|
|
|
|
|
|
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
|
|
|
Delaware
|
|
38-0387840
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
801 Lakeview Drive, Suite 100
Blue Bell, Pennsylvania
|
|
19422
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
|
|
|
|
|
|
|
|
|
Large accelerated filer
|
|
¨
|
|
Accelerated filer
|
|
ý
|
|
|
|
|
|||
Non-accelerated filer
|
|
¨
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
|
¨
|
|
|
|
|
|
|
|
|
|
|
|
Emerging growth company
|
|
¨
|
PART I - FINANCIAL INFORMATION
|
|
Page Number
|
|
Item 1.
|
Financial Statements (Unaudited)
|
|
|
|
Consolidated Statements of Income
|
|
|
|
Consolidated Statements of Comprehensive Income
|
|
|
|
Consolidated Balance Sheets
|
|
|
|
Consolidated Statements of Cash Flows
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
|
|
Item 4.
|
Controls and Procedures
|
|
|
PART II - OTHER INFORMATION
|
|||
Item 1.
|
Legal Proceedings
|
|
|
Item 1A.
|
Risk Factors
|
|
|
Item 6.
|
Exhibits
|
|
|
|
|
|
|
Exhibit Index
|
|
||
Signatures
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2018
|
|
2017
|
||||
Revenue
|
|
|
|
|
||||
Services
|
|
$
|
568.5
|
|
|
$
|
585.3
|
|
Technology
|
|
139.9
|
|
|
79.2
|
|
||
|
|
708.4
|
|
|
664.5
|
|
||
Costs and expenses
|
|
|
|
|
||||
Cost of revenue:
|
|
|
|
|
||||
Services
|
|
470.9
|
|
|
486.4
|
*
|
||
Technology
|
|
36.3
|
|
|
39.5
|
*
|
||
|
|
507.2
|
|
|
525.9
|
*
|
||
Selling, general and administrative
|
|
90.9
|
|
|
105.0
|
*
|
||
Research and development
|
|
8.5
|
|
|
11.8
|
*
|
||
|
|
606.6
|
|
|
642.7
|
*
|
||
Operating income
|
|
101.8
|
|
|
21.8
|
*
|
||
Interest expense
|
|
16.6
|
|
|
5.7
|
|
||
Other income (expense), net
|
|
(22.6
|
)
|
|
(32.9
|
)*
|
||
Income (loss) before income taxes
|
|
62.6
|
|
|
(16.8
|
)
|
||
Provision for income taxes
|
|
20.9
|
|
|
12.9
|
|
||
Consolidated net income (loss)
|
|
41.7
|
|
|
(29.7
|
)
|
||
Net income attributable to noncontrolling interests
|
|
1.1
|
|
|
3.0
|
|
||
Net income (loss) attributable to Unisys Corporation
|
|
$
|
40.6
|
|
|
$
|
(32.7
|
)
|
Earnings (loss) per share attributable to Unisys Corporation
|
|
|
|
|
||||
Basic
|
|
$
|
0.80
|
|
|
$
|
(0.65
|
)
|
Diluted
|
|
$
|
0.62
|
|
|
$
|
(0.65
|
)
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2018
|
|
2017
|
||||
Consolidated net income (loss)
|
|
$
|
41.7
|
|
|
$
|
(29.7
|
)
|
Other comprehensive income:
|
|
|
|
|
||||
Foreign currency translation
|
|
(5.1
|
)
|
|
31.1
|
|
||
Postretirement adjustments, net of tax of $1.0 in 2018 and $(1.0) in 2017
|
|
39.0
|
|
|
22.4
|
|
||
Total other comprehensive income
|
|
33.9
|
|
|
53.5
|
|
||
Comprehensive income
|
|
75.6
|
|
|
23.8
|
|
||
Less comprehensive income attributable to noncontrolling interests
|
|
(2.3
|
)
|
|
(3.2
|
)
|
||
Comprehensive income attributable to Unisys Corporation
|
|
$
|
73.3
|
|
|
$
|
20.6
|
|
|
March 31,
2018 |
|
December 31, 2017
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
656.4
|
|
|
$
|
733.9
|
|
Accounts receivable, net
|
492.5
|
|
|
503.3
|
|
||
Contract assets
|
46.4
|
|
|
—
|
|
||
Inventories:
|
|
|
|
||||
Parts and finished equipment
|
11.5
|
|
|
13.6
|
|
||
Work in process and materials
|
10.7
|
|
|
12.5
|
|
||
Prepaid expenses and other current assets
|
115.3
|
|
|
126.2
|
|
||
Total current assets
|
1,332.8
|
|
|
1,389.5
|
|
||
Properties
|
906.6
|
|
|
898.8
|
|
||
Less-Accumulated depreciation and amortization
|
769.7
|
|
|
756.3
|
|
||
Properties, net
|
136.9
|
|
|
142.5
|
|
||
Outsourcing assets, net
