Welcome to the fourth quarter fiscal year 2010 earnings conference call. (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. Please proceed.

Thank you and welcome everyone. 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.

Thank you, Laura. Good afternoon everyone. You can see from our press release that we turned in solid performance in fiscal 2010. For the call today I will cover the market conditions and provide highlights of recent business activity and then Mark will provide the financial details. I will finish up with a longer view of our business strategy which will include our assessment of the market outlook and how we expect to execute within that market. First, an update on our market conditions. As you know SAIC derives a large majority of its revenues from federal customers so obviously federal spending is SAIC’s most important market driver. Our assessment of federal budget information typically focuses on discretionary spending for Defense and federal information technology. Different from a quarter ago we now have the President’s proposed government fiscal 2011 budget. Our assessment suggests that while federal spending is budgeted to increase several percentage points over the prior year we expect most of that modest increase will be directed to cover DoD’s must pay bills. Accordingly we expect only nominal growth in our market for this year. In addition, we believe the downward pressures from both the Administration and Congress on federal discretionary spending including Defense will persist for the long-term. Another important factor for SAIC is the overall government contracting environment. In our last earning’s call I characterized this environment as increased oversight with an anti-contractor undercurrent. This characterization remains valid. New organizational conflict of interest and personal conflict of interest rules are expected to be issued soon. As we see things today we believe we can successfully navigate in this more complex contract environment. After the rules are defined and as our customers begin applying them we can adjust as necessary. A new definition of what constitutes inherently governmental…

Thank you, Walt. We spent fiscal 2010 meeting our financial goals and our results were consistent with the outlook we provided last quarter. Internal revenue growth for the year was 6% and we added another 2% of growth from acquisitions for a total of 8%. In total growth was fueled by increases in systems engineering and systems integration solutions delivered across our U.S. government base and continued ramp up and new starts on contracts in our military logistics business area. We delivered 30 basis points of operating margin improvement over last year to 8% at the high end of our expectations we set for the year. This was accomplished by improving our overall contract performance coupled with economies of scale and cost containment actions across our overhead and administrative cost base. Within the SG&A expense area the G&A portion rose only 2% during the full year whereas expense invested in growth, the S portion, bid and proposal and internal research and development costs collectively rose about 15%. Our ability to contain administrative costs reflects progress we have made through project alignment and other efforts. Our higher investment and selling costs reflects our priority for growth oriented actions coupled with higher business development costs associated with the longer government procurement cycle that Walt discussed a moment ago. Diluted earnings per share from continuing operations for the year grew 15% to $1.24 per share, right in the middle of our targeted range, primarily driven from revenue growth, margin improvement and a reduced share count from stock repurchases. We continue to take significant action on share repurchases when we viewed our stock as trading below its intrinsic value per share. Cash flow from operations and free cash flow finished particularly well with operating cash flow at $620 million for the year and free…

Thanks Mark. Before I get into strategy let me correct a statement I made with respect to our pipeline. As of a recent date we had over 200 $100 million plus opportunities in our pipeline, up about 10% from third quarter. More than half of these large opportunities have an expected award date within the next four quarters as opposed to the next four months and 31 of these $100 million plus opportunities have already been submitted in the form of proposals. With that, let’s talk about strategy. A key reason I came to SAIC is was my belief that no company in this market space would have more upside potential than SAIC particularly if we are able to leverage the various technical strengths in a more integrated fashion. For the last several months the senior team has been on a strategic thinking journey to recast our strategy for the future. As part of this journey I visited our customers, shareholders, business leaders, scientists, engineers and front line employees to get a first hand sense of the culture and expectations of and the attitudes towards our company. The breadth of domain expertise and scientific engineering and technology applications capability is remarkable. We have a strong affinity for our customers and their mission and we are trusted to deliver on our commitments. We have convictions about the future of the federal market we serve and we must be thoughtful and realistic about its outlook. Our market is becoming more challenging, characterized by flat to declining federal budgets, a more regulated contracting environment and increased competition. The government is clearly signaling future reductions to defense spending and the nation’s overall fiscal outlook strongly suggests federal discretionary spending will be constrained or contracted to accommodate non-discretionary spending and deficit control. Yet within this…

(Operator Instructions) The first question comes from the line of William R. Loomis – Stifel Nicolaus & Company, Inc. William R. Loomis – Stifel Nicolaus & Company, Inc.: Can you be clear on the amount you have submitted awaiting decision? Did I hear $16 billion? Is that directly comparable to the $7.9 billion you gave in October? Is that apples-to-apples?

