![]() Welcome and Introduction Paul Levi October 13, 2010 Exhibit 99.1 |
![]() Conference Materials • Conference materials will be available on SAIC’s Investor Relations web site – Management presentations – Presenter biographies – Acronym glossary 2 Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Agenda Time Event Speaker 7:00 a.m. Breakfast 8:00 a.m. Welcome Paul Levi 8:05 a.m. Enterprise Strategy and Outlook Walt Havenstein 8:35 a.m. Introduction to Health and Energy Strategies Joe Craver 8:45 a.m. Energy Strategy JT Grumski 9:05 a.m. Health Strategy Clement Chen 9:25 a.m. C4: Mission Capability Integration Deb Alderson 9:45 a.m. Cyber Larry Cox 10:15 a.m. Break 10:30 a.m. Business & Corporate Development Jim Cuff 10:50 a.m. Technology Amy Alving 11:10 a.m. Financial Overview Mark Sopp 11:30 a.m. Q&A Walt Havenstein 11:55 a.m. Closing Walt Havenstein 12:00 p.m. Lunch Energy | Environment | National Security | Health | Critical Infrastructure 3 © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Energy | Environment | National Security | Health | Critical Infrastructure Forward Looking Statements 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 SAIC’s Annual Report on Form 10-K for the year ended January 31, 2010, and other filings that SAIC 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 13, 2010. SAIC 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 expectations. These presentations describe financial results through H1 (February 1 – July 31, 2010) 4 © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Enterprise Strategy and Outlook Walt Havenstein October 13, 2010 |
![]() Energy | Environment | National Security | Health | Critical Infrastructure One Year Later 6 • Market pressures developing as expected • Industry responses are predictable • Need for innovation greater than ever – including cross-enterprise • Some missions will continue to grow/outperform • Enduring needs will be just that • Procurement environment will reward agility • Providers that deliver exceptional value will prosper Bullish on SAIC’s Growth in our Large Markets © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Energy | Environment | National Security | Health | Critical Infrastructure Strategy Articulation SAIC provides mission-oriented solutions for national security, energy, health, and other essential needs of the U.S. government and allied nations, as well as major enterprises serving critical infrastructure needs. SAIC combines technologies and domain knowledge to deliver solutions that support our customers’ entire life cycle. 7 Mission solutions add enduring value These markets value innovation in and integration of technology, and deliver on essential needs Our breadth and depth in this combination differentiates SAIC from the competition © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Evolving Market Focus 8 C4ISR Logistics, Readiness and Sustainment Cyber Energy Health C4 ISR Benham Atlan R. W. Beck Varec BPLG Acquisition/Investment FY06 FY07 FY08 FY09 FY10 FY11 Est* $1.6B $2.5B $1.5B $0.7B $1.0B $0.4B SET FY11 CloudShield Reveal BD Systems C4ISR Denver CarScan * Annual Revenue in each category for FY11 is estimated from SAIC Business Unit data. See Appendix for a more detailed description of the methodology used to estimate revenues in these categories GeoViz GSTI AETC C4ISR Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Energy | Environment | National Security | Health | Critical Infrastructure SAIC’s World Class Team 9 © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. SAIC Executive Team Walt Havenstein Chief Executive Officer Mark Sopp EVP, CFO Jim Cuff EVP Business Development, Strategy & M&A Amy Alving Sr. Vice President Chief Technology Officer Joe Craver Group President Infrastructure, Energy, Health & Product Solutions $4.1B Stu Shea Group President Intelligence, Surveillance & Recon (ISR) $2.6B Larry Cox SVP, BU General Mgr Intel & Info Solutions (Cyber) $0.6B Deb Alderson Group President Defense Solutions $3.5B |
![]() Energy | Environment | National Security | Health | Critical Infrastructure Major Accomplishments in FY11 • Increased investment in future growth • H1 book-to-bill 1.1 – Contract wins: 21 > $100 million and counting* • Operational achievements – Total of 23,500 MRAPs/ATVs delivered – Commercially Hosted InfraRed Payload (CHIRP) delivered – 114 bases completed for Guardian Installation Protection Program – 300,000 tires delivered in-theater (800,000 total) – Design-Build National Award of Excellence for LEED-Silver manufacturing facility – 3,000th hospital enrolled in CDC’s Health Care Safety Network 10 *As of 10/7/2010 #4 Top 25 GSA Contractors Government Executive (August 2010) #3 Barron’s 500 Barron’s (May 2010) #3 World’s Most Admired Companies: Information Technology Services FORTUNE (March 2010) #5 Top 100 Government Contractors Washington Technology (June 2010) #5 Top 100 DHS Contractors Government Security News (January 2010) #4 Sustainable Engineering Verdantix Green Quadrant (September 2010) #215 FORTUNE 500 Fortune (April 2010) Industry Recognition © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Energy | Environment | National Security | Health | Critical Infrastructure The Way Ahead • Changing environments require agility • Substantial value creation potential from SAIC – Truly broad capabilities – Outstanding customer insight and affinity – Unlocking power of the enterprise • The right team with the right tools for the times 11 INGENUITY To build solutions AGILITY To adapt to the markets GROWTH To grow value © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Appendix |
