TIDMUSY 
 
Unisys Announces Third-Quarter Results 
 
Achieves Sequential Revenue Growth and Operating Profit Margin Expansion; Free 
Cash Flow Positive; Significant Reduction to Required Pension Cash 
Contributions and Deficit Pro Forma for Proceeds from Recently-Priced Debt 
Offering 
 
BLUE BELL, Pa., Oct. 26, 2020 /PRNewswire/ -- 
 
  * Revenue growth of 12.9% sequentially to $495.2 million 
  * Operating profit margin up 750 bps sequentially to 5.6% 
      + Non-GAAP operating profit(5) margin up 830 bps sequentially and 50 bps 
        year over year to 8.5% 
  * Significant reduction in required pension cash contributions and deficit 
    pro forma for application of proceeds from recently-priced notes offering 
  * Operating cash flow up $80.5 million sequentially and $48.6 million year 
    over year to $66.3 million 
      + Free cash flow(10) positive with free cash flow growth of $83.9 million 
        sequentially and $48.6 million year over year to $34.3 million 
      + Repaid $59 million drawn on revolver; cash balance down less than $10 
        million versus 2Q20 at $774.0 million 
  * Services Total Contract Value(3) ("TCV") up 4.3% sequentially 
 
Unisys Corporation (NYSE: UIS) today reported third-quarter 2020 financial 
results. "Revenue, profitability, cash flow and Services TCV all improved from 
the COVID-related disruptions in the second quarter, with significant 
sequential revenue growth and margin expansion in both Services and Technology, 
and non-GAAP operating profit margin expansion both sequentially and year over 
year," said Unisys Chairman and CEO Peter A. Altabef. "The net proceeds from 
the notes offering we recently priced will allow us to significantly reduce our 
future required pension cash contributions and pension deficit." 
 
Third-Quarter 2020 Highlights 
 
                       QoQ Revenue Growth                         QoQ Profitability 
 
                   Revenue Services Technology           Operating   Net    EBITDA  Diluted 
                   Growth  Revenue   Revenue              Profit    Income  Margin    EPS 
                            Growth    Growth              Margin    Margin 
 
GAAP                 12.9%     7.6%      61.7%  GAAP          5.6%  (2.7%)    6.2%   ($0.21) 
 
Constant-Currency    10.0%     4.4%      61.9%   QoQ       750 bps    1470    1030     82.6% 
(GAAP)                                           Change                bps     bps 
 
Non-GAAP             12.8%     7.6%        N/M  Non-GAAP      8.5%    7.0%   14.9%     $0.51 
 
                                                 QoQ       830 bps     920     350       N/M 
                                                 Change                bps     bps 
 
                       YoY Revenue Growth                         YoY Profitability 
 
                   Revenue Services Technology           Operating   Net    EBITDA  Diluted 
                   Growth  Revenue   Revenue              Profit    Income  Margin    EPS 
                            Growth    Growth              Margin    Margin 
 
GAAP               (10.3%)  (11.0%)     (5.6%)  GAAP          5.6%  (2.7%)    6.2%   ($0.21) 
 
Constant-Currency   (9.8%)  (11.0%)     (2.0%)   YoY      (330)        260   (20)      58.0% 
(GAAP)                                           Change  bps           bps  bps 
 
Non-GAAP            (9.2%)   (9.8%)        N/M  Non-GAAP      8.5%    7.0%   14.9%     $0.51 
 
                                                 YoY        50 bps  410      (60)      96.2% 
                                                 Change             bps     bps 
 
Beginning January 1, 2020, the historical results of the company's U.S. Federal 
business have been reflected in the company's consolidated financial statements 
as discontinued operations. Prior-period amounts have been reclassified to 
reflect the company's U.S. Federal business as discontinued operations. 
Throughout this release we only refer to the company's continuing operations. 
 
Summary of Third-Quarter 2020 Business Results 
 
Company: 
Third-quarter revenue was $495.2 million, versus $552.1 million in the 
prior-year period, and was up 12.9% sequentially (down 10.3% year over year or 
9.8% on a constant-currency(1) basis). Non-GAAP adjusted revenue(4) was $495.1 
million, relative to $545.3 million in the prior-year period, and was up 12.8% 
sequentially. Sequential comparisons reflect improvement in COVID-disrupted 
portions of the business such as Field Services, BPO and Travel and 
Transportation. Additionally, the two ClearPath Forward® contracts that were 
delayed from the second quarter were signed in the third quarter, though total 
revenue and Technology revenue would have been up sequentially even excluding 
these contracts. Volumes in COVID-disrupted businesses were still down versus 
the prior-year period as were volumes in the company's check-processing JV, as 
expected, and the ClearPath Forward renewal schedule was lighter, even 
including the delayed contracts, also as expected. These items resulted in the 
noted year-over-year declines. 
 
