SAIC Announces Financial Results for Fourth Quarter and Fiscal Year 2013

   SAIC Announces Financial Results for Fourth Quarter and Fiscal Year 2013

Fourth Quarter Results

- Revenues: $2.71 billion for fourth quarter; $11.17 billion for fiscal year

- Diluted EPS from Continuing Operations: $0.54 for fourth quarter; $1.54 for
fiscal year

- Bookings: $2.0 billion (book-to-bill ratio of 0.7) for fourth quarter; $11.1
billion (book-to-bill ratio of 1.0) for fiscal year

- Quarterly Cash Dividend of $0.12 per share payable on April 30, 2013

- Special Cash Dividend of $1.00 per share payable on June 28, 2013

PR Newswire

MCLEAN, Va., March 26, 2013

MCLEAN, Va., March 26, 2013 /PRNewswire/ --SAIC, Inc. (NYSE: SAI), a
scientific, engineering, and technology applications company, today announced
financial results for the fourth quarter and fiscal year 2013, which ended
January 31, 2013. 

"During the fourth quarter, our revenue and operating income both declined
from adjusted prior year levels," said John P. Jumper, chairman and chief
executive officer. "Nevertheless, we made a number of significant investments
towards the future separation of the company, and had a few unexpected items
that adversely impacted our results.Our focus is on the long term.We are
committed to improving our operating performance by sustaining focus on our
customers and aggressively aligning our cost base.We remain on schedule for
our planned separation later in the year and look to aggressively position
both future companies for cost competitiveness by streamlining indirect
management and support functions, reducing our real estate footprint, and
driving other efficiencies."

"As announced today, our Board of Directors has approved a quarterly cash
dividend and, in addition, a special dividend," added Jumper. "We consider
this a demonstration of our continuing confidence in the strength of our
financial base, our plan of balanced capital deployment, and our commitment to
deliver shareholder value."

Summary Results

Revenues for the fourth quarter of fiscal year 2013 were $2.71 billion,
compared to $2.47 billion in the fourth quarter of fiscal year 2012. Full
fiscal year revenues were $11.17 billion, compared to $10.50 billion for
fiscal year 2012. The fourth quarter and full fiscal year 2012 revenues
reflected $358 million and $410 million, respectively, in revenue reductions
from the CityTime loss provision.After removing the effect of these
reductions, revenues declined $118 million in the fourth quarter of fiscal
year 2013 compared to the prior year quarter's adjusted revenues of $2.83
billion, but increased $266 million for the full fiscal year.

Operating income for the quarter was $145 million (5.3 percent of revenues).
Operating loss for the prior year quarter of $114 million included the $308
million CityTime loss provision. The prior year quarter's operating income
excluding the CityTime loss provision was $194 million (6.9 percent of
revenues). The reduction in operating income, as adjusted, was primarily
attributable to $23 million of expenses incurred in connection with the
planned separation transaction and $14 million of loss provisions relating to
certain legal matters. Full fiscal year operating income of $734 million (6.6
percent of revenues) was also adversely impacted by separation costs.

Income from continuing operations for the quarter was $186 million. Full
fiscal year income from continuing operations was $523 million.

Diluted earnings per share from continuing operations for the quarter were
$0.54. The diluted share count for the quarter was 335 million, up from 329
million in the fourth quarter of fiscal year 2012. Diluted earnings per share
from continuing operations for the fiscal year were $1.54.

Segment Operating Results



                             Three Months Ended
                             January 31,                   Revenue Growth (%)
                             2013            2012           Total     Internal
                             ($ millions)
Revenues:
Defense Solutions            $   1,121    $     852  32%       32%
Health, Energy and Civil     711             737            -4%       -10%
Solutions
Intelligence and             880             883            0%        0%
Cybersecurity Solutions
Corporate and Other          -               -              n/a       n/a
Intersegment Elimination     (1)             (1)            n/a       n/a
Total                        $   2,711    $   2,471   10%       8%
                                                            Operating Margin
                                                            FY 2013   FY 2012
Operating Income (Loss):
Defense Solutions            $      68  $    (216)  6.1%      -25.4%
Health, Energy and Civil     54              59             7.6%      8.0%
Solutions
Intelligence and             61              64             6.9%      7.2%
Cybersecurity Solutions
Corporate and Other          (38)            (21)           n/a       n/a
Total                        $     145   $    (114)  5.3%      -4.6%
                             Year Ended
                             January 31,                   Revenue Growth (%)
                             2013            2012           Total     Internal
                             ($ millions)
Revenues:
Defense Solutions            $   4,718    $   4,191   13%       13%
Health, Energy and Civil     2,788           2,734          2%        -4%
Solutions
Intelligence and             3,672           3,574          3%        3%
Cybersecurity Solutions
Corporate and Other          -               2              n/a       n/a
Intersegment Elimination     (5)             (4)            n/a       n/a
Total                        $  11,173     $  10,497    6%        5%
                                                            Operating Margin
                                                            FY 2013   FY 2012
Operating Income (Loss):
Defense Solutions            $     352   $    (171)  7.5%      -4.1%
Health, Energy and Civil     222             246            8.0%      9.0%
Solutions
Intelligence and             264             279            7.2%      7.8%
Cybersecurity Solutions
Corporate and Other          (104)           (55)           n/a       n/a
Total                        $     734   $     299  6.6%      2.8%