![]() Energy | Environment | National Security | Health | Critical Infrastructure Definition of Strategic Growth Areas • Strategic Growth Areas: In these presentations, we provide revenue and other performance data for the following strategic growth areas: ISR; Cyber; Energy; Logistics, Readiness & Sustainment; and Health. These are general market areas that we have determined to focus our investments and other business activities, but we do not manage our operations to fit these general market areas. We manage our operations through Business Units that form the basis for our financial reporting. The revenue and other performance data contained in these presentations reflect the performance of specific Business Units under which we focus our strategic growth area initiatives. These Business Units have operations in markets outside the strategic growth areas. Also, Business Units that are not included in calculating revenue and other performance metrics for a particular strategic growth area may have revenue from that area. The revenue and other performance data provided for strategic growth areas in these presentations, therefore, represent approximations of our performance in these areas. 13 © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Introduction to Energy and Health Joe Craver October 13, 2010 |
![]() ![]() ![]() ![]() Energy | Environment | National Security | Health | Critical Infrastructure Energy and Health Aligning for Future Growth 15 © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Energy, Environment & Infrastructure JT Grumski October 13, 2010 |
![]() SAIC in the Energy Market 17 Generation Trading Transmission Distribution Fuel production Energy Use Energy Environment Infrastructure Differentiating Energy Management Services Energy Efficiency, Independent Engineering, Consulting, Climate Change SAIC’s Current Markets Energy Infrastructure & Renewables Smart Grid, T&D Engineering, IT SAIC alignment to address increasingly hard problems at confluence of these markets Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Energy | Environment | National Security | Health | Critical Infrastructure Overall Market Characteristics Market Characteristics and SAIC • Energy Management Services – Enduring energy efficiency market – Consulting fit with SAIC – Opportunity for long-term, close client relationships • Smart Grid/T&D/IT – Convergence of engineering and information technologies and data – Enduring, developing field with need for integration – Developing cyber market • Energy Infrastructure and Renewables – Offer complete solutions to clients – Long term market as energy mix evolves and decentralizes 18 © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Energy | Environment | National Security | Health | Critical Infrastructure Relevant Drivers and Trends 19 Trends Across Our Offerings Energy Management Services Smart Grid/T&D Engineering/IT Energy Infrastructure & Renewables Industry • Enterprise approach • Sustainability • Solutions for grid connections • Demand response • Renewable generation • Continued energy efficiency Utilities • Growing demand for energy efficiency programs • Meter deployments create data management need • Concerns about cybersecurity • American Recovery and Reinvestment Act (ARRA) • Power purchase from renewable developers Government • Energy efficiency, audit through implementation • No cohesive approach yet • Microgrids • Energy security • Mandates for energy/ water use reduction Drivers Energy Prices—Green House Gas—Economic Recovery—Financing Ability—Business Transformation © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Energy | Environment | National Security | Health | Critical Infrastructure Snapshot of Market Progress 20 Solid Projects and Pipeline Across Diverse and Powerful Customer Set Industry • Heavy Industry • Refineries • Commercial • Financial Institutions • Developers • Automotive Utilities • Electric and Water • Investor Owned • Coops • Municipals • Transmission Operators Government • Department of Energy • Navy • Air Force • National Guard • State & Local Energy Agencies • Energy Information Agency Energy Management Services Smart Grid/T&D Engineering/IT Energy Infrastructure & Renewables • $5B DOE Energy Efficiency IDIQ • Pull from international customers • $15M of Air Force energy audits • Won $38M Hawaii Energy Mgt • Won 20+ utility smart grid contracts • Entergy IT contract extended 5 years • $13M Lakeland Win • Signed $23M SAIC financed geothermal project in Nevada • Won $25M DOE bio-mass contract • Pursuit of >$350M geothermal projects and $500M of other renewable energy projects © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Energy | Environment | National Security | Health | Critical Infrastructure SAIC Strategic Plan 21 Environment/ Water Energy Management Services Energy Infrastructure & Renewables Smart Grid/ Energy IT SAIC Today FY11 Acquisitions Investments IR&D Diversified energy portfolio across industrial, utility and government markets Acquisitions Execute strategic plan • IR&D for smart grid offering • Market visibility/branding • Business development • Financing support of targeted renewable projects Investments The BPL Global logo is a registered trademark of BPL Global in the United States and/or other countries. Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Health & Life Science Solutions Clement Chen October 13, 2010 |
![]() Energy | Environment | National Security | Health | Critical Infrastructure Healthcare Drivers of Change • Rising costs • Aging population • Prevalence of chronic disease • Advances in technology and medicine • Data volume and use growth • Systemic business model dysfunction • American Recovery and Reinvestment Act (ARRA) / Health Reform Bill • Emergence of new entities and disruptive delivery schemes 23 U.S. Healthcare Ecosystem Information-Based Health Solutions - Key to the Future Providers Patients Payers Life Science PHARMA Labs PBM Government Information © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Total U.S. Healthcare Cost Summary 24 Hospital care Other Admin / Private Health Insurance Prescription Drugs Nursing Homes / Home Health Other Professional Services Physician & Clinical Services 31% 26% 7% 10% 9% 6% 11% Expenditures ~ $2.6T in 2010 (Est.) Payers - Sources of Funds Consumer Medicaid Medicare Other Public Payers Private Payers 41% 15% 20% 12% 12% HIT HIT Provider Pharma / MDDE Payers Fed / S&L Govt 21% 23% 18% 38% Health Information Technology (HIT) • HIT a $78B Market • 7% CAGR - $130B+ by 2019 • Touches every health sector …catalyst for SAIC’s strategic approach Sources include: CMS Data, Gartner, Health Affairs; expenditure and sources of funds percentages based on 2008 CMS actuals Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() SAIC Health Solutions and Customers 25 • Department of Veterans Affairs • Department of Defense • Commercial Enterprises • Military Health System & VA • Health & Human Services, ONC • State and Commercial Enterprises • Agency for Healthcare Research Quality, FDA, MHS, VA • Centers for Medicare Services • SSA, States and Commercial • National Institutes of Health • Centers for Disease Control • States, International • National Institutes of Health • Food & Drug Administration • Centers for Disease Control • Commercial Enterprises • Patient Safety • Comparative Effectiveness • Health Data Repositories • Eligibility Determination • National Health Infrastructure • Health Information Exchanges • Grants Management • Pandemic and Bio Surveillance • Informatics, Disease Reporting • Epidemiology and Biostatistics • Translational Research • PTSD, TBI • Regulatory Affairs Clinical Health IT • eHealth Records • Clinical Workflow • Privacy and Security Health Infrastructure Healthcare Cost and Quality Public Health Health Sciences Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Energy | Environment | National Security | Health | Critical Infrastructure Public and Private Sectors Together Driving Toward a Future Integrated Healthcare System 26 Personal Health Record Services Health Information Exchanges State and Local Agencies University Medical and R&D Labs $ $ $ $ Federal Health Agencies CDC VA DoD SSA $ $ HHS CM S Legislation Commercial Hospitals and Providers Market Convergence Creating Opportunity Payers Source material based on Onchit & Input Medical Products Manufacturing and Pharma and PBMs © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Continuing to Pursue our Strategic Plan 27 Health Sciences Public Health Healthcare Cost and Quality Health Infrastructure Clinical Health IT SAIC Today FY11 … organic expansion, investments and acquisitions to fuel growth SAIC Health Solutions at the Heart of Information-Based Healthcare One SAIC Leverage Cyber Data Mining and Fusion Predictive Analytics Modeling and Simulation Situational Awareness Cloud Computing Systems Engineering and Integration Real Time Systems Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() C4ISR C4: Mission Capability Integration Providing Integration, Innovation and Customer Value Deb Alderson October 13, 2010 |
![]() Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. Overall C4 Market Characteristics Market Characteristics and SAIC • Market Trends • Stable market CAGR • C4 + ISR defines strength • Command and Control • Focus on Army and Air Force • Joint will increase with DoD reorganizations • Extending to the tactical edge • Service oriented architectures/collaboration • Modeling and simulation • Cybersecurity • Net Centric Communications • Distributed networks and communications infrastructure • Interoperability • Bandwidth 29 Ref: Frost & Sullivan DoD C4ISR Market Estimates March 2010 |
