solutions leveraging unique enterprise and system of

systems experience

Expertise in systems engineering and integration throughout the life-

cycle; a cradle-to-grave market orientation

Honest broker, unconstrained by OEM culture, permitting capability and

value-driven solutions through an open business model

Proven history of solving complex problems of national significance

Flexibility in applications…engineering agent, LSI,  Prime…large

program pursuits.  Capable of defining, winning and executing complex,

life-cycle solutions programs

Adept at task order execution as well as large scale program

opportunities

6

Maturity of Business Portfolio

Maturity of Business Portfolio

EMERGING                          

GROWTH                           

MATURE                              

MARKET MATURITY

VALUE

MODELING AND SIMULATION

STUDIES ANALYSIS & MANAGEMENT SERVICES

NETWORK MANAGEMENT

SERVICES

TECHNICAL AND ENGINEERING SERVICES

NETWORK CENTRIC COMMAND, CONTROL AND

COMMUNICATIONS

ENTERPRISE & CAPABILITY

MANAGEMENT

•

Foundation for capability management

•

Builds on technical expertise

•

Focused on the front end of system life cycle

•

Grow and further secure our traditional base

•

Leverage technical expertise, customer intimacy,

subcontractor management, and honest

broker status

•

Leverage second-to-none

knowledge of DISA core network

•

Expand to Services, other

government agencies

•

New approach to SE&I

delivering required capability

without contractual authority

over subs

•

SE&I

“agent”

delivering

an

open,

composable

C3

“platform”

to

meet

evolving

customer

needs

•

FCS; MRAP integration

•

Apply proven reconfigurable simulator technology to

growing flight simulation market

•

Leverages leadership in constructive and virtual

simulations

7

Strategy for Future Growth

Strategy for Future Growth

1990s

Early 2000

Today

2010

Complex Stove-piped

Systems

Emergence of

“General Contractors”

Full Life Cycle

Capability Solutions

Acceleration of Shift from

Products Toward

Capability Solutions

•

Life Cycle Systems/

Solutions focused on

capability

•

Acquisition Reform/need

for honest broker

–

Make the Homeland

Secure

–

Integrated Missile Defense

–

Global Strike

–

CANES

Vertically Integrated

Complex Systems

Life Cycle Capability

Solutions

Engineering

System Integration

Capability

Management

•

LSI Performance and

Congressional oversight

drives some Acq. functions

back to Government

•

SE&I Contractor as an

agent for PMO

–

SBI NET

–

DLA-

Global FASI

–

Deepwater-

Restructuring

•

Net-centric warfare

(Network versus Platform)

•

DoD/DHS hires LSI’s to

address SoS complexity

–

FCS

–

Deepwater

•

Systems Integration

market dominated by a few

systems programs

•

Little integration/

interoperability across

systems

–

Missile Defense

–

Joint Strike Fighter

8

President’s Summary

President’s Summary

PEOPLE FIRST

AGGRESSIVE

AGILE

ADAPTABLE

Task Order

Marketing

Pure Play

Opportunistic

Stay Ahead

Streamlined

BD Process

Margin

Expansion

Customer Intimacy

Competition

Target Campaign

Protect the Base

Follow the $$

The Way Ahead: Aggressive…Agile…Adaptable

Organic Growth

Defense Solutions Group—

Future Combat Systems

Defense Solutions Group—

Future Combat Systems

John Gully

Tactical Systems & Solutions Business

Unit General Manager

2

Army Leadership’s View of FCS

Army Leadership’s View of FCS

Principal Army modernization program

Benefits all US ground forces

Builds on Army modular force organization

Provides advanced capabilities

Increases operational and strategic options

Most affordable, effective way to modernize

“We

never

want

a

fair

fight,

and

with

FCS,

our

Soldiers

will

have

the

ability

to

see

first,

understand

first,

and

act

first.

FCS

serves

the

present

through

spin-outs,

but

it

is

the

future.

We

must

keep

it

on

track.”

The Honorable Pete Geren

-

Secretary of the Army

AUSA Institute of Land Warfare Breakfast -

May 10, 2007

“FCS

technologies

will

be

vital

to

the

Army’s

ability

to

fight

a

nontraditional

war

such

as

the

combat

in

Iraq.

We’re

up

against

an

adaptive,

asymmetric

enemy

who

is

changing

his

tactics

every

day.

We

need

to

give

our

soldiers

every

advantage.”

General George Casey, Jr. –

Chief of Staff, U.S. Army

DefenseNews.com

-

25 April 2007

3

FCS System-of-Systems (SoS)

FCS System-of-Systems (SoS)

Manned Ground Vehicles (MGV)

Non-Line of

Sight Mortar

(NLOS-M)

Medical Vehicle Treatment (MV-T)

FCS Recovery and

Maintenance

Vehicle (FRMV)

Unmanned Aerial Systems (UAS)

Class I UAS

Class IV UAS

Unattended Ground Systems (UGS)

Tactical and Urban Unattended

Ground Sensors

Unmanned Ground Vehicles (UGV)

Small UGV (SUGV)

Armed Robotic

Vehicle –

Assault

(Light) (ARV-A-L)

MULE-C

MULE-T

Mounted Combat

System (MCS)

Infantry Carrier

Vehicle (ICV)

T-UGS

U-UGS

Medical Vehicle

Evacuation (MV-E)

Non-Line of Sight

Launch System

(NLOS-LS)

