UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) January 25, 2005
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UNISYS CORPORATION
_______________________________________________________________________________
(Exact Name of Registrant as Specified in its Charter)
Delaware 1-8729 38-0387840
_______________________________________________________________________________
(State or Other (Commission File Number) (IRS Employer
Jurisdiction of Identification No.)
Incorporation)
Unisys Way,
Blue Bell, Pennsylvania 19424
_______________________________________________________________________________
(Address of Principal Executive Offices) (Zip Code)
(215) 986-4011
_______________________________________________________________________________
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions (see General Instruction A.2. below):
\ \ Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
\ \ Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
\ \ Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b)
\ \ Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On January 25, 2005, Unisys Corporation issued a news release to
report its financial results for the quarter and year ended December 31, 2004.
The release is furnished as Exhibit 99 to this Current Report.
The information in this Current Report, including the Exhibit attached hereto
shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended, or otherwise subject to the liabilities of
that section. The information contained herein and in the accompanying Exhibit
shall not be incorporated by reference into any registration statement or other
document filed with the Securities and Exchange Commission by Unisys
Corporation, whether before or after the date hereof, regardless of any general
incorporation language in such filing, except as shall be expressly set forth by
specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(c) The following exhibit is being furnished herewith:
99 News Release, dated January 25, 2005, of Unisys Corporation
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
UNISYS CORPORATION
Date: January 25, 2005 By: /s/ Janet B. Haugen
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Janet B. Haugen
Senior Vice President and
Chief Financial Officer
EXHIBIT INDEX
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Exhibit
No.
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99 News Release, dated January 25, 2005, of Unisys Corporation.
News Release UNISYS Media Contacts: Elizabeth Douglass, 215-986-6583 elizabeth.douglass@unisys.com Jacqueline Lewis, 215-986-5204 jacqueline.lewis@unisys.com Investor Contact: Jim Kerr, 215-986-5795 jim.kerr@unisys.com UNISYS ANNOUNCES FOURTH-QUARTER AND FULL-YEAR 2004 FINANCIAL RESULTS BLUE BELL, Pa., January 25, 2005 - Unisys Corporation (NYSE: UIS) today reported, as expected, a fourth-quarter 2004 net loss of $34.9 million, or 10 cents per share, compared with fourth-quarter 2003 net income of $111.5 million, or 33 cents per diluted share. The fourth-quarter 2004 net loss, as previously disclosed, included the following significant items: * a pre-tax, non-cash impairment charge of $126 million, or 26 cents per share, to write off contract-related capitalized assets associated with a previously disclosed challenging outsourcing operation; * a benefit of $29 million, or 9 cents per share, principally due to the favorable settlement of income tax audit issues in the quarter; * pre-tax pension expense of $23 million, or 5 cents per share, compared with pension expense of $0.2 million, or 0 cents per share, in the prior-year quarter. Revenue for the fourth quarter of 2004 declined 7% to $1.52 billion from $1.64 billion in the year-ago quarter. Currency had a 4 percentage-point positive impact on the company's revenue in the fourth quarter, reflecting a weak U.S. dollar against most major currencies worldwide. For the full year of 2004, Unisys reported net income of $38.6 million, or 11 cents per diluted share. This compares with full-year 2003 net income of $258.7 million, or 78 cents per diluted share. The full-year 2004 results included the following significant items: * pre-tax pension expense of $93.6 million, or 19 cents per share, compared with pre-tax pension income of $22.6 million, or 5 cents per share, in 2003; * a pre-tax non-cash impairment charge of $126 million, or 26 cents per share, recorded in the fourth quarter of 2004, as mentioned above; * a pre-tax cost reduction charge