Welcome to the third quarter fiscal year 2010 earnings conference call. At this time all participants are in listen only mode. We will conduct a question and answer session towards the end of this conference. (Operator Instructions) I would now like to turn the presentation over to your host for today’s call Ms. Laura Luke, Vice President Media Relations.

Here on today’s call are Walt Havenstein, our CEO; Mark Sopp, our CFO; and other members of our team. During this call we will make forward-looking statements to assist you in understanding the company and our expectations about its future financial and operating performance. These statements are subject to a number of risks that could cause actual events to differ materially and I refer you to our SEC filings for a discussion of these risks. In addition, the statements may represent our views as of today. We anticipate that subsequent events and developments will cause our views to change. We may elect to update the forward-looking statements at some point in the future but we specifically disclaim any obligation to do so. With that, I will turn the call over to Walt.

I am glad to be joining you today in my first earnings call as SAIC’s new Chief Executive Officer. I’m delighted to have been given the opportunity to lead this exciting company and look forward to discuss on third quarter results in the current business environment. You can see form our press release that we turned in a solid performance this quarter including an upturn in bookings and contract vehicle wins to provide for growth capacity going forward. We are on a steady course and accomplishing our objectives. Mark will provide color on the financial details in a few minutes after I describe the market dynamics and our key business drivers. Federal spending is SAIC’s most important market driver, therefore we pay close attention to the federal government’s fiscal year ’10 budget which covers the last quarter of our FY ’10 and the first three quarters of next year. Spending consists of 12 separate appropriation bills and supplemental. Five of these bills have been enacted leaving seven bills in the legislative process and the affected agencies are operating under a continuing resolution that is set to expire on December 18th. The defense appropriation bill is in conference and most observers expect a free standing defense bill before the Christmas recess. The spending levels in all of the bills represent a modest increase in overall discretionary spending over the prior fiscal year in the range of 4% to 6%. Delays in passing the remaining spend and bills have resulted from extended debates on domestic programs particularly healthcare. As work on the remaining bills continues and the healthcare debate progresses, it is possible that some of the remaining appropriation bills will become part of a mini omnibus resolution that extends current year funding levels. We do not believe an omnibus covering the…

Overall results for the quarter were consistent with our expectation to deliver on our financial goals for the full year. Earnings per share growth was 17% year-over-year on much improved operating margins but a slower pace of internal revenue growth. Revenues totaled about $2.8 billion for the quarter reflecting total growth of 5% and internal growth of 1%. Internal growth slowed from three primary causes. First, the effects of the RW Beck acquisition which dilutive to internal growth by three percentage points. Their revenues declined year-over-year in the third quarter due to much lower revenues on hurricane disaster relief this year. We set this expectation during our last earnings call. Second, we had one less working day this quarter which adversely impacted our internal revenue growth by 1.5%. That one day reduction applies to the full year as well. Internal growth year-over-year on an apples-to-apples basis from what we’ve been reporting all year excluding these two effects was 5.5%. This was lower than we’ve seen in recent quarters due to the third reason, the bookings pause and longer federal procurement cycle which Walt mentioned earlier. This has resulted in lower new awards all year and a corresponding lack of new program starts to fuel revenue growth most accentuated in our intelligence business area. Revenues actually contracted in our intelligence area during the third quarter but our view is much of this is timing. We are optimistic about renewed growth prospects particularly in cyber security, ISR, that’s intelligence, surveillance and reconnaissance and theater support operations. We’ll continue to invest in business development, bid on proposal and internal research and development to drive growth in these areas. We generated strong growth in our logistics and defense solutions areas in the third quarter with the highest contributor being the continued ramp up of…

Before turning to your questions I just wanted to say I’m honored to have the opportunity to lead SAIC and build upon the company’s legacy of excellence. Since joining the company in September, I have visited our customers and employees across the country. I’ve gotten a firsthand look at how the science and technology solutions we are delivering to our customers are helping to solve the nations’ toughest problems. Our company represents a very strong platform for growth and innovation across the markets we serve. As mark pointed out in his remarks, we’re pleased with the progress of our recent results. We’ve dedicated more resources to key growth areas and we’re optimistic that these measures will pay off. The marketplace is likely to remain challenging for the near future but we’re confident in our ability to deliver results going forward. We are now ready to take questions.

