UNITED STATES          
                    SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C.  20549
                    __________________________________

                                FORM 10-Q

(Mark One)

[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2007

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________.

                        Commission file number 1-8729


                             UNISYS CORPORATION
            (Exact name of registrant as specified in its charter)

               Delaware                            38-0387840
       (State or other jurisdiction             (I.R.S. Employer
       of incorporation or organization)        Identification No.)

               Unisys Way
        Blue Bell, Pennsylvania                          19424
       (Address of principal executive offices)        (Zip Code)

Registrant's telephone number, including area code:  (215) 986-4011


     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act 
of 1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject 
to such filing requirements for the past 90 days.  YES [X]    NO [ ]

     Indicate by check mark whether the registrant is a large accelerated 
filer, an accelerated filer, or a non-accelerated filer.  See definition of 
"accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange 
Act.  (Check one):

Large Accelerated Filer [X]  Accelerated Filer [ ]  Non-Accelerated Filer [ ]

Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act).                YES [ ]    NO [X]


     Number of shares of Common Stock outstanding as of September 30, 2007:  
351,525,102.



<PAGE> 2


Part I - FINANCIAL INFORMATION

Item 1.  Financial Statements.

                             UNISYS CORPORATION
                         CONSOLIDATED BALANCE SHEETS
                                (Millions)
   
                                          
                                        September 30,    
                                            2007       December 31,
                                         (Unaudited)       2006
                                         -----------   ------------
Assets
------
Current assets
Cash and cash equivalents                 $  448.5       $  719.3
Accounts and notes receivable, net         1,093.0        1,164.6
Inventories:
   Parts and finished equipment               99.9           95.0
   Work in process and materials              96.0           81.2
Deferred income taxes                         30.0           30.0
Prepaid expenses and other current assets    155.1          148.4
                                          --------       --------
Total                                      1,922.5        2,238.5
                                          --------       --------

Properties                                 1,320.1        1,233.4
Less-Accumulated depreciation and
  amortization                               982.7          892.1
                                          --------       --------
Properties, net                              337.4          341.3
                                          --------       --------
Outsourcing assets, net                      426.1          401.1
Marketable software, net                     282.7          304.3
Prepaid postretirement assets                338.2          250.1
Deferred income taxes                        182.4          191.3
Goodwill                                     199.3          193.9
Other long-term assets                       124.9          117.4
                                          --------       --------
Total                                     $3,813.5       $4,037.9
                                          ========       ========
Liabilities and stockholders' equity
------------------------------------
Current liabilities
Notes payable                             $    -         $    1.2

Current maturities of long-term debt         200.3             .5
Accounts payable                             420.9          460.9
Other accrued liabilities                  1,286.2        1,469.1
                                          --------       --------
Total                                      1,907.4        1,931.7
                                          --------       --------
Long-term debt                               849.4        1,049.1
Long-term postretirement liabilities         629.7          667.7
Other long-term liabilities                  414.0          453.6

Stockholders' equity (deficit)
Common stock, shares issued: 2007, 353.7; 
   2006, 347.5                                 3.5            3.5
Accumulated deficit                       (2,479.7)      (2,386.8)
Other capital                              3,999.7        3,945.1
Accumulated other comprehensive loss      (1,510.5)      (1,626.0)
                                          --------       --------
Stockholders' equity (deficit)                13.0          (64.2)
                                          --------       --------
Total                                     $3,813.5       $4,037.9
                                          ========       ========

See notes to consolidated financial statements.



<PAGE> 3



                              UNISYS CORPORATION
                CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
                     (Millions, except per share data)


                                        Three Months          Nine Months
                                     Ended September 30    Ended September 30
                                     ------------------    ------------------
                                      2007         2006     2007       2006
                                      ----         ----     ----       ----
                                                                             
Revenue                                                                      
  Services                          $1,217.6    $1,217.6  $3,579.1   $3,618.5
  Technology                           175.5       192.5     537.7      586.7
                                    --------    --------  --------   --------
                                     1,393.1     1,410.1   4,116.8    4,205.2
Costs and expenses
   Cost of revenue:
     Services                          994.5     1,058.9   2,980.6    3,271.7
     Technology                         89.5        92.5     270.3      310.0
                                    --------    --------  --------   --------
                                     1,084.0     1,151.4   3,250.9    3,581.7
                            
Selling, general and administrative    225.8       256.1     717.8      834.2
Research and development                39.7        45.5     131.6      184.7
                                    --------    --------  --------   --------
                                     1,349.5     1,453.0   4,100.3    4,600.6
                                    --------     -------  --------   --------
Operating profit (loss)                 43.6       (42.9)     16.5     (395.4)

Interest expense                        18.5        19.0      56.1       57.9
Other income (expense), net            (19.3)         .4      (2.5)     153.1
                                    --------    --------  --------   --------
Income (loss) before income taxes        5.8       (61.5)    (42.1)    (300.2)
Provision (benefit) for income taxes    36.8        16.0      50.8        (.2)
                                    --------    --------  --------   --------
Net loss                            $  (31.0)   $  (77.5) $  (92.9)  $ (300.0)
                                    ========    ========  ========   ========
Loss per share
   Basic                            $   (.09)   $   (.23) $   (.27)  $   (.87)
                                    ========    ========  ========   ========
   Diluted                          $   (.09)   $   (.23) $   (.27)  $   (.87)
                                    ========    ========  ========   ========


See notes to consolidated financial statements.



<PAGE> 4



                           UNISYS CORPORATION
               CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
                                (Millions)

                                                    Nine Months Ended
                                                       September 30
                                                    ------------------
                                                       2007      2006
                                                    --------   --------
                                                      
Cash flows from operating activities
Net loss                                           $  (92.9)   $(300.0) 
Add (deduct) items to reconcile net loss
   to net cash used for operating activities:
Equity loss                                              -         4.3
Employee stock compensation                             8.6        4.8
Company stock issued for U.S. 401(k) plan              34.3       13.4   
Depreciation and amortization of properties            83.9       88.1
Depreciation and amortization of outsourcing assets   102.4      100.5
Amortization of marketable software                    90.1       98.7
Gain on sale of assets                                (23.4)    (153.2)   
Decrease (increase) in deferred income taxes, net       8.9      (44.0)
Decrease in receivables, net                          111.7        8.0
(Increase) decrease in inventories                    (15.6)       5.2
(Decrease) increase in accounts payable and other
  accrued liabilities                                (286.8)      69.8
Decrease in other liabilities                         (68.8)     (64.8)
(Increase) decrease in other assets                   (28.7)      21.2
Other                                                   2.1        9.3
                                                    -------     ------
Net cash used for operating activities                (74.2)    (138.7)
                                                    -------     ------
Cash flows from investing activities
   Proceeds from investments                        5,785.7    5,617.8
   Purchases of investments                        (5,793.4)  (5,620.7)
   Investment in marketable software                  (73.0)     (81.2)
   Capital additions of properties                    (56.4)     (48.2)
   Capital additions of outsourcing assets           (108.4)     (68.9)
   Purchases of businesses                             (2.0)       -
   Proceeds from sale of assets                        28.0      380.6
                                                     -------     ------
Net cash (used for) provided by 
  investing activities                               (219.5)     179.4
                                                    -------     ------
Cash flows from financing activities
   Net reduction in short-term borrowings              (1.1)     (17.3)
   Proceeds from exercise of stock options             12.3         .9
   Dividends paid to minority shareholders             (5.8)        -
   Payments of long-term debt                            -       (57.9)
   Cost of credit agreement                              -        (4.6)
                                                    -------     ------
Net cash provided by (used for) financing activities    5.4      (78.9)
                                                    -------     ------
Effect of exchange rate changes on
   cash and cash equivalents                           17.5        7.7
                                                    -------     ------

(Decrease) increase in cash and cash equivalents     (270.8)     (30.5)
Cash and cash equivalents, beginning of period        719.3      642.5
                                                    -------    -------
Cash and cash equivalents, end of period           $  448.5    $ 612.0
                                                   ========    =======



See notes to consolidated financial statements.



<PAGE> 5


Unisys Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

In the opinion of management, the financial information furnished herein 
reflects all adjustments necessary for a fair presentation of the financial 
position, results of operations and cash flows for the interim periods 
specified.  These adjustments consist only of normal recurring accruals except 
as disclosed herein.  Because of seasonal and other factors, results for interim
periods are not necessarily indicative of the results to be expected for the 
full year.

a. The following table shows how the loss per share was computed for the
three and nine months ended September 30, 2007 and 2006 (dollars in millions, 
shares in thousands):
                                         Three Months         Nine Months
                                       Ended September 30  Ended September 30
                                       ----------------    -----------------
                                      2007         2006     2007       2006
                                      ----         ----     ----       ----
    Basic Loss Per Share:
    Net loss                        $  (31.0)   $   (77.5) $  (92.9)$  (300.0)
                                    ========    =========  ========  ========
    Weighted average shares          350,765      344,182   348,715   343,351
                                    ========    =========  ========  ========
    Basic loss per share            $   (.09)   $    (.23) $   (.27) $   (.87)
                                    ========    =========  ========  ========
    Diluted Loss Per Share:
    Net loss                        $  (31.0)   $  (77.5) $   (92.9) $ (300.0)
                                    ========    =========  ========  ========
    Weighted average shares          350,765      344,182   348,715   343,351
    Plus incremental shares 
      from assumed conversions
      of employee stock plans           -             -         -         -  
                                    --------    ---------  --------  --------
    Adjusted weighted average shares 350,765      344,182   348,715   343,351
                                    ========    =========  ========  ========
    Diluted loss per share          $   (.09)   $    (.23) $   (.27) $   (.87)
                                    ========    =========  ========  ========

At September 30, 2007, no shares related to employee stock plans were 
included in the computation of diluted earnings per share since inclusion of 
these shares would be antidilutive because of the net loss incurred in the 
three and nine months ended September 30, 2007.

b.  In October 2005, the company announced a cost-reduction plan to right size 
the company's cost structure.  During 2006, the company committed to a  
reduction of 5,665 employees.  This resulted in pretax charges in 2006 of 
$330.1 million, principally related to severance costs, and was comprised of 
(a) a charge of $72.4 million for 2,250 employees in the U.S. and (b) a 
charge of $257.7 million for 3,415 employees outside the U.S. 

During the three months ended September 30, 2007, the company did not record 
additional cost reduction charges.  

During the three months ended September 30, 2006, the company committed to a 
reduction of approximately 100 employees outside the U.S. that resulted in a 
pretax charge in the third quarter of 2006 of $36.4 million, principally 
related to severance costs.  The pretax charge was recorded in the following 
statement of income classifications: cost of revenue-services, $28.1 million 
and selling, general and administrative expenses, $8.3 million.  

During the nine months ended September 30, 2007, the company consolidated 
facility space and committed to an additional reduction of 1,517 employees.  
This resulted in a pretax charge of $66.0 million.  The charge related to 
work force reductions of $52.5 million is broken down as follows: (a) 876 
employees in the U.S. for a charge of $23.6 million and (b) 641 employees 
outside the U.S. for a charge of $28.9 million.  The facility charge of 
$13.5 million principally relates to leased property that the company ceased 
using as of June 30, 2007.  The pretax charge was recorded in the following 
statement of income classifications: cost of revenue-services, $31.8 
million; cost of revenue-technology, $.5 million; selling, general and 
administrative expenses, $18.6 million; research and development expenses, 
$15.9 million; and other income (expense), net, $.8 million.  



<PAGE> 6

The cost reduction actions taken in the first nine months of 2007 when 
combined with the 2006 actions bring the total pretax charge to $396.1 
million, comprised of $382.6 million for 7,182 work force reductions and 
$13.5 million for idle lease cost. The combined employee reduction actions 
are expected to be substantially completed by the end of 2007.  Given the 
company's recent headcount reductions and its continued move to an 
increasingly mobile services delivery workforce, the company is currently 
looking at potential cost saving opportunities and may take additional 
actions in the fourth quarter to further consolidate facility space.
       