The $16 billion is correct but it is not apples-to-apples when we compare it to the previous number.

The $7.9 billion was the contract awards which we distinguish from IDIQ. IDIQ is a separate category. So we have standard awards if you will which is the 729. IDIQ is a different category but the $16 billion is a combination of the two at year-end. William R. Loomis – Stifel Nicolaus & Company, Inc.: Any idea what that October number would have been with the combination?

The aggregate of the two is about the same as the standard awards and the two together was $15.5 billion. William R. Loomis – Stifel Nicolaus & Company, Inc.: Looking at that much outstanding in your win rate and that $16 billion I assume had some recompete’s in it as well. So your win rate can change between 60% and 87% somewhere in between there that suggests you won $9 billion in the last fiscal year. In theory you don’t have to submit any more bids and you can win as much business as you did last year. You are obviously going to submit a lot more given your pipeline and what you are spending on B&P. Is that a realistic assessment or is there something else going on we should…is it realistic to think in fiscal 2011 you could have substantially more awards than fiscal 2010?

I think it is likely that we could have substantially more awards in fiscal 2011 than we did in fiscal 2010 but that assumes the rate of awards picks up from what we saw in fiscal 2010 and what Mark was saying earlier is we haven’t seen evidence of that so far in our fiscal 2011. Right? So we are not making any assumptions that is going to pick up and so for us we have to increase the numbers of submits. William R. Loomis – Stifel Nicolaus & Company, Inc.: So 3-6% internal growth guidance. You have higher, another way to ask it is how much of the reduction in the organic growth outlook for fiscal 2011 is due to the future combat or [inaudible] modernization reductions or reductions of other programs. How much is headwinds you are facing versus delayed awards? Is there any way to quantify that?

I can tell you that the projection for year-over-year BCTM, formerly known as SCS, is down 20-30% in terms of our outlook in fiscal 2011 versus fiscal 2010.

The next question comes from the line of Joseph A. Vafi – Jefferies & Company, Inc. Joseph A. Vafi – Jefferies & Company, Inc.: I was wondering if we could get a little bit more color on how Vacis did in the quarter and what the outlook is for that line of business in terms of growth potential in 2011?

The Vacis area performed on plan for fiscal 2010 including the fourth quarter of fiscal 2010. It is expected to grow north of 10% in fiscal 2011 and is expected to have an uptick a little bit in profitability so that area continues to perform very well for us. Joseph A. Vafi – Jefferies & Company, Inc.: An uptick in profitability would be…if I recall that line of business is well above the overall corporate average in terms of EBIT margins right?

It is well above the average and we are expecting just a moderate uptick going forward. Joseph A. Vafi – Jefferies & Company, Inc.: I know you talked about some of what was previously defined as Future Combat System business that you have brought that outlook down. Just in terms of the book to bill in the quarter that kind of de-booking, how much did that affect the overall book to bill ratio in the quarter?

In the fourth quarter the de-bookings amounted to about 21%. So instead of 0.6 it would have been 0.7. Joseph A. Vafi – Jefferies & Company, Inc.: We kind of when you came onboard it sounded like you were clearly sharpening the M&A pencil. I know you have done a couple of small things. I was wondering if you could give us an update on your outlook relative to the relatively large amount of balance sheet capacity you have to deploy in the business. Should we still be potentially expecting to see a single or maybe two larger acquisitions relative to what the company has done historically or should we continue to expect more small, tuck in type acquisitions?

That is a good question. Let me comment by saying when I think of bolt-on acquisitions I don’t think of them necessarily in the context of size. What we are going to be looking at most importantly is on the strategic capabilities, primarily technology companies whose technologies can serve us across the broader SAIC whether they are large or small. Rather than think about it in the context of size think about it in the context of their relevance to growing those important areas we just discussed; C4ISR, logistics and cyber on the national security side, health and energy and the other two domains.