(Operator Instructions) Your first question comes from Jason A. Kupferberg – UBS Securities, LLC. Jason A. Kupferberg – UBS Securities, LLC.: Just a couple of questions, I wanted to start kind of on the M&A front and just get an update on your current thinking in terms of sizeable M&A as a potential strategic focus here just given the strength of the balance sheet and obviously a little bit of a softer organic revenue environment? And, maybe as part of that commentary if you can talk about what the larger side of the M&A pipeline looks like? Also, just frame for investors what kind of a larger size acquisition you’d be comfortable doing based on your current balance sheet capacity and appetite for leverage.

We are continuing to look at two areas of M&A growth. Those that support accelerating our organic growth within our current business model and the current emphasis across the business. So, most of those acquisitions have been consistent with the size of the acquisitions that we’ve made in the past. It’s probably premature, in fact, it is premature for me to be specific about other acquisition targets that we’re going to consider because as I told you back in the investor’s conference, I’m going through a fairly detailed strategic revenue to include with the board and it will probably be a couple more months before I can share with you any more detail around what the options are that we’re considering. Jason A. Kupferberg – UBS Securities, LLC.: A question on the macro environment for your sector, is it possible that the sector might experience any material amount of a crowding out effect as it relates to federal IT spending just given the planned troop surge in to Afghanistan? And if so, has any of that dynamic been in fact factored in to your fiscal ’11 guidance? Is that a net negative to the industry and for SAIC specifically or are there some silver linings potentially there for your company?

I would say that at some point there will be some crowding out, that’s for sure. But, I think what actually serves to our advantage is the work we’ve done over the last couple of years in capturing positions on the larger IDIQs. In particular, as you think about the surge in Afghanistan, those opportunities are going to have to be met with existing vehicles, and I don’t mean physical vehicles I mean contract vehicles if we’re going to get the surge effect both in country and in the support infrastructure here back in the United States. I think that actually serves us well and although time may tell because of the budget constraints whether there will be a crowding out in the overall IT world, I think where we are positioned we’re more likely to see upside to that rather than downside. Jason A. Kupferberg – UBS Securities, LLC.: Just one last one if I could, any update on the DOJ whistle blower lawsuit or any way to frame the potential downside or worse case scenarios there?

Jason, we’re at the beginning of what could be a long legal process. There has not been sufficient process or progress to give you any further color other than what we’ve disclosed at this time.

Your next question comes from Robert Spingarn – Credit Suisse. Robert Spingarn – Credit Suisse: A question on the log jam, about how long would that have to continue before it would impact your fiscal ’11 guidance?

The way I would characterize that Robert is we’re actually seeing the log jam starting to loosen up. If you look at the aggregate from the time the new administration went in we’ve seen probably the net effect of about maybe a 60 day what I’ll call deferral as the priorities of the administration were being set, as decision makers got in position. Most of that, especially as it pertains to the key decisions around the war in Afghanistan have now been made. So, we don’t expect that log jam to be enduring. However, that delay did have an impact on orders that impact some aspect of our most recent revenues. So, that impact will be with us for the next 60 days or so. But, I’m fully confident that based on what we’re seeing already in the last few weeks that we’re going to start seeing that log jam kind of break up. Robert Spingarn – Credit Suisse: Well, could you talk a little bit about the specific contract vehicles that would see more business from the Afghan surge?

Well, yes I can give you one in particular. We know there are going to be some acceleration of MRAP ATV and probably other vehicles, tactical vehicles that are going to be used in that environment. So, in order to accommodate the ramp up of 30,000 people we know that they’re going to be needing both people in country as well as work – when I say in country I mean in the theater as well as people to continue the integration work that we’re doing in Charleston so I think that would be the first thing. Number two, there are a variety of what I’ll characterize in general as intelligence contracts specifically that support operational intelligence. By the way, the operational intelligence work is not just that which we do in country around ISR but also that which we support back here in [Konas]. I would expect to see some of those operational intelligence contracts pickup, and frankly, we know that they’re going to pickup. And, we’ve also gotten some indicators for additional what I’ll call infrastructure work in the theater in preparation of having upwards of 30,000 additional troops in Afghanistan. Frankly, whether it’s a shift from Iraq to Afghanistan or a buildup which we’re currently looking at in Afghanistan, that all requires infrastructure. We saw a very similar ramp up if you recall back in 2004 and 2005 as we ramped up in Afghanistan. If you look at those three dimensions in particular and when I say infrastructure I’m primarily talking about the telecommunications infrastructure that we provide a lot of installation and support on. Those are the kinds of things that I think you can expect to see some upside potential for. Robert Spingarn – Credit Suisse: But you’re not saying in fact that you see between Afghanistan and in Iraq that the total business related to the two operations over there whether it be there or here, that business doesn’t rise over time with the withdrawal, or does it?

