Unisys Announces Fourth-Quarter and Full-Year 2...

Unisys Corp
                  

 Company reports significant improvement in operating profit and $247 million in
                 operating cash flow for fourth quarter of 2007

Unisys Corporation (NYSE: UIS) today reported $247 million in fourth-quarter
operating cash flow and its highest full-year operating profit since 2003 as the
company closed a year of significant progress in its multi-year repositioning
program.

Unisys reported fourth-quarter 2007 operating income of $69.4 million, which
included $55 million of net cost reduction charges and $11.6 million of
retirement-related expense. These results compared with fourth-quarter 2006
operating income of $68.6 million, which included a $10 million benefit for
changes in estimates for previously recorded cost reduction charges and $47.6
million of retirement-related expense. Fourth-quarter 2007 operating profit
before the impact of these items improved by $30 million, or 29 percent, year
over year.

For the full year of 2007, the company reported operating income of $85.9
million compared with a full-year 2006 operating loss of $326.8 million, a
year-over-year improvement of $413 million. The 2007 results include $105
million of net cost reduction charges and $82.4 million of retirement-related
expense, and the 2006 results include net cost reduction charges of $316 million
and $153.8 million of retirement-related expense. Before the impact of these
items in both years, full-year 2007 operating income improved by $130 million,
or 91 percent, year over year.

Revenue for the fourth quarter of 2007 declined 1 percent to $1.54 billion from
$1.55 billion in the year-ago quarter. Full-year 2007 revenue declined 2 percent
to $5.65 billion compared with $5.76 billion in 2006. Foreign currency exchange
rates had an approximately 5 percentage-point positive impact on revenue in the
quarter and an approximately 4 percentage point positive impact on revenue for
the full year.

Comments from President and CEO Joseph W. McGrath

'In 2007, we rebuilt our profitability to the highest level since 2003,' said
Joseph W. McGrath, Unisys president and chief executive officer. 'By staying
focused on implementing the many elements of a complex, multi-year repositioning
plan, we closed 2007 with a strong fourth quarter and reported full-year
operating profit of $85.9 million. Excluding cost reduction charges and
retirement expense, our operating profit in 2007 increased 91 percent from 2006
levels. We also generated $247 million in operating cash flow in the fourth
quarter, up 48 percent from year-ago levels. This is strong, tangible evidence
that our repositioning is working and yielding results.

'Our revenue declined in 2007 as we de-emphasized low-margin, non-strategic
areas of the business,' McGrath said. 'Within our overall revenue base, however,
we are seeing a mix change as our strategic programs grow. Collectively, these
strategic programs - outsourcing, enterprise security, open source solutions,
Microsoft solutions, and real-time infrastructure solutions - now represent the
majority of our overall revenue and grew about 10 percent in 2007. As we
continue to build out these programs, while further streamlining our operations
and reducing costs, we expect to continue our profit improvement in 2008.'

Fourth-Quarter Company Results

After tax expense, the company reported fourth-quarter 2007 net income of $13.8
million, or diluted earnings per share of 4 cents, compared with net income of
$21.3 million, or 6 cents per share in the year-ago quarter.

Services orders showed mid single-digit declines in the fourth quarter, driven
by order declines for infrastructure services and systems integration and
consulting. Outsourcing orders grew in the quarter. For the full year of 2007,
services orders were flat compared with 2006. The company closed 2007 with $6.9
billion of firm services order backlog, up 4 percent from $6.6 billion of firm
services backlog at year-end 2006.

Revenue in the United States declined 4 percent in the quarter to $629 million
while revenue in international markets increased 1 percent to $907 million. On a
constant currency basis, international revenue declined 8 percent in the
quarter.

The company's gross profit margin and operating profit margin in the fourth
quarter of 2007 improved to 27.4 percent and 4.5 percent, respectively. These
compared with gross and operating profit margins of 24.9 percent and 4.4
percent, respectively, in the fourth quarter of 2006.

Fourth-Quarter Business Segment Results

Unisys has a long-standing policy of evaluating business segment performance on
operating income exclusive of restructuring charges and unusual and
non-recurring items. Therefore, the comparisons below exclude these items.

Customer revenue in the company's services segment declined 2 percent in the
fourth quarter of 2007 compared with the year-ago period. The company reported
continued revenue growth in outsourcing, which was more than offset by revenue
declines in other services businesses. Gross profit margin in the services
business improved to 19.6 percent compared with 16.9 percent a year ago.
Services operating margin improved to 4.5 percent compared with 1.2 percent a
year ago.