|
213.4
|
|
|
202.3
|
|
||
Marketable software, net
|
142.6
|
|
|
138.3
|
|
||
Prepaid postretirement assets
|
157.3
|
|
|
148.3
|
|
||
Deferred income taxes
|
116.0
|
|
|
119.9
|
|
||
Goodwill
|
181.0
|
|
|
180.8
|
|
||
Restricted cash
|
26.6
|
|
|
30.2
|
|
||
Other long-term assets
|
207.1
|
|
|
190.6
|
|
||
Total assets
|
$
|
2,513.7
|
|
|
$
|
2,542.4
|
|
Liabilities and deficit
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current maturities of long-term-debt
|
$
|
10.6
|
|
|
$
|
10.8
|
|
Accounts payable
|
214.5
|
|
|
241.8
|
|
||
Deferred revenue
|
324.8
|
|
|
327.5
|
|
||
Other accrued liabilities
|
344.4
|
|
|
391.5
|
|
||
Total current liabilities
|
894.3
|
|
|
971.6
|
|
||
Long-term debt
|
636.2
|
|
|
633.9
|
|
||
Long-term postretirement liabilities
|
1,973.2
|
|
|
2,004.4
|
|
||
Long-term deferred revenue
|
184.9
|
|
|
159.0
|
|
||
Other long-term liabilities
|
95.9
|
|
|
100.0
|
|
||
Commitments and contingencies
|
|
|
|
||||
Deficit:
|
|
|
|
||||
Common stock, shares issued:
|
|
|
|
||||
2018; 54.1, 2017; 53.4
|
0.5
|
|
|
0.5
|
|
||
Accumulated deficit
|
(1,943.9
|
)
|
|
(1,963.1
|
)
|
||
Treasury stock, shares at cost:
|
|
|
|
||||
2018; 3.1, 2017; 2.9
|
(104.8
|
)
|
|
(102.7
|
)
|
||
Paid-in capital
|
4,530.0
|
|
|
4,526.4
|
|
||
Accumulated other comprehensive loss
|
(3,783.1
|
)
|
|
(3,815.8
|
)
|
||
Total Unisys stockholders’ deficit
|
(1,301.3
|
)
|
|
(1,354.7
|
)
|
||
Noncontrolling interests
|
30.5
|
|
|
28.2
|
|
||
Total deficit
|
(1,270.8
|
)
|
|
(1,326.5
|
)
|
||
Total liabilities and deficit
|
$
|
2,513.7
|
|
|
$
|
2,542.4
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2018
|
|
2017
|
||||
Cash flows from operating activities
|
|
|
|
|
||||
Consolidated net income (loss)
|
|
$
|
41.7
|
|
|
$
|
(29.7
|
)
|
Adjustments to reconcile consolidated net income (loss) to net cash used for operating activities:
|
|
|
|
|
||||
Foreign currency transaction losses
|
|
3.3
|
|
|
5.3
|
|
||
Non-cash interest expense
|
|
2.6
|
|
|
2.0
|
|
||
Employee stock compensation
|
|
4.0
|
|
|
3.7
|
|
||
Depreciation and amortization of properties
|
|
11.2
|
|
|
10.1
|
|
||
Depreciation and amortization of outsourcing assets
|
|
16.1
|
|
|
12.9
|
|
||
Amortization of marketable software
|
|
14.7
|
|
|
15.7
|
|
||
Other non-cash operating activities
|
|
(0.9
|
)
|
|
(1.1
|
)
|
||
Loss on disposal of capital assets
|
|
0.2
|
|
|
3.8
|
|
||
Postretirement contributions
|
|
(30.9
|
)
|
|
(31.7
|
)*
|
||
Postretirement expense
|
|
19.3
|
|
|
26.2
|
*
|
||
Decrease in deferred income taxes, net
|
|
6.0
|
|
|
2.2
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Receivables, net
|
|
(28.0
|
)
|
|
0.1
|
|
||
Inventories
|
|
0.8
|
|
|
0.1
|
|
||
Accounts payable and other accrued liabilities
|
|
(130.1
|
)
|
|
(50.0
|
)
|
||
Other liabilities
|
|
21.2
|
|
|
(9.2
|
)*
|
||
Other assets
|
|
(1.4
|
)
|
|
(1.4
|
)
|
||
Net cash used for operating activities
|
|
(50.2
|
)
|
|
(41.0
|
)
|
||
Cash flows from investing activities
|
|
|
|
|
||||
Proceeds from investments
|
|
1,222.7
|
|
|
1,218.9
|
|
||
Purchases of investments
|
|
(1,208.7
|
)
|
|
(1,211.5
|
)
|
||
Investment in marketable software
|
|
(19.0
|
)
|
|
(13.8
|
)
|
||
Capital additions of properties
|
|
(5.1
|
)
|
|
(8.5
|
)
|
||
Capital additions of outsourcing assets
|
|
(24.4
|
)
|
|
(12.9
|
)
|
||
Other
|
|
(0.4
|
)
|
|
(0.3
|
)
|
||
Net cash used for investing activities
|
|
(34.9
|
)
|
|
(28.1
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
||||
