Unisys Corporation, a Delaware corporation (Unisys, we, our, or the company), is a global information technology (IT) solutions company that delivers successful outcomespowers breakthroughs for the most demanding businessesworld’s leading organizations. Our clients rely on us to help solve many of their toughest business and governments. Unisys offerings include digital workplace solutions, cloudtechnology challenges in highly complex, regulated and infrastructure solutions, enterprise computingheterogeneous environments. Our solutions and business process solutions.services are provided through global delivery capabilities, which allows us to execute large-scale, rapid technology migration and modernization projects. From our origins dating back to 1873 through the formation of Unisys in 1986, we have built a legacy of innovation and a reputation of trust.

In January 2021,recent decades, enterprise and government interactions with customers, suppliers, employees and citizens have shifted increasingly to digital channels. Cloud computing, artificial intelligence (AI), machine learning and quantum computing have pushed the company changed its organizational structurerequired pace of innovation and led to more effectively addressa proliferation of data. At the same time, organizations face rising costs and complexity of managing IT infrastructure, data, security and compliance while integrating new technologies. We have a long track record of helping clients navigate technological change and architecting innovative solutions that simplify and accelerate digital transformation.

The markets in which we operate are broad and rapidly evolving, client needs.encompassing a wide range of technologies, services and solutions aimed at helping organizations leverage technology to improve their operations and achieve their business objectives. Organizations across the globe are harnessing technology to reimagine their business models and create competitive advantages. In addition to technical proficiency, our clients look to us for industry-specific expertise to help maximize the impact of their technology investments.

The growing use of digital platforms, connected devices and enterprise digitization generates vast amounts of structured and unstructured data, often from disparate sources or stored within disconnected environments. Collecting, cleaning, structuring and governing disparate data has become critical to maximizing the value of an organization’s data while meeting complex compliance and regulatory standards. As a result, data engineering, data infrastructure and next-generation computing capabilities have become progressively more important. Predictive analytics is increasingly utilized for forecasting trends, optimizing supply chain management, enhancing user experience and productivity, and minimizing risk. AI and machine learning play pivotal roles in enabling companies to derive meaningful insights from large datasets and make informed decisions, which recent advancements in generative AI have augmented.

We provide our global clients with advice and essential capabilities to architect, develop, modernize, implement and integrate the technologies that power their organizations. Our solutions may be delivered on a standalone basis or through integrated offerings that may incorporate proprietary Unisys products, a Unisys-managed service offering, and/or offerings of our trusted partners. We regularly collaborate with our global network of partners, to develop joint solution offerings and to build, market and co-sell these joint solutions.

Our organizational structure aligns with our clients’ evolving needs, reflected in three reportable segments are as follows:segments:

We deliver advanced IT solutionshelp clients shape the future of their workplace – in-office, remote, or hybrid – to clients in our primary target markets: Government (national governments, other than directlyhelp employees be more efficient and productive, which improves retention, collaboration and company performance. We advise and execute the deployment, integration and management of enterprise technologies, applications and data-driven management to the U.S. federal government, and state and local governments globally), Commercial (e.g., travel and transportation and life sciences and healthcare), and Financial Services (e.g., commercial and retail banking).orchestrate a seamless workplace experience.

We marketclassify our products andDWS offerings as either “Modern Workplace” or “Traditional Workplace.” Our Modern Workplace offerings are proactive, experience-based digital solutions primarily through a direct sales force. Complementing our direct sales force, we make use of a select group of resellers and alliance partnersthat transform technology support to market our services and product portfolio. In certain countries, we market primarily through distributors.

Wecommunication and collaboration. In contrast, our Traditional Workplace solutions typically seek to deliver these outcomes through platforms thatcost efficiencies for our clients.

Our Modern Workplace offerings include:

Our Traditional Workplace solutions deliver convenient, efficient technology support services at scale. Our solutions in areas such as traditional service desk, into an intelligent, user-centricdevice management and field services help clients elevate employee experience aligned withand productivity while reducing the needscost of support.

We accelerate digital transformation in the critical areas of cloud migration and management, as well as application and infrastructure transformation and modernization. Our solutions accelerate multi-cloud adoption and help our clients leverage the flexibility and efficiency of the moderncloud to deliver business growth. Our in-house developers also design and build customized enterprise applications that address our clients’ needs with long-term support to manage and evolve applications over time. Our CA&I offerings often incorporate cybersecurity services and solutions to enable secure environments. We classify our solutions within CA&I as either “Digital Platforms and Applications” or “Infrastructure.”

We also provide clients with a wide range of micro-market and business process solutions. Through local market teams, we enable mission critical functions spanning digital workplace. The service leveragesmortgage processing for financial services clients, integrated portfolio and investment management for clients with large capital investments, and data aggregation and presentation solutions for public and local law enforcement agencies, among other solutions. These solutions often involve a high level of customization, automation, and in many cases, technology and knowledge that is proprietary to Unisys. Many of our business process solutions clients seek to meet requirements for 24x7 operations or to increase business flexibility and operational efficiency through process automation, especially for high-volume or labor and time-intensive workflows.

We classify our Modern Workplace, DP&A, SS&C and certain micro-market solutions as our “Next-Gen Solutions.” These solutions may incorporate advanced technologies such as AI, machine learning, hyper-automation, or quantum computing and encryption, among others. We believe our Next-Gen Solutions create significant cross-sell and up-sell opportunities with our existing clients as well as attract new clients to the InteliServeUnisys platform anof services. We plan to continue to invest in our Next-Gen Solutions to develop and deliver innovative products and services to effectively support our clients on their business transformation and modernization journeys.

An integrated suite of technologies for omnichannel support, advanced analytics, automation, artificial intelligence,AI, machine learning and identity authentication.authentication that transforms service desks into intelligent, user-centric experiences for the modern workplace.

service system to identify and provision private, public and hybrid cloud services, real-time analytics, and capabilities for industrial-gradeindustrial grade modernization of legacy applications.

Our direct global sales force consists of sales executives focused on attracting new clients and client executives responsible for account retention, services growth and client satisfaction. Our sales teams work and collaborate closely with industry solution specialists, solution architects and technologists with domain expertise from each segment.

We deliver advanced IT solutions help law enforcementand services to some of the largest commercial and public sector clients around the world. Our public sector clients primarily consist of state, local and non-U.S. governments and agencies, solve crime; social services case workers assist families;as well as global not-for-profit organizations. Overall, our commercial clients are well-diversified across sectors. However, certain of our enterprise computing and business process solutions have a more concentrated client base, particularly in the areas of travel and transportation, companies manage freightfinancial services and distribution;healthcare. In 2023, no single client accounted for more than 10% of our revenue.

Our primary objective is to increase the value we create for our clients to support our financial objectives of improving our revenue growth, profitability and free cash flow. In that spirit, we continually evolve our solutions and services to enable our clients to continue making breakthroughs, optimizing their processes and furthering our mission to grow through our clients’ successes. Our efforts include developing, evolving and upskilling our global associate workforce.