Third-quarter total company operating profit was $27.7 million, versus $49.4 
million in the prior-year period, and was up $36.2 million sequentially. 
Operating profit margin was 5.6%, versus 8.9% in the prior-year period, and was 
up 750 bps sequentially. There were $13.8 million of cost-reduction charges 
incurred in the third quarter, which impacted the year-over-year operating 
profit and operating margin comparisons. Total company non-GAAP operating 
profit margin was up 50 basis points year over year to 8.5%, versus 8.0% in the 
prior-year period, and was up 830 bps sequentially. 
 
Net loss from continuing operations was $13.3 million versus $29.2 million in 
the prior-year period and also improved $63.2 million sequentially, from a net 
loss of $76.5 million in the second quarter. Diluted loss per share was $0.21, 
compared to $0.50 in the prior-year period, and also improved by $1.00 
sequentially. Non-GAAP net income(9) was up 116% year over year to $34.6 
million, versus non-GAAP net income of $16.0 million in the prior-year period, 
and was up $44.3 million sequentially. Non-GAAP diluted earnings per share(9) 
was up 96.2% year over year to $0.51, versus $0.26 in the prior-year period, 
and was up $0.66 sequentially. 
 
Adjusted EBITDA(8) was $74.0 million, relative to $84.4 million in the 
prior-year period, and was up 47.4% sequentially. Net income margin was (2.7)%, 
compared to (5.3)% in the prior-year period, and was up 1470 bps sequentially. 
Adjusted EBITDA margin was 14.9%, relative to 15.5% in the prior-year period, 
and was up 350 bps sequentially. 
 
Operating cash flow was up $48.6 million year over year to $66.3 million, 
versus $17.7 million in the prior-year period, and was up $80.5 million 
sequentially. Free cash flow was up $48.6 million year over year to $34.3 
million, relative to $(14.3) million in the prior-year period, and was up $83.9 
million sequentially. Adjusted free cash flow(11) was up $38.5 million year 
over year to $52.4 million, versus $13.9 million in the prior-year period, and 
was up $89.5 million sequentially. At September 30, 2020, the company had 
$774.0 million in cash and cash equivalents, relative to $782.2 million at the 
end of the second quarter and had fully repaid the $59 million previously 
outstanding on the company's revolver. Pro forma for the company's recently 
priced notes offering (which is expected to close on October 29, 2020, subject 
to customary closing conditions), and the contribution of up to $285 million in 
2020 or 2021 from cash on the balance sheet, substantially all 
currently-expected required pension contributions will effectively have been 
pre-funded. Pro forma for the application of the notes proceeds, the pension 
deficit will be reduced by $478 million dollars, and total contributions to 
date in 2020 would be over $790 million. Services TCV was up 4.3% sequentially. 
 
Services: 
Services revenue was $426.0 million, relative to $478.8 million in the 
prior-year period, and was up 7.6% sequentially (down 11.0% year over year and 
11.0% in constant-currency). Services non-GAAP adjusted revenue was $425.9 
million, relative to $472.0 million in the prior-year period, and was up 7.6% 
sequentially. As noted above, while COVID-disrupted businesses improved 
significantly relative to the second quarter, volumes were still down year over 
year as were volumes in the company's check-processing JV, as expected, driving 
the year-over-year revenue declines. Services gross profit margin was up 80 bps 
year over year to 19.0%, versus 18.2% in the prior-year period, and was up 350 
bps sequentially. Non-GAAP adjusted Services gross profit margin(6) was up 200 
bps year over year to 19.0%, versus 17.0% in the prior-year period, and was up 
350 basis points sequentially. Services operating profit margin was up 120 
basis points year over year to 4.9%, versus 3.7% in the prior-year period, and 
was up 520 bps sequentially. Non-GAAP adjusted Services operating profit(7) 
margin was up 250 bps year over year to 4.8%, versus 2.3% in the prior-year 
period, and was up 520 basis points sequentially. Services backlog was $3.3 
billion, relative to $3.6 billion at the end of the second quarter. 
 
Technology: 
Technology revenue was $69.2 million, relative to $73.3 million in the 
prior-year period, and was up 61.7% sequentially (down 5.6% year over year or 
2.0% in constant currency).  While the ClearPath Forward schedule was expected 
to be lighter year over year, the two renewals that were delayed from the 
second quarter were signed in the third quarter, contributing to the sequential 
improvement, though Technology revenue would have been up sequentially even 
excluding these two contracts. Technology gross profit margin was 59.7%, 
compared to 66.4% in the prior-year period, and was up 1770 bps sequentially. 
Technology operating profit margin was 33.1%, versus 42.1% in the prior-year 
period, and was up 3090 bps sequentially. 
 