Defense Solutions

Defense Solutions revenues for the quarter were $1.12 billion. Excluding the
prior year CityTime loss provision, revenues decreased $89 million, or 7
percent, from the fourth quarter of fiscal year 2012. This decrease was
attributable to reduced activity on a number of programs, including a systems
integration and logistics program for tactical and mine resistant ambush
protected vehicles, an infrastructure support service program for the Defense
Information Systems Agency and a tactical vehicle integration program for the
U.S. Army. These decreases were partially offset by increased revenues on a
number of programs, including a program with the Defense Logistics Agency to
provide supply chain management of military land and aircraft tires and a
program to operate and maintain the enterprise network IT infrastructure for
the U.S. Department of State.

Defense Solutions revenues for the fiscal year were $4.72 billion. Excluding
the prior year CityTime loss provision, revenues increased by $117 million, or
3 percent, from fiscal year 2012. This growth was attributable to increased
activity on a number of programs, including the ramp up of a program to
operate and maintain the enterprise network IT infrastructure for the U.S.
Department of State, the ramp up of a program with the Defense Logistics
Agency to provide supply chain management of military land and aircraft tires,
and a systems and software development program for the U.S. Army. These
increases were partially offset by reduced revenues from various programs,
including the U.S. Army Brigade Combat Team Modernization program, which was
terminated during fiscal year 2012, a program to provide systems engineering
and management support for the U.S. Navy and a systems integration and
logistics program for tactical and mine resistant ambush protected vehicles.

Defense Solutions operating income for the quarter was 6.1 percent of revenues
as compared to 7.6 percent of revenues excluding the CityTime loss provision
(-25.4 percent on a GAAP basis) in the fourth quarter of fiscal year 2012. The
decrease in Defense Solutions operating income, as adjusted, was attributable
to the ramp down of certain customer contracts having relatively higher profit
levels and net unfavorable changes in contract estimates compared to a net
favorable change in the prior year.

Defense Solutions operating income for the fiscal year was 7.5 percent of
revenues as compared to 8.0 percent of revenues excluding the CityTime loss
provision (-4.1 percent on a GAAP basis) in the fourth quarter of fiscal year
2012. The decrease in Defense Solutions operating income, as adjusted, was
attributable to a reduction in favorable changes in contract estimates and a
prior year gain on the sale of assets.

Health, Energy and Civil Solutions

Health, Energy and Civil Solutions revenues for the quarter decreased 4
percent from the fourth quarter of fiscal year 2012.Internal revenues
decreased 10 percent due to declines in various federal civilian programs and
reduced design-build volume related to energy plant construction projects.
These decreases were partially offset by an increase in healthcare IT
consulting services with commercial clients.

Health, Energy and Civil Solutions revenues for the fiscal year increased 2
percent from fiscal year 2012 primarily due to revenues acquired in connection
with the acquisitions of maxIT Healthcare Holdings, Inc. and Vitalize
Consulting Solutions, Inc.Internal revenues decreased 4 percent reflecting
declines in various federal civilian programs and program completions with
federal health information technology customers, particularly with U.S.
Department of Defense military health system customers. These decreases were
partially offset by increases in healthcare IT consulting services with
commercial clients and increased design-build volume related to energy plant
construction projects.

Health, Energy and Civil Solutions operating income for the quarter was 7.6
percent of revenues, down from 8.0 percent of revenues in the fourth quarter
of fiscal year 2012 primarily due to increased intangible asset amortization
expense and increased severance expense from cost reduction efforts.

Health, Energy and Civil Solutions operating income for the fiscal year was
8.0 percent of revenues, down from 9.0 percent of revenues in fiscal year
2012. The decline was due to a net unfavorable change in contract estimates
primarily related to certain energy and construction projects compared to a
net favorable change in the prior year, increased intangible asset
amortization expense, increased severance expense, and a lease termination
charge related to the consolidation of facilities. This decline was partially
offset by a prior year loss provision related to a data privacy litigation
matter and a reduction in research and development expense resulting from the
advancement through the product lifecycle of new non-intrusive inspection
system offerings.