Unisys purchases components and supplies from a number of suppliers around the world. For certain technology products, weWe rely on a single or limited number of suppliers for certain technology products, although we make every effortattempt to assureensure that alternative sources are available if the need arises. The failure of our suppliers to deliver components and supplies in sufficient quantities and in a timely manner could adversely affect our business. For more information on the risks associated with purchasing components and supplies, see “Risk Factors” (Part I, Item 1A of this Form 10-K).

As of January 31, 2022,2024, Unisys owns over 485420 active U.S. patents and over 4535 active patents granted in teneight non-U.S. jurisdictions. These patents cover systems and methods related to a wide variety of technologies, including, but not limited to, information security, cloud computing, virtualization, database encryption/management and user interfaces. We have granted licenses covering both single patents and particular groups of patents, to others. Likewise, we have active licensing agreements granting us rights under patents owned by other entities. Our business is not materially dependent upon any single patent, patent license or related group thereof.

Unisys also maintains 2325 U.S. trademark and service mark registrations, and over 480285 additional trademark and service mark registrations in seventy-fourfifty-four non-U.S. jurisdictions as of January 31, 2022.2024. These marks are valuable assets used on or in connection with our services and products, and as such are actively monitored policed and protected by Unisys and its agents.

Our revenue is affected by factors such factors as the introduction of new services and products,solutions, the length of sales cycles and the seasonality of purchases. Seasonality generally has not resulted in material quarterly revenue changes. Changes in timing or terms of renewals from client to client can lead to fluctuations in software license revenue from period to period since accounting rules require that software license revenue be recognized when the license term begins.

At December 31, 2021,2023, firm order backlog was $3.0 billion, compared to $3.6$2.9 billion at December 31, 2020.2022. Approximately $1.2$1.3 billion (40%(44%) of 20212023 backlog is expected to be converted to revenue in 2022.2024. Although we believe that this backlog is firm, we may, for commercial reasons, allowwill be executed, the orders tomay be canceled, in some cases with or without penalty.

At December 31, 2021, the company2023, we employed approximately 16,30016,500 professionals, of which 18%2,600 are located in the United States and 82%13,900 are located in other countries around the world. Our associates ensure our success, and weWe are committed to providing a productive, ethical, diverse and safe working environment for each and every one of them.our employees.

We welcome associates of all ethnicities, races, ages, religions, abilities, gendersqualified employees and sexual orientations.do not discriminate on any legally protected characteristics. We are committed to our culture of Diversity, Equity and Inclusion (DEI) not only as the “right thing to do,” but also as a business imperative. CreatingWe believe creating an equitable workplace improves our organization, local communities and society.

At Unisys, we are focused on having a workforce that represents the diverse communities in which we live and serve. Based on our continued efforts to improve diverse representation, women now make up 32%34% of our workforce globally and associatesemployees from Underrepresented Ethnic Groups (UREG) make up 30% within the U.S.33% of our U.S workforce. Although we are proud of our progress, there is more workwe continue to do to buildfocus our efforts on creating a more diverse workforce.culture of belonging and inclusivity.

In addition, to our efforts focused on representation, understanding our associates’employees’ perspectives and experiences--their engagement--isexperiences - their engagement - is critical to our success. Each year we measure associateemployees’ engagement through a survey and develop action plans to improve based on that feedback. This year, more than 80% of our associatesemployees participated in theour annual engagement survey with 7 out71% of 10 associatesparticipating employees indicating they arefelt engaged. Fostering an inclusive culture is a key component of engagement and 80% of associatesparticipating employees indicated they “feel comfortable being themselves at work.” Our DEI initiatives are supported by our Inclusion and Diversity Council, which consists of 20 associates from around the world and includesWe sponsor several working groups that focus on specific aspects of issues including diversity, race and ethnicity, disability and gender equity. The Inclusion and Diversity Council’s vision is to build and nurture a better, more inclusive culture at Unisys. Since 2020, the Council has sponsored multiple new Associate Impact Groups, which are associate-ledemployee-led groups that provide support, career development and professional networking for their members. These groups center on gender, race and ethnicity, LGBTQ+, veterans and people with diverse abilities.

The company recognizesWe recognize that continuous learning and professional development are key factors infor our success. We offer a range of skill development programs and opportunities that focus on leadership/management,leadership, AI, digital transformation, information technology, skills,cybersecurity, regulatory compliance, diversity, anti-harassment, ethics cybersecurity, ethics and more.

We are committed to the health, safety and wellness of our employees. We provide our associatesemployees a wide range of offerings in this regard through a range of benefits and resources, including health and welfare benefits, flexible time-off and employee assistance programs.

We also promote a culture of ethics and integrity through our Code of Ethics and Business Conduct, policies and training, and all associatesemployees must adhere to the company’sour Code. We assess human capital risk using data analytics, an annual risk assessment, investigations and other compliance-related initiatives.

Our Investor web siteinvestor website is located at www.unisys.com/investor. Through our web site,website, we make available, free of charge, our annual reportreports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the Exchange Act), as soon as reasonably practicable after this material is electronically filed with or furnished to the U.S. SEC.Securities and Exchange Commission. We also make available on our web sitewebsite our Restated Certificate of Incorporation, Amended and Restated Bylaws, Guidelines on Significant Corporate Governance Issues, the charters of the Audit and Finance Committee, Compensation and Human Resources Committee, Nominating and Corporate Governance Committee and Security and Risk Committee of our board of directors, and our Code of Ethics and Business Conduct. This information is also available in print to stockholders upon request. We do not intend for information on our web sitewebsite to be part of this Annual Report on Form 10-K.

There is no family relationship among any of the above-named executive officers. TheOur Amended and Restated By-Laws provide that the officers of Unisys shall be elected annually by the Board of Directors and that each officer shall hold office for a term of one year and until a successor is elected and qualified, or until the officer’s earlier resignation or removal.

Our business includes managing, processing, storing and transmitting information, including proprietary, confidential, client, employee and personal information, intellectual property and proprietary business information. This information is housed within our own information systems (made of a combination of on-premise and third-party cloud providers), the cloud and those that we design, develop, host or manage for clients. These systems are critical to our and our clients’ business activities and unauthorized access to, disruption of, or attacks on these systems pose serious risks, including inadvertent loss or disclosure of company, information and employee and client data. In addition, negligent or improper conduct of our employees or third parties working on our behalf with access to these systems and the company’ssensitive information housed therein have and may in the future success.adversely affect our business and reputation.