Multifunction Utility/

Logistics

and Equipment

Countermine and

Transport

Reconnaissance

And Surveillance

Vehicle (RSV)

Command

and Control

Vehicle (C2V)

Common Chassis

APS

MRM

Medium

Range

Munitions

Centralized

Controller

Notional

Non-Line of

Sight Cannon

(NLOS-C)

4

Lead Systems Integrator (LSI)

Lead Systems Integrator (LSI)

Focuses on system engineering, system integration, system

planning and control

Gets best of industry to work the hardware / software

Total system integration responsibility

5

FCS One Team –

Changing the

Way We Do Business

FCS One Team –

Changing the

Way We Do Business

Lead

Systems

Integrator

provides

total

system-of-systems

integration,

brings

all

stakeholders

together,

and

delivers

capability

faster

to

our

Warfighters

30% reduction in development-to-field timeline

One integrated management team vs. multiple independent teams

One step design process to integrate requirements to capabilities

Delivers and integrated family of systems for the FCS Brigade Combat

Team (FCS BCT), vs. a collection of individual platforms

The whole is greater than the sum of the parts

Best of industry

Reduced life cycle cost

Commonality across systems

Designed-in availability

Less Expensive

Better

Faster

6

SAIC FCS SDD Program Summary

SAIC FCS SDD Program Summary

SAIC

and

Boeing

have

formed

a

badgeless

team

in

which

SAIC

shares

Program

and

IPT

leadership roles

–

Deputy Program Manger

–

Chief Architect

–

Chief Analyst

SAIC’s

technical leadership roles include:

–

Land Warfare Technology –

MGVs, UGVs, C4ISR

–

Unmanned Aerial Vehicles

–

Operational and System of Systems Architecture Design & Analysis

–

System Engineering & Integration

–

Specialty Engineering –

Training, Logistics

–

Distributed Interactive Simulation, Test & Evaluation

–

Software Integration

–

Risk Management

SAIC’s

Product Team leadership roles include:

–

Integrated Simulation & Test

–

Technology Development

–

Training Systems

–

Unmanned Ground Vehicles

–

Warfighter

Systems

SAIC’s

Business Process roles include:

–

Earned Value Management Systems

–

Supplier Management & Procurement

–

Quality Assurance

Workshare:

15% of Boeing contract cost (SAIC $2.7B)

Contract Type:

CP FF/IF

Fixed Fee:

7.5%

Incentive Fee:

7.5%

7

Related Advanced Developments

–

DCGS-A (V3)(2007)

–

Excalibur (2007)

–

LUH (2008)

–

WIN-T Inc 1 (2008-09)

Lessons Learned

OIF and OEF

RAVEN Tactical UAV

Interceptor Body Armor (IBA)

Counter IED (Warlock, Duke)

Uparmored Vehicles (UAH, AoA)

Buffalo mine-clearing vehicle

FCS –

System Development and Demonstration

Spin Out 1 FY

2008-10

Spin Out 2 FY

2010-12

Spin Out 3 FY

2012-15

-

Limited Battle Command 

-

JTRS (GMR/HMS)

-

Unattended Ground

Sensors

-

Non-Line of Sight Launch

Systems

Systems/ Component

-

APS

-

Mast Mounted

Sensor

Options:

-

Small UGV

-

Class 1 UAV

-

ABCS to FCS Battle

Command

-

ARV-A-L

-

Small UGV

-

Class I UAV

-

Class IV UAV

Core

Program

Delivery 

FY 2015

Joint

Networked

System of

Systems

Army Modernization Strategy

Army Modernization Strategy

–

GSS (2010-14)

–

ARH (2010-2014)

–

JTRS AMF (2011-12)

–

JTRS (GMR/HMS)

–

Apache Longbow Block III (2011)

–

JLTV (2012-13)

–

WIN-T Inc 2 (2014)

Future

Fielding 6 current force BCTs/yr (76)

Fielding 15 FCS BCTs

Current

Infantry

Stryker

Heavy

FCS

Infantry

Stryker

Heavy

Networked Sensors/

Shooters 

Schedule

Network and Ground/

Air Vehicles

A1957-ID-07

8

FCS FY08 Funding

FCS FY08 Funding

FY08 President Budget at $3.7B…RDTE & Production

Congressional Marks

SAC-D:  FCS fully funded at $3.7B

No Adverse Language

HAC-D:  Net cut of $406M

$190.3M from MGV

$167.0M

for

Program

Management

(incl

+$25M

for

Small Business Tech Insertion)

+$1.1M for UAV

$3.1M for UGV

$47.0M for Sustainment & Training

SASC:  FCS fully funded at $3.7B

Added $90M to restore Armed Robotic Vehicle

program

Added $25M to accelerate APS for Stryker

HASC:

Cut $867M

$21.0M for CL IV UAV

$46.7M for MULE UGV

$233.0M from MGV

$566.3M for Program Management and Fee

Senate

House

9

FCS Status and Outlook

FCS Status and Outlook

LRIP J&A signed by ASA Claude

Bolton on 11 July 2007

–

FY08 –

FY13 President’s Budget

identifies funding for the program

–

18 MGV Early Production

Vehicles

–

Spin Out 1: 17 BCTs

–

Spin Out 2: Enhanced

Capabilities for Stryker

–

Spin-out 3: 9 BCTs

–

FCS: 3 BCTs

(LRIP)

–

Logistics & Network Services,

Training, and Fielding (LRIP)

