UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended ~~September~~June 30, ~~2022~~2023


☐			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

(215) 986-4011

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

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


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

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

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

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

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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

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

Number of shares of Unisys Common Stock, par value $.01, outstanding as of ~~September~~June 30, ~~2022: 67,787,549~~2023: 68,300,493

UNISYS CORPORATION

TABLE OF CONTENTS


		Page Number
	Information Concerning Forward-Looking Statements	2
PART I - FINANCIAL INFORMATION		~~Page Number~~
Item 1.	Consolidated Financial Statements (Unaudited)
	Consolidated Statements of Income (Loss)	24
	Consolidated Statements of Comprehensive Income (Loss)	35
	Consolidated Balance Sheets	46
	Consolidated Statements of Cash Flows	57
	Consolidated Statements of ~~Deficit~~Equity (Deficit)	68
	Notes to Consolidated Financial Statements	79
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	3029
Item 4.	Controls and Procedures	3029
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 5	Other Information	32
Item 6.	Exhibits	3533

Exhibit Index		3634
Signatures		3735

INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS

Certain statements contained in this report, including, without limitation, statements as to management expectations, assumptions and beliefs presented in Part I, Item 2. “Management's Discussion and Analysis of Financial Condition and Results of Operations,” Part I, Item 3. “Quantitative and Qualitative Disclosures About Market Risk,” Part II, Item 1. “Legal Proceedings” and in the notes to the financial statements are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Exchange Act and the Private Securities Litigation Reform Act of 1995. Words such as “anticipates,” “estimates,” “expects,” “projects,” “may,” “will,” “intends,” “plans,” “believes,” “should” and similar expressions may identify forward-looking statements and such forward-looking statements are made based upon management’s current expectations, assumptions and beliefs as of this date concerning future developments and their potential effect on us. There can be no assurance that future developments will be in accordance with management's expectations, assumptions or beliefs, or that the effect of future developments on us will be those anticipated by management. Because actual results may differ materially from those expressed or implied by these forward-looking statements, we caution readers not to place undue reliance on these statements. 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.

The factors that could cause actual results to differ materially from our expectations, assumptions and beliefs include, but are not limited to, those discussed in Item 1A. Risk Factors of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 include:

Implementation of Business Strategy in Information Technology Market

•our ability to grow revenue and expand margin in our Digital Workplace Solutions and Cloud, Applications & Infrastructure Solutions businesses;

•our ability to maintain our installed base and sell new solutions and related services;

•our ability to attract and retain experienced personnel in key positions;

•the potential adverse effects of aggressive competition;

•our ability to effectively anticipate and respond to rapid technological innovation in our industry;

•our ability to retain significant clients and attract new clients;

•our contracts may not be as profitable as expected or provide the expected level of revenues;

•the business and financial risk in implementing acquisitions or dispositions;

Defined Benefit Pension Plans

•we have significant underfunded pension obligations;

General Business Risks

•cybersecurity incidents could result in incurring significant costs and harm to our business and reputation;

•our failure to remediate material weaknesses in our disclosure controls and procedures and internal controls over financial reporting or any other material weaknesses in the future could result in material misstatements in our financial statements;

•our ability to access financing markets;

•the risks of doing business internationally when a significant portion of our revenue is derived from international operations;

•the adverse effects of global economic conditions, acts of war, terrorism, natural disasters or the widespread outbreak of infectious diseases;

•a reduction in our credit rating;

•a significant disruption in our IT systems could adversely affect our business and reputation;

•the performance and capabilities of third parties with whom we have commercial relationships;

•if our clients are not satisfied with our services or products, we may face damage to our reputation or legal liability;

•the potential for intellectual property infringement claims to be asserted against our clients or us;

•the possibility that legal proceedings could affect our results of operations or cash flow or may adversely affect our business or reputation;

•a potential impairment of goodwill or intangible assets;

•a failure to meet standards or expectations with respect to our environmental, social and governance practices; and

•our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.

Other factors discussed in this report, although not listed here, also could materially affect our future results.

Part I - FINANCIAL INFORMATION

Item 1. Financial Statements

UNISYS CORPORATION

CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Unaudited)

(Millions, except per share data)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Revenue	Revenue									Revenue
Services	Services	$	395.2	$	417.9	$	1,187.6	$	1,268.8	Services	$	417.0	$	400.3	$	820.9	$	792.4
Technology	Technology	66.0		70.1		235.3		246.3		Technology	59.8		114.7		172.3		169.3
		461.2		488.0		1,422.9		1,515.1			476.8		515.0		993.2		961.7
Costs and expenses	Costs and expenses									Costs and expenses
Cost of revenue	Cost of revenue									Cost of revenue
Services	Services	318.2		343.1		961.6		1,019.7		Services	323.5		322.1		639.6		643.4
Technology	Technology	38.7		18.0		121.5		87.1		Technology	37.5		44.8		78.8		82.8
		356.9		361.1		1,083.1		1,106.8			361.0		366.9		718.4		726.2
Selling, general and administrative	Selling, general and administrative	106.3		95.1		320.3		279.7		Selling, general and administrative	110.3		109.6		213.2		214.0
Research and development	Research and development	6.0		6.7		17.3		19.1		Research and development	5.4		4.8		11.6		11.3
		469.2		462.9		1,420.7		1,405.6			476.7		481.3		943.2		951.5
Operating (loss) income		(8.0)		25.1		2.2		109.5
Operating income										Operating income	0.1		33.7		50.0		10.2
Interest expense	Interest expense	7.9		8.5		24.6		27.0		Interest expense	7.5		8.3		15.1		16.7
Other (expense), net	Other (expense), net	(23.3)		(24.2)		(66.2)		(434.6)		Other (expense), net	(16.7)		(21.9)		(213.6)		(42.9)
Loss before income taxes		(39.2)		(7.6)		(88.6)		(352.1)
Provision for (benefit from) income taxes		0.7		10.9		25.1		(33.8)
(Loss) earnings before income taxes										(Loss) earnings before income taxes	(24.1)		3.5		(178.7)		(49.4)
Provision for income taxes										Provision for income taxes	15.4		20.3		35.3		24.4
Consolidated net loss	Consolidated net loss	(39.9)		(18.5)		(113.7)		(318.3)		Consolidated net loss	(39.5)		(16.8)		(214.0)		(73.8)
Net income (loss) attributable to noncontrolling interests		0.2		0.2		0.8		(1.0)
Net income attributable to noncontrolling interests										Net income attributable to noncontrolling interests	0.5		0.3		1.4		0.6
Net loss attributable to Unisys Corporation	Net loss attributable to Unisys Corporation	$	(40.1)	$	(18.7)	$	(114.5)	$	(317.3)	Net loss attributable to Unisys Corporation	$	(40.0)	$	(17.1)	$	(215.4)	$	(74.4)

Loss per share attributable to Unisys Corporation	Loss per share attributable to Unisys Corporation									Loss per share attributable to Unisys Corporation

Basic	Basic	$	(0.59)	$	(0.28)	$	(1.69)	$	(4.79)	Basic	$	(0.59)	$	(0.25)	$	(3.16)	$	(1.10)

Diluted	Diluted	$	(0.59)	$	(0.28)	$	(1.69)	$	(4.79)	Diluted	$	(0.59)	$	(0.25)	$	(3.16)	$	(1.10)