We have experienced, and will continue to experience, cybersecurity attacks and other security breaches that have and, in the future, could result in access to, or in some instances, loss or disclosure of, sensitive information that would require significant human and financial resources to respond. These include cyberattacks from computer hackers, cyber criminals, including nation states and nation state-sponsored actors, insiders and other malicious internet-based adversaries. The company also needsoccurrence of cybersecurity attacks and other security breaches continue to attract new talentincrease globally, and our systems, including the systems of our outsourced service providers, have been and may in the future be targeted by attacks such as denial of service attacks, wireless network attacks, viruses and worms, malicious software, ransomware, malware, misconfigurations, supply chain attacks, application centric attacks, peer-to-peer attacks, phishing, vishing and smishing attempts, backdoor trojans, distributed denial of service attacks, social engineering, business email compromises and cyber-extortion, among other cybersecurity threats. As a known provider of IT solutions, we are and will remain an attractive target for such attacks. Furthermore, our industry subjects us to augmentelevated risk and, accordingly, security vulnerabilities can occur and will continue to occur across a broad range of hardware, software or other infrastructure, increasing for us the skills required to deliver its solutions to its target markets. The failurepotential of occurrence and the cost of response and remediation. These attacks have been successful against us and those of our third-party service providers and have resulted in, and in the future could result in, misappropriation, misuse, alteration, theft, loss, corruption, leakage, falsification, and accidental or premature release or improper disclosure of confidential or other information, including intellectual property, personal information, and data of the company, third parties, employees, clients or others. For example, in 2022, the company disclosed a cyber attack involving our software lab environment, which caused no service disruptions for our operations or, to attract new talentour knowledge, to our clients, but resulted in the exfiltration of source code for our cybersecurity and product and platform software. The techniques used by computer hackers and cyber criminals to obtain unauthorized access to data or to sabotage computer systems change frequently and are growing in sophistication, which increases the risk and severity when they occur. Additionally, limitations in the ability of our IT teams to remain up-to-date with the requisite skill set, retain key personnel or implement an appropriate succession plantools necessary to thwart these threat actors could adversely impactlead to attacks not being detected until after the company’sattack has occurred. In addition, we rely on our suppliers’ tools and services to adequately detect, report and respond to cyber incidents and security breaches, which could affect our ability to successfully carry out itsreport or address these incidents effectively or in a timely manner. An increase in consumption of public cloud services also elevates the risk to our environment, as securing cloud workload regularly involves new skills, tools and processes. The introduction of AI and quantum computing is also raising the risk level as it opens new possibilities for threat actors to launch complex attacks combining social engineering and classic hacking techniques. Similarly, the threat of malicious cyber activity from nation states and other sophisticated actors continues to increase, particularly with the rise of global conflicts like in the Ukraine.

Any disruption, termination or substandard provision of services, including by us or third-party cloud providers, could materially and adversely affect our business by disrupting normal IT operations, customer service, accounting and technology functions, affecting our ability to comply with our financing arrangements and otherwise impacting our ability to manage our business. Disruption, termination or substandard provision of services could be the result of localized conditions (such as power outages, telecommunications failures, fire or explosion), failure of our systems to function as designed, or as the result of events or circumstances of broader geographic impact (such as storms, earthquakes, floods, epidemics, strikes, acts of war, civil unrest

For information on our cybersecurity risk management, strategy and retain other key personnel.governance, see Item 1C. - Cybersecurity.

The company continuesA significant portion of our revenue is derived from our installed base, many of which are subject to long-term contracts. We continue to invest in its ClearPath Forward operating system software in orderour solutions to retain and extend our existing clients in its Enterprise Computing Solutions business.client base as well as attract new clients. If legacy clients do not believe in the value proposition provided by ClearPath Forwardour solutions and exit their contracts, or if they choose not to renew their contracts, for any other reason,or not to renew these contracts on terms at least as favorable as the current contracts, our revenue could decline meaningfully and there could be a material adverse effect on our business, results of operations or financial condition. We could also lose clients because of their merger, acquisition or business failure. We may not be a meaningful returnable to replace the revenue and earnings from any such lost client. We are expecting revenue, margin and market share expansion due to our differentiated solutions and the decision by some of our competitors to exit or de-emphasize their focus on our targets markets. If some or all of these investments, and revenuecompetitors focus on our target markets, it could decline meaningfully. adversely affect our ability to gain market share or otherwise adversely affect future results.

Furthermore, if ClearPath Forward is sold in the form of Software as a Service (SaaS) at an accelerated pace, this would have a negative timing impact on the company’sour short- and medium-term cash position and could adversely impact the company’sour operations, financial condition and liquidity.

Additionally, the company also continues towe invest in other software and sell new solutions and related services. If the company iswe invest insufficiently or are unsuccessful in selling these other solutions and related services, there may not be a meaningful return on these investments. Further, the revenues generated by othernewer solutions and related services may be insufficient to offset any revenue declines caused if we are unable to retain the revenues generated by our installed base.

In many of our long-term solutions and services contracts, revenue is based on the volume of solutions and services provided. As a result, revenue levels anticipated at contract inception are not guaranteed. Some of our contracts may permit termination at the client’s discretion before the end of the contract term or may permit termination or impose other penalties if we do not meet the performance levels specified in the contracts, particularly for government and public sector clients. In addition, from time to time, the company is involved in disputes and legal proceedings with our clients concerning solutions and services that the company has provided. Some of our commercial contracts require customized solutions, features, configurations and functions, and, in such a customized environment, there have been and may continue to be claims for failure to perform. In such cases, we have not, and in the future may not, achieve expected revenue and profit from certain commercial contracts.

In addition, we cannot be sure that our services and solutions, including, for example, our software and hardware solutions, or the solutions of others that we offer to our clients, do not infringe on the intellectual property rights of third parties (including competitors as well as non-practicing holders of intellectual property assets), and these third parties could claim that we or our clients are infringing upon their intellectual property rights. Furthermore, although we have established policies and procedures to respect the intellectual property rights of third parties and that prohibit the unauthorized use of intellectual property, we may not be aware if our associates have misappropriated and/or misused intellectual property, and their actions could result in claims of intellectual property misappropriation and/or infringement from third parties. These claims could harm our reputation, cause us to incur substantial costs or prevent us from offering some services or solutions in the future. Any related proceedings could require us to expend significant resources over an extended period of time. In most of our contracts, we agree to indemnify our clients for expenses and liabilities resulting from claimed infringements of the intellectual property rights of third parties used to provide our solutions or perform our services. In some instances, the amount of these indemnities could be greater than the revenues we receive from the client. Any claims or litigation in this area could be time-consuming and costly, damage our reputation and/or require us to incur additional costs to obtain the right to continue to offer a service or solution to our clients. If we cannot secure this right at all or on reasonable terms, or we are unable to implement alternative technology in a cost-effective manner, our results of operations could be materially adversely affected. The companyrisk of infringement claims against us may increase as we expand our business.

Following the identification during the fourth quarter of 2022 of material weaknesses in our disclosure controls and procedures and internal control over financial reporting, which has since been remediated, we have expended, and anticipate we will continue to expend, significant resources including accounting-related costs and costs associated with significant management oversight to maintain and improve the effectiveness of our disclosure controls and procedures and our internal control over financial reporting. If any of these new or improved controls and systems do not perform as expected, we may impact the company’s abilityexperience material weaknesses in our controls, which could result in material misstatements in our financial statements and a failure to access the financing markets on terms acceptable to the company or at all. If the company is unable to access the financing markets, the company would be required to use cash on hand to fund operationsmeet our reporting and the company’s required pension contributions and repay outstanding debt as it comes due. There is no assurance that the company will generate sufficient cash to fund its operations and required pension contributions and refinance such debt. A failure by the company to generate such cash wouldfinancial obligations, each of which could have a material adverse effect on its business if the company wereour financial condition. If we are unable to access financing marketscontinue to meet these requirements, we may not be able to remain listed on the New York Stock Exchange (NYSE). In addition, testing and maintaining internal controls may divert our management’s attention from other matters that are important to our business.