I think it does. First of all, you have to bind the time. I think near term it will and I think your guess is as good as mine, if you’re watching the talking heads on Sunday, your guess is as good as mine as to what withdrawal means. Whether it’s a real withdrawal or whether it’s a ramp down that’s barely recognizable starting in June/July of 2011. My sense is the kinds of things we’re going to be doing are going to be needed for a long, long time. Let me just give you an example, we provide the supply chain management for tires in one of our contracts. They’re going to be grinding out a lot of tires over the next three years and frankly it doesn’t matter whether they’re grinding them out in the sand of Iraq or the hills of Afghanistan, the fact is there are going to be more tires. So, those of us who provide supply line or manage supply lines in those consumables which we do are going to have more business there’s just no way of getting around it because the overall emphasis has gone up.

Your next question comes from Joseph B. Nadol, III – JPMorgan. Joseph B. Nadol, III – JPMorgan: First question is just on the revenue organic growth outlook, just looking beyond FY ’11 Walt some of the things that you walked through at the beginning of your initial comments were short term like the log jam and some of them were longer run like your take on the defense budget which is obviously the biggest driver or the biggest end market you have. Is 6% to 9% still the right long term growth number for the company?

Well, let me put it this way Joe, I think it’s hard to predict exactly where the defense budget is going to look like for government fiscal ’11. But, we do know, we do know that the nature of the things that are going to get more emphasis are going to be around the current fight. So, at the expense frankly of future capabilities investment. That would mean for a company like SAIC, we should be in a pretty strong position to be in the area of more emphasis through our service offerings and the nature of the things that we’re currently doing. I think what it represents mostly from a challenge perspective for SAIC is that others are going to recognize that too and so the nature of the competition in that market is going to get stiffer. We have seen that in this fiscal year, in our fiscal 2010 in that the investments we’re having to make notwithstanding the pause in contract awards and the extending nature of contract awards but we just see more competitors and the costs for winning the same amount of book business is going up for us. I’m more concerned about the overall effect on other competitors entering the marketplace because their traditional business which tends to be the long term investment programs are going to come under pressure as this administration continues to emphasize the current fight versus the future fight. I hope that helps. In the meantime, we’re looking for areas for what I’ll call [inaudible] that are going to grow relatively well compared to the overall DOD market and markets that are adjacent, like an energy, health and medical that are going to grow relatively well within the government spending compared to the Department of Defense. I tried to be…

Well Joe, that really depends on the long term strategic merits of the acquisition. We have generally seen smaller acquisitions at SAIC in the past, they have been negligible in terms of dilutive effect. Should that change, that situation could change we certainly just don’t want to rule out something that’s even more dilutive than our past experience for sake of what the generally accepted accounting principles require knowing that the economic prospects may make very good sense for us. So, until we get through this strategic dialog that Walt referred to and give you a better indication of acquisition and size and stuff like that, it will depend on a case-by-case basis. But, we’re going to be focused on the long term economics and cash flows not so much, or at least to a lesser extent on GAAP dilution on a short term basis. Joseph B. Nadol, III – JPMorgan: Just one more quick one on numbers Mark, on the MRAP overall program including the ATVs and the work you’ve been doing in the past and on SCF could you give us a sense of what’s embedded in your forecast for FY ’11 relative to FY ’10?

The SCF if you will, albeit a new name now is still under much discussion and debate. While we are having very stable revenues foreseeable and it’s too early to say how that might change pending those discussions. We baked in a modest decline in revenues for 2011, I’d say a little less than what I previously had indicated which was about a $50 million reduction, I think we’ll be a little bit better than that and a modest fee decline in light of discussions there. But, we really don’t have any better information with respect to that program today. On the MRAP/ATV tactical vehicles integration, that team has done a wonderful job expanding that area beyond MRAP not only to MATVs but to other tactical vehicles. While they saw a little bit of slip as expected here in the third quarter, there is a robust pipeline of work with MATVs, 5,000 unit ballpark for fiscal ’11 and that will keep the year-over-year revenues in that area slightly down but not as noticeable as we once though prior to of course landing that order on the MATVs.

Your next question comes from Cai von Rumohr – Cowen & Company, LLC. Cai von Rumohr – Cowen & Company, LLC: Could you give us what the direct labor billings were in the third quarter?