Customer revenue in the company's technology segment increased 6 percent from
the fourth quarter of 2006. Within technology, the company saw strong
double-digit revenue growth for its ClearPath enterprise servers. Gross profit
margin in the technology business increased to 53.9 percent from 49.0 percent a
year ago while operating margin increased to 20.5 percent compared to 13.7
percent in the fourth quarter of 2006.

Cash Flow and Balance Sheet Highlights

Unisys generated $247 million of cash from operations in the fourth quarter of
2007 compared with $167 million in the year-ago quarter. The company used
approximately $28 million of cash in the fourth quarter of 2007 for
restructuring payments compared to approximately $88 million in the year-ago
period.

Capital expenditures in the fourth quarter of 2007 were $71 million compared to
$58 million in the year-ago quarter. The increase was due to investments in
outsourcing assets related to new outsourcing engagements. After deducting for
capital expenditures, Unisys generated $176 million of free cash in the quarter
compared with $109 million in the fourth quarter of 2006.

The company ended 2007 with $830 million of cash, which included the proceeds of
an offering of $210 million of 12.5% senior notes placed in the fourth quarter.
The company offered the new notes to refinance $200 million of its 7 7/8% senior
notes due 2008. The 7 7/8% senior notes were redeemed on January 11, 2008.

Full-Year 2007 Results

For the year ended December 31, 2007, Unisys reported revenue of $5.65 billion,
a decline of 2 percent from revenue of $5.76 billion in 2006. Currency had an
approximately 4 percentage point positive impact on full-year 2007 revenue.

For the year ended December 31, 2007, Unisys reported a net loss of $79.1
million, or 23 cents per share. These results included:

    --  net pre-tax cost reduction charges of approximately $105 million for
        workforce reductions and facility consolidations;

    --  a pre-tax gain of $24.7 million on the sale of the media solutions
        business;

    --  a $39.4 million tax benefit related to an income tax settlement; and

    --  $82.4 million of pre-tax retirement-related expense.

For the year ended December 31, 2006, Unisys reported a net loss of $278.7
million, or 81 cents per share. These results included:

    --  net pre-tax cost reduction charges of approximately $316 million;

    --  a pre-tax gain of $149.9 million on the sale of the company's shares in
        Nihon Unisys Limited; and

    --  $153.8 million of pre-tax retirement-related expense.

Conference Call

Unisys will hold a conference call today at 8:15 a.m. EST 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. We
provide consulting, systems integration, outsourcing and infrastructure
services, combined with powerful enterprise server technology. We specialize in
helping clients use information to create efficient, secure business operations
that allow them to achieve their business goals. Our consultants and industry
experts work with clients to understand their business challenges and create
greater visibility into critical linkages throughout their operations. 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. 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 grow outsourcing and infrastructure services and its
ability to effectively and timely complete the related solutions
implementations, client transitions to the new environment and work force and
facilities rationalizations; the company's ability to continue to effectively
address its challenging outsourcing operations through negotiations or
operationally and to fully recover the associated outsourcing assets; the
company's ability to drive profitable growth in consulting and systems
integration; the level of demand for the company's high-end enterprise servers;
the company's ability to effectively rightsize its cost structure; 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.

RELEASE NO.: 0129/8854

http://www.unisys.com/about__unisys/news_a_events/01298854.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.

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                          UNISYS CORPORATION
                  CONSOLIDATED STATEMENTS OF INCOME
                  (Millions, except per share data)

                                    Three Months           Year
                                  Ended December 31 Ended December 31
                                  ----------------- ------------------
                                    2007     2006     2007     2006
                                  -------- -------- -------- ---------
Revenue
  Services                        $1,267.6 $1,298.7 $4,846.7 $ 4,917.2
  Technology                         268.1    253.3    805.8     840.0
                                  -------- -------- -------- ---------
                                   1,535.7  1,552.0  5,652.5   5,757.2
Costs and expenses
  Cost of revenue:
    Services                       1,008.7  1,045.4  3,989.3   4,317.1
    Technology                       105.9    120.5    376.2     430.5
                                  -------- -------- -------- ---------
                                   1,114.6  1,165.9  4,365.5   4,747.6
  Selling, general and
    administrative                   304.3    270.5  1,022.1   1,104.7
  Research and development            47.4     47.0    179.0     231.7
                                  -------- -------- -------- ---------
                                   1,466.3  1,483.4  5,566.6   6,084.0
                                  -------- -------- -------- ---------
Operating profit (loss)               69.4     68.6     85.9   (326.8)