For the nine months ended September 30, 2006, a pretax charge of $323.5 
million was recorded in the following statement of income classifications:  
cost of revenue-services, $212.9 million; cost of revenue-technology, $2.0 
million; selling, general and administrative expenses, $82.0 million; 
research and development expenses, $29.4 million; and other income 
(expense), net, $2.8 million.  

A further breakdown of the individual components of these costs follows (in 
millions of dollars): 

                                                 Work Force
                                                 Reductions       
                                              --------------      Idle
                         Headcount    Total    U.S.    Int'l.  Lease Cost
                         ---------    -----    ----    ------  ----------
Balance at December 
 31, 2006                    757     $142.6   $ 26.1   $116.5
Additional provisions      1,517       66.0     23.6     28.9    $ 13.5
Minority interest                        .8                .8
Utilized                  (1,220)    (117.2)   (33.2)   (82.7)     (1.3)
Changes in estimates 
  and revisions             (126)     (17.4)     6.3    (23.0)      (.7)
Translation adjustments                 3.6               3.3        .3
                          ------     ------    -----    -----    ------
Balance at Sept. 30, 2007    928     $ 78.4    $22.8   $ 43.8    $ 11.8
                          ======     ======    =====    =====    ======
Expected future utilization:
2007 remaining three months  410      $22.2    $ 8.0   $ 13.4     $  .8
Beyond 2007                  518       56.2     14.8     30.4      11.0


c.  In March 2006, the company adopted changes to its U.S. defined benefit    
pension plans effective December 31, 2006.  The changes affected most U.S. 
employees including senior management and included ending the accrual of   
future benefits in the company's defined benefit pension plans for employees 
effective December 31, 2006.  No new entrants to the plans are allowed after 
that date.  The changes do not affect the vested accrued pension benefits of 
current and former employees, including retirees. In addition, effective  
January 1, 2007, the company increased its matching contribution for its 
U.S. defined contribution plan to 100 percent of the first 6 percent of 
eligible pay contributed by plan participants.  As a result of the 
amendment to stop accruals for future benefits in its U.S. defined benefit 
pension plans, the company recorded a pretax curtailment gain of $45.0 
million in the first quarter of 2006.  

Net periodic pension expense (income) for the three and nine months ended 
September 30, 2007 and 2006 is presented below (in millions of dollars):

                                     Three Months             Three Months
                               Ended September 30, 2007 Ended September 30, 2006
                               -----------------------  -----------------------
                                       U.S.    Int'l.            U.S.    Int'l.
                               Total   Plans   Plans    Total    Plans   Plans
                               -----   -----   -----    -----    -----   -----
    
    Service cost             $  11.4  $    .1  $ 11.3  $  26.0  $  13.9 $ 12.1
    Interest cost              101.0     69.5    31.5     91.7     63.0   28.7
    Expected return on
      plan assets             (134.5)   (97.4)  (37.1)  (114.2)   (83.1) (31.1)
    Amortization of prior
      service (benefit) cost      .1      -        .1    (  .4)   (  .5)    .1
    Recognized net actuarial 
      loss                      33.4     24.3     9.1     40.3     27.5   12.8
                               -----   ------   -----    -----    -----  -----
    Net periodic pension
      expense (income)       $  11.4  $  (3.5) $ 14.9   $ 43.4  $  20.8 $ 22.6
                              ======   ======  ======   ======  ======= ======
    


<PAGE> 7


                                 Nine Months                Nine Months
                              Ended September 30, 2007  Ended September 30, 2006
                              -----------------------   ------------------------
                                       U.S.    Int'l.            U.S.    Int'l.
                               Total   Plans   Plans     Total   Plans   Plans
                               -----   -----   ------    -----   -----   ------
    Service cost             $  33.2  $    .2   $33.0    $ 83.2  $ 47.5  $ 35.7
    Interest cost              301.1    208.5    92.6     298.5   215.3    83.2
    Expected return on
      plan assets             (401.0)  (292.3) (108.7)   (374.8) (284.1)  (90.7)
    Amortization of prior
      service (benefit) cost      .4      -        .4       (.9)   (1.5)     .6
    Recognized net actuarial 
      loss                      99.7     73.0    26.7     130.8    93.9    36.9
    Curtailment gain                                      (45.0)  (45.0)      
                             -------  -------   -------  -------  ------  -----
    Net periodic pension 
      expense (income)       $  33.4  $ (10.6)   $44.0   $ 91.8    $26.1  $65.7
                             =======  =======   =======  ======   ======  =====

The company currently expects to make cash contributions of approximately 
$75 million to its worldwide defined benefit pension plans in 2007 compared 
with $78.0 million in 2006.  For the nine months ended September 30, 2007 
and 2006, $52.6 million and $53.3 million, respectively, of cash 
contributions have been made.  In accordance with regulations governing 
contributions to U.S. defined benefit pension plans, the company is not 
required to fund its U.S. qualified defined benefit pension plan in 2007.

Net periodic postretirement benefit expense for the three and nine months 
ended September 30, 2007 and 2006 is presented below (in millions of 
dollars):
                                    Three Months                  Nine Months
                                 Ended September 30           Ended September 30
                                 -----------------            -----------------
                                2007          2006            2007         2006
                                ----          ----            ----         ----
    Interest cost               $3.1         $3.2            $ 9.2        $ 9.6
    Expected return on assets    (.1)         (.2)             (.4)         (.3)
    Amortization of prior 
      service benefit             -           (.5)              -          (1.5)
    Recognized net actuarial 
      loss                       1.2          1.4              3.8          4.0
                                ----         ----             ----        -----
    Net periodic postretirement 
      benefit expense           $4.2         $3.9            $12.6        $11.8
                                ====         ====             ====        =====

The company expects to make cash contributions of approximately $30 million 
to its postretirement benefit plan in 2007 compared with $26.9 million in 
2006.  For the nine months ended September 30, 2007 and 2006, $27.3 million 
and $19.1 million, respectively, of cash contributions have been made.

d.   In March 2006, the company sold all of the shares it owned in Nihon Unisys,
Ltd. (NUL), a publicly traded Japanese company.  The company received gross 
proceeds of $378.1 million and recognized a pretax gain of $149.9 million in 
the first quarter of 2006.  NUL will remain the exclusive distributor of the 
company's hardware and software in Japan.

In February 2007, the company sold its media business for gross proceeds of 
$28.0 million and recognized a pretax gain of $23.4 million.

e.   Under the company's stockholder approved stock-based plans, stock options,
stock appreciation rights, restricted stock and restricted stock units may 
be granted to officers, directors and other key employees.  As of September 
30, 2007, the company has granted non-qualified stock options and restricted 
stock units under these plans.  At September 30, 2007, 3.9 million shares of 
unissued common stock of the company were available for granting under these 
plans.  

For the nine months ended September 30, 2007, 54,000 stock options were 
granted.  The company currently expects that any future grants of stock 
option awards will be principally to newly hired individuals. 

The fair value of stock option awards was estimated using the Black-Scholes  
option pricing model with the following assumptions and weighted-average 
fair values:    


PAGE> 8


                                                 Nine Months Ended September 30,
                                             -------------------------------
                                                      2007          2006
                                                      ----          ----
Weighted-average fair value of grant                 $2.88          $2.46
Risk-free interest rate                               4.63%          4.35%
Expected volatility                                  35.31%         45.88%
Expected life of options in years                     3.67           3.67
Expected dividend yield                                 -              -

For periods after January 1, 2006, the company has granted an annual 
restricted stock unit award to officers, directors and other key employees 
in lieu of an annual stock option grant.  The restricted stock unit awards 
granted in March 2006 contained both time-based units (25% of the grant) and 
performance-based units (75% of the grant).  The time-based units vest in 
three equal annual installments beginning with the first anniversary of the 
grant, and the performance-based units vest in three equal annual 
installments, beginning with the first anniversary of the grant, based upon 
the achievement of pretax profit and revenue growth rate goals in 2006 (the 
first installment), 2006-2007 (the second installment), and 2006-2008 (the 
third installment).  The restricted stock unit awards granted in March 2007 
consist of only performance-based units which vest at the end of three 
years, based upon the achievement of pretax profit and revenue growth rate 
goals for the three-year period from 2007-2009.  Each performance-based unit 
will vest into zero to 1.5 shares depending on the degree to which the 
performance goals are met.  Compensation expense resulting from these awards 
is recognized as expense ratably for each installment from the date of grant 
until the date the restrictions lapse and is based on the fair market value 
at the date of grant and the probability of achievement of the specific 
performance-related goals.  The company records share-based expense in 
selling, general and administrative expense.

During the nine months ended September 30, 2007 and 2006, the company 
recorded $8.6 million and $4.8 million of share-based compensation expense, 
respectively, which is comprised of $8.4 million and $4.4 million of 
restricted stock unit expense and $.2 million and $.4 million of stock 
option expense, respectively.  

A summary of stock option activity for the nine months ended September 30, 
2007 follows (shares in thousands):

                                              Weighted-
                               Weighted-      Average        Aggregate
                               Average        Remaining      Intrinsic
                               Exercise       Contractual    Value
   Options           Shares    Price          Term (years)   ($ in millions)
   -------           ------    ---------      ------------   ---------------
Outstanding at
   December 
   31, 2006          43,190       $16.44
Granted                  54         8.87
Exercised            (1,712)        7.21
Forfeited and
   expired           (3,455)       15.18
                     -------
Outstanding at
   Sept. 30, 2007    38,077        16.95            3.27            $2.0
                     ======
Vested and 
   expected to
   vest at 
   Sept. 30, 2007    38,077        16.95            3.27             2.0   
                     ======
Exercisable at
   Sept. 30, 2007    37,614        17.08            3.27             1.8
                     ======

The aggregate intrinsic value in the above table reflects the total pretax 
intrinsic value (the difference between the company's closing stock price on 
the last trading day of the period and the exercise price of the options, 
multiplied by the number of in-the-money stock options) that would have been 
received by the option holders had all option holders exercised their 
options on September 30, 2007.  The intrinsic value of the company's stock 
options changes based on the closing price of the company's stock.  The 
total intrinsic value of options exercised for the nine months ended 
September 30, 2007 was $2.9 million; the amount for the nine months ended 
September 30, 2006 was immaterial.  As of September 30, 2007, $1.1 million 
of total unrecognized compensation cost related to stock options is expected 
to be recognized over a weighted-average period of 1.7 years.  



<PAGE> 9


A summary of restricted stock unit activity for the nine months ended 
September 30, 2007 follows (shares in thousands):
                                                                Weighted-
                                         Restricted             Average
                                           Stock                Grant Date
                                           Units                Fair Value
                                         ----------             ----------
Outstanding at
   December 31, 2006                       1,963                  $6.66
Granted                                    3,336                   8.34
Vested                                      (359)                  6.89
Forfeited and expired                       (654)                  7.36   
                                            ----
Outstanding at
   Sept. 30, 2007                          4,286                   7.84
                                           =====

The fair value of restricted stock units is determined based on the average 
of the high and low trading price of the company's common shares on the date 
of grant.  The weighted-average grant-date fair value of restricted stock 
units granted during the nine months ended September 30, 2007 and 2006 was 
$8.34 and $6.55, respectively.  As of September 30, 2007, there was $25.8 
million of total unrecognized compensation cost related to outstanding 
restricted stock units granted under the company's plans.  That cost is 
expected to be recognized over a weighted-average period of 2.1 years.  The 
total fair value of restricted share units vested during the nine months 
ended September 30, 2007 and 2006 was $3.0 million and $.8 million, 
respectively.   

