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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) October 18, 2005
_______________________________________________________________________________
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 October 18, 2005, Unisys Corporation issued a news release
regarding its financial results for the quarter ended September 30, 2005. 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 October 18, 2005, of Unisys Corporation
SIGNATURE
---------
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: October 18, 2005 By: /s/ Janet B. Haugen
-------------------
Janet B. Haugen
Senior Vice President and
Chief Financial Officer
EXHIBIT INDEX
-------------
Exhibit
No.
- ------
99 News Release, dated October 18, 2005, of Unisys Corporation.
News Release
UNISYS
Media Contact: Jacqueline Lewis, 215-986-5204 jacqueline.lewis@unisys.com
Investor Contact:
Jim Kerr, 215-986-5795 jim.kerr@unisys.com
UNISYS ANNOUNCES PRELIMINARY THIRD-QUARTER 2005 FINANCIAL RESULTS; COMPANY
ANNOUNCES STRATEGIC ACTIONS TO DRIVE PROFITABLE GROWTH, REQUIRING REVIEW OF
DEFERRED TAX ASSET
BLUE BELL, Pa., October 18, 2005 - Unisys Corporation (NYSE: UIS) today reported
a preliminary third-quarter 2005 net loss of $54.3 million, or 16 cents per
share, including a pre-tax charge of $10.7 million, or 2 cents per share,
related to the company's cash tender for its 8 1/8% notes due 2006. This
compared with third-quarter 2004 net income of $25.2 million, or 7 cents per
diluted share. The year-ago results included a net benefit of $8.2 million, or
2 cents per diluted share, from a tax benefit net of a charge for cost
reduction actions. The results are preliminary because the strategic actions
being announced today are requiring the company to review the recoverability of
its $1.6 billion deferred tax asset, net. This review will be completed by the
time the company files its timely third-quarter 10Q. The results of this
review could impact the final third-quarter financial results.
The third-quarter 2005 results include pre-tax pension expense of $44.2 million,
or 9 cents per share, compared with pension expense of $23.5 million, or 5 cents
per share, in the year-ago quarter. Excluding the impact of pension expense in
both periods, the third-quarter 2005 net loss was $24.3 million, or 7 cents per
share, compared with net income of $41.1 million, or 12 cents per diluted share,
in the third quarter of 2004. These results include the items discussed above.
Revenue for the third quarter of 2005 declined 4% to $1.39 billion from $1.45
billion in the year-ago quarter. Currency had a 1 percentage-point positive
impact on the company's revenue in the third quarter, reflecting a weak U.S.
dollar against most major currencies worldwide.
COMMENTS FROM PRESIDENT AND CEO JOSEPH W. MCGRATH
"We are disappointed by these results, and we are taking decisive actions to
accelerate our repositioning efforts," said Joseph W. McGrath, Unisys President
and Chief Executive Officer. "These actions, which are beginning now and will
roll out through 2006, will enable us to focus our resources on high-growth,
high-return market segments, reduce costs, and drive profitable revenue growth.
As these actions take hold, we believe they will enable us to build our
financial momentum and result in significantly improved profitability."
McGrath said, as a result of its strategic review process, the company will take
actions in the following areas:
* Focused investments. The company will focus its resources on high-growth
market areas - outsourcing, open source/Linux, Microsoft solutions, and
security - delivered through a vertical industry focus. Within its technology
business, the company remains strongly committed to its ClearPath and ES7000
systems and will continue to invest in operating systems and software to drive
continuous improvements in new features and capabilities.
* Divestitures. As it concentrates its resources on the areas discussed above,
the company plans to divest non-strategic areas of the business and use the
proceeds from such asset sales or divestitures to implement cost reduction
actions, fund its growth businesses, and pursue complementary tuck-in
acquisitions.
* Cost reduction. The company plans to rightsize its cost structure to support
its more focused business model and to improve margins. As a result of a
series of actions in services delivery, research and development, and selling,
general, and administrative areas, the company plans to reduce its headcount by
10% of its current workforce over the next year. Unisys expects to take cost
restructuring charges of approximately $250 - $300 million through 2006 for
these actions. These actions are expected to yield approximately $250 million
of annualized cost savings on a run-rate basis by the end of 2007.