Payments of long-term debt
|
|
(0.7
|
)
|
|
(0.7
|
)
|
||
Other
|
|
(2.1
|
)
|
|
(2.1
|
)
|
||
Net cash used for financing activities
|
|
(2.8
|
)
|
|
(2.8
|
)
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
|
6.8
|
|
|
6.3
|
|
||
Decrease in cash, cash equivalents and restricted cash
|
|
(81.1
|
)
|
|
(65.6
|
)
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
|
764.1
|
|
|
401.1
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
|
$
|
683.0
|
|
|
$
|
335.5
|
|
|
|
As Reported
|
|
|
Adjustments
|
|
|
Balances Without Adoption of Topic 606
|
||||
For the three months ended March 31, 2018
|
|
|
|
|
|
|
||||||
Statement of Income
|
|
|
|
|
|
|
||||||
Revenue
|
|
|
|
|
|
|
||||||
Services
|
|
$
|
568.5
|
|
|
$
|
2.8
|
|
|
$
|
571.3
|
|
Technology
|
|
139.9
|
|
|
(76.8
|
)
|
|
63.1
|
|
|||
Costs and expenses
|
|
|
|
|
|
|
||||||
Cost of revenue
|
|
|
|
|
|
|
||||||
Services
|
|
470.9
|
|
|
1.8
|
|
|
472.7
|
|
|||
Technology
|
|
36.3
|
|
|
(0.9
|
)
|
|
35.4
|
|
|||
Selling, general and administrative expenses
|
|
90.9
|
|
|
0.2
|
|
|
91.1
|
|
|||
Operating income
|
|
101.8
|
|
|
(75.1
|
)
|
|
26.7
|
|
|||
Income before income taxes
|
|
62.6
|
|
|
(75.1
|
)
|
|
(12.5
|
)
|
|||
Provision for income taxes
|
|
20.9
|
|
|
(9.5
|
)
|
|
11.4
|
|
|||
Consolidated net income
|
|
41.7
|
|
|
(65.6
|
)
|
|
(23.9
|
)
|
|||
Net income attributable to Unisys Corporation
|
|
40.6
|
|
|
(65.6
|
)
|
|
(25.0
|
)
|
|||
|
|
|
|
|
|
|
||||||
As of March 31, 2018
|
|
|
|
|
|
|
||||||
Balance Sheet
|
|
|
|
|
|
|
||||||
Assets
|
|
|
|
|
|
|
||||||
Accounts receivable, net current
|
|
492.5
|
|
|
39.1
|
|
|
531.6
|
|
|||
Contract assets
|
|
46.4
|
|
|
(46.4
|
)
|
|
—
|
|
|||
Inventories
|
|
22.2
|
|
|
(1.6
|
)
|
|
20.6
|
|
|||
Prepaid expenses and other current assets
|
|
115.3
|
|
|
1.5
|
|
|
116.8
|
|
|||
Outsourcing assets, net
|
|
213.4
|
|
|
3.5
|
|
|
216.9
|
|
|||
Deferred income taxes - long-term
|
|
116.0
|
|
|
1.7
|
|
|
117.7
|
|
|||
Other long-term assets
|
|
207.1
|
|
|
(24.1
|
)
|
|
183.0
|
|
|||
Total assets
|
|
2,513.7
|
|
|
(26.3
|
)
|
|
2,487.4
|
|
|||
Liabilities
|
|
|
|
|
|
|
||||||
Deferred revenue - current
|
|
324.8
|
|
|
15.2
|
|
|
340.0
|
|
|||
Other accrued liabilities - current
|
|
344.4
|
|
|
(11.8
|
)
|
|
332.6
|
|
|||
Long-term deferred revenue
|
|
184.9
|
|
|
9.0
|
|
|
193.9
|
|
|||
Other long-term liabilities
|
|
95.9
|
|
|
5.5
|
|
|
101.4
|
|
|||
Equity
|
|
|
|
|
|
|
||||||
Accumulated deficit
|
|
(1,943.9
|
)
|
|
(44.2
|
)
|
|
(1,988.1
|
)
|
|||
Total liabilities and deficit
|
|
2,513.7
|
|
|
(26.3
|
)
|
|
2,487.4
|
|
|
|
|
|
Work-Force Reductions
|
|
Idle Leased Facilities Costs
|
||||||||||
|
|
Total
|
|
U.S.
|
|
International
|
|
|||||||||
Balance at December 31, 2017
|
|
$
|
117.8
|
|
|
$
|
3.9
|
|
|
$
|
109.6
|
|
|
$
|
4.3
|
|
Payments
|
|
(16.5
|
)
|
|
(1.7
|
)
|
|
(14.2
|
)
|
|
(0.6
|
)
|
||||
Changes in estimates
|
|
(2.9
|
)
|
|
(1.2
|
)
|
|
(1.8
|
)
|
|
0.1
|
|
||||
Translation adjustments
|
|
2.9
|
|
|
—
|
|
|
2.8
|
|
|
0.1
|
|
||||
Balance at March 31, 2018
|
|
$
|
101.3
|
|
|
$
|
1.0
|
|
|
$
|
96.4
|
|
|
$
|
3.9
|
|
Expected future utilization on balance at March 31, 2018:
|
|
|
|
|
|
|
|
|
||||||||
2018 remaining nine months
|
|
$
|
69.4
|
|
|
$
|
1.0
|
|
|
$
|
67.1
|
|
|
$
|
1.3
|
|
Beyond 2018
|
|
$
|
31.9
|
|
|
$
|
—
|
|
|
$
|
29.3
|
|
|
$
|
2.6
|
|
|
|
Three Months Ended
March 31, 2018 |
|
Three Months Ended
March 31, 2017 |
||||||||||||||||||||
|
|
Total
|
|
U.S.
Plans
|
|
International
Plans
|
|
Total
|
|
U.S.