![]() Energy | Environment | National Security | Health | Critical Infrastructure C4 Strategy Components 30 C4 Mission Capability Integrator • $8.4 billion three-year pipeline; 46 opportunities > $100 million • Joint C4 interoperability and service oriented architecture • Strategic partnerships Distributed Networks • $8.3 billion three-year pipeline; 25 opportunities >$100 million • Enterprise network and communications capability and management • Tactical edge capability Life Cycle Capability Management Approach • $11 billion three-year pipeline; leveraging logistics readiness and sustainment needs • C4 legacy asset upgrades across all asset domains • ISR and ground force modernization © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. C4 Market Dynamics 31 Building it Differently Buying it Differently Using it Differently Customer Change Vectors Customer Change Vectors Irregular Warfare Integrated Solutions SAIC Approach SAIC Approach Imperatives Imperatives Enabling Innovation in Doctrine and Organization The Network as the Platform for Innovation Mission Capability Integration 75% Solutions |
![]() Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. • MRAP Integration & Support • Afghanistan Surge Support • Combatant Command Wins • Air Force Combat Information Transport System • Navy Consolidated Afloat Network Enterprises Services • Expeditionary Surveillance & Security • Air Operations Command C4 SAIC Approach C4 SAIC Approach Recent Accomplishments Recent Accomplishments Building it Differently Buying it Differently Using it Differently Enabling Innovation in Doctrine and Organization The Network as the Platform for Innovation SE&I Agent Customer Change Vectors Customer Change Vectors Market Evolution…Mission Capability Integration 32 |
![]() Ground Forces Modernization Building Upon MRAP/GCV 33 • Thought Leadership • Platform Independence • Technical Depth • Domain Expertise • Organizational Agility • Customer Affinity Ground Forces Modernization Develop and Field New Capabilities Upgrade Capabilities and Recapitalization Integrate and Sustain Capabilities Continuous Modernization Through Sustainment … Full Life-Cycle Solutions Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() C4 Game Changers Dept of State Vanguard II – Enterprise Network Solution Prime: $3B Special Operations Command IT & Enterprise Network Contract Prime: $300M Multi Year IDIQ Defense Information Systems Agency Global Services Management (GSM) Prime: $4B Air Force - Electronic Systems Center Operations Command Weapons Systems Management Prime: $500M Prime: $800M Multi Year IDIQ Army - Network Enterprise Tech. Command Sustainment & Defense of Army Communication Southwest Asia and Central Asia Prime: $400M Ground Combat Vehicle Army Acquisition Command $8B+ Opportunities Decided Over Next 12 Months 34 Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Cybersecurity Larry Cox October 13, 2010 |
![]() Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. Global Cyber Market • Global IT spending estimated at $3.2 trillion per year – Represents hundreds of billions of dollars in potential cyber opportunities • U.S. market leading global investment in cyber • Federal cyber center of gravity migrating to Maryland (I-95 corridor) • Intelligence community is leading the way in cyber technology investments in the federal space • Borderless nature of cyber is fueling international investment – Global networks are interconnected and subject to the vulnerability of weak defenses anywhere in the world • International buyers looking to U.S. companies • International market growing faster than U.S. market • Global commerce and governments are increasingly dependent on information and communication technology 36 |
![]() Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. Leveraging Intelligence Community Experience, CloudShield, IR&D, and M&A to Grow Federal & Commercial Business • Security challenges are increasing – Greater sophistication, severity, and frequency of attacks – Heightened government and industry regulations • Similarity in cyber threats drives similarity in solution sets and technology transfer – Cyber underpins all communications, records, and control systems – Domain expertise is found in both commercial and federal organizations • The majority of critical infrastructure is managed by commercial organizations – Health, banking/financial, energy, telecommunications, defense industrial base • Major push by the DoD to combine the best technologies to protect critical infrastructure across the federal and commercial markets 37 Fed/Civ .gov IC, DoD .ic, .mil Commercial .com, .org .net – Highly organized and well-funded hackers – Increased risk of unknown vulnerabilities |
