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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
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 of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
801 Lakeview Drive, Suite 100
Blue Bell, Pennsylvania 19422
(215986-4011 
(Address, zip code and telephone number, including area code, of principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading
Symbol(s)
Name of each exchange on which registered
Common Stock, par value $.01UISNew York Stock Exchange
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      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer   Accelerated filer 
Non-accelerated filer   Smaller reporting company 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
Number of shares of Common Stock outstanding as of September 30, 2020: 63,037,852.




UNISYS CORPORATION
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATIONPage Number
Item 1.Consolidated Financial Statements (Unaudited)
Consolidated Statements of Income (Loss)
Consolidated Statements of Comprehensive Income (Loss)
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
Consolidated Statements of Deficit
Notes to Consolidated Financial Statements
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.Quantitative and Qualitative Disclosures about Market Risk
Item 4.Controls and Procedures
PART II - OTHER INFORMATION
Item 1.Legal Proceedings
Item 1A.Risk Factors
Item 6.Exhibits
Exhibit Index
Signatures





Part I - FINANCIAL INFORMATION
Item 1. Financial Statements

UNISYS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Unaudited)
(Millions, except per share data)
 
 Three Months Ended
September 30,
Nine Months Ended
September 30,
 2020201920202019
Revenue
Services$426.0 $478.8 $1,247.9 $1,433.8 
Technology69.2 73.3 201.5 242.2 
495.2 552.1 1,449.4 1,676.0 
Costs and expenses
Cost of revenue:
Services345.9 389.3 1,061.6 1,185.2 
Technology29.4 22.8 79.9 73.1 
375.3 412.1 1,141.5 1,258.3 
Selling, general and administrative85.5 84.7 252.5 268.0 
Research and development6.7 5.9 16.1 22.1 
467.5 502.7 1,410.1 1,548.4 
Operating income27.7 49.4 39.3 127.6 
Interest expense2.4 15.2 20.9 46.9 
Other expense, net(32.5)(49.2)(134.3)(108.5)
Loss from continuing operations before income taxes(7.2)(15.0)(115.9)(27.8)
Provision for income taxes6.1 10.4 26.6 23.4 
Consolidated net loss from continuing operations(13.3)(25.4)(142.5)(51.2)
Net income attributable to noncontrolling interests 3.8 0.5 10.0 
Net loss from continuing operations attributable to Unisys Corporation(13.3)(29.2)(143.0)(61.2)
Income from discontinued operations, net of tax0.4 16.0 1,066.8 54.8 
Net income (loss) attributable to Unisys Corporation$(12.9)$(13.2)$923.8 $(6.4)
Earnings (loss) per share attributable to Unisys Corporation
Basic
  Continuing operations$(0.21)$(0.50)$(2.27)$(1.14)
  Discontinued operations0.01 0.27 16.96 1.02 
     Total$(0.20)$(0.23)$14.69 $(0.12)
Diluted
  Continuing operations$(0.21)$(0.50)$(2.27)$(1.14)
  Discontinued operations0.01 0.27 16.96 1.02 
    Total$(0.20)$(0.23)$14.69 $(0.12)
See notes to consolidated financial statements

2




UNISYS CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)
(Millions)
 
 Three Months Ended
September 30,
Nine Months Ended
September 30,
 2020201920202019
Consolidated net loss from continuing operations$(13.3)$(25.4)$(142.5)$(51.2)
Income from discontinued operations, net of tax0.4 16.0 1,066.8 54.8 
     Total(12.9)(9.4)924.3 3.6 
Other comprehensive income
Foreign currency translation40.1 (51.7)(41.1)(99.7)
Postretirement adjustments, net of tax of $(7.8) and $6.4 in 2020 and $8.8 and $11.9 in 2019
8.2 63.4 139.4 182.3 
Total other comprehensive income48.3 11.7 98.3 82.6 
Comprehensive income35.4 2.3 1,022.6 86.2 
Less comprehensive income attributable to noncontrolling interests2.0 2.6 0.5 5.8 
Comprehensive income (loss) attributable to Unisys Corporation$33.4 $(0.3)$1,022.1 $80.4 
See notes to consolidated financial statements
3




