Final Results

Final Results 

    BLUE BELL, Pa.--(BUSINESS WIRE)--Jan. 21, 2003--

   Unisys Reports Strong Fourth-Quarter 2002 Earnings and Cash Flow;
     Achieves Targeted Earnings Range for Full-Year 2002; Company
                Expects Double-Digit EPS Growth in 2003

Unisys Corporation (NYSE:UIS) today reported strong growth in its
fourth-quarter and full-year 2002 earnings per share, achieving its
targeted earnings range for the year. The company also reported
better-than-expected cash flow in the fourth quarter of 2002 and
expects double-digit earnings per share growth in 2003.

For the fourth-quarter of 2002, the company's net income rose to $89.1
million, or 27 cents per diluted share, compared to a fourth-quarter
2001 net loss of $169.4 million, or a loss of 53 cents per share, that
included a pre-tax charge of $276.3 million for cost reduction
actions. Excluding this charge, net income in the fourth quarter of
2001 was $34.4 million, or 11 cents per share. The 27 cents of
earnings for fourth-quarter 2002 represented a 145% increase over the
11 cents of earnings, before the charge, in 2001. The company reported
fourth-quarter 2002 revenue of $1.55 billion, essentially equal to its
revenue in the year-ago quarter. Currency had a one percentage-point
positive impact on the company's revenue in the quarter, as the U.S.
dollar weakened against major currencies worldwide.

For the full year of 2002, the company achieved net income of $223.0
million, or 69 cents per share, compared to a full-year 2001 net loss
of $67.1 million, or a loss of 21 cents per share, which included the
charge for cost reduction actions as well as an extraordinary charge
of $17.2 million for the early retirement of debt. Excluding these
items, the company's full-year 2001 net income was $153.9 million, or
48 cents per share. The 69 cents of earnings per share for full-year
2002 represented a 44% increase over the 48 cents of earnings per
share before the charges in 2001, and was within the company's
targeted earnings range of 67-70 cents per share for 2002. Revenue for
the full year of 2002 declined 7% to $5.61 billion from revenue of
$6.02 billion in 2001.

Note: The following comparisons to the prior-year results exclude the
fourth-quarter 2001 charge.

Comments from Chairman and CEO Larry Weinbach

'We closed out a successful year for Unisys with a strong fourth
quarter,' said Unisys Chairman and CEO Lawrence A. Weinbach. 'We
significantly grew our earnings and achieved a fourth-quarter
operating profit margin of 9.7% -- double our operating margin in the
year-ago quarter. This was driven by sharp improvement in our services
operating margins, which increased to 7.1% from 3.0% in the fourth
quarter of 2001. Our technology business also had a very solid profit
performance in the fourth quarter, achieving a 15.7% operating margin
- an increase of more than 5 percentage points from our technology
operating margin in the year-ago quarter. We also achieved $255
million in cash flow from operations in the quarter and closed a
number of very significant long-term services contracts. We
accomplished this in what continues to be a very difficult economic
environment, which has significantly slowed I.T. spending worldwide.
This is a real tribute to the precision thinking and relentless
execution by our employees around the world.

'We started 2002 with a clear overall objective -- to significantly
improve our profit margins and earnings per share. We achieved this
objective by being highly focused and disciplined in the types of
business opportunities we pursue in the marketplace. Our value-added,
end-to-end business strategy is delivering results.

'Equally important, our strategy is winning in the marketplace, '
Weinbach said. 'We won nearly $800 million of long-term outsourcing
and managed infrastructure services contracts in the fourth quarter.'

Major long-term services contracts signed during the quarter included:

- A major seven-year business process outsourcing (BPO) agreement
with Washington Mutual, one of the largest financial institutions in
the United States and a new Unisys client, under which Unisys will
host and manage Washington Mutual's check processing operations using
leading-edge image-based technology;

- A seven-year BPO contract from RAMS Home Loans, the second-largest
non-bank mortgage originator in Australia, under which Unisys will
assume management of mortgage processing operations for this new
client;

- A seven-year BPO contract to provide check clearing and processing
services for Malayan Banking Berhad (Maybank), the largest financial
institution in Malaysia;

- A three-year contract from the Bavarian Ministry of Justice in
Germany, a new Unisys client, to provide a full range of managed
infrastructure services supporting more than 12,000 end users in some
200 locations across the country.

'These client wins -- three of which are new clients to Unisys -- were
achieved in a tough spending environment. They are the surest
indicator that Unisys has the right offerings in the marketplace, and
that clients recognize the value we can bring to their organizations,'
Weinbach said.

Overall Company Highlights

Unisys reported that U.S. revenue increased 8% in the fourth quarter
to $717 million compared to $664 million in the year-ago period.
Revenue in international markets decreased 6% to $836 million from
$893 million a year ago, primarily reflecting economic weakness in
Latin America and Europe.