Plans
|
|
International
Plans
|
||||||||||||
Service cost
(i)
|
|
$
|
0.8
|
|
|
$
|
—
|
|
|
$
|
0.8
|
|
|
$
|
1.6
|
|
|
$
|
—
|
|
|
$
|
1.6
|
|
Interest cost
|
|
64.0
|
|
|
46.6
|
|
|
17.4
|
|
|
69.9
|
|
|
52.5
|
|
|
17.4
|
|
||||||
Expected return on plan assets
|
|
(87.2
|
)
|
|
(57.6
|
)
|
|
(29.6
|
)
|
|
(89.4
|
)
|
|
(58.8
|
)
|
|
(30.6
|
)
|
||||||
Amortization of prior service benefit
|
|
(1.5
|
)
|
|
(0.6
|
)
|
|
(0.9
|
)
|
|
(1.3
|
)
|
|
(0.6
|
)
|
|
(0.7
|
)
|
||||||
Recognized net actuarial loss
|
|
42.1
|
|
|
31.2
|
|
|
10.9
|
|
|
43.7
|
|
|
30.9
|
|
|
12.8
|
|
||||||
Net periodic pension expense (benefit)
|
|
$
|
18.2
|
|
|
$
|
19.6
|
|
|
$
|
(1.4
|
)
|
|
$
|
24.5
|
|
|
$
|
24.0
|
|
|
$
|
0.5
|
|
(i)
|
Service cost is reported in cost of revenue - services and selling, general and administrative expenses. All other components of net periodic pension expense are reported in other income (expense), net in the Consolidated Statements of Income.
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2018
|
|
2017
|
||||
Service cost
(i)
|
|
$
|
0.2
|
|
|
$
|
0.1
|
|
Interest cost
|
|
1.2
|
|
|
1.5
|
|
||
Expected return on assets
|
|
(0.1
|
)
|
|
(0.1
|
)
|
||
Recognized net actuarial loss
|
|
0.3
|
|
|
0.3
|
|
||
Amortization of prior service benefit
|
|
(0.5
|
)
|
|
(0.1
|
)
|
||
Net periodic postretirement benefit expense
|
|
$
|
1.1
|
|
|
$
|
1.7
|
|
(i)
|
Service cost is reported in selling, general and administrative expenses. All other components of net periodic postretirement benefit expense are reported in other income (expense), net in the Consolidated Statements of Income.
|
|
|
Stock Options
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Term
(years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding at December 31, 2017
|
|
1,758
|
|
|
$
|
26.35
|
|
|
|
|
|
||
Granted
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Forfeited and expired
|
|
(533
|
)
|
|
23.93
|
|
|
|
|
|
|||
Outstanding at March 31, 2018
|
|
1,225
|
|
|
27.41
|
|
|
1.94
|
|
$
|
—
|
|
|
Expected to vest at March 31, 2018
|
|
20
|
|
|
16.83
|
|
|
4.38
|
|
—
|
|
||
Exercisable at March 31, 2018
|
|
1,204
|
|
|
27.59
|
|
|
1.89
|
|
—
|
|
|
|
Restricted
Stock
Units
|
|
Weighted-
Average
Grant-Date
Fair Value
|
|||
Outstanding at December 31, 2017
|
|
1,688
|
|
|
$
|
13.39
|
|
Granted
|
|
1,373
|
|
|
12.77
|
|
|
Vested
|
|
(696
|
)
|
|
13.09
|
|
|
Forfeited and expired
|
|
(28
|
)
|
|
12.80
|
|
|
Outstanding at March 31, 2018
|
|
2,337
|
|
|
13.15
|
|
|
|
Three Months Ended
March 31, 2018
|
||
Weighted-average fair value of grant
|
|
$
|
15.84
|
|
Risk-free interest rate
(i)
|
|
2.26
|
%
|
|
Expected volatility
(ii)
|
|
52.97
|
%
|
|
Expected life of restricted stock units in years
(iii)
|
|
2.88
|
|
|
Expected dividend yield
|
|
—
|
%
|
(i)
|
Represents the continuously compounded semi-annual zero-coupon U.S. treasury rate commensurate with the remaining performance period
|
(ii)
|
Based on historical volatility for the company that is commensurate with the length of the performance period
|
(iii)
|
Represents the remaining life of the longest performance period
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Basic earnings (loss) per common share computation:
|
|
|
|
|
||||
Net income (loss) attributable to Unisys Corporation
|
|
$
|
40.6
|
|
|
$
|
(32.7
|
)
|
Weighted average shares
|
|
50,748
|
|
|
50,256
|
|
||
Basic earnings (loss) per common share
|
|
$
|
0.80
|
|
|
$
|
(0.65
|
)
|
Diluted earnings (loss) per common share computation:
|
|
|
|
|
||||
Net income (loss) attributable to Unisys Corporation
|
|
$
|
40.6
|
|
|
$
|
(32.7
|
)
|
Add interest expense on convertible senior notes, net of tax of zero
|
|
4.8
|
|
|
—
|
|
||
Net income (loss) attributable to Unisys Corporation for diluted earnings per share
|
|
$
|
45.4
|
|
|
$
|
(32.7
|
)
|
Weighted average shares
|
|
50,748
|
|
|
50,256
|
|
||
Plus incremental shares from assumed conversions:
|
|
|
|
|
||||
Employee stock plans
|
|
327
|
|
|
—
|
|
||
Convertible senior notes
|
|
21,868
|
|
|
—
|
|
||
Adjusted weighted average shares
|
|
72,943
|
|
|
50,256
|
|
||
Diluted earnings (loss) per common share
|
|
$
|
0.62
|
|
|
$
|
(0.65
|
)
|
|
|
|
|
|
||||
Anti-dilutive weighted-average stock options and restricted stock units
(i)
|
|
2,044
|
|
|
2,355
|
|
||
Anti-dilutive weighted-average common shares issuable upon conversion of the 5.50% convertible senior notes
(i)
|
|
—
|
|
|
21,868
|
|
(i)
|
Amounts represent shares excluded from the computation of diluted earnings per share, as their effect, if included, would have been anti-dilutive for the periods presented.