UNISYS CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Millions)
September 30, 2020December 31, 2019
Assets
Current assets:
Cash and cash equivalents$774.0 $538.8 
Accounts receivable, net364.1 417.7 
Contract assets47.0 38.4 
Inventories14.5 16.4 
Prepaid expenses and other current assets103.0 100.7 
    Current assets of discontinued operations 109.3 
Total current assets1,302.6 1,221.3 
Properties755.6 784.0 
Less-accumulated depreciation and amortization648.7 668.0 
Properties, net106.9 116.0 
Outsourcing assets, net177.3 202.1 
Marketable software, net191.5 186.8 
Operating lease right-of-use assets67.8 71.4 
Prepaid postretirement assets144.2 136.2 
Deferred income taxes121.6 114.0 
Goodwill108.6 110.4 
Restricted cash10.1 13.0 
Other long-term assets176.8 198.9 
Long-term assets of discontinued operations 133.9 
Total assets$2,407.4 $2,504.0 
Liabilities and deficit
Current liabilities:
Current maturities of long-term-debt$100.0 $13.5 
Accounts payable183.4 204.3 
Deferred revenue197.4 246.4 
Other accrued liabilities272.4 316.7 
    Current liabilities of discontinued operations 146.4 
Total current liabilities753.2 927.3 
Long-term debt48.4 565.9 
Long-term postretirement liabilities1,563.6 1,960.2 
Long-term deferred revenue122.5 147.0 
Long-term operating lease liabilities49.3 56.0 
Other long-term liabilities70.7 47.6 
Long-term liabilities of discontinued operations 28.3 
Commitments and contingencies (see note 14)
Deficit:
Common stock, shares issued: 2020; 66.8, 2019; 65.9
0.7 0.7 
Accumulated deficit(787.4)(1,711.2)
Treasury stock, shares at cost: 2020; 3.8, 2019; 3.5
(114.4)(109.6)
Paid-in capital4,653.5 4,643.3 
Accumulated other comprehensive loss(3,990.3)(4,088.6)
Total Unisys Corporation stockholders’ deficit(237.9)(1,265.4)
Noncontrolling interests37.6 37.1 
Total deficit(200.3)(1,228.3)
Total liabilities and deficit$2,407.4 $2,504.0 
See notes to consolidated financial statements
4




UNISYS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Millions) 
 Nine Months Ended
September 30,
 20202019
Cash flows from operating activities
Consolidated net loss from continuing operations$(142.5)$(51.2)
Income from discontinued operations, net of tax1,066.8 54.8 
Adjustments to reconcile consolidated net loss to net cash used for operating activities:
Gain on sale of U.S. Federal business(1,057.7) 
Loss on debt extinguishment28.5 20.2 
Foreign currency translation losses14.3 7.2 
Non-cash interest expense3.5 7.5 
Employee stock compensation11.1 10.1 
Depreciation and amortization of properties22.0 26.7 
Depreciation and amortization of outsourcing assets48.9 47.3 
Amortization of marketable software50.2 35.0 
Other non-cash operating activities0.6 (0.8)
Loss on disposal of capital assets3.3 1.3 
Postretirement contributions(344.5)(82.3)
Postretirement expense72.8 71.5 
Deferred income taxes, net(16.9)1.0 
Changes in operating assets and liabilities:
Receivables, net12.4 (17.4)
Inventories1.5 (1.7)
Accounts payable and current liabilities(127.7)(173.4)
Other liabilities27.2 33.1 
Other assets0.4 9.3 
Net cash used for operating activities(325.8)(1.8)
Cash flows from investing activities
Net proceeds from sale of U.S. Federal business1,162.9  
Proceeds from investments2,550.2 2,824.9 
Purchases of investments(2,561.7)(2,835.8)
Investment in marketable software(54.8)(56.2)
Capital additions of properties(16.7)(29.1)
Capital additions of outsourcing assets(23.6)(44.4)
Net proceeds from sale of properties (0.2)
Other(0.5)(0.9)
Net cash provided by (used for) investing activities1,055.8 (141.7)
Cash flows from financing activities
Cash paid in connection with debt extinguishment(23.7)(56.3)
Proceeds from capped call transactions 7.2 
Proceeds from issuance of long-term debt7.1 28.6 
Payments of long-term debt(451.0)(12.2)
Other(4.8)(4.6)
Net cash used for financing activities(472.4)(37.3)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(25.3)(10.0)
Increase (decrease) in cash, cash equivalents and restricted cash232.3 (190.8)
Cash, cash equivalents and restricted cash, beginning of period551.8 624.1 
Cash, cash equivalents and restricted cash, end of period$784.1 $433.3 
See notes to consolidated financial statements

5




UNISYS CORPORATION
CONSOLIDATED STATEMENTS OF DEFICIT (Unaudited)
(Millions)
  