* Sales and marketing. The company continues to make significant changes to
its sales and marketing programs to support its more focused model and drive
profitable order and revenue growth. In the sales area, Unisys has recently
significantly strengthened its business development skills by recruiting first-
class sales management and personnel and by implementing high-impact training
to more effectively manage relationships with large accounts and drive new
business.
"We believe these actions will position Unisys as a major player in large, fast-
growing market areas, with a competitive cost structure, and a highly skilled,
highly focused workforce," McGrath said. "As the actions take hold, they
should enable us to grow at or above industry growth rates, significantly
expand our margins and profitability, and position Unisys as a leader in our
chosen market segments."
THIRD-QUARTER COMPANY RESULTS
The company reported a decline in overall orders in the third quarter.
Services orders declined double digits, driven by substantial order declines in
the outsourcing business, which can vary substantially from quarter to quarter.
Systems integration and consulting orders grew double digits over a year ago.
In technology, growth in ES7000 orders was offset by order declines for
ClearPath mainframes.
Significant contracts signed in the quarter included:
* An IT outsourcing contract from the U.S. Department of Health and Human
Services (HHS) under which Unisys will support 8,000 users across eight HHS
operating divisions; the contract has a three-year base period, worth
approximately $65 million, and one two-year option period that is potentially
worth approximately an additional $35 million;
* A significant, multi-year contract from Lufthansa Systems to provide the
Unisys AirCore solution as the basis for Lufthansa Systems' next-generation
airline passenger management system;
* A five-year outsourcing contract, valued at approximately $30 million, from
ABN AMRO under which Unisys will process the bank's paper-based payments in the
Netherlands through the Unisys Payment Services and Solutions (UPSS) operation;
* A contract from the U.S. Federal Bureau of Prisons to provide systems and
services for the nationwide deployment and operation of a next-generation
federal inmate telephone system; the estimated value of the three-year base
period of the contract is $37 million, and if three additional one-year options
are exercised, the estimated value could be as high as $96 million.
The company said its financial results in the quarter reflected weakness in its
high-end server business, as a few clients deferred decisions on transactions
that had been expected to close in the quarter. In its services business, the
company's margins were impacted by lower-than-expected revenue, underutilization
of personnel and higher implementation costs in project-based businesses, and
continuing issues in the two challenging outsourcing operations.
Revenue in the U.S. grew 3% to $672 million. Revenue in international markets
declined 10% in the quarter to $715 million.
The company's gross profit margin and operating profit margin in the quarter
were 17.7% and (5.5%), respectively, compared with 23.6% and (2.6%) in the
third quarter of 2004. The year-over-year margin declines were principally due
to the impact of weakness in project-based services, lower sales of enterprise
servers, and higher pension expense. Excluding pension expense in both
periods, overall gross profit margin and operating profit margin for the third
quarter of 2005 were 19.9% and (2.3%), respectively, compared with 24.8% and
(1.0%) in the third quarter of 2004.
THIRD-QUARTER BUSINESS SEGMENT RESULTS
Unisys has a long-standing policy to evaluate business segment performance on
operating income exclusive of restructuring charges and unusual and non-
recurring items. Therefore, the comparisons below exclude the third-quarter
2004 cost reduction charges discussed above.
Customer revenue in the company's services segment grew 2% in the third quarter
of 2005 compared with the year-ago period. Services revenue growth was driven
by double-digit growth in outsourcing and single-digit growth in infrastructure
services. Growth in these areas was partially offset by a single-digit revenue
decline in systems integration and consulting and a double-digit revenue
decline in core maintenance. On a reported basis, gross profit margin in the
services business declined to 11.3% from 16.2% a year ago, while the services
operating margin was (5.1%) compared with (0.2%) a year ago. The services
margin declines in the quarter primarily reflected the weakness in project-
based services as well as the increase in pension expense. Excluding the
impact of pension expense in both periods, services gross profit margin
declined to 13.8% from 17.6% a year ago, while services operating margin
declined to (2.0%) compared with 1.6% a year ago.