Total worldwide orders in the fourth quarter showed mid single-digit
declines over the year-ago period. Substantial gains in U.S. orders
were offset by substantial declines in international orders. On a
business segment basis, services orders declined slightly while
technology orders showed double-digit declines in the quarter. Unisys
closed 2002 with services backlog of $6.0 billion, up 5% from services
backlog of $5.7 billion at year-end 2001.

Unisys reported an overall fourth-quarter 2002 gross profit margin of
31.7%, up from 28.4% in the year-ago period. Overall operating profit
margins doubled to 9.7% from 4.8% in the year-ago quarter, reflecting
the company's focus on higher value-added business opportunities and
continued tight cost control. Selling, general, and administrative
(SG&A) expenses declined by 10% in the fourth quarter compared to the
year-ago period. SG&A expenses represented 16.7% of revenue in the
fourth quarter.

Business Segment Highlights

Customer revenue in the company's services business grew 4% in the
fourth quarter from the year-ago quarter. Outsourcing and systems
integration services both showed double-digit revenue growth, which
was partially offset by revenue declines in project-based
infrastructure services and core maintenance. Gross profit margins in
the services business improved 1.7 percentage points from year-ago
levels to 22.5%, and services operating margins improved 4.1
percentage points from a year ago to 7.1%.

Customer revenue in the company's technology business declined 12% in
the fourth quarter, reflecting revenue declines in ClearPath systems
and specialized equipment. Sales of the company's ES7000 line of
high-end Intel-based servers showed double-digit growth from year-ago
levels. Reflecting a richer mix of ClearPath software sales, gross
margins in the technology business increased 6.7 percentage points
from year-ago levels to 49.8% and operating margins increased 5.4
percentage points from a year ago to 15.7%.

Cash Flow and Balance Sheet Highlights

Driven by strong working capital management, Unisys generated $255
million of cash from operations in the fourth quarter after absorbing
cash payments of $17 million related to prior restructuring actions.
Capital expenditures in the fourth quarter were $79 million, including
$67 million invested in revenue-generating projects. Cash increased by
$136 million in the quarter, and the company had $302 million of cash
on hand at December 31, 2002.

Due to declines in the market value of equity securities as well as
declines in long-term interest rates during 2002, the company's U.S.
and foreign defined benefit pension plans were underfunded by
approximately $728 million at year-end 2002. This underfunding
represents the amount that the present value of the company's
accumulated benefit obligation (ABO) exceeded the fair value of plan
assets at December 31, 2002. As required by U.S. accounting rules, in
the fourth quarter of 2002 the company recognized a non-cash,
after-tax charge against stockholders' equity of $1.5 billion for
minimum liabilities associated with its pension plans at year-end
2002. This charge had no impact on the company's net income,
liquidity, or cash flow. In addition, the charge has no impact on the
company's credit arrangements or debt securities, and the company is
not required to make a contribution to its U.S. defined benefit
pension plan, its largest pension plan worldwide, in 2003.

The company expects pension income of approximately $30 million in
2003, a reduction of $114 million, or 23 cents per share, from pension
income of $144 million recognized in 2002. The major driver of this
change is the performance of the debt and equity markets in 2002 and
their impact on the fair value of the company's pension assets, the
discount rate and long-term rate of return assumption.

Business Outlook

'We start 2003 with momentum,' Weinbach said. 'While the business
environment remains challenging and uncertain in many geographies, we
are winning significant new contracts around the world, expanding our
client base, and expanding our margins and profitability. Based on our
growing backlog of business, our proposal pipeline, and our
assumptions for a gradual improvement in I.T. spending later in 2003,
we look for our revenue growth to build through the course of 2003,
leading to mid single-digit revenue growth for the full year. Despite
significantly lower pension income, we expect double-digit growth in
our earnings per share in 2003, with full-year 2003 EPS in the 77 - 82
cents range. In the first quarter of 2003, we look for revenue to be
approximately equal to revenue in the year-ago quarter, with earnings
per share in the 11 - 13 cents range.'

Conference Call

Unisys will hold a conference call today from 4:30 - 5:30 p.m. Eastern
Time. The listen-only audiocast can be accessed via a link on the
Unisys Investor Web site at www.unisys.com/investor. An audio replay
of the Webcast will be available on the Web site for about 10 days
following the call.

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. 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. The
factors that could affect the company's future financial results are
discussed more fully in the company's periodic reports as filed with
the Securities and Exchange Commission.