Intelligence and Cybersecurity Solutions

Intelligence and Cybersecurity Solutions revenues for the quarter were
relatively flat as compared to the fourth quarter of fiscal year 2012.

Intelligence and Cybersecurity Solutions revenues for the fiscal year
increased 3 percent, from fiscal year 2012. This increase was primarily due to
increased activity on a number of programs including two airborne surveillance
programs, a geospatial intelligence program, a new intelligence systems
integration program for the U.S. Army, and a new intelligence analysis
solutions program. These increases were partially offset by reduced activity
on a processing, exploitation and dissemination program for the U.S. Army, a
decline in sales of proprietary products, and an intelligence analysis
contract that concluded in the current year.

Intelligence and Cybersecurity Solutions operating income for the quarter was
6.9 percent of revenues, down from 7.2 percent of revenues in the fourth
quarter of fiscal year 2012, primarily due to intangible asset impairment
charges recorded during the current year quarter.

Intelligence and Cybersecurity Solutions operating income for the fiscal year
was 7.2 percent of revenues, down from 7.8 percent of revenues in fiscal year
2012 primarily as a result of a relative increase in the proportion of
materials and subcontractor related revenues, which generally have lower
profit margins than labor-related revenues, due to increased activity as a
prime contractor on large system integration programs. Fiscal year 2013
operating income was also negatively impacted by reduced sales of
higher-margin proprietary products, partially offset by lower intangible asset
impairment charges, decreased intangible asset amortization expense and an
increase in net favorable changes in contract estimates.

Corporate and Other

Corporate and Other segment operating loss during the quarter increased from
the fourth quarter of fiscal year 2012, primarily due to expenses incurred in
connection with the planned separation transaction and loss provisions
relating to certain legal matters.

Cash Generation and Capital Deployment

Cash flow provided by operations for fiscal year 2013 was $345 million, down
from $762 million in fiscal year 2012, primarily due to the payment of the
$500 million CityTime settlement.

During the quarter, the Company paid a cash dividend of $0.12 per share. The
Company intends to continue paying dividends on a quarterly basis, although
the declaration of any future dividend will be determined by the Company's
Board of Directors each quarter and will depend on earnings, financial
condition, capital requirements and other factors.

As of January 31, 2013, the Company had $736 million in cash and cash
equivalents and $1.3 billion in long-term debt.

New Business Awards

Net business bookings totaled $2.0 billion in the fourth quarter and $11.1
billion for the fiscal year, representing a book-to-bill ratio of 0.7 and 1.0
for the fourth quarter and fiscal year, respectively. Notable awards received
during the quarter include:

U.S. Space and Naval Warfare Systems Center Atlantic. The Company was awarded
a prime contract to provide life-cycle command, control, communications,
computers, combat systems, intelligence, surveillance, and reconnaissance
support services. The multiple-award indefinite-delivery/indefinite-quantity
(IDIQ) contract has a one-year period of performance, four one-year options,
and a total contract ceiling of $899.56 million available to all awardees, if
all options are exercised.

U.S. Coast Guard (USCG). The Company was awarded a prime contract to provide
services and materials for the operational support of the USCG Integrated
Health Information System.The single-award task order has a one-year base
period of performance, one twelve-month option, one nine-month option, and a
total contract value of approximately $17 million, if all options are
exercised.

U.S. Central Command (USCENTCOM). The Company was awarded a prime contract by
the U.S. General Services Administration to provide enterprise information
technology support to USCENTCOM's Directorate of Command, Control,
Communications and Computers. The cost-plus award-fee task order has a
one-year base period of performance, four one-year options, and a total
contract value of $433 million, if all options are exercised.

The Company's backlog of signed business orders at the end of the fiscal year
2013 was $17.9 billion, of which $5.4 billion was funded, consistent with the
end of fiscal year 2012. Negotiated unfunded backlog does not include any
estimate of future task orders expected to be awarded under IDIQ, GSA Schedule
or other master agreement contract vehicles.

Cash Dividends

The Company's Board of Directors has declared a quarterly cash dividend of
$0.12 per share payable on April 30, 2013 to stockholders of record on April
15, 2013. The Company's Board of Directors also declared a special cash
dividend of $1.00 per share payable on June 28, 2013 to stockholders of record
on June 14, 2013.