Customer revenue in the company's technology segment declined 29% in the third
quarter. Sales of enterprise servers and specialized equipment both showed
double-digit declines in the quarter. On a reported basis, technology gross
margin declined to 42.4% from 51.0% a year ago, and technology operating margin
declined to (5.9%) from 13.9% a year ago. Excluding the impact of pension
expense in both periods, the technology gross margin decreased to 42.8% in the
third quarter of 2005 from 51.1% in the year-ago quarter and the technology
operating margin declined to (3.0%) compared with 14.7% in the year-ago period.
The technology margin declines in the quarter reflected lower sales and margin
in high-end enterprise servers.
CASH FLOW RESULTS
Unisys used $68 million of cash from operations in the quarter compared with
cash flow from operations of $6 million in the year-ago quarter. The decline in
operational cash flow year-over-year was primarily driven by lower net income.
Capital expenditures in the third quarter of 2005 were $85 million, including
$60 million invested in revenue-generating projects. This compared to capital
expenditures of $84 million in the year-ago quarter, including $64 million in
revenue-generating projects.
During the third quarter of 2005 Unisys announced a cash tender offer for all
of its $400 million of 8 1/8% senior notes due June 2006. Holders representing
$342.1 million aggregate principal amount of notes, or about 86% of the notes
outstanding, tendered their notes. The company financed the transaction with
the proceeds of its $550 million of senior notes, which were offered during the
quarter in two tranches -- $400 million of 8% senior notes due 2012 and $150
million of 8 1/2% senior notes due 2015. The company ended the quarter with
$466 million of cash on hand.
BUSINESS OUTLOOK
"As we work through the current significant changes to our business, we are
taking a conservative view of our financial results over the near term,"
McGrath said. "We look to close out 2005 with a profitable fourth quarter,
excluding any impact of the planned actions, driven by higher sales of
enterprise servers in our technology business. Our fourth-quarter results will
be heavily dependent on our ability to close a number of very large technology
transactions in the quarter. Given this dependency, our earnings per share,
excluding pension expense and any impact of the planned actions, could range
from 10 - 15 cents per share in the fourth quarter of 2005. We will continue
to execute against our repositioning efforts and take the aggressive actions to
drive improved results in 2006."
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, contract values 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. In particular, the company's ability to divest non-strategic
areas of the business and to use the proceeds as planned is dependent upon the
market for these businesses and on the company's ability to sell them for an
acceptable price. In addition, the estimated charges associated with planned
cost-reduction actions are subject to change based upon the degree to which the
company generates cash, the location and length of service of the affected
employees, the number of employees who leave the company voluntarily, and other
factors. The anticipated cost savings associated with the planned headcount
reductions are subject to the risk that the company may not implement the
reductions as quickly or as fully as currently planned. Statements in this
release regarding contract values are based upon various assumptions, which are
subject to change, including the projected volume of products and services to be
provided by Unisys, the contracts continuing for their full term, and for
contracts with governmental entities, the availability of appropriated funds.