See notes to consolidated financial statements

UNISYS CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

(Millions)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022

Consolidated net loss	Consolidated net loss	$	(39.9)	$	(18.5)	$	(113.7)	$	(318.3)	Consolidated net loss	$	(39.5)	$	(16.8)	$	(214.0)	$	(73.8)
Other comprehensive income (loss)	Other comprehensive income (loss)									Other comprehensive income (loss)
Foreign currency translation	Foreign currency translation	(90.9)		(36.5)		(204.2)		(36.8)		Foreign currency translation	32.5		(95.6)		56.9		(113.3)
Postretirement adjustments, net of tax of $14.4 and $35.2 in 2022 and $7.4 and $45.2 in 2021		89.1		63.4		234.8		408.6
Total other comprehensive (loss) income		(1.8)		26.9		30.6		371.8
Postretirement adjustments, net of tax of $(4.4) and $(7.4) in 2023 and $14.1 and $20.8 in 2022										Postretirement adjustments, net of tax of $(4.4) and $(7.4) in 2023 and $14.1 and $20.8 in 2022	(1.8)		88.4		176.5		145.7
Total other comprehensive income (loss)										Total other comprehensive income (loss)	30.7		(7.2)		233.4		32.4
Comprehensive (loss) income	Comprehensive (loss) income	(41.7)		8.4		(83.1)		53.5		Comprehensive (loss) income	(8.8)		(24.0)		19.4		(41.4)
Less comprehensive income (loss) attributable to noncontrolling interests	Less comprehensive income (loss) attributable to noncontrolling interests	0.1		(0.8)		(0.5)		(0.5)		Less comprehensive income (loss) attributable to noncontrolling interests	0.6		0.3		1.4		(0.6)
Comprehensive (loss) income attributable to Unisys Corporation	Comprehensive (loss) income attributable to Unisys Corporation	$	(41.8)	$	9.2	$	(82.6)	$	54.0	Comprehensive (loss) income attributable to Unisys Corporation	$	(9.4)	$	(24.3)	$	18.0	$	(40.8)

See notes to consolidated financial statements

UNISYS CORPORATION

CONSOLIDATED BALANCE SHEETS (Unaudited)

(Millions)


		September 30, 2022			December 31, 2021			June 30, 2023		December 31, 2022
Assets	Assets						Assets
Current assets:	Current assets:						Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	351.4		$	552.9	Cash and cash equivalents	$	423.2	$	391.8
Accounts receivable, net	Accounts receivable, net	404.6			451.7		Accounts receivable, net	377.2		402.5
Contract assets	Contract assets	26.3			42.0		Contract assets	16.5		28.9
Inventories	Inventories	12.4			7.6		Inventories	21.0		14.9
Prepaid expenses and other current assets	Prepaid expenses and other current assets	83.7			78.8		Prepaid expenses and other current assets	112.6		92.3
Total current assets	Total current assets	878.4			1,133.0		Total current assets	950.5		930.4
Properties	Properties	436.8			468.0		Properties	406.6		410.8
Less-accumulated depreciation and amortization	Less-accumulated depreciation and amortization	359.1			381.5		Less-accumulated depreciation and amortization	332.9		334.9
Properties, net	Properties, net	77.7			86.5		Properties, net	73.7		75.9
Outsourcing assets, net	Outsourcing assets, net	78.7			124.6		Outsourcing assets, net	46.5		66.4
Marketable software, net	Marketable software, net	168.6			176.2		Marketable software, net	164.6		165.1
Operating lease right-of-use assets	Operating lease right-of-use assets	48.0			62.7		Operating lease right-of-use assets	38.6		42.5
Prepaid postretirement assets	Prepaid postretirement assets	170.7		*	159.7		Prepaid postretirement assets	120.9		119.5
Deferred income taxes	Deferred income taxes	109.9			125.3		Deferred income taxes	112.5		118.6
Goodwill	Goodwill	286.2			315.0		Goodwill	287.3		287.1
Intangible assets, net	Intangible assets, net	54.8			34.9		Intangible assets, net	47.5		52.4
Restricted cash	Restricted cash	13.6			7.7		Restricted cash	9.0		10.9
Assets held-for-sale	Assets held-for-sale	20.0			20.0		Assets held-for-sale	6.4		6.4
Other long-term assets	Other long-term assets	151.5			173.9		Other long-term assets	175.2		190.4
Total assets	Total assets	$	2,058.1	*	$	2,419.5	Total assets	$	2,032.7	$	2,065.6
Liabilities and deficit
Total liabilities and equity							Total liabilities and equity
Current liabilities:	Current liabilities:						Current liabilities:
Current maturities of long-term-debt		$	17.5		$	18.2
Current maturities of long-term debt							Current maturities of long-term debt	$	14.5	$	17.4
Accounts payable	Accounts payable	157.3			180.2		Accounts payable	150.4		160.8
Deferred revenue	Deferred revenue	206.2			253.2		Deferred revenue	219.8		200.7
Other accrued liabilities	Other accrued liabilities	261.0			300.9		Other accrued liabilities	256.3		271.6

Total current liabilities	Total current liabilities	642.0			752.5		Total current liabilities	641.0		650.5
Long-term debt	Long-term debt	498.4			511.2		Long-term debt	488.5		495.7
Long-term postretirement liabilities	Long-term postretirement liabilities	851.0		*	976.2		Long-term postretirement liabilities	683.0		714.6
Long-term deferred revenue	Long-term deferred revenue	127.2			150.7		Long-term deferred revenue	113.0		122.3
Long-term operating lease liabilities	Long-term operating lease liabilities	34.0			46.1		Long-term operating lease liabilities	24.8		29.7
Other long-term liabilities	Other long-term liabilities	40.8			47.2		Other long-term liabilities	33.1		31.0
Commitments and contingencies (see Note 15)
Deficit:
Common stock, shares issued: 2022; 73.3, 2021; 72.5		0.7			0.7
Commitments and contingencies (see Note 13)							Commitments and contingencies (see Note 13)
Equity:							Equity:
Common stock, shares issued: 2023; 73.9, 2022; 73.3							Common stock, shares issued: 2023; 73.9, 2022; 73.3	0.7		0.7
Accumulated deficit	Accumulated deficit	(1,523.5)			(1,409.0)		Accumulated deficit	(1,730.4)		(1,515.0)
Treasury stock, shares at cost: 2022; 5.5, 2021; 5.3		(155.9)			(152.2)
Treasury stock, shares at cost: 2023; 5.6, 2022; 5.5							Treasury stock, shares at cost: 2023; 5.6, 2022; 5.5	(156.4)		(156.0)
Paid-in capital	Paid-in capital	4,726.8			4,710.9		Paid-in capital	4,740.1		4,731.6
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(3,232.2)			(3,264.1)		Accumulated other comprehensive loss	(2,842.6)		(3,076.0)
Total Unisys Corporation stockholders’ deficit		(184.1)			(113.7)
Total Unisys Corporation stockholders' equity (deficit)							Total Unisys Corporation stockholders' equity (deficit)	11.4		(14.7)
Noncontrolling interests	Noncontrolling interests	48.8			49.3		Noncontrolling interests	37.9		36.5
Total deficit		(135.3)			(64.4)
Total liabilities and deficit		$	2,058.1	*	$	2,419.5
Total equity							Total equity	49.3		21.8
Total liabilities and equity							Total liabilities and equity	$	2,032.7	$	2,065.6

*These consolidated financial statements reflect a change of $15.2 million to increase both assets and liabilities, as compared to the previously filed consolidated financial statements on November 7, 2022.

