3. UNISYS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Millions)
June 30, December 31,
2004 2003
---------- ----------
Assets
Current assets
Cash and cash equivalents $643.4 $635.9
Accounts and notes receivable, net 885.2 1,027.8
Inventories
Parts and finished equipment 112.7 121.7
Work in process and materials 120.0 116.9
Deferred income taxes 272.4 270.0
Other current assets 106.4 85.7
---------- ----------
Total 2,140.1 2,258.0
---------- ----------
Properties 1,347.4 1,352.7
Less accumulated depreciation
and amortization 924.8 928.5
---------- ----------
Properties, net 422.6 424.2
---------- ----------
Outsourcing assets, net 529.9 477.5
Marketable software, net 329.8 332.2
Investments at equity 183.3 153.3
Prepaid pension cost 49.6 55.5
Deferred income taxes 1,385.7 1,384.6
Goodwill 186.6 177.5
Other long-term assets 189.3 211.8
---------- ----------
Total $5,416.9 $5,474.6
========== ==========
Liabilities and stockholders' equity
Current liabilities
Notes payable $10.4 $17.7
Current maturities of long-term debt 150.7 2.2
Accounts payable 429.8 513.8
Other accrued liabilities 1,240.0 1,305.7
Income taxes payable 192.2 214.1
---------- ----------
Total 2,023.1 2,053.5
---------- ----------
Long-term debt 901.8 1,048.3
Accrued pension liabilities 460.1 433.6
Other long-term liabilities 539.1 544.0
Stockholders' equity
Common stock 3.4 3.3
Accumulated deficit (366.4) (414.8)
Other capital 3,856.9 3,818.6
Accumulated other comprehensive loss (2,001.1) (2,011.9)
---------- ----------
Stockholders' equity 1,492.8 1,395.2
---------- ----------
Total $5,416.9 $5,474.6
========== ==========
4. UNISYS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions)
Six Months Ended
June 30
-----------------
2004 2003
---- ----
Cash flows from operating activities
Net income $48.3 $91.0
Add (deduct) items to reconcile
net income to net cash provided
by operating activities:
Depreciation and amortization
of properties and outsourcing assets 123.1 105.4
Amortization of marketable software 62.9 59.9
(Increase) in deferred income
taxes, net (2.4) (1.5)
Decrease (increase) in receivables, net 185.3 (6.6)
Decrease in inventories 6.4 19.5
(Decrease) in accounts payable and
other accrued liabilities (172.2) (177.5)
(Decrease) increase in income
taxes payable (21.9) 17.5
Increase (decrease) in other liabilities 3.5 (14.8)
(Increase) in other assets (27.8) (39.1)
Other 8.8 (5.6)
------- -------
Net cash provided by operating activities 214.0 48.2
------- -------
Cash flows from investing activities
Proceeds from investments 2,878.8 2,387.5
Purchases of investments (2,879.0) (2,421.7)
Investment in marketable software (60.5) (76.9)
Capital additions of properties
and outsourcing assets (143.5) (112.0)
Purchases of businesses (12.6) (2.0)
------- -------
Net cash used for investing activities (216.8) (225.1)
------- -------
Cash flows from financing activities
Net reduction in short-term borrowings (10.6) (59.6)
Proceeds from employee stock plans 24.0 13.9
Payments of long-term debt (1.7) (3.0)
Proceeds from issuance of long-term debt 293.3
------- -------
Net cash provided by financing activities 11.7 244.6
------- -------
Effect of exchange rate changes on cash
and cash equivalents (1.4) 12.3
------- -------
Increase in cash and cash equivalents 7.5 80.0
Cash and cash equivalents, beginning of
period 635.9 301.8
------- -------
Cash and cash equivalents, end of period $643.4 $381.8
======= =======
5. Reconciliation of GAAP to Non-GAAP
Financial Information
The preceding release presents information with and
without pension expense or income. Unisys believes
that this information will enhance an overall
understanding of its financial performance due to the
significant change in pension expense or income from
period to period and the non-operational nature of
pension expense or income. The presentation of
non-GAAP information is not meant to be considered in
isolation or as a substitute for results prepared in
accordance with accounting principles generally
accepted in the United States.