 Unisys Corporation 
TotalTotal Unisys CorporationCommon Stock Par ValueAccumu-lated DeficitTreasury Stock At CostPaid-in CapitalAccumu-lated Other Compre-hensive LossNon-controlling Interests
Balance at December 31, 2019$(1,228.3)$(1,265.4)$0.7 $(1,711.2)$(109.6)$4,643.3 $(4,088.6)$37.1 
Consolidated net income1,015.8 1,015.3 1,015.3 0.5 
Stock-based activity(0.5)(0.5)(4.6)4.1 
Translation adjustments(87.6)(81.6)(81.6)(6.0)
Postretirement plans91.2 87.5   87.5 3.7 
Balance at March 31, 2020$(209.4)$(244.7)$0.7 $(695.9)$(114.2)$4,647.4 $(4,082.7)$35.3 
Consolidated net loss(78.6)(78.6)(78.6)
Stock-based activity2.9 2.9 (0.1)3.0 
Translation adjustments6.4 6.5     6.5 (0.1)
Postretirement plans40.0 39.6     39.6 0.4 
Balance at June 30, 2020$(238.7)$(274.3)$0.7 $(774.5)$(114.3)$4,650.4 $(4,036.6)$35.6 
Consolidated net loss(12.9)(12.9)(12.9)
Stock-based activity3.0 3.0 (0.1)3.1 
Translation adjustments40.1 38.6 38.6 1.5 
Postretirement plans8.2 7.7    7.7 0.5 
Balance at September 30, 2020$(200.3)$(237.9)$0.7 $(787.4)$(114.4)$4,653.5 $(3,990.3)$37.6 

  
 Unisys Corporation 
TotalTotal Unisys CorporationCommon Stock Par ValueAccumu-lated DeficitTreasury Stock At CostPaid-in CapitalAccumu-lated Other Compre-hensive LossNon-controlling Interests
Balance at December 31, 2018$(1,299.6)$(1,343.5)$0.5 $(1,694.0)$(105.0)$4,539.8 $(4,084.8)$43.9 
Consolidated net income (loss)(16.8)(19.4)(19.4)2.6 
Stock-based activity(0.4)(0.4)0.1 (4.4)3.9 
Translation adjustments(34.2)(32.8)(32.8)(1.4)
Postretirement plans68.5 69.2   69.2 (0.7)
Balance at March 31, 2019$(1,282.5)$(1,326.9)$0.6 $(1,713.4)$(109.4)$4,543.7 $(4,048.4)$44.4 
Consolidated net income29.8 26.2 26.2 3.6 
Stock-based activity2.4 2.4 (0.1)2.5 
Translation adjustments(13.8)(11.6)    (11.6)(2.2)
Postretirement plans50.4 49.1     49.1 1.3 
Balance at June 30, 2019$(1,213.7)$(1,260.8)$0.6 $(1,687.2)$(109.5)$4,546.2 $(4,010.9)$47.1 
Consolidated net income (loss)(9.4)(13.2)(13.2)3.8 
Stock-based activity2.9 2.9 (0.1)3.0 
Debt exchange83.9 83.9 0.1 83.8 
Capped call on debt exchange7.2 7.2 7.2 
Translation adjustments(51.7)(49.0)(49.0)(2.7)
Postretirement plans63.4 61.9    61.9 1.5 
Balance at September 30, 2019$(1,117.4)$(1,167.1)$0.7 $(1,700.4)$(109.6)$4,640.2 $(3,998.0)$49.7 

See notes to consolidated financial statements
6



UNISYS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(Dollars in millions, except share and per share amounts)
Note 1 - Basis of Presentation
The accompanying consolidated financial statements and footnotes of Unisys Corporation have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP). The financial statements and footnotes are unaudited. In the opinion of management, the financial information furnished herein reflects all adjustments necessary for a fair statement of the results of operations, comprehensive income, financial position, cash flows and deficit 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.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about future events. These estimates and assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities and the reported amounts of revenue and expenses. Such estimates include the valuation of estimated credit losses, contract assets, inventories, operating lease right-of-use assets, outsourcing assets, marketable software, goodwill and other long-lived assets, legal contingencies, indemnifications, assumptions used in the calculation for systems integration projects, income taxes and retirement and other post-employment benefits, among others. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ materially from these estimates. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.
We assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to us and the unknown future impacts of COVID-19 as of September 30, 2020 and through the date of this report. The accounting matters assessed included, but were not limited to the valuation of estimated credit losses, contract assets, outsourcing assets, marketable software, goodwill and other long-lived assets, and retirement and other post-employment benefits. While there was not a material impact to our consolidated financial position as of September 30, 2020 resulting from our assessments, our future assessment of our current expectations at that time of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to our consolidated financial position in future reporting periods. 
The company’s accounting policies are set forth in detail in Note 1 of the Notes to Consolidated Financial Statements in the company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission. Such Annual Report also contains a discussion of the company’s critical accounting policies and estimates. The company believes that these critical accounting policies and estimates affect its more significant estimates and judgments used in the preparation of the company’s consolidated financial statements.
Note 2 - Discontinued Operations
On March 13, 2020, the company completed the sale of its U.S. Federal business to Science Applications International Corporation for cash of $1.2 billion. The company’s financial statements have been retroactively reclassified to report the U.S. Federal business as discontinued operations. As a result, all items relating to the business within the consolidated statements of income (loss) have been reported as income from discontinued operations, net of tax, and all items relating to the business within the consolidated balance sheets have been reported as either assets or liabilities of discontinued operations. Depreciation, amortization, capital expenditures, and significant noncash operating and investing activities related to the U.S. Federal business were immaterial for all periods presented.
7