Forward Guidance

The Company's outlook for fiscal year 2014, which began on February 1, 2013,
is as follows:

  oRevenues of $10.0 billion to $10.7 billion;
  oDiluted earnings per share from continuing operations of $1.16 to $1.33;
    and
  oCash flows from continuing operations at or above $450 million

This guidance is based on SAIC, Inc. operating for the full fiscal year as one
company, yet includes substantial costs to prepare for the previously
announced separation transaction.If the separation occurs during fiscal year
2014 as is currently contemplated, it is expected that guidance policies will
be provided for each of the two separate companies at the time of the
separation.Fiscal year 2014 guidance is based upon the recently approved U.S.
Government fiscal year 2013 defense budget and an assumed flat spending level
thereafter consistent with theBudget Control Act of 2011.In addition, fiscal
year 2014 guidance excludes the impact of potential future acquisitions and
other non-ordinary course items, other than identified costs related to the
planned separation.

About SAIC

SAIC is a FORTUNE 500^® scientific, engineering, and technology applications
company that uses its deep domain knowledge to solve problems of vital
importance to the nation and the world, in national security, energy and the
environment, critical infrastructure, and health. The Company's approximately
40,000 employees serve customers in the U.S. Department of Defense, the
intelligence community, the U.S. Department of Homeland Security, other U.S.
Government civil agencies and selected commercial markets. Headquartered in
McLean, Va., SAIC had annual revenues of approximately $11.2 billion for its
fiscal year ended January 31, 2013. For more information, visit
www.saic.com. SAIC: From Science to Solutions®

Forward-Looking Statements

Certain statements in this release contain or are based on "forward-looking"
information within the meaning of the Private Securities Litigation Reform Act
of 1995. In some cases, you can identify forward-looking statements by words
such as "expects, " "intends," "plans," "anticipates, " "believes, "
"estimates, " "guidance, " and similar words or phrases. Forward-looking
statements in this release include, among others, estimates of future
revenues, operating income, earnings, earnings per share, charges, backlog,
outstanding shares and cash flows, as well as statements about future
dividends, share repurchases and acquisitions. These statements reflect our
belief and assumptions as to future events that may not prove to be accurate.
Actual performance and results may differ materially from the guidance and
other forward-looking statements made in this release depending on a variety
of factors, including: developments in the U.S. Government defense budget,
including budget reductions, implementation of spending cuts (sequestration)
or changes in budgetary priorities; delays in the U.S. Government budget
process or approval to raise the U.S. debt ceiling; delays in the U.S.
Government contract procurement process or the award of contracts and delays
or loss of contracts as a result of competitor protests; changes in U.S.
Government procurement rules, regulations and practices; our compliance with
various U.S. Government and other government procurement rules and
regulations; governmental reviews, audits and investigations of our company;
our ability to effectively compete and win contracts with the U.S. Government
and other customers; our ability to attract, train and retain skilled
employees, including our management team, and to obtain security clearances
for our employees; our ability to accurately estimate costs associated with
our firm-fixed-price and other contracts; our ability to comply with certain
agreements entered into in connection with the CityTime matter; cybersecurity,
data security or other security threats, systems failures or other disruptions
of our business; resolution of legal and other disputes with our customers and
others or legal or regulatory compliance issues; our ability to effectively
acquire businesses and make investments; our ability to maintain relationships
with prime contractors, subcontractors and joint venture partners; our ability
to manage performance and other risks related to customer contracts, including
complex engineering or design build projects; the failure of our inspection or
detection systems to detect threats; the adequacy of our insurance programs
designed to protect us from significant product or other liability claims; our
ability to manage risks associated with our international business; our
ability to declare future dividends based on our earnings, financial
condition, capital requirements and other factors, including compliance with
applicable laws and agreements of the Company; risks associated with the
proposed spin-off of our technical, engineering and enterprise information
technology services business, such as disruption to business operations,
unanticipated expenses, significant transaction costs and/or unknown
liabilities, the timing of the spin-off or a failure to complete the proposed
spin-off or realize the expected benefits of the proposed spin-off; and our
ability to execute our business plan and long-term management initiatives
effectively and to overcome these and other known and unknown risks that we
face. These are only some of the factors that may affect the forward-looking
statements contained in this release. For further information concerning risks
and uncertainties associated with our business, please refer to the filings we
make from time to time with the U.S. Securities and Exchange Commission,
including the "Risk Factors," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Legal Proceedings"
sections of our latest annual report on Form 10-K and quarterly reports on
Form 10-Q, all of which may be viewed or obtained through the Investor
Relations section of our web site at www.saic.com.

All information in this release is as of March 26, 2013. The Company expressly
disclaims any duty to update the guidance or any other forward-looking
statement provided in this release to reflect subsequent events, actual
results or changes in the Company's expectations. The Company also disclaims
any duty to comment upon or correct information that may be contained in
reports published by investment analysts or others.

