Investor Relations

2009 Annual Report

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Consolidated Financial Statements

Consolidated Statements of Income

Year ended December 31 (millions, except per share data)

2009

2008

2007

Revenue

Services

$4,036.9

$4,603.6

$4,846.7

Technology

560.8

629.6

805.8

4,597.7

5,233.2

5,652.5

Costs and expenses

Cost of revenue:

Services

3,214.4

3,765.9

3,989.3

Technology

246.6

340.6

376.2

3,461.0

4,106.5

4,365.5

Selling, general and administrative expenses

689.2

957.0

1,022.1

Research and development expenses

101.9

129.0

179.0

4,252.1

5,192.5

5,566.6

Operating profit

345.6

40.7

85.9

Interest expense

95.2

85.1

76.3

Other income (expense), net

(15.8)

(20.1)

19.8

Income (loss) before income taxes

234.6

(64.5)

29.4

Provision for income taxes

41.6

53.2

82.7

Consolidated net income (loss)

193.0

(117.7)

(53.3)

Net income attributable to noncontrolling interests

(3.7)

(12.4)

(25.8)

Net income (loss) attributable to Unisys Corporation

$189.3

($130.1)

($79.1)

Earnings (loss) per share attributable to Unisys Corporation

Basic

$4.82

($3.62)

($2.26)

Diluted

$4.75

($3.62)

($2.26)

See notes to consolidated financial statements.

Consolidated Balance Sheets

December 31 (millions)

2009

2008

Assets

Current assets

Cash and cash equivalents

$647.6

$544.0

Accounts and notes receivable, net

790.7

818.5

Inventories:

- Parts and finished equipment

57.5

64.7

- Work in process and materials

43.0

70.7

Deferred income taxes

19.9

23.8

Prepaid expenses and other current assets

144.7

116.7

Total

1,703.4

1,638.4

Properties

1,374.3

1,416.0

Less -- Accumulated depreciation and amortization

1,146.4

1,139.5

Properties, net

227.9

276.5

Outsourcing assets, net

277.1

314.9

Marketable software, net

154.9

202.0

Prepaid postretirement assets

20.7

Deferred income taxes

180.6

87.6

Goodwill

198.5

189.4

Other long-term assets

214.5

94.6

Total

$2,956.9

$2,824.1

Liabilities and stockholders' deficit

Current liabilities

Current maturities of long-term debt

$65.8

$1.5

Accounts payable

307.4

379.2

Other accrued liabilities

1,021.6

1,045.7

Total

1,394.8

1,426.4

Long-term debt

845.9

1,059.1

Long-term postretirement liabilities

1,640.6

1,497.0

Other long-term liabilities

347.3

265.4

Commitments and contingencies

Stockholders' deficit

Common stock, par value $0.01 per share
(72.0 million shares authorized; 42.5 million shares and 37.2 million shares issued)

0.4

0.4

Accumulated deficit

(2,406.7)

(2,596.0)

Treasury stock, at cost

(45.0)

(44.8)

Paid-in capital

4,196.5

4,102.6

Accumulated other comprehensive loss

(3,013.5)

(2,904.6)

Noncontrolling interests

(3.4)

18.6

Stockholders' deficit

(1,271.7)

(1,423.8)

Total

$2,956.9

$2,824.1

See notes to consolidated financial statements.

Consolidated Statements of Cash Flows

Year ended December 31 (millions, except per share data)

2009

2008

2007

Cash flows from operating activities

Consolidated net income (loss)

$193.0

($117.7)

($53.3)

Add (deduct) items to reconcile consolidated net income (loss) to net cash provided by operating activities:

Company stock issued for U.S. 401(k) plan

41.8

47.4

Employee stock compensation

0.7

1.1

7.7

Depreciation and amortization of properties

96.9

105.7

115.1

Depreciation and amortization of outsourcing assets

151.0

162.6

143.8

Amortization of marketable software

104.6

149.7

121.6

Disposal of capital assets

10.8

12.9

14.2

Loss (gain) on sale of assets

8.8

(24.7)

(Increase) decrease in deferred income taxes, net

(87.9)

(9.9)

82.7

Decrease in receivables, net

62.1

186.7

176.2

Decrease in inventories

14.0

27.2

10.7

Increase in other assets

(121.9)

(119.7)

(32.2)

Decrease in accounts payable and other accrued liabilities

(70.7)

(110.9)

(298.9)

Increase (decrease) in other liabilities

37.3

(79.1)

(129.1)

Other

(1.9)

4.2

(8.1)

Net cash provided by operating activities

396.8

254.6

173.1

Cash flows from investing activities

Proceeds from investments

404.1

6,208.2

7,718.5

Purchases of investments

(402.8)

(6,190.3)

(7,728.3)

Collateralized letters of credit

(86.8)

Investment in marketable software

(57.6)

(84.5)

(94.0)

Capital additions of properties

(45.9)

(76.9)

(77.5)

Capital additions of outsourcing assets

(97.8)

(133.1)

(137.5)

Proceeds from sales of assets

17.4

29.3

Purchase of businesses

(1.9)

(6.4)

(1.2)

Net cash used for investing activities

(271.3)

(283.0)

(290.7)

Cash flows from financing activities

Payments of long-term debt

(30.0)

(200.0)

Financing fees

(16.1)

(0.8)

Net reduction in short-term borrowings

(0.1)

(1.1)

Proceeds from exercise of stock options

12.3

Dividends paid to noncontrolling interests

(5.8)

Proceeds from issuance of long-term debt

204.2

Net cash (used for) provided by financing activities

(46.1)

(200.9)

209.6

Effect of exchange rate changes on cash and cash equivalents

24.2

(56.9)

18.9

Increase (decrease) in cash and cash equivalents

103.6

(286.2)

110.9

Cash and cash equivalents, beginning of year

544.0

830.2

719.3

Cash and cash equivalents, end of year

$647.6

$544.0

$830.2

See notes to consolidated financial statements.

Consolidated Statements of Stockholders' Equity (Deficit)

Unisys Corporation

CommonStock

TreasuryStock

(millions)

Total

Comprehensive
Income (Loss)

Total

Par
Value

Accumulated
Deficit

Cost

Paid-in Capital

Accumulated
Other
Comprehensive Loss

Non- controlling
Interests

Balance at December 31, 2006

($47.3)

($59.5)

$3.5

347.5

($2,386.8)

($43.6)

(2.1)

$3,988.7

($1,621.3)

$12.2

Retroactive application of one-for-ten reverse stock split

(3.1)

(312.8)

1.9

3.1

Stock-based compensation

66.8

0.9

(0.9)

67.7

Dividends paid to noncontrolling interests

(5.8)

Comprehensive Income:

Consolidated net income (loss)

(53.3)

($53.3)

(79.1)

25.8

Other comprehensive income:

Translation adjustments

38.4

37.8

0.6

Postretirement plans

405.3

420.6

(15.3)

443.7

Comprehensive income

390.4

Balance at December 31, 2007

404.1

386.6

0.4

35.6

(2,465.9)

(44.5)

(0.2)

4,059.5

(1,162.9)

17.5

Stock-based compensation

42.8

1.6

(0.3)

43.1

Dividends paid to noncontrolling interests

(0.9)

Share purchase of noncontrolling interests

(3.7)

Comprehensive Loss:

Consolidated net income (loss)

(117.7)

(130.1)

12.4

Other comprehensive loss:

Translation adjustments

(121.0)

(106.2)

(14.8)

Postretirement plans

(1,627.4)

(1,635.5

(1,635.5)

8.1

(1,748.4)

Comprehensive loss

(1,866.1)

Balance at December 31, 2008

(1,423.8)

(1,442.4)

0.4

37.2

(2,596.0)

(44.8)

(0.2)

4,102.6

(2,904.6)

18.6

Stock-based compensation

1.9

0.1

(0.2)

2.1

Shares issued in debt exchange

91.8

5.2

91.8

Comprehensive Income:

Consolidated net income

193.0

189.3

3.7

Other comprehensive income:

Translation adjustments

78.1

71.6

6.5

Postretirement plans

(212.7)

(180.5)

(32.2)

(134.6)

Comprehensive income

58.4

Balance at December 31, 2009

($1,271.7)

($1,268.3)

$0.4

42.5

($2,406.7)

($45.0)

(0.2)

$4,196.5

($3,013.5)

($3.4)

See notes to consolidated financial statements.