![]() Energy | Environment | National Security | Health | Critical Infrastructure SAIC Cybersecurity: Strategy to Serve Multiple Markets 38 Core Consumers •U.S. Government •Other Governments Vertical Consumers •Telecommunications •Defense Industrial Base (DIB) Horizontal Consumers •Critical Infrastructure •Energy •Healthcare •Finance Cybersecurity Is a Strategic Enabler / Discriminator Across the SAIC Enterprise Data Sources Sensors and Data Processing (CloudShield) Data Store Advanced Analytics (CloudShield Center of Excellence) Information Sharing and Collaboration (IR&D) Supporting Services: Policy Development, Security Life Cycle, Compliance, Integration, Etc. (Workforce Modernization) Cyber-Augmented Solutions Segment-Specific Cyber Solutions Exquisite Cyber Solutions SAIC Cybersecurity Offerings Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Energy | Environment | National Security | Health | Critical Infrastructure SAIC Cybersecurity Summary • SAIC’s cybersecurity business is well positioned for growth – $1.5 billion FY11 awards (including IDIQ) through October 2010 – Strategic internal investment • CloudShield platform: ITS integration, cloud computing, and Center of Excellence application development • Developing other platforms with multi-year investment • Workforce modernization efforts are attracting and retaining talented employees for current and future customer needs • A leader in cybersecurity: – Cybersecurity training – Security and information operations – System engineering, development and integration – Managed security services – Certification and accreditation – Deep packet inspection – Advanced analytics 39 Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Business Development / Mergers and Acquisitions Jim Cuff October 13, 2010 |
![]() Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. Business Development Successes • $ bookings and book-to-bill (BTB) tracking higher – Standard contracts* and task orders only – H1 bookings up 21 percent (FY11 vs. FY10) – H1 BTB is 1.1, compared with 0.9 a year ago • $ submittals tracking higher – For standard contracts* and task orders, H1 up 32 percent (FY11 vs. FY10) • $ win rate comparable to last year despite more competition – 65 percent for standard contracts* and task orders (H1) • Submitted undecided proposals at an all-time high – $18.8 billion – Includes $10 billion for standard contracts* and task orders • $100 million + wins tracking higher (includes IDIQ’s) – 21 wins in FY11 as of 10/7/2010; ended FY10 with 29 – 41 more decisions expected in FY11 • Growing pipeline * Excludes IDIQ vehicles 41 $0.0 $5.0 $10.0 $15.0 $20.0 Q1 Q2 Q3 Q4 Submitted Undecided Proposals ($B) FY10 Total FY11 Total |
![]() Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. FY11 $100M+ Wins* • Standard Contracts** and Task Orders (10 total) – Navy Joint Special Operations Sensors & Weapons ($351M) – Army Sustainment Command Distribution Management Center ($128M) – Navy Tactical Mobile Systems Engineering ($108M) – Seven Additional Wins ($2,109M) (Customer restrictions prohibit public release; two Recompete wins) • IDIQ’s (11 total) – Defense Intelligence Agency Solutions for the Information Technology Enterprise (Multiple, $600M) – Navy Common Afloat Local Area Network Infrastructure (Multiple, $502M) – Missile Defense Agency Engineering & Support Services Group 3 Full & Open (Multiple, $338M) – Centers for Disease Control & Prevention Information Management Services (Multiple, $250M) – Army Industrial Prime Vendor Generation II - Anniston & Red River (Single, $241M) – Defense Technical Info Center Software Network Information Modeling (Multiple, $222M) – Army Chemical Biological Radiological Nuclear Explosive Mission Support (Multiple, $200M) – US Strategic Command Systems & Mission Support II Plus-up (Single, $180M) – National Geospatial Intelligence Agency Total Application Services for Enterprise Rqmts (Multiple, $150M) – Army Aviation & Missile R&D Engineering & Integration (Single, $148M) – Navy Program Executive Office C4I Support (Multiple, $101M) 42 * Estimated future revenue value to SAIC ** Excludes IDIQ vehicles |
![]() Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. Business Development Initiatives • Sharpening our focus on faster growing markets – Cyber – C4ISR – Logistics readiness and sustainment – Energy – Health • Taking market share – Account management – Cross-selling – Differentiated offerings – Enterprise solutions – Larger more complex pursuits • Deploying an advanced customer relationship management system 43 |
![]() Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. Organizational Conflict of Interest (OCI) • Responding proactively • Tailoring our OCI approach to individual customers and markets – Overarching strategy in our high growth markets mission oriented solutions provider vs. advisor – Do not intend to declare a single strategic intent (performer or advisor) across all customers – Can best support some clients through an advisor role with no impact to our other business • Enhancing our common business development process to address OCI – Targeted checks for OCI in capture planning phases – Avoid opportunities that may interfere with ability to expand work in our high-growth markets – Leveraging our capture and account managers 44 |