Accordingly, the contract values are not guaranteed. Other 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; the company's ability to effectively
address its challenging outsourcing operations through negotiations or
operationally and to fully recover the associated outsourcing assets; the
company's ability to drive profitable growth in consulting and systems
integration; the level of demand for the company's high-end enterprise servers;
the company's ability to effectively rightsize its cost structure; 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
PRELIMINARY CONSOLIDATED STATEMENTS OF INCOME
(Millions, except per share data)
Three Months Nine Months
Ended September 30 Ended September 30
------------------ ------------------
2005 2004 2005 2004
-------- -------- -------- --------
Revenue
Services $1,174.0 $1,147.1 $3,517.7 $3,470.9
Technology 213.1 298.6 671.5 825.8
-------- -------- -------- --------
1,387.1 1,445.7 4,189.2 4,296.7
Costs and expenses
Cost of revenue:
Services 1,036.0 965.7 3,080.8 2,821.6
Technology 105.1 139.0 324.7 375.5
-------- -------- -------- --------
1,141.1 1,104.7 3,405.5 3,197.1
Selling, general and
administrative 261.0 303.7 790.0 837.8
Research and development 61.2 75.3 192.7 218.1
-------- -------- -------- --------
1,463.3 1,483.7 4,388.2 4,253.0
-------- -------- -------- --------
Operating income (loss) (76.2) (38.0) (199.0) 43.7
Interest expense 17.1 16.2 44.9 51.4
Other income
(expense), net 13.3 (3.0) 45.8 21.6
-------- -------- -------- --------
Income (loss) before
income taxes (80.0) (57.2) (198.1) 13.9
Provision (benefit) for
income taxes (25.7) (82.4) (71.2) (59.6)
-------- -------- -------- --------
Net income (loss) ($54.3) $25.2 ($126.9) $73.5
======== ======== ======== ========
Earnings (loss) per share
Basic ($ .16) $ .08 ($ .37) $ .22
======== ======== ======== ========
Diluted ($ .16) $ .07 ($ .37) $ .22
======== ======== ======== ========
Shares used in the per share
computations (thousands):
Basic 340,914 335,576 339,736 334,236
======== ======== ======== ========
Diluted 340,914 337,362 339,736 338,059
======== ======== ======== ========
UNISYS CORPORATION
PRELIMINARY SEGMENT RESULTS
(Millions)
Elimi-
Total nations Services Technology
-------- -------- -------- ----------
Three Months Ended
September 30, 2005
- ------------------
Customer revenue $1,387.1 $1,174.0 $213.1
Intersegment ($57.1) 4.5 52.6
-------- -------- -------- --------
Total revenue $1,387.1 ($57.1) $1,178.5 $265.7
======== ======== ======== ========
Gross profit percent 17.7% 11.3% 42.4%
======== ======== ========
Operating profit
(loss) percent (5.5%) (5.1%) (5.9%)
======== ======== ========
Three Months Ended
September 30, 2004
- ------------------
Customer revenue $1,445.7 $1,147.1 $298.6
Intersegment ($63.6) 5.2 58.4
-------- -------- -------- --------
Total revenue $1,445.7 ($63.6) $1,152.3 $357.0
======== ======== ======== ========
Gross profit percent 23.6% 16.2% 51.0%
======== ======== ========
Operating profit
(loss) percent (2.6%) (0.2%) 13.9%
======== ======== ========
Nine Months Ended
September 30, 2005
- ------------------
Customer revenue $4,189.2 $3,517.7 $671.5
Intersegment ($192.7) 14.2 178.5
-------- -------- -------- --------
Total revenue $4,189.2 ($192.7) $3,531.9 $850.0
======== ======== ======== ========
Gross profit percent 18.7% 11.5% 45.0%
======== ======== ========
Operating profit
(loss) percent (4.8%) (5.1%) (1.1%)
======== ======== ========
Nine Months Ended
September 30, 2004
- ------------------
Customer revenue $4,296.7 $3,470.9 $825.8
Intersegment ($166.6) 14.5 152.1
-------- -------- -------- --------
Total revenue $4,296.7 ($166.6) $3,485.4 $977.9
======== ======== ======== ========
Gross profit percent 25.6% 17.9% 50.7%
======== ======== ========
Operating profit
percent 1.0% 1.0% 9.6%
======== ======== ========
* 2004 results exclude charges for cost reductions
and related actions as announced on October 6, 2004
