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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) January 20, 2004
- -----------------------------------------------------------------------------
UNISYS CORPORATION
- ---------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 1-8729 38-0387840
- ---------------------------------------------------------------------------
(State or Other (Commission File Number) (IRS Employer
Jurisdiction of Identification No.)
Incorporation)
Township Line and Union Meeting Roads,
Blue Bell, Pennsylvania 19424
- ---------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(215) 986-4011
- ---------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Item 7. Exhibits.
(c) The following exhibit is being furnished herewith:
99 News Release, dated January 20, 2004, of Unisys Corporation
Item 12. Results of Operations and Financial Condition.
On January 20, 2004, Unisys Corporation issued a news release to
report its financial results for the quarter and year ended December 31, 2003.
The release is furnished as Exhibit 99 hereto. The information in this Item 12
and the Exhibit attached hereto shall not be deemed "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934.
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
UNISYS CORPORATION
Date: January 20, 2004 By: /s/ Janet B. Haugen
-------------------
Janet B. Haugen
Senior Vice President and
Chief Financial Officer
EXHIBIT INDEX
-------------
Exhibit
No.
- ------
99 News Release, dated January 20, 2004, of Unisys Corporation.
Exhibit 99
NEWS RELEASE
UNISYS
Media Contacts:
Elizabeth Douglass, 215-986-6583 elizabeth.douglass@unisys.com
Jacqueline Lewis, 215-986-5204 jacqueline.lewis@unisys.com
Investor Contact:
Jim Kerr, 215-986-5795 jim.kerr@unisys.com
UNISYS REPORTS STRONG EARNINGS IN 2003 AND GENERATES MORE THAN $130 MILLION OF
FREE CASH FLOW
COMPANY RECONFIRMS EARNINGS GUIDANCE FOR 2004
BLUE BELL, Pa., January 20, 2004 - Unisys Corporation (NYSE: UIS) today
reported a strong fourth quarter of 2003, meeting its earnings per share
target for both the quarter and the year and generating $134 million of free
cash flow (cash from operations reduced by capital expenditures) in 2003.
For the fourth quarter of 2003, Unisys net income rose to $111.5 million,
or 33 cents per diluted share, compared to fourth-quarter 2002 net income of
$89.1 million, or 27 cents per share. The fourth-quarter 2003 results
include a tax benefit of $3.8 million, or 1 cent per share, from the positive
resolution of a tax matter. Revenue for the fourth quarter of 2003 grew 5%
to $1.64 billion from revenue of $1.55 billion in the year-ago period.
Currency had a 6 percentage-point positive impact on the company's revenue in
the fourth quarter, reflecting a weak U.S. dollar against most major
currencies worldwide.
For the full year of 2003, Unisys reported net income of $258.7 million, or 78
cents per diluted share, compared to full-year 2002 net income of $223.0
million, or 69 cents per share. Included in these results is the $3.8 million
tax benefit as noted above. Revenue for the full year of 2003 rose 5% to
$5.91 billion from $5.61 billion for the full year of 2002. Revenue grew 1%
on a constant currency basis in 2003. At December 31, 2003, the company had
approximately $9 billion of services backlog, which included $2.6 billion of
unfunded U.S. government orders.
Included in the results for the fourth quarter and full year 2003 and 2002 is
the impact of pension accounting. For the fourth quarter, pretax pension
income declined from $34.8 million in 2002 to $0.2 million expense in 2003, a
decrease of $35 million. For the full year, pretax pension income decreased
from $143.5 million in 2002 to $22.6 million in 2003, a decrease of $121
million. Earnings per share excluding pension accounting increased from 39
cents in 2002 to 73 cents in 2003 and from 20 cents in the fourth quarter of
2002 to 33 cents in the fourth quarter of 2003.
COMMENTS FROM CHAIRMAN AND CEO LARRY WEINBACH
"This was a very good year for Unisys, delivering consistent results in a
volatile industry environment," said Unisys Chairman and CEO Lawrence A.
Weinbach. "We significantly increased our operating cash flow, generated $134
million in free cash flow, and met our earnings per share target for the year.
Our earnings per share in 2003 increased 13% on a reported basis and 87% after
eliminating the impact of pension accounting in both 2003 and 2002. We also
continued to enhance our value-added strategy with new services and product
offerings."
Weinbach said that in 2003 Unisys met each of its strategic objectives for
the year. These accomplishments included:
* double-digit growth in business process outsourcing;
* double-digit growth in enterprise security revenue with a growing
base of security clients;
* a 110-basis point improvement in services operating margins, excluding
the impact of pension accounting;
* double-digit growth in ES7000 server sales;
* a reduction in selling, general and administrative (SG&A) expenses as a
percentage of revenue from 17.7% in 2002 to 17.0% in 2003.
"The talent, commitment, dedication, and teamwork of our more than 37,000
employees worldwide enabled us to achieve these outstanding results in 2003,"
Weinbach said.
FOURTH-QUARTER COMPANY HIGHLIGHTS
U.S. revenue grew 3% to $741 million, driven by continued growth in the
company's U.S. Federal government business. Revenue in international markets
increased 7% to $897 million.
Due to a decline in outsourcing orders, services orders declined in the
fourth quarter. Services orders, excluding outsourcing, showed double-digit
growth in the fourth quarter. The timing of outsourcing deal closures can
vary significantly from quarter to quarter because of the large size and
extended closing process. Although outsourcing orders declined from a strong
year-ago period, the company's pipeline of large deals remains strong.
The company's margins continued to improve in 2003 excluding the impact of
pension accounting. On a reported basis Unisys reported an overall fourth-
quarter 2003 gross profit margin of 31.2% compared to 31.7% in the year-
ago period, and a fourth-quarter operating profit margin of 9.7% in both
years. Excluding the impact of pension accounting in both years,
fourth-quarter gross profit margins improved 90 basis points over the prior
year to 31.5% while fourth-quarter operating margins improved 220 basis points
to 9.7%.
SG&A expenses as a percentage of revenue declined to 16.5% in the fourth
quarter of 2003 compared to 16.7% of revenue in the year-ago quarter.
FOURTH-QUARTER BUSINESS SEGMENT HIGHLIGHTS
Customer revenue in the company's services segment grew 10% in the fourth
quarter, driven by strong growth in outsourcing and systems integration and
consulting. On a reported basis, gross profit margins in the services
business declined slightly from year-ago levels to 22.1% while services
operating margins improved slightly from a year ago to 7.2%. Excluding the
impact of pension accounting in both years, services gross profit margins
improved to 22.6% in the fourth quarter of 2003 compared to 21.3% in the year-
ago period, while services operating margins increased to 7.5% in the fourth
quarter of 2003 from 5.3% in the year-ago quarter.
Customer revenue in the company's technology segment declined 9% in the
fourth quarter, primarily driven by declines in specialized equipment sales.
On a reported basis, gross margins in the technology business increased 2
percentage points from year-ago levels to 51.6% while technology operating
margins declined 1 percentage point from a year ago to 14.6%. Excluding the
impact of pension accounting in both years, technology gross margins
improved to 51.4% in the fourth quarter of 2003 compared to 49.2% in the year-
ago quarter, while technology operating margins increased to 13.6% in the
fourth quarter of 2003 compared to 12.9% in the year-ago period.
CASH FLOW HIGHLIGHTS
Unisys generated $367 million of cash flow from operations in the fourth
quarter. Capital expenditures in the fourth quarter of 2003 were $108
million, including $79 million invested in revenue-generating projects.
For the full year of 2003, Unisys generated $529 million of cash flow from
operations. Capital expenditures were $395 million, including $286 million
invested in revenue-generating projects. After deducting capital
expenditures, Unisys generated $134 million of free cash flow and ended 2003
with $636 million of cash on hand.
PENSION PLANS AND ACCOUNTING
Unisys assumed an 8.75% expected long-term rate of return and a 6.75%
discount rate for its U.S. pension plan in 2003. The company's U.S. pension
plan assets returned 25% in 2003. For its U.S. pension plan in 2004, Unisys
will again assume an 8.75% expected long-term rate of return. However, given
the current interest rate environment, the U.S. discount rate will be reduced
to 6.25%. Based on these and other assumptions, the company expects
approximately $85 million of pretax pension expense in 2004 compared to
pretax pension income of $22.6 million in 2003. The company paid
approximately $63 million into its pension plans in 2003 and expects cash
contributions of about $66 million in 2004. No cash payments were made in
2003 or are required in 2004 for the company's U.S. qualified defined benefit
pension plan.
BUSINESS OUTLOOK
"We look for continued strong progress in 2004 as the market continues to
improve," Weinbach said. "We have five strategic objectives for the new year:
to continue double-digit growth in our annuity-based outsourcing business; to
drive continued growth in our services operating margin; to accelerate growth
in enterprise security; to achieve double-digit growth in our ES7000 server
sales; and to continue enhancing market brand awareness of Unisys.
Financially, we continue to look for mid single-digit revenue growth in 2004,
with earnings per share, excluding the impact of pension accounting, of about
83 - 87 cents. In the first quarter of 2004, we expect earnings per share of
about 11 - 13 cents, excluding the impact of pension accounting, on
single-digit revenue growth."
CONFERENCE CALL
Unisys will hold a conference call today at 8:15 a.m. Eastern Time to discuss
its results. The listen-only Webcast, as well as the accompanying
presentation materials, can be accessed via a link on the Unisys Investor Web
site at www.unisys.com/investor. Following the call, an audio replay of the
Webcast, and accompanying presentation materials, can be accessed through the
same link.
ABOUT UNISYS
Unisys is a worldwide information technology services and solutions company.
Our people combine expertise in systems integration, outsourcing,
infrastructure, server technology and consulting with precision thinking and
relentless execution to help clients, in more than 100 countries, quickly and
efficiently achieve competitive advantage. For more information, visit
www.unisys.com.
FORWARD-LOOKING STATEMENTS
Any statements contained in this release that are not historical facts are
forward-looking statements as defined in the Private Securities Litigation
Reform Act of 1995. Forward-looking statements include, but are not limited
to, any projections of earnings, revenues or other financial items; any
statements of the company's plans, strategies or objectives for future
operations; statements regarding future economic conditions or performance;
and any statements of belief or expectation. All forward-looking statements
rely on assumptions and are subject to various risks and uncertainties that
could cause actual results to differ materially from expectations. Statements
in this release regarding the company's financial outlook are based in part on
the company's assumptions for the economy. Risks and uncertainties that could
affect the company's future results include general economic and business
conditions, the effects of aggressive competition in the information services
and technology markets on the company's revenues, pricing and margins and on
the competitiveness of its product and services offerings, the level
of demand for the company's products and services and the company's ability to
anticipate and respond to changes in technology and customer preferences, the
company's ability to continue to accelerate growth in outsourcing and
infrastructure services, the company's ability to drive profitable growth in
systems integration and consulting, the degree of market acceptance of the
company's high-end enterprise servers, the company's ability to maintain tight
cost controls, the risks of doing business internationally and the potential
for infringement claims to be asserted against the company or its clients.
Additional discussion of these and other factors that could affect Unisys
future results is contained in its periodic filings with the Securities and
Exchange Commission. Unisys assumes no obligation to update any forward-
looking statements.
PRESENTATION OF INFORMATION IN THIS PRESS RELEASE
This release presents information that excludes pension income and also
provides disclosure of free cash flow. These financial measures are
considered non-GAAP. Generally, a non-GAAP financial measure is a numerical
measure of a company's performance, financial position, or cash flows where
amounts are either excluded or included not in accordance with generally
accepted accounting principles. A reconciliation of these non-GAAP
measures to the most directly comparable GAAP measures, as well as disclosure
of the reasons why the company uses these measures, is included in the
financial information accompanying this release.
###
RELEASE NO: 01208372 (See accompanying financial information)
http://www.unisys.com/about__unisys/news_a_events/01208372.htm
Unisys is a registered trademark of Unisys Corporation. All other brands and
products referenced herein are acknowledged to be trademarks
or registered trademarks of their respective holders.
UNISYS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Millions, except per share data)
Three Months Year
Ended December 31 Ended December 31
------------------ ------------------
2003 2002 2003 2002
-------- -------- -------- --------
Revenue
Services $1,297.2 $1,180.3 $4,691.9 $4,285.1
Technology 340.4 372.5 1,219.3 1,322.3
-------- -------- -------- --------
1,637.6 1,552.8 5,911.2 5,607.4
Costs and expenses
Cost of revenue:
Services 979.3 882.9 3,654.7 3,244.9
Technology 147.6 178.2 541.5 674.0
-------- -------- -------- --------
1,126.9 1,061.1 4,196.2 3,918.9
Selling, general and
administrative 270.1 259.8 1,007.2 992.0
Research and development 81.4 80.7 280.1 273.3
-------- -------- -------- --------
1,478.4 1,401.6 5,483.5 5,184.2
-------- -------- -------- --------
Operating income 159.2 151.2 427.7 423.2
Interest expense 18.3 13.3 69.6 66.5
Other income
(expense), net 19.9 (5.0) 22.4 (23.9)
-------- -------- -------- --------
Income before income taxes 160.8 132.9 380.5 332.8
Provision for income taxes 49.3 43.8 121.8 109.8
-------- -------- -------- --------
Net income $111.5 $89.1 $258.7 $223.0
======== ======== ======== ========
Earnings per share
Basic $ .34 $ .27 $ .79 $ .69
======== ======== ======== ========
Diluted $ .33 $ .27 $ .78 $ .69
======== ======== ======== ========
Shares used in the per share
computations (thousands):
Basic 331,371 325,726 329,349 323,526
======== ======== ======== ========
Diluted 337,842 326,740 332,948 324,744
======== ======== ======== ========
UNISYS CORPORATION
SEGMENT RESULTS
(Millions)
Elimi-
Total nations Services Technology
-------- -------- -------- ----------
Three Months Ended
December 31, 2003
- ------------------
Customer revenue $1,637.6 $1,297.2 $340.4
Intersegment ($94.2) 6.7 87.5
-------- -------- -------- --------
Total revenue $1,637.6 ($94.2) $1,303.9 $427.9
======== ======== ======== ========
Gross profit percent 31.2% 22.1% 51.6%
======== ======== ========
Operating profit
percent 9.7% 7.2% 14.6%
======== ======== ========
Three Months Ended
December 31, 2002
- ------------------
Customer revenue $1,552.8 $1,180.3 $372.5
Intersegment ($98.9) 6.6 92.3
-------- -------- -------- --------
Total revenue $1,552.8 ($98.9) $1,186.9 $464.8
======== ======== ======== ========
Gross profit percent 31.7% 22.5% 49.8%
======== ======== ========
Operating profit
percent 9.7% 7.1% 15.7%
======== ======== ========
Year Ended
December 31, 2003
- ------------------
Customer revenue $5,911.2 $4,691.9 $1,219.3
Intersegment ($319.8) 25.9 293.9
-------- -------- -------- --------
Total revenue $5,911.2 ($319.8) $4,717.8 $1,513.2
======== ======== ======== ========
Gross profit percent 29.0% 20.2% 50.4%
======== ======== ========
Operating profit
percent 7.2% 5.0% 12.7%
======== ======== ========
Year Ended
December 31, 2002
- ------------------
Customer revenue $5,607.4 $4,285.1 $1,322.3
Intersegment ($331.9) 38.8 293.1
-------- -------- -------- --------
Total revenue $5,607.4 ($331.9) $4,323.9 $1,615.4
======== ======== ======== ========
Gross profit percent 30.1% 22.2% 46.5%
======== ======== ========
Operating profit
percent 7.5% 5.9% 11.7%
======== ======== ========
UNISYS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Millions)
December 31, December 31,
2003 2002
---------- ----------
Assets
Current assets
Cash and cash equivalents $635.9 $301.8
Accounts and notes receivable, net 1,027.8 955.6
Inventories
Parts and finished equipment 121.7 165.3
Work in process and materials 116.9 127.5
Deferred income taxes 270.0 311.3
Other current assets 85.7 84.5
---------- ----------
Total 2,258.0 1,946.0
---------- ----------
Properties 1,812.6 1,542.7
Less accumulated depreciation
and amortization 1,077.3 932.9
---------- ----------
Properties, net 735.3 609.8
---------- ----------
Investments at equity 153.3 111.8
Marketable software, net 332.2 311.8
Prepaid pension cost 55.5
Deferred income taxes 1,384.6 1,476.0
Goodwill 177.5 160.6
Other long-term assets 378.2 365.4
---------- ----------
Total $5,474.6 $4,981.4
========== ==========
Liabilities and stockholders' equity
Current liabilities
Notes payable $17.7 $77.3
Current maturities of long-term debt 2.2 4.4
Accounts payable 513.8 532.5
Other accrued liabilities 1,305.7 1,312.8
Income taxes payable 214.1 228.9
---------- ----------
Total 2,053.5 2,155.9
---------- ----------
Long-term debt 1,048.3 748.0
Accrued pension liabilities 433.6 727.7
Other long-term liabilities 544.0 493.8
Stockholders' equity
Common stock 3.3 3.3
Accumulated deficit (414.8) (673.5)
Other capital 3,818.6 3,763.1
Accumulated other comprehensive loss (2,011.9) (2,236.9)
---------- ----------
Stockholders' equity 1,395.2 856.0
---------- ----------
Total $5,474.6 $4,981.4
========== ==========
UNISYS CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(Millions)
Year Ended
December 31
------------------
2003 2002
------- -------
Cash flows from operating activities
Net income $258.7 $223.0
Add (deduct) items to reconcile
net income to net cash provided
by operating activities:
Depreciation and amortization
of properties 184.9 154.5
Amortization:
Marketable software 123.6 121.0
Deferred outsourcing contract costs 34.1 22.3
Decrease in deferred income taxes, net 57.2 39.4
(Increase) decrease in receivables, net (67.7) 156.5
Decrease in inventories 54.1 53.0
Increase (decrease) in accounts
payable and other accrued liabilities 30.3 (129.2)
(Decrease) in income taxes payable (4.8) (15.5)
(Decrease) in other liabilities (70.9) (61.2)
(Increase) in other assets (50.9) (251.2)
Other (19.4) 11.9
------- -------
Net cash provided by operating activities 529.2 324.5
------- -------
Cash flows from investing activities
Proceeds from investments 5,054.0 3,447.1
Purchases of investments (5,122.1) (3,485.4)
Investment in marketable software (144.1) (139.9)
Capital additions of properties (251.3) (196.2)
Purchases of businesses (5.3) (4.8)
------- -------
Net cash used for investing activities (468.8) (379.2)
------- -------
Cash flows from financing activities
Proceeds from issuance of long-term debt 293.3
Net (reduction in) short-term borrowings (64.5) (1.6)
Proceeds from employee stock plans 31.5 29.0
Payments of long-term debt (4.8) (2.1)
------- -------
Net cash provided by financing activities 255.5 25.3
------- -------
Effect of exchange rate changes on cash
and cash equivalents 18.2 5.3
------- -------
Increase (decrease) in cash
and cash equivalents 334.1 (24.1)
Cash and cash equivalents, beginning of
period 301.8 325.9
------- -------
Cash and cash equivalents, end of period $635.9 $301.8
======= =======
Reconciliation of GAAP to Non-GAAP
Financial Information
The preceding release presents information with and
without pension income. Unisys believes that this
information will enhance an overall understanding of
its financial performance due to the significant change
in pension income from period to period and the
non-operational nature of pension income. In addition,
the release provides disclosure of free cash flow. The
company defines free cash flow as net cash provided by
(used for) operating activities less capital
expenditures. This measure of free cash flow may not
be comparable to similarly titled measures of other
companies. Free cash flow is not intended as an
alternative measure of cash flow from operations (as
determined in accordance with GAAP). Rather, free cash
flow is presented as additional information because the
company believes it to be a useful indicator of its
ability to execute its business strategy without
reliance on additional borrowing or the use of its cash
or liquid investments. The presentation of non-GAAP
information is not meant to be considered in isolation
or as a substitute for results prepared in accordance
with accounting principles generally accepted in the
United States.