of $82.0 million, or 18 cents per share, recorded in the third quarter of 2004; and * net tax benefits of $97.0 million, or 29 cents per share, related to the settlement of income tax audit issues during the year, of which $68.2 million, or 20 cents per share, was recorded in the third quarter of 2004 and $28.8 million, or 9 cents per share, was recorded in the fourth quarter of 2004. COMMENTS FROM PRESIDENT AND CEO JOSEPH F. MCGRATH "This was a challenging quarter to close out 2004," said Joseph F. McGrath, Unisys President and Chief Executive Officer. "We saw weaker-than-expected demand toward the end of the quarter in our technology business. Our results were also impacted by the charge we took to write off assets associated with a challenging outsourcing operation. Overall, 2004 was clearly a disappointing year, and we are committed to doing better in 2005." McGrath said the company is focused on five key areas to drive growth and shareholder value in 2005: * Return the business process outsourcing operation to profitable growth. The company is taking aggressive actions to deal with a few challenging transformational outsourcing engagements as well as win promising new opportunities. * Drive growth and market differentiation through the Unisys 3D Visible Enterprise methodology and solution. The company is marketing 3D-VE globally and is seeing good market acceptance by customers of this approach for helping clients see the effects of business changes before they make strategic decisions. * Seize growth opportunities in the growing security market. The company is aggressively pursuing opportunities in the areas of secure supply chain, enterprise and network security, and U.S. Federal Homeland Security initiatives. * Drive greater volume in its enterprise server program. The company is implementing programs to increase sales volume in its ClearPath and ES7000 server families. These programs include targeted marketing to focused accounts, a greater focus on solution sales, and the introduction of leading- edge new models and functionality. * Reduce costs and enhance operational efficiency. The company continues to implement the administrative cost reduction actions announced in the third quarter of 2004. Unisys is also actively expanding its use of lower-cost resources, both offshore and in the United States. "Unisys has strong solutions, technology, and highly skilled people," McGrath said. "By focusing on these priorities, I am confident that we can regain our momentum in the marketplace and achieve a leadership position in the IT industry." FOURTH-QUARTER COMPANY HIGHLIGHTS Overall orders were flat in the fourth quarter. Services orders were up slightly, while technology orders showed low double-digit declines. On a geographic basis, U.S. revenue declined 10% to $665 million. Revenue in international markets declined 4% in the quarter to $859 million. The company's gross profit margin and operating profit margin in the quarter were 17.2% and (5.2%), respectively, compared to 31.2% and 9.7% in the fourth quarter of 2003. The year-over-year margin declines were principally due to the asset impairment charge and the impact of pension accounting. Selling, general and administrative (SG&A) expense and research and development (R&D) expense were 17.4% and 5.0% of revenue, respectively, in the fourth quarter of 2004 compared with 16.5% and 5.0% of revenue in the year-ago quarter. The principal reason for the increase in SG&A was the impact of pension accounting and foreign currency exchange. Operating income was a loss of $78.5 million in the fourth quarter of 2004 compared with $159.2 million of income in the year-ago quarter. The principal reasons for the decline were the asset impairment charge and the impact of pension accounting. FOURTH-QUARTER BUSINESS SEGMENT HIGHLIGHTS Customer revenue in the company's services segment declined 3% in the fourth quarter of 2004 compared with the year-ago period. All services segments showed single-digit revenue declines in the quarter. Gross profit margin in the services business declined to 6.2% from 22.1% a year ago, while the services operating margin declined to (9.4)% compared with 7.2% a year ago. The asset impairment charge discussed above impacted both gross margins and operating margins by 10 percentage points. Additionally, the change in pension expense impacted the year-over-year comparison of gross margin by 1.3 percentage points and operating margin by 1.6 percentage