Select Third-Quarter Contract Signings: 
In the third quarter, the company entered into several noteworthy contracts: 
 
  * InteliServeT: Unisys signed a new-logo contract with DJO Global, Inc., 
    including to provide the Unisys InteliServe solution to enable omnichannel 
    service desk support for improved end-user experience and lower service 
    delivery costs. 
  * CloudForte®: The State of North Dakota, a current public sector client, 
    awarded Unisys a new contract to support Job Service of North Dakota 
    (JSND), the state's unemployment insurance agency. The contract scope 
    includes ClearPath Forward for Azure, as well as CloudForte consulting 
    services in the Azure GovCloud. 
  * Security Services: A Unisys partner secured several contracts with a U.S. 
    government organization to provide Unisys Stealth® security software and 
    deployment services to secure workloads for coalition partner information 
    sharing. 
 
Conference Call 
Unisys will hold a conference call tomorrow at 8:00 a.m. Eastern Time to 
discuss its results. The listen-only webcast, as well as the accompanying 
presentation materials, can be accessed on the Unisys Investor website 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. 
 
(1) Constant currency - The company refers to growth rates in constant currency 
or on a constant currency basis 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 is calculated by retranslating current and prior 
period results at a consistent rate. 
 
(2) Pipeline - Pipeline represents prospective sale opportunities being pursued 
or for which bids have been submitted. There is no assurance that pipeline will 
translate into recorded revenue. 
 
(3) Total Contract Value - TCV is the estimated total contractual revenue 
related to contracts signed in the period without regard for cancellation 
terms. New business TCV represents TCV attributable to new scope for existing 
clients and new logo contracts. 
 
Non-GAAP and Other Information 
Although appropriate under generally accepted accounting principles ("GAAP"), 
the company's results reflect revenue and charges that the company believes are 
not indicative of its ongoing operations and that can make its revenue, 
profitability and liquidity results difficult to compare to prior periods, 
anticipated future periods, or to its competitors' results. These items consist 
of certain portions of revenue, post-retirement, debt exchange and 
extinguishment and cost-reduction and other expenses. Management believes each 
of these items can distort the visibility of trends associated with the 
company's ongoing performance. Management also believes that the evaluation of 
the company's financial performance can be enhanced by use of supplemental 
presentation of its results that exclude the impact of these items in order to 
enhance consistency and comparativeness with prior or future period results. 
The following measures are often provided and utilized by the company's 
management, analysts, and investors to enhance comparability of year-over-year 
results, as well as to compare results to other companies in our industry. 
 
(4) Non-GAAP adjusted revenue - In 2019 and 2020, the company's non-GAAP 
results reflect adjustments to exclude certain revenue and related profit 
relating to reimbursements from the company's check-processing JV partners for 
restructuring expenses included as part of the company's restructuring program. 
 
(5) Non-GAAP operating profit - The company recorded pretax post-retirement 
expense and pretax charges in connection with cost-reduction activities, debt 
exchange/extinguishment and other expenses. For the company, non-GAAP operating 
profit excluded these items. The company believes that this profitability 
measure is more indicative of the company's operating results and aligns those 
results to the company's external guidance, which is used by the company's 
management to allocate resources and may be used by analysts and investors to 
gauge the company's ongoing performance. During 2019 and 2020, the company 
included the non-GAAP adjustments discussed in (4) herein. 
 
(6)  Non-GAAP adjusted Services gross profit - During 2019 and 2020, the 
company included the adjustments discussed in (4) herein. 
 
(7) Non-GAAP adjusted Services operating profit - During 2019 and 2020, the 
company included the adjustments discussed in (4) herein. 
 
(8) EBITDA & adjusted EBITDA - Earnings before interest, taxes, depreciation 
and amortization ("EBITDA") is calculated by starting with net income (loss) 
from continuing operations attributable to Unisys Corporation common 
shareholders and adding or subtracting the following items: net income 
attributable to noncontrolling interests, interest expense (net of interest 
income), provision for income taxes, depreciation and amortization. Adjusted 
EBITDA further excludes post-retirement, debt exchange/extinguishment, and 
cost-reduction and other expenses, non-cash share-based expense, and other 
(income) expense adjustment. In order to provide investors with additional 
understanding of the company's operating results, these charges are excluded 
from the adjusted EBITDA calculation. During 2019 and 2020, the company 
included the adjustments discussed in (4) herein. 
 
(9) Non-GAAP net income and non-GAAP diluted earnings per share - The company 
has recorded post-retirement expense and charges in connection with debt 
exchange/extinguishment and cost-reduction activities and other expenses. 
Management believes that investors may have a better understanding of the 
company's performance and return to shareholders by excluding these charges 
from the GAAP diluted earnings/loss per share calculations. The tax amounts 
presented for these items for the calculation of non-GAAP diluted earnings per 
share include the current and deferred tax expense and benefits recognized 
under GAAP for these amounts. During 2019 and 2020, the company included the 
adjustments discussed in (4) herein. 
 