Army deployed ~1000 soldiers to

Ft Bliss to evaluate FCS

Key Highlights / Indicators

–

On budget, on schedule

–

Successful experiment 1.1 soldier

exercise

–

Delivered FCS Build 1 software

(~5M SLOCs)

–

Delivered first 12 current force

network “Kits”

–

Initiated FCS Production planning

–

Discovery Channel “Future

Weapons”

–

Major Prototype Builds Underway

-

All systems

65 test activities underway…all

platforms in testing

Strong Momentum…

10

FCS Expansion

FCS Expansion

+1

X15

Infantry Modular BCT

Stryker Modular BCT

Heavy Modular BCT

X63

SPT BDEs

X198

Also includes Configuration Management & Logistics Support

FCS BCT

Current Contract

Future Opportunities

11

SAIC Capability Management –

Addressing The Future Need

SAIC Capability Management –

Addressing The Future Need

Exploits SAIC’s

front-end strength, SoS qualifications, domain expertise across

full life-cycle, honest broker reputation and ability to partner with our customers to

incorporate best-of-breed capabilities into full life-cycle, best value solutions

–

Address our customers’

capability needs, not just their equipment needs

–

Provide disciplined SoS Life Cycle SE&I processes that are not corrupted by a solutions

view focused on platforms

–

Enable greater innovation by supporting honest equipment trades

–

Maximize probability of getting it right the first time and meeting customer expectations

–

Achieve

greater

adaptability

and

flexibility

through

emphasis

on

GOTS/COTS,

upgrades

and spirals to offer a more robust solution (re: addressing changing user challenges)

Studies &

Analysis

Operational

Design

System

Optimization

Reqmts &      

Specs

Design &

Code

Assy,

Integrate &

Test

Production

Train

Field

Support

Capability Management Throughout the Life Cycle

Intelligence, Security and

Technology Group

Intelligence, Security and

Technology Group

Stu Shea

President

2

Group Structure and Focus

Group Structure and Focus

INTELLIGENCE,

SECURITY and

TECHNOLOGY

GROUP

Revenue $2.8B

Group President

Stu Shea

Space and Geospatial

Intelligence

Tony Moraco

$450M

Intelligence and

Information Solutions

Larry Cox

$450M

Technology and

Advanced Systems

Jurgen Gobien

$650M

Operations, Intelligence

and Security

John Thomas

$800M

Information Operations,

Assurance, and Security

Mission Integration

Leo Hazlewood

$450M

National Intelligence

Science R&D / Systems

Engineering and Prototyping

National Security Space / 

Intelligence Production

Defense Intelligence and

Operations Support

#1 NCTC technical

services contractor

#1 NGA contractor for

geospatial products

Leading provider of

operational intelligence

support to deployed forces

#2 NSA technical

services contractor

#1 DARPA R&D

contractor 

3

Key Customers and Capabilities

Key Customers and Capabilities

Air Force

17%

National

Security

62%

Army

13%

Navy

6%

Other

Gov’t

4%

•

Counterterrorism Analysis

•

Policy Support

•

Digital Asset Systems

•

IT Planning & Oversight

•

Watch Center Support

•

Translation Support

•

Analytical Training

•

HUMINT Support

•

Geospatial Production

•

SE&I

•

QRC

•

Advanced SIGINT Processing

•

Space Hardware

•

Cryptologic Support

•

Development and Integration

•

ONI/NMIC Analysis

•

Special Programs Support

•

Cryptologic Support

•

Information Dominance

•

Joint Intelligence OPS

•

NGIC Analysis

•

Target Intelligence Analysis

•

Counter IED

•

Advanced R&D

•

Operations Research

•

Space Systems Design

•

SE&I

•

Air / Space S&T Analysis

•

Technology Studies

•

UAS Support

4

IST Group Supports the Entire

Intelligence Community

IST Group Supports the Entire

Intelligence Community

Cryptologic Support

Development and Integration

ONI/NMIC Analysis/ACINT support

Special Programs Support

Technical Support

SETA (SIGINT, COMM, AS&T, DSI&E)

Special Technology Development

Advanced SIGINT Processing

Advanced Technology Studies

Operational Experiments

All-source Analysis

Collection Management

S&T Analysis

Translation Services

Analytic Support

Analytic Training

CI Analysis

DNA Indexing

Information Sharing (LEO)