UNISYS CORPORATION
PRELIMINARY CONSOLIDATED BALANCE SHEETS
(Millions)
September 30, December 31,
2005 2004
------------ ------------
Assets
Current assets
Cash and cash equivalents $466.1 $660.5
Accounts and notes receivable, net 1,118.2 1,136.8
Inventories
Parts and finished equipment 86.9 93.7
Work in process and materials 109.1 122.4
Deferred income taxes 292.4 291.8
Prepaid expense and other
current assets 142.7 112.4
---------- ----------
Total 2,215.4 2,417.6
---------- ----------
Properties 1,326.8 1,305.5
Less accumulated depreciation
and amortization 928.9 881.4
---------- ----------
Properties, net 397.9 424.1
---------- ----------
Outsourcing assets, net 428.3 431.9
Marketable software, net 335.3 336.8
Investments at equity 197.1 197.1
Prepaid pension cost 43.3 52.5
Deferred income taxes 1,394.6 1,394.6
Goodwill 193.1 189.9
Other long-term assets 158.3 176.4
---------- ----------
Total $5,363.3 $5,620.9
========== ==========
Liabilities and stockholders' equity
Current liabilities
Notes payable $4.7 $1.0
Current maturities of long-term debt 60.5 151.7
Accounts payable 413.0 487.4
Other accrued liabilities 1,053.0 1,382.7
---------- ----------
Total 1,531.2 2,022.8
---------- ----------
Long-term debt 1,052.2 898.4
Accrued pension liabilities 638.9 537.9
Other long-term liabilities 708.2 655.3
Stockholders' equity
Common stock 3.4 3.4
Accumulated deficit (503.1) (376.2)
Other capital 3,911.6 3,883.8
Accumulated other comprehensive loss (1,979.1) (2,004.5)
---------- ----------
Stockholders' equity 1,432.8 1,506.5
---------- ----------
Total $5,363.3 $5,620.9
UNISYS CORPORATION
PRELIMINARY CONSOLIDATED STATEMENT OF CASH FLOWS
(Millions)
Nine Months Ended
September 30
------------------
2005 2004
------- -------
Cash flows from operating activities
Net income (loss) ($126.9) $73.5
Add (deduct) items to reconcile
net income (loss) to net cash
provided by operating activities:
Equity income (3.8) (7.2)
Depreciation and amortization of properties 89.7 99.9
Depreciation and amortization of
outsourcing assets 96.0 88.6
Amortization of marketable software 91.6 96.6
Gain on the sale of facility (15.8)
Loss on the tender of debt 10.7
Increase in deferred income taxes, net (.6) (25.3)
Decrease in receivables, net 20.7 97.2
Decrease in inventories 19.6 19.1
Decrease in accounts payable and
other accrued liabilities (344.6) (260.1)
Increase in other liabilities 199.4 19.8
Increase in other assets (48.8) (9.8)
Other 35.3 50.6
------- -------
Net cash provided by operating activities 22.5 242.9
------- -------
Cash flows from investing activities
Proceeds from investments 5,758.9 4,423.4
Purchases of investments (5,746.2) (4,427.4)
Investment in marketable software (93.7) (88.8)
Capital additions of properties (84.9) (95.5)
Capital additions of outsourcing assets (115.7) (126.6)
Purchases of businesses (.5) (18.6)
Proceeds from sales of properties 23.4
------- -------
Net cash used for investing activities (258.7) (333.5)
------- -------
Cash flows from financing activities
Net proceeds from (reduction in)
short-term borrowings 3.8 (1.0)
Proceeds from employee stock plans 12.8 30.9
Payments of long-term debt (500.2) (2.3)
Proceeds from issuance of long-term debt 541.5
------- -------
Net cash provided by financing activities 57.9 27.6
------- -------
Effect of exchange rate changes on cash
and cash equivalents (16.1) .8
------- -------
Decrease in cash and cash equivalents (194.4) (62.2)
Cash and cash equivalents, beginning of
period 660.5 635.9
------- -------
Cash and cash equivalents, end of period $466.1 $573.7
======= =======
Reconciliation of GAAP to Non-GAAP
Financial Information
The preceding release presents information with and
without pension expense. Unisys believes that this
information will enhance an overall understanding
of its financial performance due to the significant
change in pension expense from period to period
and the non-operational nature of pension expense.
