10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2011

¨ 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 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)

Registrant’s telephone number, including area code: (215) 986-4011

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   x    NO   ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (sec. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    YES  x    NO  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer  x	Accelerated Filer	¨
Non-Accelerated Filer    ¨  (Do not check if a smaller reporting company)	Smaller Reporting Company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    YES  ¨    NO  x

Number of shares of Common Stock outstanding as of June 30, 2011: 43,166,933.

Part I – FINANCIAL INFORMATION

Item 1. Financial Statements.

UNISYS CORPORATION

CONSOLIDATED BALANCE SHEETS (Unaudited)

(Millions)

	June 30, 2011			December 31, 2010
Assets
Current assets
Cash and cash equivalents	$	625.0		$	828.3
Accounts and notes receivable, net		667.1			789.7
Inventories:
Parts and finished equipment		39.4			44.8
Work in process and materials		35.7			44.1
Deferred income taxes		36.4			40.7
Prepaid expenses and other current assets		128.3			127.8
Total		1,531.9			1,875.4
Properties		1,377.3			1,339.0
Less-Accumulated depreciation and amortization		1,164.5			1,119.3
Properties, net		212.8			219.7
Outsourcing assets, net		157.3			162.3
Marketable software, net		132.3			143.8
Prepaid postretirement assets		36.6			31.2
Deferred income taxes		178.5			179.6
Goodwill		201.0			197.9
Other long-term assets		192.5			211.0
Total	$	2,642.9		$	3,020.9
Liabilities and stockholders’ deficit
Current liabilities
Current maturities of long-term debt	$	.9		$	.8
Accounts payable		236.5			260.7
Deferred revenue		477.9			556.3
Other accrued liabilities		441.9			518.9
Total		1,157.2			1,336.7
Long-term debt		446.5			823.2
Long-term postretirement liabilities		1,445.3			1,509.2
Long-term deferred revenue		146.7			149.4
Other long-term liabilities		109.0			136.2
Commitments and contingencies
Stockholders’ deficit
6.25% mandatory convertible preferred stock, net of issuance costs, shares issued: 2011; 2.6, 2010; 0		249.7			—
Common stock, shares issued: 2011; 43.5, 2010; 42.9		.4			.4
Accumulated deficit		(2,217.6	)		(2,170.6	)
Treasury stock, shares at cost: 2011; .3, 2010; .3		(48.0	)		(46.0	)
Paid-in capital		4,220.0			4,207.2
Accumulated other comprehensive loss		(2,877.5	)		(2,928.3	)
Total Unisys stockholders’ deficit		(673.0	)		(937.3	)
Noncontrolling interests		11.2			3.5
Total stockholders’ deficit		(661.8	)		(933.8	)
Total	$	2,642.9		$	3,020.9

See notes to consolidated financial statements.

2

UNISYS CORPORATION

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(Millions, except per share data)

	Three Months Ended June 30						Six Months Ended June 30
	2011			2010*			2011			2010*
Revenue
Services	$	842.7		$	892.0		$	1,643.0		$	1,742.5
Technology		94.5			145.0			205.4			271.9
		937.2			1,037.0			1,848.4			2,014.4
Costs and expenses
Cost of revenue:
Services		676.1			707.0			1,330.6			1,394.6
Technology		47.4			42.0			95.9			96.6
		723.5			749.0			1,426.5			1,491.2
Selling, general and administrative		147.2			160.4			293.2			316.3
Research and development		18.4			21.1			38.7			41.9
		889.1			930.5			1,758.4			1,849.4
Operating profit		48.1			106.5			90.0			165.0
Interest expense		13.3			25.3			39.2			51.8
Other income (expense), net		(49.4	)		(7.5	)		(73.2	)		(44.4	)
(Loss) income from continuing operations before income taxes		(14.6	)		73.7			(22.4	)		68.8
(Benefit) provision for income taxes		(9.2	)		13.3			19.0			24.5
Consolidated (loss) income before discontinued operations		(5.4	)		60.4			(41.4	)		44.3
Income from discontinued operations, net of tax		—			61.0			—			66.7
Net (loss) income		(5.4	)		121.4			(41.4	)		111.0
Less: Net income attributable to noncontrolling interests		2.2			1.2			5.6			2.4
Less: Preferred stock dividends		4.0			—			5.4			—
Net (loss) income attributable to Unisys Corporation common shareholders	$	(11.6	)	$	120.2		$	(52.4	)	$	108.6
Amounts attributable to Unisys Corporation common shareholders
(Loss) income from continuing operations, net of tax	$	(11.6	)	$	59.2		$	(52.4	)	$	41.9
Income from discontinued operations, net of tax		—			61.0			—			66.7
Net (loss) income attributable to Unisys Corporation common shareholders	$	(11.6	)	$	120.2		$	(52.4	)	$	108.6
Earnings (loss) per common share attributable to Unisys Corporation
Basic
Continuing operations	$	(.27	)	$	1.39		$	(1.22	)	$	.99
Discontinued operations		—			1.43			—			1.57
Total	$	(.27	)	$	2.82		$	(1.22	)	$	2.56
Diluted
Continuing operations	$	(.27	)	$	1.36		$	(1.22	)	$	.96
Discontinued operations		—			1.41			—			1.54
Total	$	(.27	)	$	2.77		$	(1.22	)	$	2.50

* Reclassified for discontinued operations. See note (a).

See notes to consolidated financial statements.

3

UNISYS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Millions)

	Six Months Ended June 30
	2011			2010
Cash flows from operating activities
Consolidated (loss) income before discontinued operations	$	(41.4	)	$	44.3
Income from discontinued operations, net of tax		—			66.7
Add (deduct) items to reconcile consolidated net (loss) income to net cash provided by operating activities:
Foreign currency transaction losses		—			19.9
Loss on debt extinguishment		77.5			1.4
Employee stock compensation		9.4			5.8
Company stock issued for U.S. 401(k) plan		6.7			—
Depreciation and amortization of properties		34.3			39.6
Depreciation and amortization of outsourcing assets		33.9			58.6
Amortization of marketable software		34.8			31.2
Disposal of capital assets		.7			7.4
Loss (gain) on sale of businesses and assets		.3			(62.0	)
Decrease (increase) in deferred income taxes, net		11.4			(9.3	)
Decrease (increase) in receivables, net		148.2			(52.2	)
Decrease in inventories		16.5			5.8
Decrease in accounts payable and other accrued liabilities		(231.4	)		(65.6	)
Decrease in other liabilities		(27.7	)		(34.4	)
Increase in other assets		(8.6	)		(35.0	)
Other		(.7	)		1.0
Net cash provided by operating activities		63.9			23.2
Cash flows from investing activities
Proceeds from investments		173.7			211.8
Purchases of investments		(171.3	)		(211.4	)
Restricted deposits		10.3			(80.6	)
Investment in marketable software		(23.3	)		(27.3	)
Capital additions of properties		(24.0	)		(37.3	)
Capital additions of outsourcing assets		(25.0	)		(51.7	)
Net proceeds from sale of businesses and assets		(10.1	)		130.3
Net cash used for investing activities		(69.7	)		(66.2	)
Cash flows from financing activities
Proceeds from issuance of preferred stock, net of issuance costs		249.7			—
Payments of long-term debt		(460.3	)		(78.0	)
Proceeds from exercise of stock options		1.4			1.2
Dividends paid on preferred stock		(4.1	)		—
Dividend paid to noncontrolling interests		(.4	)		—
Financing fees		(2.2	)		(.1	)
Net cash used for financing activities		(215.9	)		(76.9	)
Effect of exchange rate changes on cash and cash equivalents		18.4			(31.2	)
Decrease in cash and cash equivalents		(203.3	)		(151.1	)
Cash and cash equivalents, beginning of period		828.3			647.6
Cash and cash equivalents, end of period	$	625.0		$	496.5

See notes to consolidated financial statements.

4

Unisys Corporation

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

In the opinion of management, the financial information furnished herein reflects all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods specified. These adjustments consist only of normal recurring accruals except as disclosed herein. Because of seasonal and other factors, results for interim periods are not necessarily indicative of the results to be expected for the full year.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions about future events. These estimates and assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities and the reported amounts of revenue and expenses. Such estimates include the valuation of accounts receivable, inventories, outsourcing assets, marketable software, goodwill and other long-lived assets, legal contingencies, indemnifications, and assumptions used in the calculation for systems integration projects, income taxes and retirement and other post-employment benefits, among others. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.

The company’s accounting policies are set forth in detail in note 1 of the notes to the consolidated financial statements in the company’s Annual Report on Form 10-K for the year ended December 31, 2010 filed with the Securities and Exchange Commission. Such Annual Report also contains a discussion of the company’s critical accounting policies. The company believes that these critical accounting policies affect its more significant estimates and judgments used in the preparation of the company’s consolidated financial statements. There have been no changes in the company’s critical accounting policies from those disclosed in the company’s Annual Report on Form 10-K for the year ended December 31, 2010.

a. On April 30, 2010, the company completed the sale of its health information management (HIM) business, and on August 31, 2010, the company completed the sale of its UK-based Unisys Insurance Services Limited (UISL) business, which provides business process outsourcing (BPO) services to the UK life and pensions industry. In connection with the sale of UISL, the company paid $14.9 million in 2010, $9.8 million during the six months ended June 30, 2011 and has payment obligations of approximately $9.6 million to be paid ratably over the next two quarterly periods.

The results of discontinued operations for the three and six months ended June 30, 2010 are as follows (in millions of dollars):

	Three Months Ended June 30, 2010							Six Months Ended June 30, 2010
	Total		HIM		UISL			Total		HIM		UISL
Revenue	$	29.7	$	10.4	$	19.3		$	82.2	$	42.0	$	40.2
Income
Operations	$	1.1	$	1.0	$	.1		$	10.4	$	9.8	$	.6
Gain on sale		64.8		64.8		—			64.8		64.8		—
		65.9		65.8		.1			75.2		74.6		.6
Income tax provision		4.9		5.0		(.1	)		8.5		8.5		—
Income from discontinued operations, net of tax	$	61.0	$	60.8	$	.2		$	66.7	$	66.1	$	.6

b. Due to cumulative inflation of approximately 100 percent or more over the last 3-year period, the company’s Venezuelan subsidiary has applied highly inflationary accounting beginning January 1, 2010. For those international subsidiaries operating in highly inflationary economies, the U.S. dollar is the functional currency, and as such, nonmonetary assets and liabilities are translated at historical exchange rates, and monetary assets and liabilities are translated at current exchange rates. Exchange gains and losses arising from translation are included in other income (expense), net. Effective January 11, 2010, the Venezuelan government devalued the Bolivar Fuerte by 50 percent by resetting the official exchange rate from 2.15 to the U.S. dollar to 4.30 to the U.S. dollar. As a result, the company recorded a foreign exchange loss in the first quarter of 2010 of approximately $20 million. The company has used and continues to use the official exchange rate for translation purposes. At June 30, 2011, the company’s operations in Venezuela had net monetary assets denominated in local currency of approximately $19 million.

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c. The following table shows how earnings (loss) per common share attributable to Unisys Corporation was computed for the three and six months ended June 30, 2011 and 2010 (dollars in millions, shares in thousands):

	Three Months Ended June 30,					Six Months Ended June 30,
	2011			2010		2011			2010
Basic Earnings (Loss) Per Common Share
Net (loss) income from continuing operations attributable to Unisys Corporation common shareholders	$	(11.6	)	$	59.2	$	(52.4	)	$	41.9
Income from discontinued operations, net of tax		—			61.0		—			66.7
Net (loss) income attributable to Unisys Corporation common shareholders	$	(11.6	)	$	120.2	$	(52.4	)	$	108.6
Weighted average shares		43,106			42,590		42,971			42,494
Continuing operations	$	(.27	)	$	1.39	$	(1.22	)	$	.99
Discontinued operations		—			1.43		—			1.57
Total	$	(.27	)	$	2.82	$	(1.22	)	$	2.56
Diluted Earnings (Loss) Per Common Share
Net (loss) income from continuing operations attributable to Unisys Corporation common shareholders	$	(11.6	)	$	59.2	$	(52.4	)	$	41.9
Add preferred stock dividends		—			—		—			—
Net (loss) income from continuing operations attributable to Unisys Corporation for diluted earnings per share		(11.6	)		59.2		(52.4	)		41.9
Income from discontinued operations, net of tax		—			61.0		—			66.7
Net (loss) income attributable to Unisys Corporation for diluted earnings per share	$	(11.6	)	$	120.2	$	(52.4	)	$	108.6
Weighted average shares		43,106			42,590		42,971			42,494
Plus incremental shares from assumed conversions
Employee stock plans		—			739		—			862
Preferred stock		—			—		—			—
Adjusted weighted average shares		43,106			43,329		42,971			43,356
Continuing operations	$	(.27	)	$	1.36	$	(1.22	)	$	.96
Discontinued operations		—			1.41		—			1.54
Total	$	(.27	)	$	2.77	$	(1.22	)	$	2.50

The following number of stock options and restricted stock units was antidilutive and therefore excluded from the computation of diluted earnings per share (in thousands): 2011, 3,265 and 2010, 2,545. The following number of mandatory convertible preferred stock was antidilutive and therefore excluded from the computation of diluted earnings per share (in thousands): 2011, 2,588.

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d. Net periodic pension expense (income) for the three and six months ended June 30, 2011 and 2010 is presented below (in millions of dollars):

	Three Months Ended June 30, 2011									Three Months Ended June 30, 2010
	Total			U.S. Plans			Int’l. Plans			Total			U.S. Plans			Int’l. Plans
Service cost	$	2.4		$	—		$	2.4		$	3.3		$	—		$	3.3
Interest cost		98.1			65.5			32.6			97.8			69.0			28.8
Expected return on plan assets		(118.3	)		(83.5	)		(34.8	)		(122.0	)		(90.9	)		(31.1	)
Amortization of prior service cost		—			.2			(.2	)		—			.1			(.1	)
Recognized net actuarial loss		26.5			19.8			6.7			19.7			13.3			6.4
Net periodic pension expense (income)	$	8.7		$	2.0		$	6.7		$	(1.2	)	$	(8.5	)	$	7.3

	Six Months Ended June 30, 2011									Six Months Ended June 30, 2010
	Total			U.S. Plans			Int’l. Plans			Total			U.S. Plans			Int’l. Plans
Service cost	$	6.1		$	—		$	6.1		$	7.2		$	—		$	7.2
Interest cost		196.0			132.0			64.0			197.7			138.2			59.5
Expected return on plan assets		(237.1	)		(168.7	)		(68.4	)		(246.8	)		(182.5	)		(64.3	)
Amortization of prior service cost		.2			.4			(.2	)		.2			.3			(.1	)
Recognized net actuarial loss		52.5			39.2			13.3			40.2			27.2			13.0
Net periodic pension expense (income)	$	17.7		$	2.9		$	14.8		$	(1.5	)	$	(16.8	)	$	15.3

The company currently expects to make cash contributions of approximately $115 million to its worldwide defined benefit pension plans (principally international plans) in 2011 compared with $81.5 million in 2010. For the six months ended June 30, 2011 and 2010, $42.8 million and $39.5 million, respectively, of cash contributions have been made. In accordance with regulations governing contributions to U.S. defined benefit pension plans, the company is not required to fund its U.S. qualified defined benefit pension plan in 2011.

Net periodic postretirement benefit expense for the three and six months ended June 30, 2011 and 2010 is presented below (in millions of dollars):

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Service cost	$	.1		$	.1		$	.2		$	.1
Interest cost		2.5			2.6			4.9			5.3
Expected return on assets		(.2	)		(.2	)		(.3	)		(.3	)
Amortization of prior service cost		.5			.3			.9			.7
Recognized net actuarial loss		1.0			1.0			2.0			1.9
Net periodic postretirement benefit expense	$	3.9		$	3.8		$	7.7		$	7.7

The company expects to make cash contributions of approximately $22 million to its postretirement benefit plan in 2011 compared with $23.9 million in 2010. For the six months ended June 30, 2011 and 2010, $8.8 million and $10.4 million, respectively, of cash contributions have been made.

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e. Due to its foreign operations, the company is exposed to the effects of foreign currency exchange rate fluctuations on the U.S. dollar, principally related to intercompany account balances. The company uses derivative financial instruments to reduce its exposure to market risks from changes in foreign currency exchange rates on such balances. The company enters into foreign exchange forward contracts, generally having maturities of one month, which have not been designated as hedging instruments. At June 30, 2011 and 2010, the notional amount of these contracts was $45.9 million and $40.1 million, respectively. At June 30, 2011 and 2010, the fair value of such contracts was a net gain of $.1 million and zero, respectively, of which $.5 million and $6.5 million, respectively, has been recognized in “Prepaid expenses and other current assets” and $.4 and $6.5 million, respectively, has been recognized in “Other accrued liabilities” in the company’s consolidated balance sheet. For the six months ended June 30, 2011 and 2010, changes in the fair value of these instruments were a gain of $2.0 million and a loss of $.1 million, respectively, which has been recognized in earnings in “Other income (expense), net” in the company’s consolidated statement of income. The fair value of these forward contracts is based on quoted prices for similar but not identical financial instruments; as such, the inputs are considered Level 2 inputs.

Financial assets with carrying values approximating fair value include cash and cash equivalents and accounts receivable. Financial liabilities with carrying values approximating fair value include accounts payable and other accrued liabilities. The carrying amounts of these financial assets and liabilities approximate fair value due to their short maturities. At June 30, 2011 and December 31, 2010, the carrying amount of long-term debt was less than fair value, which is based on market prices (Level 2 inputs), of such debt by approximately $60 million and $140 million, respectively.

f. Under stockholder approved stock-based plans, stock options, stock appreciation rights, restricted stock and restricted stock units may be granted to officers, directors and other key employees. At June 30, 2011, 4.7 million shares of unissued common stock of the company were available for granting under these plans.

The fair value of stock option awards was estimated using the Black-Scholes option pricing model with the following assumptions and weighted-average fair values:

	Six Months Ended June 30,
	2011			2010
Weighted-average fair value of grant	$	20.22		$	17.97
Risk-free interest rate		1.71	%		1.74	%
Expected volatility		71.31	%		72.20	%
Expected life of options in years		3.62			3.63
Expected dividend yield		—			—

Restricted stock unit awards may contain time-based units, performance-based units or a combination of both. Each performance-based unit will vest into zero to 1.5 shares depending on the degree to which the performance goals are met. Compensation expense resulting from these awards is recognized as expense ratably for each installment from the date of grant until the date the restrictions lapse and is based on the fair market value at the date of grant and the probability of achievement of the specific performance-related goals.

The company records all share-based expense in selling, general and administrative expense.

During the six months ended June 30, 2011 and 2010, the company recorded $9.4 million and $5.8 million of share-based compensation expense, respectively, which is comprised of $3.6 million and $2.1 million of restricted stock unit expense and $5.8 million and $3.7 million of stock option expense, respectively.

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A summary of stock option activity for the six months ended June 30, 2011 follows (shares in thousands):

Options	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)		Aggregate Intrinsic Value ($ in millions)
Outstanding at December 31, 2010		3,125		$	85.78
Granted		611			38.60
Exercised		(154	)		9.00
Forfeited and expired		(722	)		168.05
Outstanding at June 30, 2011		2,860			59.12		2.73	$	13.0
Expected to vest at June 30, 2011		1,181			31.03		3.90		4.3
Exercisable at June 30, 2011		1,636			80.09		1.85		8.6

The aggregate intrinsic value represents the total pretax value of the difference between the company’s closing stock price on the last trading day of the period and the exercise price of the options, multiplied by the number of in-the-money stock options that would have been received by the option holders had all option holders exercised their options on June 30, 2011. The intrinsic value of the company’s stock options changes based on the closing price of the company’s stock. The total intrinsic value of options exercised for the six months ended June 30, 2011 and 2010 was $4.3 million and $5.4 million, respectively. As of June 30, 2011, $12.4 million of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 2.1 years.

A summary of restricted stock unit activity for the six months ended June 30, 2011 follows (shares in thousands):

	Restricted Stock Units			Weighted- Average Grant-Date Fair Value
Outstanding at December 31, 2010		401		$	29.10
Granted		288			38.38
Vested		(187	)		27.58
Forfeited and expired		(97	)		40.56
Outstanding at June 30, 2011		405			32.34

The fair value of restricted stock units is determined based on the trading price of the company’s common shares on the date of grant. The aggregate weighted-average grant-date fair value of restricted stock units granted during the six months ended June 30, 2011 and 2010 was $11.0 million and $7.6 million, respectively. As of June 30, 2011, there was $10.1 million of total unrecognized compensation cost related to outstanding restricted stock units granted under the company’s plans. That cost is expected to be recognized over a weighted-average period of 2.2 years. The aggregate weighted-average grant-date fair value of restricted share units vested during the six months ended June 30, 2011 and 2010 was $5.2 million and $3.7 million, respectively.