See notes to consolidated financial statements

UNISYS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Millions)


		Nine Months Ended September 30,					Six Months Ended June 30,
		2022		2021			2023		2022
Cash flows from operating activities	Cash flows from operating activities					Cash flows from operating activities
Consolidated net loss	Consolidated net loss	$	(113.7)	$	(318.3)	Consolidated net loss	$	(214.0)	$	(73.8)

Adjustments to reconcile consolidated net loss to net cash (used for) provided by operating activities:
Adjustments to reconcile consolidated net loss to net cash provided by (used for) operating activities:						Adjustments to reconcile consolidated net loss to net cash provided by (used for) operating activities:

Foreign currency losses		6.3		3.2
Foreign currency (gains) losses						Foreign currency (gains) losses	(0.5)		0.4
Non-cash interest expense	Non-cash interest expense	1.0		1.5		Non-cash interest expense	0.6		0.7
Employee stock compensation	Employee stock compensation	15.2		11.5		Employee stock compensation	8.9		10.3
Depreciation and amortization of properties	Depreciation and amortization of properties	29.3		23.2		Depreciation and amortization of properties	13.7		19.2
Depreciation and amortization of outsourcing assets	Depreciation and amortization of outsourcing assets	48.8		50.8		Depreciation and amortization of outsourcing assets	25.1		36.0
Amortization of marketable software	Amortization of marketable software	42.7		50.9		Amortization of marketable software	24.5		29.6
Amortization of intangible assets	Amortization of intangible assets	7.7		1.7		Amortization of intangible assets	4.9		5.3
Other non-cash operating activities	Other non-cash operating activities	0.2		(0.1)		Other non-cash operating activities	0.4		0.2
Loss on disposal of capital assets	Loss on disposal of capital assets	1.6		1.5		Loss on disposal of capital assets	0.1		0.6
Postretirement contributions	Postretirement contributions	(33.9)		(43.6)		Postretirement contributions	(31.1)		(25.1)
Postretirement expense	Postretirement expense	34.1		407.7		Postretirement expense	203.8		22.7
Deferred income taxes, net	Deferred income taxes, net	(6.5)		(65.3)		Deferred income taxes, net	9.3		3.1
Changes in operating assets and liabilities, excluding the effect of acquisitions:	Changes in operating assets and liabilities, excluding the effect of acquisitions:					Changes in operating assets and liabilities, excluding the effect of acquisitions:
Receivables, net and contract assets	Receivables, net and contract assets	48.4		135.0		Receivables, net and contract assets	71.0		22.7
Inventories	Inventories	(5.6)		2.2		Inventories	(5.7)		(5.4)
Other assets	Other assets	(2.5)		(4.1)		Other assets	(16.1)		(9.3)
Accounts payable and current liabilities	Accounts payable and current liabilities	(101.5)		(229.6)		Accounts payable and current liabilities	(37.6)		(108.2)
Other liabilities	Other liabilities	6.2		36.3		Other liabilities	(2.0)		4.3
Net cash (used for) provided by operating activities		(22.2)		64.5
Net cash provided by (used for) operating activities						Net cash provided by (used for) operating activities	55.3		(66.7)
Cash flows from investing activities	Cash flows from investing activities					Cash flows from investing activities
Purchase of businesses, net of cash acquired		(0.3)		(150.4)

Proceeds from investments	Proceeds from investments	2,441.0		3,286.4		Proceeds from investments	1,485.4		1,668.0
Purchases of investments	Purchases of investments	(2,499.4)		(3,294.6)		Purchases of investments	(1,470.4)		(1,697.6)
Investment in marketable software	Investment in marketable software	(35.2)		(42.1)		Investment in marketable software	(21.3)		(23.6)
Capital additions of properties	Capital additions of properties	(21.5)		(19.7)		Capital additions of properties	(11.9)		(14.0)
Capital additions of outsourcing assets	Capital additions of outsourcing assets	(8.1)		(14.7)		Capital additions of outsourcing assets	(4.9)		(6.5)
Purchase of businesses, net of cash acquired						Purchase of businesses, net of cash acquired	—		(0.3)
Other	Other	(0.9)		(0.9)		Other	(0.4)		(0.4)
Net cash used for investing activities	Net cash used for investing activities	(124.4)		(236.0)		Net cash used for investing activities	(23.5)		(74.4)
Cash flows from financing activities	Cash flows from financing activities					Cash flows from financing activities
Payments of long-term debt	Payments of long-term debt	(14.6)		(99.1)		Payments of long-term debt	(10.6)		(11.2)

Proceeds from issuance of long-term debt		—		1.5

Proceeds from exercise of stock options		—		4.5

Other	Other	(3.8)		(7.7)		Other	(0.4)		(3.8)
Net cash used for financing activities	Net cash used for financing activities	(18.4)		(100.8)		Net cash used for financing activities	(11.0)		(15.0)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	Effect of exchange rate changes on cash, cash equivalents and restricted cash	(30.6)		(9.9)		Effect of exchange rate changes on cash, cash equivalents and restricted cash	8.7		(15.2)
Decrease in cash, cash equivalents and restricted cash		(195.6)		(282.2)
Increase (decrease) in cash, cash equivalents and restricted cash						Increase (decrease) in cash, cash equivalents and restricted cash	29.5		(171.3)
Cash, cash equivalents and restricted cash, beginning of period	Cash, cash equivalents and restricted cash, beginning of period	560.6		906.7		Cash, cash equivalents and restricted cash, beginning of period	402.7		560.6
Cash, cash equivalents and restricted cash, end of period	Cash, cash equivalents and restricted cash, end of period	$	365.0	$	624.5	Cash, cash equivalents and restricted cash, end of period	$	432.2	$	389.3

See notes to consolidated financial statements

UNISYS CORPORATION

CONSOLIDATED STATEMENTS OF ~~DEFICIT~~EQUITY (DEFICIT) (Unaudited)

(Millions)


				Unisys Corporation																	Unisys Corporation
		Total		Total Unisys Corporation		Common Stock Par Value		Accumu-lated Deficit		Treasury Stock At Cost		Paid-in Capital		Accumu-lated Other Compre-hensive Loss		Non-controlling Interests			Total		Total Unisys Corporation		Common Stock Par Value		Accumu-lated Deficit		Treasury Stock At Cost		Paid-in Capital		Accumu-lated Other Compre-hensive Loss		Non-controlling Interests
Balance at December 31, 2021		$	(64.4)	$	(113.7)	$	0.7	$	(1,409.0)	$	(152.2)	$	4,710.9	$	(3,264.1)	$	49.3
Balance at December 31, 2022																		Balance at December 31, 2022	$	21.8	$	(14.7)	$	0.7	$	(1,515.0)	$	(156.0)	$	4,731.6	$	(3,076.0)	$	36.5
Consolidated net (loss) income	Consolidated net (loss) income	(57.0)		(57.3)				(57.3)								0.3		Consolidated net (loss) income	(174.5)		(175.4)				(175.4)								0.9