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Balance Sheet Location
|
|
|
|
|
||||
Prepaid expenses and other current assets
|
|
$
|
1.1
|
|
|
$
|
4.9
|
|
Other accrued liabilities
|
|
1.1
|
|
|
1.6
|
|
||
Total fair value
|
|
$
|
—
|
|
|
$
|
3.3
|
|
|
Three months ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Statement of Income Location
|
|
|
|
||||
Other income (expense), net
|
$
|
10.7
|
|
|
$
|
5.7
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||
Long-term debt:
|
|
|
|
|
|
|
|
||||||||
10.75% senior secured notes due 2022
|
$
|
430.2
|
|
|
$
|
495.0
|
|
|
$
|
429.6
|
|
|
$
|
492.8
|
|
5.50% convertible senior notes due 2021
|
$
|
188.2
|
|
|
$
|
279.9
|
|
|
$
|
186.3
|
|
|
$
|
237.9
|
|
|
|
Total
|
|
Services
|
|
Technology
|
||||||
Balance at December 31, 2017
|
|
$
|
180.8
|
|
|
$
|
72.1
|
|
|
$
|
108.7
|
|
Translation adjustments
|
|
0.2
|
|
|
0.2
|
|
|
—
|
|
|||
Balance at March 31, 2018
|
|
$
|
181.0
|
|
|
$
|
72.3
|
|
|
$
|
108.7
|
|
|
|
March 31,
2018 |
|
December 31, 2017
|
||||
10.75% senior secured notes due April 15, 2022 ($440.0 million face value less unamortized discount and fees of $9.8 million and $10.4 million at March 31, 2018 and December 31, 2017, respectively)
|
|
$
|
430.2
|
|
|
$
|
429.6
|
|
5.50% convertible senior notes due March 1, 2021 ($213.5 million face value less unamortized discount and fees of $25.3 million and $27.2 million at March 31, 2018 and December 31, 2017, respectively)
|
|
188.2
|
|
|
186.3
|
|
||
Capital leases
|
|
7.7
|
|
|
7.5
|
|
||
Other debt
|
|
20.7
|
|
|
21.3
|
|
||
Total
|
|
646.8
|
|
|
644.7
|
|
||
Less – current maturities
|
|
10.6
|
|
|
10.8
|
|
||
Total long-term debt
|
|
$
|
636.2
|
|
|
$
|
633.9
|
|
See Note 9 for the fair value of the notes in the table above.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Contractual interest coupon
|
|
$
|
2.9
|
|
|
$
|
2.9
|
|
Amortization of debt discount
|
|
1.6
|
|
|
1.5
|
|
||
Amortization of debt issuance costs
|
|
0.3
|
|
|
0.3
|
|
||
Total
|
|
$
|
4.8
|
|
|
$
|
4.7
|
|
|
|
Total
|
|
Translation
Adjustments
|
|
Postretirement
Plans
|
||||||
Balance at December 31, 2017
|
|
$
|
(3,815.8
|
)
|
|
$
|
(817.0
|
)
|
|
$
|
(2,998.8
|
)
|
Other comprehensive income before reclassifications
|
|
(6.0
|
)
|
|
(5.8
|
)
|
|
(0.2
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income
|
|
38.7
|
|
|
—
|
|
|
38.7
|
|
|||
Current period other comprehensive income
|
|
32.7
|
|
|
(5.8
|
)
|
|
38.5
|
|
|||
Balance at March 31, 2018
|
|
$
|
(3,783.1
|
)
|
|
$
|
(822.8
|
)
|
|
$
|
(2,960.3
|
)
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Translation Adjustments
(i)
:
|
|
|
|
|
||||
Adjustment for substantial completion of liquidation of foreign subsidiaries
|
|
$
|
—
|
|
|
$
|
(5.3
|
)
|
Postretirement Plans
(ii)
:
|
|
|
|
|
||||
Amortization of prior service cost
|
|
(1.8
|
)
|
|
(1.4
|
)
|
||
Amortization of actuarial losses
|
|
41.8
|
|
|
43.3
|
|
||
Total before tax
|
|
40.0
|
|
|
36.6
|
|
||
Income tax benefit
|
|
(1.3
|
)
|
|
(1.7
|
)
|
||
Total reclassification for the period
|
|
$
|
38.7
|
|
|
$
|
34.9
|
|
(i)
|
Reported in other income (expense), net in the consolidated statements of income
|
(ii)
|
These items are included in net periodic postretirement cost (see Note 5).
|
|
Noncontrolling
Interests
|
||
Balance at December 31, 2017
|
$
|
28.2
|
|
Net income
|
1.1
|
|
|
Translation adjustments
|
0.8
|
|
|
Postretirement plans
|
0.4
|
|
|
Balance at March 31, 2018
|
$
|
30.5
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Cash paid during the period for:
|
|
|
|
||||
Income taxes, net of refunds
|
$
|
13.6
|
|
|
$
|
16.0
|
|
Interest
|
$
|
6.3
|
|
|
$
|
9.0
|
|
|
March 31,
2018 |
|
December 31, 2017
|
||||
Cash and cash equivalents
|
$
|
656.4
|
|
|
$
|
733.9
|
|
Restricted cash
|
26.6
|
|
|
30.2
|
|
||
Total cash, cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows
|
$
|
683.0
|
|
|
$
|
764.1
|
|
•
|
Cloud & infrastructure services. This represents revenue from helping clients apply cloud and as-a-service delivery models to capitalize on business opportunities, make their end users more productive and manage and secure their IT infrastructure and operations more economically.
