0000746838-15-000013.txt : 20151002
0000746838-15-000013.hdr.sgml : 20151002
20150710123215
ACCESSION NUMBER: 0000746838-15-000013
CONFORMED SUBMISSION TYPE: CORRESP
PUBLIC DOCUMENT COUNT: 1
FILED AS OF DATE: 20150710
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: UNISYS CORP
CENTRAL INDEX KEY: 0000746838
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373]
IRS NUMBER: 380387840
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: CORRESP
BUSINESS ADDRESS:
STREET 1: 801 LAKEVIEW DRIVE, SUITE 100
CITY: BLUE BELL
STATE: PA
ZIP: 19422
BUSINESS PHONE: 2159864011
MAIL ADDRESS:
STREET 1: 801 LAKEVIEW DRIVE, SUITE 100
CITY: BLUE BELL
STATE: PA
ZIP: 19422
FORMER COMPANY:
FORMER CONFORMED NAME: BURROUGHS CORP /DE/
DATE OF NAME CHANGE: 19861204
CORRESP
1
filename1.txt
July 10, 2015
United States Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, D.C. 20549
Attention: Craig D. Wilson, Senior Assistant Chief Accountant
Re: Unisys Corporation
Form 10-K for the Fiscal Year Ended December 31, 2014
Filed February 23, 2015
Form 10-Q for the Quarterly Period Ended March 31, 2015
Filed April 30, 2015
File No. 001-08729
Dear Mr. Wilson:
On behalf of Unisys Corporation (the "Company"), set forth below are the
Company's responses to the comments of the Staff of the Securities and
Exchange Commission regarding the above referenced filings set forth in the
Staff's letter dated June 29, 2015. For your convenience, we have repeated
each of the comments set forth in the Staff's letter and followed each
comment with the Company's response.
FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2014
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA (INCORPORATED BY
REFERENCE FROM THE UNISYS CORPORATION 2014 ANNUAL REPORT TO STOCKHOLDERS,
EXHIBIT 13)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6. INCOME TAXES, PAGE 27
COMMENT 1
We note from the reconciliation of the provision for income taxes that income
and losses for which no provision or benefit has been recognized increased
significantly in 2014. Please explain to us in greater detail the nature of
this item, its relationship to domestic and foreign income or loss before
income taxes, and the specific reasons for the 2014 increase. Tell us what
consideration you gave to disclosure of such information. We refer you to
ASC 740-10-50-12 and 50-14.
RESPONSE TO COMMENT 1
The amounts captioned in "Income and losses for which no provision or benefit
has been recognized" represent the effective tax rate impact of generating
income or loss in jurisdictions with valuation allowances for which no tax
expense or benefit is recognized.
This amount is calculated as the pretax income or loss for each entity with a
valuation allowance multiplied by that entity's statutory tax rate. The
increase in 2014 versus 2013 is due to more losses and less income in these
jurisdictions. The majority of this change, approximately $19 million, is
due to the significant change in the pretax income of the United States
during this time.
The Company has considered the disclosure requirements referred to in
ASC 740-10-50-12 and 50-14, specifically relating to disclosure of
significant matters affecting comparability of information for all periods
presented. The Company believes that it has disclosed such significant
matters. For example, the change in the United States pretax income
position, referred to above, is shown in the table entitled "Income before
income taxes" which is included in Note 6. In the "Results of operations"
section of the Company's Management's Discussion in its 2014 Form 10-K, the
Company disclosed the following, "Any profit or loss recorded for the
company's U.S. operations will have no provision or benefit associated with
it due to its full valuation allowance, except with respect to refundable tax
credits and withholding taxes not creditable against future taxable income.
As a result, the company's provision or benefit for taxes may vary
significantly period to period depending on the geographic distribution of
income." In addition, Note 6 also includes a table detailing the tax effects
of temporary differences and carryforwards that give rise to significant
portions of deferred tax assets and liabilities. This table discloses the
significant valuation allowances that the Company has recorded against its
deferred tax assets.