Common stock issued upon exercise of stock options or upon lapse of 
restrictions on restricted stock units is newly issued shares.  Cash 
received from the exercise of stock options for the nine months ended 
September 30, 2007 and 2006 was $12.3 million and $.9 million, respectively.  
The company is currently not recognizing any tax benefits from the exercise 
of stock options or upon issuance of stock upon lapse of restrictions on 
restricted stock units in light of its tax position.  Tax benefits resulting 
from tax deductions in excess of the compensation costs recognized are 
classified as financing cash flows.

f.  The company has two business segments:  Services and Technology.  Revenue 
classifications by segment are as follows:  Services - systems integration 
and consulting, outsourcing, infrastructure services and core maintenance; 
Technology - enterprise-class servers and specialized technologies.

The accounting policies of each business segment are the same as those 
followed by the company as a whole.  Intersegment sales and transfers are 
priced as if the sales or transfers were to third parties.  Accordingly, the 
Technology segment recognizes intersegment revenue and manufacturing profit 
on hardware and software shipments to customers under Services contracts.  
The Services segment, in turn, recognizes customer revenue and marketing 
profits on such shipments of company hardware and software to customers.  
The Services segment also includes the sale of hardware and software 
products sourced from third parties that are sold to customers through the 
company's Services channels.  In the company's consolidated statements of 
income, the manufacturing costs of products sourced from the Technology 
segment and sold to Services customers are reported in cost of revenue for 
Services.  

Also included in the Technology segment's sales and operating profit are 
sales of hardware and software sold to the Services segment for internal use 
in Services engagements.  The amount of such profit included in operating 
income of the Technology segment for the three and nine months ended 
September 30, 2007 and 2006 was $14.4 million and $9.7 million, and $16.2 
million and $13.0 million, respectively.  The profit on these transactions 
is eliminated in Corporate.

The company evaluates business segment performance on operating income    
exclusive of restructuring charges and unusual and nonrecurring items, which 
are included in Corporate.  All other corporate and centrally incurred costs 
are allocated to the business segments based principally on revenue, 
employees, square footage or usage.  Therefore, the segment comparisons    
below exclude the cost reduction items mentioned above.  



<PAGE> 10

A summary of the company's operations by business segment for the three and 
nine month periods ended September 30, 2007 and 2006 is presented below (in 
millions of dollars):

                               Total    Corporate    Services    Technology
                               -----    ---------    --------    ----------
    Three Months Ended 
    September 30, 2007
    ------------------
    Customer revenue         $1,393.1                $1,217.6     $ 175.5
    Intersegment                        $ (61.2)          3.4        57.8
                             --------   -------      --------      ------
    Total revenue            $1,393.1   $ (61.2)     $1,221.0     $ 233.3
                             ========   =======      ========      ======
    Operating income (loss)  $   43.6   $  (9.5)     $   43.6     $   9.5
                             ========   =======      ========     =======


    Three Months Ended
    September 30, 2006
    ------------------  

    Customer revenue         $1,410.1                $1,217.6     $ 192.5
    Intersegment                        $ (76.5)          3.6        72.9
                             --------   --------     --------     -------
    Total revenue            $1,410.1   $ (76.5)     $1,221.2     $ 265.4
                             ========   ========     ========     =======
    Operating income (loss)  $  (42.9)  $ (42.0)     $  (15.6)    $  14.7
                             ========   =======      ========     =======

    Nine Months Ended
    September 30, 2007
    ------------------

    Customer revenue         $4,116.8               $3,579.1      $ 537.7
    Intersegment                         $(148.7)       10.9        137.8 
                             --------    --------   --------      -------
    Total revenue            $4,116.8    $(148.7)   $3,590.0      $ 675.5 
                             ========    ========   ========      =======
    Operating income (loss)  $   16.5    $ (62.5)   $   62.8      $  16.2
                             ========    ========   ========      =======

    Nine Months Ended
    September 30, 2006
    ------------------

    Customer revenue         $4,205.2               $3,618.5     $ 586.7
    Intersegment                         $(172.3)       10.8       161.5
                             --------    --------   --------     -------
    Total revenue            $4,205.2    $(172.3)   $3,629.3     $ 748.2
                             ========    ========   ========     =======
    Operating loss           $ (395.4)    $(330.7)  $  (37.7)    $ (27.0)
                             ========    ========   ========     =======


Presented below is a reconciliation of total business segment operating 
income (loss) to consolidated income (loss) before income taxes (in millions 
of dollars):


                                    Three Months               Nine Months
                                 Ended September 30        Ended September 30
                                 -----------------        -------------------

                                  2007         2006          2007        2006
                                  ----         ----          ----        ----
    Total segment
     operating income (loss)     $  53.1    $   (.9)       $  79.0     $  (64.7)
    Interest expense               (18.5)     (19.0)         (56.1)       (57.9)
    Other income (expense), net    (19.3)        .4           (2.5)       153.1 
    Cost reduction charges            -       (36.4)         (66.0)      (323.5)
    Corporate and eliminations      (9.5)      (5.6)           3.5         (7.2)
                                 -------    -------        -------      ------- 
    Total income (loss) before                                                  
      income taxes               $   5.8    $ (61.5)       $ (42.1)     $(300.2)
                                 =======    =======        =======      =======



<PAGE> 11

Customer revenue by classes of similar products or services, by segment, is 
presented below (in millions of dollars):

                                    Three Months                Nine Months
                                 Ended September 30          Ended September 30
                                 ------------------          ------------------

                                   2007       2006           2007        2006
                                   ----       ----           ----        ----

    Services 
     Systems integration
       and consulting            $  379.2    $ 377.6       $1,092.6    $1,162.9
     Outsourcing                    523.9      491.0        1,497.7     1,417.4
     Infrastructure services        208.6      237.0          667.4       691.5
     Core maintenance               105.9      112.0          321.4       346.7
                                 --------   --------       --------    --------
                                  1,217.6    1,217.6        3,579.1     3,618.5
    Technology
     Enterprise-class servers       133.9      146.2          411.8       459.9
     Specialized technologies        41.6       46.3          125.9       126.8
                                 --------   --------       --------    --------
                                    175.5      192.5          537.7       586.7
                                 --------   --------       --------    --------
    Total                        $1,393.1   $1,410.1       $4,116.8    $4,205.2
                                 ========   ========       ========    ========


g.  Comprehensive income (loss) for the three and nine months ended September  
30, 2007 and 2006 includes the following components (in millions of   
dollars):

                                  Three Months               Nine Months
                               Ended September 30         Ended September 30
                               ------------------         ------------------

                                  2007         2006          2007        2006
                                  ----         ----          ----        ----
    Net loss                     $(31.0)    $  (77.5)      $  (92.9)  $ (300.0)
    Other comprehensive income   
      (loss)                     
      Cash flow hedges
        Income (loss)                .4         (.1)            -          (.3)
        Reclassification adj.       (.4)         .5             -           .5 
      Foreign currency                     
       translation adjustments       6.4         6.0           35.8       (6.2)
      Postretirement adjustments    24.3          -            79.7    1,446.0 
                                  ------     --------       --------   -------
    Total other comprehensive 
      income (loss)                 30.7         6.4          115.5    1,440.0
                                 -------     -------       --------    -------
    Comprehensive income (loss)  $   (.3)    $ (71.1)      $   22.6   $1,140.0
                                 =======     =======       ========    =======

    Accumulated other comprehensive income (loss) as of December 31, 2006 and
    September 30, 2007 is as follows (in millions of dollars):

                                                          Cash    
                                            Translation   Flow   Postretirement
                                     Total  Adjustments  Hedges     Plans
                                     -----  -----------  ------  -------------
    Balance at December 31, 2006  $(1,626.0)  $(633.1)   $  -      $  (992.9)

    Change during period              115.5      35.8       -           79.7
                                   --------   -------    ------    ---------

    Balance at September 30, 2007 $(1,510.5)  $(597.3)   $  -     $   (913.2)
                                  =========   =======    ======    =========

h.   For equipment manufactured by the company, the company warrants that it 
will substantially conform to relevant published specifications for 12 months 
after shipment to the customer.  The company will repair or replace, at its 
option and expense, items of equipment that do not meet this warranty.  For 
company software, the company warrants that it will conform substantially to 
then-current published functional specifications for 90 days from customer's 
receipt.  The company will provide a workaround or correction for material 
errors in its software that prevents its use in a production environment.



<PAGE> 12


The company estimates the costs that may be incurred under its warranties 
and records a liability in the amount of such costs at the time revenue is 
recognized.  Factors that affect the company's warranty liability include 
the number of units sold, historical and anticipated rates of warranty 
claims and cost per claim.  The company quarterly assesses the adequacy of 
its recorded warranty liabilities and adjusts the amounts as necessary.  
Presented below is a reconciliation of the aggregate product warranty 
liability (in millions of dollars):

                                   Three Months              Nine Months
                                Ended September 30        Ended September 30
                                ------------------        ------------------

                                    2007       2006          2007        2006
                                    ----       ----          ----        ----

    Balance at beginning of 
      period                     $   8.6    $    8.9      $   8.2      $  8.0
    
    Accruals for warranties 
      issued during the period       1.4         2.1          3.9         7.1

    Settlements made during 
      the period                    (1.8)       (2.3)        (5.6)       (7.1)

    Changes in liability for 
      pre-existing warranties
      during the period, 
      including expirations          (.1)        (.1)         1.6          .6
                                 -------     --------     -------      ------
    Balance at September 30      $   8.1     $   8.6      $   8.1      $  8.6
                                 =======     ========     =======      ======

i.  Net cash refunds received during the nine months ended September 30, 2007 
for income taxes was $4.0 million compared with net cash paid for income 
taxes during the nine months ended September 30, 2006 of $60.4 million.

Cash paid during the nine months ended September 30, 2007 and 2006 for 
interest was $52.6 million and $60.4 million, respectively.

During the nine months ended September 30, 2007, the company financed $22.7 
million of internal use software licenses.

j.  Effective January 1, 2007, the company adopted FASB Interpretation No. 48,  
"Accounting for Uncertainty in Income Taxes, an interpretation of FASB   
Statement No. 109" (FIN 48).  FIN 48 prescribes a recognition threshold and  
measurement attribute for the financial statement recognition and 
measurement of a tax position taken or expected to be taken in a tax return.  
Adoption of FIN 48 did not have a material impact on the company's 
consolidated results of operations and financial position.  See note (l).
    
Effective January 1, 2007, the company adopted EITF 06-2, "Accounting for    
Sabbatical Leave and Other Similar Benefits Pursuant to FASB Statement No.  
43." EITF 06-2 applies to compensated absences that require a minimum  
service period but have no increase in the benefit even with additional  
years of service and requires the benefit to be recognized as a liability  
over the service period.  Adoption of EITF 06-2 did not have a material  
impact on the company's consolidated results of operations and financial  
position.
    
Effective January 1, 2007, the company adopted EITF 06-5, "Accounting for  
Purchases of Life Insurance - Determining the Amount That Could Be Realized  
in Accordance with FASB Technical Bulletin No. 85-4."  EITF 06-5 requires  
that a policyholder should consider any additional amounts included in the   
contractual terms of the policy in determining the amount that could be   
realized under the insurance contract on a policy-by-policy basis.  Adoption   
of EITF 06-5 did not have a material impact on the company's consolidated   
results of operations and financial position.

In September 2006, the Financial Accounting Standards Board (FASB) issued   
Statement of Financial Accounting Standards No. 157, "Fair Value 
Measurements" (SFAS No. 157).  SFAS No. 157 defines fair value, establishes 
a framework for measuring fair value and expands disclosures about fair 
value measurements.  This statement applies under other accounting 
pronouncements that require or permit fair value measurements.  Accordingly, 
SFAS No. 157 does not require any new fair value measurements.  The 
provisions of SFAS No. 157 are to be applied prospectively and are effective 
for financial statements issued for fiscal years beginning after November 
15, 2007.  The company is currently evaluating what effect, if any, adoption 
of SFAS No. 157 will have on the company's consolidated results of 
operations and financial position.