(10) Free cash flow - The company defines free cash flow as cash flow from 
operations less capital expenditures. Management believes this liquidity 
measure gives investors an additional perspective on cash flow from on-going 
operating activities in excess of amounts used for reinvestment. 
 
(11) Adjusted free cash flow - Because inclusion of the company's 
post-retirement contributions, discontinued operations and cost-reduction 
charges/reimbursements and other payments in free cash flow may distort the 
visibility of the company's ability to generate cash flow from its operations 
without the impact of these non-operational costs, management believes that 
investors may be interested in adjusted free cash flow, which provides free 
cash flow before these payments. This liquidity measure was provided to 
analysts and investors in the form of external guidance and is used by 
management to measure operating liquidity. 
 
About Unisys 
Unisys is a global IT services company that delivers successful outcomes for 
the most demanding businesses and governments. Unisys offerings include digital 
workplace services, cloud and infrastructure services and software operating 
environments for high-intensity enterprise computing. Unisys integrates 
security into all of its solutions. For more information on how Unisys delivers 
for its clients across the government, financial services and commercial 
markets, 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 or expectations of earnings, revenues, annual contract value, 
total contract value, new business ACV or TCV, backlog or other financial 
items; any statements of the company's plans, strategies or objectives for 
future operations; statements regarding future economic conditions or 
performance; and any statements of belief or expectation. All forward-looking 
statements rely on assumptions and are subject to various risks and 
uncertainties that could cause actual results to differ materially from 
expectations. In particular, statements concerning annual and total contract 
value are based, in part, on the assumption that each of those contracts will 
continue for their full contracted term. Risks and uncertainties that could 
affect the company's future results include, but are not limited to, the 
following: uncertainty of the magnitude, duration and spread of the novel 
coronavirus ("COVID-19") pandemic and the impact of COVID-19 and governments' 
responses to it on the global economy and our business, growth, reputation, 
projections, prospects, financial condition, operations, cash flows and 
liquidity, our ability to continue revenue growth and margin expansion in our 
Services business; our ability to maintain our installed base and sell new 
solutions; the potential adverse effects of aggressive competition in the 
information services and technology marketplace; our significant pension 
obligations and required cash contributions and requirements to make additional 
significant cash contributions to our defined benefit pension plans; our 
ability to effectively anticipate and respond to volatility and rapid 
technological innovation in our industry; our ability to retain significant 
clients; our contracts may not be as profitable as expected or provide the 
expected level of revenues; the risks of doing business internationally when a 
significant portion of our revenue is derived from international operations; 
the business and financial risk in implementing future acquisitions or 
dispositions; our ability to access financing markets; the adverse effects of a 
reduction in our credit rating; cybersecurity breaches could result in 
significant costs and could harm our business and reputation; we may not 
achieve the operational and financial results that we anticipate from the sale 
of our U.S. Federal business; the adverse effects of global economic 
conditions, acts of war, terrorism, natural disasters or the widespread 
outbreak of infectious diseases; the impact of Brexit could adversely affect 
the company's operations in the United Kingdom as well as the funded status of 
the company's U.K. pension plans; our ability to attract, motivate and retain 
experienced and knowledgeable personnel in key positions; a significant 
disruption in our IT systems could adversely affect our business and 
reputation; we may face damage to our reputation or legal liability if our 
clients are not satisfied with our services or products; the performance and 
capabilities of third parties with whom we have commercial relationships; our 
ability to use our net operating loss carryforwards and certain other tax 
attributes may be limited; an involuntary termination of the company's U.S. 
qualified defined benefit pension plans; the potential for intellectual 
property infringement claims to be asserted against us or our clients; the 
possibility that legal proceedings could affect our results of operations or 
cash flow or may adversely affect our business or reputation; and the company's 
consideration of all available information following the end of the quarter and 
before the filing of the Form 10-Q and the possible impact of this subsequent 
event information on its financial statements for the reporting period. 
Additional discussion of factors that could affect the company's future results 
is contained in its periodic filings with the Securities and Exchange 
Commission. The company assumes no obligation to update any forward-looking 
statements. 
 
RELEASE NO.: 1026/9795 
 
Unisys and other Unisys products and services mentioned herein, as well as 
their respective logos, are trademarks or registered trademarks of Unisys 
Corporation. Any other brand or product referenced herein is acknowledged to be 
a trademark or registered trademark of its respective holder. 
 