points. Customer revenue in the company's technology segment declined 21% in the fourth quarter. Enterprise server sales showed low double-digit declines while sales of specialized equipment showed substantial declines. Within enterprise servers, sales of both ClearPath and ES7000 systems showed double-digit declines. Technology gross margin increased to 54.2% from 51.6% a year ago, and technology operating margin declined to 12.0% from 14.6% a year ago. Excluding the impact of pension accounting in both periods, the technology gross margin increased to 54.3% in the fourth quarter of 2004 from 51.4% in the year-ago quarter. The technology operating margin excluding pension accounting declined to 12.8% compared with 13.6% in the year-ago period. CASH FLOW HIGHLIGHTS Unisys generated $227 million of cash from operations in the fourth quarter compared with operational cash flow of $378 million in the year-ago quarter. The change in operational cash flow year-over-year was primarily driven by the decline in operating income. Capital expenditures in the fourth quarter of 2004 were $123.2 million, including $83.2 million invested in revenue- generating projects. After considering capital expenditures, the company generated free cash flow of $103.7 million in the quarter compared with $259 million in the year-ago quarter. Unisys ended the year with $660.5 million of cash on hand. On January 18, 2005, Unisys repaid at maturity all outstanding $150 million of its 7 1/4% senior notes. The repayment was made from cash on hand. BUSINESS OUTLOOK "We expect some of the challenges we faced in the fourth quarter to continue into the first quarter of 2005," McGrath said. "In particular, we look for continued impact from the challenging outsourcing contracts as well as continued weak sales of large enterprise servers. Based on this, we expect approximate breakeven to a slight loss in earnings per share, excluding the impact of pension accounting, for the first quarter of 2005 on a low single- digit revenue decline. Accordingly, we are revising our financial outlook for the full year of 2005. We now expect full-year earnings per share, excluding the impact of pension accounting and stock option expensing, of 50 - 60 cents on low to mid-single digit revenue growth." CONFERENCE CALL Unisys will hold a conference call today at 8:15 a.m. Eastern Time to discuss its results. The listen-only Webcast, as well as the accompanying presentation materials, can be accessed via a link on the Unisys Investor Web site at www.unisys.com/investor. Following the call, an audio replay of the Webcast, and accompanying presentation materials, can be accessed through the same link. ABOUT UNISYS Unisys is a worldwide information technology services and solutions company. Our people combine expertise in consulting, systems integration, outsourcing, infrastructure and server technology with precision thinking and relentless execution to help clients, in more than 100 countries, quickly and efficiently achieve competitive advantage. For more information, visit www.unisys.com. FORWARD-LOOKING STATEMENTS Any statements contained in this release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, any projections of earnings, revenues or other financial items; any statements of the company's plans, strategies or objectives for future operations; statements regarding future economic conditions or performance; and any statements of belief or expectation. All forward-looking statements rely on assumptions and are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Statements in this release regarding the company's financial outlook are based in part on the company's assumptions for the economy. Risks and uncertainties that could affect the company's future results include general economic and business conditions; the effects of aggressive competition in the information services and technology markets on the company's revenues, pricing and margins and on the competitiveness of its product and services offerings; the level of demand for the company's products and services and the company's ability to anticipate and respond to changes in technology and customer preferences; the company's ability to grow outsourcing and infrastructure services and its ability to effectively and timely complete the related solutions implementations, client transitions to the new environment and work force and facilities rationalizations and to fully recover the associated outsourcing