The next question comes from the line of Edward Caso – Wells Fargo. Edward Caso – Wells Fargo: I was wondering if you could clarify the 3-6. Are those just guidance for F11 and if things get back to normal, whatever that is, could we have higher numbers, maybe not the 6-9 but sort of higher than the 3-6?

The answer to the first part of your question is yes. Those reflect our guidance for FY11. As we think about the uncertainty of the market and as that uncertainty either increases or decreases over time in the fall we will be looking at what is an appropriate set of guidance for the future. The only guidance we are giving today is guidance on fiscal year 2011. Edward Caso – Wells Fargo: Just to clarify, you broke your business into core and high growth, core being flat to slightly up. High growth, cyber, energy and health, up 15% or as much as 15%. Did I hear that correctly?

The growth part yes. Let me correct you on one point if you don’t mind. As we see our core federal services business which is about half, we see that market actually flat to declining. Modest decline as opposed to any growth at all. It is in the context of those other high growth areas that have up to 15%. Not in each one of them with 15% but within that group that we mentioned we could see up to 15%. Edward Caso – Wells Fargo: Tax rate assumption in the FY11 guidance?

Tax rate [we used] is 38.5%.

The next question comes from the line of Joseph B. Nadol, III – JPMorgan. Joseph B. Nadol, III – JPMorgan: Again on the M&A front you suggested in the past that products were going to be a bigger, may be more of a target than services and looking at the M&A stream how would you update us on that?

Again, I won’t characterize our M&A strategy to be weighted to either products or services. I would simply say this. The nature of this company and its future growth is going to be based on widely leveraging our technology and so first and foremost we are going to be looking for opportunities that give us technology discriminators that are leverageable. That may manifest itself in acquisitions that have a product centric nature to them and it may manifest itself in companies that are less product. Joseph B. Nadol, III – JPMorgan: Is there a specific view as to the optimal balance sheet of SAIC? Not that you are going to get to an optimal place in a month or a year but are you going to use some sort of internal guideline in order to maximize returns on equity how you are going to think about that?

We do not have a view of optimal balance sheet. We like having strategic flexibility through our balance sheet. We like having an investment grade credit rating. That is about it at this time. We would consider additional leverage for the right opportunities but no specific targeted balance sheet set of numbers at this time. Joseph B. Nadol, III – JPMorgan: I think you suggested that the FY11 budget maybe was a little bit surprising in some areas or was disappointing relative to what you may have been thinking about 3-4 months ago. I was wondering if you could give any more specificity on that?

I think 3-4 months ago it was the uncertainty we didn’t have a budget. So there was a lot of questions as to what that first Obama Administration budget would look like. What we saw, as you know, is some upticks in Defense and some discretionary accounts including Defense but when you peel back the budget and you look at the nature of the things that I refer to as “must pay” bills, some of that is associated with the 30,000 additional troops going in harm’s way, the healthcare costs and a variety of things they were really not adding a lot of budget in the areas that we serve. So from my perspective it was a big surprise to me in that it didn’t go down. I think that is the only color I would add.

The next question comes from the line of Cai von Rumohr – Cowen & Company, LLC. Cai von Rumohr – Cowen & Company, LLC: It looks like your acquisition growth was a little over 2.5% in the quarter. You have done a couple of these. Could you give us a rough sense how much you expect the acquisitions to add to revenues in fiscal 2011?

Thanks for the question. I don’t think we can predict that frankly because if we are talking about future M&A a lot of that… Cai von Rumohr – Cowen & Company, LLC: Not future M&A but the companies you have already purchased. You have given us the organic growth but how much of the recent acquisitions you have made including Beck how much do you expect them to add to revenues in fiscal 2011?

In a range of $150-200 million. Cai von Rumohr – Cowen & Company, LLC: You mentioned your $16 billion I think and about half of it was IDIQ. Should we take the non-IDIQ are $8 million up from $7.9 million going back to the first question you got?

Yes. Cai von Rumohr – Cowen & Company, LLC: You haven’t changed your longer-term goals of 6-9% but your tone sounds very cautious in terms of the outlook for lots of reasons. Is it realistic to have a goal of 6-9% if in fact the market is changing and if in fact it sounds like things are going to be tougher going forward?