Common stock issued upon exercise of stock options or upon lapse of restrictions on restricted stock units is newly issued shares. Cash received from the exercise of stock options for the six months ended June 30, 2011 and 2010 was $1.4 million and $1.2 million, respectively. The company is currently not recognizing any tax benefits from the exercise of stock options or upon issuance of stock upon lapse of restrictions on restricted stock units in light of its tax position. Tax benefits resulting from tax deductions in excess of the compensation costs recognized are classified as financing cash flows.

g. The company has two business segments: Services and Technology. Revenue classifications by segment are as follows: Services – systems integration and consulting, outsourcing, infrastructure services and core maintenance; Technology – enterprise-class servers and other technology.

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The accounting policies of each business segment are the same as those followed by the company as a whole. Intersegment sales and transfers are priced as if the sales or transfers were to third parties. Accordingly, the Technology segment recognizes intersegment revenue and manufacturing profit on hardware and software shipments to customers under Services contracts. The Services segment, in turn, recognizes customer revenue and marketing profits on such shipments of company hardware and software to customers. The Services segment also includes the sale of hardware and software products sourced from third parties that are sold to customers through the company’s Services channels. In the company’s consolidated statements of income, the manufacturing costs of products sourced from the Technology segment and sold to Services customers are reported in cost of revenue for Services.

Also included in the Technology segment’s sales and operating profit are sales of hardware and software sold to the Services segment for internal use in Services engagements. The amount of such profit included in operating income of the Technology segment for the three months ended June 30, 2011 and 2010 was $3.9 million and $.1 million, respectively. The amount for the six months ended June 30, 2011 and 2010 was $4.7 million and $.5 million, respectively. The profit on these transactions is eliminated in Corporate.

The company evaluates business segment performance on operating income exclusive of restructuring charges and unusual and nonrecurring items, which are included in Corporate. Effective January 1, 2011, the company changed the measurement of segment performance that it evaluates to exclude pension income or expense. Prior periods have been reclassified to conform to the 2011 presentation. All other corporate and centrally incurred costs are allocated to the business segments based principally on revenue, employees, square footage or usage.

A summary of the company’s operations by business segment for the three and six month periods ended June 30, 2011 and 2010 is presented below (in millions of dollars):

	Total		Corporate			Services		Technology
Three Months Ended June 30, 2011
Customer revenue	$	937.2				$	842.7	$	94.5
Intersegment			$	(22.2	)		.9		21.3
Total revenue	$	937.2	$	(22.2	)	$	843.6	$	115.8
Operating income	$	48.1	$	(15.0	)	$	60.3	$	2.8
Three Months Ended June 30, 2010
Customer revenue	$	1,037.0				$	892.0	$	145.0
Intersegment			$	(36.2	)		1.5		34.7
Total revenue	$	1,037.0	$	(36.2	)	$	893.5	$	179.7
Operating income	$	106.5	$	3.8		$	54.5	$	48.2
Six Months Ended June 30, 2011
Customer revenue	$	1,848.4				$	1,643.0	$	205.4
Intersegment			$	(43.8	)		1.8		42.0
Total revenue	$	1,848.4	$	(43.8	)	$	1,644.8	$	247.4
Operating income	$	90.0	$	(19.5	)	$	92.3	$	17.2
Six Months Ended June 30, 2010
Customer revenue	$	2,014.4				$	1,742.5	$	271.9
Intersegment			$	(59.3	)		2.4		56.9
Total revenue	$	2,014.4	$	(59.3	)	$	1,744.9	$	328.8
Operating income	$	165.0	$	2.4		$	94.5	$	68.1

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Presented below is a reconciliation of total business segment operating income to consolidated (loss) income from continuing operations before income taxes (in millions of dollars):

	Three Months Ended June 30						Six Months Ended June 30
	2011			2010			2011			2010
Total segment operating income	$	63.1		$	102.7		$	109.5		$	162.6
Interest expense		(13.3	)		(25.3	)		(39.2	)		(51.8	)
Other income (expense), net		(49.4	)		(7.5	)		(73.2	)		(44.4	)
Corporate and eliminations		(15.0	)		3.8			(19.5	)		2.4
Total (loss) income from continuing operations before income taxes	$	(14.6	)	$	73.7		$	(22.4	)	$	68.8

Customer revenue by classes of similar products or services, by segment, is presented below (in millions of dollars):

	Three Months Ended June 30				Six Months Ended June 30
	2011		2010		2011		2010
Services
Systems integration and consulting	$	286.0	$	335.3	$	570.9	$	630.5
Outsourcing		369.6		383.0		721.5		751.8
Infrastructure services		129.9		115.1		240.1		240.7
Core maintenance		57.2		58.6		110.5		119.5
		842.7		892.0		1,643.0		1,742.5
Technology
Enterprise-class servers		79.6		131.6		179.3		234.0
Other technology		14.9		13.4		26.1		37.9
		94.5		145.0		205.4		271.9
Total	$	937.2	$	1,037.0	$	1,848.4	$	2,014.4

Geographic information about the company’s revenue, which is principally based on location of the selling organization, is presented below (in millions of dollars):

	Three Months Ended June 30				Six Months Ended June 30
	2011		2010		2011		2010
United States	$	363.2	$	450.2	$	724.2	$	880.8
United Kingdom		99.1		113.7		198.9		211.6
Other international		474.9		473.1		925.3		922.0
Total	$	937.2	$	1,037.0	$	1,848.4	$	2,014.4

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h. Comprehensive income for the three and six months ended June 30, 2011 and 2010 includes the following components (in millions of dollars):

	Three Months Ended June 30						Six Months Ended June 30
	2011			2010			2011			2010
Consolidated net (loss) income from continuing operations	$	(5.4	)	$	60.4		$	(41.4	)	$	44.3
Income from discontinued operations, net of tax		—			61.0			—			66.7
Total		(5.4	)		121.4			(41.4	)		111.0
Other comprehensive income (loss)
Foreign currency translation adjustments		11.6			(17.0	)		25.4			(26.0	)
Postretirement adjustments		22.0			36.1			27.9			100.5
Total other comprehensive income		33.6			19.1			53.3			74.5
Consolidated comprehensive income		28.2			140.5			11.9			185.5
Comprehensive income attributable to noncontrolling interests		2.8			1.7			8.1			3.9
Comprehensive income attributable to Unisys Corporation	$	25.4		$	138.8		$	3.8		$	181.6

Accumulated other comprehensive loss as of December 31, 2010 and June 30, 2011 is as follows (in millions of dollars):

	Total			Translation Adjustments			Postretirement Plans
Balance at December 31, 2010	$	(2,928.3	)	$	(604.2	)	$	(2,324.1	)
Change during period		50.8			24.2			26.6
Balance at June 30, 2011	$	(2,877.5	)	$	(580.0	)	$	(2,297.5	)

Noncontrolling interests as of December 31, 2010 and June 30, 2011 is as follows (in millions of dollars):

	Non-controlling Interests
Balance at December 31, 2010	$	3.5
Net income		5.6
Translation adjustments		1.2
Dividends paid to non-controlling interests		(.4	)
Postretirement plans		1.3
Balance at June 30, 2011	$	11.2

i. Cash paid during the six months ended June 30, 2011 and 2010 for income taxes was $46.4 million and $28.3 million, respectively.

Cash paid during the six months ended June 30, 2011 and 2010 for interest was $54.9 million and $57.4 million, respectively.

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j. Effective January 1, 2011, the company adopted two accounting standards issued by the Financial Accounting Standards Board that amend revenue recognition guidance. The first standard supersedes certain prior accounting guidance and requires an entity to allocate arrangement consideration at the inception of an arrangement to all of its deliverables based on their relative standalone selling prices (i.e., the relative-selling-price method). The standard eliminates the use of the residual method of allocation and requires the relative-selling-price method in all circumstances in which an entity recognizes revenue for an arrangement with multiple deliverables subject to this standard. The second standard amends prior software revenue recognition accounting guidance by excluding from the scope of such prior guidance tangible products that contain both software elements and non-software elements that function together to deliver the tangible product’s essential functionality. The company has adopted the new standards prospectively for revenue arrangements entered into or materially modified on or after January 1, 2011. In certain of the company’s arrangements, revenue was previously deferred for certain deliverables included in multiple element arrangements where the arrangements also included undelivered services for which the company was unable to demonstrate fair value pursuant to previous standards. The new standards require deliverables for which revenue was previously deferred to be separated and recognized as delivered, rather than combined with undelivered items and recognized over the longest service delivery period.

If the new standards were applied to transactions entered into or materially modified in the year ended December 31, 2010, it would not have resulted in a material change to the company’s reported revenue for 2010. The company is not able to reasonably estimate the effect of adopting these standards on future periods as the impact will vary based on the nature and volume of new or materially modified deals in any given period.

k. Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the fee is fixed or determinable, and collectability is probable.

Revenue from hardware sales with standard payment terms is recognized upon the passage of title and the transfer of risk of loss. Outside the United States, the company recognizes revenue even if it retains a form of title to products delivered to customers, provided the sole purpose is to enable the company to recover the products in the event of customer payment default and the arrangement does not prohibit the customer’s use of the product in the ordinary course of business.

Revenue from software licenses with standard payment terms is recognized at the inception of the initial license term and upon execution of an extension to the license term.

The company also enters into multiple-element arrangements, which may include any combination of hardware, software or services. For example, a client may purchase an enterprise server that includes operating system software. In addition, the arrangement may include post-contract support for the software and a contract for post-warranty maintenance for service of the hardware. These arrangements consist of multiple deliverables, with hardware and software delivered in one reporting period and the software support and hardware maintenance services delivered across multiple reporting periods. In another example, the company may provide desktop managed services to a client on a long term multiple year basis and periodically sell hardware and software products to the client. The services are provided on a continuous basis across multiple reporting periods and the hardware and software products are delivered in one reporting period. To the extent that a deliverable in a multiple-deliverable arrangement is subject to specific guidance, that deliverable is accounted for in accordance with such specific guidance. Examples of such arrangements may include leased hardware which is subject to specific leasing guidance or software which is subject to specific software revenue recognition guidance.

In these transactions, the company allocates the total revenue to be earned under the arrangement among the various elements based on a selling price hierarchy. The selling price for a deliverable is based on its vendor specific objective evidence (VSOE) if available, third party evidence (TPE) if VSOE is not available, or the best estimated selling price (ESP) if neither VSOE nor TPE is available. VSOE of selling price is based upon the normal pricing and discounting practices for those products and services when sold separately. TPE of selling price is based on evaluating largely similar and interchangeable competitor products or services in standalone sales to similarly situated customers. ESP is established considering factors such as margin objectives, discounts off of list prices, market conditions, competition and other factors. ESP represents the price at which the company would transact for the deliverable if it were sold by the company regularly on a standalone basis.

For multiple-element arrangements that involve the licensing, selling or leasing of software, the allocation of revenue, for software and software-related elements, is based on VSOE. There may be cases in which there is VSOE of selling price of the undelivered elements but no such evidence for the delivered elements. In these cases, the residual method is used to allocate the arrangement consideration. Under the residual method, the amount of consideration allocated to the delivered elements equals the total arrangement consideration less the aggregate VSOE of selling price of the undelivered elements.

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For multiple-element arrangements for products or services that (a) do not include the licensing, selling or leasing of software, or (b) contain software that is incidental to the products or services as a whole or (c) contain software components that are sold, licensed or leased with tangible products when the software components and non-software components (i.e., the hardware and software) of the tangible product function together to deliver the tangible product’s essential functionality (e.g., sales of the company’s enterprise-class servers including hardware and software), the allocation of revenue is based on the relative selling prices of each of the deliverables in the arrangement based on the selling price hierarchy, discussed above.

The company recognizes revenue on delivered elements only if: (a) any undelivered products or services are not essential to the functionality of the delivered products or services, (b) the company has an enforceable claim to receive the amount due in the event it does not deliver the undelivered products or services, (c) there is evidence of the selling price for each undelivered products or services, and (d) the revenue recognition criteria otherwise have been met for the delivered elements. Otherwise, revenue on delivered elements is recognized as the undelivered elements are delivered.

The company evaluates each deliverable in an arrangement to determine whether they represent separate units of accounting. A delivered element constitutes a separate unit of accounting when it has standalone value and there is no customer-negotiated refund or return rights for the delivered elements. If these criteria are not met, the deliverable is combined with the undelivered elements and the allocation of the arrangement consideration and revenue recognition are determined for the combined unit as a single unit.

Revenue from hardware sales and software licenses with extended payment terms is recognized as payments from customers become due (assuming that all other conditions for revenue recognition have been satisfied).

Revenue for operating leases is recognized on a monthly basis over the term of the lease and for sales-type leases at the inception of the lease term.

Revenue from equipment and software maintenance and post-contract support is recognized on a straight-line basis as earned over the terms of the respective contracts. Cost related to such contracts is recognized as incurred.

Revenue and profit under systems integration contracts are recognized either on the percentage-of-completion method of accounting using the cost-to-cost method, or when services have been performed, depending on the nature of the project. For contracts accounted for on the percentage-of-completion basis, revenue and profit recognized in any given accounting period are based on estimates of total projected contract costs. The estimates are continually reevaluated and revised, when necessary, throughout the life of a contract. Any adjustments to revenue and profit resulting from changes in estimates are accounted for in the period of the change in estimate. When estimates indicate that a loss will be incurred on a contract upon completion, a provision for the expected loss is recorded in the period in which the loss becomes evident.

Revenue from time and materials service contracts and outsourcing contracts is recognized as the services are provided using either an objective measure of output or on a straight-line basis over the term of the contract.

l. There are various lawsuits, claims, investigations and proceedings that have been brought or asserted against the company, which arise in the ordinary course of business, including actions with respect to commercial and government contracts, labor and employment, employee benefits, environmental matters, intellectual property, and non-income tax and employment compensation in Brazil. The company records a provision for these matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Any provisions are reviewed at least quarterly and are adjusted to reflect the impact and status of settlements, rulings, advice of counsel and other information and events pertinent to a particular matter.

The company believes that it has valid defenses with respect to legal matters pending against it. Based on its experience, the company also believes that the damage amounts claimed in the lawsuits disclosed below are not a meaningful indicator of the company’s potential liability. Litigation is inherently unpredictable, however, and it is possible that the company’s results of operations or cash flow could be materially affected in any particular period by the resolution of one or more of the legal matters pending against it.

The company had a competitively awarded contract with the Transportation Security Administration (TSA) that provided for the establishment of secure information technology environments in airports. The Civil Division of the Department of Justice, working with the Inspector General’s Office of the Department of Homeland Security, is reviewing issues relating to labor categorization and overtime on the TSA contract. The Civil Division is also reviewing issues relating to cyber intrusion protection under the TSA and follow-on contracts. The company is working cooperatively with TSA and the Civil Division. The company has commenced preliminary settlement discussions with these government agencies regarding labor categorization and overtime. The company cannot now predict the duration or outcome of these discussions.

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The company has contracts with the General Services Administration (GSA), known as Multiple Award Schedule Contracts, under which various U.S. governmental agencies can purchase products and services from the company. Auditors from the GSA’s Office of Inspector General are reviewing the company’s compliance with the disclosure and pricing provisions under one of these contracts, and whether the company has potentially overcharged the government under the contract. Separately, the company has made a voluntary disclosure about this matter to the responsible GSA contracting officer. The company has been providing pricing and other information to the GSA auditors and is working cooperatively with them. The audit is in its preliminary stages, and the company cannot predict the outcome at this time.

In April 2007, the Ministry of Justice of Belgium sued Unisys Belgium SA-NV, a Unisys subsidiary (Unisys Belgium), in the Court of First Instance of Brussels. The Belgian government had engaged the company to design and develop software for a computerized system to be used to manage the Belgian court system. The Belgian State terminated the contract and in its lawsuit has alleged that the termination was justified because Unisys Belgium failed to deliver satisfactory software in a timely manner. It claims damages of approximately 28 million Euros. Unisys Belgium has filed its defense and counterclaim in the amount of approximately 18.5 million Euros. The company believes it has valid defenses to the claims and contends that the Belgian State’s termination of the contract was unjustified.

In December 2007, Lufthansa AG sued Unisys Deutschland GmbH, a Unisys subsidiary (Unisys Germany), in the District Court of Frankfurt, Germany, for allegedly failing to perform properly its obligations during the initial phase of a 2004 software design and development contract relating to a Lufthansa customer loyalty program. Under the contract, either party was free to withdraw from the project at the conclusion of the initial design phase. Rather than withdraw, Lufthansa instead terminated the contract and failed to pay the balance owed to Unisys Germany for the initial phase. Lufthansa’s lawsuit alleges that Unisys Germany breached the contract by failing to deliver a proper design for the new system and seeks approximately 21.4 million Euros in damages. The company believes it has valid defenses and has filed its defense and a counterclaim in the amount of approximately 1.5 million Euros. The litigation is proceeding.

Notwithstanding that the ultimate results of the lawsuits, claims, investigations and proceedings that have been brought or asserted against the company are not currently determinable, the company believes that at June 30, 2011, it has adequate provisions for any such matters.

m. Accounting rules governing income taxes require that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. These rules also require that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or the entire deferred tax asset will not be realized.

The company evaluates the realizability of its deferred tax assets by assessing its valuation allowance and by adjusting the amount of such allowance, if necessary. The factors used to assess the likelihood of realization are the company’s historical profitability, forecast of future taxable income and available tax-planning strategies that could be implemented to realize the net deferred tax assets. The company uses tax-planning strategies to realize or renew net deferred tax assets to avoid the potential loss of future tax benefits.

A full valuation allowance is currently maintained for all U.S. and certain foreign deferred tax assets in excess of deferred tax liabilities. The company will record a tax provision or benefit for those international subsidiaries that do not have a full valuation allowance against their net deferred tax assets. Any profit or loss recorded for the company’s U.S. continuing operations will have no provision or benefit associated with it due to full valuation allowance, except with respect to benefits related to income from discontinued operations. As a result, the company’s provision or benefit for taxes will vary significantly depending on the geographic distribution of income. Included in the current quarter was a benefit of $30.3 million related to the settlement of two European tax matters.

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Internal Revenue Code Sections 382 and 383 provide annual limitations with respect to the ability of a corporation to utilize its net operating loss (as well as certain built-in losses) and tax credit carryforwards, respectively (Tax Attributes), against future U.S. taxable income, if the corporation experiences an “ownership change.” In general terms, an ownership change may result from transactions increasing the ownership of certain stockholders in the stock of a corporation by more than 50 percentage points over a three-year period. The company regularly monitors ownership changes (as calculated for purposes of Section 382). Based on currently available information, the company believes that an ownership change may have occurred during the first quarter of 2011, for purposes of the rules described above. However, the final determination of whether an ownership change has occurred is currently subject to a number of discretionary tax rules and factual uncertainties. Moreover, any future transaction or transactions and the timing of such transaction or transactions could trigger an additional ownership change under Section 382.

In the event of an ownership change, utilization of the company’s Tax Attributes will be subject to an estimated overall annual limitation determined in part by multiplying the total aggregate market value of the company’s common stock immediately preceding the ownership change by the applicable long-term tax-exempt rate, possibly subject to increase based on the built-in gain, if any, in the company’s assets at the time of the ownership change. Any unused annual limitation may be carried over to later years. Future U.S. taxable income may not be fully offset by existing Tax Attributes, if such income exceeds the company’s annual limitation. However, based on presently available information and the existence of tax planning strategies, currently the company does not expect to incur a cash tax liability in the near term. The company maintains a full valuation allowance against the realization of all U.S. deferred tax assets as well as certain foreign deferred tax assets in excess of deferred tax liabilities.

n. On February 28, 2011, the company sold 2,587,500 shares of 6.25% mandatory convertible preferred stock for net proceeds of $249.7 million. Each share of mandatory convertible preferred stock will automatically convert on March 1, 2014 into between 2.1899 and 2.6717 shares of the company’s common stock, subject to adjustment, depending on the volume weighted average price per share of the company’s common stock over the 20 consecutive trading days ending on the third trading day immediately preceding the mandatory conversion date. At any time prior to March 1, 2014, holders may elect to convert all or a portion of their shares of the mandatory convertible preferred stock at the minimum conversion rate of 2.1899 shares of the company’s common stock, subject to adjustment.

The company pays dividends on each share of the mandatory convertible preferred stock on a cumulative basis at an annual rate of 6.25% on the initial liquidation preference of $100 per share (equivalent to $6.25 per year per share). Dividends accrue and accumulate from the date of issuance and, to the extent the company has lawfully available funds to pay dividends and the company’s Board of Directors or an authorized committee of the Board of Directors declares a dividend payable, the company will pay dividends on March 1, June 1, September 1 and December 1 of each year prior to March 1, 2014 in cash and on March 1, 2014 or any earlier conversion date in cash, shares of the company’s common stock, or a combination thereof, at the company’s election. The first dividend payment was on June 1, 2011. The annualized dividend on the mandatory convertible preferred stock will be approximately $16.2 million until conversion.

