Growth of the Company: FY 2000

Fiscal Year 2000

SAIC and its subsidiaries experienced strong growth. For example, publicly traded Network Solutions, Inc. (NSI) (NASDAQ:NSOL), which was 22.6 percent owned by SAIC Venture Capital Corporation at he end of fiscal year 2000, reported record net revenue for its fourth quarter. NSI, the leading registrar and exclusive registry of domain names in .com, .net, and .org, provides a broad range of services that allow businesses and individuals to establish and enhance their Web presence. (Shortly after the fiscal year-end, NSI and VeriSign, Inc. announced a merger agreement in which NSI would become a wholly owned subsidiary of VeriSign.)

As a result of the company's growth, SAIC now ranks #313 on the FORTUNE 500® list of the largest U.S. companies and remains the largest employee-owned research and engineering firm in the United States. The company was also named the #1 Leading Private Info-Tech Company by Business Week, received the Best R&D Award and the Best Predator Award for past acquisitions by Red Herring, and was named one of the top ten federal contractors by Government Executive magazine.

During fiscal year 2000, SAIC launched new initiatives and expanded its business in information technology (IT), e-commerce, and next generation networks. It also enhanced its strong growth with acquisitions, mergers, and purchases.

Broadway & Seymour, Inc.'s financial services customer relationship management business was acquired to help financial institutions improve their processes and manage information.

Boeing Information Services, systems integration subsidiary of The Boeing Company, was acquired to serve SAIC's growing aerospace and military IT business.

A joint venture with Rolls-Royce called Data Systems & Solutions, was initiated to provide integrated control and knowledge management systems to energy, aerospace, and marine companies using gas turbines.

The formation of a new limited liability company named AMSEC LLC, combined SAIC's wholly owned subsidiary AMSEC Corporation with certain business units of Newport News Shipbuilding (NNS) to provide a full range of logistics, life-cycle, and fleet services to submarines, aircraft carriers, and other ships.

Purchase of the assets and operations of the Automotive Network eXchange® (ANX®), also known as the Advanced Network eXchange™, from the Automotive Industry Action Group (AIAG) to provide a secure, reliable, multi-provider virtual private network service for business-to-business internetworking.

SAIC expertise was one of the major factors in winning a number of large contracts with commercial companies and government agencies during FY00.

SAIC was part of a consortium formally known as the Pennant Alliance that won the largest outsourcing contract ever awarded by a county government. Under the contract, which has a ceiling value of $644 million, information and telecommunications services will be provided for the County of San Diego. The services will provide citizens with greater accessibility to County services.

SAIC signed a $400 million IT services agreement with Entergy, one of the largest outsourcing contracts ever awarded by a U.S. utility. Entergy, a major global energy company headquartered in New Orleans, La, provides power production, distribution operations, and related diversified services.

SAIC and its teammates will provide engineering and technical services for Air Force Materiel Command weapon systems, components and support equipment for the Design and Engineering Support Program from the Ogden Air Logistics Center. This contract has a total ceiling of $450 million.

Under a $197 million task order contract from the U.S. Navy Space and Naval Warfare Systems Command's (SPAWAR) Chief Engineer's office and the SPAWAR Program Directorates, SAIC will provide system architecture, engineering, integration and design; testing; program engineering; and acquisition management and life-cycle support.

Participating on several teams, SAIC's Energy Systems Group is providing engineering and analysis support, site operations and program support, and information technology services on three separate Department of Energy's (DOE) Federal Energy Technology Center contracts totaling more than $100 million.

SAIC was one of four contractors selected to provide support for Phase I of the U.S. Air Force Distributed Mission Training Operations and Integration program. After the downselect at the end of Phase I, one contractor will be awarded a single potential 15-year contract valued at more than $500 million to execute the overall program during Phase II.

Under the General Services Administration's (GSA) Millennia contract SAIC can provide a wide variety of IT support services to federal agencies. The indefinite delivery/indefinite quantity task order contract has a total ceiling value of $25 billion.

SAIC can provide a broad range of critical infrastructure protection support services to all government agencies under the Federal Technology Service Program SAFEGUARD, a Blanket Purchase Agreement from the General Services Administration with a total ceiling value of $250 million.