The results of the U.S. Federal business discontinued operations for the three and nine months ended September 30, 2020 and 2019 were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
202020192020*2019
Revenue$ $205.5 $149.5 $531.2 
Income (loss)
Operations 21.5 9.1 73.2 
Gain on sale(0.2) 1,060.6  
(0.2)21.5 1,069.7 73.2 
Income tax provision (benefit)(0.6)5.5 2.9 18.4 
Income from discontinued operations, net of tax$0.4 $16.0 $1,066.8 $54.8 
* Includes results of operations through the March 13, 2020 closing date.

Note 3 - Accounting Standards
Effective January 1, 2020, the company adopted ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract which clarifies the accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The company adopted the new guidance on a prospective basis and the adoption did not have a material impact on its consolidated results of operations and financial position.
Effective January 1, 2020, the company adopted ASU No. 2016-13 Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments which introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected losses. This includes trade and other receivables, contract assets, loans and other financial instruments. The adoption did not have a material impact on the company’s consolidated results of operations and financial position.
Effective January 1, 2020, the company adopted ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes which removed certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new standard was applied to the presentation of the company’s U.S. Federal business, which is reflected in discontinued operations.
Note 4 - Cost-Reduction Actions
During the three months ended September 30, 2020, the company recognized cost-reduction charges and other costs of $13.2 million. The charges (credits) related to work-force reductions were $0.7 million, principally related to severance costs, and were comprised of: (a) a charge of $2.7 million and (b) a credit of $(2.0) million for changes in estimates. In addition, the company recorded a credit of $(0.6) million for net foreign currency gains related to exiting foreign countries, a charge of $7.5 million for asset impairments and $5.6 million of other expenses. The charges (credits) were recorded in the following statement of income classifications: cost of revenue - services, $2.9 million; selling, general and administrative expenses, $10.8 million; research and development expenses, $0.1 million; and other expense, net, $(0.6) million.
During the three months ended September 30, 2019, the company recognized cost-reduction charges and other costs of $0.2 million. Charges (credits) were comprised of $0.7 million for lease abandonment costs and $(0.5) million for changes in estimates principally related to work-force reductions. The charges (credits) were recorded in the following statement of income classifications: cost of revenue - services, $(1.9) million and selling, general and administrative expenses, $2.1 million.
During the nine months ended September 30, 2020, the company recognized cost-reduction charges and other costs of $48.6 million. The charges related to work-force reductions were $6.2 million, principally related to severance costs, and were comprised of: (a) a charge of $14.0 million and (b) a credit of $(7.8) million for changes in estimates. In addition, the company recorded charges of $17.8 million for net foreign currency losses related to exiting foreign countries, $19.0 million for asset impairments and $5.6 million of other expenses. The charges were recorded in the following statement of income classifications: cost of revenue - services, $15.7 million; selling, general and administrative expenses, $14.8 million; research and development expenses, $0.3 million; and other expense, net, $17.8 million.
8




During the nine months ended September 30, 2019, the company recognized cost-reduction charges and other costs of $5.4 million. Charges were comprised of $5.0 million for lease abandonment costs and asset write-offs and $0.4 million for changes in estimates principally related to work-force reductions. The charges were recorded in the following statement of income classifications: cost of revenue - services, $(6.6) million; selling, general and administrative expenses, $10.7 million; and research and development expenses, $1.3 million.
Liabilities and expected future payments related to the company’s work-force reduction actions are as follows:
TotalU.S.International
Balance at December 31, 2019$49.8 $5.2 $44.6 
Additional provisions14.0 4.0