<PAGE> 13


In February 2007, the FASB issued Statement of Financial Accounting 
Standards No. 159, "The Fair Value Option for Financial Assets and Financial 
Liabilities" (SFAS No. 159).  SFAS No. 159 permits entities to choose to 
measure many financial instruments and certain other items at fair value.  
Unrealized gains and losses on items for which the fair value option has 
been elected are reportable in earnings.  The provisions of SFAS No. 159 
shall be effective as of the beginning of each reporting entity's first 
fiscal year that begins after November 15, 2007.  The company is currently 
assessing the impact of SFAS No. 159 on its consolidated results of 
operations and financial position.

EITF 06-4, "Accounting for Deferred Compensation and Postretirement Benefit  
Aspects of Endorsement Split-Dollar Life Insurance Arrangements," was issued 
in September 2006 and is effective for fiscal years beginning after December 
15, 2007.  EITF 06-4 requires that, for split-dollar life insurance 
arrangements that provide a benefit to an employee that extends to 
postretirement periods, an employer should recognize a liability for future 
benefits in accordance with SFAS No. 106.  EITF 06-4 requires that 
recognition of the effects of adoption should be either by (a) a change in 
accounting principle through a cumulative-effect adjustment to retained 
earnings as of the beginning of the year of adoption or (b) a change in 
accounting principle through retrospective application to all prior periods.  
The company is reviewing EITF 06-4 and does not currently expect that its 
adoption will have a material impact on the company's consolidated results 
of operations and financial position.

k.  In 2002, the company and the Transportation Security Administration (TSA) 
entered into a competitively awarded contract providing for the 
establishment of secure information technology environments in airports. The 
Defense Contract Audit Agency (DCAA), at the request of TSA, reviewed  
contract performance and raised some government contracting issues.  The 
company continues to work to address certain contracts administration issues 
raised by the DCAA.  In addition, the Civil Division of the Department of     
Justice, working with the Inspector General's Office of the Department of  
Homeland Security, is reviewing issues raised by the DCAA relating to labor 
categorization and overtime on the TSA contract. The company understands 
that the Civil Division's review continues at a preliminary stage.  The   
company is working cooperatively with the Civil Division.  The company does 
not know whether the Civil Division will pursue the matter, or, if pursued, 
what effect this might have on the company.

l.  Effective January 1, 2007, the company adopted FASB Interpretation No. 48, 
"Accounting for Uncertainty in Income Taxes, an interpretation of FASB 
Statement No. 109" (FIN 48).  FIN 48 prescribes a recognition threshold and 
measurement attribute for the financial statement recognition and 
measurement of a tax position taken or expected to be taken in a tax return.  
Adoption of FIN 48 did not have a material impact on the company's 
consolidated results of operations and financial position.

The company and its subsidiaries file income tax returns in the U.S. federal 
jurisdiction, and various states and foreign jurisdictions.  The company 
recently concluded a U.S. federal income tax audit of the years 2000-2003 
with no material impact.  Several U.S. state and foreign income tax audits 
are in process.  There are currently no income tax audits in process in 
either Brazil or the United Kingdom, which are the most significant 
jurisdictions outside the U.S.  For Brazil, the audit period through 2000 is 
closed and for the United Kingdom, the audit period through 2004 is closed.  
All of the various ongoing income tax audits throughout the world are not 
expected to have a material impact on the company's financial position.

The company recognizes penalties and interest accrued related to income tax 
liabilities in the provision (benefit) for income taxes in its consolidated 
statements of income.  The company had an accrual of $7.7 million for the 
payment of penalties and interest at September 30, 2007 and $10.3 million at 
December 31, 2006.  

As of December 31, 2006, the company had $38.3 million of a liability for 
unrecognized tax benefits.  In March 2007, the company settled an income tax 
audit in the Netherlands and as a result, recorded a tax benefit of $39.4 
million and received a refund, including interest, of approximately $57 
million during the second quarter of 2007.  




<PAGE> 14

After the settlement discussed above, the company had $14.4 million of a 
liability for unrecognized tax benefits as of September 30, 2007, all of 
which, if recognized, would affect the company's effective tax rate.  The 
company does not currently expect that the total amount of unrecognized tax 
benefits at September 30, 2007 will significantly increase or decrease 
within the next 12 months.




I
tem 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations.



Overview

In October 2005, Unisys announced a comprehensive, multi-year program to 
fundamentally reposition the company in the marketplace and enhance its 
profitability.  The program included: 1) focusing the company's resources on 
higher-growth market segments such as outsourcing, enterprise security, open 
source, Microsoft solutions, and real-time infrastructure while continuing to 
invest in its proprietary ClearPath enterprise servers; 2) focusing sales and 
marketing efforts on large client accounts and selected geographies; 3) 
significantly reducing the company's cost structure in line with its more 
focused business model; and 4) divesting non-core areas of the business and 
using the proceeds to fund its restructuring efforts.

In the third quarter of 2007, the company continued to make progress against 
this repositioning program.  As a result of its cost-reduction efforts and other
actions, the company's operating profit margins improved significantly in the 
quarter from year-ago levels.  The company saw this progress particularly in its
services business, which represented 87% of its revenue in the quarter.  

The company achieved this progress despite two issues that continue to impact 
its operating profitability: 1) higher temporary contract labor costs, which 
have been needed to help maintain service delivery levels during the 
transitional period as it implements headcount reductions; and 2) lower volume 
in its systems integration and consulting business due to disruptions in this 
business related to repositioning actions.  The company is focused on addressing
these issues while continuing to implement the repositioning program.

For the nine months ended September 30, 2007, the company reported a net loss of
$92.9 million, or $.27 per share, compared with a net loss of $300.0 million, or
$.87 per share, for the nine months ended September 30, 2006.  The current nine-
month period includes pretax charges relating to cost reduction actions of $66.0
million compared with $323.5 million in the prior nine-month period.

During the first nine months of 2007, the company: 

*    recorded cost reduction charges of $66.0 million for 1,517 personnel 
     reductions and idle facility costs  (see note (b));  

*    continued its program to divest non-core assets by selling its media 
     business for cash proceeds of approximately $28 million  (see note (d)); 
     and

*    settled a Netherlands income tax audit and as a result recorded a tax 
     benefit of approximately $39 million and received a cash refund, 
     including interest, of approximately $57 million (see note (l)).



<PAGE> 15

Results of operations

Company results
     
For the three months ended September 30, 2007, the company reported a net loss 
of $31.0 million, or $.09 per share, compared with a net loss of $77.5 million, 
or $.23 per share, for the three months ended September 30, 2006.  The current 
period includes no pretax charges relating to cost reduction actions compared 
with $36.4 million of charges in the prior-year period.

Revenue for the quarter ended September 30, 2007 was $1.39 billion compared with
$1.41 billion for the third quarter of 2006, a decrease of 1% from the prior 
year.  Technology revenue declined 9% while Services revenue was flat when 
compared with the prior year.  Foreign currency fluctuations had a 3-percentage-
point positive impact on revenue in the current period compared with the year-
ago period.  U.S. revenue declined 5% in the quarter compared with the year-ago 
period, principally driven by weakness in infrastructure services. Revenue in 
international markets increased 2% due to increases in Latin America, Canada and
Pacific/Asia, offset in part by a decrease in Europe.  On a constant currency 
basis, international revenue declined 4% in the three months ended September 30,
2007 compared with the three months ended September 30, 2006.

During the three months ended September 30, 2007, the company did not record 
additional cost reduction charges.

During the three months ended September 30, 2006, the company committed to a 
reduction of approximately 100 employees outside the U.S. that resulted in a 
pretax charge in the third quarter of 2006 of $36.4 million, principally related
to severance costs.  The pretax charge was recorded in the following statement 
of income classifications: cost of revenue-services, $28.1 million and selling, 
general and administrative expenses, $8.3 million.

The cost reduction actions taken in the first nine months of 2007 when combined 
with the 2006 actions bring the total pretax charge to $396.1 million, comprised
of $382.6 million for 7,182 work force reductions and $13.5 million for idle 
lease cost. The combined employee reduction actions are expected to be 
substantially completed by the end of 2007.  Net of investments in offshore 
resources and outsourcing of certain internal, non-client facing functions, the 
company anticipates that these combined actions will yield, on a run-rate basis,
annualized cost savings in excess of $365 million by the first half of 2008.  
Given the company's recent headcount reductions and its continued move to an 
increasingly mobile services delivery workforce, the company is currently 
looking at potential cost saving opportunities and may take additional actions 
in the fourth quarter to further consolidate facility space.

In March 2006, the company adopted changes to its U.S. defined benefit    
pension plans effective December 31, 2006.  The changes affected most U.S.     
employees including senior management and included ending the accrual of future 
benefits in the company's defined benefit pension plans for employees 
effective December 31, 2006.  No new entrants to the plans are allowed after 
that date.  The changes do not affect the vested accrued pension benefits of 
current and former employees, including retirees. In addition, effective  
January 1, 2007, the company increased its matching contribution for its 
U.S. defined contribution plan to 100 percent of the first 6 percent of 
eligible pay contributed by plan participants.  As a result of the 
amendment to stop accruals for future benefits in its U.S. defined benefit 
pension plans, the company recorded a pretax curtailment gain of $45.0 
million in the first quarter of 2006.  

Pension expense for the three months ended September 30, 2007 was $11.4 million 
compared with $43.4 million for the three months ended September 30, 2006.  The 
company records pension income or expense, as well as other employee-related 
costs such as payroll taxes and medical insurance costs, in operating income in 
the following income statement categories:  cost of sales; selling, general and 
administrative expenses; and research and development expenses.  The amount 
allocated to each category is based on where the salaries of active employees 
are charged.

Total gross profit margin was 22.2% in the three months ended September 30, 2007
compared with 18.3% in the three months ended September 30, 2006.  Included in 
the gross profit margin in 2006 were cost reduction charges of $28.1 million.  
The increase in gross profit margin excluding the 2006 charges principally 
reflects the benefits derived from the cost reduction actions as well as a 
decline in pension expense of $22.3 million ($8.8 million for the three months 
ended September 30, 2007 compared with $31.1 million in the year-ago period).



<PAGE> 16

Selling, general and administrative expenses were $225.8 million for the three 
months ended September 30, 2007 (16.2% of revenue) compared with $256.1 million 
(18.2% of revenue) in the year-ago period.  During the current quarter, as a 
result of unfavorable administrative tax rulings, the company recorded a charge 
of approximately $6 million principally related to a sales and use tax matter.  
In addition, as a result of a favorable arbitration ruling, the company reversed
approximately $6.5 million of outstanding bad debt reserves related to a former 
systems integration contract.  Included in selling, general and administrative 
expense in the year-ago quarter were cost reduction charges of $8.3 million.  
The decrease in selling, general and administrative expense excluding these 
items principally reflects the benefits derived from the cost reduction actions 
as well as a decline in pension expense of $6.3 million ($2.9 million for the 
three months ended September 30, 2007 compared with $9.2 million in the year-ago
period).  

Research and development (R&D) expenses in the third quarter of 2007 were $39.7 
million compared with $45.5 million in the third quarter of 2006.  The company 
continues to invest in proprietary operating systems and in key programs within 
its industry practices.  The reduction in R&D in 2007 compared with 2006 
principally reflects the benefits derived from the cost reduction actions as 
well as a decline in pension expense of $3.3 million ($.2 million of income for 
the three months ended September 30, 2007 compared with $3.1 million of expense 
in the year-ago period).  