![]() Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. Mergers and Acquisitions • Strategy-driven enterprise M&A focus – Defined process led by the CEO – Enterprise-driven due diligence and integration • Emphasis on high-growth markets and mission-oriented solutions: – Assets that can give us market access 45 CloudShield - Department of Homeland Security SET – Providing CounterBomber system technology Reveal – Leader in explosive detection systems – Assets that grow our technical discriminators CloudShield Benham – Assets that benefit the enterprise |
![]() Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. Leveraging SAIC Market Position “One SAIC” 46 |
![]() Technology An enabler for growth Amy Alving October 13, 2010 |
![]() Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. The Current Environment • Funding is tight in all markets – DoD: fewer new-start programs • Technology is needed to solve our toughest problems 48 National Academy of Engineering “Grand Challenges” www.engineeringchallenges.org |
![]() Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. Data Tsunami – Where We’re Headed • Enduring realities – Data tsunami is here and getting worse: • More resolution per sensor • More sensors • More sensors of different types • Extended persistence – Available bandwidth is insufficient – Increasing reliance on mobile devices • Not well-suited for high volume tactical data 49 Wide Area Multi-Int Multi-Platform Persistent Near Real-Time |
![]() Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. • Architectural elements that support real-time operations: – On-board processing – Operationally informed workflow – Smart fusion – Cross-cueing sensors in real time – Intelligent push/pull data dissemination – “Chipping” info of interest Data Tsunami – The Path Forward 50 Tasking Collection Processing Exploitation Dissemination |
![]() Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. • Enduring realities enabled by virtualization – More efficient asset utilization – New business model: pay “by the drink” – Elastic – what you need, when you need it – Platform for innovation – New software delivery model • The marketplace is already moving, e.g. – Amazon launches S3, AWS… – Google launches Google App Engine – HP purchases EDS, 3COM, 3Par, … – EMC purchases RSA, VMware – Acadia joint venture: EMC, VMware, Cisco Next-Gen IT – Where Things are Headed 51 Software as a Service Platform as a Service Compute Storage Network Infrastructure as a Service Infrastructure as a Service Virtualized Physical Infrastructure Virtualized Physical Infrastructure |
![]() Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. Governance / Management Cybersecurity and Privacy Software as a Service Platform as a Service Infrastructure as a Service Virtualized Physical Infrastructure Compute Storage Network Next-Gen IT – SAIC’s Role • SAIC’s role: – Transition into cloud – Managed services – Governance – Cyber security – Domain-specific software as a service (SaaS) 52 Public Cloud Private Cloud |
![]() Financial Overview Mark Sopp, Chief Financial Officer October 13, 2010 |
![]() Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. Guidance • Today we reaffirm this guidance for FY11 FY10 FY11 Revenues $10.85B 3% - 6% Internal Growth Operating Margin 8.0% 20 – 40 bps Improvement EPS* $1.24 14% - 18% Growth *Diluted EPS from Continuing Operations Issued on Q2 FY11 Earnings Call: 9/1/2010 54 |
![]() Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. Revenue Growth Trend • Key growth drivers – Redirect spend from G&A to growth initiatives – Business Development, B&P, IR&D – Bid larger programs – FY10 29 wins >$100M – FY11 YTD 21 wins* >$100M – Expand focus and resources to Strategic Growth Areas (SGA) *as of 10/7/2010 Internal Acquisitions Internal Year End Guidance Range 55 |
![]() Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. Revenue Breakout • Trend towards fixed price contracts • Contract sources continue to migrate towards heavier ID/IQ mix Attribute FY08 Revenue FY09 Revenue FY10 Revenue FY11 H1 Revenue Reporting Segment Government 94% 95% 96% 96% Commercial 6% 5% 4% 4% Group / Organization* Infrastructure, Energy, Health & Product Solutions 40% 38% 38% 36% Defense Solutions 29% 31% 32% 33% Intelligence, Surveillance & Reconnaissance 31% 31% 30% 31% Revenue Type Labor-Related 62% 60% 58% 58% Material and Subcontract 38% 40% 42% 42% Contract Type Cost-Reimbursement 47% 48% 48% 47% Time and Materials 35% 33% 30% 30% Fixed Price 18% 19% 22% 23% Contract Source Single-Award IDIQ Task Order 24% 25% 26% 27% Multiple-Award IDIQ Task Order 26% 27% 27% 28% GSA Schedule 14% 15% 15% 15% Subtotal Master and Schedule Agreements 64% 67% 68% 70% Standard Contract 36% 33% 32% 30% 56 *Revenue from Groups provided for illustrative purposes only. SAIC manages its operations at the business unit level which are aggregated into Groups for presentation purposes only. |
![]() Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. Enterprise Market Areas* 54% of revenue** in strategic growth areas*** • Focus of investments • Differentiated offerings • Higher margins 32% of revenue** in core business • Limited investments • Create discretion to fund campaigns • Significant overhead absorption • SAIC legacy * Areas represented by SAIC Business Units **Estimated revenue for FY11 ***Definition of SGA in Appendix 14% of revenue** in C4 “sustaining business” • Moderate investments • Large addressable market • Large opportunities • Demonstrated ability to compete Core C4 ISR Cyber Energy Logistics, Readiness & Sustainment Health 57 |