RELEASE NO.: 0103/8226 (See accompanying financial information)

http://www.unisys.com/about__unisys/news_a_events/01218226.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 STATEMENT OF INCOME
                 (Millions, except per share data)

                            Three Months           Year
                         Ended December 31    Ended December 31
                         ------------------   ------------------
                            2002      2001       2002      2001
                         --------  --------   --------  --------
Revenue                  $1,552.8  $1,556.9   $5,607.4  $6,018.1
                         --------  --------   --------  --------
Costs and expenses
  Cost of revenue         1,061.1   1,278.5    3,918.9   4,534.8
  Selling, general and
    administrative          259.8     371.9      992.0   1,156.3
  Research and development   80.7     106.9      273.3     331.5
                         --------  --------   --------  --------
                          1,401.6   1,757.3    5,184.2   6,022.6
                         --------  --------   --------  --------
Operating income (loss)     151.2    (200.4)     423.2      (4.5)

Interest expense             13.3      20.0       66.5      70.0
Other income
 (expense), net              (5.0)     (4.6)     (23.9)     28.0
                         --------  --------   --------  --------
Income (loss) before
 income taxes               132.9    (225.0)     332.8     (46.5)
Provision for income taxes   43.8     (55.6)     109.8       3.4
                         --------  --------   --------  --------
Income (loss) before
 extraordinary item          89.1    (169.4)     223.0     (49.9)
Extraordinary item                                         (17.2)
                         --------  --------   --------  --------
Net income (loss)           $89.1   ($169.4)    $223.0    ($67.1)
                         ========  ========   ========  ========
Earnings (loss) per share
Basic
 Before extraordinary item  $ .27    ($ .53)     $ .69    ($ .16)
 Extraordinary item                                         (.05)
                         --------  --------   --------  --------
  Total                     $ .27    ($ .53)     $ .69    ($ .21)
                         ========  ========   ========  ========
Diluted
 Before extraordinary item  $ .27    ($ .53)     $ .69    ($ .16)
 Extraordinary item                                         (.05)
                         --------  --------   --------  --------
  Total                     $ .27    ($ .53)     $ .69    ($ .21)
                         ========  ========   ========  ========
Shares used in the per share
  computations (thousands):
  Basic                   325,726   320,100    323,526   318,207
                         ========  ========   ========  ========
  Diluted                 326,740   320,100    324,744   318,207
                         ========  ========   ========  ========


                        UNISYS CORPORATION
                 CONSOLIDATED STATEMENT OF INCOME
                     EXCLUDING SPECIAL ITEMS(1)
                 (Millions, except per share data)

                            Three Months           Year
                         Ended December 31    Ended December 31
                         ------------------   ------------------
                            2002      2001       2002      2001
                         --------  --------   --------  --------
Revenue                  $1,552.8  $1,556.9   $5,607.4  $6,018.1
                         --------  --------   --------  --------
Costs and expenses
  Cost of revenue         1,061.1   1,114.7    3,918.9   4,371.0
  Selling, general and
    administrative          259.8     288.7      992.0   1,073.1
  Research and development   80.7      79.3      273.3     303.9
                         --------  --------   --------  --------
                          1,401.6   1,482.7    5,184.2   5,748.0
                         --------  --------   --------  --------
Operating income            151.2      74.2      423.2     270.1

Interest expense             13.3      20.0       66.5      70.0
Other income
 (expense), net              (5.0)     (2.9)     (23.9)     29.7
                         --------  --------   --------  --------
Income before income taxes  132.9      51.3      332.8     229.8
Provision for income taxes   43.8      16.9      109.8      75.9
                         --------  --------   --------  --------
Net income                  $89.1     $34.4     $223.0    $153.9
                         ========  ========   ========  ========
Diluted earnings per share  $ .27     $ .11      $ .69     $ .48
                         ========  ========   ========  ========

    (1) Special Items:
        These results exclude charges for cost reductions and related
        actions as well as extraordinary items in 2001.


                        UNISYS CORPORATION
                       SUPPLEMENTAL SUMMARY
                            (Millions)

                                 Elimi-
                       Total     nations    Services  Technology
                      --------   --------   --------  ----------
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%
                      ========              ========    ========
Three Months Ended
December 31, 2001
-----------------
Customer revenue      $1,556.9              $1,132.9      $424.0
Intersegment                       ($96.4)      22.0        74.4
                      --------   --------   --------    --------
Total revenue         $1,556.9     ($96.4)  $1,154.9      $498.4
                      ========   ========   ========    ========

Gross profit percent     28.4%                 20.8%       43.1%
                      ========              ========    ========
Operating profit
  percent                 4.8%                  3.0%       10.3%
                      ========              ========    ========

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%
                      ========              ========    ========
Year Ended
December 31, 2001
-----------------
Customer revenue      $6,018.1              $4,444.6    $1,573.5
Intersegment                      ($363.4)      73.8       289.6
                      --------   --------   --------    --------
Total revenue         $6,018.1    ($363.4)  $4,518.4    $1,863.1
                      ========   ========   ========    ========