For the third quarter of 2007, the company reported a pretax operating income of
$43.6 million compared with a pretax operating loss of $42.9 million in the 
third quarter of 2006.  The third quarter of 2006 included a $36.4 million 
charge related to cost reduction actions.  Contributing to the increase in 
operating profit was a decline in pension expense of $32.0 million ($11.4 
million for the three months ended September 30, 2007 compared with $43.4 
million in the year-ago period), as well as the benefits derived from the cost 
reduction actions.

Interest expense for the three months ended September 30, 2007 was $18.5 million
compared with $19.0 million for the three months ended September 30, 2006.

Other income (expense), net, which can vary from period to period, was expense 
of $19.3 million in the third quarter of 2007, compared with income of $.4 
million in 2006.  The difference in 2007 from 2006 was principally due to 
expense of $10.7 million in the current quarter to settle an escheat audit and 
foreign exchange losses in the current period of $6.1 million compared with $.2 
million gain in the prior-year period.  In addition, there was an expense of 
$6.2 million in the current quarter compared with expense of $2.3 million in the
last year's third quarter related to minority shareholders' portion of income of
iPSL, a 51% owned subsidiary which is fully consolidated by the company.  The 
change was due to increased profit from iPSL resulting from the renegotiated 
contract in January 2006 and benefits derived from cost reduction actions.

Income (loss) before income taxes for the three months ended September 30, 2007 
was income of $5.8 million compared with a loss of $61.5 million in 2006.  The 
provision for income taxes was $36.8 million in the current quarter compared 
with a provision of $16.0 million in the year-ago period.  Due to the 
establishment of a full valuation allowance for all of the company's U.S. 
deferred tax assets and certain international subsidiaries in the third quarter 
of 2005, the company no longer has a meaningful effective tax rate.  The company
will record a tax provision or benefit for those international subsidiaries that
do not have a full valuation allowance against their deferred tax assets.  Any 
profit or loss recorded for the company's U.S. operations will have no provision
or benefit associated with it.  As a result, the company's provision or benefit 
for taxes will vary significantly quarter to quarter depending on the geographic
distribution of income.  In the current quarter, income increased in certain 
international jurisdictions due in large part to profit improvement caused by 
the company's cost reduction actions.  In addition, the provision for income 
taxes in the current period includes $8.9 million due to a reduction in the UK 
income tax rate.  The rate reduction from 30% to 28% was enacted in the third 
quarter effective April 1, 2008.  The provision of $8.9 million was caused by a 
write down of the UK deferred tax assets to the 28% rate.

For the nine months ended September 30, 2007, the company reported a net loss of
$92.9 million, or $.27 per share, compared with a net loss of $300.0 million, or
$.87 per share, for the nine months ended September 30, 2006.  The current nine-
month period includes pretax charges relating to cost reduction actions of $66.0
million compared with $323.5 million in the prior nine-month period.



<PAGE> 17

Total revenue for the nine months ended September 30, 2007 and 2006 was $4.12 
billion and $4.21 billion, respectively.  Foreign currency translations had a 3-
percentage-point positive impact on revenue in the current nine months when 
compared with the year-ago period.  In the current nine-month period, Services 
revenue decreased 1% and Technology revenue decreased 8%.

U.S. revenue declined 5% in the current nine-month period compared with the 
year-ago period and revenue in international markets was up slightly. On a 
constant currency basis, international revenue decreased 6% in the nine months 
ended September 30, 2007.

Pension expense for the nine months ended September 30, 2007 was $33.4 million 
compared with $91.8 million of pension expense for the nine months ended 
September 30, 2006. The decrease in pension expense in 2007 from 2006 was 
principally due to the change in the U.S. defined benefit pension plans, 
discussed above.

Total gross profit margin was 21.0% in the nine months ended September 30, 2007 
compared with 14.8% in the year-ago period.  Included in the gross profit margin
in 2007 and 2006 were cost reduction charges of $32.3 million and $214.9 
million, respectively.  The increase in gross profit margin excluding these 
charges principally reflects the benefits derived from the cost reduction 
actions as well as a decline in pension expense of $42.9 million ($25.1 million 
for the nine months ended September 30, 2007 compared with $68.0 million in the 
year-ago period).

For the nine months ended September 30, 2007, selling, general and 
administrative expenses were $717.8 million (17.4% of revenue) compared with 
$834.2 million (19.8% of revenue) for the nine months ended September 30, 2006. 
Included in selling, general and administrative expense in 2007 and 2006 were 
cost reduction charges of $18.6 million and $82.0 million, respectively.  The 
decrease in selling, general and administrative expense excluding these charges 
principally reflects the benefits derived from the cost reduction actions as 
well as a decline in pension expense of $10.4 million ($9.1 million for the nine
months ended September 30, 2007 compared with $19.5 million in the year-ago 
period). 

R&D expense for the nine months ended September 30, 2007 was $131.6 million 
compared with $184.7 million a year ago.  Included in R&D expense in 2007 and 
2006 were cost reduction charges of $15.9 million and $29.4 million, 
respectively.  The reduction in R&D in 2007 compared with 2006 excluding these 
charges principally reflects the benefits derived from the cost reduction 
actions as well as a decline in pension expense of $5.0 million ($.7 million of 
income for the nine months ended September 30, 2007 compared with $4.3 million 
of expense in the year-ago period). 

For the nine months ended September 30, 2007, the company reported an operating 
profit of $16.5 million compared with an operating loss of $395.4 million for 
the nine months ended September 30, 2006.  Included in operating profit was 
charges of $66.8 million and $323.5 million in 2007 and 2006, respectively, 
related to the cost reduction actions.  Contributing to the increase in 
operating profit was a decline in pension expense of $58.4 million ($33.4 
million for the nine months ended September 30, 2007 compared with $91.8 million
in the year-ago period), as well as the benefits derived from the cost reduction
actions.

Interest expense for the nine months ended September 30, 2007 was $56.1 million 
compared with $57.9 million for the nine months ended September 30, 2006.

Other income (expense), net was an expense of $2.5 million in the current nine-
month period compared with income of $153.1 million in the year-ago period.  
Other income (expense) in 2007 principally reflects a gain of $23.4 million on 
the sale of the company's media business as well as an expense of $10.7 million 
to settle an escheat audit.  The 2006 period principally reflects a gain of 
$149.9 million from the sale of all of the company's shares in NUL (see note 
(d)).

Income (loss) before income taxes was a loss of $42.1 million in the nine months
ended September 30, 2007 compared with a loss of $300.2 million last year.  The 
provision for income taxes was $50.8 million in the current period compared with
a benefit of $.2 million in the year-ago period.  The tax provision in the 
current period includes $39.4 million related to the Netherlands income tax 
audit settlement (see note (l)) and $8.9 million related to the U.K income tax 
rate change (discussed above). 



<PAGE> 18

In 2002, the company and the Transportation Security Administration (TSA)   
entered into a competitively awarded contract providing for the establishment of
secure information technology environments in airports. The Defense Contract 
Audit Agency (DCAA), at the request of TSA, reviewed contract performance and 
raised some government contracting issues.  The company continues to work to 
address certain contracts administration issues raised by the DCAA.  In 
addition, the Civil Division of the Department of Justice, working with the 
Inspector General's Office of the Department of Homeland Security, is reviewing 
issues raised by the DCAA relating to labor categorization and overtime on the 
TSA contract. The company understands that the Civil Division's review continues
at a preliminary stage.  The company is working cooperatively with the Civil 
Division.  The company does not know whether the Civil Division will pursue the 
matter, or, if pursued, what effect this might have on the company.

Segment results

The company has two business segments:  Services and Technology.  Revenue 
classifications by segment are as follows:  Services - systems integration and 
consulting, outsourcing, infrastructure services and core maintenance; 
Technology - enterprise-class servers and specialized technologies.  The 
accounting policies of each business segment are the same as those followed by 
the company as a whole.  Intersegment sales and transfers are priced as if the 
sales or transfers were to third parties.  Accordingly, the Technology segment 
recognizes intersegment revenue and manufacturing profit on hardware and 
software shipments to customers under Services contracts.  The Services segment,
in turn, recognizes customer revenue and marketing profit on such shipments of 
company hardware and software to customers.  The Services segment also includes 
the sale of hardware and software products sourced from third parties that are 
sold to customers through the company's Services channels.  In the company's 
consolidated statements of income, the manufacturing costs of products sourced 
from the Technology segment and sold to Services customers are reported in cost 
of revenue for Services.  
          
Also included in the Technology segment's sales and operating profit are sales 
of hardware and software sold to the Services segment for internal use in 
Services agreements.  The amount of such profit included in operating income of 
the Technology segment for the three and nine months ended September 30, 2007 
and 2006 was $14.4 million and $9.7 million, and $16.2 million and $13.0 
million, respectively. The profit on these transactions is eliminated in 
Corporate.  
          
The company evaluates business segment performance on operating income exclusive
of restructuring charges and unusual and nonrecurring items, which are included 
in Corporate.  All other corporate and centrally incurred costs are allocated to
the business segments, based principally on revenue, employees, square footage 
or usage.  Therefore, the segment comparisons below exclude the cost reduction 
items mentioned above.  

Information by business segment is presented below (in millions of dollars):

                                       Elimi-    
                            Total      nations      Services    Technology
                           -------     -------      --------    ----------
Three Months Ended
September 30, 2007
------------------
Customer revenue          $1,393.1                  $1,217.6     $175.5
Intersegment                           $(61.2)           3.4       57.8
                          --------     -------      --------     ------
Total revenue             $1,393.1     $(61.2)      $1,221.0     $233.3
                          ========     =======      ========     ====== 
Gross profit percent          22.2 %                    17.7 %     44.6 %
                          ========                  ========     ======
Operating profit percent       3.1 %                     3.6 %      4.0 %
                          ========                  ========     ======      

Three Months Ended
September 30, 2006 
------------------
Customer revenue          $1,410.1                  $1,217.6     $192.5
Intersegment                           $(76.5)           3.6       72.9
                          --------     -------      --------     ------ 
Total revenue             $1,410.1     $(76.5)      $1,221.2     $265.4
                          ========     =======      ========     ====== 
Gross profit percent          18.3 %                    13.9 %     46.3 %
                          ========                  ========     ======
Operating profit                                  
  (loss) percent              (3.0)%                    (1.3)%     5.5 %
                          ========                  ========     ======

Gross profit percent and operating income percent are as a percent of total 
revenue.



<PAGE> 19

Customer revenue by classes of similar products or services, by segment, is 
presented below (in millions of dollars):


                                    Three Months                
                                 Ended September 30      Percent    
                                 ------------------      Increase    
                                   2007       2006       (Decrease)    
                                   ----       ----       ----------            
    Services 
     Systems integration
       and consulting            $  379.2    $ 377.6          -   
     Outsourcing                    523.9      491.0          7 %
     Infrastructure services        208.6      237.0        (12)%
     Core maintenance               105.9      112.0         (5)% 
                                 --------   --------       
                                  1,217.6    1,217.6          -
    Technology
     Enterprise-class servers       133.9      146.2         (8)%    
     Specialized technologies        41.6       46.3        (10)%  
                                 --------   --------       
                                    175.5      192.5         (9)%
                                 --------   --------       
    Total                        $1,393.1   $1,410.1         (1)%
                                 ========   ========       


In the Services segment, customer revenue was $1.22 billion for the three months
ended September 30, 2007 unchanged from the three months ended September 30, 
2006.  Foreign currency translation had a 4-percentage-point positive impact on 
Services revenue in current quarter compared with the year-ago period.  

Revenue from systems integration and consulting remained flat with an increase 
of $1.6 million from $377.6 million in the September 2006 quarter to $379.2 
million in the September 2007 quarter.  Although revenue was flat in the current
quarter, the company continues to work through disruptions in this business 
related to changes made in the repositioning program.