|
•
|
Application services. This represents revenue from helping clients transform their business processes by developing and managing new leading-edge applications for select industries, offering advanced data analytics and modernizing existing enterprise applications.
|
•
|
Business process outsourcing (BPO) services. This represents revenue from the management of critical processes and functions for clients in target industries, helping them improve performance and reduce costs.
|
•
|
Technology. This represents revenue from designing and developing software and offering hardware and other related products to help clients reduce costs, improve security and flexibility and improve the efficiency of their data-center environments.
|
|
|
Total
|
|
Corporate
|
|
Services
|
|
Technology
|
||||||||
Three Months Ended March 31, 2018
|
|
|
|
|
|
|
|
|
||||||||
Customer revenue
|
|
$
|
708.4
|
|
|
$
|
—
|
|
|
$
|
568.5
|
|
|
$
|
139.9
|
|
Intersegment
|
|
—
|
|
|
(10.0
|
)
|
|
—
|
|
|
10.0
|
|
||||
Total revenue
|
|
$
|
708.4
|
|
|
$
|
(10.0
|
)
|
|
$
|
568.5
|
|
|
$
|
149.9
|
|
Operating income
|
|
$
|
101.8
|
|
|
$
|
2.7
|
|
|
$
|
17.1
|
|
|
$
|
82.0
|
|
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended March 31, 2017
|
|
|
|
|
|
|
|
|
||||||||
Customer revenue
|
|
$
|
664.5
|
|
|
$
|
—
|
|
|
$
|
585.3
|
|
|
$
|
79.2
|
|
Intersegment
|
|
—
|
|
|
(5.3
|
)
|
|
—
|
|
|
5.3
|
|
||||
Total revenue
|
|
$
|
664.5
|
|
|
$
|
(5.3
|
)
|
|
$
|
585.3
|
|
|
$
|
84.5
|
|
Operating income (loss)
|
|
$
|
21.8
|
*
|
|
$
|
(18.5
|
)*
|
|
$
|
27.3
|
|
|
$
|
13.0
|
|
*
|
Amounts were changed to conform to the current-year presentation. See Note 3.
|
|
|
Three Months Ended March 31,
|
|
||||||
|
|
2018
|
|
2017
|
|
||||
Total segment operating income
|
|
$
|
99.1
|
|
|
$
|
40.3
|
|
|
Interest expense
|
|
(16.6
|
)
|
|
(5.7
|
)
|
|
||
Other income (expense), net
|
|
(22.6
|
)
|
|
(32.9
|
)
|
*
|
||
Cost-reduction charges
(i)
|
|
2.9
|
|
|
(20.1
|
)
|
|
||
Corporate and eliminations
|
|
(0.2
|
)
|
|
1.6
|
|
*
|
||
Total income (loss) before income taxes
|
|
$
|
62.6
|
|
|
$
|
(16.8
|
)
|
|
*
|
Amounts were changed to conform to the current-year presentation. See Note 3.
|
(i)
|
The three months ended March 31, 2017 excludes $5.3 million for net foreign currency losses related to exiting foreign countries which are reported in other income (expense), net in the consolidated statements of income.
|
|
|
Three Months Ended March 31,
|
|
||||||
|
|
2018
|
|
2017
|
|
||||
Services
|
|
|
|
|
|
||||
Cloud & infrastructure services
|
|
$
|
318.4
|
|
|
$
|
337.4
|
|
*
|
Application services
|
|
192.9
|
|
|
199.4
|
|
*
|
||
Business process outsourcing services
|
|
57.2
|
|
|
48.5
|
|
|
||
|
|
568.5
|
|
|
585.3
|
|
|
||
Technology
|
|
139.9
|
|
|
79.2
|
|
|
||
Total
|
|
$
|
708.4
|
|
|
$
|
664.5
|
|
|
*
|
Amounts were changed to conform to the current-year presentation.
|
•
|
Cloud & infrastructure services. This represents revenue from helping clients apply cloud and as-a-service delivery models to capitalize on business opportunities, make their end users more productive and manage and secure their IT infrastructure and operations more economically.
|
•
|
Application services. This represents revenue from helping clients transform their business processes by developing and managing new leading-edge applications for select industries, offering advanced data analytics and modernizing existing enterprise applications.
|
•
|
Business process outsourcing (BPO) services. This represents revenue from the management of critical processes and functions for clients in target industries, helping them improve performance and reduce costs.
|
•
|
Technology. This represents revenue from designing and developing software and offering hardware and other related products to help clients reduce costs, improve security and flexibility and improve the efficiency of their data-center environments.