UIS-Q 
 
                              UNISYS CORPORATION 
 
                   CONSOLIDATED STATEMENTS OF INCOME (LOSS) 
 
                                  (Unaudited) 
 
                       (Millions, except per share data) 
 
                                               Three Months   Nine Months Ended 
                                                  Ended         September 30, 
                                              September 30, 
 
                                               2020    2019    2020      2019 
 
Revenue 
 
Services                                           $       $        $         $ 
                                               426.0   478.8  1,247.9   1,433.8 
 
Technology                                      69.2    73.3    201.5     242.2 
 
                                               495.2   552.1  1,449.4   1,676.0 
 
Costs and expenses 
 
Cost of revenue: 
 
Services                                       345.9   389.3  1,061.6   1,185.2 
 
Technology                                      29.4    22.8     79.9      73.1 
 
                                               375.3   412.1  1,141.5   1,258.3 
 
Selling, general and administrative             85.5    84.7    252.5     268.0 
 
Research and development                         6.7     5.9     16.1      22.1 
 
                                               467.5   502.7  1,410.1   1,548.4 
 
Operating income                                27.7    49.4     39.3     127.6 
 
Interest expense                                 2.4    15.2     20.9      46.9 
 
Other expense, net                            (32.5)  (49.2)  (134.3)   (108.5) 
 
Loss from continuing operations before income  (7.2)  (15.0)  (115.9)    (27.8) 
taxes 
 
Provision for income taxes                       6.1    10.4     26.6      23.4 
 
Consolidated net loss from continuing         (13.3)  (25.4)  (142.5)    (51.2) 
operations 
 
Net income attributable to noncontrolling          -     3.8      0.5      10.0 
interests 
 
Net loss from continuing operations           (13.3)  (29.2)  (143.0)    (61.2) 
attributable to Unisys Corporation 
 
Income loss from discontinued operations, net    0.4    16.0  1,066.8      54.8 
of tax 
 
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) 
 
Disontinued Operations                          0.01    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) 
 
Disontinued Operations                          0.01    0.27    16.96      1.02 
 
Total                                            $       $        $       $ 
                                              (0.20)  (0.23)    14.69    (0.12) 
 
 
 
                              UNISYS CORPORATION 
 
                                SEGMENT RESULTS 
 
                                  (Unaudited) 
 
                                  (Millions) 
 
                                Total     Eliminations    Services  Technology 
 
Three Months Ended September 
30, 2020 
 
Customer revenue                    $    $                     $      $ 
                                  495.2                -     426.0         69.2 
 
Intersegment                          -            (6.0)         -          6.0 
 
Total revenue                       $        $                 $      $ 
                                  495.2            (6.0)     426.0         75.2 
 
Gross profit percent             24.2 %                     19.0 %       59.7 % 
 
Operating profit percent          5.6 %                      4.9 %       33.1 % 
 
Three Months Ended September 
30, 2019 
 
Customer revenue                    $    $                     $      $ 
                                  552.1                -     478.8         73.3 
 
Intersegment                          -            (2.3)         -          2.3 
 
Total revenue                       $        $                 $      $ 
                                  552.1            (2.3)     478.8         75.6 
 
Gross profit percent             25.4 %                     18.1 %       66.4 % 
 
Operating profit percent          8.9 %                      3.7 %       42.1 % 
 
                                Total     Eliminations    Services  Technology 
 
Nine Months Ended September 
30, 2020 
 
Customer revenue                      $  $                       $      $ 
                                1,449.4                -   1,247.9        201.5 
 
Intersegment                          -           (10.9)         -         10.9 
 
Total revenue                         $        $                 $      $ 
                                1,449.4           (10.9)   1,247.9        212.4 
 
Gross profit percent             21.2 %                     15.8 %       59.7 % 
 
Operating profit percent          2.7 %                      0.4 %       32.1 % 
 
Nine Months Ended September 
30, 2019 
 
Customer revenue                      $  $                       $      $ 
                                1,676.0                -   1,433.8        242.2 
 
Intersegment                          -            (6.8)         -          6.8 
 
Total revenue                         $      $                   $      $ 
                                1,676.0            (6.8)   1,433.8        249.0 
 
Gross profit percent             24.9 %                     16.6 %       67.9 % 
 
Operating profit percent          7.6 %                      1.8 %       44.7 % 
 
 
 
                              UNISYS CORPORATION 
 
                          CONSOLIDATED BALANCE SHEETS 
 
                                  (Unaudited) 
 
                                  (Millions) 
 
                                             September 30,      December 31, 
                                                 2020               2019 
 
Assets 
 
Current assets: 
 
Cash and cash equivalents                      $                   $ 
                                                       774.0             538.8 
 