Outsourcing revenue increased by $32.9 million or 7% for the three months ended 
September 30, 2007 compared with the three months ended September 30, 2006, led 
by increases in both information technology outsourcing (ITO) and business 
processing outsourcing (BPO).  

Infrastructure services revenue declined by $28.4 million or 12% for the three 
month period ended September 30, 2007 compared with the three month period ended
September 30, 2006 due to weakness in network design and consulting projects, as
well as the shift of project-based infrastructure work to managed outsourcing 
contracts.  This trend is expected to continue.

Core maintenance revenue declined by $6.1 million or 5% in the current quarter 
compared with the prior-year quarter.  The company expects the secular decline 
of core maintenance will continue.

Services gross profit was 17.7% in the third quarter of 2007 compared with 13.9%
in the year-ago period.  Services operating income (loss) percent was 3.6% in 
the three months ended September 30, 2007 compared with (1.3)% in the three 
months ended September 30, 2006.  The increase in Services operating profit 
margin principally reflects the benefits derived from the cost reduction actions
as well as a decline in pension expense of $26.7 million ($11.2 million for the 
three months ended September 30, 2007 compared with $37.9 million in the year-
ago period).  During the quarter, the company continued to experience higher 
temporary contract labor costs, which have been needed to help maintain service 
delivery levels during the transitional period as it implements headcount 
reductions; and lower volume in its systems integration and consulting business 
due to disruptions in this business related to repositioning actions.  The 
company is focused on addressing these issues while continuing to implement the 
repositioning program.

In the Technology segment, customer revenue was $176 million in the current 
quarter compared with $193 million in the year-ago period for a decrease of 9%. 
Foreign currency translation had a positive impact of approximately 1-percentage
points on Technology revenue in the current period compared with the prior-year 
period.  



<PAGE> 20

Revenue for the company's enterprise-class servers, which includes the company's
ClearPath and ES7000 product families, decreased from $146.2 million for the 
three months ended September 30, 2006 to $133.9 million for the three months 
ended September 30, 2007, a decline of $12.3 million or 8%.  Included in the 
three months ended September 30, 2007 were systems upgrades from large financial
services customers in Latin America and Pacific/Asia.  The revenue decline 
reflects the continuing secular decline in enterprise servers.

Revenue from specialized technologies, which includes the company's payment 
systems products, third-party technology products and royalties from the 
company's agreement with NUL, decreased from $46.3 million for the three months 
ended September 30, 2006 to $41.6 million for the three months ended September 
30, 2007, a decrease of $4.7 million or 10%.  The decline was principally due to
reduced revenue from the company's former semiconductor test equipment business 
that was sold in 2006.  Revenue from NUL will decline in 2008 due to expiration 
of the one-time fixed royalty fee of $225 million under an agreement executed in
2005.  The company currently is recognizing $18.8 million per quarter under this
royalty agreement over the three-year period ending March 31, 2008.

Technology gross profit was 44.6% in the current quarter compared with 46.3% in 
the year-ago quarter.  Technology operating income percent was 4.0% in the three
months ended September 30, 2007 compared with 5.5% in the three months ended 
September 30, 2006.  The decline in revenue and operating margins in 2007 
compared with 2006 primarily reflects the continuing secular decline in 
enterprise servers. 
 


Information by business segment is presented below (in millions of dollars):


                                       Elimi-    
                            Total      nations      Services    Technology
                           -------     -------      --------    ----------

Nine Months Ended
September 30, 2007
------------------

Customer revenue          $4,116.8                  $3,579.1     $537.7
Intersegment                           $(148.7)         10.9      137.8
                          --------     -------      --------     ------
Total revenue             $4,116.8     $(148.7)     $3,590.0     $675.5
                          ========     =======      ========     ====== 
Gross profit percent          21.0 %                    16.7 %     43.7 %
                          ========                  ========     ======
Operating profit percent       0.4 %                     1.7 %      2.4 %
                          ========                  ========     ======    


Nine Months Ended
September 30, 2006 
------------------

Customer revenue          $4,205.2                  $3,618.5     $586.7
Intersegment                           $(172.3)         10.8      161.5
                          --------     -------      --------     ------ 
Total revenue             $4,205.2     $(172.3)     $3,629.3     $748.2
                          ========     =======      ========     ====== 
Gross profit percent          14.8 %                    14.4 %     42.1 %
                          ========                  ========     ======
Operating profit                                  
  (loss) percent              (9.4)%                    (1.0)%     (3.6)%
                          ========                  ========     ======


Gross profit percent and operating income percent are as a percent of total 
revenue.



<PAGE> 21


Customer revenue by classes of similar products or services, by segment, is 
presented below (in millions of dollars):

                                    Nine Months                
                                 Ended September 30      Percent    
                                 ------------------      Increase    
                                   2007       2006       (Decrease)    
                                   ----       ----       ----------         
    Services 
     Systems integration
       and consulting            $1,092.6   $1,162.9         (6)%   
     Outsourcing                  1,497.7    1,417.4          6 %
     Infrastructure services        667.4      691.5         (3)%
     Core maintenance               321.4      346.7         (7)% 
                                 --------   --------       
                                  3,579.1    3,618.5         (1)%
    Technology
     Enterprise-class servers       411.8      459.9        (10)%    
     Specialized technologies       125.9      126.8         (1)%  
                                 --------   --------       
                                    537.7      586.7         (8)%
                                 --------   --------       
    Total                        $4,116.8   $4,205.2         (2)%
                                 ========   ========       



In the Services segment, customer revenue was $3.58 billion for the nine months 
ended September 30, 2007, down 1% from $3.62 billion for the nine months ended 
September 30, 2006.  Foreign currency translation had a 4-percentage-point 
positive impact on Services revenue in the current period compared with the 
year-ago period.  

Revenue from systems integration and consulting decreased $70.3 million or 6% 
from $1.16 billion in the nine months ended September 30, 2006 to $1.09 billion 
in the nine months ended September 30, 2007.  The company continues to work 
through disruptions in this business related to changes made in the 
repositioning program.

Outsourcing revenue increased by $80.3 million or 6% for the nine months ended 
September 30, 2007 compared with the nine months ended September 30, 2006, led 
by increases in both information technology outsourcing (ITO) and business 
processing outsourcing (BPO).  

Infrastructure services revenue declined by $24.1 million or 3% for the nine 
month period ended September 30, 2007 compared with the nine month period ended 
September 30, 2006 due to weakness in network design and consulting projects, as
well as the shift of project-based infrastructure work to managed outsourcing 
contracts.  This trend is expected to continue.

Core maintenance revenue declined by $25.3 million or 7% in the current period 
compared with the prior-year period.  The company expects the secular decline of
core maintenance will continue.

Services gross profit was 16.7% in the nine months ended September 30, 2007 
compared with 14.4% in the year-ago period.  Services operating income (loss) 
percent was 1.7% in the nine months ended September 30, 2007 compared with 
(1.0)% in the nine months ended September 30, 2006.  The increase in Services 
operating profit margin principally reflects the benefits derived from the cost 
reduction actions as well as a decline in pension expense of $50.0 million 
($33.0 million for the nine months ended September 30, 2007 compared with $83.0 
million in the year-ago period).  During the period, the company continued to 
experience higher temporary contract labor costs, which have been needed to help
maintain service delivery levels during the transitional period as it implements
headcount reductions; and lower volume in its systems integration and consulting
business due to disruptions in this business related to repositioning actions.  
The company is focused on addressing these issues while continuing to implement 
the repositioning program.

In the Technology segment, customer revenue was $538 million in the current 
quarter compared with $587 million in the year-ago period for a decrease of 8%.
Foreign currency translation had a positive impact of approximately 2-percentage
points on Technology revenue in the current period compared with the prior-year 
period.  



<PAGE> 22

Revenue for the company's enterprise-class servers decreased from $459.9 million
for the nine months ended September 30, 2006 to $411.8 million for the nine 
months ended September 30, 2007, a decline of $48.1 million or 10%.  The revenue
decline reflects the continuing secular decline in enterprise servers.

Revenue from specialized technologies decreased from $126.8 million for the nine
months ended September 30, 2006 to $125.9 million for the nine months ended 
September 30, 2007, a decrease of $.9 million or 1%.  

Technology gross profit was 43.7% in the current period compared with 42.1% in 
the year-ago period.  Technology operating income percent was 2.4% in the nine 
months ended September 30, 2007 compared with (3.6)% in the nine months ended 
September 30, 2006.  The increase in Technology operating profit margin 
principally reflects the benefits derived from the cost reduction actions as 
well as a decline in pension expense of $8.5 million ($.3 million for the nine 
months ended September 30, 2007 compared with $8.8 million in the year-ago 
period).  


New accounting pronouncements

See note (j) of the Notes to Consolidated Financial Statements for a full 
description of recent accounting pronouncements, including the expected dates of
adoption and estimated effects on results of operations and financial condition.


Financial condition

Cash and cash equivalents at September 30, 2007 were $448.5 million compared 
with $719.3 million at December 31, 2006.  

During the nine months ended September 30, 2007, cash used for operations was 
$74.2 million compared with cash used of $138.7 million for the nine months 
ended September 30, 2006.  The current-year period included a tax refund of 
approximately $57 million.  Cash expenditures in the current period related to 
the current year and prior-year restructuring actions (which are included in 
operating activities) were approximately $123.9 million compared with $110.2 
million for the prior-year period.  Cash expenditures for the current-year and 
the prior-year restructuring actions are expected to be approximately $24 
million for the remainder of 2007, resulting in an expected cash expenditure of 
approximately $148 million in 2007 compared with $198 million in 2006.  At 
September 30, 2007 and December 31, 2006, receivables of $100 million and $170 
million, respectively, were sold under the company's U.S. trade accounts 
receivable program discussed below.

Cash used for investing activities for the nine months ended September 30, 2007 
was $219.5 million compared with $179.4 million of cash provided during the nine
months ended September 30, 2006.  The principal reason for the decrease was that
in 2006, the company received net proceeds of $380.6 million from the sale of 
the NUL shares and other assets.  Net purchases of investments were $7.7 million
for the nine months ended September 30, 2007 compared with net purchases of $2.9
million in the prior-year period.  Proceeds from investments and purchases of 
investments represent derivative financial instruments used to manage the 
company's currency exposure to market risks from changes in foreign currency 
exchange rates.  In addition, in the current period, the investment in 
marketable software was $73.0 million compared with $81.2 million in the year-
ago period, capital additions of properties were $56.4 million in 2007 compared 
with $48.2 million in 2006 and capital additions of outsourcing assets were 
$108.4 million in 2007 compared with $68.9 million in 2006.  The increase in 
capital expenditures for outsourcing assets reflects higher expenditures on 
outsourcing projects as the company began new client projects.  During the nine 
months ended September 30, 2007, the company financed $22.7 million of internal 
use software licenses.

Cash provided by financing activities during the nine months ended September 30,
2007 was $5.4 million compared with $78.9 million of cash used during the nine 
months ended September 30, 2006.  The prior-year period includes a cash 
expenditure of $57.9 million to retire at maturity all of the company's 
remaining 8 1/8% senior notes.  The current-year period includes $12.3 million 
of cash received due to employee exercise of stock options during the nine 
months ended September 30, 2007 compared with $.9 million in the prior-year 
period.  The current period also includes $5.8 million of cash expenditure for 
dividends paid to minority shareholders.

At September 30, 2007 and December 31, 2006, total debt was $1.05 billion.