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
PRELIMINARY CONSOLIDATED STATEMENTS OF INCOME
(Millions, except per share data)
Three Months Ended
September 30, 2005
----------------------------
US GAAP Less Without
as Pension Pension
Reported Expense Expense
-------- -------- --------
Revenue $1,387.1 $1,387.1
Costs and expenses
Cost of revenue 1,141.1 ($30.2) 1,110.9
Selling, general and
administrative 261.0 (9.1) 251.9
Research and development 61.2 (4.9) 56.3
-------- -------- --------
1,463.3 (44.2) 1,419.1
-------- -------- --------
Operating income (loss) (76.2) 44.2 (32.0)
Interest expense 17.1 17.1
Other income
(expense), net 13.3 13.3
-------- -------- --------
Income (loss) before
income taxes (80.0) 44.2 (35.8)
Provision (benefit) for
income taxes (25.7) 14.2 (11.5)
-------- -------- --------
Net income (loss) ($54.3) $30.0 ($24.3)
======== ======== ========
Earnings (loss) per share ($ .16) $ .09 ($ .07)
======== ======== ========
Three Months Ended
September 30, 2004
----------------------------
US GAAP Less Without
as Pension Pension
Reported Expense Expense
-------- -------- --------
Revenue $1,445.7 $1,445.7
Costs and expenses
Cost of revenue 1,104.7 ($17.1) 1,087.6
Selling, general and
administrative 303.7 (4.4) 299.3
Research and development 75.3 (2.0) 73.3
-------- -------- --------
1,483.7 (23.5) 1,460.2
-------- -------- --------
Operating income (loss) (38.0) 23.5 (14.5)
Interest expense 16.2 16.2
Other income
(expense), net (3.0) (3.0)
-------- -------- --------
Income (loss) before
income taxes (57.2) 23.5 (33.7)
Provision (benefit) for
income taxes (82.4) 7.6 (74.8)
-------- -------- --------
Net income $25.2 $15.9 $41.1
======== ======== ========
Earnings per share $ .07 $ .05 $ .12
======== ======== ========
UNISYS CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP
PRELIMINARY CONSOLIDATED STATEMENTS OF INCOME
(Millions, except per share data)
Nine Months Ended
September 30, 2005
----------------------------
US GAAP Less Without
as Pension Pension
Reported Expense Expense
-------- -------- --------
Revenue $4,189.2 $4,189.2
Costs and expenses
Cost of revenue 3,405.5 ($95.0) 3,310.5
Selling, general and
administrative 790.0 (27.1) 762.9
Research and development 192.7 (14.7) 178.0
-------- -------- --------
4,388.2 (136.8) 4,251.4
-------- -------- --------
Operating income (loss) (199.0) 136.8 (62.2)
Interest expense 44.9 44.9
Other income
(expense), net 45.8 45.8
-------- -------- --------
Income (loss) before
income taxes (198.1) 136.8 (61.3)
Provision (benefit) for
income taxes (71.2) 43.8 (27.4)
-------- -------- --------
Net income (loss) ($126.9) $93.0 ($33.9)
======== ======== ========
Earnings (loss) per share ($ .37) $ .27 ($ .10)
======== ======== ========
Nine Months Ended
September 30, 2004
----------------------------
US GAAP Less Without
as Pension Pension
Reported Expense Expense
-------- -------- --------
Revenue $4,296.7 $4,296.7
Costs and expenses
Cost of revenue 3,197.1 ($50.4) 3,146.7
Selling, general and
administrative 837.8 (14.1) 823.7
Research and development 218.1 (6.0) 212.1
-------- -------- --------
4,253.0 (70.5) 4,182.5
-------- -------- --------
Operating income 43.7 70.5 114.2
Interest expense 51.4 51.4
Other income
(expense), net 21.6 21.6
-------- -------- --------
Income before income taxes 13.9 70.5 84.4
Provision (benefit) for
income taxes (59.6) 22.6 (37.0)
-------- -------- --------