We have received, and may result in a default with respect to the company’s pension obligation and under the company’s debt agreements. Market conditions may also impact the company’s ability to utilize surety bonds, letters of credit, foreign exchange derivatives or other financial instruments the company uses to conduct its business.

Unisys Common Stock is listed for trading on the New York Stock Exchange (trading symbol “UIS”).

At January 31, 2022,2024, there were approximately 4,4004,000 stockholders of record.

The following graph compares the cumulative total stockholder return on Unisys common stock during the five fiscal years ended December 31, 2021,2023, with the cumulative total return on the Standard & Poor’s 500 Stock Index and the Standard & Poor’s 500 IT Services Index. The comparison assumes $100 was invested on December 31, 2016,2018, in Unisys common stock and in each of such indices and assumes reinvestment of any dividends.

Revenue for 20212023 was $2.05$2.02 billion compared with $2.03$1.98 billion for 2020,2022, an increase of 1.4%1.8%. Foreign currency fluctuations had a 2-percentage-point positivenegligible impact on revenue in the current year2023 compared with the year-ago period.2022.

Revenue from international operations for 2021both 2023 and 2022 was $1.20 billion compared with $1.24 billion for 2020, a decrease of 3.7% principally due to decreases in Latin America and Asia/Pacific.$1.13 billion. Foreign currency had a 3-percentage-point positivenegligible impact on international revenue in 20212023 compared with 2020.2022. Revenue from U.S. operations was $856.2$889.0 million for 20212023 compared with $781.5$854.9 million for 2020,2022, an increase of 9.6%4.0%.

During 2021,2023, the company recognized cost-reduction charges and other costs of $23.2$9.3 million. The net charges related to work-forceworkforce reductions were $0.4$8.3 million, principally related to severance costs, and were comprised of: (a) a charge of $12.3$15.2 million and (b) a credit of $11.9$6.9 million for changes in estimates. In addition, the company recorded net charges of $22.8$1.0 million comprised of $4.0charges of $4.7 million primarily related to professional fees and other expenses related to cost-reduction efforts and a credit of $3.7 million for net foreign currency lossesgains related to exiting foreign countries, $12.6 millioncountries. See Note 4, “Cost-reduction actions,” of the Notes to Consolidated Financial Statements for asset impairments and $6.2 million for other expenses related to cost-reduction efforts.details of the cost reduction activities.

During 2020,2022, the company recognized cost-reduction charges and other costs of $95.5$54.9 million. The net charges related to work-forceworkforce reductions were $25.5$7.5 million, principally related to severance costs, and were comprised of: (a) a charge of $39.0$7.1 million and (b) a creditcharge of $13.5$0.4 million for changes in estimates. In addition, the company recorded charges of $70.0$47.4 million comprised of $32.3$35.8 million for asset impairments, $8.7 million for other expenses related to cost-reduction efforts and $2.9 million for net foreign currency losses related to exiting foreign countries, $24.0 million for asset impairments and $13.7 million for other expenses related to cost-reduction efforts.countries.

The cost reduction charges (credits) were recorded in the following statement of income (loss) classifications:

Gross profit and gross profit margin was 27.8%were $551.3 million and 27.4% in 20212023, respectively, and 23.8%$529.6 million and 26.7% in 2020.2022, respectively. The increase in gross profit and gross profit margin in 2021 was2023 were primarily due lower cost reduction charges in part to improvements2023 and gross profit improvement in all the company’s segments drivenCloud, Applications & Infrastructure Solutions (CA&I) segment, partially offset by higher sales of the company’s enterprise software and improvements to efficiency.lower gross profit in Enterprise Computing Solutions (ECS) segment.

Selling, general and administrative expenses were $389.5$450.3 million in 2021 (19.0%2023 (22.3% of revenue) and $369.4$453.2 million in 2020 (18.2%2022 (22.9% of revenue). The increase was primarily due to increased investments in the company’s go-to-market efforts, primarily related to direct sales support and increases to non-cash-based compensation.

Research and development (R&D) expenses in 20212023 were $28.5$24.1 million compared with $26.6$24.2 million in 2020.2022.

In 2021,2023, the company reported an operating profit of $154.0$76.9 million compared with an operating profit of $87.0$52.2 million in 2020.2022. The increase in 20212023 was due in part by improvements in all the company’s segmentsprimarily driven by higher sales of the company’s enterprise software and improvements to efficiency.gross profit as discussed above.

Interest expense was $35.4$30.8 million in 20212023 compared with $29.2$32.4 million in 2020. The increase was principally due to the issuance of the 6.875% senior secured notes due 2027 in October 2020.2022.

Other (expense), net was expense of $580.3$393.9 million in 20212023 compared with expense of $329.6$82.4 million in 2020.2022. Other (expense), net in 20212023 includes $499.4$348.9 million of pension settlement losses compared with $142.1 million in 2020.losses. See Note 7,6, “Other (expense), net,” of the Notes to Consolidated Financial Statements for details of other (expense), net.

Pension expense for 2021in 2023 was $553.9$391.3 million compared with $235.3$47.1 million in 2020. The increase2022. Pension expense in 2021 was principally due to $499.42023 included $348.9 million of settlement losses in 2021primarily related to defined benefits plans in the Netherlands, the United States and Switzerland compared to a $142.1 million settlement loss in 2020 related tocompany’s U.S. defined benefit pensionbenefits plans. See Note 18,17, “Employee plans,” of the Notes to Consolidated Financial Statements for details of the settlement losses.

The loss from continuing operations before income taxes in 20212023 was $461.7$347.8 million compared with a loss of $271.8$62.6 million in 2020.2022. Included in the loss in 2021 and 2020 was $499.42023 were $348.9 million and $142.1 million, respectively, of settlement losses related to

The benefitprovision for income taxes in 20212023 was $11.9$79.3 million compared with a provision of $45.4$42.3 million in 2020.2022. The current period includes income tax benefits of $51.5 million related to the pension plan settlement losseschange in the Netherlands and Switzerland. In addition, in June 2021 the UK enacted an income tax rate increase from 19% to 25% for the fiscal year beginning April 1, 2023. The UK rate increase resulted in a deferred tax benefit of $17.7 million in 2021.provision is described below.

The company evaluates quarterly the realizability of its deferred tax assets by assessing its valuation allowance and by adjusting such amount, if necessary. The company records a tax provision or benefit for those international subsidiaries that do not have a full valuation allowance against their deferred tax assets. Any profit or loss recorded for the company’s U.S. operations will have no provision or benefit associated with it due to the company’s valuation allowance, except with respect to refundable tax credits and withholding taxes not creditable against future taxable income. As a result, the company’s provision or benefit for taxes may vary significantly period to period depending on the geographic distribution of income.