assets; the company's ability to drive profitable growth in consulting and systems integration; the degree of market acceptance of the company's high-end enterprise servers; the company's ability to maintain tight cost controls; the risks of doing business internationally and the potential for infringement claims to be asserted against the company or its clients. Additional discussion of these and other factors that could affect Unisys future results is contained in its periodic filings with the Securities and Exchange Commission. Unisys assumes no obligation to update any forward-looking statements. PRESENTATION OF INFORMATION IN THIS PRESS RELEASE This release presents information that excludes pension expense. This financial measure is considered non-GAAP. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows where amounts are either excluded or included not in accordance with generally accepted accounting principles. A reconciliation of this non- GAAP measure to the most directly comparable GAAP measure, as well as disclosure of the reasons why the company uses this measure, is included in the financial information accompanying this release. .. ### RELEASE NO: xxxx/xxxx (See accompanying financial information) Unisys is a registered trademark of Unisys Corporation. All other brands and products referenced herein are acknowledged to be trademarks or registered trademarks of their respective holders.UNISYS CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Millions, except per share data) Three Months Year Ended December 31 Ended December 31 ------------------ ------------------ 2004 2003 2004 2003 -------- -------- -------- -------- Revenue Services $1,253.8 $1,297.2 $4,724.7 $4,691.9 Technology 270.2 340.4 1,096.0 1,219.3 -------- -------- -------- -------- 1,524.0 1,637.6 5,820.7 5,911.2 Costs and expenses Cost of revenue: Services 1,119.2 979.3 3,940.8 3,654.7 Technology 142.0 147.6 517.5 541.5 -------- -------- -------- -------- 1,261.2 1,126.9 4,458.3 4,196.2 Selling, general and administrative 265.1 270.1 1,102.9 1,007.2 Research and development 76.2 81.4 294.3 280.1 -------- -------- -------- -------- 1,602.5 1,478.4 5,855.5 5,483.5 -------- -------- -------- -------- Operating income (loss) (78.5) 159.2 (34.8) 427.7 Interest expense 17.6 18.3 69.0 69.6 Other income (expense), net 6.2 19.9 27.8 22.4 -------- -------- -------- -------- Income (loss) before income taxes (89.9) 160.8 (76.0) 380.5 Provision (benefit) for income taxes (55.0) 49.3 (114.6) 121.8 -------- -------- -------- -------- Net income (loss) ($34.9) $111.5 $38.6 $258.7 ======== ======== ======== ======== Earnings (loss) per share Basic ($ .10) $ .34 $ .12 $ .79 ======== ======== ======== ======== Diluted ($ .10) $ .33 $ .11 $ .78 ======== ======== ======== ======== Shares used in the per share computations (thousands): Basic 336,873 331,371 334,896 329,349 ======== ======== ======== ======== Diluted 336,873 337,842 338,217 332,948 ======== ======== ======== ========
UNISYS CORPORATION SEGMENT RESULTS (Millions) Elimi- Total nations Services* Technology* -------- -------- -------- ---------- Three Months Ended December 31, 2004 - ------------------ Customer revenue $1,524.0 $1,253.8 $270.2 Intersegment ($85.2) 3.6 81.6 -------- -------- -------- -------- Total revenue $1,524.0 ($85.2) $1,257.4 $351.8 ======== ======== ======== ======== Gross profit percent 17.2% 6.2% 54.2% ======== ======== ======== Operating profit (loss) percent (5.2%) (9.4%) 12.0% ======== ======== ======== Three Months Ended December 31, 2003 - ------------------ Customer revenue $1,637.6 $1,297.2 $340.4 Intersegment ($94.2) 6.7 87.5 -------- -------- -------- -------- Total revenue $1,637.6 ($94.2) $1,303.9 $427.9 ======== ======== ======== ======== Gross profit percent 31.2% 22.1% 51.6% ======== ======== ======== Operating profit percent 9.7% 7.2% 14.6% ======== ======== ======== Year Ended December 31, 2004 - ------------------ Customer revenue $5,820.7 $4,724.7 $1,096.0 Intersegment ($251.8) 18.1 233.7 -------- -------- -------- -------- Total revenue $5,820.7 ($251.8) $4,742.8 $1,329.7 ======== ======== ======== ======== Gross profit percent 23.4% 14.8% 51.7% ======== ======== ======== Operating profit (loss) percent (0.6%) (1.7%) 10.2% ======== ======== ======== Year Ended December 31, 2003 - ------------------ Customer revenue $5,911.2 $4,691.9 $1,219.3 Intersegment ($319.8) 25.9 293.9 -------- -------- -------- -------- Total revenue $5,911.2 ($319.8) $4,717.8 $1,513.2 ======== ======== ======== ======== Gross profit percent 29.0% 20.2% 50.4% ======== ======== ======== Operating profit percent 7.2% 5.0% 12.7% ======== ======== ======== * 2004 results exclude charges for cost reductions and related actions as announced on October 6, 2004