The direct labor was 58% of revenues. Cai von Rumohr – Cowen & Company, LLC: Then you’d mentioned that you did I think 27 $100 million plus contracts through December, how many of those are so far in the fourth quarter? And, could you give us color around the 13 that you won in the third and whatever you’ve won here so far in terms of what percentage of those are IDIQs?

The 13 north of $100 million wins were in the third quarter. So far in the fourth quarter we’ve won two building up to the 27 year-to-date. In terms of the mix, roughly 50/50 in terms of IDIQ versus standard contracts on a year-to-date basis. Cai von Rumohr – Cowen & Company, LLC: Where do we stand with the Greek contract in terms of the negotiation there?

As I mentioned Cai it is in arbitration. We continue to serve our mission there in our opinion very well. The status of the negotiations is ongoing. We continue to expect at some point a favorable resolution however determining the time frame for that is too uncertain for us and that’s the reason why we did not bake any of that resolution in to our guidance for fiscal ’11. Cai von Rumohr – Cowen & Company, LLC: If we look at the final quarter, you mentioned that you kind of year-over-year had 65 days versus 60 so that really took 1.5% so kind of if it was equal days you would have been about 5%, what should we think about if you’re saying the log jam is starting to break? Fourth quarter does it look like the organic growth should be 6% or better excluding kind of taking out the acquisitions from last year? If you just look at the businesses you had last year excluding acquisitions versus what those businesses expect to generate this year?

Excluding the effects of the acquisition we think we’re in the low to mid single digits give the bookings experience we’ve had year-to-date for the fourth quarter. Cai von Rumohr – Cowen & Company, LLC: At one point I think you were looking for – I mean as recently as your analyst day in October you were looking for a higher book-to-bill and so these numbers seem like something of a decline since then and yet you say you’re starting to see a break in the log jam, those two changes don’t seem to be quite in synch. Can you help us understand what seems to be in conflict between those two situations?

Cai, we expect, as we said in our prepared remarks that the bookings and book-to-bill should improve as the log jam has lifted and we’re just comfortable with the visibility that we have in the fourth to generate the numbers equivalent to the guidance. If you look at the pace of bookings during the third quarter they were somewhat back end weighted which gives us the confidence that we’ll make the mark here. Cai von Rumohr – Cowen & Company, LLC: Just the last one you mentioned bids awaiting decision were $7.9 billion, the notes I took on the second quarter were you exited at $8.5 billion suggesting they actually went down in this quarter. Is that true, and if so why?

We had a slight difference in timing when we reported that. For the analyst day we reported a number through the August period whereas in Walt’s earlier remarks we are just looking at the quarter end as reported which takes you back to July so there’s a little bit of difference there, we apologize for that. Cai von Rumohr – Cowen & Company, LLC: No, but I’m saying if you go back to July it was $8.5 and now it’s $7.9 so the book-to-bill was greater than one but the bids awaiting decision kind of went down which would suggest you’re not submitting that many bids. Or, is that just the fact of the bids your winning the bigger ones are IDIQs and therefore these metrics don’t really reflect the ongoing business potential?

Well clearly that’s true the IDIQs are affecting the bookings numbers however, I’ll go back the $8.5 billion was an end of August number not an end of Q2 number that was used in the analyst day. So, the appropriate Q2 number was the $6.6 for the end of the second quarter so we had a big August in terms of submissions.

The next question comes from Joseph A. Vafi – Jefferies & Company, Inc. Joseph A. Vafi – Jefferies & Company, Inc.: For guidance for fiscal ’11 does that include some of this kind of weakness we’re seeing in RW Beck as we move forward? Is that part of the guidance for fiscal ’11?

It assumes the lower level of revenues we’re experiencing this fiscal year, we’re effectively assuming a moderate growth from fiscal ’10 to ’11 but not anything like the episodic revenues that were present in fiscal ’09 which is now part of our baseline. Joseph A. Vafi – Jefferies & Company, Inc.: Then if we look at some of the bookings pauses we’ve talked about here is there any delta between DOD and some of the civilian agencies in terms of the pauses? Is one place more severe than others or is that kind of across the board with administration changes etc.?