On March 30, 2011, the net proceeds from the sale of the mandatory convertible preferred stock were used to redeem an aggregate principal amount of $124.7 million of the company’s senior secured notes due 2014 and an aggregate principal amount of $86.3 million of the company’s senior secured notes due 2015 under the provisions of the indentures relating to the notes that allow the company to redeem, at its option, up to 35% of the original principal amount of each series of notes from the net cash proceeds of one or more equity offerings. As a result of these redemptions, the company recognized a charge of $31.8 million in “Other income (expense), net” in the three months ended March 31, 2011, which was comprised of $28.2 million of premium paid and $3.6 million for the write off of unamortized discounts, issuance costs and gains related to the portion of the notes redeemed.

On April 11, 2011, the company purchased $44.1 million of its senior secured notes due 2014 and $134.8 million of its senior secured notes due 2015 that had been tendered into a cash tender offer conducted by the company. As a result of this purchase of notes, the company recognized a charge of $45.7 million in “Other income (expense), net” in the three months ended June 30, 2011, which is comprised of $42.2 million of premium and expenses paid and $3.5 million for the write off of unamortized discounts, issuance costs and gains related to the portion of the notes purchased.

On June 23, 2011, the company entered into a new, five-year, secured revolving credit facility, to replace the company’s $150 million U.S. trade accounts receivable securitization facility that terminated on that date. The new credit agreement provides for loans and letters of credit up to an aggregate amount of $150 million (with a limit on letters of credit of $100 million). The prior accounts receivable securitization facility had not provided for letters of credit. Borrowing limits under the new credit agreement are based upon the amount of eligible U.S. accounts receivable. Borrowings under the facility will bear interest based on short-term rates. The credit agreement contains customary representations and warranties, including that there has been no material adverse change in the company’s business, properties, operations or financial condition. It also contains financial covenants requiring the company to maintain a minimum fixed charge coverage ratio and, if the company’s consolidated cash plus availability under the credit facility falls below $130 million, a maximum secured leverage ratio. The credit agreement allows the company to pay dividends on its preferred stock unless the company is in default and to, among other things, repurchase its equity, prepay other debt, incur other debt or liens, dispose of assets and make acquisitions, loans and investments, provided the company complies with certain requirements and limitations set forth in the agreement. Events of default include non-payment, failure to perform covenants, materially incorrect representations and warranties, change of control and default under other debt aggregating at least $50 million. The credit facility is guaranteed by Unisys Holding Corporation, Unisys NPL, Inc. and any future material domestic subsidiaries. The facility is secured on a first priority basis by certain assets of Unisys Corporation and the subsidiary guarantors consisting primarily of the U.S. trade accounts receivable of Unisys Corporation. It is secured on a junior basis (to the senior secured notes due 2014 and 2015) by the other assets of Unisys Corporation and the subsidiary guarantors, other than certain excluded assets. The company may elect to prepay or terminate the credit facility without penalty.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

The company reported a second-quarter 2011 net loss of $11.6 million, or $.27 per diluted share. The company’s results in the quarter were impacted by the following items:

• a debt-reduction charge of $45.7 million, discussed below;

• a 35 percent decline in technology revenue, reflecting lower sales of ClearPath systems compared to the second quarter of 2010;

• a $62 million or 29% decline in revenue in the company’s U.S. Federal government business. The decline reflected ongoing budget uncertainty that resulted in delayed awards and funding, as well as the impact of the Transportation Security Administration (TSA) contract, which expired at the end of November 2010. The contract provided approximately $31 million of revenue in the second quarter of 2010.

In the second quarter of 2010, the company reported net income from continuing operations of $59.2 million, or $1.36 per diluted share.

Revenue in the second quarter of 2011 declined 10 percent to $937 million compared with $1.04 billion in the year-ago quarter. Foreign currency fluctuations had a 5 percentage-point positive impact on revenue in the quarter.

As part of the company’s ongoing efforts to enhance its balance sheet and capital structure, during the first six months of 2011 the company took actions to significantly reduce its debt and interest expense. On February 28, 2011, the company sold approximately 2.6 million shares of 6.25% mandatory convertible preferred stock for net proceeds of approximately $250 million. On March 30, 2011, the company used the net proceeds from the sale of the mandatory convertible preferred stock to redeem an aggregate principal amount of $211.0 million of its senior secured notes due 2014 and 2015.

On April 11, 2011, the company completed a cash tender offer and purchased an aggregate principal amount of $178.9 million of its senior secured notes due 2014 and 2015. As a result of the debt reductions, annual interest expense will decrease by approximately $53 million. The annualized dividend on the mandatory convertible preferred stock will be approximately $16.2 million until mandatory conversion in 2014.

Results of operations

Company results

Three months ended June 30, 2011 compared with the three months ended June 30, 2010

Revenue for the quarter ended June 30, 2011 was $937.2 million compared with $1,037.0 million for the second quarter of 2010, a decrease of 10% from the prior year, primarily reflecting a $61.6 million decline in the company’s U.S. Federal business and lower technology revenue. Foreign currency fluctuations had a 5-percentage-point positive impact on revenue in the current period compared with the year-ago period.

Services revenue declined 6% and Technology revenue decreased 35% in the current quarter compared with the year-ago period. U.S. revenue was down 19% in the second quarter compared with the year-ago period. The U.S. revenue decline was principally driven by the decrease in the U.S. Federal government business and lower ClearPath systems sales which were strong in the year-ago period. International revenue decreased 2% in the current quarter. Foreign currency had a 10-percentage-point positive impact on international revenue in the three months ended June 30, 2011 compared with the three months ended June 30, 2010.

Total gross profit margin was 22.8% in the three months ended June 30, 2011 compared with 27.8% in the three months ended June 30, 2010, driven by lower revenue and margin in the company’s ClearPath business.

Selling, general and administrative expense in the three months ended June 30, 2011 was $147.2 million (15.7% of revenue) compared with $160.4 million (15.5% of revenue) in the year-ago period. The decline of 8% reflects the company’s continued focus on cost reduction.

Research and development (R&D) expenses in the second quarter of 2011 were $18.4 million compared with $21.1 million in the second quarter of 2010.

For the second quarter of 2011, the company reported an operating profit of $48.1 million compared with an operating profit of $106.5 million in the second quarter of 2010, reflecting the lower ClearPath revenue and margin.

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For the three months ended June 30, 2011, pension expense was $8.7 million compared with pension income of $1.2 million for the three months ended June 30, 2010. In 2011, the increase in pension expense was principally due to lower expected returns on plan assets and higher recognition of net actuarial losses in 2011 compared with 2010. The company records pension income or expense, as well as other employee-related costs such as payroll taxes and medical insurance costs, in operating income in the following income statement categories: cost of revenue; selling, general and administrative expenses; and research and development expenses. The amount allocated to each category is based on where the salaries of active employees are charged.

During the three months ended June 30, 2011, the company recorded a charge of $13.5 million ($6.4 million in cost of revenue and $7.1 million in other income/expense) related to the loss of an old non-income tax case concerning the company’s former Brazilian manufacturing operations.

Interest expense for the three months ended June 30, 2011 was $13.3 million compared with $25.3 million for the three months ended June 30, 2010. As a result of the debt reductions discussed below, annual interest expense will decrease by approximately $53 million.

Other income (expense), net was an expense of $49.4 million in the second quarter of 2011, compared with expense of $7.5 million in 2010. Included in the second quarter of 2011 were a charge of $45.7 million related to the debt redemptions, discussed below, and a charge of $7.1 million related to the Brazil matter discussed above.

The loss from continuing operations before income taxes for the three months ended June 30, 2011 was $14.6 million compared with income of $73.7 million in 2010. The provision for income taxes was a benefit of $9.2 million in the current quarter compared with a provision of $13.3 million in the year-ago period. Included in the current quarter was a benefit of $30.3 million related to the settlement of two European tax matters. As discussed in note (m) of the Notes to Consolidated Financial Statements, the company evaluates quarterly the realizability of its deferred tax assets by assessing its valuation allowance and by adjusting the amount of such allowance, if necessary. The company will record a tax provision or benefit for those international subsidiaries that do not have a full valuation allowance against their net deferred tax assets. Any profit or loss recorded for the company’s U.S. continuing operations will have no provision or benefit associated with it due to full valuation allowance, except with respect to benefits related to income from discontinued operations. As a result, the company’s provision or benefit for taxes will vary significantly quarter to quarter depending on the geographic distribution of income.

In March of 2011, the UK government announced its intention to reduce the UK corporate tax rate from 27% to 26% effective April 1, 2011, as well as a further reduction in the main corporate tax rate from 26% to 25% effective April 1, 2012. These changes were considered to be enacted for U.S. GAAP purposes in July of 2011, at which time all legislative procedures were completed and the Finance Act of 2011 received Royal Assent. It is expected that the rate change will increase the company’s income tax provision by approximately $8 million due to the impact on the UK net deferred tax assets. This impact will be recorded in the third quarter of 2011.

Six months ended June 30, 2011 compared with the six months ended June 30, 2010

Revenue for the six months ended June 30, 2011 was $1,848.4 million compared with $2,014.4 million for the prior-year period, a decrease of 8% from the prior year, primarily reflecting a $111.2 million decline in the company’s U.S. Federal business and lower technology revenue. Foreign currency fluctuations had a 4-percentage-point positive impact on revenue in the current period compared with the year-ago period.

Services revenue declined 6% and Technology revenue decreased 24% in the current six-month period compared with the year-ago period. U.S. revenue was down 18% in the current period compared with the year-ago period. The U.S. revenue decline was principally driven by the decrease in the U.S. Federal government business and lower ClearPath systems sales which were strong in the year-ago period. International revenue decreased 1% in the current period. Foreign currency had a 7-percentage-point positive impact on international revenue in the six months ended June 30, 2011 compared with the six months ended June 30, 2010.

Total gross profit margin was 22.8% in the six months ended June 30, 2011 compared with 26.0% in the six months ended June 30, 2010, driven by lower revenue and margin in the company’s ClearPath business.

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Selling, general and administrative expense in the six months ended June 30, 2011 was $293.2 million (15.9% of revenue) compared with $316.3 million (15.7% of revenue) in the year-ago period. The decline of 7% reflects the company’s continued focus on cost reduction.

Research and development (R&D) expenses in the six months ended June 30, 2011 were $38.7 million compared with $41.9 million in the prior-year period.

For the first half of 2011, the company reported an operating profit of $90.0 million compared with an operating profit of $165.0 million in the first half of 2010, reflecting the lower U.S. Federal business revenue and margin and lower ClearPath revenue and margin.

For the six months ended June 30, 2011, pension expense was $17.7 million compared with pension income of $1.5 million for the six months ended June 30, 2010.

During the six months ended June 30, 2011, the company recorded a charge of $13.5 million (a $6.4 million charge in cost of revenue and a $7.1 million charge in other income/expense) related to the Brazilian matter discussed above.

Interest expense for the six months ended June 30, 2011 was $39.2 million compared with $51.8 million for the six months ended June 30, 2010.

Other income (expense), net was an expense of $73.2 million in the first half of 2011, compared with expense of $44.4 million in 2010. Included in the first half of 2011 were a charge of $77.5 million related to the debt redemptions, discussed below and a charge of $7.1 million related to the Brazilian matter discussed above. Included in the first half of 2010 were foreign exchange losses of $38.9 million, which included $19.9 million related to the Venezuelan devaluation.

The loss from continuing operations before income taxes for the six months ended June 30, 2011 was $22.4 million compared with income of $68.8 million in 2010. The provision for income taxes was $19.0 million in the current period compared with a provision of $24.5 million in the year-ago period. Included in the current period was a benefit of $30.3 million related to the settlement of two European tax matters.

Segment results

The company has two business segments: Services and Technology. Revenue classifications by segment are as follows: Services – systems integration and consulting, outsourcing, infrastructure services and core maintenance; Technology – enterprise-class servers and other technology.

The accounting policies of each business segment are the same as those followed by the company as a whole. Intersegment sales and transfers are priced as if the sales or transfers were to third parties. Accordingly, the Technology segment recognizes intersegment revenue and manufacturing profit on hardware and software shipments to customers under Services contracts. The Services segment, in turn, recognizes customer revenue and marketing profits on such shipments of company hardware and software to customers. The Services segment also includes the sale of hardware and software products sourced from third parties that are sold to customers through the company's Services channels. In the company's consolidated statements of income, the manufacturing costs of products sourced from the Technology segment and sold to Services customers are reported in cost of revenue for Services.

Also included in the Technology segment's sales and operating profit are sales of hardware and software sold to the Services segment for internal use in Services engagements. The amount of such profit included in operating income of the Technology segment for the three months ended June 30, 2011 and 2010 was $3.9 million and $.1 million, respectively. The amount for the six months ended June 30, 2011 and 2010 was $4.7 million and $.5 million, respectively. The profit on these transactions is eliminated in Corporate.

The company evaluates business segment performance on operating income exclusive of restructuring charges and unusual and nonrecurring items, which are included in Corporate. Effective January 1, 2011, the company changed the measurement of segment performance that it evaluates to exclude pension income or expense. Prior periods have been reclassified to conform to the 2011 presentation. All other corporate and centrally incurred costs are allocated to the business segments based principally on revenue, employees, square footage or usage.

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Three months ended June 30, 2011 compared with the three months ended June 30, 2010

Information by business segment is presented below (in millions of dollars):

	Total			Eliminations			Services			Technology
Three Months Ended June 30, 2011
Customer revenue	$	937.2					$	842.7		$	94.5
Intersegment				$	(22.2	)		.9			21.3
Total revenue	$	937.2		$	(22.2	)	$	843.6		$	115.8
Gross profit percent		22.8	%					20.1	%		49.0	%
Operating profit percent		5.1	%					7.1	%		2.4	%
Three Months Ended June 30, 2010
Customer revenue	$	1,037.0					$	892.0		$	145.0
Intersegment				$	(36.2	)		1.5			34.7
Total revenue	$	1,037.0		$	(36.2	)	$	893.5		$	179.7
Gross profit percent		27.8	%					19.3	%		61.2	%
Operating profit percent		10.3	%					6.1	%		26.8	%

Gross profit percent and operating income percent are as a percent of total revenue.

Customer revenue by classes of similar products or services, by segment, is presented below (in millions of dollars):

	Three Months Ended June 30				Percent Change
	2011		2010
Services
Systems integration and consulting	$	286.0	$	335.3		(14.7	)%
Outsourcing		369.6		383.0		(3.5	)%
Infrastructure services		129.9		115.1		12.9	%
Core maintenance		57.2		58.6		(2.4	)%
		842.7		892.0		(5.5	)%
Technology
Enterprise-class servers		79.6		131.6		(39.5	)%
Other technology		14.9		13.4		11.2	%
		94.5		145.0		(34.8	)%
Total	$	937.2	$	1,037.0		(9.6	)%

In the Services segment, customer revenue was $842.7 million for the three months ended June 30, 2011 down 5.5% from the three months ended June 30, 2010. Exclusive of the decline in the U.S. Federal business, services revenue was flat when compared with the prior year. Foreign currency translation had a 6-percentage-point positive impact on Services revenue in the current quarter compared with the year-ago period.

Revenue from systems integration and consulting decreased 14.7% from $335.3 million in the June 2010 quarter to $286.0 million in the June 2011 quarter.

Outsourcing revenue decreased 3.5% for the three months ended June 30, 2011 to $369.6 million compared with the three months ended June 30, 2010. Exclusive of the decline in the U.S. Federal business, outsourcing revenue increased.

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Infrastructure services revenue increased 12.9% for the three month period ended June 30, 2011 compared with the three month period ended June 30, 2010.

Core maintenance revenue declined 2.4% in the current quarter compared with the prior-year quarter.

Services gross profit was 20.1% in the second quarter of 2011 compared with 19.3% in the year-ago period. Services operating income percent was 7.1% in the three months ended June 30, 2011 compared with 6.1% in the three months ended June 30, 2010. The increase in Services gross profit and operating profit margins reflected improved service delivery execution and continuing cost controls.

In the Technology segment, customer revenue was $94.5 million in the current quarter compared with $145.0 million in the year-ago period for a decrease of 34.8%, as ClearPath revenue declined from a strong 2010 second quarter. Foreign currency translation had a positive impact of approximately 3-percentage point on Technology revenue in the current period compared with the prior-year period.

Revenue from the company’s enterprise-class servers, which includes the company’s ClearPath and ES7000 product families, decreased 39.5% for the three months ended June 30, 2011 compared with the three months ended June 30, 2010. The decrease was due to lower sales of the company’s ClearPath products.

Revenue from other technology increased 11.2% for the three months ended June 30, 2011 compared with the three months ended June 30, 2010, principally due to higher sales of third-party technology products.

Technology gross profit was 49.0% in the current quarter compared with 61.2% in the year-ago quarter. Technology operating income percent was 2.4% in the three months ended June 30, 2011 compared with 26.8% in the three months ended June 30, 2010. The decrease in Technology gross profit and operating profit margins reflected the lower ClearPath revenue.

Six months ended June 30, 2011 compared with the six months ended June 30, 2010

Information by business segment is presented below (in millions of dollars):

	Total			Eliminations			Services			Technology
Six Months Ended June 30, 2011
Customer revenue	$	1,848.4					$	1,643.0		$	205.4
Intersegment				$	(43.8	)		1.8			42.0
Total revenue	$	1,848.4		$	(43.8	)	$	1,644.8		$	247.4
Gross profit percent		22.8	%					19.0	%		50.1	%
Operating profit percent		4.9	%					5.6	%		7.0	%
Six Months Ended June 30, 2010
Customer revenue	$	2,014.4					$	1,742.5		$	271.9
Intersegment				$	(59.3	)		2.4			56.9
Total revenue	$	2,014.4		$	(59.3	)	$	1,744.9		$	328.8
Gross profit percent		26.0	%					18.9	%		57.0	%
Operating profit percent		8.2	%					5.4	%		20.7	%

Gross profit percent and operating income percent are as a percent of total revenue.

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Customer revenue by classes of similar products or services, by segment, is presented below (in millions of dollars):

	Six Months Ended June 30				Percent Change
	2011		2010
Services
Systems integration and consulting	$	570.9	$	630.5		(9.5	)%
Outsourcing		721.5		751.8		(4.0	)%
Infrastructure services		240.1		240.7		(.2	)%
Core maintenance		110.5		119.5		(7.5	)%
		1,643.0		1,742.5		(5.7	)%
Technology
Enterprise-class servers		179.3		234.0		(23.4	)%
Other technology		26.1		37.9		(31.1	)%
		205.4		271.9		(24.5	)%
Total	$	1,848.4	$	2,014.4		(8.2	)%

In the Services segment, customer revenue was $1,643.0 million for the six months ended June 30, 2011 down 5.7% from the six months ended June 30, 2010. Exclusive of the decline in the U.S. Federal business, services revenue was flat when compared with the prior year. Foreign currency translation had a 4-percentage-point positive impact on Services revenue in the current period compared with the year-ago period.

Revenue from systems integration and consulting decreased 9.5% from $630.5 million in the first half of 2010 to $570.9 million in the first half of 2011.

Outsourcing revenue decreased 4.0% for the six months ended June 30, 2011 to $721.5 million compared with the six months ended June 30, 2010. Exclusive of the decline in the U.S. Federal business, outsourcing revenue increased.

Infrastructure services revenue was flat for the six month period ended June 30, 2011 compared with the six month period ended June 30, 2010.

Core maintenance revenue declined 7.5% in the current six-month period compared with the prior-year period.

Services gross profit was 19.0% in the first half of 2011 compared with 18.9% in the year-ago period. Services operating income percent was 5.6% in the six months ended June 30, 2011 compared with 5.4% in the six months ended June 30, 2010.

In the Technology segment, customer revenue was $205.4 million in the current period compared with $271.9 million in the year-ago period for a decrease of 24.5%, as ClearPath revenue declined. Foreign currency translation had a positive impact of approximately 3-percentage point on Technology revenue in the current period compared with the prior-year period.

Revenue from the company’s enterprise-class servers, which includes the company’s ClearPath and ES7000 product families, decreased 23.4% for the six months ended June 30, 2011 compared with the six months ended June 30, 2010. The decrease was due to lower sales of the company’s ClearPath products.

Revenue from other technology decreased 31.1% for the six months ended June 30, 2011 compared with the six months ended June 30, 2010, principally due to lower sales of third-party technology products.

Technology gross profit was 50.1% in the current six-month period compared with 57.0% in the year-ago period. Technology operating income percent was 7.0% in the six months ended June 30, 2011 compared with 20.7% in the six months ended June 30, 2010. The decrease in Technology gross profit and operating profit margins reflected the lower ClearPath revenue.