<PAGE> 23

The company has a three-year, secured revolving credit facility which expires in
2009 that provides for loans and letters of credit up to an aggregate of $275 
million.  Borrowings under the facility bear interest based on short-term rates 
and the company's credit rating.  The credit agreement contains customary 
representations and warranties, including no material adverse change in the 
company's business, results of operations or financial condition.  It also 
contains financial covenants requiring the company to maintain certain interest 
coverage, leverage and asset coverage ratios and a minimum amount of liquidity, 
which could reduce the amount the company is able to borrow.  The credit 
facility also includes covenants limiting liens, mergers, asset sales, dividends
and the incurrence of debt.  Events of default include non-payment, failure to 
perform covenants, materially incorrect representations and warranties, change 
of control and default under other debt aggregating at least $25 million.  If an
event of default were to occur under the credit agreement, the lenders would be 
entitled to declare all amounts borrowed under it immediately due and payable.  
The occurrence of an event of default under the credit agreement could also 
cause the acceleration of obligations under certain other agreements and the 
termination of the company's U.S. trade accounts receivable facility, discussed 
below.  Also, the credit facility may be terminated if the 7 7/8% senior notes 
due 2008 have not been repaid, refinanced or defeased by payment of amounts due 
to an escrow agent on or prior to January 1, 2008.  The credit facility is 
secured by the company's assets, except that the collateral does not include 
accounts receivable that are subject to the receivable facility, U.S. real 
estate or the stock or indebtedness of the company's U.S. operating 
subsidiaries.  As of September 30, 2007, there were letters of credit of $43.7 
million issued under the facility and there were no cash borrowings.

In addition, the company and certain international subsidiaries have access to 
uncommitted lines of credit from various banks.  Other sources of short-term 
funding are operational cash flows, including customer prepayments, and the 
company's U.S. trade accounts receivable facility.  

At September 30, 2007, the company had an agreement to sell, on an on-going 
basis, through Unisys Funding Corporation I, a wholly owned subsidiary, 
interests in up to $300 million of eligible U.S. trade accounts receivable.  The
receivables are sold at a discount that reflects a margin based on, among other 
things, the company's then-current S&P and Moody's credit rating.  The facility 
is terminable by the purchasers if the company's corporate rating is below B by 
S&P or B2 by Moody's and requires the maintenance of certain ratios related to 
the sold receivables.  At September 30, 2007, the company's corporate rating was
B+ and B2 by S&P and Moody's, respectively.  The facility is renewable annually 
in November at the purchasers' option until November 2008.  At September 30, 
2007 and December 31, 2006, the company had sold $100 million and $170 million, 
respectively, of eligible receivables.

At September 30, 2007, the company has met all covenants and conditions under 
its various lending and funding agreements.  The company expects to continue to 
meet these covenants and conditions.  The company believes that it will have 
adequate sources and availability of short-term funding to meet its expected 
cash requirements.

The company may, from time to time, redeem, tender for, or repurchase its 
securities in the open market or in privately negotiated transactions depending 
upon availability, market conditions and other factors.

The company has on file with the Securities and Exchange Commission a 
registration statement covering $650 million of debt or equity securities, which
enables the company to be prepared for future market opportunities.
          
Stockholders' equity increased $77.2 million during the nine months ended 
September 30, 2007, principally reflecting a decrease of $79.7 million in other 
comprehensive loss due to amortization of postretirement losses recognized in 
accumulated other comprehensive income as well as positive currency exchange 
rate changes of $35.8 million and an increase of $54.5 million relating to 
issuance of stock under various share-based plans, offset in part by a net loss 
of $92.9 million.



<PAGE> 24


Factors that may affect future results

From time to time, the company provides information containing "forward-looking"
statements, as defined in the Private Securities Litigation Reform Act of 1995. 
Forward-looking statements provide current expectations of future events and 
include any statement that does not directly relate to any historical or current
fact. Words such as "anticipates," "believes," "expects," "intends," "plans," 
"projects" and similar expressions may identify such forward-looking statements.
All forward-looking statements rely on assumptions and are subject to risks, 
uncertainties and other factors that could cause the company's actual results to
differ materially from expectations. Factors that could affect future results 
include, but are not limited to, those discussed below. Any forward-looking 
statement speaks only as of the date on which that statement is made. The 
company assumes no obligation to update any forward-looking statement to reflect
events or circumstances that occur after the date on which the statement is 
made.

Statements in this report regarding the company's cost reduction plan are 
subject to the risk that the company may not implement the planned headcount 
reductions, increase its offshore resources, or reduce its use of third-party 
contract labor as quickly as currently planned.  All of these factors could 
affect the timing of anticipated cost savings.  The amount of anticipated cost 
savings is also subject to currency exchange rate fluctuations with regard to 
actions taken outside the U.S.  

Other factors that could affect future results include the following: 

The company's business is affected by changes in general economic and business 
conditions. The company continues to face a highly competitive business 
environment. If the level of demand for the company's products and services 
declines in the future, the company's business could be adversely affected. The 
company's business could also be affected by acts of war, terrorism or natural 
disasters. Current world tensions could escalate, and this could have 
unpredictable consequences on the world economy and on the company's business. 

The information services and technology markets in which the company operates 
include a large number of companies vying for customers and market share both 
domestically and internationally. The company's competitors include consulting 
and other professional services firms, systems integrators, outsourcing 
providers, infrastructure services providers, computer hardware manufacturers 
and software providers. Some of the company's competitors may develop competing 
products and services that offer better price-performance or that reach the 
market in advance of the company's offerings. Some competitors also have or may 
develop greater financial and other resources than the company, with enhanced 
ability to compete for market share, in some instances through significant 
economic incentives to secure contracts. Some also may be better able to compete
for skilled professionals. Any of these factors could have an adverse effect on 
the company's business. Future results will depend on the company's ability to 
mitigate the effects of aggressive competition on revenues, pricing and margins 
and on the company's ability to attract and retain talented people. 

The company operates in a highly volatile industry characterized by rapid 
technological change, evolving technology standards, short product life cycles 
and continually changing customer demand patterns. Future success will depend in
part on the company's ability to anticipate and respond to these market trends 
and to design, develop, introduce, deliver or obtain new and innovative products
and services on a timely and cost-effective basis. The company may not be 
successful in anticipating or responding to changes in technology, industry 
standards or customer preferences, and the market may not demand or accept its 
services and product offerings. In addition, products and services developed by 
competitors may make the company's offerings less competitive. 

The company's future results will depend in part on the success of its efforts 
to control and reduce costs through the development and use of low-cost 
subsidiaries and low-cost offshore and global sourcing models.  Future results 
will also depend in part on the success of the company's focused investment and 
sales and marketing strategies.  These strategies are based on various 
assumptions, including assumptions regarding market segment growth, client 
demand, and the proper skill set of and training for sales and marketing 
management and personnel, all of which are subject to change.  

The company's future results will depend in part on its ability to grow 
outsourcing and infrastructure services.  The company's outsourcing contracts 
are multiyear engagements under which the company takes over management of a 
client's technology operations, business processes or networks.  In a number of 
these arrangements, the company hires certain of its clients' employees and may 
become responsible for the related employee obligations, such as pension and 
severance commitments.  In addition, system development activity on outsourcing 
contracts may require the company to make significant upfront investments.  The 
company will need to have available sufficient financial resources in order to 
take on these obligations and make these investments. 



<PAGE> 25

Recoverability of outsourcing assets is dependent on various factors, including 
the timely completion and ultimate cost of the outsourcing solution, and 
realization of expected profitability of existing outsourcing contracts.  These 
risks could result in an impairment of a portion of the associated assets, which
are tested for recoverability quarterly. 

As long-term relationships, outsourcing contracts provide a base of recurring 
revenue.  However, outsourcing contracts are highly complex and can involve the 
design, development, implementation and operation of new solutions and the 
transitioning of clients from their existing business processes to the new 
environment.  In the early phases of these contracts, gross margins may be lower
than in later years when an integrated solution has been implemented, the 
duplicate costs of transitioning from the old to the new system have been 
eliminated and the work force and facilities have been rationalized for 
efficient operations. Future results will depend on the company's ability to 
effectively and timely complete these implementations, transitions and 
rationalizations.  Future results will also depend on the company's ability to 
continue to effectively address its challenging outsourcing operations through 
negotiations or operationally and to fully recover the associated outsourcing 
assets. 

Future results will also depend in part on the company's ability to drive 
profitable growth in systems integration and consulting. The company's ability 
to grow profitably in this business will depend on the level of demand for 
systems integration projects and the portfolio of solutions offered by the 
company for specific industries.  It will also depend on an improvement in the 
utilization of services delivery personnel. In addition, profit margins in this 
business are largely a function of the rates the company is able to charge for 
services and the chargeability of its professionals. If the company is unable to
attain sufficient rates and chargeability for its professionals, profit margins 
will suffer. The rates the company is able to charge for services are affected 
by a number of factors, including clients' perception of the company's ability 
to add value through its services; introduction of new services or products by 
the company or its competitors; pricing policies of competitors; and general 
economic conditions. Chargeability is also affected by a number of factors, 
including the company's ability to transition employees from completed projects 
to new engagements, and its ability to forecast demand for services and thereby 
maintain an appropriate head count. 

Future results will also depend, in part, on market demand for the company's 
high-end enterprise servers and maintenance on these servers, both of which 
continue to experience secular revenue declines.  The company continues to apply
its resources to develop value-added software capabilities and optimized 
solutions for these server platforms which provide competitive differentiation. 
Future results will depend, in part, on customer acceptance of new ClearPath 
systems and the company's ability to maintain its installed base for ClearPath 
and to develop next-generation ClearPath products that are purchased by the 
installed base. In addition, future results will depend, in part, on the 
company's ability to generate new customers and increase sales of the Intel-
based ES7000 line. The company believes there is growth potential in the market 
for high-end, Intel-based servers running Microsoft and Linux operating system 
software. However, the company's ability to succeed will depend on its ability 
to compete effectively against enterprise server competitors with more 
substantial resources and its ability to achieve market acceptance of the ES7000
technology by clients, systems integrators and independent software vendors.  
Future results of the technology business will also depend, in part, on the 
successful implementation of the company's arrangements with NEC.

The company frequently enters into contracts with governmental entities. U.S. 
government agencies, including the Defense Contract Audit Agency and the 
Department of Labor, routinely audit government contractors. These agencies 
review a contractor's performance under its contracts, cost structure and 
compliance with applicable laws, regulations and standards. The U.S. government 
also may review the adequacy of, and a contractor's compliance with, its systems
and policies, including the contractor's purchasing, property, estimating, 
accounting, compensation and management information systems. Any costs found to 
be overcharged or improperly allocated to a specific contract will be subject to
reimbursement to the government. If an audit uncovers improper or illegal 
activities, the company may be subject to civil and criminal penalties and 
administrative sanctions, including termination of contracts, forfeiture of 
profits, suspension of payments, fines and suspension or prohibition from doing 
business with the U.S. government. Other risks and uncertainties associated with
government contracts include the availability of appropriated funds and 
contractual provisions that allow governmental entities to terminate agreements 
at their discretion before the end of their terms. In addition, if the company's
performance is unacceptable to the customer under a government contract, the 
government retains the right to pursue remedies under the affected contract, 
which remedies could include termination. 



<PAGE> 26

A number of the company's long-term contracts for infrastructure services, 
outsourcing, help desk and similar services do not provide for minimum 
transaction volumes. As a result, revenue levels are not guaranteed. In 
addition, some of these contracts may permit customer termination or may impose 
other penalties if the company does not meet the performance levels specified in
the contracts. 

Certain of the company's outsourcing agreements require that the company's 
prices be benchmarked and provide for a downward adjustment to those prices if 
the pricing for similar services in the market has changed.  As a result, 
anticipated revenues from these contracts may decline.

Some of the company's systems integration contracts are fixed-price contracts 
under which the company assumes the risk for delivery of the contracted services
and products at an agreed-upon fixed price. At times the company has experienced
problems in performing some of these fixed-price contracts on a profitable basis
and has provided periodically for adjustments to the estimated cost to complete 
them. Future results will depend on the company's ability to perform these 
services contracts profitably. 