My sense is it’s been a little more severe in DOD and the Intel community simply driven by the delay in the decision making or the policy decision regarding the ramp in Afghanistan. That really hasn’t affected a lot of other people but that clearly affected – frankly, people were keeping their procurement powder dry until some of those decisions made. We started seeing that break lose as that decision became more and more evident. We actually saw some indicators just by the what if questions we were asked on some of our existing contracts starting about four or five weeks ago. Joseph A. Vafi – Jefferies & Company, Inc.: Then just finally if we look at what you’ve seen happen in terms of the pipeline and things in the very recent past here in the last few weeks would you say this pause or I guess some of the constipation in the system has kind of troughed and we’re starting to see better activity at this point kind of reemerge or do you think the kind of pause could actually get worse from here?

I don’t think the pause will get worse. Your description of constipation, I think you want to think of this kind of as a rat moving through a snake, it still has some time to go before all the things associated with acquisition reform and the change in the change in the acquisition climate fully affects us. But, I think what we’ve attempted to do in looking at 2011 is to accommodate that in our plan. So, we’ve essentially adjusted the acquisitions cycle time in our plans and we think that now is reflected in our 2011 plan. Joseph A. Vafi – Jefferies & Company, Inc.: So if we did see actual some of this submitted, pending award, if that actually accelerated we could kind of potentially see a little upside relative to the plan you’re laying out here then?

Yes, I think so. I think that’s possibly true but I think my guess is that we’ve reached more of a steady state in terms of the overall acquisition time, or that process as opposed to it speeding up, I don’t think the process itself will get faster I just think we’re farther through the process that we were say a quarter ago.

Your next question comes from William R. Loomis – Stifel Nicolaus & Company, Inc. William R. Loomis – Stifel Nicolaus & Company, Inc.: When you talked about the intelligence revenues declining or I think maybe Mark said it, where you talking about the whole intelligence security technology group overall or any particular groups under that?

I’d rather not talk about anything below that in any event but yes, I think it’s true across the board there. William R. Loomis – Stifel Nicolaus & Company, Inc.: So that whole group, you saw revenues decline in that whole group?

Yes. William R. Loomis – Stifel Nicolaus & Company, Inc.: Was there any recomplete losses or anything driving that or terminations or anything like that?

No, frankly it was more an expectation of what we thought was going to happen got delayed. Frankly, you need to also keep in mind, and as is typical of new administrations especially in the defense world and especially given the strategic decision around Afghanistan, the execution on some of the contracts that we’ve won had been what I’ll called delayed in that the scope that was expected at the time we won the contract has either been modified because they want to keep their powder dry or has been delayed until they got this strategic decision worked out. Similarly, what we’re seeing is things that were RFPs that were based upon a year ago thinking, the past administration thinking, those things are being delayed or at least got delayed in this budget cycle. So, my sense is there is still built up demand and I’d be disappointed if we didn’t see that build up demand start to manifest itself in new work here over the next six months. William R. Loomis – Stifel Nicolaus & Company, Inc.: Then on the security sales, you mentioned that they were good in the quarter and that helped. Mark said that was one of the factors of improved margins, how do you see that in the January quarter in terms of was there some that got pulled kind of forward in to the October quarter from January? Because I know you previously thought it would be more in the January quarter on the bigger security systems deals.

Bill, they did moderately better in the third quarter than expected. I honestly don’t know if some of that was acceleration but we have the fourth quarter outlook pretty much consistent with what we had been discussing before.

Your next question comes from Jeff Houston – William Blair & Company. Jeff Houston – William Blair & Company: Could you talk about any sizeable upcoming recompetes for the rest of fiscal ’11 and in to fiscal ’12?

We have our largest contract in essence comes up for recompete during fiscal ’11 however, it’s at the back end of fiscal ’11. That’s the [Sense Global Solutions] Contract previously known as the GIG and that’s with [Ditsa] so that’s north of $300 million in annual revenues. But again, that’s a late fiscal ’11 event but that clearly will have an impact in fiscal ’12 so we’ll just be discussing that about a year from now in terms of its status.

Bob, the NASA Space Flight Center work that had been under a very large omnibus contract has actually been broken up and some of those contracts get awarded out in our fiscal ’11. That will have an impact for us in fiscal ’12. But, frankly we’re pretty confident about that. Jeff Houston – William Blair & Company: How about with the Global Solutions contract, do you feel fairly confident about that one as well?

Yes, we feel fairly confident about it but that’s why we have $90 billion in our pipeline because you never can tell these days.

I want to go back and correct the record for one of the previous responses that Cai von Rumohr asked which was the mix of IDIQ contracts and standard contracts in the north of $100 million category. That mix year-to-date is about a third standard contracts and two thirds IDIQ contracts for the record.

On behalf of the SAIC team we want to thank everybody on the call for their participation and their interest in the company.

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect.