Fourth-Quarter and Full-Year 2009 Financial Results · Fourth-Quarter and Full-Year 2009 Financial...

Webcast available on www.unisys.com/investor

Janet HaugenChief Financial Officer

Ed ColemanChairman & CEO

Fourth-Quarter and Full-Year 2009 Financial Results

February 4, 2010

Disclaimer

• Statements made by Unisys during today’s presentation that are not historical facts, including those regarding future performance, are forward-looking statements under the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations and assumptions and involve risks and uncertainties that could cause actual results to differ from expectations. These risks and uncertainties are discussed in the company’s reports filed with the SEC and in today’s earnings release.

• In this presentation, we will be presenting certain non-GAAP financial measures of Unisys results. A reconciliation of these non-GAAP financial measures to GAAP can be found in the back of this presentation.

• These presentation materials can be accessed through a link on the Unisys Investor Web site at www.unisys.com/investor. Information in this presentation is as of February 4, 2010 and Unisys undertakes no duty to update this information.

Year of Significant Progress for Unisys

+$105

+$173

+14.5 pts

+19%

-9%

-5%

Y/Y Ch

+$236$196$163Free Cash Flow*

+$319$189$115Net Income Attributable to Unisys

+6.7 pts7.5%10.8%Operating Profit Margin

-11%$561$193Technology

-12%$4,037$1,017Services

-12%$4,598$1,210Revenue

Y/Y Ch20094Q09$M

* Free cash flow = Cash flow from operations less capital expenditures. See Slide 16.

Priorities of Turnaround Program

• Enhance cost-efficiency of labor modelto drive gross margin expansion

• Simplify organization and reduce expenses

• Focus resources on fewer markets and portfolio offerings

• Offer clear, differentiated value propositionsin chosen markets

Drive cost efficiency &

margin

Drive profitable revenue

Focus in 2010

• Priorities haven’t changed

• Goal: consistent, predictable profitability and cash flow

• Focused on driving profitable growth in areas of strength

• Continue to reduce costs and simplify

• Strengthen balance sheet

• Maintaining sense of urgency … focus on execution

4Q09 Order Highlights

• Global economic conditions and competitive pressures remained challenging, but there were some positive indicators

• While services orders were down by mid-single digits, outsourcing orders grew– Offset by double digit declines in project-based orders

• U.S. commercial orders grew double digits … Federal orders declined

• International orders declined on constant currencybasis in Europe, Asia-Pacific, and Latin America

• Closed 2009 with $6.5 billion in services backlog vs. $6.1 billion at year-end 2008

4Q09 Financial Results

($58.0)

($19.3)

4.0%*

$51.2*

(3.7%)

($47.8)

$1,280

4Q08

10.8%Operating Profit Margin - Reported

$130.2Operating Profit - Reported

10.8%Operating Profit Margin – Non-GAAP

$130.2Operating Profit – Non-GAAP

$114.5

($16.8)

$1,210

4Q09

Tax Benefit

Net Income (Loss) Attributable to Unisys

Revenue

$M

* Non-GAAP excludes 4Q08 cost-reduction charges. See Schedule A.

Q09 Revenue by Geography

Customer Revenue: $1,210 Million

-3%4%$448M> Europe/Africa

-17%-4%$129M> Pacific Asia

-13%-1%$138M> Latin America

-5%

1%

-14%

% Changevs. 4Q08

(Reported)

-10%$1,210MOverall

-8%$715MInternational

-14%$495MUnited States

% Changevs. 4Q08(@CC)

4Q09CustomerRevenue

United States41%

Europe/Africa37%

LatinAmerica

11%PacificAsia 11%

Q09 Revenue by Business

Customer Revenue $1,210M$456

$342

$75$144$169

$24

$0

$100

$200

$300

$400

$500

Outsourcing SI/Consulting EnterpriseServers

InfrastructureServices

CoreMaintenance

SpecializedTechnology

$M

-25%-12%-10%29%-14%-4%4Q09 vs. 4Q082%6%12%14%28%38%% of Total $

Overall currency impact +5 pts in 4Q09

2009 Financial Results

($130.1)

$53.2

2.7%*

$143.8*

0.8%

$40.7

$5,233

2008

7.5%Operating Profit Margin – Non-GAAP

$345.6Operating Profit – Reported

$345.6Operating Profit – Non-GAAP

7.5%Operating Profit Margin – Reported

$189.3

$41.6

$4,598

2009

Tax Expense

Net Income (Loss) Attributable to Unisys

Revenue

$M

* Non-GAAP excludes 2008 cost-reduction charges. See Schedule A.

Revenue by Geography


-10%-19%$1,468M> Europe/Africa

-13%-17%$507M> Pacific Asia

-4%-11%$506M> Latin America

-12%

-17%

-6%

% Changevs. 2008

(Reported)

-8%$4,598MOverall

-10%$2,481MInternational

-6%$2,117MUnited States

% Changevs. 2008(@CC)

2009CustomerRevenue

United States46%

Europe/Africa32%

LatinAmerica

11%PacificAsia11%

Revenue by Business

Customer Revenue $4,598M$1,804

$564$465

$309

$1,360

$96

$0

$500

$1,000

$1,500

$2,000

Outsourcing SI/Consulting InfrastructureServices

EnterpriseServers

CoreMaintenance

SpecializedTechnology

$M

-15%-17%-9%-23%-9%-10%2009 vs. 20082%7%10%12%30%39%% of Total $

Overall currency impact -4 pts in 2009

Outsourcing

BPO30%ITO

70%

$320

$157

$698

$322

$1,262

$135

$542

$1,308

$0

$500

$1,000

$1,500

4Q Full Year 4Q Full Year

2008 2009$M

ITO BPO

Revenue Mix


Revenue by Industry


-25%$1,121MFinancial

-12%

-19%

+4%

% Changevs. 2008

$4,598MOverall

$1,393MCommercial

$2,084MPublic Sector

2009CustomerRevenue

PublicSector

45%Commercial

31%

Financial24%

U.S. Federal = 20%

$246 $241 $222 $218

$862 $927

$0

$250

$500

$750

$1,000

1Q09 2Q09 3Q09 4Q09 2008 2009

$M

Slide 13U.S. Federal Government Business

2009 Business MixRevenue Trend

Civilian42%

HomelandSecurity

32%

Departmentof Defense

26%

+8%2009-8%4Q09

Rev Y/Y

Q09 & 2009 Segment Margin Trends

31.5%

61.0%

$193

6.4%

18.2%

$1,017

4Q09

+2480 bp

+1730 bp

+19%

+320 bp

+130 bp

-9%

Y/Y Ch

-11%$561Customer Revenue

-12%$4,037Customer Revenue

Y/Y Ch2009

12.4%

49.6%

6.2%

18.8% +70 bpGross Margin

+320 bpOperating Margin

Technology

+610 bpGross Margin

+830 bpOperating Margin

Services

$M

SG&A Expense Trend

$689.2

$957.0

18.3%15.0%

$0

$300

$600

$900

$1,200

$1,500

2008 20090%

10%

20%

30%

40%

50%

% of Revenue$M

• Y/Y SG&A expenses declined $268M, or 28%

• 2008 results included cost-reduction charges of $49M

• Excluding currency fluctuations and the cost reduction charges, SG&A declined 20%

Cash Flow Comparison

$353

$196

$201

$61

$397

2009

$544

$122

$58

$80

$11

$138

4Q08

$418

($40)

$295

$60

$255

2008

$5Cash Restructuring Payments

$215Cash Flow From Operations

$648

$97

$163

$52

4Q09

Cash Balance

Free Cash Flow (Usage)*

Depreciation & Amortization

Capital Expenditures

$M

* Free cash flow = Cash flow from operations less capital expenditures

Balance Sheet & Capital Structure

• Focused on strengthening balance sheet & capital structure

• Made initial progress in 2009

• Successfully completed our debt exchange offer– Plan to pay remaining $65M of March 2010 notes from cash

on hand

• Continue to explore potential divestitures– Closed several small divestitures in 2009

– Closed sale of check sorter and check scanner equipment business

– In process of completing sale of HIM business

– Proceeds will help strengthen our capital structure

Update on Pension Plan and Cash Requirements

26.2%Return on Assets

6.11%U.S. Discount Rate

2010E2009Worldwide P&L Impact ($M)

$0($24)Total Pension (Income) Expense

2010E2009Cash Funding Requirements ($M)

$0$0U.S. Qualified Defined Benefit Pension Plan

$115$94Other Plans

$115$94Total

2009U.S. Qualified Defined Benefit Pension Plan

Questions & Answers



The following Schedule A presents financial information with and without 2008 net cost-reduction charges. The company is providing financial information without the net cost-reduction charges as supplemental information to the financial information presented on a GAAP basis because the company believes it provides investors with a meaningful comparison to operations in prior-year periods. Non-GAAP information may have limitations as an analytical tool, and it should not be considered in isolation or as a substitute for analysis of the company’s results as reported under GAAP.

Constant CurrencyManagement refers to growth rates at constant currency or adjusting for currency so that the business results can be viewed without the impact of fluctuations in foreign currency exchange rates to facilitate comparisons of the company’s business performance from one period to another. Constant currency for orders, revenue or SG&A are calculated by retranslating current and prior period results at a consistent rate. This approach is based on the pricing currency for each country which is typically the functional currency. Generally, when the dollar either strengthens or weakens against other currencies, the growth at constant currency rates or adjusting for currency will be higher or lower than growth reported at actual exchange rates.

Reconciliation of GAAP to Non-GAAP Financial Information

Schedule A2008 Operating Profit & Margins: GAAP to Non-GAAP Reconciliation

20084Q08

$51.2

$99.0

($47.8)

4.0%

7.7%

(3.7%) 0.8%$40.7Operating Profit – GAAP

2.7%$143.8Operating Profit – Non-GAAP

$M

1.9%$103.1Net Cost Reduction

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