Accounts receivable, net                               364.1             417.7 
 
Contract assets                                         47.0              38.4 
 
Inventories                                             14.5              16.4 
 
Prepaid expenses and other current assets              103.0             100.7 
 
Current assets of discontinued operations                  -             109.3 
 
Total current assets                                 1,302.6           1,221.3 
 
Properties                                             755.6             784.0 
 
Less-accumulated depreciation and                      648.7             668.0 
amortization 
 
Properties, net                                        106.9             116.0 
 
Outsourcing assets, net                                177.3             202.1 
 
Marketable software, net                               191.5             186.8 
 
Operating lease right-of-use assets                     67.8              71.4 
 
Prepaid postretirement assets                          144.2             136.2 
 
Deferred income taxes                                  121.6             114.0 
 
Goodwill                                               108.6             110.4 
 
Restricted cash                                         10.1              13.0 
 
Other long-term assets                                 176.8             198.9 
 
Long-term assets of discontinued                           -             133.9 
operations 
 
Total assets                                       $                 $ 
                                                     2,407.4           2,504.0 
 
Liabilities and deficit 
 
Current liabilities: 
 
Current maturities of long-term-debt           $                 $ 
                                                       100.0              13.5 
 
Accounts payable                                       183.4             204.3 
 
Deferred revenue                                       197.4             246.4 
 
Other accrued liabilities                              272.4             316.7 
 
Current liabilities of discontinued                        -             146.4 
operations 
 
Total current liabilities                              753.2             927.3 
 
Long-term debt                                          48.4             565.9 
 
Long-term postretirement liabilities                 1,563.6           1,960.2 
 
Long-term deferred revenue                             122.5             147.0 
 
Long-term operating lease liabilities                   49.3              56.0 
 
Other long-term liabilities                             70.7              47.6 
 
Long-term liabilities of discontinued                      -              28.3 
operations 
 
Commitments and contingencies 
 
Total Unisys Corporation stockholders'               (237.9)         (1,265.4) 
deficit 
 
Noncontrolling interests                                37.6              37.1 
 
Total deficit                                        (200.3)         (1,228.3) 
 
Total liabilities and deficit                      $                 $ 
                                                     2,407.4           2,504.0 
 
 
 
                              UNISYS CORPORATION 
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS 
 
                                  (Unaudited) 
 
                                  (Millions) 
 
                                                            Nine Months Ended 
                                                              September 30, 
 
                                                             2020       2019 
 
Cash flows from operating activities 
 
Consolidated net loss from continuing operations                 $        $ 
                                                             (142.5)     (51.2) 
 
Income from discontinued operations, net of tax              1,066.8       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 extinguishment                                     28.5       20.2 
 
Foreign currency translation losses                             14.3        7.2 
 
Non-cash interest expense                                        3.5        7.5 
 
Employee stock compensation                                     11.1       10.1 
 
Depreciation and amortization of properties                     22.0       26.7 
 
Depreciation and amortization of outsourcing assets             48.9       47.3 
 
Amortization of marketable software                             50.2       35.0 
 
Other non-cash operating activities                              0.6      (0.8) 
 
Loss on disposal of capital assets                               3.3        1.3 
 
Postretirement contributions                                 (344.5)     (82.3) 
 
Postretirement expense                                          72.8       71.5 
 
Deferred income taxes, net                                    (16.9)        1.0 
 
Changes in operating assets and liabilities: 
 
Receivables, net                                                12.4     (17.4) 
 
Inventories                                                      1.5      (1.7) 
 
Accounts payable and current liabilities                     (127.7)    (173.4) 
 
Other liabilities                                               27.2       33.1 
 
Other assets                                                     0.4        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 business              1,162.9          - 
 
Proceeds from investments                                    2,550.2    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 activities         1,055.8    (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 debt                         7.1       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     (25.3)     (10.0) 
and restricted cash 
 
Increase (decrease) in cash, cash equivalents and              232.3    (190.8) 
restricted cash 
 
Cash, cash equivalents and restricted cash, beginning of       551.8      624.1 
period 
 
Cash, cash equivalents and restricted cash, end of period  $   784.1  $   433.3 
 
 
 
                               UNISYS CORPORATION 
 
         RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES 
 
                                  (Unaudited) 
 
                       (Millions, except per share data) 
 
                                                  Three Months     Nine Months 
                                                     Ended            Ended 
 
                                                 September 30,    September 30, 
 
                                                  2020    2019    2020     2019 
 
GAAP net loss from continuing operations              $       $      $         $ 
attributable to Unisys Corporation               (13.3)  (29.2)  (143.0)  (61.2) 
 
Postretirement expense:          pretax            24.4    24.4     72.8    71.5 
 
                                 tax                0.4   (0.1)      1.1   (0.2) 
 
                                 net of tax        24.0    24.5     71.7    71.7 
 
Debt extinguishment, cost        pretax            23.7    18.1     97.4    28.7 
reduction and other expenses: 
 