![]() Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. Focus: Strategic Growth Areas *Estimated revenue for SAIC FY11 Core C4 ISR Cyber Energy Logistics, Readiness & Sustainment Health Strategic Growth Areas (SGA) Core+C4 FY10 FY11E FY10 FY11E Total Revenue Growth* 9.5% 8.0% 5.8% 2.3% Internal Revenue Growth* 8.3% 5.2% 2.7% 0.8% Book to Bill: FY11 H1 1.3x 0.9x 58 |
![]() Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. Guidance issued on 3/30/2010 Margin Tailwinds - Project Alignment - Shift to FFP - Higher Revenues in SGA - Facilities and Real Estate Margin Headwinds - Amortization from acquisitions - Fee pressures 10 - 20 FY11 Discrete Items - VirnetX Royalty - Unabsorbed investments - Revenue shortfall 45 (20) (5) – (15) Guidance issued on 9/1/2010 20 - 40 Focus: Operating Margin Dynamics ~120 bps margin improvement since FY08 Still expect additional base margin improvements Factors FY11 bps Impact FY12 and Beyond 59 |
![]() Energy | Environment | National Security | Health | Critical Infrastructure 60 Savings FY09 – FY11 Streamlining Organizations Shared Services/ GBS Facilities Consolidation Business Process Reengineering Leveraged Spend Project Alignment is a catalyst for future margin improvement Project Alignment: Sources and Uses of Savings Savings FY12 – FY14 Streamlining Organizations Shared Services/ GBS Facilities Consolidation Business Process Reengineering Leveraged Spend Total Targeted Savings $75M - $100M Uses • Lower wrap rates to increase competitiveness • Increase investment to drive growth and profitability – B&P to increase volume and win probability – IR&D to build discriminators • IT modernization to achieve efficiencies • Improve operating margin – Higher fees on fixed price contracts Expected Uses • Pricing flexibility • Discretionary investments in Strategic Growth Areas • Operating margin improvement © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Energy | Environment | National Security | Health | Critical Infrastructure Capital Deployment and Liquidity • Strong, consistent free cash flow generation • Greater than 90% of free cash flow since FY08 returned to shareholders through stock repurchases • Consistently strong (>22%) ROIC* • Future real estate sales targeted to generate additional capital for deployment Capital Deployment ($M) FY08 FY09 FY10 FY11 H1 Operating Cash Flow 346 583 620 249 Capital Expenditures (61) (59) (58) (35) Free Cash Flow 285 524 562 214 Acquisitions (145) (204) (258) (140) Public Stock Repurchases (215) (382) (434) (415) Payment of Debt (10) (113) (18) (1) Other 68 15 73 85 Total Cash (17) (160) (75) (257) Ending Cash Position 1,096 936 861 604 * See reconciliation table in Appendix 61 Acquisitions Public Stock Repurchases Free Cash Flow © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Energy | Environment | National Security | Health | Critical Infrastructure Additional Debt Capacity: Acquisitions vs. Stock Repurchases • Reflective of an indicative leverage ratio consistent with external rating agencies’ guidance. • As an example, SAIC could borrow at most an additional $900 million for acquisitions and retain it’s A- rating (1.8x max) or $1.3 billion for a BBB+ rating (2.1 max) • Estimated borrowing capacity includes incremental income generated by target acquisitions 62 © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Energy | Environment | National Security | Health | Critical Infrastructure Financial Summary Chart • More emphasis and investment in Strategic Growth Areas (SGA) should drive enterprise-wide improvement in revenues and profitability – Higher FY11 H1 Book to Bill: 1.3x vs. 0.9x for non-SGA – Significantly higher projected FY11 internal revenue growth: • SGA: 5.2% • Non-SGA: 0.8% – Significantly higher margin performance in SGA • Significant, ongoing cost reduction initiatives – especially Project Alignment – expected to increase SAIC ability to invest in SGA and contribute to margin improvement • Strong, disciplined cash-flow generation leaves SAIC well capitalized and can be further leveraged to fuel other initiatives targeted to improve shareholder value 63 © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Appendix |