The realization of the company’s net deferred tax assets as of December 31, 20212023, is primarily dependent on the ability to generate sustained taxable income in various jurisdictions. Judgment is required to estimate forecasted future taxable income, which may be impacted by future business developments, actual results, strategic operational and tax initiatives, legislative, and other economic factors and developments. It is at least reasonably possible that the company’s judgment about the need for, and level of, existing valuation allowances could change in the near term based on changes in objective evidence such as further sustained income or loss in certain jurisdictions, as well as the other factors discussed above, primarily in certain jurisdictions outside of the United States. As such, the company will continue to monitor income levels and mix among jurisdictions, potential changes to the company’s operating and tax model, and other legislative or global developments in its determination. It is reasonably possible that such changes could result in a material impact to the company’s valuation allowance within the next 12 months. Any increase or decrease in the valuation allowance would result in additional or lower income tax expense in suchthat period and could have a significant impact on that period’s earnings. During 2023, the company determined that a portion of its non-U.S. net deferred tax assets required an additional valuation allowance. The net change in the valuation allowance impacting the effective tax rate in 2023 was approximately $2.1 million, primarily in Latin America. During 2022, the company determined that a portion of its non-U.S. net deferred tax assets no longer required a valuation allowance. The net change in the valuation allowances impacting the effective tax rate in 2022 was approximately $9.8 million of a tax benefit, primarily in the United Kingdom and other foreign jurisdictions.

Net loss from continuing operations attributable to Unisys Corporation for 20212023 was $448.5$430.7 million, or $6.75$6.31 per diluted share, compared with $317.7a net loss of $106.0 million, or $5.05$1.57 per diluted share in 2020.2022. Included in the loss in 2021 and 20202023 was $447.9$348.9 million and $142.1 million, respectively, of after taxafter-tax settlement losses related to the company’s defined benefit pension plans.

The accounting policies of each 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 ECS segment records intersegment revenue and manufacturing profit on software and hardware shipments to customers under contracts of other segments. These segments, in turn, record customer revenue and marketing profits on such shipments of company hardware and software to customers. In the company’s consolidated statements of income (loss), the manufacturing costs of products sourced from the ECS segment and sold to other segments’ customers are reported in cost of revenue for these other segments.

Corporate assets are principally cash and cash equivalents, prepaid postretirement assets and deferred income taxes. The expense or income related to corporate assets and centrally incurred costs are allocated to the business segments. See Note 21,20, “Segment information,” of the Notes to Consolidated Financial Statements.

Information by reportable segment is presented below:

DWS revenue was $567.0$546.1 million in 20212023 and $588.3$509.9 million in 2020. Revenue2022. The increase in 2021revenue in 2023 was negatively impacted as the company exited certain non-strategic contracts that were not aligned to its targeted margin profile.primarily driven by new business with existing clients. Foreign currency fluctuations had a 2-percentage-point positivenegligible impact on DWS revenue in 20212023 compared with 2020.2022. Gross profit percent was 13.5%14.0% in 2021both 2023 and 9.4% in 2020. The increase in gross profit in 2021 compared with 2020 was due in part to improvements in efficiency as well as the company’s focus on higher margin solutions.2022.

CCA&I revenue was $496.5$531.0 million in 20212023 and $465.2$520.3 million in 2020. The increase in revenue in 2021 compared with 2020 was driven by continued momentum with public sector clients as well as other highly-regulated industries.2022. Foreign currency fluctuations had a 2-percentage-point positivenegligible impact on CCA&I revenue in 20212023 compared with 2020.2022. Gross profit percent was 11.4%15.4% in 20212023 and 5.0%9.1% in 2020. The increase in gross profit in 2021 compared with 2020 was due in part to improvements in efficiency.

ECS revenue was $648.0 million in 2023 and $669.7 million in 2022. Foreign currency fluctuations had a negligible impact on ECS revenue in 2023 compared with 2022. Gross profit percent was 61.2% in 2023 and 64.5% in 2022. The decrease in revenue and gross profit percent was driven by the timing of the company’s enterprise software.software license renewals.

See Note 3,2, “Recent accounting pronouncements and accounting changes,” 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 the company’s consolidated financial statements.

The company’s principal sources of liquidity are cash on hand, cash from operations and its revolving credit facility, discussed below. The company and certain international subsidiaries have access to uncommitted lines of credit from various banks. The company believes that it will have adequate sources of liquidity to meet its expected cash requirements through at least the next twelve months.

Cash and cash equivalents at December 31, 20212023 were $552.9$387.7 million compared with $898.5$391.8 million at December 31, 2020.2022.

As of December 31, 2021, $326.62023, $232.2 million of cash and cash equivalents were held by the company’s foreign subsidiaries and branches operating outside of the U.S. The company may not be able to readily transfer up toapproximately one-third of these funds out of the country in which they are located as a result of local restrictions, contractual or other legal arrangements or commercial considerations. Additionally, any transfers of these funds to the U.S. in the future may require the company to accrue or pay withholding or other taxes on a portion of the amount transferred. See Note 8,7, “Income taxes,” of the Notes to Consolidated Financial Statements regarding the company’s intention to indefinitely reinvest earnings of foreign subsidiaries.

Cash used for investing activities during 2023 was $69.6 million compared with cash used for operations of $681.2 million during 2020. The operating cash improvement in 2021 was principally due to lower cash contributions to the company’s postretirement plans of $56.4 million in 2021 compared to $832.2 million in 2020.

Cash used for financing activities during 20212023 was $105.5$17.3 million compared with cash provided byused for financing activities of $5.1$21.6 million during 2020. The cash used2022.

In March 2023, the company purchased a group annuity contract, with plan assets, for approximately $263 million to transfer projected benefit obligations related to approximately 8,650 retirees of one of the company’s U.S. defined benefit pension plans. This action resulted in 2021 was principally duea pre-tax settlement loss of $181.0 million for the year ended December 31, 2023.

In November 2023, the company purchased a group annuity contract, with plan assets, for approximately $253 million to transfer projected benefit obligations related to approximately 3,900 retirees of one of the convertible notes exchange.company’s U.S. defined benefit pension plans. This action resulted in a pre-tax settlement loss of $167.2 million for the year ended December 31, 2023.

The American Rescue Plan Act, which was signed into lawAfter considering these most recent group annuity contract purchases, the company has successfully reduced its global defined benefit pension obligations since December 2020 by approximately $2.0 billion, including approximately $1.3 billion in the U.S. on March 11, 2021, includes a provisionThe company will continue to evaluate opportunities for pension relief that extends the amortization period for required contributions from 7 to 15 years and provides for the stabilizationadditional reduction of interest rates used to calculate future required contributions. As a result, the company was not required to make cash contributions in 2021 to its U.S. qualifiedglobal defined benefit pension obligations in future periods depending on overall market conditions. Due to the company’s significant postretirement plans and did not makeaccumulated other comprehensive losses, future group annuity contract purchases could result in material non-cash settlement losses.