Stock-based activity	Stock-based activity	2.2		2.2						(3.5)		5.7						Stock-based activity	4.0		4.0						(0.3)		4.3
Translation adjustments	Translation adjustments	(17.7)		(14.9)										(14.9)		(2.8)		Translation adjustments	24.4		23.3										23.3		1.1
Postretirement plans	Postretirement plans	57.3		55.7										55.7		1.6		Postretirement plans	178.3		179.5										179.5		(1.2)
Balance at March 31, 2022		$	(79.6)	$	(128.0)	$	0.7	$	(1,466.3)	$	(155.7)	$	4,716.6	$	(3,223.3)	$	48.4
Balance at March 31, 2023																		Balance at March 31, 2023	$	54.0	$	16.7	$	0.7	$	(1,690.4)	$	(156.3)	$	4,735.9	$	(2,873.2)	$	37.3
Consolidated net income (loss)	Consolidated net income (loss)	(16.8)		(17.1)				(17.1)								0.3		Consolidated net income (loss)	(39.5)		(40.0)				(40.0)								0.5
Stock-based activity	Stock-based activity	5.1		5.1						(0.2)		5.3						Stock-based activity	4.1		4.1						(0.1)		4.2
Translation adjustments	Translation adjustments	(95.6)		(92.3)										(92.3)		(3.3)		Translation adjustments	32.5		30.8										30.8		1.7
Postretirement plans	Postretirement plans	88.4		85.1										85.1		3.3		Postretirement plans	(1.8)		(0.2)										(0.2)		(1.6)
Balance at June 30, 2022		$	(98.5)	$	(147.2)	$	0.7	$	(1,483.4)	$	(155.9)	$	4,721.9	$	(3,230.5)	$	48.7
Consolidated net (loss) income		(39.9)		(40.1)				(40.1)								0.2
Stock-based activity		4.9		4.9								4.9
Translation adjustments		(90.9)		(87.4)										(87.4)		(3.5)
Postretirement plans		89.1		85.7										85.7		3.4
Balance at September 30, 2022		$	(135.3)	$	(184.1)	$	0.7	$	(1,523.5)	$	(155.9)	$	4,726.8	$	(3,232.2)	$	48.8
Balance at June 30, 2023																		Balance at June 30, 2023	$	49.3	$	11.4	$	0.7	$	(1,730.4)	$	(156.4)	$	4,740.1	$	(2,842.6)	$	37.9


				Unisys Corporation																	Unisys Corporation
		Total		Total Unisys Corporation		Common Stock Par Value		Accumu-lated Deficit		Treasury Stock At Cost		Paid-in Capital		Accumu-lated Other Compre-hensive Loss		Non-controlling Interests			Total		Total Unisys Corporation		Common Stock Par Value		Accumu-lated Deficit		Treasury Stock At Cost		Paid-in Capital		Accumu-lated Other Compre-hensive Loss		Non-controlling Interests
Balance at December 31, 2020		$	(312.1)	$	(356.8)	$	0.7	$	(960.5)	$	(114.4)	$	4,656.9	$	(3,939.5)	$	44.7
Balance at December 31, 2021																		Balance at December 31, 2021	$	(64.4)	$	(113.7)	$	0.7	$	(1,409.0)	$	(152.2)	$	4,710.9	$	(3,264.1)	$	49.3
Consolidated net (loss) income	Consolidated net (loss) income	(157.5)		(157.8)				(157.8)								0.3		Consolidated net (loss) income	(57.0)		(57.3)				(57.3)								0.3
Capped call on conversion of notes		—		—						(30.8)		30.8

Stock-based activity	Stock-based activity	(1.3)		(1.3)						(6.7)		5.4						Stock-based activity	2.2		2.2						(3.5)		5.7
Translation adjustments	Translation adjustments	(17.1)		(17.9)										(17.9)		0.8		Translation adjustments	(17.7)		(14.9)										(14.9)		(2.8)
Postretirement plans	Postretirement plans	202.2		202.2										202.2		—		Postretirement plans	57.3		55.7										55.7		1.6
Balance at March 31, 2021		$	(285.8)	$	(331.6)	$	0.7	$	(1,118.3)	$	(151.9)	$	4,693.1	$	(3,755.2)	$	45.8
Consolidated net loss		(142.3)		(140.8)				(140.8)								(1.5)
Stock-based activity		4.5		4.5						(0.2)		4.7
Translation adjustments		16.8		16.4										16.4		0.4
Postretirement plans		143.0		142.7										142.7		0.3
Balance at June 30, 2021		$	(263.8)	$	(308.8)	$	0.7	$	(1,259.1)	$	(152.1)	$	4,697.8	$	(3,596.1)	$	45.0
Balance at March 31, 2022																		Balance at March 31, 2022	$	(79.6)	$	(128.0)	$	0.7	$	(1,466.3)	$	(155.7)	$	4,716.6	$	(3,223.3)	$	48.4
Consolidated net (loss) income	Consolidated net (loss) income	(18.5)		(18.7)				(18.7)								0.2		Consolidated net (loss) income	(16.8)		(17.1)				(17.1)								0.3
Stock-based activity	Stock-based activity	5.3		5.3						—		5.3						Stock-based activity	5.1		5.1						(0.2)		5.3
Translation adjustments	Translation adjustments	(36.5)		(33.9)										(33.9)		(2.6)		Translation adjustments	(95.6)		(92.3)										(92.3)		(3.3)
Postretirement plans	Postretirement plans	63.4		61.8										61.8		1.6		Postretirement plans	88.4		85.1										85.1		3.3
Balance at September 30, 2021		$	(250.1)	$	(294.3)	$	0.7	$	(1,277.8)	$	(152.1)	$	4,703.1	$	(3,568.2)	$	44.2
Balance at June 30, 2022																		Balance at June 30, 2022	$	(98.5)	$	(147.2)	$	0.7	$	(1,483.4)	$	(155.9)	$	4,721.9	$	(3,230.5)	$	48.7

See notes to consolidated financial statements

UNISYS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Dollars in millions, except share and per share amounts)

Note 1 - Basis of Presentation

The ~~accompanying~~unaudited consolidated financial statements ~~and footnotes of Unisys Corporation~~included in this Quarterly Report on Form 10-Q have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). These rules and regulations permit some of the information and footnote disclosures normally included in financial statements, prepared in accordance with ~~generally accepted accounting principles in~~U.S. GAAP, to be condensed or omitted. In management’s opinion, the ~~United States of America (GAAP). The~~unaudited consolidated financial statements ~~and footnotes~~contain all adjustments that are ~~unaudited. In the opinion~~ of ~~management, the financial information furnished herein reflects all adjustments~~a normal recurring nature, necessary for a fair ~~statement~~presentation of the results of operations ~~comprehensive income (loss),~~and financial position ~~cash flows and deficit~~of the company for the interim periods ~~specified.~~presented. 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.

These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the fiscal year ended December 31, 2022 and the notes thereto included in the company’s Annual Report on Form 10-K, filed with the SEC.

Use of Estimates

The preparation of financial statements in conformity with GAAP 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 estimated credit losses, contract assets, operating lease right-of-use assets, outsourcing assets, marketable software, goodwill, purchased intangibles and other long-lived assets, legal contingencies, 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 materially from these estimates. Changes in those estimates resulting from continuing changes in the economic environment such as rising interest rates, inflation, fluctuation in foreign exchange rates and the conflict in Ukraine, 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 Consolidated Financial Statements in the company’s Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 filed with the ~~Securities and Exchange Commission.~~SEC. Such Annual Report also contains a discussion of the company’s critical accounting policies and estimates. The company believes that these critical accounting policies and estimates affect its more significant estimates and judgments used in the preparation of the company’s consolidated financial statements.

~~Note 2~~ - ~~Accounting Standards~~

Effective January 1, 2022, the company adopted Accounting Standards Update (ASU) No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This guidance requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers, as if it had originated the contracts. Deferred revenue acquired in a business combination is no longer required to be measured at its fair value, which had historically resulted in a deferred revenue impairment at the date of acquisition. The company will adopt this guidance for acquisitions completed on or after January 1, 2022.

~~Note 3 - Acquisitions~~

On December 14, 2021, the company acquired 100% of CompuGain LLC (CompuGain), a leading cloud solutions provider, for a purchase price consideration of $85.3 million on a cash-free, debt-free basis. The company funded the cash consideration and acquisition-related costs with cash on hand.

~~The acquisition enhanced the company’s delivery of rapid and agile cloud migration, application modernization and data value realization to our clients.~~

~~The fair values of the total net assets acquired was as follows:~~



~~Receivables~~	$	~~7.8~~
~~Prepaid expenses and other current assets~~	~~0.7~~
~~Properties and other long-term assets~~	~~0.2~~
~~Operating lease right-of-use assets~~	~~0.2~~
~~Accounts payable and accruals~~	~~(7.4)~~

~~Long-term operating lease liabilities~~	~~(0.1)~~
~~Intangible assets~~	~~45.9~~
~~Goodwill~~	~~38.0~~
~~Total~~	$	~~85.3~~

In the second quarter of 2022, the company finalized its valuation of assets acquired and liabilities assumed resulting in measurement period adjustments that decreased goodwill by $27.5 million primarily related to an increase of $27.6 million in the fair value of the acquired intangible assets.

Goodwill is the excess of the purchase price consideration over the fair value of the underlying intangible assets and net liabilities assumed. The goodwill represents expected synergies, intellectual capital and the acquired assembled workforce, none of which qualify for recognition as a separate intangible asset. Goodwill determined by the allocation of the purchase price was recorded in the company’s Cloud, Applications & Infrastructure Solutions segment and is deductible for tax purposes.

~~The following table summarizes the fair value of the intangible assets acquired and the related weighted average amortization period:~~

Weighted Average Amortization Period in Years Fair Value
Customer relationships 12.0 $ 44.6
Trademark 4.0 1.3
Total $ 45.9

The company’s consolidated financial statements include the results of CompuGain commencing as of the acquisition date. Revenue and earnings for CompuGain have not been presented as the impact is not material to the company’s consolidated financial statements.

For the nine months ended September 30, 2022, the company incurred and expensed acquisition-related costs of $0.4 million, Acquisition-related costs are included within selling, general and administrative expenses on the consolidated statements of income (loss).

Note 42 - Cost-Reduction Actions

During the three months ended ~~September~~June 30, 2022, the company recognized cost-reduction charges and other costs of $8.1 million. The charges related to work-force reductions were $0.5 million for changes in estimates. In addition, the company recorded charges of $7.6 million comprised of $1.9 million for net foreign currency losses related to exiting foreign countries, $4.7 million for asset impairments and $1.0 million for other expenses related to cost-reduction efforts.

~~During the three months ended September 30, 2021,~~2023, the company recognized net cost-reduction charges and other costs of ~~$0.8~~$3.5 million. The net ~~credits~~charge related to ~~work-force~~workforce reductions ~~were $0.6~~was $2.1 million, principally related to severance costs, and were comprised of: (a) a charge of ~~$0.7~~$3.9 million and (b) a credit of ~~$1.3~~$1.8 million for changes in estimates. In addition, the company recorded ~~net~~ charges of $1.4 million comprised of $1.3 million for professional fees and other expenses related to cost-reduction efforts and $0.1 million for net foreign currency losses related to exiting foreign countries.

During the three months ended June 30, 2022, the company recognized net cost-reduction charges and other costs of $3.1 million. The company recorded charges of $3.4 million comprised of $1.8 million for net foreign currency losses related to exiting foreign countries, $0.9 million for asset impairments and $0.7 million for other expenses related to cost-reduction efforts. In addition, the company recorded a credit related to workforce reductions of $0.3 million for changes in estimates.

During the six months ended June 30, 2023, the company recognized net cost-reduction charges and other costs of $0.7 million. The net charge related to work-force reductions was $2.8 million, principally related to severance costs. These net charges were comprised of: (a) a charge of $6.5 million and (b) a credit of $3.7 million for changes in estimates. In addition, the company recorded a net credit of $2.1 million comprised of a credit of $3.4 million for net foreign currency gains related to exiting foreign countries and a charge of $1.3 million for professional fees and other expenses related to cost-reduction efforts.

During the six months ended June 30, 2022, the company recognized net cost-reduction charges and other costs of $6.1 million. The company recorded net charges of $7.0 million comprised of a charge of $2.9 million for net foreign currency losses related to exiting foreign countries, a charge of ~~$0.5~~$4.7 million for asset impairments and a credit of ~~$0.4~~$0.6 million for changes in estimates related to ~~other~~ cost-reduction efforts.

~~During the nine months ended September 30, 2022,~~ In addition, the company ~~recognized net cost-reduction charges and other costs of $14.2 million. The~~recorded a credit related to work-force reductions ~~was $0.4~~of $0.9 million for changes in estimates. In addition, the company recorded charges of $14.6 million comprised of $4.8 million for net foreign currency losses related to exiting foreign countries, $9.4 million for asset impairments and a net charge of $0.4 million for other expenses related to cost-reduction efforts.

During the nine months ended September 30, 2021, the company recognized net cost-reduction charges and other costs of $14.4 million. The net credits related to work-force reductions were $2.5 million, principally related to severance costs, and were comprised of: (a) a charge of $6.5 million and (b) a credit of $9.0 million for changes in estimates. In addition, the company recorded charges of $16.9 million comprised of $2.9 million for net foreign currency losses related to exiting foreign countries, $7.3 million for asset impairments and $6.7 million for other expenses related to cost-reduction efforts.

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Cost of revenue	Cost of revenue	$	3.9	$	(0.2)	$	7.4	$	0.9	Cost of revenue	$	2.8	$	0.8	$	3.4	$	3.5
Selling, general and administrative	Selling, general and administrative	2.4		(0.1)		2.2		8.7		Selling, general and administrative	0.5		0.5		0.5		(0.2)
Research and development	Research and development	(0.1)		(0.2)		(0.2)		1.9		Research and development	0.1		—		0.2		(0.1)
Other (expense), net	Other (expense), net	1.9		1.3		4.8		2.9		Other (expense), net	0.1		1.8		(3.4)		2.9
Total	Total	$	8.1	$	0.8	$	14.2	$	14.4	Total	$	3.5	$	3.1	$	0.7	$	6.1

Liabilities and expected future payments related to the company’s work-force reduction actions are as follows:


		Total		U.S.		International			Total		U.S.		International
Balance at December 31, 2021		$	16.3	$	5.7	$	10.6

Balance at December 31, 2022								Balance at December 31, 2022	$	11.7	$	4.2	$	7.5
Additional provisions								Additional provisions	6.5		1.8		4.7
Payments	Payments	(8.6)		(3.4)		(5.2)		Payments	(4.4)		(2.1)		(2.3)
Changes in estimates	Changes in estimates	(0.4)		(1.0)		0.6		Changes in estimates	(3.7)		(1.2)		(2.5)
Translation adjustments	Translation adjustments	(1.0)		—		(1.0)		Translation adjustments	0.1		—		0.1
Balance at September 30, 2022		$	6.3	$	1.3	$	5.0
Expected future utilization on balance at September 30, 2022:
Balance at June 30, 2023								Balance at June 30, 2023	$	10.2	$	2.7	$	7.5
Expected future utilization on balance at June 30, 2023:								Expected future utilization on balance at June 30, 2023:
Short-term	Short-term	$	6.3	$	1.3	$	5.0	Short-term	$	10.2	$	2.7	$	7.5

910

Note 53 - Pension and Postretirement Benefits

Net periodic pension expense (income) is presented below:


		Three Months Ended September 30, 2022						Three Months Ended September 30, 2021							Three Months Ended June 30, 2023						Three Months Ended June 30, 2022
		Total		U.S. Plans		International Plans		Total		U.S. Plans		International Plans			Total		U.S. Plans		International Plans		Total		U.S. Plans		International Plans
Service cost(i)	Service cost(i)	$	0.4	$	—	$	0.4	$	0.7	$	—	$	0.7	Service cost(i)	$	0.3	$	—	$	0.3	$	0.5	$	—	$	0.5
Interest cost	Interest cost	38.2		28.7		9.5		38.2		29.4		8.8		Interest cost	53.7		35.5		18.2		39.1		29.0		10.1
Expected return on plan assets	Expected return on plan assets	(66.1)		(47.4)		(18.7)		(69.8)		(50.0)		(19.8)		Expected return on plan assets	(62.0)		(40.7)		(21.3)		(67.3)		(47.4)		(19.9)
Amortization of prior service benefit	Amortization of prior service benefit	(1.2)		(0.6)		(0.6)		(1.3)		(0.7)		(0.6)		Amortization of prior service benefit	(1.2)		(0.6)		(0.6)		(1.3)		(0.7)		(0.6)
Recognized net actuarial loss	Recognized net actuarial loss	40.5		31.4		9.1		45.8		34.0		11.8		Recognized net actuarial loss	20.1		17.9		2.2		41.9		32.3		9.6

Net periodic pension expense (income)	Net periodic pension expense (income)	$	11.8	$	12.1	$	(0.3)	$	13.6	$	12.7	$	0.9	Net periodic pension expense (income)	$	10.9	$	12.1	$	(1.2)	$	12.9	$	13.2	$	(0.3)


		Nine Months Ended September 30, 2022						Nine Months Ended September 30, 2021							Six Months Ended June 30, 2023						Six Months Ended June 30, 2022
		Total		U.S. Plans		International Plans		Total		U.S. Plans		International Plans			Total		U.S. Plans		International Plans		Total		U.S. Plans		International Plans
Service cost(i)	Service cost(i)	$	1.4	$	—	$	1.4	$	2.4	$	—	$	2.4	Service cost(i)	$	0.6	$	—	$	0.6	$	1.0	$	—	$	1.0
Interest cost	Interest cost	116.2		86.0		30.2		116.2		88.2		28.0		Interest cost	112.2		76.3		35.9		78.0		57.3		20.7
Expected return on plan assets	Expected return on plan assets	(201.8)		(142.3)		(59.5)		(212.3)		(149.9)		(62.4)		Expected return on plan assets	(131.4)		(89.3)		(42.1)		(135.7)		(94.9)		(40.8)
Amortization of prior service benefit	Amortization of prior service benefit	(3.8)		(1.9)		(1.9)		(4.0)		(1.9)		(2.1)		Amortization of prior service benefit	(2.4)		(1.2)		(1.2)		(2.6)		(1.3)		(1.3)
Recognized net actuarial loss	Recognized net actuarial loss	123.3		94.4		28.9		138.6		101.8		36.8		Recognized net actuarial loss	42.2		37.8		4.4		82.8		63.0		19.8
Settlement losses (ii) (iii)		—		—		—		368.7		158.0		210.7
Settlement losses (ii)														Settlement losses (ii)	183.2		183.2		—		—		—		—
Net periodic pension expense (income)	Net periodic pension expense (income)	$	35.3	$	36.2	$	(0.9)	$	409.6	$	196.2	$	213.4	Net periodic pension expense (income)	$	204.4	$	206.8	$	(2.4)	$	23.5	$	24.1	$	(0.6)


(i)Service cost is reported in selling, general and administrative expense. All other components of net periodic pension expense (income) are reported in other (expense), net in the consolidated statements of income (loss).
(ii)In the second quarter of 2021, the company’s primary pension plan related to its Dutch subsidiary was transferred to a multi-client circle within a multi-employer fund. This action resulted in a pre-tax settlement loss of $182.6 million for the nine months ended September 30, 2021. Additionally, the company’s Swiss subsidiary transferred its defined benefit pension plans to a multiple-employer collective foundation. This action resulted in a pre-tax settlement loss of $28.1 million for the nine months ended September 30, 2021.
~~(iii)In January 2021,~~March 2023, the company purchased a group annuity contract, with plan assets, for approximately $265 million to ~~transferred~~transfer projected benefit obligations related to ~~its~~approximately 8,650 retirees of one of the company’s U.S. defined benefit pension plans. This action resulted in a pre-tax settlement loss of ~~$158.0~~$183.2 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2023.

In ~~2022,~~2023, the company expects to make cash contributions of approximately ~~$38.5~~$41 million primarily for ~~the company’s~~its international defined benefit pension plans. In ~~2021,~~2022, the company made cash contributions of ~~$52.4~~$39.3 million to its worldwide defined benefit pension plans. During the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, the company made cash contributions of ~~$30.9~~$28.4 million and ~~$40.3~~$23.3 million, respectively.

At the end of each year, the company estimates its future cash contributions to its U.S. qualified defined benefit pension plans based on year-end pension data and assumptions. Any material deterioration in the value of the company’s U.S. qualified defined benefit pension plan assets, as well as changes in pension legislation, discount rate changes, asset return changes, or changes in economic or demographic trends, could require the company to make cash contributions to its U.S. defined benefit pension ~~plans.~~

plans in different amounts and on a different schedule than previously contemplated.

Net periodic postretirement benefit income is presented below:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Service cost(i)	Service cost(i)	$	0.1	$	0.1	$	0.2	$	0.3	Service cost(i)	$	0.1	$	0.1	$	0.1	$	0.1
Interest cost	Interest cost	0.4		0.5		1.4		1.3		Interest cost	0.7		0.5		1.5		1.0
Expected return on assets	Expected return on assets	—		(0.1)		(0.2)		(0.3)		Expected return on assets	(0.1)		(0.1)		(0.2)		(0.2)
Recognized net actuarial gain	Recognized net actuarial gain	(0.5)		(0.7)		(1.5)		(2.0)		Recognized net actuarial gain	(0.7)		(0.5)		(1.4)		(1.0)
Amortization of prior service cost		(0.4)		(0.4)		(1.1)		(1.2)
Amortization of prior service benefit										Amortization of prior service benefit	(0.3)		(0.4)		(0.6)		(0.7)
Net periodic postretirement benefit income	Net periodic postretirement benefit income	$	(0.4)	$	(0.6)	$	(1.2)	$	(1.9)	Net periodic postretirement benefit income	$	(0.3)	$	(0.4)	$	(0.6)	$	(0.8)


(i)Service cost is reported in selling, general and administrative expense. All other components of net periodic postretirement benefit expense (income) are reported in other (expense), net in the consolidated statements of income (loss).

The company expects to make ~~cash contributions of approximately $6 million to its postretirement benefit plan in 2022. In 2021, the company made~~ cash contributions of $4.0 million to its postretirement benefit ~~plan. For the nine months ended September 30,~~plan in 2023. In 2022, ~~and 2021,~~ the company made cash contributions of ~~$3.0~~$4.3 million to its postretirement benefit plan. For the six months ended June 30, 2023 and 2022, the company made cash contributions of $2.7 million and ~~$3.3~~$1.8 million, respectively.

Note 64 - Stock Compensation

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.

As of ~~September~~June 30, ~~2022,~~2023, the company has granted ~~non-qualified stock options,~~ restricted stock and restricted stock units under these plans. The company recognizes compensation cost, net of a forfeiture rate, in selling, general and administrative expense, and recognizes compensation cost only for those awards expected to vest. The company estimates the forfeiture rate based on its historical experience and its expectations about future forfeitures.