CONTACTS:
Investor Relations:
Paul Levi
703-676-2283
Paul.E.Levi@saic.com
Media Relations:
Melissa Koskovich
(703)676-6762
koskovichm@saic.com





SAIC, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, in millions, except per share amounts)


                           Three Months Ended   Year Ended
                           January 31           January 31
                           2013      2012       2013      2012       2011
                           $     $      $     $      $    
Revenues                           2,471   11,173   10,497    10,798
                           2,711
Costs and expenses:
 Cost of revenues         2,380     2,479      9,809     9,530      9,374
 Selling, general and      163       106        592       668        495
 administrative expenses
 Separation transaction    23        -          38        -          -
 expenses
Operating income (loss)    145       (114)      734       299        929
Non-operating income
(expense):
 Interest income          3         2          9         5          2
 Interest expense         (20)      (29)       (93)      (114)      (79)
 Other income (expense),   -         2          8         5          2
 net
Income (loss) from
continuing operations      128       (139)      658       195        854
before income taxes
Benefit (provision) for    58        (22)       (135)     (210)      (307)
income taxes
Income (loss) from         186       (161)      523       (15)       547
continuing operations
Discontinued operations:
 Income from discontinued
 operations before income  14        2          17        129        107
 taxes
 Provision for income      (14)      (2)        (15)      (55)       (35)
 taxes
Income from discontinued   -         -          2         74         72
operations
                           $     $      $     $      $    
Net income (loss)                  (161)     525     59   619
                           186
Earnings per share (EPS):
 Income (loss) from       $     $      $     $      $    
 continuing operations,            (161)     523    (15)   547
 as reported              186
    Less: earnings
    allocated to           (4)       -          (11)      -          (17)
    participating
    securities
 Income (loss) from       $     $      $     $      $    
 continuing operations,            (161)     512    (15)   530
 for computing EPS        182
 Net income (loss), as    $     $      $     $      $    
 reported                         (161)     525     59   619
                           186
    Less: earnings
    allocated to           (4)       -          (11)      -          (20)
    participating
    securities
 Net income (loss), for   $     $      $     $      $    
 computing EPS                    (161)     514     59   599
                           182
 Basic:
    Income (loss) from     $     $      $     $      $    
    continuing                     (0.49)    1.54  (0.04)    1.46
    operations            0.54
    Income from
    discontinued           -         -          -         0.22       0.19
    operations
                           $     $      $     $      $    
                                   (0.49)    1.54   0.18    1.65
                           0.54
 Diluted:
    Income (loss) from     $     $      $     $      $    
    continuing                     (0.49)    1.54  (0.04)    1.45
    operations            0.54
    Income from
    discontinued           -         -          -         0.22       0.19
    operations
                           $     $      $     $      $    
                                   (0.49)    1.54   0.18    1.64
                           0.54
 Weighted average number
 of shares outstanding:
    Basic                  334       329        333       336        364
    Diluted               335       329        333       336        366



SAIC, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in millions)
                                                 January 31,      January 31,
                                                 2013             2012
ASSETS
Current assets:
  Cash and cash equivalents                      $         $     
                                                 736              1,592
  Receivables, net                               1,889            2,164
  Inventory, prepaid expenses and other          454              439
  current assets
  Assets of discontinued operations              -                36
        Total current assets                    3,079            4,231
Property, plant and equipment, net               318              348
Intangible assets, net                          190              176
Goodwill                                        2,195            1,800
Deferred income taxes                            14               37
Other assets                                    79               75
                                                 $           $     
                                                 5,875           6,667
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable and accrued liabilities      $           $     
                                                 1,249           1,961
  Accrued payroll and employee benefits         542              504
  Notes payable and long-term debt, current      2                553
  portion
  Liabilities of discontinued operations         -                7
        Total current liabilities               1,793            3,025
Notes payable and long-term debt, net of         1,296            1,299
current portion
Other long-term liabilities                     168              162
Stockholders' equity:
  Common stock, $.0001 par value, 2 billion
  shares authorized, 342 million and 341
  million
        shares issued and outstanding at
        January 31, 2013 and 2012,               -                -
        respectively
  Additional paid-in capital                    2,110            2,028
  Retained earnings                             510              164
  Accumulated other comprehensive loss          (2)              (11)
  Total stockholders' equity                     2,618            2,181
                                                 $           $     
                                                 5,875           6,667