Intel Analysis & Technical Operations Support

Watch Center Support

Identity Management Support

Cryptologic Support

Information Dominance

Joint Intelligence Operations

NGIC Analysis

Target Intelligence Analysis

Air/Space S&T Analysis

Cryptologic Support

IO/IA/IW Support

Requirements Support

War Gaming Support

Cryptologic Support

CT Database Support

Geospatial Support

MCIA Database Support

Analytical Support

CBR Support

Gamma Ray Vehicle Inspection

IT Support

IA and C&A Support

Analytical Training

Conference Support

HUMINT Support

Strategic Planning

Technical Collection

Technical Training

Translation Services

S&T Analysis

Equipment QRC

IO/IA/IW Support

Processing QRC

SIGINT Architecture

Signal  and S&T Analysis

Acquisition Support

Collection Management

Geospatial Production

Policy Support

SE&I

Studies and Assessments

Counterterrorism Analysis

Customs Enforcement

Geospatial Architectures

Planning and Policy

Watch Center Support

COOP

Operations Research

Nuclear Technical Support

Enterprise Security

Studies and Assessments

Technical Services

Translation Services

Special

Access

Required

Defense

Intelligence

Agency

National

Security

Agency

Army

Intelligence

Navy

Intelligence

Air Force

Intelligence

Marine

Corps

Intelligence

Department

of State

Department

of Energy

Department of

Treasury

Department of

Homeland

Security

Federal Bureau

of Investigation

Drug

Enforcement

Administration

Coast

Guard

National

Geospatial

-

Intelligence

Agency

National

Reconnaissance

Office

•

CT Analysis

•

Policy Support

•

Digital Asset Systems

•

Administrative Services

•

IT Planning & Oversight

•

Watch Center Support

•

Strategic Planning

Analytic Support

CBW Vulnerability

Embassy Security

Strategic Planning

Facial Recognition

5

Vision and Strategic Intent

Vision and Strategic Intent

Top provider of full spectrum intelligence and security solutions to the national

security community:

–

Preferred partner for analysis, IT, ops support, tech ops support, and system

engineering

and

integration

capabilities

to

the

Intelligence

and

National

Security

Communities

–

Leading provider of intelligence services to downrange and contingency ops

–

Principal support contractor for the evolution of the O/DNI, Department of Homeland

Security, and Department of Defense Joint Functional Component Commands

Leading provider of intelligence, tools, and services for information and

network operations in defense, government, and commercial infrastructure

markets

Top SE&I provider for DoD

and NRO in National Security Space

Top-global provider of all aspect, end-to-end physical, cyber and converged

security solutions

Top developer and integrator for intelligence, surveillance, reconnaissance,

and targeting systems

#1 Provider of system engineering and integration services for federal

government’s large scale, multi-vendor Systems-of-Systems

#1 Provider of specialized, rapid-response technologies to enable intelligence

and national security missions

Leading provider of security, operational intelligence, and technology solutions

for U.S. strategic partners supporting U.S. international security objectives

Frontline Partner in National Security and Intelligence

A vital member of

the National

Security

Community….

confronting its

toughest

challenges

Performing

mission-critical

tasks for our

nation’s most

important

customers

6

Our People are our #1 Discriminator

Success Depends on

the People on our Team

Success Depends on

the People on our Team

Breadth and depth of Group market penetration

–

Strategic, operational, and tactical levels

–

Location, location, location

Breadth and depth of science and technology expertise

–

33 of 64 SAIC Fellows in IST

–

Performing over half of all SAIC IR&D research

–

5 patents issued in FY 08

USSTRATCOM Strategic Advisory Group

AFCEA Intelligence Committee

Intelligence and National Security Alliance

Information Technology Association of America

Defense Science Board

Military Intelligence Corps Association

Marine Corps Intelligence Association

National Correlation Working Group

NGA Advisory Board

USGIF & GEOINT Symposium

NSA/DARPA Leadership Panel

Our Senior Executives Play Leadership Roles

in a Wide Variety of External Organizations

Operational acumen

Real experience in enterprise systems

Flexibility to provide special services

Leading provider of cleared personnel

7

Maturity of Business Portfolio

Maturity of Business Portfolio

A1957-ID-11

VALUE

R&D, T+E,

EARTH SCIENCES

IC AND DOD

INTELLIGENCE

SURVEILLANCE,

RECONAISSANCE,

and TARGETING

HOMELAND

SECURITY and

DEFENSE

DOWNRANGE

OPERATIONS

SPACE

SUPERIORITY

CYBER-SECURITY

OPERATIONS

INTEGRATED

SECURITY

SOLUTIONS

INFORMATION

OPERATIONS

GLOBAL

CHANGE IMPACT

EMERGING                            GROWTH                      

MATURE                               MARKET MATURITY

8

Explosive Growth Opportunities

Explosive Growth Opportunities

Cyber-Security Operations

–

Integrated defensive and offensive computer operations that

protect national military, government, and industrial networks

–

$20B Market Value (09-11)

Space Superiority Mission Systems

–

Satellite and ground systems that support space surveillance and

offensive / defensive counter-space missions

–

$6B Market Value (09-11)

Downrange Operations

–

Operational services and products that support defense and

intelligence overseas missions

–

$1B Market Value (09-11)

Global Change Impact Services

–

International operational intelligence and security services driven

by global change

–

$0.5B Market Value (09-11)

9

Space Superiority:

A National Imperative

Space Superiority:

A National Imperative

On January 11, 2007, the

Chinese demonstrated the ability

to destroy Low Earth Orbit (LEO)

satellites with a Direct Ascent

Anti-Satellite (DA ASAT) missile.

–

D/NRO acknowledged Chinese

laser tracking of US EO -

LEO

satellite in 2006 (Space News)

–

Intelligence Estimates project

Chinese satellite-to-satellite

capability in 2009 (AWS&T)