6. UNISYS CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP
CONSOLIDATED STATEMENTS OF INCOME
(Millions, except per share data)
Three Months Ended
June 30, 2004
----------------------------
US GAAP Less Without
as Pension Pension
Reported Expense Expense
-------- -------- --------
Revenue $1,388.1 $1,388.1
Costs and expenses
Cost of revenue 1,021.0 ($17.8) 1,003.2
Selling, general and
administrative 272.9 (4.8) 268.1
Research and development 71.3 (2.2) 69.1
-------- -------- --------
1,365.2 (24.8) 1,340.4
-------- -------- --------
Operating income 22.9 24.8 47.7
Interest expense 18.2 18.2
Other income
(expense), net 24.0 24.0
-------- -------- --------
Income before income taxes 28.7 24.8 53.5
Provision for income taxes 9.3 7.9 17.2
-------- -------- --------
Net income $19.4 $16.9 $36.3
======== ======== ========
Diluted earnings per share $ .06 $ .05 $ .11
======== ======== ========
Three Months Ended
June 30, 2003
----------------------------
US GAAP Less Without
as Pension Pension
Reported Income Income
-------- -------- --------
Revenue $1,425.0 $1,425.0
Costs and expenses
Cost of revenue 1,032.9 $1.5 1,034.4
Selling, general and
administrative 242.4 2.4 244.8
Research and development 63.7 4.0 67.7
-------- -------- --------
1,339.0 7.9 1,346.9
-------- -------- --------
Operating income 86.0 (7.9) 78.1
Interest expense 18.4 18.4
Other income
(expense), net 10.6 10.6
-------- -------- --------
Income before income taxes 78.2 (7.9) 70.3
Provision for income taxes 25.7 (2.6) 23.1
-------- -------- --------
Net income $52.5 ($5.3) $47.2
======== ======== ========
Diluted earnings per share $ .16 ($ .02) $ .14
======== ======== ========
7. UNISYS CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP
CONSOLIDATED STATEMENTS OF INCOME
(Millions, except per share data)
Six Months Ended
June 30, 2004
----------------------------
US GAAP Less Without
as Pension Pension
Reported Expense Expense
-------- -------- --------
Revenue $2,851.0 $2,851.0
Costs and expenses
Cost of revenue 2,092.4 ($33.3) 2,059.1
Selling, general and
administrative 534.1 (9.7) 524.4
Research and development 142.8 (4.0) 138.8
-------- -------- --------
2,769.3 (47.0) 2,722.3
-------- -------- --------
Operating income 81.7 47.0 128.7
Interest expense 35.2 35.2
Other income
(expense), net 24.6 24.6
-------- -------- --------
Income before income taxes 71.1 47.0 118.1
Provision for income taxes 22.8 15.0 37.8
-------- -------- --------
Net income $48.3 $32.0 $80.3
======== ======== ========
Diluted earnings per share $ .14 $ .10 $ .24
======== ======== ========
Six Months Ended
June 30, 2003
----------------------------
US GAAP Less Without
as Pension Pension
Reported Income Income
-------- -------- --------
Revenue $2,823.9 $2,823.9
Costs and expenses
Cost of revenue 2,044.7 $2.7 2,047.4
Selling, general and
administrative 486.1 4.4 490.5
Research and development 130.5 7.2 137.7
-------- -------- --------
2,661.3 14.3 2,675.6
-------- -------- --------
Operating income 162.6 (14.3) 148.3
Interest expense 34.1 34.1
Other income
(expense), net 7.2 7.2
-------- -------- --------
Income before income taxes 135.7 (14.3) 121.4
Provision for income taxes 44.7 (4.7) 40.0
-------- -------- --------
Net income $91.0 ($9.6) $81.4
======== ======== ========