At the previously-contemplated voluntary $200 million contribution to its U.S. pension plans in 2021. Based on year-end 2021 pension data and actuarial assumptions, which are likely to change in the future,end of each year, the company is not expected to be required to makeestimates its future cash contributions to its U.S. qualified defined benefit pension plans based on year-end pension data and assumptions. In 2023, we made cash contributions of $42.4 million, primarily for at leastour international defined benefit pension plans. Based on current legislation, global regulations, recent interest rates and expected returns, the next 10 years.

The company has commitments under operating leases for certain facilities and equipment used in its operations. As of December 31, 2021,2023, the company’s operating lease liabilities were $81.5$44.7 million. The company also havehas a number of finance leases for equipment, with lease liabilities totaling $2.7$0.3 million as of December 31, 2021.2023. See Note 6,5, “Leases and commitments,” of the Notes to Consolidated Financial Statements for more information pertaining to future minimum lease payments relating to the company’s operating and finance lease obligations.

Additionally, as described in Note 5,4, “Cost-reduction actions,” of the Notes to Consolidated Financial Statements, the company expects to make payments of approximately $14.9$9.4 million in 20222024 related to the company’s work-forceworkforce reduction actions and the company expects to make payments of approximately $1.4 million beyond 2022.actions.

The company has a secured revolving credit facility (the Amended and Restated ABL Credit Facility) that expires, which matures on October 29, 2025, thatand provides for revolving loans and letters of credit up to an aggregate amount of $145.0 million (with a limit on letters of credit of $40.0 million), with an accordion feature provision allowing for the aggregate amount available under the credit facility to be increased up to $175.0 million upon the satisfaction of certain conditions specified in theconditions. The Amended and Restated ABL Credit Facility.Facility was amended on June 2, 2023, primarily to replace the reference rate from the London Interbank Offered Rate to the Secured Overnight Financing Rate. Availability under the credit facility is subject to a borrowing base calculated by reference to the

The Amended and Restated ABL Credit Facility is subject to a springing maturity, under which the Amended and Restated ABL Credit Facility will immediately mature 91 days prior to any date on which contributions to pension funds in the United States in an amount in excess of $100.0 million are required to be paid unless the company is able to meet certain conditions, including that the company has the liquidity (as defined in the Amended and RestartedRestated ABL Credit Facility) to cash settle the amount of such pension payments, no default or event of default has occurred under the Amended and Restated ABL Credit Facility, the company’s liquidity is above $130.0 million and the company is in compliance with the then applicable fixed charge coverage ratio on a pro forma basis.

The Amended and Restated ABL Credit Facility is guaranteed by Unisys Holding Corporation, Unisys NPL, Inc., and Unisys AP Investment Company I, CompuGain LLC and CompuGain Public Services, LLC, each of which is a U.S. corporation or limited liability company that is directly or indirectly owned by the company (the subsidiary guarantors). The facility is secured by the assets of the company and the subsidiary guarantors, other than certain excluded assets, under a security agreement entered into by the company and the subsidiary guarantors in favor of JPMorgan Chase Bank, N.A., as agent for the lenders under the credit facility.

The company is required to maintain a minimum fixed charge coverage ratio if the availability under the Amended and Restated ABL Credit Facility falls below the greater of 10% of the lenders’ commitments under the facility and $14.5 million.

The Amended and Restated ABL Credit Facility contains customary representations and warranties, including, but not limited to, that there has been no material adverse change in the company’s business, properties, operations or financial condition. The Amended and Restated ABL Credit Facility includes restrictions on the ability of the company and its subsidiaries to, among other things, incur other debt or liens, dispose of assets and make acquisitions, loans and investments, repurchase its equity, and prepay other debt. These restrictions are subject to several important limitations and exceptions. Events of default include non-payment, failure to comply with covenants, materially incorrect representations and warranties, change of control and default under other debt aggregating at least $50.0 million, subject to relevant cure periods, as applicable.

At December 31, 2021,2023, the company hashad met all covenants and conditions under its various lending and funding agreements. The company expects to continue to meet these covenants and conditions through at least the next twelve months.

At December 31, 2021,2023, the company had outstanding standby letters of credit and surety bonds totaling approximately $198$232 million related to performance and payment guarantees. On the basis of experience with these arrangements, the company believes that any obligations that may arise will not be material.

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 preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes. Certain accounting policies, methods and estimates are particularly important because of their significance to the financial statements and because of the possibility that future events affecting them may differ from management’s current judgments. The company bases its estimates and judgments on historical experience and on other assumptions that it believes are reasonable under the circumstances; however, to the extent there are material differences between these estimates, judgments and assumptions and actual results, the financial statements will be affected. Although there are a number of accounting policies, methods and estimates affecting the company’s financial statements as described in Note 1, “Summary of significant accounting policies,” of the Notes to Consolidated Financial Statements, the following critical accounting policies reflect the significant estimates, judgments and assumptions. The development and selection of these critical accounting policies have been determined by management of the company and the related disclosures have been reviewed with the Audit and Finance Committee of the Board of Directors.

Many of the company’s sales agreements contain standard business terms and conditions; however, some agreements contain multiple performance obligations or non-standard terms and conditions. As discussed in Note 1, “Summary of significant accounting policies,” of the Notes to Consolidated Financial Statements, the company enters into arrangements that may include any combination of hardware, software or services. As a result, significant contract interpretation is sometimes required to determine the appropriate accounting, including how many performance obligations are present in an arrangement, whether

they should be treated as separate performance obligations and when to recognize revenue and under what method for each performance obligation.

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.

At December 31, 20212023 and 2020,2022, the company had deferred tax assets in excess of deferred tax liabilities of $1,332.3$1,263.2 million and $1,380.8$1,218.9 million, respectively. For the reasons cited below, at December 31, 20212023 and 2020,2022, management determined that it is more likely than not that $106.1$113.1 million and $109.3$108.4 million, respectively, of such assets will be realized, resulting in a valuation allowance of $1,226.2$1,150.1 million and $1,271.5$1,110.5 million, respectively.

The company evaluates the realizability of its deferred tax assets by assessing its valuation allowance and by adjusting such amount, if necessary. The realization of the company’s deferred tax assets is primarily dependent on the ability to generate sustained taxable income in various jurisdictions. Judgment is required to estimate forecasted future taxable income, which may be impacted by future business developments, actual results, strategic operational and tax initiatives, legislative, and other economic factors and developments. See “Item 1A. Risk Factors.” It is at least reasonably possible“Risk Factors” (Part I, Item 1A of this Form 10-K). The company records a tax provision or benefit for those international subsidiaries that do not have a full valuation allowance against their deferred tax assets. Any profit or loss recorded for the company’s judgment about the need for, and level of, existing valuation allowances could change in the near term based on changes in objective evidence such as further sustained incomeU.S. operations will have no provision or loss in certain jurisdictions, as well as the other factors discussed above, primarily in certain jurisdictions outside of the United States. As such, the company will continue to monitor income levels and mix among jurisdictions, potential changesbenefit associated with it due to the company’s operating and tax model, and other legislative or global developments in its determination. It is reasonably possible that such changes could result in a material impact to the Company’s valuation allowance, withinexcept with respect to refundable tax credits and withholding taxes not creditable against future taxable income. As a result, the next 12 months.company’s provision or benefit for taxes may vary significantly from period to period depending on the geographic distribution of income.