|
|
|
Total
|
|
Eliminations
|
|
Services
|
|
Technology
|
||||||||
Three Months Ended March 31, 2018
|
|
|
|
|
|
|
|
|
||||||||
Customer revenue
|
|
$
|
708.4
|
|
|
$
|
—
|
|
|
$
|
568.5
|
|
|
$
|
139.9
|
|
Intersegment
|
|
—
|
|
|
(10.0
|
)
|
|
—
|
|
|
10.0
|
|
||||
Total revenue
|
|
$
|
708.4
|
|
|
$
|
(10.0
|
)
|
|
$
|
568.5
|
|
|
$
|
149.9
|
|
Gross profit percent
|
|
28.4
|
%
|
|
|
|
16.6
|
%
|
|
68.9
|
%
|
|||||
Operating profit percent
|
|
14.4
|
%
|
|
|
|
3.0
|
%
|
|
54.7
|
%
|
|||||
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Customer revenue
|
|
$
|
664.5
|
|
|
$
|
—
|
|
|
$
|
585.3
|
|
|
$
|
79.2
|
|
Intersegment
|
|
—
|
|
|
(5.3
|
)
|
|
—
|
|
|
5.3
|
|
||||
Total revenue
|
|
$
|
664.5
|
|
|
$
|
(5.3
|
)
|
|
$
|
585.3
|
|
|
$
|
84.5
|
|
Gross profit percent
|
|
20.9
|
%
|
*
|
|
|
18.2
|
%
|
|
46.6
|
%
|
|||||
Operating profit percent
|
|
3.3
|
%
|
*
|
|
|
4.7
|
%
|
|
15.4
|
%
|
|
Gross profit and operating profit percent are as a percent of total revenue.
|
|
|
*
|
Amounts were changed to conform to the current-year presentation. See Note 3.
|
|
|
Three Months Ended
March 31, |
|
Percent
Change
|
|||||||
|
|
2018
|
|
2017
|
|
||||||
Services
|
|
|
|
|
|
|
|||||
Cloud & infrastructure services
|
|
$
|
318.4
|
|
|
$
|
337.4
|
|
*
|
(5.6
|
)%
|
Application services
|
|
192.9
|
|
|
199.4
|
|
*
|
(3.3
|
)%
|
||
Business process outsourcing services
|
|
57.2
|
|
|
48.5
|
|
|
17.9
|
%
|
||
|
|
568.5
|
|
|
585.3
|
|
|
(2.9
|
)%
|
||
Technology
|
|
139.9
|
|
|
79.2
|
|
|
76.6
|
%
|
||
Total
|
|
$
|
708.4
|
|
|
$
|
664.5
|
|
|
6.6
|
%
|
*
|
Amounts were changed to conform to the current-year presentation.
|
•
|
The company will add personnel with an appropriate level of U.S. GAAP revenue recognition knowledge and experience by hiring additional personnel or by internal realignment.
|
•
|
Additional revenue recognition training is being provided to responsible staff.
|
•
|
Implementation of enhanced procedures whereby a comprehensive review is being performed for certain Technology transactions.
|
•
|
Enhanced processes to review all major multiple-element transactions is being implemented.
|
•
|
Data elements that support enhanced analytics and controls are being added to the revenue recognition process.
|
•
|
The company has and will continue to supplement existing revenue recognition resources with consultants where necessary.
|
•
|
our ability to improve revenue and margins in our Services business;
|
•
|
our ability to maintain our installed base and sell new products in our Technology business;
|
•
|
our ability to effectively anticipate and respond to volatility and rapid technological innovation in our industry;
|
•
|
our ability to retain significant clients;
|
•
|
the potential adverse effects of aggressive competition in the information services and technology marketplace;
|
•
|
cybersecurity breaches could result in significant costs and could harm our business and reputation;
|
•
|
our significant pension obligations and required cash contributions and requirements to make additional significant cash contributions to our defined benefit pension plans;
|
•
|
our ability to attract, motivate and retain experienced and knowledgeable personnel in key positions;
|
•
|
the risks of doing business internationally when a significant portion of our revenue is derived from international operations;
|
•
|
our contracts may not be as profitable as expected or provide the expected level of revenues;
|
•
|
our ability to access financing markets;
|
•
|
contracts with U.S. governmental agencies may subject us to audits, criminal penalties, sanctions and other expenses and fines;
|
•
|
a significant disruption in our IT systems could adversely affect our business and reputation;
|
•
|
we may face damage to our reputation or legal liability if our clients are not satisfied with our services or products;
|
•
|
the performance and capabilities of third parties with whom we have commercial relationships;
|
•
|
an involuntary termination of the company’s U.S. qualified defined benefit pension plan;
|
•
|
the potential for intellectual property infringement claims to be asserted against us or our clients;
|
•
|
the business and financial risk in implementing future acquisitions or dispositions;
|
•
|
the adverse effects of global economic conditions, acts of war, terrorism or natural disasters;
|
•
|
the possibility that pending litigation could affect our results of operations or cash flow; and
|
•
|
our controls and procedures may fail or be circumvented, which may result in a material adverse effect on our business, results of operations and financial condition.