During the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, the company recorded ~~$15.2~~$8.9 million and ~~$11.5~~$10.3 million of share-based restricted stock and restricted stock unit compensation expense, respectively.

Restricted stock and restricted stock unit awards may contain time-based units, performance-based units, total shareholder return market-based units, or a combination of these units. Each performance-based and market-based unit will vest into zero to two shares depending on the degree to which the performance or market conditions are met. Compensation expense for performance-based 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. Compensation expense for market-related awards is recognized as expense ratably over the measurement period, regardless of the actual level of achievement, provided the service requirement is met. Restricted stock unit grants for the company’s directors vest upon award and compensation expense for such awards is recognized upon grant.

A summary of restricted stock and restricted stock unit (RSU) activity for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 follows (shares in thousands):


		Restricted Stock and RSU	Weighted- Average Grant-Date Fair Value			Restricted Stock and RSU	Weighted- Average Grant-Date Fair Value
Outstanding at December 31, 2021		2,124	$	22.73
Outstanding at December 31, 2022					Outstanding at December 31, 2022	2,230	$	23.53
Granted	Granted	1,174	24.73		Granted	3,821	4.12
Vested	Vested	(787)	22.23		Vested	(575)	12.60
Forfeited and expired	Forfeited and expired	(163)	25.23		Forfeited and expired	(444)	12.08
Outstanding at September 30, 2022		2,348	23.71
Outstanding at June 30, 2023					Outstanding at June 30, 2023	5,032	9.52

1112

The aggregate weighted-average grant-date fair value of restricted stock and restricted stock units granted during the ~~nine~~six months ended ~~September~~June 30, 2023 and 2022 ~~and 2021~~ was ~~$27.0~~$16.7 million and ~~$32.4~~$26.7 million, respectively. The fair value of restricted stock and restricted stock units with time and performance conditions was determined based on the trading price of the company’s common shares on the date of grant. The fair value of awards with market conditions was estimated using a Monte Carlo simulation with the following weighted-average assumptions:


		Nine Months Ended September 30,							Six Months Ended June 30,
		2022			2021				2023			2022
Weighted-average fair value of grant	Weighted-average fair value of grant	$	34.14		$	40.02		Weighted-average fair value of grant	$	7.32		$	34.14
Risk-free interest rate(i)	Risk-free interest rate(i)	1.72		%	0.27		%	Risk-free interest rate(i)	4.51		%	1.72		%
Expected volatility(ii)	Expected volatility(ii)	57.71		%	57.08		%	Expected volatility(ii)	63.63		%	57.71		%
Expected life of restricted stock units in years(iii)	Expected life of restricted stock units in years(iii)	2.85			2.84			Expected life of restricted stock units in years(iii)	2.84			2.85
Expected dividend yield	Expected dividend yield	—		%	—		%	Expected dividend yield	—		%	—		%


(i)Represents the continuously compounded semi-annual zero-coupon U.S. treasury rate commensurate with the remaining performance period.
(ii)Based on historical volatility for the company that is commensurate with the length of the performance period.
(iii)Represents the remaining life of the longest performance period.

As of ~~September~~June 30, ~~2022,~~2023, there was ~~$34.0~~$28.4 million of total unrecognized compensation cost related to outstanding restricted stock and restricted stock units granted under the company’s plans. That cost is expected to be recognized over a weighted-average period of ~~2.1~~2.0 years. The aggregate weighted-average grant-date fair value of restricted stock and restricted stock units vested during the ~~nine~~six months ended ~~September~~June 30, 2023 and 2022 ~~and 2021~~ was ~~$16.6~~$7.2 million and ~~$14.8~~$16.6 million, respectively.

Common stock issued upon the lapse of restrictions on restricted stock and restricted stock units are newly issued shares. In light of its tax position, the company is currently not recognizing any tax benefits from the issuance of stock upon lapse of restrictions on restricted stock and restricted stock units.

Note 75 - Other (expense), net

Other (expense), net is comprised of the following:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Postretirement expense*	Postretirement expense*	$	(10.9)	$	(12.2)	$	(32.5)	$	(405.0)	Postretirement expense*	$	(10.2)	$	(11.9)	$	(203.1)	$	(21.6)

Foreign exchange losses**		(5.9)		(2.1)		(6.3)		(3.0)
Environmental costs and other, net		(6.5)		(9.9)		(27.4)		(26.6)
Foreign exchange (losses) gains**										Foreign exchange (losses) gains**	(3.2)		(2.6)		0.5		(0.4)
Environmental costs and other, net***										Environmental costs and other, net***	(3.3)		(7.4)		(11.0)		(20.9)
Total other (expense), net	Total other (expense), net	$	(23.3)	$	(24.2)	$	(66.2)	$	(434.6)	Total other (expense), net	$	(16.7)	$	(21.9)	$	(213.6)	$	(42.9)

*Includes ~~$368.7~~$183.2 million in the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2023, of a settlement ~~losses~~loss related to one of the company’s U.S. defined benefit pension plans. See Note 5.3.

**Includes net foreign exchange losses of ~~$1.9~~$0.1 million and ~~$1.3~~$1.8 million, respectively, in the three months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, related to substantial completion of liquidation of foreign subsidiaries. Includes net foreign currency gains of $3.4 million and net foreign currency losses of ~~$4.8 million and~~ $2.9 million, respectively, in the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, related to substantial completion of liquidation of foreign subsidiaries.

***Environmental costs relate to a previously disposed business.

Note 86 - Income Taxes

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~~such amount, ~~of such allowance,~~ if necessary. The realization of the company’s net deferred tax assets as of ~~September~~June 30, ~~2022~~2023, 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. Any increase or decrease in the valuation allowance would result in additional or lower income tax expense in that period and could have a significant impact on that period’s earnings. As a result of its projections of future taxable income, the company has determined that a portion of its non-U.S. net deferred tax assets no longer requires a valuation allowance as of September 30, 2022. The release of the valuation allowance for the three and nine months ended September 30, 2022 was approximately $10.4 million and $12.1 million, respectively, primarily in the United Kingdom and other European jurisdictions.

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. operations will have no provision or benefit associated with it due to such valuation allowance, except with respect to withholding taxes not creditable against future taxable income. As a result, the company’s provision or benefit for taxes may vary significantly depending on the geographic distribution of income.

A corporation’s ability to deduct its federal net operating loss (NOL) carryforwards and utilize certain other available tax attributes can be substantially constrained under the general annual limitation rules of Section 382 of the U.S. Internal Revenue Code (Section 382) if it undergoes an “ownership change” as defined in Section 382 (generally where cumulative stock ownership changes among material shareholders exceed 50 percent during a rolling three-year period). Similar rules may apply under state tax laws. A future tax “ownership change” pursuant to Section 382 or future changes in tax laws that impose tax attribute utilization limitations may severely limit or effectively eliminate the company’s ability to utilize its NOL carryforwards and other tax attributes.