New accounting pronouncements

See note (j) of the Notes to Consolidated Financial Statements for a full description of recent accounting pronouncements, including the expected dates of adoption and estimated effects on results of operations and financial condition.

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Financial condition

The company’s principal sources of liquidity are cash on hand, cash from operations and its new five-year revolving credit facility, discussed below, which has replaced the company’s U.S. trade accounts receivable facility. The company believes that it will have adequate sources of liquidity to meet its expected near-term cash requirements.

Cash and cash equivalents at June 30, 2011 were $625.0 million compared with $828.3 million at December 31, 2010. The decline was principally due to the debt reductions described below. At June 30, 2010 and December 31, 2010, the company had sold no receivables under the prior U.S. trade accounts receivable facility, compared with $100 million as of December 31, 2009.

During the six months ended June 30, 2011, cash provided by operations was $63.9 million compared with cash provided of $23.2 million for the six months ended June 30, 2010. One of the principal reasons for the increase in cash flow from operations was the $100 million decrease in utilization of the company’s U.S. trade accounts receivable facility during the first quarter of 2010.

Cash used for investing activities for the six months ended June 30, 2011 was $69.7 million compared with cash usage of $66.2 million during the six months ended June 30, 2010. Items affecting cash used for investing activities were the following: Net proceeds of investments were $2.4 million for the six months ended June 30, 2011 compared with net proceeds of $.4 million in the prior-year period. Proceeds from investments and purchases of investments represent derivative financial instruments used to reduce the company’s currency exposure to market risks from changes in foreign currency exchange rates. During the six months ended June 30, 2011, the net change in restricted deposits resulted in cash provided of $10.3 million compared with cash usage of $80.6 million during the six months ended June 30, 2010. In addition, in the current period, the investment in marketable software was $23.3 million compared with $27.3 million in the year-ago period, capital additions of properties were $24.0 million in 2011 compared with $37.3 million in 2010 and capital additions of outsourcing assets were $25.0 million in 2011 compared with $51.7 million in 2010.

Cash used for financing activities during the six months ended June 30, 2011 was $215.9 million compared with cash usage of $76.9 million during the six months ended June 30, 2010. The current period includes cash proceeds of $249.7 million related to the issuance of preferred stock, net of issuance costs, and cash payments for long-term debt of $460.3 million (see discussion below). The prior-year period includes $78.0 million used to redeem and to extinguish long-term debt.

At June 30, 2011, total debt was $447.4 million, a decrease of $376.6 million from December 31, 2010.

On February 28, 2011, the company sold 2,587,500 shares of 6.25% mandatory convertible preferred stock for net proceeds of $249.7 million. Each share of mandatory convertible preferred stock will automatically convert on March 1, 2014 into between 2.1899 and 2.6717 shares of the company’s common stock, subject to adjustment, depending on the volume weighted average price per share of the company’s common stock over the 20 consecutive trading days ending on the third trading day immediately preceding the mandatory conversion date. At any time prior to March 1, 2014, holders may elect to convert all or a portion of their shares of the mandatory convertible preferred stock at the minimum conversion rate of 2.1899 shares of the company’s common stock, subject to adjustment.

The company pays dividends on each share of the mandatory convertible preferred stock on a cumulative basis at an annual rate of 6.25% on the initial liquidation preference of $100 per share (equivalent to $6.25 per year per share). Dividends accrue and accumulate from the date of issuance and, to the extent the company has lawfully available funds to pay dividends and the company’s Board of Directors or an authorized committee of the Board of Directors declares a dividend payable, the company will pay dividends on March 1, June 1, September 1 and December 1 of each year prior to March 1, 2014 in cash and on March 1, 2014 or any earlier conversion date in cash, shares of the company’s common stock, or a combination thereof, at the company’s election. The first dividend payment was on June 1, 2011. The annualized dividend on the mandatory convertible preferred stock will be approximately $16.2 million until conversion.

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On March 30, 2011, the net proceeds from the sale of the mandatory convertible preferred stock were used to redeem an aggregate principal amount of $124.7 million of the company’s senior secured notes due 2014 and an aggregate principal amount of $86.3 million of the company’s senior secured notes due 2015 under the provisions of the indentures relating to the notes that allow the company to redeem, at its option, up to 35% of the original principal amount of each series of notes from the net cash proceeds of one or more equity offerings. As a result of these redemptions, the company recognized a charge of $31.8 million in “Other income (expense), net” in the three months ended March 31, 2011, which was comprised of $28.2 million of premium paid and $3.6 million for the write off of unamortized discounts, issuance costs and gains related to the portion of the notes redeemed.

On April 11, 2011, the company purchased $44.1 million of its senior secured notes due 2014 and $134.8 million of its senior secured notes due 2015 that had been tendered into a cash tender offer conducted by the company. As a result of this purchase of notes, the company recognized a charge of $45.7 million in “Other income (expense), net” in the three months ended June 30, 2011, which is comprised of $42.2 million of premium and expenses paid and $3.5 million for the write off of unamortized discounts, issuance costs and gains related to the portion of the notes purchased.

As a result of the debt reductions discussed above, annual interest expense will decrease by approximately $53 million.

The company and certain international subsidiaries have access to uncommitted lines of credit from various banks.

On June 23, 2011, the company entered into a new, five-year, secured revolving credit facility, to replace the company’s $150 million U.S. trade accounts receivable securitization facility that terminated on that date. The new credit agreement provides for loans and letters of credit up to an aggregate amount of $150 million (with a limit on letters of credit of $100 million). The prior accounts receivable securitization facility had not provided for letters of credit. Borrowing limits under the new credit agreement are based upon the amount of eligible U.S. accounts receivable. Borrowings under the facility will bear interest based on short-term rates. The credit agreement contains customary representations and warranties, including that there has been no material adverse change in the company’s business, properties, operations or financial condition. It also contains financial covenants requiring the company to maintain a minimum fixed charge coverage ratio and, if the company’s consolidated cash plus availability under the credit facility falls below $130 million, a maximum secured leverage ratio. The credit agreement allows the company to pay dividends on its preferred stock unless the company is in default and to, among other things, repurchase its equity, prepay other debt, incur other debt or liens, dispose of assets and make acquisitions, loans and investments, provided the company complies with certain requirements and limitations set forth in the agreement. Events of default include non-payment, failure to perform covenants, materially incorrect representations and warranties, change of control and default under other debt aggregating at least $50 million. The credit facility is guaranteed by Unisys Holding Corporation, Unisys NPL, Inc. and any future material domestic subsidiaries. The facility is secured on a first priority basis by certain assets of Unisys Corporation and the subsidiary guarantors consisting primarily of the U.S. trade accounts receivable of Unisys Corporation. It is secured on a junior basis (to the senior secured notes due 2014 and 2015) by the other assets of Unisys Corporation and the subsidiary guarantors, other than certain excluded assets. The company may elect to prepay or terminate the credit facility without penalty.

At June 30, 2011, the company has met all covenants and conditions under its various lending agreements. The company expects to continue to meet these covenants and conditions.

In 2011, the company expects to make cash contributions of approximately $115 million to its worldwide, primarily non-U.S., defined benefit pension plans. In accordance with regulations governing contributions to U.S. defined benefit pension plans, the company is not required to fund its U.S. qualified defined benefit pension plan in 2011. Based on current legislation, recent interest rates and expected returns for 2011, the company currently expects that it will be required to make a contribution of approximately $100 million in 2012 to this plan.

The company may, from time to time, redeem, tender for, or repurchase its securities in the open market or in privately negotiated transactions depending upon availability, market conditions and other factors. The company has on file with the Securities and Exchange Commission an effective registration statement, expiring in June of 2012, covering approximately $.8 billion of debt or equity securities, which enables the company to be prepared for future market opportunities.

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Factors that may affect future results

From time to time, the company provides information containing “forward-looking” statements, as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events and include any statement that does not directly relate to any historical or current fact. Words such as “anticipates,” “believes,” “expects,” “intends,” “plans,” “projects” and similar expressions may identify such forward-looking statements. All forward-looking statements rely on assumptions and are subject to risks, uncertainties and other factors that could cause the company’s actual results to differ materially from expectations. Factors that could affect future results include, but are not limited to, those discussed below. Any forward-looking statement speaks only as of the date on which that statement is made. The company assumes no obligation to update any forward-looking statement to reflect events or circumstances that occur after the date on which the statement is made.

Factors that could affect future results include the following:

Future results will depend in part on the company’s ability to drive profitable growth in consulting and systems integration. The company’s ability to grow profitably in this business will depend on the level of demand for systems integration projects and the portfolio of solutions the company offers for specific industries. It will also depend on an efficient utilization of services delivery personnel. In addition, profit margins in this business are largely a function of the rates the company is able to charge for services and the chargeability of its professionals. If the company is unable to attain sufficient rates and chargeability for its professionals, profit margins will be adversely affected. The rates the company is able to charge for services are affected by a number of factors, including clients’ perception of the company’s ability to add value through its services; introduction of new services or products by the company or its competitors; pricing policies of competitors; and general economic conditions. Chargeability is also affected by a number of factors, including the company’s ability to transition employees from completed projects to new engagements, and its ability to forecast demand for services and thereby maintain an appropriate headcount.

The company’s future results will depend in part on its ability to take on, successfully implement and grow outsourcing operations. The company’s outsourcing contracts are multiyear engagements under which the company takes over management of a client’s technology operations, business processes or networks. In a number of these arrangements, the company hires certain of its clients’ employees and may become responsible for the related employee obligations, such as pension and severance commitments. In addition, system development activity on outsourcing contracts may require the company to make significant upfront investments. The company will need to have available sufficient financial resources in order to take on these obligations and make these investments.

Recoverability of outsourcing assets is dependent on various factors, including the timely completion and ultimate cost of the outsourcing solution, and realization of expected profitability of existing outsourcing contracts. These risks could result in an impairment of a portion of the associated assets, which are tested for recoverability quarterly.

As long-term relationships, outsourcing contracts provide a base of recurring revenue. However, outsourcing contracts are highly complex and can involve the design, development, implementation and operation of new solutions and the transitioning of clients from their existing business processes to the new environment. In the early phases of these contracts, gross margins may be lower than in later years when an integrated solution has been implemented, the duplicate costs of transitioning from the old to the new system have been eliminated and the work force and facilities have been rationalized for efficient operations. Future results will depend on the company’s ability to effectively and timely complete these implementations, transitions and rationalizations.

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Future results will also depend, in part, on market demand for the company’s high-end enterprise servers and maintenance on these servers. The company continues to apply its resources to develop value-added software capabilities and optimized solutions for these server platforms which provide competitive differentiation. Future results will depend on the company’s ability to maintain its installed base for ClearPath and to develop next-generation ClearPath products to expand the market.

The company faces aggressive competition in the information services and technology marketplace, which could lead to reduced demand for the company’s products and services and could have an adverse effect on the company’s business. The information services and technology markets in which the company operates include a large number of companies vying for customers and market share both domestically and internationally. The company’s competitors include consulting and other professional services firms, systems integrators, outsourcing providers, infrastructure services providers, computer hardware manufacturers and software providers. Some of the company’s competitors may develop competing products and services that offer better price-performance or that reach the market in advance of the company’s offerings. Some competitors also have or may develop greater financial and other resources than the company, with enhanced ability to compete for market share, in some instances through significant economic incentives to secure contracts. Some also may be better able to compete for skilled professionals. Any of these factors could lead to reduced demand for the company’s products and services and could have an adverse effect on the company’s business. Future results will depend on the company’s ability to mitigate the effects of aggressive competition on revenues, pricing and margins and on the company’s ability to attract and retain talented people.

The company’s future results will depend on its ability to retain significant clients. The company has a number of significant long-term contracts with clients, including governmental entities, and its future success will depend, in part, on retaining its relationships with these clients. The company could lose clients for such reasons as contract expiration, conversion to a competing service provider, disputes with clients or a decision to in-source services, including for contracts with governmental entities as part of the rebid process. The company could also lose clients as a result of their merger, acquisition or business failure. The company may not be able to replace the revenue and earnings from any such lost client.

The company’s future results will depend upon its ability to effectively anticipate and respond to volatility and rapid technological change in its industry. The company operates in a highly volatile industry characterized by rapid technological change, evolving technology standards, short product life cycles and continually changing customer demand patterns. Future success will depend in part on the company’s ability to anticipate and respond to these market trends and to design, develop, introduce, deliver or obtain new and innovative products and services on a timely and cost-effective basis. The company may not be successful in anticipating or responding to changes in technology, industry standards or customer preferences, and the market may not demand or accept its services and product offerings. In addition, products and services developed by competitors may make the company’s offerings less competitive.

The company’s business can be adversely affected by global economic conditions, acts of war, terrorism or natural disasters. The company’s financial results have been impacted by the global economic slowdown in recent years. If economic conditions worsen, the company could see reductions in demand and increased pressure on revenue and profit margins. The company could also see a further consolidation of clients, which could also result in a decrease in demand. The company’s business could also be affected by acts of war, terrorism or natural disasters. Current world tensions could escalate, and this could have unpredictable consequences on the world economy and on the company’s business.

The company has significant pension obligations and may be required to make significant cash contributions to its defined benefit pension plans. The company has unfunded obligations under its U.S. and non-U.S. defined benefit pension plans. In 2011, the company expects to make cash contributions of approximately $115 million to its worldwide, primarily non-U.S., defined benefit pension plans. In accordance with regulations governing contributions to U.S. defined benefit pension plans, the company is not required to fund its U.S. qualified defined benefit pension plan in 2011. Based on current legislation, recent interest rates and expected returns for 2011, the company currently expects that it will be required to make a contribution of approximately $100 million in 2012 to this plan.

26

Deterioration in the value of the company’s worldwide defined benefit pension plan assets could require the company to make larger cash contributions to its defined benefit pension plans in the future. In addition, the funding of plan deficits over a shorter period of time than currently anticipated could result in making cash contributions to these plans on a more accelerated basis. Either of these events would reduce the cash available for working capital and other corporate uses and may have an adverse impact on the company’s operations, financial condition and liquidity.

The company’s future results will depend on the success of its program to reduce costs, focus its global resources and simplify its business structure. Over the past several years, the company has implemented significant cost-reduction measures and continues to focus on measures intended to further improve cost efficiency. In prior years, the company has incurred significant cost reduction charges in connection with these efforts. Future results will depend on the success of these efforts as well as on the success of the company’s program to focus its global resources and simplify its business structure. This program is based on various assumptions, including assumptions regarding market segment growth, client demand, and the proper skill set of and training for sales and marketing management and personnel, all of which are subject to change. Furthermore, the company’s institutional stockholders may attempt to influence these strategies.

The company’s contracts may not be as profitable as expected or provide the expected level of revenues. In a number of the company’s long-term contracts for infrastructure services, outsourcing, help desk and similar services, the company’s revenue is based on the volume of products and services provided. As a result, revenue levels anticipated at the contract’s inception are not guaranteed. In addition, some of these contracts may permit termination at the customer’s discretion before the end of the contract’s term or may permit termination or impose other penalties if the company does not meet the performance levels specified in the contracts.

The company’s contracts with governmental entities are subject to the availability of appropriated funds. These contracts also contain provisions allowing the governmental entity to terminate the contract at the governmental entity’s discretion before the end of the contract’s term. In addition, if the company’s performance is unacceptable to the customer under a government contract, the government retains the right to pursue remedies under the affected contract, which remedies could include termination.

Certain of the company’s outsourcing agreements require that the company’s prices be benchmarked if the customer requests it and provide that those prices may be adjusted downward if the pricing for similar services in the market has changed. As a result, revenues anticipated at the beginning of the terms of these contracts may decline in the future.

Some of the company’s systems integration contracts are fixed-price contracts under which the company assumes the risk for delivery of the contracted services and products at an agreed-upon fixed price. Should the company experience problems in performing fixed-price contracts on a profitable basis, adjustments to the estimated cost to complete may be required. Future results will depend on the company’s ability to perform these services contracts profitably.

The company’s contracts with U.S. governmental agencies may subject the company to audits, criminal penalties, sanctions and other expenses and fines. The company frequently enters into contracts with governmental entities. U.S. government agencies, including the Defense Contract Audit Agency and the Department of Labor, routinely audit government contractors. These agencies review a contractor’s performance under its contracts, cost structure and compliance with applicable laws, regulations and standards. The U.S. government also may review the adequacy of, and a contractor’s compliance with contract terms and conditions, its systems and policies, including the contractor’s purchasing, property, estimating, billing, accounting, compensation and management information systems. Any costs found to be overcharged or improperly allocated to a specific contract or any amounts improperly billed or charged for products or services will be subject to reimbursement to the government. In addition, government contractors, such as the company, are required to disclose credible evidence of certain violations of law and contract overpayments to the federal government. If the company is found to have participated in improper or illegal activities, the company may be subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of profits, suspension of payments, fines and suspension or prohibition from doing business with the U.S. government. Any negative publicity related to such contracts, regardless of the accuracy of such publicity, may adversely affect the company’s business or reputation.

27

The company may face damage to its reputation or legal liability if its clients are not satisfied with its services or products. The success of the company’s business is dependent on strong, long-term client relationships and on its reputation for responsiveness and quality. As a result, if a client is not satisfied with the company’s services or products, its reputation could be damaged and its business adversely affected. Allegations by private litigants or regulators of improper conduct, as well as negative publicity and press speculation about the company, whatever the outcome and whether or not valid, may harm its reputation. In addition to harm to reputation, if the company fails to meet its contractual obligations, it could be subject to legal liability, which could adversely affect its business, operating results and financial condition.

Future results will depend in part on the performance and capabilities of third parties with whom the company has commercial relationships. The company has commercial relationships with suppliers, channel partners and other parties that have complementary products, services or skills. Future results will depend, in part, on the performance and capabilities of these third parties, on the ability of external suppliers to deliver components at reasonable prices and in a timely manner, and on the financial condition of, and the company’s relationship with, distributors and other indirect channel partners.

More than half of the company’s revenue is derived from operations outside of the United States, and the company is subject to the risks of doing business internationally. More than half of the company’s total revenue is derived from international operations. The risks of doing business internationally include foreign currency exchange rate fluctuations, currency restrictions and devaluations, changes in political or economic conditions, trade protection measures, import or export licensing requirements, multiple and possibly overlapping and conflicting tax laws, new tax legislation, weaker intellectual property protections in some jurisdictions and additional legal and regulatory compliance requirements applicable to businesses that operate internationally, including the Foreign Corrupt Practices Act and non-U.S. laws and regulations.

Financial market conditions may inhibit the company’s ability to access capital and credit markets to address its liquidity needs. Financial market conditions may impact the company’s ability to borrow, to refinance its outstanding debt, or to utilize surety bonds, letters of credit, foreign exchange derivatives and other financial instruments the company uses to conduct its business. Although the company intends to use cash on hand to address its liquidity needs, its ability to do so assumes that its operations will continue to generate sufficient cash.

The company’s services or products may infringe upon the intellectual property rights of others. The company cannot be sure that its services and products do not infringe on the intellectual property rights of third parties, and it may have infringement claims asserted against it or against its clients. These claims could cost the company money, prevent it from offering some services or products, or damage its reputation.

Pending litigation could affect the company’s results of operations or cash flow. There are various lawsuits, claims, investigations and proceedings that have been brought or asserted against the company, which arise in the ordinary course of business, including actions with respect to commercial and government contracts, labor and employment, employee benefits, environmental matters, intellectual property and non-income tax and employment compensation in Brazil. See note (l) of the Notes to Consolidated Financial Statements for more information on litigation. The company believes that it has valid defenses with respect to legal matters pending against it. Litigation is inherently unpredictable, however, and it is possible that the company’s results of operations or cash flow could be materially affected in any particular period by the resolution of one or more of the legal matters pending against it.

28

The company could face business and financial risk in implementing future dispositions or acquisitions. As part of the company’s business strategy, it may from time to time consider disposing of existing technologies, products and businesses that may no longer be in alignment with its strategic direction, including transactions of a material size, or acquiring complementary technologies, products and businesses. Potential risks with respect to dispositions include difficulty finding buyers or alternative exit strategies on acceptable terms in a timely manner; potential loss of employees; and dispositions at unfavorable prices or on unfavorable terms, including relating to retained liabilities. Any acquisitions may result in the incurrence of substantial additional indebtedness or contingent liabilities. Acquisitions could also result in potentially dilutive issuances of equity securities and an increase in amortization expenses related to intangible assets. Additional potential risks associated with acquisitions include integration difficulties; difficulties in maintaining or enhancing the profitability of any acquired business; risks of entering markets in which the company has no or limited prior experience; potential loss of employees or failure to maintain or renew any contracts of any acquired business; and expenses of any undiscovered or potential liabilities of the acquired product or business, including relating to employee benefits contribution obligations or environmental requirements. Further, with respect to both dispositions and acquisitions, management’s attention could be diverted from other business concerns. Adverse credit conditions could also affect the company’s ability to consummate dispositions or acquisitions. The risks associated with dispositions and acquisitions could have a material adverse effect upon the company’s business, financial condition and results of operations. There can be no assurance that the company will be successful in consummating future dispositions or acquisitions on favorable terms or at all.