UNISYS CORPORATION CONSOLIDATED BALANCE SHEETS (Millions) December 31, December 31, 2004 2003 ---------- ---------- Assets Current assets Cash and cash equivalents $660.5 $635.9 Accounts and notes receivable, net 1,136.8 1,027.8 Inventories Parts and finished equipment 93.7 121.7 Work in process and materials 122.4 116.9 Deferred income taxes 291.8 270.0 Prepaid expense and other current assets 112.4 85.7 ---------- ---------- Total 2,417.6 2,258.0 ---------- ---------- Properties 1,305.5 1,352.7 Less accumulated depreciation and amortization 881.4 928.5 ---------- ---------- Properties, net 424.1 424.2 ---------- ---------- Outsourcing assets, net 431.9 477.5 Marketable software, net 336.8 332.2 Investments at equity 197.1 153.3 Prepaid pension cost 52.5 55.5 Deferred income taxes 1,394.6 1,384.6 Goodwill 189.9 177.5 Other long-term assets 176.4 206.8 ---------- ---------- Total $5,620.9 $5,469.6 ========== ========== Liabilities and stockholders' equity Current liabilities Notes payable $1.0 $17.7 Current maturities of long-term debt 151.7 2.2 Accounts payable 487.4 513.8 Other accrued liabilities 1,316.1 1,305.7 Income taxes payable 66.6 214.1 ---------- ---------- Total 2,022.8 2,053.5 ---------- ---------- Long-term debt 898.4 1,048.3 Accrued pension liabilities 537.9 433.6 Other long-term liabilities 655.3 539.0 Stockholders' equity Common stock 3.4 3.3 Accumulated deficit (376.2) (414.8) Other capital 3,883.8 3,818.6 Accumulated other comprehensive loss (2,004.5) (2,011.9) ---------- ---------- Stockholders' equity 1,506.5 1,395.2 ---------- ---------- Total $5,620.9 $5,469.6 ========== ==========
UNISYS CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (Millions) Year Ended December 31 ------------------ 2004 2003 ------- ------- Cash flows from operating activities Net income $38.6 $258.7 Add (deduct) items to reconcile net income to net cash provided by operating activities: Equity (income) (16.1) (18.2) Depreciation of properties 136.5 144.4 Depreciation and amortization of outsourcing assets 123.3 82.3 Amortization of marketable software 134.2 123.6 Impairment charge 125.6 (Increase) decrease in deferred income taxes, net (41.2) 57.2 Increase in receivables, net (61.8) (67.7) Decrease in inventories 23.0 54.1 (Decrease) increase in accounts payable and other accrued liabilities (1.6) 25.6 Decrease in income taxes payable (120.5) (4.8) Increase (decrease) in other liabilities 111.3 (70.9) Increase in other assets (16.2) (6.0) Other 34.7 (7.5) ------- ------- Net cash provided by operating activities 469.8 570.8 ------- ------- Cash flows from investing activities Proceeds from investments 6,026.5 5,054.0 Purchases of investments (6,054.3) (5,122.1) Investment in marketable software (119.6) (144.1) Capital additions of properties (137.0) (116.7) Capital additions of outsourcing assets (177.5) (176.2) Purchases of businesses (19.4) (5.3) Proceeds from sales of businesses 1.7 ------- ------- Net cash used for investing activities (479.6) (510.4) ------- ------- Cash flows from financing activities Net reduction in short-term borrowings (20.0) (64.5) Proceeds from employee stock plans 38.8 31.5 Payments of long-term debt (3.5) (4.8) Proceeds from issuance of long-term debt 293.3 ------- ------- Net cash provided by financing activities 15.3 255.5 ------- ------- Effect of exchange rate changes on cash and cash equivalents 19.1 18.2 ------- ------- Increase in cash and cash equivalents 24.6 334.1 Cash and cash equivalents, beginning of period 635.9 301.8 ------- ------- Cash and cash equivalents, end of period $660.5 $635.9 ======= =======
Reconciliation of GAAP to Non-GAAP Financial Information The preceding release presents information with and without pension expense or income. Unisys believes that this information will enhance an overall understanding of its financial performance due to the significant change in pension expense or income from period to period and the non-operational nature of pension expense or income. The presentation of non-GAAP information is not meant to be considered in isolation or as a substitute for results prepared in accordance with accounting principles generally accepted in the United States.