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). The company has determined that, for purposes of the rules of Section 382 described above, an ownership change occurred in February 2011. Any future transaction or transactions and the timing of such transaction or transactions could trigger additional ownership changes under Section 382.

As a result of the February 2011 ownership change in 2011, utilization for certain of the company’s Tax Attributes, U.S. net operating losses and tax credits, is subject to an overall annual limitation of $70.6 million. The cumulative limitation as of December 31, 20212023 is approximately $462.4$488 million. This limitation will be applied to any net operating losses and then to any other Tax Attributes. Any unused limitation may be carried over to later years. Based on presently available information and the existence of tax planning strategies, the company does not expect to incur a U.S. federal 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. See Note 8,7, “Income taxes,” of the Notes to Consolidated Financial Statements.

The company’s provision for income taxes and the determination of the resulting deferred tax assets and liabilities involve a significant amount of management judgment and are based on the best information available at the time. The company operates within federal, state and international taxing jurisdictions and is subject to audit in these jurisdictions. These audits can involve complex issues, which may require an extended period of time to resolve. As a result, the actual income tax liabilities in the jurisdictions with respect to any fiscal year are ultimately determined long after the financial statements have been published.

Accounting rules governing defined benefit pension plans require that amounts recognized in financial statements be determined on an actuarial basis. The measurement of the company’s pension obligations, costs and liabilities is dependent on a variety of assumptions selected by the company and used by the company’s actuaries. These assumptions include estimates of the present value of projected future pension payments to plan participants, taking into consideration the likelihood of potential

As permitted for purposes of computing pension expense, the company uses a calculated value of plan assets (which is further described below). This allows the effects of the performance of the pension plan’s assets on the company’s computation of pension income or expense to be amortized over future periods. A substantial portion of the company’s pension plan assets relates to its qualified defined benefit plans in the United States.

Funding requirements for its U.S. qualified pension plans are calculated by the plan’s actuaries based on certain assumptions as permitted under current regulations. Changes to the benefit obligation caused by a 25 basis point change noted below are related to the balance sheet obligation and are not necessarily indicative of the impact on the funding liability.

At the end of each year, the company determines the discount rate to be used to calculate the present value of plan liabilities. Inherent in deriving the discount rate are significant assumptions with respect to the timing and magnitude of expected benefit payment obligations. The discount rate is an estimate of the current interest rate at which the pension liabilities could be effectively settled at the end of the year. In estimating this rate, the company looks to rates of return on high-quality, fixed-income investments that (a) receive one of the two highest ratings given by a recognized ratings agency and (b) are currently available and expected to be available during the period to maturity of the pension benefits. At December 31, 2021,2023, the company determined this rate to be 3.18%5.70% for its U.S. defined benefit pension plans, an increasea decrease of 3334 basis points from the rate used at December 31, 2020,2022, and 1.73%4.24% for the company’s non-U.S. defined benefit pension plans, an increasea decrease of 5056 basis points from the rate used at December 31, 2020.2022. A change of 25 basis points in the U.S. and non-U.S. discount rates causes a change in 20222024 pension expense of approximately $1 million$500 thousand and $200$800 thousand, respectively, and a change of approximately $83$42 million and $102$48 million, respectively, in the benefit obligation. These estimates are intended to be illustrative based on a single 25 basis point change. The sensitivity to rate changes is not linear and additional changes in rates may result in a different impact on the pension liability. The net effect of changes in the discount rate, as well as the net effect of other changes in actuarial assumptions and experience, has been deferred, as permitted.

A significant element in determining the company’s pension income or expense is the expected long-term rate of return on plan assets. The company sets the expected long-term rate of return based on the expected long-term return of the various asset categories in which it invests. The company considers the current expectations for future returns and the actual historical returns of each asset class. Also, because the company’s investment policy is to actively manage certain asset classes where the potential exists to outperform the broader market, the expected returns for those asset classes are adjusted to reflect the expected additional returns. For 2022,2024, the company has assumed that the expected long-term rate of return on U.S. plan assets will be 6.50%7.00%, and on the company’s non-U.S. plan assets will be 3.88%4.82%. A change of 25 basis points in the expected long-term rate of return for the company’s U.S. and non-U.S. pension plans causes a change of approximately $7$5 million and $5$4 million, respectively, in 20222024 pension expense. The assumed long-term rate of return on assets is applied to a calculated value of plan assets, which recognizes changes in the fair value of plan assets in a systematic manner over four years. This produces the expected return on plan assets that is included in pension income or expense. The difference between this expected return and the actual return on plan assets is deferred. The net deferral of past asset gains or losses affects the calculated value of plan assets and, ultimately, future pension income or expense. At December 31, 2021,2023, for the company’s U.S. qualified defined benefit pension plans, the calculated value of plan assets was $3.14$2.08 billion and the fair value was $3.07$1.82 billion.

Gains and losses are defined as changes in the amount of either the projected benefit obligation or plan assets resulting from experience different from that assumed and from changes in assumptions. Because gains and losses may reflect refinements in estimates as well as real changes in economic values and because some gains in one period may be offset by losses in another and vice versa, the accounting rules do not require recognition of gains and losses as components of net pension costexpense of the period in which they arise.

At a minimum, amortization of an unrecognized net gain or loss must be included as a component of net pension costexpense for a year if, as of the beginning of the year, that unrecognized net gain or loss exceeds 10 percent of the greater of the projected benefit obligation or the calculated value of plan assets. If amortization is required, the minimum amortization is that excess above the 10 percent divided by the average remaining life expectancy of the plan participants. For the company’s U.S. qualified defined benefit pension plans and the company’s non-U.S. pension plans, that period is approximately 14 and 2321 years, respectively. At December 31, 2021,2023, the estimated unrecognized loss for the company’s U.S. qualified defined benefit pension plans and the company’s non-U.S. pension plans was $2.10$1.02 billion and $850$400 million, respectively.

For the year ended December 31, 2021,2023, the company recognized consolidated pension expense of $553.9$391.3 million (which includes $499.4$348.9 million of settlement losses), compared with $235.3$47.1 million for the year ended December 31, 2020 (which includes a $142.1 million settlement loss).2022. For 2022,2024, the company expects to recognize pension expense of approximately $42.3$57.7 million. See Note 18,17, “Employee plans,” of the Notes to Consolidated Financial Statements.

The company testsreviews goodwill for impairment annually in the fourth quarter using data as of September 30 of that year, as well as whenever there are events or changes in circumstances (triggering events), which suggestindicate that the carrying amount may not be recoverable.

The company initially assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. This qualitative assessment considers all relevant factors specific to the reporting units, including macroeconomic conditions, industry and market considerations, overall financial performance, changes in share price and relevant entity-specific events.