NOTE 16. EMPLOYEE PLANS
RETIREMENT BENEFITS, PAGE 38
COMMENT 2
We note the higher projected benefit obligation (PBO) balance at December 31,
2014 as compared to the balance at December 31, 2013 relating to your U.S.
defined benefit pension plans. We also note that $507 million net increase
in the PBO balance was largely attributable to the deferral of a $670 million
actuarial loss during fiscal 2014. Please tell us what portion of this
deferred loss was attributable to updated mortality tables published by the
Society of Actuaries in October 2014, and how you considered disclosing the
impact of these changed mortality assumptions on your PBO balance in
accordance with ASC 715-20-50-1r.
RESPONSE TO COMMENT 2
The portion of the 2014 net increase in the PBO of the Company's U.S. defined
benefit pension plans included in the $670 million actuarial loss
attributable to updated mortality tables published by the Society of
Actuaries was approximately $150 million. The portion of 2014 net increase
in the PBO of the Company's worldwide defined benefit pension plans
attributable to actuarial losses was $1.229 billion. Included in this amount
is the $150 million due to the use of updated mortality tables in the United
States. The remainder of the $1.1 billion increase was overwhelmingly due to
the decreases in worldwide discount rates. In formulating its disclosures,
the Company considered the guidance in ASC 715-20-50-1r. The Company did not
disclose the amount of the actuarial loss attributed to the updated mortality
tables because it was not considered to be significant in the context of the
$1.2 billion change. The Company did disclose the significance of the change
in discount rates and the impact it had on the underfunded position of its
defined benefit pension plans. In the "Overview" section of the Management's
Discussion in its 2014 Form 10-K, the Company disclosed the following, "The
company's underfunded defined benefit pension plan obligations increased by
approximately $750 million to $2.2 billion at December 31, 2014 from
$1.5 billion at December 31, 2013, principally due to a decrease in discount
rates."
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2015
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE e. SEGMENT INFORMATION, PAGE 9
COMMENT 3
We note your change in grouping of certain classes of products and services
reported between your Services segment and Technology segment effective
January 1, 2015. To the extent these changes impacted your reporting units,
tell us how you considered the guidance in ASC 350-20-35-45 and
ASC 350-20-35-3C.
RESPONSE TO COMMENT 3
The changes referred to in Note (e) necessitated a change, as of
January 1, 2015, in the reporting units of the Company's Services segment.
In accordance with ASC 350-20-35-45, the Company reassigned assets and
liabilities to the affected reporting units. In addition, goodwill of the
Services segment, approximately $75 million, was reassigned to the affected
reporting units using a relative fair value allocation approach.
After the reassignments mentioned above, the Company determined that the
carrying amount of its Services reporting units did not exceed their estimated
fair value. Since the carrying amounts of the Services reporting units were
all negative, the Company then considered ASC 350-20-35-8A in determining
whether it was necessary to perform a Step 2 impairment analysis. This
consideration included an evaluation, using the process described in
ASC 350-20-35-3F through 35-3G, including the events and circumstances
provided in ASC 350-20-35-3C (a) through (g). The Company does not expect
that a Step 2 goodwill analysis, if it were required, would result in an
impairment of the goodwill of the Services segment recorded at December 31,
2014.
Application of the goodwill impairment analysis requires significant
judgment. Based on consideration of the weight of evidence of the factors
considered above, the Company concluded that it was not more likely than not
that the Services segment goodwill was impaired as of December 31, 2014.
* * *
In addition, the Company acknowledges that:
* the Company is responsible for the adequacy and accuracy of the disclosure
in the filings;
* staff comments or changes to disclosure in response to staff comments do
not foreclose the Commission from taking any action with respect to the
filings; and
* the Company may not assert staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities
laws of the United States.
The Company hopes that the above is responsive to the Staff's comments.
Very truly yours,
UNISYS CORPORATION
/s/ Janet Brutschea Haugen
Janet Brutschea Haugen
Senior Vice President and Chief Financial Officer