SAIC, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in millions)
                                 Three Months Ended  Year Ended
                                 January 31          January 31
                                 2013     2012       2013    2012      2011
Cash flows from continuing
operations:
                                 $     $      $    $     $   
 Net income (loss)                      (161)              
                                  186               525     59        619
 Income from discontinued        -        -          (2)     (74)      (72)
 operations
 Adjustments to reconcile net
 income (loss) to net cash
 provided by continuing
 operations:
     Depreciation and            28       28         113     114       110
     amortization
     Stock-based compensation    17       19         84      83        99
     Excess tax benefits from    -        -          -       -         (11)
     stock-based compensation
     Impairment losses           11       -          13      19        4
     Net loss (gain) on sale of  1        1          (6)     (31)      (5)
     assets
     Other items                 1        (1)        4       (1)       1
     Increase (decrease) in
     cash and cash equivalents,
     excluding effects of
     acquisitions and
     divestitures, resulting
     from changes in:
      Receivables              54       43         325     (51)      (18)
      Inventory, prepaid
     expenses and other current  15       (131)      (64)    (93)      (29)
     assets
      Deferred income taxes   76       2          72      (9)       9
      Other assets            (4)      (1)        (5)     (22)      (2)
      Accounts payable and     (47)     435        (744)   757       (16)
     accrued liabilities
      Accrued payroll and      (82)     (103)      36      1         24
     employee benefits
      Income taxes payable    (35)     (5)        -       5         6
      Other long-term          (10)     9          (6)     5         (9)
     liabilities
Total cash flows provided by
operating activities of          211      135        345     762       710
continuing operations
Cash flows from investing
activities of continuing
operations:
 Expenditures for property,      (5)      (17)       (48)    (65)      (73)
 plant and equipment
 Acquisitions of businesses,     (5)      (2)        (483)   (218)     (382)
 net of cash acquired
 Net receipts (payments) for
 purchase price adjustments      -        -          1       (4)       -
 related to prior year
 acquisitions
 Proceeds from sale of assets    -        1          3       85        10
 Other items                     -        -          -       (1)       -
Total cash flows used in
investing activities of          (10)     (18)       (527)   (203)     (445)
continuing operations
Cash flows from financing
activities of continuing
operations:
 Issuance of long-term debt,     -        -          -       -         742
 net of offering costs
 Payments on notes payable and   (1)      -          (554)   (3)       (3)
 long-term debt
 Sales of stock and exercises    4        6          19      27        38
 of stock options
 Dividend payments               (41)     -          (165)   -         -
 Repurchases of stock            (1)      (1)        (22)    (471)     (601)
 Excess tax benefits from        -        -          -       -         11
 stock-based compensation
 Other items                     -        -          -       (2)       -
Total cash flows provided by
(used in) financing activities   (39)     5          (722)   (449)     187
of continuing operations
Increase (decrease) in cash and
cash equivalents from            162      122        (904)   110       452
continuing operations
Cash flows from discontinued
operations:
 Cash provided by (used in)
 operating activities of         (7)      9          (2)     (52)      4
 discontinued operations
 Cash provided by (used in)
 investing activities of         50       (2)        50      166       51
 discontinued operations
Increase in cash and cash
equivalents from discontinued    43       7          48      114       55
operations
Effect of foreign currency
exchange rate changes on cash    -        -          -       1         (1)
and cash equivalents
Total increase (decrease) in     205      129        (856)   225       506
cash and cash equivalents
Cash and cash equivalents at     531      1,463      1,592   1,367     861
beginning of period
Cash and cash equivalents at     $     $      $    $     $   
end of period                          1,592        1,592   
                                  736               736               1,367



SAIC, INC.
BACKLOG BY REPORTABLE SEGMENT
(Unaudited, $ in millions)
Backlog represents the estimated amount of future revenues to be recognized
under negotiated contracts as work is performed and excludes contract awards
which have been protested by competitors. SAIC, Inc. segregates its backlog
into two categories: funded backlog and negotiated unfunded backlog. Funded
backlog for contracts with government agencies primarily represents contracts
for which funding is appropriated less revenues previously recognized on these
contracts, and does not include the unfunded portion of contracts where
funding is incrementally appropriated or authorized on a quarterly or annual
basis by the U.S. Government and other customers, even though the contract may
call for performance over a number of years. Funded backlog for contracts with
non-government agencies represents the estimated value on contracts, which may
cover multiple future years, under which SAIC, Inc. is obligated to perform,
less revenues previously recognized on these contracts. Negotiated unfunded
backlog represents the estimated amounts of revenue to be earned in the future
from (1) negotiated contracts for which funding has not been appropriated or
otherwise authorized and (2) unexercised priced contract options. Negotiated
unfunded backlog does not include any estimate of future potential task orders
expected to be awarded under IDIQ, GSA Schedule, or other master agreement
contract vehicles.