SAIC will continue to perform on a broad range of space programs

covering a wide range of technologies and operations (communications,

navigation, imaging), but is targeting a growth market in the space

superiority area –

driven by these international events

SAIC has participated on the cutting edge of the national space

superiority initiative with thought leadership, operational sensor systems,

and analytical support

10

President’s Summary

President’s Summary

We have a passion for executing the mission and a commitment to take

on tasks of vital interest to the Nation…our people are mission critical 

We have deep domain expertise in every mission area we support and

we are the best at what we do…

recognized national treasures walk our

hallways

We apply creative science and disciplined engineering to create

innovative solutions for our customers –

people for whom we care and

strive for their success

We work as imaginative, driven, entrepreneurial teams and we move

mountains to deliver results

We share in our customers’

success, and we thrive on the hard work

that gets us there

At the same time, we take pride in our high ethical standards and joy in

doing good deeds for our communities, families, friends, neighbors and

fellow employees 

Our work enriches us and it is an honor to be part of SAIC

Information Technology and

Network Solutions Group

Information Technology and

Network Solutions Group

Charles Koontz

President

2

Group Structure and Focus

Group Structure and Focus

INFORMATION

TECHNOLOGY &

NETWORK

SOLUTIONS GROUP

Revenue $1.5B

Group President

Charles Koontz

Technology Development &

Science Discovery for Diagnosis &

Treatment of Cancer & AIDS

Managed IT & Infrastructure

Services

Health IT, Public Health &

Biomedical Research

Global Energy and Life

Sciences Solutions and

Integration Services

Top Tier Provider for IT

Services in Oil & Gas

Upstream

Sole Source Contractor for

the National Cancer Institute

#1 Provider of DHS data

center migration,

consolidation, and

transformation solutions

Top 3 Provider of IT

Services to the Dept. of

Health & Human Services

Enterprise Solutions

R. Cash

$600M

Health Solutions

B. McCord

$350M

Commercial Business

Services

D. Charles

$550M

SAIC-Frederick

(NCI)

L. Arthur

3

Key Customers & Capabilities

Key Customers & Capabilities

Federal,

DoD

&

Commercial

Health

30%

World-wide deployment and support of

IT Health Solutions

Disease Surveillance and Bioterrism

Research Support and Knowledge

Management

Enterprise IT Optimization

Full-Service IT Provider

Enterprise and Business Strategy Solutions

Infrastructure and Applications Rationalization,

Consolidation and Transformation

Information Content and Data Mgmt Solutions

Infrastructure Services Mgmt and Support

Civilian

Government

35%

Commercial

Energy

35%

–

CDC

–

NCI-Frederick

–

TRICARE

–

Pfizer

–

BP

–

Scottish Power

–

Entergy

–

DHS

–

NASA

–

State/Local

A1957-ID-09

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

4

Vision & Strategic Intent

Vision & Strategic Intent

DHS: achieve top-3 IT solutions provider status

–

Capture 3 data center migrations

–

Maintain #1 share position in EAGLE task order awards

Expand NASA business following UNITeS

re-compete win

Become Top 5 provider of data management services in US & UK Energy

Become Top 5 provider of IT services for Oil and Gas Upstream

Become #1 IT provider to the Military Health System

Expand role at CDC beyond bio-surveillance

Double our revenue at NIH

Become a top-3 provider of IT services at VA

–

including VHA, VBA and administrative groups

Become a preferred contractor at CMS

The Information Technology and Network Solutions center of excellence for SAIC

with responsibility for the Federal DoD (non-war-fighting), Federal Civil, Health, and

Commercial & International markets.  By expanding our presence in these markets,

we will diversify our business thereby improving our resiliency to accommodate any

DoD market shifts.

5

Major Growth Drivers

Major Growth Drivers

Use of domain knowledge to deliver IT business solutions

ISO, ITIL, and CMMI certifications ensure customer focus and

continuous improvement

Flexible, platform-independent pricing models fit all client needs (both

federal and commercial) and bring creative pricing strategies to

the

federal space

“Skin in the Game”

performance metrics ensure strong, sustainable

performance

Integrated Services Management Center (ISMC) and SAIC India delivers

outstanding infrastructure support services at reduced cost for federal

and/or commercial clients

Migration, consolidation, transformation model reduces footprint

and

cost of infrastructure and provides long-term cost reduction and

performance improvement as applications and data are transformed

Strong focus on specific vertical markets with outstanding pipeline—

Homeland Security, Health, and Energy—provide the domain knowledge

to deliver business solutions

6

DHS, Federal Health

(MHS, VA, HHS, incl. NIH, CDC,

FDA, CMS & NCI),

NASA (UNITeS),

Commercial

(Energy, Pharma)

NASA (other IT), Census,

DOT, FAA, SSA NRC, OPM,

SBA, Smithsonian, DOL,

HUD, Armed Services IT,

State and Local Gov,

Process Industries

Opportunistic

Markets

EPA,

Agriculture,

IRS, DOE (IT),

Commerce

UK Public Sector

(Central Gov)

“Pre-Strategic”

Markets

Strategic Markets

Energy

Strategic Campaigns

Major Growth Markets

Major Growth Markets

Health

7

Strategic Campaign -

Energy

Strategic Campaign -

Energy

Core Business

–

Upstream Oil & Gas

•

Enhanced Oil recovery / Digital Oil Field

-

Engineering & IT Services

–

Downstream Oil & Gas

•

Pipelines, Refineries, Fuels, Retail

–

Power generation

•

Efficiency using Fossil Fuels

•

Carbon Capture and Sequestration

–

SmartGrid

Solutions (T&D)

–

Energy Management Services

•

Benham Associates

–

Remote Power systems

Key Customers and Programs

–

BP: Field of the Future

–

Shell: Collaborative Work

Environments

–

Marathon: IT Outsourcing

–

Entergy: Applications & IT

Infrastructure

–

Scottish Power: IT Outsourcing

Innovative Capabilities, Solutions and

Technologies

–

Process Modeling and Simulation

–

Process Optimization

–

Economic & Business Modeling

–

Regulatory Consulting

–

Environmental Solutions

–

Command & Control Systems

–

Products (Robotics, Inspection, etc.)