The company believes that its ability to use its U.S. federal net operating loss carryforwards and other tax attributes is limited. Internal Revenue Code Sections 382 and 383 provide annual limitations with respect to the ability of a corporation to utilize its net operating loss (as well as certain built-in losses) and tax credit carryforwards, respectively (Tax Attributes), against future U.S. taxable income, if the corporation experiences an “ownership change.” In general terms, an ownership change may result from transactions increasing the ownership of certain stockholders in the stock of a corporation by more than 50 percentage points over a three-year period. The company regularly monitors ownership changes (as calculated for purposes of Section 382). Based on currently available information, the company believes that an ownership change may have occurred during the first quarter of 2011, for purposes of the rules described above. However, the final determination of whether an ownership change has occurred is currently subject to a number of discretionary tax rules and factual uncertainties. Moreover, any future transaction or transactions and the timing of such transaction or transactions could trigger an additional ownership change under Section 382.

In the event of an ownership change, utilization of the company’s Tax Attributes will be subject to an estimated overall annual limitation determined in part by multiplying the total aggregate market value of the company’s common stock immediately preceding the ownership change by the applicable long-term tax-exempt rate, possibly subject to increase based on the built-in gain, if any, in the company’s assets at the time of the ownership change. Any unused annual limitation may be carried over to later years. Future U.S. taxable income may not be fully offset by existing Tax Attributes, if such income exceeds the company’s annual limitation. However, based on presently available information and the existence of tax planning strategies, currently the company does not expect to incur a cash tax liability in the near term. The company maintains a full valuation allowance against the realization of all U.S. deferred tax assets as well as certain foreign deferred tax assets in excess of deferred tax liabilities.

29

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There has been no material change in the company’s assessment of its sensitivity to market risk since its disclosure in its Annual Report on Form 10-K for the fiscal year ended December 31, 2010.

Item 4. Controls and Procedures

The company’s management, with the participation of the company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end of the period covered by this report. Based on this evaluation, the company's Chief Executive Officer and Chief Financial Officer concluded that, as of the end of such period, the company’s disclosure controls and procedures are effective. Such evaluation did not identify any change in the company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter to which this report relates that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting.

Part II – OTHER INFORMATION

Item 1 Legal Proceedings

Information with respect to litigation is set forth in note (l) of the Notes to Consolidated Financial Statements, and such information is incorporated herein by reference.

Item 1A. Risk Factors

See “Factors that may affect future results” in Management’s Discussion and Analysis of Financial Condition and Results of Operations for a discussion of risk factors.

Item 6. Exhibits

(a) Exhibits

See Exhibit Index

30

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	UNISYS CORPORATION
Date: July 29, 2011	By:	/s/ Janet Brutschea Haugen
		Janet Brutschea Haugen
		Senior Vice President and
		Chief Financial Officer
		(Principal Financial Officer)
	By:	/s/ Scott Hurley
		Scott Hurley
		Vice President and
		Corporate Controller
		(Chief Accounting Officer)

31

EXHIBIT INDEX

Exhibit Number	Description
3.1	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)
3.2	Certificate of Designations of the registrant’s 6.25% Mandatory Convertible Preferred Stock, Series A (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on March 1, 2011)
3.3	Certificate of Amendment to 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)
3.4	Bylaws of Unisys Corporation, as amended through April 29, 2010 (incorporated by reference to Exhibit 3.2 to the registrant’s Current Report on Form 8-K filed on April 30, 2010)
12	Statement of Computation of Ratio of Earnings to Fixed Charges
31.1	Certification of J. Edward Coleman required by Rule 13a-14(a) or Rule 15d-14(a)
31.2	Certification of Janet Brutschea Haugen required by Rule 13a-14(a) or Rule 15d-14(a)
32.1	Certification of J. Edward Coleman 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
32.2	Certification of Janet Brutschea Haugen 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.INS	XBRL Instance Document*
101.SCH	XBRL Taxonomy Extension Schema Document*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document*
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*

* Furnished, not filed.

32

EX-12

Exhibit 12

UNISYS CORPORATION

COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND

PREFERRED STOCK DIVIDENDS (UNAUDITED)

($ in millions)

	Six Months Ended June 30, 2011			Years Ended December 31
				2010			2009			2008			2007			2006
Fixed charges
Interest expense	$	39.2		$	101.8		$	95.2		$	85.1		$	76.3		$	77.2
Interest capitalized during the period		2.3			9.1			7.5			9.0			9.1			9.9
Amortization of debt issuance expenses		1.0			2.6			3.3			4.1			3.8			3.8
Portion of rental expense representative of interest		16.7			33.5			34.9			46.9			52.4			53.7
Total Fixed Charges		59.2			147.0			140.9			145.1			141.6			144.6
Preferred stock dividend requirements (a)		5.4			—			—			—			—			—
Total fixed charges and preferred stock dividends		64.6			147.0			140.9			145.1			141.6			144.6
Earnings
Income (loss) from continuing operations before income taxes		(22.4	)		222.9			218.2			(97.6	)		14.8			(228.9	)
Add (deduct) the following:
Share of loss of associated companies		—			—			—			—			—			4.5
Amortization of capitalized interest		3.8			9.1			11.6			16.1			14.5			13.7
Subtotal		(18.6	)		232.0			229.8			(81.5	)		29.3			(210.7	)
Fixed charges per above		59.2			147.0			140.9			145.1			141.6			144.6
Less interest capitalized during the period		(2.3	)		(9.1	)		(7.5	)		(9.0	)		(9.1	)		(9.9	)
Total earnings (loss)	$	38.3		$	369.9		$	363.2		$	54.6		$	161.8		$	(76.0	)
Ratio of earnings to fixed charges		*			2.52			2.58			*			1.14			*
Ratio of earnings to fixed charges and preferred stock dividends		**			2.52			2.58			**			1.14			**

(a) Amounts have not been grossed up for income tax since the preferred stock was issued by the U.S. parent corporation which has a full valuation allowance against its net deferred tax assets.

* Earnings for the six months ended June 30, 2011 and for the years ended December 31, 2008 and 2006 were inadequate to cover fixed charges by $20.9 million, $90.5 million and $220.6 million, respectively.

** Earnings for the six months ended June 30, 2011 and for the years ended December 31, 2008 and 2006 were inadequate to cover fixed charges and preferred stock dividends by $26.3 million, $90.5 million and $220.6 million, respectively.

33

EX-31.1

Exhibit 31.1

CERTIFICATION

I, J. Edward Coleman, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Unisys Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: July 29, 2011

	/s/ J. Edward Coleman
Name:	J. Edward Coleman
Title:	Chairman of the Board and
	Chief Executive Officer

34

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Janet Brutschea Haugen, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Unisys Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: July 29, 2011

	/s/ Janet Brutschea Haugen
Name:	Janet Brutschea Haugen
Title:	Senior Vice President and
	Chief Financial Officer

35

EX-32.1

Exhibit 32.1

CERTIFICATION OF PERIODIC REPORT

I, J. Edward Coleman, Chairman of the Board and Chief Executive Officer of Unisys Corporation (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1) the Quarterly Report on Form 10-Q of the Company for the quarterly period ended June 30, 2011 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: July 29, 2011

/s/ J. Edward Coleman

J. Edward Coleman

Chairman of the Board and

Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

36

EX-32.2

Exhibit 32.2

CERTIFICATION OF PERIODIC REPORT

I, Janet Brutschea Haugen, Senior Vice President and Chief Financial Officer of Unisys Corporation (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1) the Quarterly Report on Form 10-Q of the Company for the quarterly period ended June 30, 2011 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: July 29, 2011

/s/ Janet Brutschea Haugen

Janet Brutschea Haugen

Senior Vice President and

Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

37

XML



Document and Entity Information	6 Months Ended
	Jun. 30, 2011
Document And Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Entity Registrant Name	UNISYS CORP
Entity Central Index Key	0000746838
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	43,166,933

XML



Pension and Other Postretirement Benefits

6 Months Ended

Jun. 30, 2011

Pension and Other Postretirement Benefits

Pension and Other Postretirement Benefits

d. Net periodic pension expense (income) for the three and six months ended June 30, 2011 and 2010 is presented below (in millions of dollars):

	Three Months Ended June 30, 2011									Three Months Ended June 30, 2010
	Total			U.S. Plans			Int'l. Plans			Total			U.S. Plans			Int'l. Plans
Service cost	$	2.4		$	—		$	2.4		$	3.3		$	—		$	3.3
Interest cost		98.1			65.5			32.6			97.8			69.0			28.8
Expected return on plan assets		(118.3	)		(83.5	)		(34.8	)		(122.0	)		(90.9	)		(31.1	)
Amortization of prior service cost		—			.2			(.2	)		—			.1			(.1	)
Recognized net actuarial loss		26.5			19.8			6.7			19.7			13.3			6.4
Net periodic pension expense (income)	$	8.7		$	2.0		$	6.7		$	(1.2	)	$	(8.5	)	$	7.3

	Six Months Ended June 30, 2011									Six Months Ended June 30, 2010
	Total			U.S. Plans			Int'l. Plans			Total			U.S. Plans			Int'l. Plans
Service cost	$	6.1		$	—		$	6.1		$	7.2		$	—		$	7.2
Interest cost		196.0			132.0			64.0			197.7			138.2			59.5
Expected return on plan assets		(237.1	)		(168.7	)		(68.4	)		(246.8	)		(182.5	)		(64.3	)
Amortization of prior service cost		.2			.4			(.2	)		.2			.3			(.1	)
Recognized net actuarial loss		52.5			39.2			13.3			40.2			27.2			13.0
Net periodic pension expense (income)	$	17.7		$	2.9		$	14.8		$	(1.5	)	$	(16.8	)	$	15.3

The company currently expects to make cash contributions of approximately $115 million to its worldwide defined benefit pension plans (principally international plans) in 2011 compared with $81.5 million in 2010. For the six months ended June 30, 2011 and 2010, $42.8 million and $39.5 million, respectively, of cash contributions have been made. In accordance with regulations governing contributions to U.S. defined benefit pension plans, the company is not required to fund its U.S. qualified defined benefit pension plan in 2011.

Net periodic postretirement benefit expense for the three and six months ended June 30, 2011 and 2010 is presented below (in millions of dollars):

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Service cost	$	.1		$	.1		$	.2		$	.1
Interest cost		2.5			2.6			4.9			5.3
Expected return on assets		(.2	)		(.2	)		(.3	)		(.3	)
Amortization of prior service cost		.5			.3			.9			.7
Recognized net actuarial loss		1.0			1.0			2.0			1.9
Net periodic postretirement benefit expense	$	3.9		$	3.8		$	7.7		$	7.7

The company expects to make cash contributions of approximately $22 million to its postretirement benefit plan in 2011 compared with $23.9 million in 2010. For the six months ended June 30, 2011 and 2010, $8.8 million and $10.4 million, respectively, of cash contributions have been made.

XML



Fair Value Measurements

6 Months Ended

Jun. 30, 2011

Fair Value Measurements

Fair Value Measurements

e. Due to its foreign operations, the company is exposed to the effects of foreign currency exchange rate fluctuations on the U.S. dollar, principally related to intercompany account balances. The company uses derivative financial instruments to reduce its exposure to market risks from changes in foreign currency exchange rates on such balances. The company enters into foreign exchange forward contracts, generally having maturities of one month, which have not been designated as hedging instruments. At June 30, 2011 and 2010, the notional amount of these contracts was $45.9 million and $40.1 million, respectively. At June 30, 2011 and 2010, the fair value of such contracts was a net gain of $.1 million and zero, respectively, of which $.5 million and $6.5 million, respectively, has been recognized in "Prepaid expenses and other current assets" and $.4 and $6.5 million, respectively, has been recognized in "Other accrued liabilities" in the company's consolidated balance sheet. For the six months ended June 30, 2011 and 2010, changes in the fair value of these instruments were a gain of $2.0 million and a loss of $.1 million, respectively, which has been recognized in earnings in "Other income (expense), net" in the company's consolidated statement of income. The fair value of these forward contracts is based on quoted prices for similar but not identical financial instruments; as such, the inputs are considered Level 2 inputs.

Financial assets with carrying values approximating fair value include cash and cash equivalents and accounts receivable. Financial liabilities with carrying values approximating fair value include accounts payable and other accrued liabilities. The carrying amounts of these financial assets and liabilities approximate fair value due to their short maturities. At June 30, 2011 and December 31, 2010, the carrying amount of long-term debt was less than fair value, which is based on market prices (Level 2 inputs), of such debt by approximately $60 million and $140 million, respectively.

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Stock Options

6 Months Ended

Jun. 30, 2011

Stock Options

Stock Options

f. Under stockholder approved stock-based plans, stock options, stock appreciation rights, restricted stock and restricted stock units may be granted to officers, directors and other key employees. At June 30, 2011, 4.7 million shares of unissued common stock of the company were available for granting under these plans.

The fair value of stock option awards was estimated using the Black-Scholes option pricing model with the following assumptions and weighted-average fair values:

	Six Months Ended June 30,
	2011			2010
Weighted-average fair value of grant	$	20.22		$	17.97
Risk-free interest rate		1.71	%		1.74	%
Expected volatility		71.31	%		72.20	%
Expected life of options in years		3.62			3.63
Expected dividend yield		—			—

Restricted stock unit awards may contain time-based units, performance-based units or a combination of both. Each performance-based unit will vest into zero to 1.5 shares depending on the degree to which the performance goals are met. Compensation expense resulting from these awards is recognized as expense ratably for each installment from the date of grant until the date the restrictions lapse and is based on the fair market value at the date of grant and the probability of achievement of the specific performance-related goals.

The company records all share-based expense in selling, general and administrative expense.

During the six months ended June 30, 2011 and 2010, the company recorded $9.4 million and $5.8 million of share-based compensation expense, respectively, which is comprised of $3.6 million and $2.1 million of restricted stock unit expense and $5.8 million and $3.7 million of stock option expense, respectively.

A summary of stock option activity for the six months ended June 30, 2011 follows (shares in thousands):

Options	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)		Aggregate Intrinsic Value ($ in millions)
Outstanding at December 31, 2010		3,125		$	85.78
Granted		611			38.60
Exercised		(154	)		9.00
Forfeited and expired		(722	)		168.05
Outstanding at June 30, 2011		2,860			59.12		2.73	$	13.0
Expected to vest at June 30, 2011		1,181			31.03		3.90		4.3
Exercisable at June 30, 2011		1,636			80.09		1.85		8.6

The aggregate intrinsic value represents the total pretax value of the difference between the company's closing stock price on the last trading day of the period and the exercise price of the options, multiplied by the number of in-the-money stock options that would have been received by the option holders had all option holders exercised their options on June 30, 2011. The intrinsic value of the company's stock options changes based on the closing price of the company's stock. The total intrinsic value of options exercised for the six months ended June 30, 2011 and 2010 was $4.3 million and $5.4 million, respectively. As of June 30, 2011, $12.4 million of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 2.1 years.

A summary of restricted stock unit activity for the six months ended June 30, 2011 follows (shares in thousands):

	Restricted Stock Units			Weighted- Average Grant-Date Fair Value
Outstanding at December 31, 2010		401		$	29.10
Granted		288			38.38
Vested		(187	)		27.58
Forfeited and expired		(97	)		40.56
Outstanding at June 30, 2011		405			32.34

The fair value of restricted stock units is determined based on the trading price of the company's common shares on the date of grant. The aggregate weighted-average grant-date fair value of restricted stock units granted during the six months ended June 30, 2011 and 2010 was $11.0 million and $7.6 million, respectively. As of June 30, 2011, there was $10.1 million of total unrecognized compensation cost related to outstanding restricted stock units granted under the company's plans. That cost is expected to be recognized over a weighted-average period of 2.2 years. The aggregate weighted-average grant-date fair value of restricted share units vested during the six months ended June 30, 2011 and 2010 was $5.2 million and $3.7 million, respectively.

Common stock issued upon exercise of stock options or upon lapse of restrictions on restricted stock units is newly issued shares. Cash received from the exercise of stock options for the six months ended June 30, 2011 and 2010 was $1.4 million and $1.2 million, respectively. The company is currently not recognizing any tax benefits from the exercise of stock options or upon issuance of stock upon lapse of restrictions on restricted stock units in light of its tax position. Tax benefits resulting from tax deductions in excess of the compensation costs recognized are classified as financing cash flows.

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Segment Information

6 Months Ended

Jun. 30, 2011

Segment Information

Segment Information

g. The company has two business segments: Services and Technology. Revenue classifications by segment are as follows: Services – systems integration and consulting, outsourcing, infrastructure services and core maintenance; Technology – enterprise-class servers and other technology.

The accounting policies of each business segment are the same as those followed by the company as a whole. Intersegment sales and transfers are priced as if the sales or transfers were to third parties. Accordingly, the Technology segment recognizes intersegment revenue and manufacturing profit on hardware and software shipments to customers under Services contracts. The Services segment, in turn, recognizes customer revenue and marketing profits on such shipments of company hardware and software to customers. The Services segment also includes the sale of hardware and software products sourced from third parties that are sold to customers through the company's Services channels. In the company's consolidated statements of income, the manufacturing costs of products sourced from the Technology segment and sold to Services customers are reported in cost of revenue for Services.

Also included in the Technology segment's sales and operating profit are sales of hardware and software sold to the Services segment for internal use in Services engagements. The amount of such profit included in operating income of the Technology segment for the three months ended June 30, 2011 and 2010 was $3.9 million and $.1 million, respectively. The amount for the six months ended June 30, 2011 and 2010 was $4.7 million and $.5 million, respectively. The profit on these transactions is eliminated in Corporate.

The company evaluates business segment performance on operating income exclusive of restructuring charges and unusual and nonrecurring items, which are included in Corporate. Effective January 1, 2011, the company changed the measurement of segment performance that it evaluates to exclude pension income or expense. Prior periods have been reclassified to conform to the 2011 presentation. All other corporate and centrally incurred costs are allocated to the business segments based principally on revenue, employees, square footage or usage.