Let’s be crystal clear. We are disavowing the 6-9% long-term goal. Cai von Rumohr – Cowen & Company, LLC: So is there a long-term goal?

No. Cai von Rumohr – Cowen & Company, LLC: There is not a long-term goal. Okay. Regarding either revenues or operating margins?

That is correct. Cai von Rumohr – Cowen & Company, LLC: I guess I didn’t catch it, cash flow from ops would equal net income plus depreciation?

Our general model which we have consistently applied is it would be net income plus depreciation and amortization and we stick to that unless we see any specific reasons to depart from that. So…operating cash flow. Cai von Rumohr – Cowen & Company, LLC: Operating cash flow. How should we think about CapEx? It looked a little light last year.

CapEx will generally be equivalent to our depreciation and amortization level as it has been for a number of years. So it is $60-80 million of depreciation and amortization and that has been our CapEx rate pretty steady. Cai von Rumohr – Cowen & Company, LLC: Lastly, did I catch you saying you expect to have consistent growth in cash flow per share?

The remark was we are going to strive to improve free cash flow per share. Cai von Rumohr – Cowen & Company, LLC: Strive to improve it. Okay.

The next question comes from the line of Eric Olbeter – Pacific Crest Securities. Eric Olbeter – Pacific Crest Securities: How should we think about amortization next year running through the model?

I will get back to you. Why don’t you ask your other housekeeping questions. Eric Olbeter – Pacific Crest Securities: On previous calls you have talked about the intelligence business being a particular source of frustration. A lot of the political constipation in the market. I know that in the last call you were waiting for two big cyber security awards. Are you also seeing that translate into cyber security? That general sort of stuckness if you will in intel?

We have several proposals awaiting awards. A good bit of our cyber security work is with the government it probably has some of the same characteristics we think about in the broader intel role. Eric Olbeter – Pacific Crest Securities: One of the things you have mentioned previously is potentially sort of taking a more look at the commercial marketplace in areas where it makes sense; smart grid energy. Can you give us an update of where you are thinking there? Is that still the direction you are going? Do you have any more granularity for us?

I don’t think we have more granularity. As we have said before where those adjacent commercial markets behave like our federal market we will consider them. Our focus is predominately still driven by our federal business.

The range for amortization next year in fiscal 2011 is $35-40 million.

The next question comes from the line of Michael Lewis – BB&T Capital. Michael Lewis – BB&T Capital : A quick question with regard to the core business. If it is indeed flat to modestly declining and it is up to 50% of total revenue have you assessed any possible divestitures from these businesses? I think that would be a way to help in lifting the all internal growth rates here at the company?

Thanks for the question. We are as we always do periodically look at our portfolio. It would be both premature and inappropriate for me to comment on any specific divestiture and it would be frankly very premature at this point. Michael Lewis – BB&T Capital : With regard to the recomplete we witnessed in the last 6-9 months that have come in and some of the new competition you have won, what I am really interested in hearing about is have you noticed there has been an increase in scale and scope of the new contracts versus the predecessor contracts? Or are they somewhat in line with the prior recompeted actions or did they fall within the plan of what you were expecting on new competition?

I think they are pretty much in line. I would just add a bit of color. The sweet spot for our company frankly is in the $50-100 million and we are also very good at the $100 million plus. I think we are eager to see how some of the new rules on the acquisition side of the government may change how they think about these large contracts. As you know we have seen some of these large omnibus contracts broken up in the last 12 months to create opportunities for small business and other areas of competition. So there is not a trend there I can point to but we are seeing instances of that happening. Michael Lewis – BB&T Capital : What should we assume here for repurchase expectations for fiscal year 2011? We have been running north of $400 million per year for the last two fiscal years. Should we figure in $400-500 million again this year?

As Walt responded to an earlier question it is hard to predict that. We do for planning purposes assume we will conduct a moderate amount to offset our creep but we don’t buy back for that purpose. We just use that as a base assumption and that is a moderate amount of repurchases. We carefully evaluate the tradeoffs we have between M&A opportunities that may exist in a given quarter and what our view of the intrinsic value of the stock price is and we make decisions accordingly. It is not appropriate to project precisely. We evaluate it each quarter and we report what we do and I think you can see our track record in our previous actions but I wouldn’t necessarily project that is going to be the case in the future.

