Second-Quarter 2012 Financial Results - Unisys...2Q12 Highlights Profitability • Net income of $46.6M in 2Q12 vs. a net loss of $11.6 in the prior year • Diluted EPS of $0.99 vs.

Second-Quarter 2012 Financial Results July 24, 2012

www.unisys.com/investor

Ed Coleman

Chairman & CEO

Janet Haugen

Chief Financial Officer

© 2012 Unisys Corporation. All rights reserved. 2

Disclaimer

• Statements made by Unisys during today’s presentation that are not historical facts, including those regarding future performance, are forward-looking statements under the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations and assumptions and involve risks and uncertainties that could cause actual results to differ from expectations. These risks and uncertainties are discussed in the company’s reports filed with the SEC and in today’s earnings release.

• This presentation also includes non-GAAP financial measures including Net Cash (Debt), EBITDA, Adjusted EBITDA, non-GAAP Earnings per Diluted Share, Free Cash Flow, and Constant Currency. Definitions of these non-GAAP financial measures and reconciliations to GAAP measures are included in this presentation.

• These presentation materials can be accessed through a link on the Unisys Investor Web site at www.unisys.com/investor. Information in this presentation is as of July 24, 2012 and Unisys undertakes no duty to update this information.

http://www.unisys.com/investor

Ed Coleman

Chairman & CEO


2Q12 Highlights

Profitability • Net income of $46.6M in 2Q12 vs. a net loss of $11.6 in the prior year

• Diluted EPS of $0.99 vs. a diluted loss per share of $0.27 in 2Q11

• Non-GAAP EPS of $1.41 vs. non-GAAP EPS of $1.07 a year ago*

Revenue • Revenue down 2%; 3% growth on constant currency basis

• Revenue growth in 3 out of last 4 quarters on a constant currency basis

• Technology revenue grew 12%; grew 23% on constant currency basis

• Services revenue down 3%; grew 1% on a constant currency basis

• IT outsourcing revenue grew 8%

Operational

Efficiency

• Services operating margin of 8.0% vs. 7.1% in 2Q11

• Technology operating margin of 28.6% vs. 2.4% in 2Q11

Debt

Reduction

• Announced today actions to reduce debt by an additional $84.5M.

When completed, we will achieve our December 31, 2013 debt

reduction goal.

*See Schedule A: GAAP to non-GAAP Reconciliation


Three Year Financial Goals - Continued Progress Maintaining focus on operational efficiency while growing profitable revenue

Three Year Goals

2011 – 2013

2Q12

Progress

Pre-tax Profit

• Increase annual pre-tax profit to

$350M in 2013, excluding any

change in pension

income/expense from 2010 levels

• 2Q12 pre-tax profit of $75M; $97M before pension

expense of $21.1M and debt reduction charges of $0.3M

• YTD pre-tax profit of $117M; $171M excluding pension

expense of $46.8M and debt reduction charges of $7.5M

Operational Efficiency

• Consistently deliver 8-10%

services operating margin

• Services operating margin of 8.0% in 2Q12

• YTD Services operating margin of 6.5% vs. 5.6% in 2011

• Low cost labor 31% of total labor at June 30, 2012

Revenue Growth

• Grow IT outsourcing and system

integration at market rates

• Maintain stable Technology

revenue

• ITO revenue grew 8%

– Up 4% YTD

• SI revenue, excluding U.S. Federal, grew 3%

– Up 16% YTD

• Technology revenue grew 12%

– Tech up 3% YTD

Debt Reduction

• By year end 2013, reduce our

outstanding debt by 75% (or

$625M) from September 30,

2010 levels

• Calling $85M in 2016 maturities and with call, debt

reduced by $629M since Sept. 30, 2010

• With call, will achieve 100% of our debt reduction goal


Reducing Leverage

-$750

-$500

-$250

$0

$250

$500

$750

$1,000

$1,250

$1,500

4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 2Q12PF**

Long-Term Debt (LTD) AR Securitization\Revolver Cash Net Cash*$M

See Schedule B: GAAP to non-GAAP Reconciliation

*Net Cash = Cash less LTD and utilization under AR securitization\revolver facility.