A summary of the company's operations by business segment for the three and six month periods ended June 30, 2011 and 2010 is presented below (in millions of dollars):

	Total		Corporate			Services		Technology
Three Months Ended June 30, 2011
Customer revenue	$	937.2				$	842.7	$	94.5
Intersegment			$	(22.2	)		.9		21.3
Total revenue	$	937.2	$	(22.2	)	$	843.6	$	115.8
Operating income	$	48.1	$	(15.0	)	$	60.3	$	2.8
Three Months Ended June 30, 2010
Customer revenue	$	1,037.0				$	892.0	$	145.0
Intersegment			$	(36.2	)		1.5		34.7
Total revenue	$	1,037.0	$	(36.2	)	$	893.5	$	179.7
Operating income	$	106.5	$	3.8		$	54.5	$	48.2
Six Months Ended June 30, 2011
Customer revenue	$	1,848.4				$	1,643.0	$	205.4
Intersegment			$	(43.8	)		1.8		42.0
Total revenue	$	1,848.4	$	(43.8	)	$	1,644.8	$	247.4
Operating income	$	90.0	$	(19.5	)	$	92.3	$	17.2
Six Months Ended June 30, 2010
Customer revenue	$	2,014.4				$	1,742.5	$	271.9
Intersegment			$	(59.3	)		2.4		56.9
Total revenue	$	2,014.4	$	(59.3	)	$	1,744.9	$	328.8
Operating income	$	165.0	$	2.4		$	94.5	$	68.1

Presented below is a reconciliation of total business segment operating income to consolidated (loss) income from continuing operations before income taxes (in millions of dollars):

	Three Months Ended June 30						Six Months Ended June 30
	2011			2010			2011			2010
Total segment operating income	$	63.1		$	102.7		$	109.5		$	162.6
Interest expense		(13.3	)		(25.3	)		(39.2	)		(51.8	)
Other income (expense), net		(49.4	)		(7.5	)		(73.2	)		(44.4	)
Corporate and eliminations		(15.0	)		3.8			(19.5	)		2.4
Total (loss) income from continuing operations before income taxes	$	(14.6	)	$	73.7		$	(22.4	)	$	68.8

Customer revenue by classes of similar products or services, by segment, is presented below (in millions of dollars):

	Three Months Ended June 30				Six Months Ended June 30
	2011		2010		2011		2010
Services
Systems integration and consulting	$	286.0	$	335.3	$	570.9	$	630.5
Outsourcing		369.6		383.0		721.5		751.8
Infrastructure services		129.9		115.1		240.1		240.7
Core maintenance		57.2		58.6		110.5		119.5
		842.7		892.0		1,643.0		1,742.5
Technology
Enterprise-class servers		79.6		131.6		179.3		234.0
Other technology		14.9		13.4		26.1		37.9
		94.5		145.0		205.4		271.9
Total	$	937.2	$	1,037.0	$	1,848.4	$	2,014.4

Geographic information about the company's revenue, which is principally based on location of the selling organization, is presented below (in millions of dollars):

	Three Months Ended June 30				Six Months Ended June 30
	2011		2010		2011		2010
United States	$	363.2	$	450.2	$	724.2	$	880.8
United Kingdom		99.1		113.7		198.9		211.6
Other international		474.9		473.1		925.3		922.0
Total	$	937.2	$	1,037.0	$	1,848.4	$	2,014.4

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Comprehensive Income

6 Months Ended

Jun. 30, 2011

Comprehensive Income

Comprehensive Income

h. Comprehensive income for the three and six months ended June 30, 2011 and 2010 includes the following components (in millions of dollars):

	Three Months Ended June 30						Six Months Ended June 30
	2011			2010			2011			2010
Consolidated net (loss) income from continuing operations	$	(5.4	)	$	60.4		$	(41.4	)	$	44.3
Income from discontinued operations, net of tax		—			61.0			—			66.7
Total		(5.4	)		121.4			(41.4	)		111.0
Other comprehensive income (loss)
Foreign currency translation adjustments		11.6			(17.0	)		25.4			(26.0	)
Postretirement adjustments		22.0			36.1			27.9			100.5
Total other comprehensive income		33.6			19.1			53.3			74.5
Consolidated comprehensive income		28.2			140.5			11.9			185.5
Comprehensive income attributable to noncontrolling interests		2.8			1.7			8.1			3.9
Comprehensive income attributable to Unisys Corporation	$	25.4		$	138.8		$	3.8		$	181.6

Accumulated other comprehensive loss as of December 31, 2010 and June 30, 2011 is as follows (in millions of dollars):

	Total			Translation Adjustments			Postretirement Plans
Balance at December 31, 2010	$	(2,928.3	)	$	(604.2	)	$	(2,324.1	)
Change during period		50.8			24.2			26.6
Balance at June 30, 2011	$	(2,877.5	)	$	(580.0	)	$	(2,297.5	)

Noncontrolling interests as of December 31, 2010 and June 30, 2011 is as follows (in millions of dollars):

	Non-controlling Interests
Balance at December 31, 2010	$	3.5
Net income		5.6
Translation adjustments		1.2
Dividends paid to non-controlling interests		(.4	)
Postretirement plans		1.3
Balance at June 30, 2011	$	11.2

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Supplemental Cash Flow Information

6 Months Ended

Jun. 30, 2011

Supplemental Cash Flow Information

Supplemental Cash Flow Information

i. Cash paid during the six months ended June 30, 2011 and 2010 for income taxes was $46.4 million and $28.3 million, respectively.

Cash paid during the six months ended June 30, 2011 and 2010 for interest was $54.9 million and $57.4 million, respectively.

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Accounting Standards

6 Months Ended

Jun. 30, 2011

Accounting Standards

Accounting Standards

j. Effective January 1, 2011, the company adopted two accounting standards issued by the Financial Accounting Standards Board that amend revenue recognition guidance. The first standard supersedes certain prior accounting guidance and requires an entity to allocate arrangement consideration at the inception of an arrangement to all of its deliverables based on their relative standalone selling prices (i.e., the relative-selling-price method). The standard eliminates the use of the residual method of allocation and requires the relative-selling-price method in all circumstances in which an entity recognizes revenue for an arrangement with multiple deliverables subject to this standard. The second standard amends prior software revenue recognition accounting guidance by excluding from the scope of such prior guidance tangible products that contain both software elements and non-software elements that function together to deliver the tangible product's essential functionality. The company has adopted the new standards prospectively for revenue arrangements entered into or materially modified on or after January 1, 2011. In certain of the company's arrangements, revenue was previously deferred for certain deliverables included in multiple element arrangements where the arrangements also included undelivered services for which the company was unable to demonstrate fair value pursuant to previous standards. The new standards require deliverables for which revenue was previously deferred to be separated and recognized as delivered, rather than combined with undelivered items and recognized over the longest service delivery period.

If the new standards were applied to transactions entered into or materially modified in the year ended December 31, 2010, it would not have resulted in a material change to the company's reported revenue for 2010. The company is not able to reasonably estimate the effect of adopting these standards on future periods as the impact will vary based on the nature and volume of new or materially modified deals in any given period.

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Revenue Recognition

6 Months Ended

Jun. 30, 2011

Revenue Recognition

Revenue Recognition

k. Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the fee is fixed or determinable, and collectability is probable.

Revenue from hardware sales with standard payment terms is recognized upon the passage of title and the transfer of risk of loss. Outside the United States, the company recognizes revenue even if it retains a form of title to products delivered to customers, provided the sole purpose is to enable the company to recover the products in the event of customer payment default and the arrangement does not prohibit the customer's use of the product in the ordinary course of business.

Revenue from software licenses with standard payment terms is recognized at the inception of the initial license term and upon execution of an extension to the license term.

The company also enters into multiple-element arrangements, which may include any combination of hardware, software or services. For example, a client may purchase an enterprise server that includes operating system software. In addition, the arrangement may include post-contract support for the software and a contract for post-warranty maintenance for service of the hardware. These arrangements consist of multiple deliverables, with hardware and software delivered in one reporting period and the software support and hardware maintenance services delivered across multiple reporting periods. In another example, the company may provide desktop managed services to a client on a long term multiple year basis and periodically sell hardware and software products to the client. The services are provided on a continuous basis across multiple reporting periods and the hardware and software products are delivered in one reporting period. To the extent that a deliverable in a multiple-deliverable arrangement is subject to specific guidance, that deliverable is accounted for in accordance with such specific guidance. Examples of such arrangements may include leased hardware which is subject to specific leasing guidance or software which is subject to specific software revenue recognition guidance.

In these transactions, the company allocates the total revenue to be earned under the arrangement among the various elements based on a selling price hierarchy. The selling price for a deliverable is based on its vendor specific objective evidence (VSOE) if available, third party evidence (TPE) if VSOE is not available, or the best estimated selling price (ESP) if neither VSOE nor TPE is available. VSOE of selling price is based upon the normal pricing and discounting practices for those products and services when sold separately. TPE of selling price is based on evaluating largely similar and interchangeable competitor products or services in standalone sales to similarly situated customers. ESP is established considering factors such as margin objectives, discounts off of list prices, market conditions, competition and other factors. ESP represents the price at which the company would transact for the deliverable if it were sold by the company regularly on a standalone basis.

For multiple-element arrangements that involve the licensing, selling or leasing of software, the allocation of revenue, for software and software-related elements, is based on VSOE. There may be cases in which there is VSOE of selling price of the undelivered elements but no such evidence for the delivered elements. In these cases, the residual method is used to allocate the arrangement consideration. Under the residual method, the amount of consideration allocated to the delivered elements equals the total arrangement consideration less the aggregate VSOE of selling price of the undelivered elements.

For multiple-element arrangements for products or services that (a) do not include the licensing, selling or leasing of software, or (b) contain software that is incidental to the products or services as a whole or (c) contain software components that are sold, licensed or leased with tangible products when the software components and non-software components (i.e., the hardware and software) of the tangible product function together to deliver the tangible product's essential functionality (e.g., sales of the company's enterprise-class servers including hardware and software), the allocation of revenue is based on the relative selling prices of each of the deliverables in the arrangement based on the selling price hierarchy, discussed above.

The company recognizes revenue on delivered elements only if: (a) any undelivered products or services are not essential to the functionality of the delivered products or services, (b) the company has an enforceable claim to receive the amount due in the event it does not deliver the undelivered products or services, (c) there is evidence of the selling price for each undelivered products or services, and (d) the revenue recognition criteria otherwise have been met for the delivered elements. Otherwise, revenue on delivered elements is recognized as the undelivered elements are delivered.

The company evaluates each deliverable in an arrangement to determine whether they represent separate units of accounting. A delivered element constitutes a separate unit of accounting when it has standalone value and there is no customer-negotiated refund or return rights for the delivered elements. If these criteria are not met, the deliverable is combined with the undelivered elements and the allocation of the arrangement consideration and revenue recognition are determined for the combined unit as a single unit.

Revenue from hardware sales and software licenses with extended payment terms is recognized as payments from customers become due (assuming that all other conditions for revenue recognition have been satisfied).

Revenue for operating leases is recognized on a monthly basis over the term of the lease and for sales-type leases at the inception of the lease term.

Revenue from equipment and software maintenance and post-contract support is recognized on a straight-line basis as earned over the terms of the respective contracts. Cost related to such contracts is recognized as incurred.

Revenue and profit under systems integration contracts are recognized either on the percentage-of-completion method of accounting using the cost-to-cost method, or when services have been performed, depending on the nature of the project. For contracts accounted for on the percentage-of-completion basis, revenue and profit recognized in any given accounting period are based on estimates of total projected contract costs. The estimates are continually reevaluated and revised, when necessary, throughout the life of a contract. Any adjustments to revenue and profit resulting from changes in estimates are accounted for in the period of the change in estimate. When estimates indicate that a loss will be incurred on a contract upon completion, a provision for the expected loss is recorded in the period in which the loss becomes evident.

Revenue from time and materials service contracts and outsourcing contracts is recognized as the services are provided using either an objective measure of output or on a straight-line basis over the term of the contract.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2011

Commitments and Contingencies

Commitments and Contingencies

l. There are various lawsuits, claims, investigations and proceedings that have been brought or asserted against the company, which arise in the ordinary course of business, including actions with respect to commercial and government contracts, labor and employment, employee benefits, environmental matters, intellectual property, and non-income tax and employment compensation in Brazil. The company records a provision for these matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Any provisions are reviewed at least quarterly and are adjusted to reflect the impact and status of settlements, rulings, advice of counsel and other information and events pertinent to a particular matter.

The company believes that it has valid defenses with respect to legal matters pending against it. Based on its experience, the company also believes that the damage amounts claimed in the lawsuits disclosed below are not a meaningful indicator of the company's potential liability. Litigation is inherently unpredictable, however, and it is possible that the company's results of operations or cash flow could be materially affected in any particular period by the resolution of one or more of the legal matters pending against it.

The company had a competitively awarded contract with the Transportation Security Administration (TSA) that provided for the establishment of secure information technology environments in airports. The Civil Division of the Department of Justice, working with the Inspector General's Office of the Department of Homeland Security, is reviewing issues relating to labor categorization and overtime on the TSA contract. The Civil Division is also reviewing issues relating to cyber intrusion protection under the TSA and follow-on contracts. The company is working cooperatively with TSA and the Civil Division. The company has commenced preliminary settlement discussions with these government agencies regarding labor categorization and overtime. The company cannot now predict the duration or outcome of these discussions.

The company has contracts with the General Services Administration (GSA), known as Multiple Award Schedule Contracts, under which various U.S. governmental agencies can purchase products and services from the company. Auditors from the GSA's Office of Inspector General are reviewing the company's compliance with the disclosure and pricing provisions under one of these contracts, and whether the company has potentially overcharged the government under the contract. Separately, the company has made a voluntary disclosure about this matter to the responsible GSA contracting officer. The company has been providing pricing and other information to the GSA auditors and is working cooperatively with them. The audit is in its preliminary stages, and the company cannot predict the outcome at this time.

In April 2007, the Ministry of Justice of Belgium sued Unisys Belgium SA-NV, a Unisys subsidiary (Unisys Belgium), in the Court of First Instance of Brussels. The Belgian government had engaged the company to design and develop software for a computerized system to be used to manage the Belgian court system. The Belgian State terminated the contract and in its lawsuit has alleged that the termination was justified because Unisys Belgium failed to deliver satisfactory software in a timely manner. It claims damages of approximately 28 million Euros. Unisys Belgium has filed its defense and counterclaim in the amount of approximately 18.5 million Euros. The company believes it has valid defenses to the claims and contends that the Belgian State's termination of the contract was unjustified.

In December 2007, Lufthansa AG sued Unisys Deutschland GmbH, a Unisys subsidiary (Unisys Germany), in the District Court of Frankfurt, Germany, for allegedly failing to perform properly its obligations during the initial phase of a 2004 software design and development contract relating to a Lufthansa customer loyalty program. Under the contract, either party was free to withdraw from the project at the conclusion of the initial design phase. Rather than withdraw, Lufthansa instead terminated the contract and failed to pay the balance owed to Unisys Germany for the initial phase. Lufthansa's lawsuit alleges that Unisys Germany breached the contract by failing to deliver a proper design for the new system and seeks approximately 21.4 million Euros in damages. The company believes it has valid defenses and has filed its defense and a counterclaim in the amount of approximately 1.5 million Euros. The litigation is proceeding.

Notwithstanding that the ultimate results of the lawsuits, claims, investigations and proceedings that have been brought or asserted against the company are not currently determinable, the company believes that at June 30, 2011, it has adequate provisions for any such matters.

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Income Taxes

6 Months Ended

Jun. 30, 2011

Income Taxes

Income Taxes

m. Accounting rules governing income taxes require that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. These rules also require that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or the entire deferred tax asset will not be realized.

The company evaluates the realizability of its deferred tax assets by assessing its valuation allowance and by adjusting the amount of such allowance, if necessary. The factors used to assess the likelihood of realization are the company's historical profitability, forecast of future taxable income and available tax-planning strategies that could be implemented to realize the net deferred tax assets. The company uses tax-planning strategies to realize or renew net deferred tax assets to avoid the potential loss of future tax benefits.

A full valuation allowance is currently maintained for all U.S. and certain foreign deferred tax assets in excess of deferred tax liabilities. The company will record a tax provision or benefit for those international subsidiaries that do not have a full valuation allowance against their net deferred tax assets. Any profit or loss recorded for the company's U.S. continuing operations will have no provision or benefit associated with it due to full valuation allowance, except with respect to benefits related to income from discontinued operations. As a result, the company's provision or benefit for taxes will vary significantly depending on the geographic distribution of income. Included in the current quarter was a benefit of $30.3 million related to the settlement of two European tax matters.

Internal Revenue Code Sections 382 and 383 provide annual limitations with respect to the ability of a corporation to utilize its net operating loss (as well as certain built-in losses) and tax credit carryforwards, respectively (Tax Attributes), against future U.S. taxable income, if the corporation experiences an "ownership change." In general terms, an ownership change may result from transactions increasing the ownership of certain stockholders in the stock of a corporation by more than 50 percentage points over a three-year period. The company regularly monitors ownership changes (as calculated for purposes of Section 382). Based on currently available information, the company believes that an ownership change may have occurred during the first quarter of 2011, for purposes of the rules described above. However, the final determination of whether an ownership change has occurred is currently subject to a number of discretionary tax rules and factual uncertainties. Moreover, any future transaction or transactions and the timing of such transaction or transactions could trigger an additional ownership change under Section 382.

In the event of an ownership change, utilization of the company's Tax Attributes will be subject to an estimated overall annual limitation determined in part by multiplying the total aggregate market value of the company's common stock immediately preceding the ownership change by the applicable long-term tax-exempt rate, possibly subject to increase based on the built-in gain, if any, in the company's assets at the time of the ownership change. Any unused annual limitation may be carried over to later years. Future U.S. taxable income may not be fully offset by existing Tax Attributes, if such income exceeds the company's annual limitation. However, based on presently available information and the existence of tax planning strategies, currently the company does not expect to incur a cash tax liability in the near term. The company maintains a full valuation allowance against the realization of all U.S. deferred tax assets as well as certain foreign deferred tax assets in excess of deferred tax liabilities.

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Consolidated Balance Sheets (USD $) In Millions	Jun. 30, 2011	Dec. 31, 2010
Assets
Cash and cash equivalents	$ 625.0	$ 828.3
Accounts and notes receivable, net	667.1	789.7
Inventories:
Parts and finished equipment	39.4	44.8
Work in process and materials	35.7	44.1
Deferred income taxes	36.4	40.7
Prepaid expenses and other current assets	128.3	127.8
Total	1,531.9	1,875.4
Properties	1,377.3	1,339.0
Less-Accumulated depreciation and amortization	1,164.5	1,119.3
Properties, net	212.8	219.7
Outsourcing assets, net	157.3	162.3
Marketable software, net	132.3	143.8
Prepaid postretirement assets	36.6	31.2
Deferred income taxes	178.5	179.6
Goodwill	201.0	197.9
Other long-term assets	192.5	211.0
Total	2,642.9	3,020.9
Liabilities and stockholders' deficit
Current maturities of long-term debt	0.9	0.8
Accounts payable	236.5	260.7
Deferred revenue	477.9	556.3
Other accrued liabilities	441.9	518.9
Total	1,157.2	1,336.7
Long-term debt	446.5	823.2
Long-term postretirement liabilities	1,445.3	1,509.2
Long-term deferred revenue	146.7	149.4
Other long-term liabilities	109.0	136.2
Commitments and contingencies
Stockholders' deficit
6.25% mandatory convertible preferred stock, net of issuance costs, shares issued: 2011; 2.6, 2010; 0	249.7
Common stock, shares issued: 2011; 43.5, 2010; 42.9	0.4	0.4
Accumulated deficit	(2,217.6)	(2,170.6)
Treasury stock, shares at cost: 2011; .3, 2010; .3	(48.0)	(46.0)
Paid-in capital	4,220.0	4,207.2
Accumulated other comprehensive loss	(2,877.5)	(2,928.3)
Total Unisys stockholders' deficit	(673.0)	(937.3)
Noncontrolling interests	11.2	3.5
Total stockholders' deficit	(661.8)	(933.8)
Total	$ 2,642.9	$ 3,020.9

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Stockholders' Equity

6 Months Ended

Jun. 30, 2011

Stockholders' Equity

Stockholders' Equity

n. On February 28, 2011, the company sold 2,587,500 shares of 6.25% mandatory convertible preferred stock for net proceeds of $249.7 million. Each share of mandatory convertible preferred stock will automatically convert on March 1, 2014 into between 2.1899 and 2.6717 shares of the company's common stock, subject to adjustment, depending on the volume weighted average price per share of the company's common stock over the 20 consecutive trading days ending on the third trading day immediately preceding the mandatory conversion date. At any time prior to March 1, 2014, holders may elect to convert all or a portion of their shares of the mandatory convertible preferred stock at the minimum conversion rate of 2.1899 shares of the company's common stock, subject to adjustment.

The company pays dividends on each share of the mandatory convertible preferred stock on a cumulative basis at an annual rate of 6.25% on the initial liquidation preference of $100 per share (equivalent to $6.25 per year per share). Dividends accrue and accumulate from the date of issuance and, to the extent the company has lawfully available funds to pay dividends and the company's Board of Directors or an authorized committee of the Board of Directors declares a dividend payable, the company will pay dividends on March 1, June 1, September 1 and December 1 of each year prior to March 1, 2014 in cash and on March 1, 2014 or any earlier conversion date in cash, shares of the company's common stock, or a combination thereof, at the company's election. The first dividend payment was on June 1, 2011. The annualized dividend on the mandatory convertible preferred stock will be approximately $16.2 million until conversion.

On March 30, 2011, the net proceeds from the sale of the mandatory convertible preferred stock were used to redeem an aggregate principal amount of $124.7 million of the company's senior secured notes due 2014 and an aggregate principal amount of $86.3 million of the company's senior secured notes due 2015 under the provisions of the indentures relating to the notes that allow the company to redeem, at its option, up to 35% of the original principal amount of each series of notes from the net cash proceeds of one or more equity offerings. As a result of these redemptions, the company recognized a charge of $31.8 million in "Other income (expense), net" in the three months ended March 31, 2011, which was comprised of $28.2 million of premium paid and $3.6 million for the write off of unamortized discounts, issuance costs and gains related to the portion of the notes redeemed.

On April 11, 2011, the company purchased $44.1 million of its senior secured notes due 2014 and $134.8 million of its senior secured notes due 2015 that had been tendered into a cash tender offer conducted by the company. As a result of this purchase of notes, the company recognized a charge of $45.7 million in "Other income (expense), net" in the three months ended June 30, 2011, which is comprised of $42.2 million of premium and expenses paid and $3.5 million for the write off of unamortized discounts, issuance costs and gains related to the portion of the notes purchased.