|
(a)
|
Exhibits
|
|
|
Exhibit Number
|
Description
|
|
|
Restated Certificate of Incorporation of Unisys Corporation (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on April 30, 2010)
|
|
|
|
Certificate of Amendment of the Restated Certificate of Incorporation of Unisys Corporation (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on April 28, 2011)
|
|
|
|
Certificate of Amendment of the Restated Certificate of Incorporation of Unisys Corporation (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on April 28, 2017)
|
|
|
|
Bylaws of Unisys Corporation, as amended through April 30, 2015 (incorporated by reference to Exhibit 3.3 to the registrant’s Quarterly Report on Form 10-Q filed on April 30, 2015)
|
|
|
|
Statement of Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
|
|
|
|
Certification of Peter A. Altabef required by Rule 13a-14(a) or Rule 15d-14(a)
|
|
|
|
Certification of Inder M. Singh required by Rule 13a-14(a) or Rule 15d-14(a)
|
|
|
|
Certification of Peter A. Altabef required by Rule 13a-14(b) or Rule 15d-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
|
|
|
|
Certification of Inder M. Singh required by Rule 13a-14(b) or Rule 15d-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
|
|
|
|
101.INSXBRL
|
Instance Document
|
|
|
101.SCHXBRL
|
Taxonomy Extension Schema Document
|
|
|
101.CALXBRL
|
Taxonomy Extension Calculation Linkbase Document
|
|
|
101.LABXBRL
|
Taxonomy Extension Labels Linkbase Document
|
|
|
101.PREXBRL
|
Taxonomy Extension Presentation Linkbase Document
|
|
|
101.DEFXBRL
|
Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
UNISYS CORPORATION
|
|
|
|
|
Date: May 2, 2018
|
By:
|
/s/ Inder M. Singh
|
|
|
Inder M. Singh
|
|
|
Senior Vice President and
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
|
|
|
|
By:
|
/s/ Michael M. Thomson
|
|
|
Michael M. Thomson
|
|
|
Vice President and
|
|
|
Corporate Controller
|
|
|
(Principal Accounting Officer)
|
|
|
Three Months Ended
March 31, 2018 |
|
Years Ended December 31,
|
||||||||||||||||||||
|
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||
Fixed charges
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
|
$
|
16.6
|
|
|
$
|
52.8
|
|
|
$
|
27.4
|
|
|
$
|
11.9
|
|
|
$
|
9.2
|
|
|
$
|
9.9
|
|
Interest capitalized during the period
|
|
1.2
|
|
|
4.2
|
|
|
3.0
|
|
|
3.1
|
|
|
4.0
|
|
|
3.2
|
|
||||||
Amortization of revolving credit facility expenses
|
|
0.1
|
|
|
0.7
|
|
|
0.4
|
|
|
1.5
|
|
|
1.6
|
|
|
1.6
|
|
||||||
Portion of rental expense representative of interest
|
|
5.1
|
|
|
23.9
|
|
|
25.8
|
|
|
26.9
|
|
|
27.9
|
|
|
28.4
|
|
||||||
Total Fixed Charges
|
|
23.0
|
|
|
81.6
|
|
|
56.6
|
|
|
43.4
|
|
|
42.7
|
|
|
43.1
|
|
||||||
Preferred stock dividend requirements
(i)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.7
|
|
|
16.2
|
|
||||||
Total fixed charges and preferred stock dividends
|
|
23.0
|
|
|
81.6
|
|
|
56.6
|
|
|
43.4
|
|
|
45.4
|
|
|
59.3
|
|
||||||
Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income (loss) before income taxes
|
|
62.6
|
|
|
(72.1
|
)
|
|
20.5
|
|
|
(58.8
|
)
|
|
145.5
|
|
|
219.4
|
|
||||||
Add amortization of capitalized interest
|
|
0.9
|
|
|
3.2
|
|
|
3.1
|
|
|
3.7
|
|
|
4.5
|
|
|
5.0
|
|
||||||
Subtotal
|
|
63.5
|
|
|
(68.9
|
)
|
|
23.6
|
|
|
(55.1
|
)
|
|
150.0
|
|
|
224.4
|
|
||||||
Fixed charges per above
|
|
23.0
|
|
|
81.6
|
|
|
56.6
|
|
|
43.4
|
|
|
42.7
|
|
|
43.1
|
|
||||||
Less interest capitalized during the period
|
|
(1.2
|
)
|
|
(4.2
|
)
|
|
(3.0
|
)
|
|
(3.1
|
)
|
|
(4.0
|
)
|
|
(3.2
|
)
|
||||||
Total earnings
|
|
$
|
85.3
|
|
|
$
|
8.5
|
|
|
$
|
77.2
|
|
|
$
|
(14.8
|
)
|
|
$
|
188.7
|
|
|
$
|
264.3
|
|
Ratio of earnings to fixed charges
|
|
3.71
|
|
|
*
|
|
|
1.36
|
|
|
*
|
|
|
4.42
|
|
|
6.13
|
|
||||||
Ratio of earnings to fixed charges and preferred stock dividends
(ii)
|
|
3.71
|
|
|
N/A
|
|
|
1.36
|
|
|
N/A
|
|
|
4.16
|
|
|
4.46
|
|
(i)
|
Amounts have not been grossed up for income taxes since the preferred stock was issued by the U.S. parent corporation which has a valuation allowance against its net deferred tax assets.
|
(ii)
|
The ratio of earnings to fixed charges and preferred stock dividends is calculated by dividing total earnings by total fixed charges and preferred stock dividends.
|
*
|
Earnings for the years ended December 31, 2017 and 2015 were inadequate to cover fixed charges by
$73.1 million
and
$58.2 million
, respectively.
|
|
|
|
|
|
/s/ Peter A. Altabef
|
|
Name:
|
Peter A. Altabef
|
|
Title:
|
President and
|
|
|
Chief Executive Officer
|
|
|
|
|
|
/s/ Inder M. Singh
|
|
Name:
|
Inder M. Singh
|
|
Title:
|
Senior Vice President and
|
|
|
Chief Financial Officer
|
|
|
/s/ Peter A. Altabef
|
|
Peter A. Altabef
|
|
President and
|
|
Chief Executive Officer
|
|
|
|
/s/ Inder M. Singh
|
|
Inder M. Singh
|
|
Senior Vice President and
|
|
Chief Financial Officer
|
|