** Pro forma results reflect the expected impact of the call of the 2016 notes.


Positioning Unisys for Profitable Growth

• Differentiate through services and solutions that help our clients operate more safely and securely in an ever more connected world

• Help clients address disruptive trends such as mobility, cloud computing, and cybersecurity

• Believe we are positioned to capitalize on growth opportunities

Janet Haugen

SVP & CFO


$M (excluding EPS) 2Q12 2Q11 Y/Y Ch

Revenue $921 $937 (2%)

Gross Profit $243 $214 14%

Gross Profit Margin 26.4% 22.8% 3.6 pts

Operating Expenses (SG&A plus R&D) $164 $166 (1%)

Operating Profit $79 $48 64%

Operating Profit Margin 8.6% 5.1% 3.5 pts

Interest Expense $8 $13

Other Income (Expense) $4 ($49)

Pretax Income (Loss) $75 ($15)

Tax Provision (Benefit) $22 ($9)

Net Income (Loss) $47 ($12)

EBITDA* $127 $46 175%

Adjusted EBITDA* $149 $114 30%

Diluted EPS $0.99 ($0.27)

Non-GAAP Earnings per Diluted Share* $1.41 $1.07 32%

2Q12 Financial Results

*See Schedule A and C: GAAP to non-GAAP Reconciliation


Operating Profit

-$3

$52

$140

$330

$373

$411 $375 $376

$359

$301

$338 $325 $347

$378

-0.1% 1.1%

3.2%

7.5% 8.6%

9.6% 9.1% 9.3% 9.1% 7.8%

8.6% 8.4% 9.0% 9.8%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

-$100

$0

$100

$200

$300

$400

$500

1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12

$M Trailing Twelve Months Operating Profit % of

Revenue


2Q12 Segment Revenue

2Q11 Revenue = $937M 2Q12 Revenue = $921M

• Services revenue down 3% Y/Y – Services revenue up 1% in constant currency

– Excluding U.S. Federal, Services revenue flat; up 5% in constant currency

• Technology revenue up 12% Y/Y

Technology 10%

Technology 11%

Services 90% Services 89%


2Q12 Services Revenue by Portfolio

$M 2Q12 Y/Y Ch

Services Revenue $816 (3%)

Gross Margin 21.0% 90 bp

Operating Margin 8.0% 90 bp

Revenue by Portfolio 2Q12 Y/Y Ch

Systems Integration $264 (8%)

Information Technology

Outsourcing $330 8%

Infrastructure Services $108 (17%)

Core Maintenance $48 (16%)

Business Process

Outsourcing $66 5%

32% 34%

41% 37%

13% 15%

6% 7%

8% 7%

0%

25%

50%

75%

100%

2Q12 2Q11

BPO

Core

ISS

ITO

SI

Services Revenue

Services portfolio revenue as a %

of Unisys services revenue


2Q12 Technology Revenue by Portfolio

Technology Revenue $M 2Q12 Y/Y Ch

Technology Revenue $105 12%

Gross Margin 63.4% 1440 bp

Operating Margin 28.6% 2620 bp

Revenue by Portfolio 2Q12 Y/Y Ch

Enterprise Class

Software & Servers $100 27%

Other Technology $5 (68%)

95%

84%

5%

16%

0%

25%

50%

75%

100%

2Q12 2Q11

OtherTechnology

EnterpriseClassSoftware &Servers

Technology portfolio revenue as a %

of Unisys technology revenue


U.S. Federal Government Business

2Q12 Business Mix

Revenue Y/Y

2Q12 (20%)

$157 $152

$181

$162

$125 $121

$0

$50

$100

$150

$200

$250

$300

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12

Federal Revenue $M

Civilian 51%

Homeland Security

23%

Defense & Intelligence

26%


2Q12 Unisys Revenue Profile

U.S.

Federal

13%

U.S.

Federal

13%

Industry

Geography Y/Y Ch

North America Excluding U.S. Federal

1% 15%

Europe/Africa (5%)

Asia Pacific 19%

Latin America (25%)

Y/Y Ch

Public Sector Excluding U.S. Federal

(10%) (4%)

Commercial 6%

Financial 3%

Europe/ Africa

32%

North America

41%

Latin America

10% Asia Pacific

17%

Public Sector

40% Commercial 37%

Financial 23%


2Q12 Services Order Highlights

• Services orders declined by double digits Y/Y

• Services orders by geography:

– Orders grew in Asia Pacific and Latin America

– Orders declined in North America and Europe

• Closed 2Q12 with $5.1B in services backlog vs. $5.7B at 2Q11

– $670M of services backlog expected to turn into 3Q12 revenue


Cash Flow Comparison

$M 2Q12 2Q11

Cash Flow From Operations $57 $36

Capital Expenditures $35 $29

Free Cash Flow* $22 $7

Pension Funding $51 $21

Free Cash Flow Before Pension Funding* $73 $27

Depreciation & Amortization $47 $50

Cash Balance $660 $625

*See Schedule D: GAAP to non-GAAP Reconciliation


Balance Sheet & Capital Structure

• Three-year goal to reduce debt to ~$210M by Dec. 31, 2013

– Retired $68.5M of debt in first half 2012

– Today announced redemption of $84.5M in 12.5% notes due January 2016

• After completion of redemption announced today:

– Total debt will be reduced to $208M

– 100% of three-year debt reduction goal will be achieved


Defined Benefit Plans Cash Funding Estimates

Cash Funding Requirements ($M) 2011 2012 2013 2014 2015 2016 2017

Previous

Estimates

U.S. Qualified Defined Benefit Pension Plan $0 $143 $155 $130 $110 $85 $65

Other Defined Benefit Pension Plans $83 $97 $115 $95 $80 $80 $80

Total $83 $240 $270 $225 $190 $165 $145

Current

Estimates

U.S. Qualified Defined Benefit Pension Plan Under

Moving Ahead for Progress in the 21st Century Act $0 $110 $85 $140 $170 $110 $90

Other Defined Benefit Pension Plans $83 $90 $115 $95 $80 $80 $80

Total $83 $200 $200 $235 $250 $190 $170

Estimates

All estimates are based on expected asset

returns and discount rate assumptions as

calculated at December 31, 2011 except for the

discount rate used for the U.S. qualified

defined benefit plan which has been updated

for our estimate of the impact of recent U.S.

legislation. These are likely to change for 2012

and beyond based on -- among other items --

market conditions, published IRS discount

rates, and changes in currency rates.

Questions & Answers


Non-GAAP Financial Measures

In an effort to provide investors with additional information regarding the company’s results as determined by generally accepted accounting principles (GAAP), the company also discusses, in its earnings press release and/or earnings presentation materials, the following non-GAAP information which management believes provides useful information to investors.

Net Cash (Debt) – In an effort to help investors better understand the debt held by the company, this measure takes into account not only the total debt obligations of the company, but the significance of debt compared to its cash balances. Net Cash (Debt) is calculated by subtracting Long-Term Debt and utilization under the company’s Accounts Receivable securitization/revolver facility from the company’s cash balance.

EBITDA – Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) is an approximate measure of a company’s operating cash flow based on data from the company’s income statement. EBITDA is calculated as earnings before the deduction of interest expenses, taxes, depreciation, and amortization. Management believes this measure may be relevant to investors due to the level of fixed assets and related depreciation charges. This measure is also of interest to the company’s creditors, since it provides a perspective on earnings available for interest payments.

Adjusted EBITDA – Unisys completed debt reductions in 2Q12 and 2Q11. As a result of these reductions, Unisys recorded pretax charges of $0.3 million and $45.7 million, respectively, in the second quarters 2012 and 2011. The company also recorded pretax pension expense of $21.1 million and $8.7 million, respectively, during the second quarters of 2012 and 2011. In addition, during the second quarter of 2011 the company recorded a pre-tax charge of $13.5 million related to the loss of an old non-income tax case concerning the company’s former Brazilian manufacturing operations. In order to provide investors with additional understanding of the company’s operating results, these charges are excluded from the Adjusted EBITDA calculation.


Non-GAAP Financial Measures

Non-GAAP Earnings Per Diluted Share – As a result of debt reductions, Unisys recorded charges, net of tax, of $0.3 million and $45.7 million, respectively, during the second quarters of 2012 and 2011, respectively. The company also recorded pension expense, net of tax, of $21.5 million and $7.2 million, respectively, during the second quarters of 2012 and 2011. In addition, during the second quarter of 2011 the company recorded an after-tax charge of $8.9 million related to the loss of an old non-income tax case concerning the company’s former Brazilian manufacturing operations. In an effort to provide investors with a perspective on the company’s earnings without these charges, they are excluded from the non-GAAP earnings per diluted share calculations.