Interest expense                      20.2     19.3     76.3      77.2
Other income
 (expense), net                      (3.6)        -    (6.1)     153.1
                                  -------- -------- -------- ---------
Income (loss) before
 income taxes                         45.6     49.3      3.5   (250.9)
Provision for income taxes            31.8     28.0     82.6      27.8
                                  -------- -------- -------- ---------
Net income (loss)                 $   13.8 $   21.3  ($79.1)  ($278.7)
                                  ======== ======== ======== =========
Earnings (loss) per share
Basic                             $.04     $.06      ($ .23)   ($ .81)
                                  ======== ======== ======== =========
Diluted                           $.04     $.06      ($ .23)   ($ .81)
                                  ======== ======== ======== =========
Shares used in the per share
  computations (thousands):
  Basic                            352,502  344,935  349,661   343,747
                                  ======== ======== ======== =========
  Diluted                          352,936  345,627  349,661   343,747
                                  ======== ======== ======== =========
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                          UNISYS CORPORATION
                           SEGMENT RESULTS
                              (Millions)

                                        Elimi-
                              Total    nations  Services*  Technology*
                            ---------- -------- ---------- -----------
Three Months Ended
December 31, 2007
---------------------------
Customer revenue            $1,535.7            $1,267.6     $  268.1
Intersegment                            ($58.0)      3.0         55.0
                            ---------- -------- ---------- -----------
Total revenue               $1,535.7    ($58.0) $1,270.6     $  323.1
                            ========== ======== ========== ===========

Gross profit percent            27.4%               19.6%        53.9%
                            ==========          ========== ===========
Operating profit
  percent                        4.5%                4.5%        20.5%
                            ==========          ========== ===========
Three Months Ended
December 31, 2006
---------------------------
Customer revenue            $1,552.0            $1,298.7     $  253.3
Intersegment                            ($78.0)      4.0         74.0
                            ---------- -------- ---------- -----------
Total revenue               $1,552.0    ($78.0) $1,302.7     $  327.3
                            ========== ======== ========== ===========

Gross profit percent            24.9%               16.9%        49.0%
                            ========== ======== ========== ==========
Operating profit
  percent                        4.4%                1.2%        13.7%
                            ========== ======== ========== ===========

Year Ended
December 31, 2007
---------------------------
Customer revenue            $5,652.5            $4,846.7     $  805.8
Intersegment                           ($206.7)     13.9        192.8
                            ---------- -------- ---------- -----------
Total revenue               $5,652.5   ($206.7) $4,860.6     $  998.6
                            ========== ======== ========== ===========

Gross profit percent            22.8%               17.4%        47.0%
                            ==========          ========== ===========
Operating profit
  percent                        1.5%                2.5%         8.3%
                            ==========          ========== ===========
Year Ended
December 31, 2006
---------------------------
Customer revenue            $5,757.2            $4,917.2     $  840.0
Intersegment                           ($250.3)     14.8        235.5
                            ---------- -------- ---------- -----------
Total revenue               $5,757.2   ($250.3) $4,932.0     $1,075.5
                            ========== ======== ========== ===========

Gross profit percent            17.5%               15.1%        44.2%
                            ==========          ========== ===========
Operating profit
  (loss) percent                (5.7%)              (0.5%)        1.7%
                            ==========          ========== ===========

* Results exclude cost reduction actions
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                          UNISYS CORPORATION
                     CONSOLIDATED BALANCE SHEETS
                              (Millions)

                                                 December   December
                                                     31,        31,
                                                    2007       2006
                                                 ---------- ----------
Assets
Current assets
 Cash and cash equivalents                       $   830.2  $   719.3
 Accounts and notes receivable, net                1,059.2    1,164.6
 Inventories
   Parts and finished equipment                       91.9       95.0
   Work in process and materials                      79.2       81.2
 Deferred income taxes                                15.0       30.0
 Prepaid expense and other
   current assets                                    133.7      148.4
                                                 ---------- ----------
 Total                                             2,209.2    2,238.5
                                                 ---------- ----------
Properties                                         1,336.9    1,233.4
 Less accumulated depreciation
   and amortization                                1,004.7      892.1
                                                 ---------- ----------
 Properties, net                                     332.2      341.3
                                                 ---------- ----------
Outsourcing assets, net                              409.4      401.1
Marketable software, net                             268.8      304.3
Prepaid postretirement assets                        497.0      250.1
Deferred income taxes                                101.2      191.3
Goodwill                                             200.6      193.9
Other long-term assets                               123.1      117.4
                                                 ---------- ----------
 Total                                           $ 4,141.5  $ 4,037.9
                                                 ========== ==========
Liabilities and stockholders' equity (deficit)