                                 tax              (0.2)     0.8      0.9     1.8 
 
                                 net of tax        23.9    17.3     96.5    26.9 
 
                                 minority             -     3.4      0.4     6.6 
                                 interest 
 
                                 net of            23.9    20.7     96.9    33.5 
                                 minority 
                                 interest 
 
Non-GAAP net income from continuing operations     34.6    16.0     25.6    44.0 
attributable to Unisys Corporation 
 
Add interest expense on convertible notes           2.1     3.2      6.2    13.3 
 
Non-GAAP net income attributable to Unisys            $       $      $         $ 
Corporation for diluted earnings per share         36.7    19.2     31.8    57.3 
 
Weighted average shares (thousands)              63,032  58,245   62,897  53,815 
 
Plus incremental shares from assumed conversion: 
 
                                 Employee stock     613     341      504     395 
                                 plans 
 
                                 Convertible      8,625  13,951    8,625  19,229 
                                 notes 
 
Non-GAAP adjusted weighted average shares        72,270  72,537   72,026  73,439 
 
Diluted earnings (loss) per share from 
continuing operations 
 
GAAP basis 
 
GAAP net loss from continuing operations              $       $      $         $ 
attributable to Unisys Corporation for diluted   (13.3)  (29.2)  (143.0)  (61.2) 
earnings per share 
 
Divided by weighted average shares               63,032  58,245   62,897  53,815 
 
GAAP diluted loss per share                           $       $      $         $ 
                                                 (0.21)  (0.50)   (2.27)  (1.14) 
 
Non-GAAP basis 
 
Non-GAAP net income from continuing operations        $       $      $         $ 
attributable to Unisys Corporation for diluted     36.7    19.2     31.8    57.3 
earnings per share 
 
Divided by Non-GAAP adjusted weighted average    72,270  72,537   72,026  73,439 
shares 
 
Non-GAAP diluted loss per share                       $       $      $         $ 
                                                   0.51    0.26     0.44    0.78 
 
 
 
                              UNISYS CORPORATION 
 
                      RECONCILIATION OF GAAP TO NON-GAAP 
 
                                  (Unaudited) 
 
                                  (Millions) 
 
                                FREE CASH FLOW 
 
                                         Three Months Ended      Nine Months 
                                                                    Ended 
 
                                           September 30,        September 30, 
 
                                             2020        2019     2020     2019 
 
Cash provided by (used for)                $ 66.3      $ 17.7        $      $ 
operations                                                     (325.8)    (1.8) 
 
Additions to marketable software           (18.1)      (19.0)   (54.8)   (56.2) 
 
Additions to properties                     (6.1)       (8.3)   (16.7)   (29.1) 
 
Additions to outsourcing assets             (7.8)       (4.7)   (23.6)   (44.4) 
 
Free cash flow                               34.3      (14.3)  (420.9)  (131.5) 
 
Postretirement funding                       11.5        34.6    344.5     82.3 
 
Discontinued operations                       0.2      (21.6)    (8.9)   (73.3) 
 
Debt extinguishment, cost reduction           6.4        15.2     23.5     37.1 
and other payments, net of 
reimbursements 
 
Adjusted free cash flow                    $ 52.4      $ 13.9      $          $ 
                                                                (61.8)   (85.4) 
 
 
 
                              UNISYS CORPORATION 
 
                      RECONCILIATION OF GAAP TO NON-GAAP 
 
                                  (Unaudited) 
 
                                  (Millions) 
 
                                    EBITDA 
 
                                              Three Months   Nine Months Ended 
                                                 Ended 
 
                                             September 30,     September 30, 
 
                                              2020    2019     2020      2019 
 
Net loss from continuing operations             $       $         $       $ 
attributable to Unisys Corporation           (13.3)  (29.2)   (143.0)    (61.2) 
 
Net income attributable to noncontrolling         -     3.8       0.5      10.0 
interests 
 
Interest expense, net of interest income of     1.1    12.4      14.9      38.3 
$1.3, $2.8, $6.0, $8.6 respectively* 
 
Provision for income taxes                      6.1    10.4      26.6      23.4 
 
Depreciation                                   22.6    24.5      70.9      74.0 
 
Amortization                                   14.2    13.4      50.2      35.0 
 
EBITDA                                          $       $       $           $ 
                                               30.7    35.3      20.1     119.5 
 
Postretirement expense                          $       $       $         $ 
                                               24.4    24.4      72.8      71.5 
 
Debt extinguishment, cost reduction and        15.5    18.1      89.2      27.6 
other expenses** 
 
Non-cash share based expense                    3.1     2.8      11.1      10.1 
 
Other expense, net adjustment***                0.3     3.8       2.4      14.9 
 
Adjusted EBITDA                                 $       $         $         $ 
                                               74.0    84.4     195.6     243.6 
 