UNISYS CORPORATION RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF INCOME (Millions, except per share data) Three Months Ended December 31, 2004 ---------------------------- US GAAP Less Without as Pension Pension Reported Expense Expense -------- -------- -------- Revenue $1,524.0 $1,524.0 Costs and expenses Cost of revenue 1,261.2 ($16.8) 1,244.4 Selling, general and administrative 265.1 (4.2) 260.9 Research and development 76.2 (2.1) 74.1 -------- -------- -------- 1,602.5 (23.1) 1,579.4 -------- -------- -------- Operating income (loss) (78.5) 23.1 (55.4) Interest expense 17.6 17.6 Other income (expense), net 6.2 6.2 -------- -------- -------- Income (loss) before income taxes (89.9) 23.1 (66.8) Provision (benefit) for income taxes (55.0) 7.4 (47.6) -------- -------- -------- Net income (loss) ($34.9) $15.7 ($19.2) ======== ======== ======== Earnings (loss) per share ($ .10) $ .05 ($ .05) ======== ======== ======== Three Months Ended December 31, 2003 ---------------------------- US GAAP Less Without as Pension Pension Reported Income Income -------- -------- -------- Revenue $1,637.6 $1,637.6 Costs and expenses Cost of revenue 1,126.9 ($5.7) 1,121.2 Selling, general and administrative 270.1 2.1 272.2 Research and development 81.4 3.4 84.8 -------- -------- -------- 1,478.4 (0.2) 1,478.2 -------- -------- -------- Operating income 159.2 0.2 159.4 Interest expense 18.3 18.3 Other income (expense), net 19.9 19.9 -------- -------- -------- Income before income taxes 160.8 0.2 161.0 Provision for income taxes 49.3 0.3 49.6 -------- -------- -------- Net income $111.5 ($0.1) $111.4 ======== ======== ======== Earnings per share $ .33 $ .00 $ .33 ======== ======== ========
UNISYS CORPORATION RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF INCOME (Millions, except per share data) Year Ended December 31, 2004 ---------------------------- US GAAP Less Without as Pension Pension Reported Expense Expense -------- -------- -------- Revenue $5,820.7 $5,820.7 Costs and expenses Cost of revenue 4,458.3 ($67.2) 4,391.1 Selling, general and administrative 1,102.9 (18.3) 1,084.6 Research and development 294.3 (8.1) 286.2 -------- -------- -------- 5,855.5 (93.6) 5,761.9 -------- -------- -------- Operating income (34.8) 93.6 58.8 Interest expense 69.0 69.0 Other income (expense), net 27.8 27.8 -------- -------- -------- Income (loss) before income taxes (76.0) 93.6 17.6 Provision (benefit) for income taxes (114.6) 30.0 (84.6) -------- -------- -------- Net income $38.6 $63.6 $102.2 ======== ======== ======== Earnings per share $ .11 $ .19 $ .30 ======== ======== ======== Year Ended December 31, 2003 ---------------------------- US GAAP Less Without as Pension Pension Reported Income Income -------- -------- -------- Revenue $5,911.2 $5,911.2 Costs and expenses Cost of revenue 4,196.2 ($1.3) 4,194.9 Selling, general and administrative 1,007.2 9.7 1,016.9 Research and development 280.1 14.2 294.3 -------- -------- -------- 5,483.5 22.6 5,506.1 -------- -------- -------- Operating income 427.7 (22.6) 405.1 Interest expense 69.6 69.6 Other income (expense), net 22.4 22.4 -------- -------- -------- Income before income taxes 380.5 (22.6) 357.9 Provision for income taxes 121.8 (7.2) 114.6 -------- -------- -------- Net income $258.7 ($15.4) $243.3 ======== ======== ======== Earnings per share $ .78 ($ .05) $ .73 ======== ======== ========