Gross profit percent     27.4%                 19.7%       43.0%
                      ========              ========    ========
Operating profit
  percent                 4.5%                  2.1%       11.6%
                      ========              ========    ========


                        UNISYS CORPORATION
                    CONSOLIDATED BALANCE SHEET
                            (Millions)

                                       December 31, December 31,
                                           2002         2001
                                        ----------   ----------
Assets
Current assets
 Cash and cash equivalents                  $301.8       $325.9
 Accounts and notes receivable, net          955.6      1,093.7
 Inventories
   Parts and finished equipment              165.3        201.6
   Work in process and materials             127.5        144.2
 Deferred income taxes                       311.3        342.6
 Other current assets                         84.5         96.1
                                        ----------   ----------
 Total                                     1,946.0      2,204.1
                                        ----------   ----------
Properties                                 1,542.7      1,460.4
 Less accumulated depreciation               932.9        910.8
                                        ----------   ----------
 Properties, net                             609.8        549.6
                                        ----------   ----------
Investments at equity                        111.8        212.3
Marketable software, net                     311.8        287.9
Prepaid pension cost                                    1,221.0
Deferred income taxes                      1,476.0        747.8
Goodwill                                     160.6        159.0
Other long-term assets                       365.4        387.4
                                        ----------   ----------
 Total                                    $4,981.4     $5,769.1
                                        ==========   ==========

Liabilities and stockholders' equity
Current liabilities
 Notes payable                               $77.3        $78.9
 Current maturities of long-term debt          4.4          2.2
 Accounts payable                            532.5        694.9
 Other accrued liabilities                 1,341.4      1,302.9
 Income taxes payable                        228.9        234.6
                                        ----------   ----------
 Total                                     2,184.5      2,313.5
                                        ----------   ----------
Long-term debt                               748.0        745.0
Accrued pension liability                    727.7         10.1
Other long-term liabilities                  465.2        587.8
Stockholders' equity
 Common stock                                  3.3          3.2
 Accumulated deficit                        (673.6)      (896.5)
 Other capital                             3,763.2      3,712.8
 Accumulated other comprehensive loss     (2,236.9)      (706.8)
                                        ----------   ----------
 Stockholders' equity                        856.0      2,112.7
                                        ----------   ----------
 Total                                    $4,981.4     $5,769.1
                                        ==========   ==========

                        UNISYS CORPORATION
               CONSOLIDATED STATEMENT OF CASH FLOWS
                            (Millions)

                                                 Year Ended
                                                December 31
                                             ------------------
                                               2002       2001
                                             -------    -------
Cash flows from operating activities
Income before extraordinary item              $223.0     ($49.9)
Add (deduct) items to reconcile
 income before extraordinary item
 to net cash provided by
 operating activities:
Extraordinary item                                        (17.2)
Depreciation                                   154.5      140.2
Amortization:
 Marketable software                           121.0      145.5
 Deferred outsourcing contract costs            22.3       15.8
 Goodwill                                                  16.5
Decrease (increase) in deferred
  income taxes, net                             39.4      (44.4)
Decrease in receivables, net                   156.5       72.3
Decrease in inventories                         53.0       79.7
(Decrease) in accounts payable
 and other accrued liabilities                (116.5)    (144.5)
(Decrease) in income taxes payable             (15.5)     (58.0)
(Decrease) increase in other liabilities       (73.9)     246.5
(Increase) in other assets                    (251.2)    (238.8)
Other                                           11.9       38.7
                                             -------    -------
Net cash provided by
 operating activities                          324.5      202.4
                                             -------    -------
Cash flows from investing activities
 Proceeds from investments                   3,447.1    3,028.7
 Purchases of investments                   (3,485.4)  (3,009.0)
 Investment in marketable software            (139.9)    (136.8)
 Capital additions of properties              (196.2)    (199.4)
 Purchases of businesses                        (4.8)      (9.1)
                                             -------    -------
Net cash used for investing activities        (379.2)    (325.6)
                                             -------    -------
Cash flows from financing activities
 Net (reduction in) short-term
   borrowings                                   (1.6)    (127.7)
 Proceeds from employee stock plans             29.0       33.6
 Payments of long-term debt                     (2.1)    (370.8)
 Proceeds from issuance of long-term debt                 536.5
                                             -------    -------
Net cash provided by financing activities       25.3       71.6
                                             -------    -------
Effect of exchange rate changes on cash
 and cash equivalents                            5.3        (.5)
                                             -------    -------
Decrease in cash and cash equivalents          (24.1)     (52.1)
Cash and cash equivalents, beginning of
 period                                        325.9      378.0
                                             -------    -------
Cash and cash equivalents, end of period      $301.8     $325.9
                                             =======    =======
*T

   Short Name: Unisys Corp
   Category Code: FR
   Sequence Number: 00001650
   Time of Receipt (offset from UTC): 20030121T195035+0000