–

Outsourced R&D

–

Engineering Services (domain)

–

IT (Apps, Data, Infrastructure)

8

Strategic Campaign -

Health

Strategic Campaign -

Health

Core Business

–

Health Information Technology

•

Electronic Health Records

•

Technical & Semantic

Interoperability

•

Privacy Protection

•

Data Mining & Knowledge Extraction

•

Federated Systems

–

Public Health

•

Biosurveillance

•

Situational Awareness,

Bioinformatics

•

Technical & Semantic

Interoperability

–

Life Sciences

•

Biomedical/Clinical Research

•

Clinical Trials Information Exchange

(CRIX)

•

Adverse Events Surveillance

–

Health Services

•

Medicare Program Integrity

•

Behavioral Health

Key Customers and Programs

–

Military Health System: CHCS

Legacy Support, Tricare

Online

–

Department of Veterans Affairs:

VistA

Contractor Support

–

Centers for Disease Control and

Prevention: BioSense

–

National Institutes of Health:

Malaria Vaccine Production

Support

–

National Cancer Institute: NCI-

Frederick FFRDC, caBIG

Innovative Capabilities,

Solutions and Technologies

–

Medical Terminology Provisioning

–

Health Grid

–

Drug Safety Information

Exchange

–

Translational Research

–

DoD/VA Data Sharing

–

Disease Surveillance

9

Bio-Surveillance & Epidemiology

Maturity of Business Portfolio

Maturity of Business Portfolio

Cancer & AIDS Research

Data Lifecycle

Management

Software Portfolio Management

•

SOA  & WS infrastructure & business process enablement &

governance

•

Apps development in focused market domains (i.e. MHS, HHS,

DHS, Oil & Gas)

•

Legacy apps consolidation & rationalization

Data Lifecycle Management

•

Business Intelligence & Data

Warehouse

•

Enterprise Content Management

•

Knowledge management for Drug

Discovery

•

Information Security & Assurance

•

GIS and Data Analytics for supply

chains

Managed IT Services & Infrastructure

Business Analysis & IT

Transformation

•

Bio-terror threat detection & mitigation

•

Drug safety adverse events reporting

•

Pandemic detection and response services

•

Data center consolidation

•

Security infrastructure design, and integration

•

Managed networks

•

Service Centers (ISMC, NOC/SOC, India)

•

Technology assessment

•

Early Clinical Trial R&D

•

Bio-Medical Computing

•

Enterprise Architecture

•

Business Process Optimization &

Automation

•

Shared Service Integration

•

Utility Computing / SaaS

Energy

Solutions

•

Digital Oil Field

•

SmartGrid

•

Enhanced Oil

Recovery

•

Bio-Fuels

VALUE

EMERGING                            GROWTH                      

MATURE                               MARKET MATURITY

10

President’s Summary

President’s Summary

We are well positioned to deliver growth and margin

improvement through prudent execution of our strategy

–

Invest to grow faster in “strategic”

markets: DoD & Civilian Health,

Homeland Security, Commercial Energy & Life Sciences

–

Launch solution campaigns in Energy & Health and prepare to invest

in our “pre-Strategic”

markets in FY10/11

–

Increased competitiveness via agile business models (e.g., service

catalogue, performance based pricing)