UNISYS CORPORATION RECONCILIATION OF GAAP TO NON-GAAP SEGMENT RESULTS OF OPERATIONS (Millions) Three Months Ended December 31, 2004 --------------------------- Less Without As Pension Pension Reported Expense Expense -------- -------- -------- Services Segment Total revenue $1,257.4 $1,257.4 Gross profit 78.2 ($16.4) 94.6 % of revenue 6.2% 7.5% Operating income (loss) (118.0) (20.1) (97.9) % of revenue -9.4% -7.8% Technology Segment Total revenue 351.8 351.8 Gross profit 190.6 (0.4) 191.0 % of revenue 54.2% 54.3% Operating income 42.0 (3.0) 45.0 % of revenue 12.0% 12.8% Total Company Total revenue 1,524.0 1,524.0 Gross profit 262.8 (16.8) 279.6 % of revenue 17.2% 18.3% Operating income (loss) (78.5) (23.1) (55.4) % of revenue -5.2% -3.6% Three Months Ended December 31, 2003 ---------------------------- Less Without As Pension Pension Reported Expense Expense -------- -------- -------- Services Segment Total revenue $1,303.9 $1,303.9 Gross profit 288.4 ($6.4) 294.8 % of revenue 22.1% 22.6% Operating income 93.9 (4.4) 98.3 % of revenue 7.2% 7.5% Technology Segment Total revenue 427.9 427.9 Gross profit 220.8 0.7 220.1 % of revenue 51.6% 51.4% Operating income 62.3 4.2 58.1 % of revenue 14.6% 13.6% Total Company Total revenue 1,637.6 1,637.6 Gross profit 510.7 (5.7) 516.4 % of revenue 31.2% 31.5% Operating income 159.2 (0.2) 159.4 % of revenue 9.7% 9.7%
UNISYS CORPORATION RECONCILIATION OF GAAP TO NON-GAAP SEGMENT RESULTS OF OPERATIONS (Millions) Year Ended December 31, 2004 ---------------------------- Less Without As Pension Pension Reported Expense Expense -------- -------- -------- Services Segment * Total revenue $4,742.8 $4,742.8 Gross profit 702.2 ($65.7) 767.9 % of revenue 14.8% 16.2% Operating income (loss) (82.8) (81.1) (1.7) % of revenue -1.7% 0.0% Technology Segment * Total revenue 1,329.7 1,329.7 Gross profit 686.8 (1.5) 688.3 % of revenue 51.7% 51.8% Operating income 136.0 (12.5) 148.5 % of revenue 10.2% 11.2% Total Company Total revenue 5,820.7 5,820.7 Gross profit 1,362.4 (67.2) 1,429.6 % of revenue 23.4% 24.6% Operating income (loss) (34.8) (93.6) 58.8 % of revenue -0.6% 1.0% Year Ended December 31, 2003 ---------------------------- Less Without As Pension Pension Reported Income Income -------- -------- -------- Services Segment Total revenue $4,717.8 $4,717.8 Gross profit 955.3 ($4.7) 960.0 % of revenue 20.2% 20.3% Operating income 236.2 4.6 231.6 % of revenue 5.0% 4.9% Technology Segment Total revenue 1,513.2 1,513.2 Gross profit 763.4 3.4 760.0 % of revenue 50.4% 50.2% Operating income 192.1 18.0 174.1 % of revenue 12.7% 11.5% Total Company Total revenue 5,911.2 5,911.2 Gross profit 1,715.0 (1.3) 1,716.3 % of revenue 29.0% 29.0% Operating income 427.7 22.6 405.1 % of revenue 7.2% 6.9% * 2004 results exclude charges for cost reductions and related actions as announced on October 6, 2004
UNISYS CORPORATION RECONCILATION OF GAAP TO NON-GAAP FORWARD-LOOKING ESTIMATED EARNINGS (LOSS) PER SHARE Three Months Year Ending Ending 3/31/2005 12/31/2005 ---------- ---------- Earnings (loss) per share- on a GAAP basis (.12)-(.09) .13-.23 Add back estimated pension expense, net of tax .09 .37 --------- --------- Earnings (loss) per share- on a NON-GAAP basis (excluding pension expense) (.03)-0 .50-.60 ========= ========= NOTE: See section in press release entitled "Forward-Looking Statements".