If, after completing the qualitative assessment, the company determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the company proceeds to perform a subsequent quantitative goodwill impairment test. Alternatively, the company may elect to bypass the qualitative assessment and perform the quantitative impairment test. The quantitative goodwill impairment test compares each reporting unit’s fair value to its carrying value. If the reporting unit’s fair value exceeds its carrying value, no further procedures are required. However, if a reporting unit’s fair value is less than its carrying value, then an impairment charge is recorded in the amount of the excess.

When the company performs the quantitative goodwill impairment test for a reporting unit, it estimates the fair value of the reporting unit using both the income approach and the market approach. The methodology used to determine the fair values using the income and market approaches, as described below, are weighted to determine the fair value for each reporting unit.

The income approach is a forward-looking approach to estimating fair value and relies primarily on internal forecasts. Within the income approach, the method used is the discounted cash flow method. The company starts with a forecast of all expected net cash flows associated with the reporting unit, which includes the application of a terminal value, and then a reporting unit-specific discount rate is applied to arrive at a net present value amount. Some of the more significant estimates and assumptions inherent in this approach include the amount and timing of projected net cash flows, long-term growth rate and the discount rate. Cash flow projections are based on management’s estimates of economic and market conditions, which drive key assumptions of revenue growth rates and operating margins. The discount rate, in turn, is based on various market factors and specific risk characteristics of each reporting unit.

The market approach relies primarily on external information for estimating the fair value. Some of the more significant estimates and assumptions inherent in this approach include the selection of appropriate guideline companies and the selected performance metric used in this approach.

Estimating the fair value of reporting units requires the use of estimates and significant judgments about key assumptions. There are a number of factors, including potential events and changes in circumstances that could change in future periods, including: projected operating results; valuation multiples exhibited by the company and by companies considered comparable to the reporting units; and other macro-economic factors that could impact the discount rate. It is reasonably possible that the judgments and estimates described above could change in future periods.periods, which could have a significant impact on the fair value of the related reporting units.

In January 2021,During the fourth quarter of 2023, the company changed its organizational structure to more effectively address evolving client needs. With these changes, the company changed its reportable segments, operating segments and reporting units. The realignment and change was deemedperformed a triggering event, resulting in the company performing an interim quantitative goodwill impairment test onfor each reporting unit. The quantitative assessment indicated that each reporting unit’s fair value exceeded its carrying value, as such no impairment charge was recognized as of December 31, 2023. We estimated the fair value of the reporting units impactedusing a combination of discounted cash flows and market-based valuation methodologies as noted above. These methodologies involve significant assumptions that are subject to variability.

The company continuously monitors and evaluates relevant events and circumstances that could unfavorably impact the significant assumptions noted above, including changes to U.S. treasury rates and equity risk premiums, tax rates, recent market valuations from transactions by this segment change as of immediately beforecomparable companies, volatility in the company’s market capitalization, and immediately aftergeneral industry, market and macro-economic conditions. It is possible that future changes in such circumstances or in the change. There were no impairment charges resulting from this analysis. As a resultinputs and assumptions used in estimating the fair value of the realignment, goodwill totaling $108.6 million was reallocated as follows: ECS, $98.3 million and Other, $10.3 million.reporting units, could require the company to record a non-cash impairment charge.

Goodwill by reporting unit at December 31, 2021,2023, was as follows (dollars in millions):follows:

The company has exposure to interest rate risk from its debt. In general,an effort to manage interest rate exposures, the company’s long-termcompany strives to achieve an acceptable balance between fixed and variable debt is fixed rate and, to the extent it has any, its short-term debt is variable rate. See Note 16, “Debt,” of the Notes to Consolidated Financial Statements. The company believes that the market risk assuming a hypothetical 10% increase in interest rates would not be material to the fair value of these financial instruments, or the related cash flows, or future results of operations.

As of December 31, 2021,2023, the company had outstanding $480.4 million ($485.0 million face value) of 6.875% senior secured notes due 2027 (the 2027 Notes). As the 2027 Notes have a fixed interest rate, the company does not have financial and economic exposure related to rising interest rates with respect to the 2027 Notes. However, the fair value of fixed rate instruments fluctuates when interest rates change. As of December 31, 2023, the fair value of the senior secured notes due 2027 Notes was $527.0$437.5 million.

The company is also exposed to foreign currency exchange rate risks. The company is a net receiver of currencies other than the U.S. dollar and, as such, can benefit from a weaker dollar, and can be adversely affected by a stronger dollar relative to currencies worldwide.worldwide, primarily the euro and British pound sterling. Accordingly, changes in exchange rates, and in particular a strengthening of the U.S. dollar, may adversely affect consolidated revenue and operating margins as expressed in U.S. dollars. Currency exposure gains and losses are mitigated by purchasing components and incurring expenses in local currencies.

In addition, the company uses derivative financial instruments, primarily foreign exchange forward contracts, to reduce its exposure to market risks from changes in foreign currency exchange rates on intercompany balances. See Note 13,12, “Financial instruments and concentration of credit risks,” of the Notes to Consolidated Financial Statements for additional information on the company’s derivative financial instruments.

The company has performed a sensitivity analysis assuming a hypothetical 10% adverse movement in foreign currency exchange rates applied to these derivative financial instruments described above. As of December 31, 20212023 and 2020,2022, the analysis indicated that such market movements would have reduced the estimated fair value of these derivative financial instruments by approximately $55$49 million and $50$54 million, respectively. Based on changes in the timing and amount of interest rate and foreign currency exchange rate movements and the company’s actual exposures and hedges, actual gains and losses in the future may differ from the above analysis.

We also have audited, in our opinion,accordance with the standards of the Public Company maintained, in all material respects, effectiveAccounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2021,2023, based on criteria established in the 2013 Internal Control - Control—Integrated Framework(2013)issued by the COSO.

Our audit procedures related to the estimation of the fair value of the reporting unit included the following, among others:

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also includedrisk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audits provideaudit provides a reasonable basis for our opinions.opinion.

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (i)(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii)(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii)(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

We have audited the accompanyingconsolidated balance sheet of Unisys Corporation and its subsidiaries (the “Company”) as of December 31, 2022, and the related consolidated statements of income (loss), of comprehensive income, (loss),of equity (deficit) and of cash flows and deficit for each of the yeartwo years in the period ended December 31, 2019, and2022, including the related notes and schedule of valuation and qualifying accounts for each of the two years in the period ended December 31, 2022 appearing after the signatures page (collectively referred to as the “consolidated financial statement schedule II (collectively, the consolidated financial statements)statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for each of the yeartwo years in the period ended December 31, 2019,2022 in conformity with U.S.accounting principles generally accepted accounting principles.in the United States of America.

These consolidated financial statements are the responsibility of the Company’sCompany's management. Our responsibility is to express an opinion on thesethe Company’s consolidated financial statements based on our audit.audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our auditaudits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our auditaudits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our auditaudits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit providesaudits provide a reasonable basis for our opinion.