–

Export our defense, intelligence and IT offerings to selected

International commercial markets

–

Grow our high margin key business area via organic investments and

M&A in business intelligence, software and IT transformation

Infrastructure, Logistics and

Product Solutions Group

Infrastructure, Logistics and

Product Solutions Group

Joe Craver

President

2

Group Structure and Focus

Group Structure and Focus

INFRASTRUCTURE,

LOGISTICS and

PRODUCT

SOLUTIONS GROUP

Revenue $2.0B

Group President

Joseph W. Craver III

Security and

Transportation

Technology

A. Preston

$200M

Science and Systems

Engineering Solutions

C. Zang

$450M

Logistics, Engineering,

and Product Support

Solutions

J. Cuff

$600M

Engineering and

Infrastructure

R. Shokes

$450M

Systems Engineering,

Mission Support, and OT&E

Homeland Protection

and Preparedness

J. Ferriter

$350M

CBRN and Preparedness

Services and Solutions

Logistics and Product

Support Solutions

Non-Intrusive Inspection &

Rad Detection Products

Environmental, Energy, and

Engineering Services

#1 Provider of CBRN

Services

#1 installed base of large

NII equipment

Top 10 provider

#1 Technical services

NASA contractor

#1 Non-OEM provider to

Defense Logistics Agency

3

Key Customers and Capabilities

Key Customers and Capabilities

Homeland

Security and

Defense

26%

NASA,

Global Climate

Change and

Other

21%

Energy,

Environment

and

Infrastructure

25%

Safety and Mission Assurance

Earth Sciences Data Integration

Operational Test and Evaluation

Energy Management

Environmental Services

Design/Build of Tech-

Intensive Infrastructure

Supply Chain Management

Asset Visibility

Logistics Systems

Product Support Integration

Integrated Container Inspection

Radiation Detection

CBRN Services and Systems

Non-Intrusive Imaging Systems

Transportation Automation

Logistics and

Product

Support

27%

–

DLA

–

DoD

–

NASA

–

NOAA

–

USGS

–

FAA

–

Comm’l

–

DoD

–

DOE

–

DHS

–

DoD

–

Int’l

4

Vision and Strategic Intent

Vision and Strategic Intent

#1 Non-OEM Sustainment provider to DoD

#1 Operational Test and Evaluation provider for DoD

#1 Provider of Security Products for ports and borders

#1 provider of CBRN/ All-Hazards preparedness systems and

services in US

Top 3 Integrated Energy Management Services provider

#1 Integrator of Earth sciences/ climate change data in support of

research and national policy formation

Provide Life-Cycle Technical Solutions with Deep Domain Content

to Homeland Security, Energy, Logistics, Environmental, and

Earth Sciences Markets

5

Major Growth Drivers

Major Growth Drivers

Superior performance in Non-Intrusive Inspection

–

Patented technology drives greater penetration and throughput,

smaller footprint

–

Security and Commerce

Proprietary technology platform drives supply chain efficiency

Deep CBRN expertise makes us private sector supplier of choice

End-to-end Energy Management Services solution provider

Deep talent base and exceptional reputation in Test and

Evaluation community keeps us the market leader

Deep reputation for quality and commitment to safety at NASA

Lifecycle technology deployment skills and experience

Robust Health and Safety program and record of success

6

SAIC combines deep domain and technical expertise with customer

understanding to deliver Life-Cycle Technology Solutions across our markets

6

Maturity of Business Portfolio

Maturity of Business Portfolio

Energy

Homeland Security/Defense

Environmental/ Infrastructure

Build Commercial Energy business lines

Leverage Lifecycle Solutions Delivery acquisition(s)

Leverage Lifecycle Solutions Delivery acquisition(s)

to grow capabilities

Follow Commercial customers internationally

ICIS/HE deployment

Grow product portfolio

Expand CBRN services

Expand on training portfolio

Traditional Logistics &

Systems Engineering

Prime Vendor/ Managed Services

Testing & Evaluation

Adapt to changing procurement patterns

Streamline systems

Position for next NASA era

Pursue growing govt. outsourcing

opportunities

Increase value added

VALUE

EMERGING                            GROWTH                      

MATURE                               MARKET MATURITY

7

Integrated Strategy

for Trade Security

Integrated Strategy

for Trade Security

P7500

High Energy Product Line

Data analysis,

management, and

integration

ICIS S/W Platform

Rapid IR&D

Program

+

Integrated Cargo Inspection

System –

ICIS

SAFE Ports/ SFI pilots

Military Mobile VACIS

VACIS Family of Products

Gamma-based

Radiation Monitors

Mobile VACIS

Relocatable

Rail

Pallet

Portal

Optical Character

Recognition

P H A S E   1

P H A S E   2

P H A S E   3

Mobile

Rail

Other

8

CBRN Lifecycle Solutions

CBRN Lifecycle Solutions

Basic Research

Applied  Research

Engineering &

Design

Analysis &

Assessment

Integration &

Implementation

Training & Exercise

Logistics &

Sustainment

From Science to Solutions

Edgewood Chem

& Bio Center

Naval Research

Lab

DTRA

Natick Soldier

Center

Naval Health

Research Center

Chemical

Weapons

Disposal Support

CBRNE Mail

Screening

CB Protective

Mask Programs

Department

of Defense

Installation

Protection

CB Protective

Mask Programs

Natl. Guard

Analytical

Laboratory

Systems

Center for

Domestic

Preparedness

Army Chemical

and MP School

Edgewood Chem

& Bio Center

US Marine Corps/

Pre-Positioned

Equipment PODS

Department of

Homeland

Security

Research

and Development

Program

Management

& Technical

Support

Systems

Integration

Training,

Exercise, Doctrine

CBRN/

1st Responder

Logistics

9

Logistics Investments Paying Off

Logistics Investments Paying Off

IPV Qualifications

Integrated

Logistics

Toolset w/

Repairables

Capability

POLCHEM

IR&D

RESET

IR&D

DLA Repairables

Varec Acquisition

Fuels management for DLA

Automated tank gauging

Outsourcing of Defense

Fuel Supply Point

Investments

Legend

Opportunities

Contracts

TIRES

ProcureNet Acquisition

Purchase Place/Plus

PVMRO Quals

40,000 Qualified Vendors

Integrated Logistics

Toolset

Advanced Logistics

Technologies

AIT/RFID

UID

Advanced Logistics

Systems

10

Building Portfolio of Capabilities

in Energy (Non-IT)

Building Portfolio of Capabilities

in Energy (Non-IT)

Benham

Domain Engineering

Process Resources

CCS

Utility Capabilities

EMS Consulting

CCS

Domain Engineering

Utility Capabilities

EMS Consulting

Benham

Utility Capabilities

EMS Consulting

Utility Capabilities

EMS Consulting

Benham

Core

SAIC

Adds project delivery skills

Increases EMS credibility and capacity

Acquire domain engineering skills

Begin pursuit of CCS expertise–

building on environmental heritage

Add Biofuels process expertise

Grow Benham engineering base

Continue pursuit of CCS expertise

Investment areas:

Talent

Customer Solutions

Engineering skills

11

Leadership in Climate Change

Leadership in Climate Change

NOAA

NASA

DOE

USCG

Air Force

NSF

FAA

Navy

USGS

MMS

Corp of

Engineers

EPA

Data

Collection -

Air, Ground,

Sea, Space

Data

Integration -

Architecture,

Systems,

Expertise

Research

and Policy

Support

Ocean

Observation

Initiative

Meteorological

Training

Marine Domain

Awareness

Data Infrastructure

Operational

Modeling

Climate Change

Support

Oil and Gas

Support

Landsat data

processing

Operational Modeling

Data Collection

Earth Sciences Research

Research Modeling

Environmental Support

Environmental

Support

Laboratory

Management

Environmental

Support

Systems

Integration

12

President’s Summary

President’s Summary

We are well-positioned to deliver growth and profitability to our

shareholders and distinctive capabilities and solutions to our

customers:

–

Delivering Energy Management Services and Engineering

capabilities to a nation struggling with fast-rising energy costs

–

Helping protect the Homeland with CBRN, Preparedness, and Trade

Security solutions

–

Supporting the Department of Defense with logistics and product

sustainment solutions

–

Playing a leadership role in our nation’s Climate Change research

and policy program

–

Supporting NASA in its human spaceflight and exploration missions

Infrastructure, Logistics and

Product Solutions Group—

Non-Intrusive Inspection Systems

Infrastructure, Logistics and

Product Solutions Group—

Non-Intrusive Inspection Systems

Alex Preston

Security and Transportation Technology

General Manager

2

Business/Product Overview

Business/Product Overview

Imaging inspection systems

Gamma ray and X-ray imaging

for cargo and vehicles

Sensing and classification products

Identification of radiation sources, explosives,

chemicals, and other hazardous materials

Intermodal solutions

OCR, digital imaging, and biometrics

to streamline terminal processes

Railway and road systems

RFID and OCR systems for rail

management and traffic enforcement

Integrated solutions

Combinations of technologies

for complex requirements

3

Veracruz, Mexico

Otay Mesa, California

Non Intrusive Inspection (VACIS)

Overview

Non Intrusive Inspection (VACIS)

Overview

4

Integrated Cargo Inspection

System (ICIS) Overview

Integrated Cargo Inspection

System (ICIS) Overview

System to scan vehicles without

impeding traffic

Provides assurance of security

Integrates data from many

sources:

–

Gamma ray imaging

–

Radiation scanning

–

OCR equipment Identification

–

Driver data

Console displays integrated data

Streamlines inspection

processes

Fixed and mobile configurations

A1957-ID-08

5

Integrated Cargo Inspection

System (ICIS) Overview

Integrated Cargo Inspection

System (ICIS) Overview

6

Integrated Cargo Inspection

System (ICIS) Overview

Integrated Cargo Inspection

System (ICIS) Overview

7

Market / Growth Opportunities

Market / Growth Opportunities

Safe Ports Act –

100% screening of US bound containers

–

Secure Freight Initiative –

7 port pilots in 2007/2008

–

Congressional Feedback

•

October:  Southampton, Honduras, Pakistan

•

April:  Oman, Hong Kong, Singapore, Korea

Container Security –

Information Management

–

US Targeting Center Pilot in progress

Air Cargo Security –

Democrat’s Security Initiative

Ship-To-Ship Container Transfer –

Product Initiative

Military Mobile market/aftermarket opportunity

8

P7500 in Southampton, UK

High Energy Portal (P7500)

Product Development

High Energy Portal (P7500)

Product Development

First deployment of new core

X-Ray technology

Rapid development (less than

12 months) and deployment

Deployed as part of Secure

Freight Initiative

Significant return on

investment in less than one

year

SAIC is setting the standard

for ‘commerce and security’

9

High Energy Portal (P7500)

Product Development

High Energy Portal (P7500)

Product Development

10

High Energy Mobile Product

Development

High Energy Mobile Product

Development

11

High Energy Mobile Product

Development

High Energy Mobile Product

Development

12

High Energy Mobile Product

Development

High Energy Mobile Product

Development

What does it take to be successful in the Security Products business?

Competitive Pricing

–

SAIC commercial price for a mobile x-ray system will be $2.4M

–

25% lower cost than competitive products

Greater Effectiveness/Value

–

Higher throughput (price/performance)

–

Lower lifecycle (service) costs

Lower Safety Risk

–

Smallest control area

–

Lowest dose to driver

–

Lowest dose to cargo

Rapid Development

First production unit delivery will be Dec 2007

13

Military Mobile Applications

Military Mobile Applications

14

Military Mobile Applications

Military Mobile Applications

15

Military Mobile Applications

Military Mobile Applications

23 Military Mobile VACIS units in production

–

Delivery schedule: 4-5 per month from May through September

–

Likely shipment South West Asia

In theater maintenance and support provided by SAIC

–

Complements ‘Award Winning’

maintenance and service in Iraq

Commercial product for aftermarket and military applications

16

Next Generation Mil Mobile

Product Development

Next Generation Mil Mobile

Product Development

A1957-ID-09

17

Next Generation Mil Mobile

Product Development

Next Generation Mil Mobile

Product Development

A1957-ID-09

18

Spectroscopic Portal Option/Upgrade

Hutchison Port Holdings Pilot

(IP6500) Product Development

Hutchison Port Holdings Pilot

(IP6500) Product Development

‘ICIS in a box’

combining

X-Ray and Advanced

Spectroscopic Portal (ASP)

Reduce footprint, civil works

costs, maintenance compared

to ICIS

Hutchison Port Holdings

currently evaluating the

integrated unit

6 months from specification to

first production unit

Exploits SAIC unique

integration capabilities

19

Driver holding

area

Control booth

Normalization/maintenance

parking location

Info marquee

Relocatable

shielding

CAARS Conceptual Design

CAARS Conceptual Design