The next question comes from the line of Jason A. Kupferberg – UBS Securities, LLC. Jason A. Kupferberg – UBS Securities, LLC.: So we basically got a three point delta here in terms of the old organic revenue guidance for fiscal 2011 versus the new guidance there. I wanted to get a sense of how much of that three point delta is really due to the weakness on the intel front. It seems like on the high growth areas you seem to be as bullish now as you have been in the past. Intel seems to be one area you seem to be highlighting as seeing some worsening trends. How much of that three points is really weakness in intel and what would the balance be if you can get more specific in terms of which service lines within your “core” you are seeing worsening trends?

Certainly the intel market is one we just highlighted as we saw some shifts in the intel market from last quarter. I gave you an example of $1 billion in bookings that we had forecasted and planned for the fourth quarter that has moved into this fiscal year. We haven’t seen that breaking where we call “log jam” breaking on the intel side yet but as I characterized before there is similar sluggishness in other parts of our market. Mark do you have any other color to add to that?

No sir. Jason A. Kupferberg – UBS Securities, LLC.: So mostly intel it sounds like what you are saying.

I would say it is broadly across the business. I think intel is probably the most dramatic for us. Jason A. Kupferberg – UBS Securities, LLC.: What kind of book to bill ratio is embedded into the fiscal 2011 guidance?

We are targeting to do between 1-1.1 to make the numbers we are talking about here. We would love to do better than that and have a pipeline that allows us to do better than that as a potential but we need to do between 1-1.1 to deliver what we are talking about here. Jason A. Kupferberg – UBS Securities, LLC.: On the Scottish Power re-bid I know you outlined a potential hit of $20-30 million. Did that contract go to a competitor? I know it was coming up for expiration. Did you have the actual re-bid outcome known at this point?

It did go to a competitor and it was awarded in the winter time but it was finally contracted just before we released our 8-K about a month ago. Jason A. Kupferberg – UBS Securities, LLC.: So we will see that charge in Q1?

As we disclosed due to the specific requirements of this sort of transition which involves folks that have pension benefits the charge is tied to their physical movement to the successor contractor. We disclosed we expect it to be done mostly in the first half. There is a possibility it could lead beyond that but our expectation is the bulk in the first half. Jason A. Kupferberg – UBS Securities, LLC.: When you look at those high growth areas like energy and healthcare you talked about when you think longer term about what the mix of your business should look like in terms of national security versus non-national security if you will I guess we have thought about that in the past as maybe being a 70/30 ratio? Where would you like to see that go over time based on the new strategy for SAIC you have outlined?

I wouldn’t characterize it as a percentage basis. What will drive how we end up in the balance of our business would be driven by the markets themselves as opposed to us trying to…we are certainly going to put more emphasis on those markets specifically around organic growth. But whether or not that ends up being a 70/30 split will depend upon what is not pretty uncertain about the continued emphasis that the government and our customers put on it.

The next question comes from the line of Jeff Houston – William Blair & Company. Jeff Houston – William Blair & Company: Could you talk a little bit about employee attrition rates in the fourth quarter? Were they roughly in line with where they have been historically?

Attrition rate was just below 10% for the year. Jeff Houston – William Blair & Company: How about the voluntary part of that?

That’s what I meant. The voluntary attrition was below 10% for the year and it was also below 10% for the fourth quarter. Voluntary. Jeff Houston – William Blair & Company: Regarding the two major upcoming recompletes, are they likely to get pushed back as well?

Interestingly if one of those two you are referring to is formerly known as the Gig, we beat the DGS contract. We were informed that will likely be extended for one year just the other day. So we were planning on a recompete at the end of fiscal 2011. That looks to be the end of fiscal 2012 based on that information. The other major one is NASA and that is continuing on the same course we discussed before.

This concludes the Q&A portion of today’s conference. I will now turn the call over to Ms. Laura Luke. Please proceed.

Thank you operator. On behalf of the SAIC team we want to thank everyone on the call for their participation and your interest in the company.