On June 23, 2011, the company entered into a new, five-year, secured revolving credit facility, to replace the company's $150 million U.S. trade accounts receivable securitization facility that terminated on that date. The new credit agreement provides for loans and letters of credit up to an aggregate amount of $150 million (with a limit on letters of credit of $100 million). The prior accounts receivable securitization facility had not provided for letters of credit. Borrowing limits under the new credit agreement are based upon the amount of eligible U.S. accounts receivable. Borrowings under the facility will bear interest based on short-term rates. The credit agreement contains customary representations and warranties, including that there has been no material adverse change in the company's business, properties, operations or financial condition. It also contains financial covenants requiring the company to maintain a minimum fixed charge coverage ratio and, if the company's consolidated cash plus availability under the credit facility falls below $130 million, a maximum secured leverage ratio. The credit agreement allows the company to pay dividends on its preferred stock unless the company is in default and to, among other things, repurchase its equity, prepay other debt, incur other debt or liens, dispose of assets and make acquisitions, loans and investments, provided the company complies with certain requirements and limitations set forth in the agreement. Events of default include non-payment, failure to perform covenants, materially incorrect representations and warranties, change of control and default under other debt aggregating at least $50 million. The credit facility is guaranteed by Unisys Holding Corporation, Unisys NPL, Inc. and any future material domestic subsidiaries. The facility is secured on a first priority basis by certain assets of Unisys Corporation and the subsidiary guarantors consisting primarily of the U.S. trade accounts receivable of Unisys Corporation. It is secured on a junior basis (to the senior secured notes due 2014 and 2015) by the other assets of Unisys Corporation and the subsidiary guarantors, other than certain excluded assets. The company may elect to prepay or terminate the credit facility without penalty.

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Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2011

Discontinued Operations

Results of Discontinued Operations

	Three Months Ended June 30, 2010							Six Months Ended June 30, 2010
	Total		HIM		UISL			Total		HIM		UISL
Revenue	$	29.7	$	10.4	$	19.3		$	82.2	$	42.0	$	40.2
Income
Operations	$	1.1	$	1.0	$	.1		$	10.4	$	9.8	$	.6
Gain on sale		64.8		64.8		—			64.8		64.8		—
		65.9		65.8		.1			75.2		74.6		.6
Income tax provision		4.9		5.0		(.1	)		8.5		8.5		—
Income from discontinued operations, net of tax	$	61.0	$	60.8	$	.2		$	66.7	$	66.1	$	.6

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2011

Earnings Per Share

Computation of Earning Per Share Attributable to Unisys Corporation

	Three Months Ended June 30,					Six Months Ended June 30,
	2011			2010		2011			2010
Basic Earnings (Loss) Per Common Share
Net (loss) income from continuing operations attributable to Unisys Corporation common shareholders	$	(11.6	)	$	59.2	$	(52.4	)	$	41.9
Income from discontinued operations, net of tax		—			61.0		—			66.7
Net (loss) income attributable to Unisys Corporation common shareholders	$	(11.6	)	$	120.2	$	(52.4	)	$	108.6
Weighted average shares		43,106			42,590		42,971			42,494
Continuing operations	$	(.27	)	$	1.39	$	(1.22	)	$	.99
Discontinued operations		—			1.43		—			1.57
Total	$	(.27	)	$	2.82	$	(1.22	)	$	2.56
Diluted Earnings (Loss) Per Common Share
Net (loss) income from continuing operations attributable to Unisys Corporation common shareholders	$	(11.6	)	$	59.2	$	(52.4	)	$	41.9
Add preferred stock dividends		—			—		—			—
Net (loss) income from continuing operations attributable to Unisys Corporation for diluted earnings per share		(11.6	)		59.2		(52.4	)		41.9
Income from discontinued operations, net of tax		—			61.0		—			66.7
Net (loss) income attributable to Unisys Corporation for diluted earnings per share	$	(11.6	)	$	120.2	$	(52.4	)	$	108.6
Weighted average shares		43,106			42,590		42,971			42,494
Plus incremental shares from assumed conversions
Employee stock plans		—			739		—			862
Preferred stock		—			—		—			—
Adjusted weighted average shares		43,106			43,329		42,971			43,356
Continuing operations	$	(.27	)	$	1.36	$	(1.22	)	$	.96
Discontinued operations		—			1.41		—			1.54
Total	$	(.27	)	$	2.77	$	(1.22	)	$	2.50

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Pension and Other Postretirement Benefits (Tables)

6 Months Ended

Jun. 30, 2011

Pension Plans [Member]

Schedule of Net Periodic Benefit Expense

	Three Months Ended June 30, 2011									Three Months Ended June 30, 2010
	Total			U.S. Plans			Int'l. Plans			Total			U.S. Plans			Int'l. Plans
Service cost	$	2.4		$	—		$	2.4		$	3.3		$	—		$	3.3
Interest cost		98.1			65.5			32.6			97.8			69.0			28.8
Expected return on plan assets		(118.3	)		(83.5	)		(34.8	)		(122.0	)		(90.9	)		(31.1	)
Amortization of prior service cost		—			.2			(.2	)		—			.1			(.1	)
Recognized net actuarial loss		26.5			19.8			6.7			19.7			13.3			6.4
Net periodic pension expense (income)	$	8.7		$	2.0		$	6.7		$	(1.2	)	$	(8.5	)	$	7.3

Other Postretirement Benefit Plans [Member]

Schedule of Net Periodic Benefit Expense

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Service cost	$	.1		$	.1		$	.2		$	.1
Interest cost		2.5			2.6			4.9			5.3
Expected return on assets		(.2	)		(.2	)		(.3	)		(.3	)
Amortization of prior service cost		.5			.3			.9			.7
Recognized net actuarial loss		1.0			1.0			2.0			1.9
Net periodic postretirement benefit expense	$	3.9		$	3.8		$	7.7		$	7.7

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Stock Options (Tables)

6 Months Ended

Jun. 30, 2011

Stock Options

Fair Value Assumptions on Stock Option

	Six Months Ended June 30,
	2011			2010
Weighted-average fair value of grant	$	20.22		$	17.97
Risk-free interest rate		1.71	%		1.74	%
Expected volatility		71.31	%		72.20	%
Expected life of options in years		3.62			3.63
Expected dividend yield		—			—

Summary of Stock Option Activity

Options	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)		Aggregate Intrinsic Value ($ in millions)
Outstanding at December 31, 2010		3,125		$	85.78
Granted		611			38.60
Exercised		(154	)		9.00
Forfeited and expired		(722	)		168.05
Outstanding at June 30, 2011		2,860			59.12		2.73	$	13.0
Expected to vest at June 30, 2011		1,181			31.03		3.90		4.3
Exercisable at June 30, 2011		1,636			80.09		1.85		8.6

Summary of Restricted Stock Unit Activity

	Restricted Stock Units			Weighted- Average Grant-Date Fair Value
Outstanding at December 31, 2010		401		$	29.10
Granted		288			38.38
Vested		(187	)		27.58
Forfeited and expired		(97	)		40.56
Outstanding at June 30, 2011		405			32.34

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2011

Segment Information

Summary of the Operations by Segment

	Total		Corporate			Services		Technology
Three Months Ended June 30, 2011
Customer revenue	$	937.2				$	842.7	$	94.5
Intersegment			$	(22.2	)		.9		21.3
Total revenue	$	937.2	$	(22.2	)	$	843.6	$	115.8
Operating income	$	48.1	$	(15.0	)	$	60.3	$	2.8
Three Months Ended June 30, 2010
Customer revenue	$	1,037.0				$	892.0	$	145.0
Intersegment			$	(36.2	)		1.5		34.7
Total revenue	$	1,037.0	$	(36.2	)	$	893.5	$	179.7
Operating income	$	106.5	$	3.8		$	54.5	$	48.2
Six Months Ended June 30, 2011
Customer revenue	$	1,848.4				$	1,643.0	$	205.4
Intersegment			$	(43.8	)		1.8		42.0
Total revenue	$	1,848.4	$	(43.8	)	$	1,644.8	$	247.4
Operating income	$	90.0	$	(19.5	)	$	92.3	$	17.2
Six Months Ended June 30, 2010
Customer revenue	$	2,014.4				$	1,742.5	$	271.9
Intersegment			$	(59.3	)		2.4		56.9
Total revenue	$	2,014.4	$	(59.3	)	$	1,744.9	$	328.8
Operating income	$	165.0	$	2.4		$	94.5	$	68.1

Reconciliation of Total Business Segment Operating Income to Consolidated Income

	Three Months Ended June 30						Six Months Ended June 30
	2011			2010			2011			2010
Total segment operating income	$	63.1		$	102.7		$	109.5		$	162.6
Interest expense		(13.3	)		(25.3	)		(39.2	)		(51.8	)
Other income (expense), net		(49.4	)		(7.5	)		(73.2	)		(44.4	)
Corporate and eliminations		(15.0	)		3.8			(19.5	)		2.4
Total (loss) income from continuing operations before income taxes	$	(14.6	)	$	73.7		$	(22.4	)	$	68.8

Customer Revenue by Classes of Similar Products or Services

	Three Months Ended June 30				Six Months Ended June 30
	2011		2010		2011		2010
Services
Systems integration and consulting	$	286.0	$	335.3	$	570.9	$	630.5
Outsourcing		369.6		383.0		721.5		751.8
Infrastructure services		129.9		115.1		240.1		240.7
Core maintenance		57.2		58.6		110.5		119.5
		842.7		892.0		1,643.0		1,742.5
Technology
Enterprise-class servers		79.6		131.6		179.3		234.0
Other technology		14.9		13.4		26.1		37.9
		94.5		145.0		205.4		271.9
Total	$	937.2	$	1,037.0	$	1,848.4	$	2,014.4

Revenue by Geographic Segment

	Three Months Ended June 30				Six Months Ended June 30
	2011		2010		2011		2010
United States	$	363.2	$	450.2	$	724.2	$	880.8
United Kingdom		99.1		113.7		198.9		211.6
Other international		474.9		473.1		925.3		922.0
Total	$	937.2	$	1,037.0	$	1,848.4	$	2,014.4

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Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2011

Comprehensive Income

Schedule of Comprehensive Income

	Three Months Ended June 30						Six Months Ended June 30
	2011			2010			2011			2010
Consolidated net (loss) income from continuing operations	$	(5.4	)	$	60.4		$	(41.4	)	$	44.3
Income from discontinued operations, net of tax		—			61.0			—			66.7
Total		(5.4	)		121.4			(41.4	)		111.0
Other comprehensive income (loss)
Foreign currency translation adjustments		11.6			(17.0	)		25.4			(26.0	)
Postretirement adjustments		22.0			36.1			27.9			100.5
Total other comprehensive income		33.6			19.1			53.3			74.5
Consolidated comprehensive income		28.2			140.5			11.9			185.5
Comprehensive income attributable to noncontrolling interests		2.8			1.7			8.1			3.9
Comprehensive income attributable to Unisys Corporation	$	25.4		$	138.8		$	3.8		$	181.6

Accumulated Other Comprehensive Loss

	Total			Translation Adjustments			Postretirement Plans
Balance at December 31, 2010	$	(2,928.3	)	$	(604.2	)	$	(2,324.1	)
Change during period		50.8			24.2			26.6
Balance at June 30, 2011	$	(2,877.5	)	$	(580.0	)	$	(2,297.5	)

Noncontrolling Interests

	Non-controlling Interests
Balance at December 31, 2010	$	3.5
Net income		5.6
Translation adjustments		1.2
Dividends paid to non-controlling interests		(.4	)
Postretirement plans		1.3
Balance at June 30, 2011	$	11.2

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Discontinued Operations (Narrative) (Details) (Unisys Insurance Services Limited [Member], USD $) In Millions	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Unisys Insurance Services Limited [Member]
Payment on sale of business	$ 9.8	$ 14.9
Payment obligations		$ 9.6

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Discontinued Operations (Results of Discontinued Operations) (Details) (USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2010		Jun. 30, 2010
Revenue	$ 29.7		$ 82.2
Operations	1.1		10.4
Gain on sale	64.8		64.8
Income	65.9		75.2
Income tax provision	4.9		8.5
Income from discontinued operations, net of tax	61.0	[1]	66.7	[1]
Health Information Management [Member]
Revenue	10.4		42.0
Operations	1.0		9.8
Gain on sale	64.8		64.8
Income	65.8		74.6
Income tax provision	5.0		8.5
Income from discontinued operations, net of tax	60.8		66.1
Unisys Insurance Services Limited [Member]
Revenue	19.3		40.2
Operations	0.1		0.6
Income	0.1		0.6
Income tax provision	(0.1)
Income from discontinued operations, net of tax	$ 0.2		$ 0.6

[1] Reclassified for discontinued operations. See note (a).

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Foreign Currency Losses (Details) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2011 USD ($)	Dec. 31, 2010 USD ($)	Jan. 11, 2010	Jan. 10, 2010	Jun. 30, 2011 Venezuelan Subsidiary [Member] VEF
Rate of inflation	100.00%
Inflation period (in years)	3
Bolivar Fuerte devalued percentage	50.00%
Foreign currency exchange rate			4.30	2.15
Foreign exchange loss	$ (20)
Assets	$ 2,642.9	$ 3,020.9			19.0

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Consolidated Balance Sheets (Parenthetical)	Jun. 30, 2011	Dec. 31, 2010
Consolidated Balance Sheets
Preferred stock, shares issued	2,600,000	0
Common stock, shares issued	43,500,000	42,900,000
Treasury stock, shares	300,000	300,000

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Earnings Per Share (Details) (USD $) In Millions, except Share data in Thousands, unless otherwise specified	3 Months Ended			6 Months Ended				12 Months Ended	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010		Jun. 30, 2011	Jun. 30, 2010		Jun. 30, 2011 Stock Options and Restricted Stock Units [Member]	Dec. 31, 2010 Stock Options and Restricted Stock Units [Member]	Jun. 30, 2011 Mandatory Convertible Preferred Stock [Member]
Net (loss) income from continuing operations attributable to Unisys Corporation common shareholders	$ (11.6)	$ 59.2		$ (52.4)	$ 41.9
Income from discontinued operations, net of tax		61.0	[1]		66.7	[1]
Net (loss) income attributable to Unisys Corporation common shareholders	$ (11.6)	$ 120.2	[1]	$ (52.4)	$ 108.6	[1]
Weighted average shares	43,106	42,590		42,971	42,494
Continuing operations	$ (0.27)	$ 1.39	[1]	$ (1.22)	$ 0.99	[1]
Discontinued operations		$ 1.43	[1]		$ 1.57	[1]
Total	$ (0.27)	$ 2.82	[1]	$ (1.22)	$ 2.56	[1]
Employee stock plans		739			862
Adjusted weighted average shares	43,106	43,329		42,971	43,356
Continuing operations	$ (0.27)	$ 1.36	[1]	$ (1.22)	$ 0.96	[1]
Discontinued operations		$ 1.41	[1]		$ 1.54	[1]
Total	$ (0.27)	$ 2.77	[1]	$ (1.22)	$ 2.50	[1]
Antidilutive securities							3,265	2,545	2,588

[1] Reclassified for discontinued operations. See note (a).

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Pension and Other Postretirement Benefits (Narrative) (Details) (USD $) In Millions	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2010
Pension Plans [Member]
Expected cash contributions	$ 115.0		$ 81.5
Cash contributions	42.8	39.5
Other Postretirement Benefit Plans [Member]
Expected cash contributions	22.0		23.9
Cash contributions	$ 8.8	$ 10.4

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Pension and Other Postretirement Benefits (Schedule of Benefit Plan) (Details) (USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Pension Plans [Member]
Service cost	$ 2.4	$ 3.3	$ 6.1	$ 7.2
Interest cost	98.1	97.8	196.0	197.7
Expected return on plan assets	(118.3)	(122.0)	(237.1)	(246.8)
Amortization of prior service cost			0.2	0.2
Recognized net actuarial loss	(26.5)	(19.7)	(52.5)	(40.2)
Net periodic pension expense (income)	8.7	(1.2)	17.7	(1.5)
U.S. Plans [Member]
Interest cost	65.5	69.0	132.0	138.2
Expected return on plan assets	(83.5)	(90.9)	(168.7)	(182.5)
Amortization of prior service cost	0.2	0.1	0.4	0.3
Recognized net actuarial loss	(19.8)	(13.3)	(39.2)	(27.2)
Net periodic pension expense (income)	2.0	(8.5)	2.9	(16.8)
Int'l. Plans [Member]
Service cost	2.4	3.3	6.1	7.2
Interest cost	32.6	28.8	64.0	59.5
Expected return on plan assets	(34.8)	(31.1)	(68.4)	(64.3)
Amortization of prior service cost	(0.2)	(0.1)	(0.2)	(0.1)
Recognized net actuarial loss	(6.7)	(6.4)	(13.3)	(13.0)
Net periodic pension expense (income)	6.7	7.3	14.8	15.3
Other Postretirement Benefit Plans [Member]
Service cost	0.1	0.1	0.2	0.1
Interest cost	2.5	2.6	4.9	5.3
Expected return on plan assets	(0.2)	(0.2)	(0.3)	(0.3)
Amortization of prior service cost	0.5	0.3	0.9	0.7
Recognized net actuarial loss	(1.0)	(1.0)	(2.0)	(1.9)
Net periodic pension expense (income)	$ 3.9	$ 3.8	$ 7.7	$ 7.7

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Fair Value Measurements (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended							6 Months Ended
	Jun. 30, 2011	Dec. 31, 2010	Jun. 30, 2010	Jun. 30, 2011 Prepaid Expenses and Other Current Assets [Member]	Jun. 30, 2010 Prepaid Expenses and Other Current Assets [Member]	Jun. 30, 2011 Other Accrued Liabilities [Member]	Jun. 30, 2010 Other Accrued Liabilities [Member]	Jun. 30, 2011 Other Income (Expense), Net [Member]	Jun. 30, 2010 Other Income (Expense), Net [Member]
Notional amount of foreign currency forward contract	$ 45.9		$ 40.1
Foreign currency forward contract maturity term (months)	1
Foreign currency forward contract fair value, assets				0.5	6.5
Foreign currency forward contract fair value, liabilities						0.4	6.5
Foreign currency forward contract, fair value of net gain (loss)	0.1		0
Gain on foreign currency forward contract								2.0
Loss on foreign currency forward contract									(0.1)
Difference between carrying amount and fair value of long-term debt	$ 60	$ 140

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Stock Options (Narrative) (Details) (USD $) In Millions, except Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Shares reserved for issuance upon granting	4,700,000
Share-based compensation expense	$ 9.4	$ 5.8
Total intrinsic value of options exercised	4.3	5.4
Cash received from stock options exercised	1.4	1.2
Performance-Based Unit [Member]
Minimum units vested (shares)	0
Maximum units vested (shares)	1.5
Employee Stock Option [Member]
Share-based compensation expense	5.8	3.7
Total unrecognized compensation cost	12.4
Recognition period for remaining unrecognized compensation expense, weighted-average period (years)	2.10
Restricted Stock Unit Awards [Member]
Share-based compensation expense	3.6	2.1
Total unrecognized compensation cost	10.1
Recognition period for remaining unrecognized compensation expense, weighted-average period (years)	2.2
Aggregate weighted-average grant-date fair value of units granted	11.0	7.6
Aggregate weighted-average grant-date fair value of units vested	$ 5.2	$ 3.7

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Stock Options (Fair Value Assumptions on Stock Option) (Details) (USD $)	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Stock Options
Weighted-average fair value of grant	$ 20.22	$ 17.97
Risk-free interest rate	1.71%	1.74%
Expected volatility	71.31%	72.20%
Expected life of options in years	3.62	3.63

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Stock Options (Summary of Stock Option Activity) (Details) (Employee Stock Option [Member], USD $) In Millions, except Share data in Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2011
Employee Stock Option [Member]
Outstanding at December 31, 2010, Shares	3,125
Granted, Shares	611
Exercised, Shares	(154)
Forfeited and expired, Shares	(722)
Outstanding at June 30, 2011, Shares	2,860
Expected to vest at June 30, 2011, Shares	1,181
Exercisable at June 30, 2011, Shares	1,636
Outstanding at December 31, 2010, Weighted-Average Exercise Price	$ 85.78
Granted, Weighted-Average Exercise Price	$ 38.60
Exercised, Weighted-Average Exercise Price	$ 9.00
Forfeited and expired, Weighted-Average Exercise Price	$ 168.05
Outstanding at June 30, 2011, Weighted-Average Exercise Price	$ 59.12
Expected to vest at June 30, 2011, Weighted-Average Exercise Price	$ 31.03
Exercisable at June 30, 2011, Weighted-Average Exercise Price	$ 80.09
Outstanding at June 30, 2011, Weighted-Average Remaining Contractual Term (years)	2.73
Expected to vest at June 30, 2011, Weighted-Average Remaining Contractual Term (years)	3.90
Exercisable at June 30, 2011, Weighted-Average Remaining Contractual Term (years)	1.85
Outstanding at June 30, 2011, Aggregate Intrinsic Value	$ 13.0
Expected to vest at June 30, 2011, Aggregate Intrinsic Value	4.3
Exercisable at June 30, 2011, Aggregate Intrinsic Value	$ 8.6

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Stock Options (Summary of Restricted Stock Unit Activity) (Details) (USD $) In Thousands, except Per Share data	6 Months Ended
	Jun. 30, 2011
Deferred Compensation, Share-based Payments [Member]
Granted, Restricted Stock Units	288
Vested, Restricted Stock Units	(187)
Granted, Weighted-Average Grand Date Fair Value	$ 38.38
Vested, Weighted-Average Grand Date Fair Value	$ 27.58
Restricted Stock Unit Awards [Member]
Outstanding at December 31, 2010, Restricted Stock Units	401
Forfeited and expired, Restricted Stock Units	(97)
Outstanding at June 30, 2011, Restricted Stock Units	405
Outstanding at December 31, 2010, Weighted-Average Grand Date Fair Value	$ 29.10
Forfeited and expired, Weighted-Average Grand Date Fair Value	$ 40.56
Outstanding at June 30, 2011, Weighted-Average Grand Date Fair Value	$ 32.34

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Segment Information (Narrative) (Details) (Technology [Member], USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Technology [Member]
Intersegment profit	$ 3.9	$ 0.1	$ 4.7	$ 0.5

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Segment Information (Summary of the Operations by Segment) (Details) (USD $) In Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010		Jun. 30, 2011	Jun. 30, 2010
Customer revenue	$ 937.2	$ 1,037.0		$ 1,848.4	$ 2,014.4
Revenues, total	937.2	1,037.0	[1]	1,848.4	2,014.4	[1]
Operating income	48.1	106.5	[1]	90.0	165.0	[1]
Technology [Member]
Customer revenue	94.5	145.0		205.4	271.9
Intersegment	21.3	34.7		42.0	56.9
Revenues, total	115.8	179.7		247.4	328.8
Operating income	2.8	48.2		17.2	68.1
Services [Member]
Customer revenue	842.7	892.0		1,643.0	1,742.5
Intersegment	0.9	1.5		1.8	2.4
Revenues, total	843.6	893.5		1,644.8	1,744.9
Operating income	60.3	54.5		92.3	94.5
Corporate [Member]
Intersegment	(22.2)	(36.2)		(43.8)	(59.3)
Revenues, total	(22.2)	(36.2)		(43.8)	(59.3)
Operating income	$ (15.0)	$ 3.8		$ (19.5)	$ 2.4

[1] Reclassified for discontinued operations. See note (a).