The estimated value of backlog as of the dates presented was as follows:

                              January 31, October 31,  July 31,    April 30,
                              2013        2012         2012        2012
Defense Solutions:
Funded backlog           $      $       $      $     
                               1,972    2,174       2,013      2,026
Negotiated unfunded      4,400       4,563        4,309       4,605
backlog
Total Defense Solutions  $      $       $      $     
backlog                        6,372    6,737       6,322      6,631
Health, Energy and Civil
Solutions:
Funded backlog           $      $       $      $     
                               1,740    1,842       1,858      1,911
Negotiated unfunded      2,654       2,854        2,865       3,061
backlog
Total Health, Energy     $      $       $      $     
and Civil Solutions backlog    4,394    4,696       4,723      4,972
Intelligence and
Cybersecurity Solutions:
Funded backlog           $      $       $      $     
                               1,649    1,705       1,615      1,752
Negotiated unfunded      5,461       5,440        3,867       3,880
backlog
Total Intelligence and   $      $       $      $     
Cybersecurity Solutions        7,110    7,145       5,482      5,632
backlog
Total:
Funded backlog           $      $       $      $     
                               5,361    5,721       5,486      5,689
Negotiated unfunded      12,515      12,857       11,041      11,546
backlog
Total backlog            $      $        $       $    
                              17,876     18,578      16,527     17,235





SAIC, INC.
INTERNAL REVENUE GROWTH (CONTRACTION) PERCENTAGE CALCULATIONS (NON-GAAP
RECONCILIATION)
(Unaudited, $ in millions)
In this release, SAIC, Inc. refers to internal revenue growth (contraction)
percentage, which is a non-GAAP financial measure that is reconciled to the
most directly comparable GAAP financial measure. The Company calculates its
internal revenue growth (contraction) percentage by comparing reported revenue
for the current year period to the revenue for the prior year period adjusted
to include the actual revenue of acquired businesses for the comparable prior
year period before acquisition. This calculation has the effect of adding
revenue for the acquired businesses for the comparable prior year period to
the Company's prior year period reported revenue.

SAIC, Inc. uses internal revenue growth (contraction) percentage as an
indicator of how successful it is at growing its base business and how
successful it is at growing the revenues of the businesses that it acquires.
The integration of acquired businesses allows current management to leverage
business development capabilities, drive internal resource collaboration,
utilize access to markets and qualifications, and refine strategies to realize
synergies, which benefits both acquired and existing businesses. As a result,
the performance of the combined enterprise post-acquisition is an important
measurement. In addition, as a means of rewarding the successful integration
and growth of acquired businesses, and not acquisitions themselves, incentive
compensation for senior management is based, in part, on achievement of
revenue targets linked to internal revenue growth.

The limitation of this non-GAAP financial measure as compared to the most
directly comparable GAAP financial measure is that internal revenue growth
(contraction) percentage is one of two components of the total revenue growth
(contraction) percentage, which is the most directly comparable GAAP financial
measure. The Company addresses this limitation by presenting the total revenue
growth (contraction) percentage next to or near disclosures of internal
revenue growth (contraction) percentage. 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 internal revenue growth (contraction) percentage is
not necessarily comparable to similarly titled financial measures presented by
other companies.


Internal revenue growth (contraction) percentages for the three months and
year ended January 31, 2013 were calculated as follows:



                                           Three Months     Year
                                           Ended            Ended January31
                                           January 31
                                           2013             2013
Defense Solutions:
    Prior year period's revenues, as       $         $      4,191
    reported                               852
    Revenues of acquired businesses for    -                -
    the comparable prior year period
    Prior year period's revenues, as       $         $      4,191
    adjusted                               852
    Current year period's revenues, as     1,121            4,718
    reported
    Internal revenue growth                $         $       
                                           269              527
    Internal revenue growth percentage     32%              13%
Health, Energy and Civil Solutions:
    Prior year period's revenues, as       $         $      2,734
    reported                               737
    Revenues of acquired businesses for    50               177
    the comparable prior year period
    Prior year period's revenues, as       $         $      2,911
    adjusted                               787
    Current year period's revenues, as     711              2,788
    reported
    Internal revenue contraction           $         $      
                                           (76)             (123)
    Internal revenue contraction           -10%             -4%
    percentage
Intelligence and Cybersecurity
Solutions:
    Prior year period's revenues, as       $         $      3,574
    reported                               883
    Revenues of acquired businesses for    -                -
    the comparable prior year period
    Prior year period's revenues, as       $         $      3,574
    adjusted                               883
    Current year period's revenues, as     880              3,672
    reported
    Internal revenue growth                $         $        
    (contraction)                           (3)            98
    Internal revenue growth                0%               3%
    (contraction) percentage
Total*:
    Prior year period's revenues, as       $           $     10,497
    reported                               2,471
    Revenues of acquired businesses for    50               177
    the comparable prior year period
    Prior year period's revenues, as       $           $     10,674
    adjusted                               2,521
    Current year period's revenues, as     2,711            11,173
    reported
    Internal revenue growth                $         $       
                                           190              499
    Internal revenue growth percentage     8%               5%
*Total revenues include amounts related to Corporate and Other and
intersegment eliminations.