The success of the company's business is dependent on strong, long-term client 
relationships and on its reputation for responsiveness and quality. As a result,
if a client is not satisfied with the company's services or products, its 
reputation could be damaged and its business adversely affected. Allegations by 
private litigants or regulators of improper conduct, as well as negative 
publicity and press speculation about the company, whatever the outcome and 
whether or not valid, may harm its reputation.  For example, in September 2007, 
an article in the Washington Post alleged that the FBI is investigating the 
company in connection with its alleged failure to detect cyber intrusions at 
the Department of Homeland Security, a client of the company, and its alleged 
failure to disclose these security breaches once detected.  The company 
disputed the allegations made in the article. In addition to harm to reputation,
if the company fails to meet its contractual obligations, it could be subject 
to legal liability, which could adversely affect its business, operating 
results and financial condition.

The company has commercial relationships with suppliers, channel partners and 
other parties that have complementary products, services or skills. The company 
has announced that alliance partnerships with select IT companies are a key 
factor in the development and delivery of the company's refocused portfolio. 
Future results will depend, in part, on the performance and capabilities of 
these third parties, on the ability of external suppliers to deliver components 
at reasonable prices and in a timely manner, and on the financial condition of, 
and the company's relationship with, distributors and other indirect channel 
partners.

More than half of the company's total revenue derives from international 
operations. The risks of doing business internationally include foreign currency
exchange rate fluctuations, changes in political or economic conditions, trade 
protection measures, import or export licensing requirements, multiple and 
possibly overlapping and conflicting tax laws, new tax legislation, and weaker 
intellectual property protections in some jurisdictions. 

The company cannot be sure that its services and products do not infringe on the
intellectual property rights of third parties, and it may have infringement 
claims asserted against it or against its clients. These claims could cost the 
company money, prevent it from offering some services or products, or damage its
reputation.



<PAGE> 27



I
tem 4.  Controls and Procedures
--------------------------------

The Company's management, with the participation of the Company's Chief 
Executive Officer and Chief Financial Officer, has evaluated the effectiveness 
of the Company's disclosure controls and procedures as of September 30, 2007.  
Based on this evaluation, the Company's Chief Executive Officer and Chief 
Financial Officer concluded that the Company's disclosure controls and 
procedures were effective for gathering, analyzing and disclosing the 
information the Company is required to disclose in the reports it files under 
the Securities Exchange Act of 1934, within the time periods specified in the 
SEC's rules and forms.  Such evaluation did not identify any change in the 
Company's internal controls over financial reporting that occurred during the 
quarter ended September 30, 2007 that has materially affected, or is reasonably 
likely to materially affect, the Company's internal control over financial 
reporting.



Part II - OTHER INFORMATION
-------   -----------------


Item 1A.  Risk Factors
-------   ------------

See "Factors that may affect future results" in Management's Discussion and 
Analysis of Financial Condition and Results of Operations for a discussion of 
risk factors.



Item 6.   Exhibits 
-------   --------

(a)       Exhibits

          See Exhibit Index




<PAGE> 28



                               SIGNATURES
                               ----------



     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 thereunto duly authorized.

                                              UNISYS CORPORATION


November 9, 2007                         By: /s/ Janet Brutschea Haugen
                                                -----------------------------
                                                Janet Brutschea Haugen
                                                Senior Vice President and 
                                                Chief Financial Officer 
                                                (Principal Financial Officer)


                                         By: /s/ William M. Reinheimer
                                                 -------------------------
                                                 William M. Reinheimer
                                                 Principal Accounting Officer
                                                 




<PAGE> 29


                             EXHIBIT INDEX

Exhibit
Number                        Description
-------                       -----------
3.1      Restated Certificate of Incorporation of Unisys Corporation 
         (incorporated by reference to Exhibit 3.1 to the registrant's Quarterly
         Report on Form 10-Q for the quarterly period ended September 30, 1999)

3.2      Bylaws of Unisys Corporation, as amended through February 8, 2007 
         (incorporated by reference to Exhibit 3 to the registrant's Current 
         Report on Form 8-K dated February 8, 2007)

12       Statement of Computation of Ratio of Earnings to Fixed Charges

31.1     Certification of Joseph W. McGrath required by Rule 13a-14(a)
         or Rule 15d-14(a)

31.2     Certification of Janet Brutschea Haugen required by Rule 13a-14(a)
         or Rule 15d-14(a)

32.1     Certification of Joseph W. McGrath required by Rule 13a-14(b)
         or Rule 15d-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002,
         18 U.S.C. Section 1350

32.2     Certification of Janet Brutschea Haugen required by Rule 13a-14(b)
         or Rule 15d-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002,
         18 U.S.C. Section 1350









                                                                      Exhibit 12

                             UNISYS CORPORATION
       COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (UNAUDITED)
                               ($ in millions)

                                

                                  Nine             
                                  Months     
                                  Ended          Years Ended December 31
                                  Sept. 30, -----------------------------------
                                  2007      2006   2005   2004   2003   2002  
                                  --------  ----   ----   ----   ----   ----  
Fixed charges
Interest expense                  $ 56.1   $ 77.2 $ 64.7 $ 69.0 $ 69.6 $ 66.5 
Interest capitalized during 
  the period                         6.2      9.9   15.0   16.3   14.5   13.9 
Amortization of debt issuance
  expenses                           2.9      3.8    3.4    3.5    3.8    2.6 
Portion of rental expense
  representative of interest        42.5     56.7   60.9   61.6   55.2   53.0 
                                   ------  ------ ------ ------ ------  ----- 
    Total Fixed Charges            107.7    147.6  144.0  150.4  143.1  136.0 
                                   ------  ------ ------ ------ ------  -----
Earnings                             
Income (loss) from continuing
 operations before income taxes    (42.1)  (250.9)(170.9) (76.0) 380.5  332.8
Add (deduct) the following:
 Share of loss (income) of
  associated companies               -        4.5   (7.2) (14.0) (16.2)  14.2
 Amortization of capitalized
  interest                          10.5     13.7   12.9   11.7   10.2    8.8 
                                   ------  ------ ------ ------ ------  -----
    Subtotal                       (31.6)  (232.7)(165.2) (78.3) 374.5  355.8 
                                   ------  ------ ------ ------ ------  -----

Fixed charges per above            107.7    147.6  144.0  150.4  143.1  136.0 
Less interest capitalized during
  the period                        (6.2)    (9.9) (15.0) (16.3) (14.5) (13.9) 
                                   -----   ------ ------ ------ ------ ------
Total earnings (loss)              $69.9   $(95.0)$(36.2)$ 55.8 $503.1 $477.9 
                                   =====   ====== ====== ====== ====== ======

Ratio of earnings to fixed  
  charges                            *       *      *      *      3.52   3.51 
                                   =====   ====== ====== ====== ======  =====

* Earnings for the nine months and years ended September 30, 2007, December 31, 
2006, 2005 and 2004 were inadequate to cover fixed charges by $37.8 million, 
$242.6 million, $180.2 million and $94.6 million, respectively.








Exhibit 31.1

                             CERTIFICATION


I, Joseph W. McGrath, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Unisys Corporation;

2.  Based on my knowledge, this report does not contain any untrue statement of 
a material fact or omit to state a material fact necessary to make the 
statements made, in light of the circumstances under which such statements were 
made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial 
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as 
of, and for, the periods presented in this report;

4.  The registrant's other certifying officer and I are responsible for 
establishing and maintaining disclosure controls and procedures (as defined in 
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the 
registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure 
controls and procedures to be designed under our supervision, to ensure that 
material information relating
 to the registrant, including its consolidated 
subsidiaries, is made known to us by others within those entities, particularly 
during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such 
internal control over financial reporting to be designed under our supervision, 
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance 
with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and 
procedures and presented in this report our conclusions about the effectiveness 
of the disclosure controls and procedures, as of the end of the period covered 
by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over
financial reporting that occurred during the registrant's most recent fiscal 
quarter that has materially affected, or is reasonably likely to materially 
affect, the registrant's internal control over financial reporting; 
and 

5.  The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the 
registrant's auditors and the audit committee of the registrant's board of 
directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or 
operation of internal control over financial reporting which are reasonably 
likely to adversely affect the registrant's ability to record, process, 
summarize and report financial information; and 

b. Any fraud, whether or not material, that involves management or other 
employees who have a significant role in the registrant's internal control over 
financial reporting.

Date: November 9, 2007


                                /s/ Joseph W. McGrath 
                                    -------------------------
                            Name:   Joseph W. McGrath
                           Title:   President and Chief
                                    Executive Officer






Exhibit 31.2

                             CERTIFICATION


I, Janet Brutschea Haugen, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Unisys Corporation;

2.  Based on my knowledge, this report does not contain any untrue statement of 
a material fact or omit to state a material fact necessary to make the 
statements made, in light of the circumstances under which such statements were 
made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial 
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as 
of, and for, the periods presented in this report;

4.  The registrant's other certifying officer and I are responsible for 
establishing and maintaining disclosure controls and procedures (as defined in 
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the 
registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure 
controls and procedures to be designed under our supervision, to ensure that 
material information
 relating to the registrant, including its consolidated 
subsidiaries, is made known to us by others within those entities, particularly 
during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such 
internal control over financial reporting to be designed under our supervision, 
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance 
with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and 
procedures and presented in this report our conclusions about the effectiveness 
of the disclosure controls and procedures, as of the end of the period covered 
by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over
financial reporting that occurred during the registrant's most recent fiscal 
quarter that has materially affected, or is reasonably likely to materially 
affect, the registrant's internal control over financial reporting; 
and 

5.  The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the 
registrant's auditors and the audit committee of the registrant's board of 
directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or 
operation of internal control over financial reporting which are reasonably 
likely to adversely affect the registrant's ability to record, process, 
summarize and report financial information; and 

b. Any fraud, whether or not material, that involves management or other 
employees who have a significant role in the registrant's internal control over 
financial reporting.

Date: November 9, 2007

                                /s/ Janet Brutschea Haugen 
                                    -------------------------
                            Name:   Janet Brutschea Haugen
                           Title:   Senior Vice President and
                                    Chief Financial Officer




Exhibit 32.1



                  CERTIFICATION OF PERIODIC REPORT

I, Joseph W. McGrath, President and Chief Executive Officer of Unisys 
Corporation (the "Company"), certify, pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1)   the Quarterly Report on Form 10-Q of the Company for the quarterly period 
ended September 30, 2007 (the "Report") fully complies with the requirements of 
Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and 

(2)   the information contained in the Report fairly presents, in all material 
respects, the financial condition and results of operations of the Company.


Dated: November 9, 2007



/s/ Joseph W. McGrath
------------------------
Joseph W. McGrath
President and Chief Executive Officer




A signed original of this written statement required by Section 906 has been 
provided to the Company and will be retained by the Company and furnished to the
Securities and Exchange Commission or its staff upon request.










Exhibit 32.2



                  CERTIFICATION OF PERIODIC REPORT

I, Janet Brutschea Haugen, Senior Vice President and Chief Financial Officer of 
Unisys Corporation (the "Company"), certify, pursuant to Section 906 of the 
Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1)   the Quarterly Report on Form 10-Q of the Company for the quarterly period 
ended September 30, 2007 (the "Report") fully complies with the requirements of 
Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and 

(2)   the information contained in the Report fairly presents, in all material 
respects, the financial condition and results of operations of the Company.


Dated: November 9, 2007



/s/ Janet Brutschea Haugen
------------------------
Janet Brutschea Haugen
Senior Vice President and 
Chief Financial Officer




A signed original of this written statement required by Section 906 has been 
provided to the Company and will be retained by the Company and furnished to the
Securities and Exchange Commission or its staff upon request.