Diluted earnings per share $ .28 ($ .03) $ .25
======== ======== ========
8. UNISYS CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP
SEGMENT RESULTS OF OPERATIONS
(Millions)
Three Months Ended
June 30, 2004
----------------------------
Less Without
As Pension Pension
Reported Expense Expense
-------- -------- --------
Services Segment
Total revenue $1,163.3 $1,163.3
Gross profit 214.9 ($17.4) 232.3
% of revenue 18.5% 20.0%
Operating income 8.2 (21.1) 29.3
% of revenue 0.7% 2.5%
Technology Segment
Total revenue 282.1 282.1
Gross profit 150.4 (0.4) 150.8
% of revenue 53.3% 53.5%
Operating income 15.1 (3.7) 18.8
% of revenue 5.4% 6.7%
Total Company
Total revenue 1,388.1 1,388.1
Gross profit 367.1 (17.8) 384.9
% of revenue 26.4% 27.7%
Operating income 22.9 (24.8) 47.7
% of revenue 1.6% 3.4%
Three Months Ended
June 30, 2003
----------------------------
Less Without
As Pension Pension
Reported Income Income
-------- -------- --------
Services Segment
Total revenue $1,169.7 $1,169.7
Gross profit 234.5 $0.7 233.8
% of revenue 20.0% 20.0%
Operating income 64.1 3.2 60.9
% of revenue 5.5% 5.2%
Technology Segment
Total revenue 344.5 344.5
Gross profit 160.5 0.8 159.7
% of revenue 46.6% 46.4%
Operating income 26.8 4.7 22.1
% of revenue 7.8% 6.4%
Total Company
Total revenue 1,425.0 1,425.0
Gross profit 392.1 1.5 390.6
% of revenue 27.5% 27.4%
Operating income 86.0 7.9 78.1
% of revenue 6.0% 5.5%
9. UNISYS CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP
SEGMENT RESULTS OF OPERATIONS
(Millions)
Six Months Ended
June 30, 2004
----------------------------
Less Without
As Pension Pension
Reported Expense Expense
-------- -------- --------
Services Segment
Total revenue $2,333.1 $2,333.1
Gross profit 437.8 ($32.6) 470.4
% of revenue 18.8% 20.2%
Operating income 37.4 (40.4) 77.8
% of revenue 1.6% 3.3%
Technology Segment
Total revenue 620.9 620.9
Gross profit 314.2 (0.7) 314.9
% of revenue 50.6% 50.7%
Operating income 44.3 (6.6) 50.9
% of revenue 7.1% 8.2%
Total Company
Total revenue 2,851.0 2,851.0
Gross profit 758.6 (33.3) 791.9
% of revenue 26.6% 27.8%
Operating income 81.7 (47.0) 128.7
% of revenue 2.9% 4.5%
Six Months Ended
June 30, 2003
----------------------------
Less Without
As Pension Pension
Reported Income Income
-------- -------- --------
Services Segment
Total revenue $2,282.3 $2,282.3
Gross profit 442.9 $0.7 442.2
% of revenue 19.4% 19.4%
Operating income 98.5 5.1 93.4
% of revenue 4.3% 4.1%
Technology Segment
Total revenue 700.8 700.8
Gross profit 338.6 2.0 336.6
% of revenue 48.3% 48.0%
Operating income 66.4 9.2 57.2
% of revenue 9.5% 8.2%
Total Company
Total revenue 2,823.9 2,823.9
Gross profit 779.2 2.7 776.5
% of revenue 27.6% 27.5%
Operating income 162.6 14.3 148.3
% of revenue 5.8% 5.3%
10. UNISYS CORPORATION
RECONCILATION OF GAAP TO NON-GAAP
FORWARD-LOOKING ESTIMATED DILUTED EARNINGS PER SHARE
Three
Months Year
Ending Ending
9/30/2004 12/31/2004
---------- ----------
Diluted earnings per share-
on a GAAP basis .03-.07 .49-.53
Add back estimated pension expense,
net of tax .05 .19
--------- ---------
Diluted earnings per share-
on a NON-GAAP basis
(excluding pension expense) .08-.12 .68-.72
========= =========
NOTE: See section in press release entitled
quot;Forward-Looking Statementsquot;.