SAIC, INC.
CONDENSED CONSOLIDATED INCOME STATEMENT EXCLUDING THE CITYTIME LOSS PROVISION
(NON-GAAP RECONCILIATION)
(Unaudited, $ in millions, except per share amounts)
In this release, SAIC, Inc. refers to revenues, operating income (loss), and
operating margin excluding the CityTime loss provision, which are non-GAAP
financial measures. The Company calculates these measures by excluding the
CityTime loss provision from revenues, operating income (loss), and operating
margin, the most directly comparable GAAP financial measures.
The Company uses these non-GAAP financial measures to provide investors with
visibility to how its business performed excluding the CityTime loss
provision. The limitation of these non-GAAP financial measures as compared to
the most directly comparable GAAP financial measures is that the Company has
recorded the CityTime loss provision which is not reflected in these non-GAAP
financial measures. The Company addresses this limitation by presenting this
reconciliation to the most directly comparable GAAP financial measures. These
financial measures are not meant to be considered in isolation or as a
substitute for comparable GAAP financial measures and should be read only in
connection with the Company's consolidated financial statements prepared in
accordance with GAAP.

                                Three Months Ended January 31, 2012
                                As Reported      City Time       As Adjusted
                                                 Loss Provision
 Revenues                       $            $         $    
                                2,471           358            2,829
 Cost of revenues               2,479            -               2,479
 Selling, general and           106              50              156
 administrative expenses
 Operating income (loss)        (114)            308             194
 Non-operating expenses, net    (25)             -               (25)
 Income (loss) from continuing
 operations before income       (139)            308             169
 taxes
 Provision for income taxes     (22)             (41)            (63)
 Income (loss) from continuing  (161)            267             106
 operations
 Income from discontinued       -                -               -
 operations, net of tax
 Net income (loss)              $           $         $      
                                (161)           267            106
 Operating margin               -4.6%                            6.9%
                                Year Ended January 31, 2012
                                As Reported      City Time       As Adjusted
                                                 Loss Provision
 Revenues                       $    10,497  $         $   
                                                 410            10,907
 Cost of revenues               9,530            -               9,530
 Selling, general and           668              (130)           538
 administrative expenses
 Operating income               299              540             839
 Non-operating expenses, net    (104)            -               (104)
 Income from continuing
 operations before income       195              540             735
 taxes
 Provision for income taxes     (210)            (64)            (274)
 Income (loss) from continuing  (15)             476             461
 operations
 Income from discontinued       74               -               74
 operations, net of tax
 Net income                     $         $         $      
                                59               476            535
 Operating margin               2.8%                             7.7%





SAIC, INC.
DEFENSE SOLUTIONS SEGMENT
CONDENSED CONSOLIDATED INCOME STATEMENT EXCLUDING THE CITYTIME LOSS PROVISION
(NON-GAAP RECONCILIATION)
(Unaudited, $ in millions)
In this release, SAIC, Inc. refers to revenues, operating income (loss) and
operating margin of the Defense Solutions segment excluding the CityTime loss
provision, which are non-GAAP financial measures. The Company calculates these
measures by excluding the CityTime loss provision from Defense Solutions
revenues, operating income (loss), and operating margin, the most directly
comparable GAAP financial measures.
The Company uses these non-GAAP financial measures to provide investors with
visibility to how its business performed excluding the CityTime loss
provision. The limitation of these non-GAAP financial measures as compared to
the most directly comparable GAAP financial measures is that the Company has
recorded the CityTime loss provision which is not reflected in these non-GAAP
financial measures. The Company addresses this limitation by presenting this
reconciliation to the most directly comparable GAAP financial measures. These
financial measures are not meant to be considered in isolation or as a
substitute for comparable GAAP financial measures and should be read only in
connection with the Company's consolidated financial statements prepared in
accordance with GAAP.
                           Three Months Ended January 31, 2012
                                            City Time
                           As Reported      Loss             As Adjusted
                                            Provision
   Revenues                $          $          $    
                           852              358             1,210
   Operating income        $           $          $      
   (loss)                  (216)           308              92
   Operating margin        -25.4%                            7.6%
                           Year Ended January 31, 2012
                                            City Time
                           As Reported      Loss             As Adjusted
                                            Provision
   Revenues                $            $          $    
                           4,191           410             4,601
   Operating income        $           $          $      
   (loss)                  (171)           540             369
   Operating margin        -4.1%                             8.0%

SOURCE SAIC, Inc.

Website: http://www.saic.com
 
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