UNISYS CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP
CONSOLIDATED STATEMENTS OF INCOME
(Millions, except per share data)
Three Months
Ended 12/31/03
----------------------------
US GAAP Less Without
as Pension Pension
Reported Income Income
-------- -------- --------
Revenue $1,637.6 $1,637.6
Costs and expenses
Cost of revenue 1,126.9 ($5.7) 1,121.2
Selling, general and
administrative 270.1 2.1 272.2
Research and development 81.4 3.4 84.8
-------- -------- --------
1,478.4 (0.2) 1,478.2
-------- -------- --------
Operating income 159.2 0.2 159.4
Interest expense 18.3 18.3
Other income
(expense), net 19.9 19.9
-------- -------- --------
Income before income taxes 160.8 0.2 161.0
Provision for income taxes 49.3 0.3 49.6
-------- -------- --------
Net income $111.5 ($0.1) $111.4
======== ======== ========
Diluted earnings per share $ .33 $ - $ .33
======== ======== ========
Three Months
Ended 12/31/02
----------------------------
US GAAP Less Without
as Pension Pension
Reported Income Income
-------- -------- --------
Revenue $1,552.8 $1,552.8
Costs and expenses
Cost of revenue 1,061.1 $16.8 1,077.9
Selling, general and
administrative 259.8 10.1 269.9
Research and development 80.7 8.0 88.7
-------- -------- --------
1,401.6 34.9 1,436.5
-------- -------- --------
Operating income 151.2 (34.9) 116.3
Interest expense 13.3 13.3
Other income
(expense), net (5.0) (5.0)
-------- -------- --------
Income before income taxes 132.9 (34.9) 98.0
Provision for income taxes 43.8 (11.5) 32.3
-------- -------- --------
Net income $89.1 ($23.4) $65.7
======== ======== ========
Diluted earnings per share $ .27 ($ .07) $ .20
======== ======== ========
UNISYS CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP
CONSOLIDATED STATEMENTS OF INCOME
(Millions, except per share data)
Year Ended 12/31/03
----------------------------
US GAAP Less Without
as Pension Pension
Reported Income Income
-------- -------- --------
Revenue $5,911.2 $5,911.2
Costs and expenses
Cost of revenue 4,196.2 ($1.3) 4,194.9
Selling, general and
administrative 1,007.2 9.7 1,016.9
Research and development 280.1 14.2 294.3
-------- -------- --------
5,483.5 22.6 5,506.1
-------- -------- --------
Operating income 427.7 (22.6) 405.1
Interest expense 69.6 69.6
Other income
(expense), net 22.4 22.4
-------- -------- --------
Income before income taxes 380.5 (22.6) 357.9
Provision for income taxes 121.8 (7.2) 114.6
-------- -------- --------
Net income $258.7 ($15.4) $243.3
======== ======== ========
Diluted earnings per share $ .78 ($ .05) $ .73
======== ======== ========
Year Ended 12/31/02
----------------------------
US GAAP Less Without
as Pension Pension
Reported Income Income
-------- -------- --------
Revenue $5,607.4 $5,607.4
Costs and expenses
Cost of revenue 3,918.9 $73.0 3,991.9
Selling, general and
administrative 992.0 39.4 1,031.4
Research and development 273.3 31.1 304.4
-------- -------- --------
5,184.2 143.5 5,327.7
-------- -------- --------
Operating income 423.2 (143.5) 279.7
Interest expense 66.5 66.5
Other income
(expense), net (23.9) (23.9)
-------- -------- --------
Income before income taxes 332.8 (143.5) 189.3
Provision for income taxes 109.8 (47.4) 62.4
-------- -------- --------
Net income $223.0 ($96.1) $126.9
======== ======== ========
Diluted earnings per share $ .69 ($ .30) $ .39
======== ======== ========
UNISYS CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP
SEGMENT RESULTS OF OPERATIONS