*Included in other expense, net on the consolidated statements of income 
 
**Reduced for depreciation and amortization included above 
 
***Other (income) expense, net as reported on the consolidated statements of 
income less postretirement expense, interest income and items included in debt 
extinguishment, cost reduction and other expenses 
 
                                              Three Months   Nine Months Ended 
                                                 Ended 
 
                                             September 30,     September 30, 
 
                                              2020    2019     2020      2019 
 
Revenue                                           $       $         $         $ 
                                              495.2   552.1   1,449.4   1,676.0 
 
Non-GAAP revenue                              495.1   545.3   1,448.4   1,660.7 
 
Net loss from continuing operations          (2.7)%  (5.3)%    (9.9)%    (3.7)% 
attributable to Unisys Corporation as a 
percentage of revenue 
 
Non-GAAP net income from continuing           7.0 %   2.9 %     1.8 %     2.6 % 
operations attributable to Unisys 
Corporation as a percentage of Non-GAAP 
revenue 
 
Adjusted EBITDA as a percentage of Non-GAAP  14.9 %  15.5 %    13.5 %    14.7 % 
revenue 
 
 
 
                              UNISYS CORPORATION 
 
    RECONCILIATION OF GAAP SEGMENT REPORTING TO NON-GAAP SEGMENT REPORTING 
 
                                 (Unaudited) 
 
                                  (Millions) 
 
                                   Three Months Ended     Nine Months Ended 
 
Services Segment                     September 30,          September 30, 
 
                                     2020      2019       2020         2019 
 
GAAP total revenue                   $426.0    $478.8     $1,247.9    $1,433.8 
 
Restructuring reimbursement           (0.1)     (6.8)        (1.0)      (15.3) 
 
Non-GAAP revenue                     $425.9    $472.0     $1,246.9    $1,418.5 
 
GAAP gross margin                   $  81.0   $  87.0    $   197.4   $   237.7 
 
Restructuring reimbursement           (0.1)     (6.8)        (1.0)      (15.3) 
 
Non-GAAP gross margin               $  80.9   $  80.2    $   196.4   $   222.4 
 
GAAP operating profit               $  20.7   $  17.7   $      5.1  $     25.3 
 
Restructuring reimbursement           (0.1)     (6.8)        (1.0)      (15.3) 
 
Non-GAAP operating profit           $  20.6   $  10.9   $      4.1  $     10.0 
 
GAAP gross margin %                   19.0%     18.2%        15.8%       16.6% 
 
Non-GAAP gross margin %               19.0%     17.0%        15.8%       15.7% 
 
GAAP operating profit %                4.9%      3.7%         0.4%        1.8% 
 
Non-GAAP operating profit  %           4.8%      2.3%         0.3%        0.7% 
 
                                   Three Months Ended     Nine Months Ended 
 
Total Unisys                         September 30,          September 30, 
 
                                     2020      2019       2020         2019 
 
GAAP total revenue                   $495.2    $552.1     $1,449.4    $1,676.0 
 
Restructuring reimbursement           (0.1)     (6.8)        (1.0)      (15.3) 
 
Non-GAAP revenue                     $495.1    $545.3     $1,448.4    $1,660.7 
 
GAAP gross margin                   $ 119.9   $ 140.0   $    307.9  $    417.7 
 
Restructuring reimbursement           (0.1)     (6.8)        (1.0)      (15.3) 
 
Cost reduction expense                  2.9     (1.9)         15.7       (6.6) 
 
Non-GAAP gross margin                $122.7    $131.3    $   322.6   $   395.8 
 
GAAP operating profit              $   27.7  $   49.4  $      39.3  $    127.6 
 
Restructuring reimbursement           (0.1)     (6.8)        (1.0)      (15.3) 
 
Postretirement expense                  0.9       0.9          2.5         2.5 
 
Cost reduction and other expense       13.8       0.2         30.8        10.8 
 
Non-GAAP operating profit           $  42.3   $  43.7   $     71.6   $   125.6 
 
GAAP gross margin %                   24.2%     25.4%        21.2%       24.9% 
 
Non-GAAP gross margin %               24.8%     24.1%        22.3%       23.8% 
 
GAAP operating profit %                5.6%      8.9%         2.7%        7.6% 
 
Non-GAAP operating profit %            8.5%      8.0%         4.9%        7.6% 
 
CONTACT: Investors: Courtney Holben, Unisys, 215-986-3379, 
courtney.holben@unisys.com; Media: John Clendening, Unisys, 214-403-1981, 
john.clendening@unisys.com 
 
 
 
END 
 

(END) Dow Jones Newswires

October 27, 2020 03:00 ET (07:00 GMT)

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