Net income $73.5 $47.9 $121.4
======== ======== ========
Earnings per share $ .22 $ .14 $ .36
======== ======== ========
UNISYS CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP
PRELIMINARY SEGMENT RESULTS OF OPERATIONS
(Millions)
Three Months Ended
September 30, 2005
---------------------------
Less Without
As Pension Pension
Reported Expense Expense
-------- -------- --------
Services Segment
Total revenue $1,178.5 $1,178.5
Gross profit 133.3 ($29.2) 162.5
% of revenue 11.3% 13.8%
Operating income (loss) (60.2) (36.7) (23.5)
% of revenue -5.1% -2.0%
Technology Segment
Total revenue 265.7 265.7
Gross profit 112.6 (1.0) 113.6
% of revenue 42.4% 42.8%
Operating income (loss) (15.6) (7.5) (8.1)
% of revenue -5.9% -3.0%
Total Company
Total revenue 1,387.1 1,387.1
Gross profit 246.0 (30.2) 276.2
% of revenue 17.7% 19.9%
Operating income (loss) (76.2) (44.2) (32.0)
% of revenue -5.5% -2.3%
Three Months Ended
September 30, 2004
---------------------------
Less Without
As Pension Pension
Reported Expense Expense
-------- -------- --------
Services Segment *
Total revenue $1,152.3 $1,152.3
Gross profit 186.2 ($16.7) 202.9
% of revenue 16.2% 17.6%
Operating income (loss) (2.2) (20.6) 18.4
% of revenue -0.2% 1.6%
Technology Segment *
Total revenue 357.0 357.0
Gross profit 182.0 (0.4) 182.4
% of revenue 51.0% 51.1%
Operating income 49.7 (2.9) 52.6
% of revenue 13.9% 14.7%
Total Company
Total revenue 1,445.7 1,445.7
Gross profit 341.0 (17.1) 358.1
% of revenue 23.6% 24.8%
Operating income (loss) (38.0) (23.5) (14.5)
% of revenue -2.6% -1.0%
* 2004 results exclude charges for cost reductions
and related actions as announced on October 6, 2004
UNISYS CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP
PRELIMINARY SEGMENT RESULTS OF OPERATIONS
(Millions)
Nine Months Ended
September 30, 2005
-----------------------------
Less Without
As Pension Pension
Reported Expense Expense
-------- -------- --------
Services Segment
Total revenue $3,531.9 $3,531.9
Gross profit 406.6 ($92.1) 498.7
% of revenue 11.5% 14.1%
Operating income (loss) (181.7) (114.6) (67.1)
% of revenue -5.1% -1.9%
Technology Segment
Total revenue 850.0 850.0
Gross profit 382.8 (2.9) 385.7
% of revenue 45.0% 45.4%
Operating income (9.2) (22.2) 13.0
% of revenue -1.1% 1.5%
Total Company
Total revenue 4,189.2 4,189.2
Gross profit 783.7 (95.0) 878.7
% of revenue 18.7% 21.0%
Operating income (loss) (199.0) (136.8) (62.2)
% of revenue -4.8% -1.5%
Nine Months Ended
September 30, 2004
-----------------------------
Less Without
As Pension Pension
Reported Expense Expense
-------- -------- --------
Services Segment *
Total revenue $3,485.4 $3,485.4
Gross profit 624.0 ($49.3) 673.3
% of revenue 17.9% 19.3%
Operating income 35.2 (61.0) 96.2
% of revenue 1.0% 2.8%
Technology Segment *
Total revenue 977.9 977.9
Gross profit 496.2 (1.1) 497.3
% of revenue 50.7% 50.9%
Operating income 94.0 (9.5) 103.5
% of revenue 9.6% 10.6%
Total Company
Total revenue 4,296.7 4,296.7
Gross profit 1,099.6 (50.4) 1,150.0
% of revenue 25.6% 26.8%
Operating income 43.7 (70.5) 114.2
% of revenue 1.0% 2.7%
* 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
Ending
12/31/2005
----------
Earnings per share-
on a GAAP basis .01 - .06
Add back estimated pension expense,
net of tax .09
---------
Earnings per share-
on a NON-GAAP basis
(excluding pension expense) .10 - .15
=========
NOTE: See section in press release entitled
"Forward-Looking Statements".
24