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Consolidated Statements of Income (USD $) In Millions, except Per Share data	3 Months Ended			6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010		Jun. 30, 2011	Jun. 30, 2010
Revenue
Services	$ 842.7	$ 892.0	[1]	$ 1,643.0	$ 1,742.5	[1]
Technology	94.5	145.0	[1]	205.4	271.9	[1]
Revenues, total	937.2	1,037.0	[1]	1,848.4	2,014.4	[1]
Costs and expenses
Services	676.1	707.0	[1]	1,330.6	1,394.6	[1]
Technology	47.4	42.0	[1]	95.9	96.6	[1]
Cost of revenue, total	723.5	749.0	[1]	1,426.5	1,491.2	[1]
Selling, general and administrative	147.2	160.4	[1]	293.2	316.3	[1]
Research and development	18.4	21.1	[1]	38.7	41.9	[1]
Costs and expenses, total	889.1	930.5	[1]	1,758.4	1,849.4	[1]
Operating profit	48.1	106.5	[1]	90.0	165.0	[1]
Interest expense	13.3	25.3	[1]	39.2	51.8	[1]
Other income (expense), net	(49.4)	(7.5)	[1]	(73.2)	(44.4)	[1]
(Loss) income from continuing operations before income taxes	(14.6)	73.7	[1]	(22.4)	68.8	[1]
(Benefit) provision for income taxes	(9.2)	13.3	[1]	19.0	24.5	[1]
Consolidated (loss) income before discontinued operations	(5.4)	60.4	[1]	(41.4)	44.3	[1]
Income from discontinued operations, net of tax		61.0	[1]		66.7	[1]
Net (loss) income	(5.4)	121.4	[1]	(41.4)	111.0	[1]
Less: Net income attributable to noncontrolling interests	2.2	1.2	[1]	5.6	2.4	[1]
Less: Preferred stock dividends	4.0			5.4
Net (loss) income attributable to Unisys Corporation common shareholders	(11.6)	120.2	[1]	(52.4)	108.6	[1]
Amounts attributable to Unisys Corporation common shareholders
(Loss) income from continuing operations, net of tax	$ (11.6)	$ 59.2	[1]	$ (52.4)	$ 41.9	[1]
Basic
Continuing operations	$ (0.27)	$ 1.39	[1]	$ (1.22)	$ 0.99	[1]
Discontinued operations		$ 1.43	[1]		$ 1.57	[1]
Total	$ (0.27)	$ 2.82	[1]	$ (1.22)	$ 2.56	[1]
Diluted
Continuing operations	$ (0.27)	$ 1.36	[1]	$ (1.22)	$ 0.96	[1]
Discontinued operations		$ 1.41	[1]		$ 1.54	[1]
Total	$ (0.27)	$ 2.77	[1]	$ (1.22)	$ 2.50	[1]

[1] Reclassified for discontinued operations. See note (a).

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Segment Information (Reconciliation of Total Business Segment Operating Income to Consolidated Income) (Details) (USD $) In Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010		Jun. 30, 2011	Jun. 30, 2010
Segment Information
Total segment operating income	$ 63.1	$ 102.7		$ 109.5	$ 162.6
Interest expense	(13.3)	(25.3)	[1]	(39.2)	(51.8)	[1]
Other income (expense), net	(49.4)	(7.5)	[1]	(73.2)	(44.4)	[1]
Corporate and eliminations	(15.0)	3.8		(19.5)	2.4
(Loss) income from continuing operations before income taxes	$ (14.6)	$ 73.7	[1]	$ (22.4)	$ 68.8	[1]

[1] Reclassified for discontinued operations. See note (a).

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Segment Information (Customer Revenue by Classes of Similar Products or Services) (Details) (USD $) In Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010		Jun. 30, 2011	Jun. 30, 2010
Customer revenue	$ 937.2	$ 1,037.0		$ 1,848.4	$ 2,014.4
Revenues, total	937.2	1,037.0	[1]	1,848.4	2,014.4	[1]
Services [Member] | Systems Integration and Consulting [Member]
Customer revenue	286.0	335.3		570.9	630.5
Services [Member] | Outsourcing [Member]
Customer revenue	369.6	383.0		721.5	751.8
Services [Member] | Infrastructure Services [Member]
Customer revenue	129.9	115.1		240.1	240.7
Services [Member] | Core Maintenance [Member]
Customer revenue	57.2	58.6		110.5	119.5
Technology [Member] | Enterprise-Class Servers [Member]
Customer revenue	79.6	131.6		179.3	234.0
Technology [Member] | Other Technology [Member]
Customer revenue	14.9	13.4		26.1	37.9
Technology [Member]
Customer revenue	94.5	145.0		205.4	271.9
Revenues, total	115.8	179.7		247.4	328.8
Services [Member]
Customer revenue	842.7	892.0		1,643.0	1,742.5
Revenues, total	$ 843.6	$ 893.5		$ 1,644.8	$ 1,744.9

[1] Reclassified for discontinued operations. See note (a).

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Segment Information (Revenue by Geographic Segment) (Details) (USD $) In Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010		Jun. 30, 2011	Jun. 30, 2010
Revenues, total	$ 937.2	$ 1,037.0	[1]	$ 1,848.4	$ 2,014.4	[1]
United States [Member]
Revenues	363.2	450.2		724.2	880.8
United Kingdom [Member]
Revenues	99.1	113.7		198.9	211.6
Other International [Member]
Revenues	$ 474.9	$ 473.1		$ 925.3	$ 922.0

[1] Reclassified for discontinued operations. See note (a).

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Comprehensive Income (Schedule of Comprehensive Income) (Details) (USD $) In Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010		Jun. 30, 2011	Jun. 30, 2010
Comprehensive Income
Consolidated net (loss) income from continuing operations	$ (5.4)	$ 60.4	[1]	$ (41.4)	$ 44.3	[1]
Income from discontinued operations, net of tax		61.0	[1]		66.7	[1]
Net (loss) income	(5.4)	121.4	[1]	(41.4)	111.0	[1]
Foreign currency translation adjustments	11.6	(17.0)		25.4	(26.0)
Postretirement adjustments	22.0	36.1		27.9	100.5
Total other comprehensive income	33.6	19.1		53.3	74.5
Consolidated comprehensive income	28.2	140.5		11.9	185.5
Comprehensive income attributable to noncontrolling interests	2.8	1.7		8.1	3.9
Comprehensive income attributable to Unisys Corporation	$ 25.4	$ 138.8		$ 3.8	$ 181.6

[1] Reclassified for discontinued operations. See note (a).

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Comprehensive Income (Accumulated Other Comprehensive Loss) (Details) (USD $) In Millions	6 Months Ended
	Jun. 30, 2011
Comprehensive Income
Accumulated other comprehensive loss, beginning balance	$ (2,928.3)
Accumulated other comprehensive loss, change during period	50.8
Accumulated other comprehensive loss, ending balance	(2,877.5)
Translation adjustments, beginning balance	(604.2)
Translation adjustments, change during period	24.2
Translation adjustments, ending balance	(580.0)
Post-retirement plans, beginning balance	(2,324.1)
Post-retirement plans, change during period	26.6
Post-retirement plans, ending balance	$ (2,297.5)

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Comprehensive Income (Noncontrolling Interests) (Details) (USD $) In Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010		Jun. 30, 2011	Jun. 30, 2010
Comprehensive Income
Beginning balance				$ 3.5
Net income	2.2	1.2	[1]	5.6	2.4	[1]
Translation adjustments				1.2
Dividends paid to noncontrolling interests				(0.4)
Postretirement plans				1.3
Ending balance	$ 11.2			$ 11.2

[1] Reclassified for discontinued operations. See note (a).

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Supplemental Cash Flow Information (Details) (USD $) In Millions	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Supplemental Cash Flow Information
Income taxes paid	$ 46.4	$ 28.3
Interest paid	$ 54.9	$ 57.4

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Commitments and Contingencies (Details) (EUR €) In Millions	Apr. 30, 2007 Ministry of Justice of Belgium [Member]	Dec. 31, 2007 Lufthansa AG [Member]
Claim for damages against termination of contract	€ 28.0	€ 21.4
Counterclaim against termination of contract	€ 18.5	€ 1.5

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Income Taxes (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended			6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010		Jun. 30, 2011	Jun. 30, 2010
Expected change in ownership percentage				50.00%
Income tax benefit	$ (9.2)	$ 13.3	[1]	$ 19.0	$ 24.5	[1]
Europe [Member]
Income tax benefit	$ 30.3

[1] Reclassified for discontinued operations. See note (a).

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Stockholders' Equity (Details) (USD $) In Millions, except Share data, unless otherwise specified	1 Months Ended	3 Months Ended		6 Months Ended			0 Months Ended							6 Months Ended
	Feb. 28, 2011	Jun. 30, 2011	Mar. 31, 2011	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2010	Apr. 11, 2011 Senior Secured Notes due 2014 [Member]	Mar. 30, 2011 Senior Secured Notes due 2014 [Member]	Apr. 11, 2011 Senior Secured Notes due 2015 [Member]	Mar. 30, 2011 Senior Secured Notes due 2015 [Member]	Jun. 30, 2011 Securitization Facility [Member]	Jun. 30, 2011 Revolving Credit Facility [Member]	Jun. 30, 2011 Letter of Credit [Member]	Jun. 30, 2011 Maximum [Member]	Feb. 28, 2011 Maximum [Member]	Feb. 28, 2011 Minimum [Member]
Sale of preferred stock	2,587,500	2,600,000		2,600,000		0
Net proceeds from issuance of 6.25% mandatory convertible preferred stock	$ 249.7
Conversion rate of preferred stock															2.6717	2.1899
Convertible preferred stock dividend, rate				6.25%
Initial liquidation preference per share		$ 100		$ 100
Preferred stock dividend per year per share				$ 6.25
Annualized dividend on mandatory convertible preferred stock				16.2
Percentage of notes to be redeemed at option of company														35.00%
Redemption of debt							44.1	124.7	134.8	86.3
Losses on debt extinguishment		45.7	31.8	(77.5)	(1.4)
Premium on extinguishment of debt		42.2	28.2
Write off of notes discount and issuance cost upon redemption		3.5	3.6
Credit facility term (in years)												5
Credit agreement, maximum borrowing capacity											150	150	100
Threshold for maximum secured leverage ratio		130		130
Credit facility default threshold, other debt		$ 50

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Consolidated Statements of Cash Flows (USD $) In Millions	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Cash flows from operating activities
Consolidated (loss) income before discontinued operations	$ (41.4)	$ 44.3	[1]
Income from discontinued operations, net of tax		66.7	[1]
Add (deduct) items to reconcile consolidated net (loss) income to net cash provided by operating activities:
Foreign currency transaction losses		19.9
Loss on debt extinguishment	77.5	1.4
Employee stock compensation	9.4	5.8
Company stock issued for U.S. 401(k) plan	6.7
Depreciation and amortization of properties	34.3	39.6
Depreciation and amortization of outsourcing assets	33.9	58.6
Amortization of marketable software	34.8	31.2
Disposal of capital assets	0.7	7.4
Loss (gain) on sale of businesses and assets	0.3	(62.0)
Decrease (increase) in deferred income taxes, net	11.4	(9.3)
Decrease (increase) in receivables, net	148.2	(52.2)
Decrease in inventories	16.5	5.8
Decrease in accounts payable and other accrued liabilities	(231.4)	(65.6)
Decrease in other liabilities	(27.7)	(34.4)
Increase in other assets	(8.6)	(35.0)
Other	(0.7)	1.0
Net cash provided by operating activities	63.9	23.2
Cash flows from investing activities
Proceeds from investments	173.7	211.8
Purchases of investments	(171.3)	(211.4)
Restricted deposits	10.3	(80.6)
Investment in marketable software	(23.3)	(27.3)
Capital additions of properties	(24.0)	(37.3)
Capital additions of outsourcing assets	(25.0)	(51.7)
Net proceeds from sale of businesses and assets	(10.1)	130.3
Net cash used for investing activities	(69.7)	(66.2)
Cash flows from financing activities
Proceeds from issuance of preferred stock, net of issuance costs	249.7
Payments of long-term debt	(460.3)	(78.0)
Proceeds from exercise of stock options	1.4	1.2
Dividends paid on preferred stock	(4.1)
Dividends paid to noncontrolling interests	(0.4)
Financing fees	(2.2)	(0.1)
Net cash used for financing activities	(215.9)	(76.9)
Effect of exchange rate changes on cash and cash equivalents	18.4	(31.2)
Decrease in cash and cash equivalents	(203.3)	(151.1)
Cash and cash equivalents, beginning of period	828.3	647.6
Cash and cash equivalents, end of period	$ 625.0	$ 496.5

[1] Reclassified for discontinued operations. See note (a).

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Basis of Presentation

6 Months Ended

Jun. 30, 2011

Basis of Presentation

Basis of Presentation

In the opinion of management, the financial information furnished herein reflects all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods specified. These adjustments consist only of normal recurring accruals except as disclosed herein. Because of seasonal and other factors, results for interim periods are not necessarily indicative of the results to be expected for the full year.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions about future events. These estimates and assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities and the reported amounts of revenue and expenses. Such estimates include the valuation of accounts receivable, inventories, outsourcing assets, marketable software, goodwill and other long-lived assets, legal contingencies, indemnifications, and assumptions used in the calculation for systems integration projects, income taxes and retirement and other post-employment benefits, among others. These estimates and assumptions are based on management's best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.

The company's accounting policies are set forth in detail in note 1 of the notes to the consolidated financial statements in the company's Annual Report on Form 10-K for the year ended December 31, 2010 filed with the Securities and Exchange Commission. Such Annual Report also contains a discussion of the company's critical accounting policies. The company believes that these critical accounting policies affect its more significant estimates and judgments used in the preparation of the company's consolidated financial statements. There have been no changes in the company's critical accounting policies from those disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2010.

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Discontinued Operations

6 Months Ended

Jun. 30, 2011

Discontinued Operations

Discontinued Operations

a. On April 30, 2010, the company completed the sale of its health information management (HIM) business, and on August 31, 2010, the company completed the sale of its UK-based Unisys Insurance Services Limited (UISL) business, which provides business process outsourcing (BPO) services to the UK life and pensions industry. In connection with the sale of UISL, the company paid $14.9 million in 2010, $9.8 million during the six months ended June 30, 2011 and has payment obligations of approximately $9.6 million to be paid ratably over the next two quarterly periods.The results of discontinued operations for the three and six months ended June 30, 2010 are as follows (in millions of dollars):

	Three Months Ended June 30, 2010							Six Months Ended June 30, 2010
	Total		HIM		UISL			Total		HIM		UISL
Revenue	$	29.7	$	10.4	$	19.3		$	82.2	$	42.0	$	40.2
Income
Operations	$	1.1	$	1.0	$	.1		$	10.4	$	9.8	$	.6
Gain on sale		64.8		64.8		—			64.8		64.8		—
		65.9		65.8		.1			75.2		74.6		.6
Income tax provision		4.9		5.0		(.1	)		8.5		8.5		—
Income from discontinued operations, net of tax	$	61.0	$	60.8	$	.2		$	66.7	$	66.1	$	.6

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Foreign Currency Losses

6 Months Ended

Jun. 30, 2011

Foreign Currency Losses

Foreign Currency Losses

b. Due to cumulative inflation of approximately 100 percent or more over the last 3-year period, the company's Venezuelan subsidiary has applied highly inflationary accounting beginning January 1, 2010. For those international subsidiaries operating in highly inflationary economies, the U.S. dollar is the functional currency, and as such, nonmonetary assets and liabilities are translated at historical exchange rates, and monetary assets and liabilities are translated at current exchange rates. Exchange gains and losses arising from translation are included in other income (expense), net. Effective January 11, 2010, the Venezuelan government devalued the Bolivar Fuerte by 50 percent by resetting the official exchange rate from 2.15 to the U.S. dollar to 4.30 to the U.S. dollar. As a result, the company recorded a foreign exchange loss in the first quarter of 2010 of approximately $20 million. The company has used and continues to use the official exchange rate for translation purposes. At June 30, 2011, the company's operations in Venezuela had net monetary assets denominated in local currency of approximately $19 million.

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Earnings Per Share

6 Months Ended

Jun. 30, 2011

Earnings Per Share

Earnings Per Share

c. The following table shows how earnings (loss) per common share attributable to Unisys Corporation was computed for the three and six months ended June 30, 2011 and 2010 (dollars in millions, shares in thousands):

	Three Months Ended June 30,					Six Months Ended June 30,
	2011			2010		2011			2010
Basic Earnings (Loss) Per Common Share
Net (loss) income from continuing operations attributable to Unisys Corporation common shareholders	$	(11.6	)	$	59.2	$	(52.4	)	$	41.9
Income from discontinued operations, net of tax		—			61.0		—			66.7
Net (loss) income attributable to Unisys Corporation common shareholders	$	(11.6	)	$	120.2	$	(52.4	)	$	108.6
Weighted average shares		43,106			42,590		42,971			42,494
Continuing operations	$	(.27	)	$	1.39	$	(1.22	)	$	.99
Discontinued operations		—			1.43		—			1.57
Total	$	(.27	)	$	2.82	$	(1.22	)	$	2.56
Diluted Earnings (Loss) Per Common Share
Net (loss) income from continuing operations attributable to Unisys Corporation common shareholders	$	(11.6	)	$	59.2	$	(52.4	)	$	41.9
Add preferred stock dividends		—			—		—			—
Net (loss) income from continuing operations attributable to Unisys Corporation for diluted earnings per share		(11.6	)		59.2		(52.4	)		41.9
Income from discontinued operations, net of tax		—			61.0		—			66.7
Net (loss) income attributable to Unisys Corporation for diluted earnings per share	$	(11.6	)	$	120.2	$	(52.4	)	$	108.6
Weighted average shares		43,106			42,590		42,971			42,494
Plus incremental shares from assumed conversions
Employee stock plans		—			739		—			862
Preferred stock		—			—		—			—
Adjusted weighted average shares		43,106			43,329		42,971			43,356
Continuing operations	$	(.27	)	$	1.36	$	(1.22	)	$	.96
Discontinued operations		—			1.41		—			1.54
Total	$	(.27	)	$	2.77	$	(1.22	)	$	2.50

The following number of stock options and restricted stock units was antidilutive and therefore excluded from the computation of diluted earnings per share (in thousands): 2011, 3,265 and 2010, 2,545. The following number of mandatory convertible preferred stock was antidilutive and therefore excluded from the computation of diluted earnings per share (in thousands): 2011, 2,588.