Free Cash Flow – To better understand the trends in our business, we believe that it is helpful to present free cash flow, which we define as cash flow from operations less capital expenditures. Management believes this measure gives investors an additional perspective on cash flow from operating activities in excess of amounts required for reinvestment. Because of the significance of the company’s pension funding obligations in 2012, free cash flow before pension funding is also provided.

Constant Currency – The company refers to growth rates at constant currency or adjusting for currency 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 for revenue is calculated by retranslating current and prior period results at a consistent rate. This approach is based on the pricing currency for each country which is typically the functional currency. Generally, when the dollar either strengthens or weakens against other currencies, the growth at constant currency rates will be higher or lower, respectively, than growth reported at actual exchange rates.


Schedule A: GAAP to Non-GAAP Reconciliation

Non-GAAP Earnings (Loss) per Diluted Share

$M except share and per share data 2Q12 2Q11

GAAP net income (loss) attributable to Unisys Corporation common shareholders $46.6 ($11.6)

Debt reduction charge, net of tax 0.3 45.7

Brazilian non-income tax case, net of tax -- 8.9

Pension expense, net of tax 21.5 7.2

Non-GAAP net income (loss) attributable to Unisys Corporation common shareholders $68.4 $50.2

Add preferred stock dividends $4.1 $4.0

Non-GAAP net income (loss) attributable to Unisys Corporation for diluted earnings per share $72.5 $54.2

Weighted average shares (thousands) 43,905 43,106

Plus incremental shares from assumed conversion of employee stock plans and preferred stock 7,339 7,484

Adjusted weighted average shares 51,244 50,590

Earnings per Share

GAAP basis

GAAP net income (loss) attributable to Unisys Corporation common shareholders $50.7 ($11.6)

Divided by weighted average shares 51,244 43,106

GAAP net income (loss) per share $0.99 ($0.27)

Non-GAAP basis

Non-GAAP net income (loss) attributable to Unisys Corporation for diluted earnings per share $72.5 $54.2

Divided by adjusted weighted average shares 51,244 50,590

Non-GAAP earnings (loss) per diluted share $1.41 $1.07


Schedule B: GAAP to Non-GAAP Reconciliation

Net Cash (Debt)

$M 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 2Q12

PF*

Long-Term Debt

(Including

Current

Maturities)

1,060.6 1,060.3 1,061.2 911.0 911.7 847.4 836.4 837.5 824.0 619.3 447.4 445.3 359.7 295.5 292.4 208.3

AR

Securitization /

Revolver Usage

141.0 120.0 130.0 118.0 100.0 - - - - - - - - - - -

Subtotal 1,201.6 1,180.3 1,191.2 1,029.0 1,011.7 847.4 836.4 837.5 824.0 619.3 447.4 445.3 359.7 295.5 292.4 208.3

Cash 544.0 468.7 475.0 473.6 647.6 468.5 496.5 688.7 828.3 833.1 625.0 667.3 714.9 654.7 659.7 569.9

Net Cash (Debt) (657.6) (711.6) (716.2) (555.4) (364.1) (378.9) (339.9) (148.8) 4.3 213.8 177.6 222.0 355.2 359.2 367.3 361.6

*Pro forma results reflect the expected impact of the call of the 2016 notes.


Schedule C: GAAP to Non-GAAP Reconciliation

EBITDA and Adjusted EBITDA

$M 2Q12 2Q11

Net Income (Loss) Attributable to Unisys $50.7 ($7.6)

Interest Expense 7.9 13.3

Income Tax Provision (Benefit) 22.1 (9.2)

Depreciation & Amortization 46.5 49.8

EBITDA $127.2 $46.3

Debt reduction charges 0.3 45.7

Pension Expense 21.1 8.7

Brazil Tax Matter -- 13.5

Adjusted EBITDA $148.6 $114.2

Earnings before Interest, Taxes, Depreciation and Amortization


Schedule D: GAAP to Non-GAAP Reconciliation

Free Cash Flow

$M 2Q12 2Q11

Cash Provided by Operations $57.1 $35.5

Capital Expenditures (34.8) (28.9)

Free Cash Flow $22.3 $6.6

Pension Funding 50.6 20.6

Free Cash Flow Before Pension Funding $72.9 $27.2


Thank You

www.unisys.com/investor

Second-Quarter 2012 Financial Results - Unisys...2Q12 Highlights Profitability • Net income of $46.6M in 2Q12 vs. a net loss of $11.6 in the prior year • Diluted EPS of $0.99 vs.

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