(Millions of Dollars)
Three Months
Ended 12/31/03
----------------------------
Less Without
As Pension Pension
Reported Income Income
-------- -------- --------
Services Segment
Total Revenue $1,303.9 $1,303.9
Gross Profit 288.4 (6.4) 294.8
% of revenue 22.1% 22.6%
Operating income 93.9 (4.4) 98.3
% of revenue 7.2% 7.5%
Technology Segment
Total Revenue $427.9 $427.9
Gross Profit 220.8 0.7 220.1
% of revenue 51.6% 51.4%
Operating income 62.3 4.2 58.1
% of revenue 14.6% 13.6%
Total Company
Total Revenue $1,637.6 $1,637.6
Gross Profit 510.7 (5.7) 516.4
% of revenue 31.2% 31.5%
Operating income 159.2 (0.2) 159.4
% of revenue 9.7% 9.7%
Three Months
Ended 12/31/02
----------------------------
Less Without
As Pension Pension
Reported Income Income
-------- -------- --------
Services Segment
Total Revenue $1,186.9 $1,186.9
Gross Profit 267.0 14.3 252.7
% of revenue 22.5% 21.3%
Operating income 84.5 21.7 62.8
% of revenue 7.1% 5.3%
Technology Segment
Total Revenue $464.8 $464.8
Gross Profit 231.4 2.5 228.9
% of revenue 49.8% 49.2%
Operating income 73.1 13.2 59.9
% of revenue 15.7% 12.9%
Total Company
Total Revenue $1,552.8 $1,552.8
Gross Profit 491.7 16.8 474.9
% of revenue 31.7% 30.6%
Operating income 151.2 34.9 116.3
% of revenue 9.7% 7.5%
UNISYS CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP
SEGMENT RESULTS OF OPERATIONS
(Millions of Dollars)
Year Ended 12/31/03
----------------------------
Less Without
As Pension Pension
Reported Income Income
-------- -------- --------
Services Segment
Total Revenue $4,717.8 $4,717.8
Gross Profit 955.3 (4.7) 960.0
% of revenue 20.2% 20.3%
Operating income 236.2 4.6 231.6
% of revenue 5.0% 4.9%
Technology Segment
Total Revenue $1,513.2 $1,513.2
Gross Profit 763.4 3.4 760.0
% of revenue 50.4% 50.2%
Operating income 192.1 18.0 174.1
% of revenue 12.7% 11.5%
Total Company
Total Revenue $5,911.2 $5,911.2
Gross Profit 1,715.0 (1.3) 1,716.3
% of revenue 29.0% 29.0%
Operating income 427.7 22.6 405.1
% of revenue 7.2% 6.9%
Year Ended 12/31/02
----------------------------
Less Without
As Pension Pension
Reported Income Income
-------- -------- --------
Services Segment
Total Revenue $4,323.9 $4,323.9
Gross Profit 957.9 63.4 894.5
% of revenue 22.2% 20.7%
Operating income 256.0 92.3 163.7
% of revenue 5.9% 3.8%
Technology Segment
Total Revenue $1,615.4 $1,615.4
Gross Profit 752.0 9.6 742.4
% of revenue 46.5% 46.0%
Operating income 188.6 51.2 137.4
% of revenue 11.7% 8.5%
Total Company
Total Revenue $5,607.4 $5,607.4
Gross Profit 1,688.5 73.0 1,615.5
% of revenue 30.1% 28.8%
Operating income 423.2 143.5 279.7
% of revenue 7.5% 5.0%
UNISYS CORPORATION
RECONCILIATION OF GAAP FINANCIAL MEASURES
TO NON-GAAP FINANCIAL MEASURES
(in millions of dollars)
Free cash flow is computed as follows:
Year
Ended
12/31/2003
----------
Net cash provided by operating activities 529.2
Less: capital expenditures (395.4)
----------
Free cash flow 133.8
==========
UNISYS CORPORATION
RECONCILATION OF GAAP TO NON-GAAP
FORWARD-LOOKING ESTIMATED DILUTED EARNINGS PER SHARE
Three
Months Year
Ending Ending
3/31/2004 12/31/2004
---------- ----------
Diluted earnings per share-
on a GAAP basis .07-.09 .66-.70
Add back estimated pension expense,
net of tax 0.04 0.17
--------- ---------
Diluted earnings per share-
on a NON-GAAP basis
(excluding pension expense) .11-.13 .83-.87
========= =========
NOTE: See section in press release entitled
"Forward-Looking Statements".