Unisys : Quarterly Reporting Document 10Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

• QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

• TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

to

.

Commission file number 1-8729

UNISYS CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	38-0387840
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

801 Lakeview Drive, Suite 100

Blue Bell, Pennsylvania 19422

[phone]

(Address, zip code and telephone number, including area code, of principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading	Name of each exchange on which registered
Symbol(s)
Common Stock, par value $.01	UIS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of Common Stock outstanding as of June 30, 2021: 67,115,826

UNISYS CORPORATION

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION	Page
Number
Item 1.	Consolidated Financial Statements (Unaudited)
	Consolidated Statements of Income (Loss)	2
	Consolidated Statements of Comprehensive Income (Loss)	3
	Consolidated Balance Sheets	4
	Consolidated Statements of Cash Flows	5
	Consolidated Statements of Deficit	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	33
Item 4.	Controls and Procedures	33
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 6.	Exhibits	35
Exhibit Index	36
Signatures		37

Part I - FINANCIAL INFORMATION

Item 1. Financial Statements

UNISYS CORPORATION

CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Unaudited)

(Millions, except per share data)

	Three Months Ended			Six Months Ended
		June 30,			June 30,
		2021			2020			2021			2020
Revenue
Services	$	430.5	$	396.0	$	850.9	$	821.9
Technology		86.8			42.8			176.2			132.3
		517.3			438.8			1,027.1			954.2
Costs and expenses
Cost of revenue
Services		337.9			340.0			676.6			715.7
Technology		37.2			23.9			69.1			50.5
		375.1			363.9			745.7			766.2
Selling, general and administrative		94.6			80.2			184.6			167.0
Research and development		6.8			3.2			12.4			9.4
		476.5			447.3			942.7			942.6
Operating income (loss)		40.8			(8.5)			84.4			11.6
Interest expense		8.4			4.6			18.5			18.5
Other (expense), net		(227.8)			(53.7)			(410.4)			(101.8)
Loss from continuing operations before income taxes		(195.4)			(66.8)			(344.5)			(108.7)
Provision (benefit) for income taxes		(53.1)			9.7			(44.7)			20.5
Consolidated net loss from continuing operations		(142.3)			(76.5)			(299.8)			(129.2)
Net income (loss) attributable to noncontrolling interests		(1.5)			-			(1.2)			0.5
Net loss from continuing operations attributable to Unisys Corporation		(140.8)			(76.5)			(298.6)			(129.7)
Income (loss) from discontinued operations, net of tax		-			(2.1)			-			1,066.4
Net income (loss) attributable to Unisys Corporation	$	(140.8)	$	(78.6)	$	(298.6)	$	936.7
Earnings (loss) per share attributable to Unisys Corporation
Basic
Continuing operations	$	(2.10)	$	(1.21)	$	(4.54)	$	(2.06)
Discontinued operations		-			(0.04)			-			16.97
Total	$	(2.10)	$	(1.25)	$	(4.54)	$	14.91
Diluted
Continuing operations	$	(2.10)	$	(1.21)	$	(4.54)	$	(2.06)
Discontinued operations		-			(0.04)			-			16.97
Total	$	(2.10)	$	(1.25)	$	(4.54)	$	14.91

See notes to consolidated financial statements

2

UNISYS CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

(Millions)

	Three Months Ended			Six Months Ended
		June 30,			June 30,
		2021			2020			2021			2020
Consolidated net loss from continuing operations	$	(142.3)	$	(76.5)	$	(299.8)	$	(129.2)
Income (loss) from discontinued operations, net of tax		-			(2.1)			-			1,066.4
Total		(142.3)			(78.6)			(299.8)			937.2
Other comprehensive income
Foreign currency translation		16.8			6.4			(0.3)			(81.2)
Postretirement adjustments, net of tax of $34.7 and $37.8 in 2021 and $0.4		143.0			40.0			345.2			131.2
and $14.3 in 2020
Total other comprehensive income		159.8			46.4			344.9			50.0
Comprehensive income (loss)		17.5			(32.2)			45.1			987.2
Less comprehensive income (loss) attributable to noncontrolling interests		(0.8)			0.3			0.3			(1.5)
Comprehensive income (loss) attributable to Unisys Corporation	$	18.3	$	(32.5)	$	44.8	$	988.7

See notes to consolidated financial statements

3

UNISYS CORPORATION

CONSOLIDATED BALANCE SHEETS (Unaudited)

(Millions)

		June 30,		December 31,
		2021			2020
Assets
Current assets:
Cash and cash equivalents	$	596.7	$	898.5
Accounts receivable, net		400.7			460.5
Contract assets		47.8			44.3
Inventories		6.1			13.4
Prepaid expenses and other current assets		94.9			89.3
Total current assets		1,146.2			1,506.0
Properties		712.9			727.0
Less-accumulated depreciation and amortization		605.5			616.5
Properties, net		107.4			110.5
Outsourcing assets, net		150.1			173.9
Marketable software, net		188.9			193.6
Operating lease right-of-use assets		67.5			79.3
Prepaid postretirement assets		124.1			187.5
Deferred income taxes		153.5			136.2
Goodwill		226.2			108.6
Intangible assets, net		34.0			-
Restricted cash		9.5			8.2
Other long-term assets		168.9			204.1
Total assets	$	2,376.3		$	2,707.9
Liabilities and deficit
Current liabilities:
Current maturities of long-term-debt	$	19.4	$	102.8
Accounts payable		131.0			223.2
Deferred revenue		242.0			257.1
Other accrued liabilities		286.5			352.0
Total current liabilities		678.9			935.1
Long-term debt		517.5			527.1

Long-term postretirement liabilities

Long-term deferred revenue

Long-term operating lease liabilities

Other long-term liabilities

Commitments and contingencies (see Note 15) Deficit:

Common stock, shares issued: 2021; 72.4, 2020; 66.8 Accumulated deficit

Treasury stock, shares at cost: 2021; 5.3, 2020; 3.8 Paid-in capital

Accumulated other comprehensive loss Total Unisys Corporation stockholders' deficit Noncontrolling interests

Total deficit

Total liabilities and deficit

See notes to consolidated financial statements

1,195.7 1,286.1

143.3 137.9

54.1 62.4

50.6 71.4

0.70.7

(1,259.1) (960.5)

(152.1) (114.4)

4,697.8 4,656.9

(3,596.1) (3,939.5)

(308.8) (356.8)

	45.0			44.7
	(263.8)			(312.1)
$	2,376.3		$	2,707.9

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