![]() Energy | Environment | National Security | Health | Critical Infrastructure Appendix • Definition of Strategic Growth Areas • Reconciliation of Non-GAAP ROIC to GAAP Operating Income • Reconciliation of Non-GAAP Free Cash Flow to GAAP Cash Flow from Operations 65 © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Energy | Environment | National Security | Health | Critical Infrastructure Definition of Strategic Growth Areas • : In these presentations, we provide estimates of revenue and other performance data for the following strategic growth areas: ISR; Cyber; Energy; Logistics, Readiness & Sustainment; and Health. These are general market areas that we have determined to focus our investments and other business activities, but we do not manage our operations to fit these general market areas. We manage our operations through Business Units that form the basis for our financial reporting. The revenue and other performance data contained in these presentations reflect the performance of specific Business Units under which we focus our strategic growth area initiatives. These Business Units have operations in markets outside the strategic growth areas. Also, Business Units that are not included in calculating revenue and other performance metrics for a particular strategic growth area may have revenue from that area. The revenue and other performance data provided for strategic growth areas in these presentations, therefore, represent approximations of our performance in these areas. 66 Strategic Growth Areas © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Energy | Environment | National Security | Health | Critical Infrastructure Reconciliation of Non-GAAP ROIC to GAAP Operating Income In this presentation, SAIC, Inc. refers to return on invested capital (ROIC) which is a non-GAAP financial measure that is reconciled to the most directly comparable financial measure, which is operating income. The company believes that reporting ROIC provides investors with greater visibility into how effectively it uses the capital invested in its operations. The company calculates ROIC by dividing operating income after normalized income taxes by average invested capital. Operating income after normalized income taxes is calculated by multiplying the sum of operating income by (1 - the normalized income tax rate). The normalized income tax rate of 38.5% approximates our combined federal and state statutory tax rate. Average invested capital is calculated by adding total stockholders' equity to notes payable and long-term debt and subtracting cash and cash equivalents. The limitation of this non-GAAP financial measure as compared to the most directly comparable GAAP financial measure is that financing or cash deployment decisions may cause ROIC to trend differently from operating income which is the most directly comparable GAAP financial measure. The company addresses this limitation by presenting ROIC near disclosures of operating income and net income. This financial measure is not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with SAIC, Inc.’s consolidated financial statements prepared in accordance with GAAP. The method that the company uses to calculate ROIC is not necessarily comparable to similarly titled financial measures presented by other companies. Reconciliation of Return on Invested Capital FY08 FY09 FY10 H1 FY11 Operating income, as reported $673 $776 $867 $480 Normalized income tax rate 38.5% 38.5% 38.5% 38.5% Operating income after normalized income taxes $414 $477 $533 $295 Components of Invested Capital: 31-Jan-07 31-Jan-08 31-Jan-09 31-Jan-10 31-Jul-10 Total stockholders equity $1,502 $1,868 $2,084 $2,291 $2,280 Notes payable and long-term debt 1,228 1,228 1,116 1,106 1,105 Cash and cash equivalents (1,109) (1,096) (936) (861) (604) Invested Capital $1,621 $2,000 $2,264 $2,536 $2,781 Average Invested Capital $1,811 $2,132 $2,400 $2,659 Return on Invested Capital 22.9% 22.4% 22.2% 22.2%* * FY 2011 H1 Return on Invested Capital is an annualized number 67 © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. |
![]() Energy | Environment | National Security | Health | Critical Infrastructure © 2010 Science Applications International Corporation. All rights reserved. SAIC, the SAIC logo, and "From Science to Solutions" are trademarks or registered trademarks of Science Applications International Corporation in the United States and/or other countries. Reconciliation of Non-GAAP Free Cash Flow to GAAP Cash Flow from Operations Calculation of Free Cash Flow FY08 FY09 FY10 H1 FY11 Total cash flows provided by operations $346 $583 $620 $249 Less: Expenditures for property, plant and equipment ($61) ($59) ($58) ($35) Free Cash Flow $285 $524 $562 $214 68 In this presentation, SAIC, Inc. refers to free cash flow which is a non-GAAP financial measure that is reconciled to the most directly comparable financial measure, which is cash flows provided by operations. The company believes that reporting free cash flow provides investors with greater visibility into how effectively it generates cash. The company calculates free cash flow by subtracting expenditures for property, plant and equipment from total cash flows provided by operations. The limitation of this non-GAAP financial measure as compared to the most directly comparable GAAP financial measure is that free cash flow does not represent total cash flows. The company addresses this limitation by presenting free cash flow near disclosures of cash flows provided by operations. This financial measure is not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with SAIC, Inc.'s consolidated financial statements prepared in accordance with GAAP. The method that the company uses to calculate free cash flow is not necessarily comparable to similarly titled financial measures presented by other companies. |