Current liabilities
 Notes payable                                   $     0.1  $     1.2
 Current maturities of long-term debt                204.3        0.5
 Accounts payable                                    419.6      460.9
 Other accrued liabilities                         1,253.4    1,469.1
                                                 ---------- ----------
 Total                                             1,877.4    1,931.7
                                                 ---------- ----------
Long-term debt                                     1,058.3    1,049.1
Long-term postretirement liabilities                 420.7      667.7
Other long-term liabilities                          387.1      453.6
Stockholders' equity (deficit)
 Common stock                                          3.6        3.5
 Accumulated deficit                              (2,465.9)  (2,386.8)
 Other capital                                     4,011.9    3,945.1
 Accumulated other comprehensive loss             (1,151.6)  (1,626.0)
                                                 ---------- ----------
 Stockholders' equity (deficit)                      398.0      (64.2)
                                                 ---------- ----------
 Total                                           $ 4,141.5  $ 4,037.9
                                                 ========== ==========
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                        UNISYS CORPORATION
               CONSOLIDATED STATEMENT OF CASH FLOWS
                            (Millions)

                                                  Year Ended
                                                 December 31
                                           ------------------------
                                               2007        2006
                                           ------------ -----------
Cash flows from operating activities
Net loss                                        ($79.1)    ($278.7)
Add (deduct) items to reconcile
 net loss to net cash provided by
 operating activities:
Equity loss                                                    4.5
Employee stock compensation expense                7.7         6.7
Company stock issued for U.S. 401(k) plan         47.4        18.3
Depreciation and amortization
 of properties                                   115.1       120.5
Depreciation and amortization of
 outsourcing assets                              143.8       135.1
Amortization of marketable software              121.6       132.9
Gain on sale of assets                           (24.7)     (153.2)
Decrease (increase) in deferred
 income taxes, net                                69.9       (66.5)
Decrease in receivables, net                     176.2        14.2
Decrease in inventories                           10.7        19.4
(Decrease) increase in accounts payable
 and other accrued liabilities                  (286.1)       74.1
Decrease in other liabilities                   (103.3)      (68.8)
(Increase) decrease in other assets              (32.2)       52.8
Other                                              6.1        17.4
                                           ------------ -----------
Net cash provided by operating activities        173.1        28.7
                                           ------------ -----------
Cash flows from investing activities
 Proceeds from investments                     7,718.5     7,522.0
 Purchases of investments                     (7,728.3)   (7,535.9)
 Investment in marketable software               (94.0)     (105.4)
 Capital additions of properties                 (77.5)      (70.1)
 Capital additions of outsourcing assets        (137.5)      (81.0)
 Purchases of businesses                          (1.2)       (1.1)
 Proceeds from sale of assets                     29.3       380.6
                                           ------------ -----------
Net cash (used for) provided by
  investing activities                          (290.7)      109.1
                                           ------------ -----------
Cash flows from financing activities
 Net reduction in short-term borrowings           (1.1)      (17.0)
 Minority shareholder dividends                   (5.8)
 Proceeds from exercise of stock options          12.3         1.6
 Payments of long-term debt                                  (57.9)
 Proceeds from issuance of long-term debt        204.2
 Cost of credit agreement                                     (4.6)
                                           ------------ -----------
Net cash provided by (used for) financing
  activities                                     209.6       (77.9)
                                           ------------ -----------
Effect of exchange rate changes on cash
 and cash equivalents                             18.9        16.9
                                           ------------ -----------
Increase in cash and cash equivalents            110.9        76.8
Cash and cash equivalents, beginning of
 period                                          719.3       642.5
                                           ------------ -----------
Cash and cash equivalents, end of period   $     830.2  $    719.3
                                           ============ ===========
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CONTACT:  Unisys Corporation
          Investor:
          Jack McHale, 215-986-6050
          [e-mail]
          or
          Media:
          Jim Kerr, 215-986-5795
          [e-mail]
          or
          Gail Ferrari Marold, 919-302-1620
          [e-mail]
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