Note 97 - Loss Per Share

The following table shows how loss per share attributable to Unisys Corporation was computed (shares in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Basic loss per common share computation:	Basic loss per common share computation:									Basic loss per common share computation:

Net loss attributable to Unisys Corporation	Net loss attributable to Unisys Corporation	$	(40.1)	$	(18.7)	$	(114.5)	$	(317.3)	Net loss attributable to Unisys Corporation	$	(40.0)	$	(17.1)	$	(215.4)	$	(74.4)
Weighted average shares	Weighted average shares	67,787		67,131		67,623		66,211		Weighted average shares	68,289		67,694		68,116		67,541

Basic loss per common share	Basic loss per common share	$	(0.59)	$	(0.28)	$	(1.69)	$	(4.79)	Basic loss per common share	$	(0.59)	$	(0.25)	$	(3.16)	$	(1.10)

Diluted loss per common share computation:	Diluted loss per common share computation:									Diluted loss per common share computation:
Net loss attributable to Unisys Corporation	Net loss attributable to Unisys Corporation	$	(40.1)	$	(18.7)	$	(114.5)	$	(317.3)	Net loss attributable to Unisys Corporation	$	(40.0)	$	(17.1)	$	(215.4)	$	(74.4)

Weighted average shares	Weighted average shares	67,787		67,131		67,623		66,211		Weighted average shares	68,289		67,694		68,116		67,541

Plus incremental shares from assumed conversions of employee stock plans	Plus incremental shares from assumed conversions of employee stock plans	—		—		—		—		Plus incremental shares from assumed conversions of employee stock plans	—		—		—		—

Adjusted weighted average shares	Adjusted weighted average shares	67,787		67,131		67,623		66,211		Adjusted weighted average shares	68,289		67,694		68,116		67,541

Diluted loss per common share	Diluted loss per common share	$	(0.59)	$	(0.28)	$	(1.69)	$	(4.79)	Diluted loss per common share	$	(0.59)	$	(0.25)	$	(3.16)	$	(1.10)

Anti-dilutive weighted-average stock options and restricted stock units(i)	Anti-dilutive weighted-average stock options and restricted stock units(i)	339		764		531		857		Anti-dilutive weighted-average stock options and restricted stock units(i)	901		418		646		628


(i)Amounts represent shares excluded from the computation of diluted loss per share, as their effect, if included, would have been anti-dilutive for the periods presented.

1314

Note 108 - Contract Assets and Deferred Revenue

Contract assets represent rights to consideration in exchange for goods or services transferred to a customer when that right is conditional on something other than the passage of time. Deferred revenue represents contract liabilities.

Net contract assets (liabilities) are as follows:


		September 30, 2022		December 31, 2021			June 30, 2023		December 31, 2022
Contract assets - current	Contract assets - current	$	26.3	$	42.0	Contract assets - current	$	16.5	$	28.9
Contract assets - long-term(i)	Contract assets - long-term(i)	13.6		17.4		Contract assets - long-term(i)	9.8		11.0
Deferred revenue - current	Deferred revenue - current	(206.2)		(253.2)		Deferred revenue - current	(219.8)		(200.7)
Deferred revenue - long-term	Deferred revenue - long-term	(127.2)		(150.7)		Deferred revenue - long-term	(113.0)		(122.3)


(i)Reported in other long-term assets on the company’s consolidated balance sheets.

Significant changes in the above contract liability balances were as follows:

Three Months Ended
September 30, Nine Months Ended
September 30,
2022 2021 2022 2021
Revenue recognized that was included in deferred revenue at the beginning of the period $ 40.7 $ 47.5 $ 185.5 $ 210.4


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenue recognized that was included in deferred revenue at the beginning of the period	$	53.5	$	61.9	$	118.6	$	144.8

Note 119 - Capitalized Contract Costs

The company’s incremental direct costs of obtaining a contract consist of sales commissions, which are deferred and amortized ratably over the initial contract life. These costs are classified as current or noncurrent based on the timing of when the company expects to recognize the expense. The current and noncurrent portions of deferred commissions are included in prepaid expenses, ~~and~~ other current assets and in other long-term assets, respectively, in the company’s consolidated balance sheets. At ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the company had ~~$4.1~~$2.6 million and ~~$6.7~~$4.9 million, respectively, of deferred commissions.

Amortization expense related to deferred commissions was as follows:

Three Months Ended
September 30, Nine Months Ended
September 30,
2022 2021 2022 2021
Deferred commissions - amortization expense(i)
$ 0.5 $ 0.6 $ 2.4 $ 2.2


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Deferred commissions - amortization expense(i)	$	0.4	$	0.8	$	0.8	$	1.9

(i)Reported in selling, general and administrative expense in the company’s consolidated statements of income (loss).

Costs on outsourcing contracts are generally expensed as incurred. However, certain costs incurred upon initiation of an outsourcing contract (costs to fulfill a contract), principally initial customer setup, are capitalized and expensed over the initial contract life. These costs are included in outsourcing assets, net in the company’s consolidated balance sheets. The amount of such costs at ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021~~2022, was ~~$38.8~~$28.5 million and ~~$56.2~~$34.8 million, respectively. These costs are amortized over the initial contract life and reported in cost of revenue.

Amortization expense related to costs to fulfill a contract was as follows:

Three Months Ended
September 30, Nine Months Ended
September 30,
2022 2021 2022 2021
Costs to fulfill a contract - amortization expense $ 5.1 $ 7.7 $ 21.5 $ 20.4


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Costs to fulfill a contract - amortization expense	$	1.4	$	7.5	$	3.6	$	16.4

The remaining balance of outsourcing assets, net is comprised of fixed assets and software used in connection with outsourcing contracts. These costs are capitalized and depreciated over the shorter of the initial contract life or in accordance with the company’s fixed asset policy.

1415

Note 1210 - Financial Instruments and Fair Value Measurements

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 three months or less, which have not been designated as hedging instruments. At ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the notional amount of these contracts was ~~$484.9~~$462.1 million and ~~$552.2~~$533.5 million, respectively. 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.

The following table summarizes the fair value of the company’s foreign exchange forward contracts.


		September 30, 2022		December 31, 2021			June 30, 2023		December 31, 2022
Balance Sheet Location	Balance Sheet Location					Balance Sheet Location
Prepaid expenses and other current assets	Prepaid expenses and other current assets	$	0.1	$	3.6	Prepaid expenses and other current assets	$	2.8	$	7.9
Other accrued liabilities	Other accrued liabilities	13.4		2.1		Other accrued liabilities	1.1		1.3
Total fair value	Total fair value	$	(13.3)	$	1.5	Total fair value	$	1.7	$	6.6

The following table summarizes the location and amount of gains and (losses) recognized on foreign exchange forward contracts.


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Statement of Income Location	Statement of Income Location									Statement of Income Location
Other (expense), net	Other (expense), net	$	(33.1)	$	(11.4)	$	(73.3)	$	(15.7)	Other (expense), net	$	5.0	$	(29.3)	$	10.2	$	(40.2)

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 liabilities. The carrying amounts of these financial assets and liabilities approximate fair value due to their short maturities. Such financial instruments are not included in the following table that provides information about the estimated fair values of other financial instruments that are not measured at fair value in the consolidated balance sheets as of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021.~~2022.


		September 30, 2022				December 31, 2021					June 30, 2023				December 31, 2022
		Carrying Amount		Fair Value		Carrying Amount		Fair Value			Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt:	Long-term debt:									Long-term debt:
6.875% senior secured notes due November 1, 2027	6.875% senior secured notes due November 1, 2027	$	479.0	$	381.9	$	478.1	$	527.0	6.875% senior secured notes due November 1, 2027	$	479.8	$	349.8	$	479.2	$	373.0

Long-term debt is carried at amortized cost and its estimated fair value is based on market prices classified as Level 2 in the fair value hierarchy.

Note 1311 - Goodwill and Intangible Assets

Goodwill

Changes in the carrying value of goodwill by reporting unit were as follows:

Total DWS CA&I ECS Other
Balance at December 31, 2021 $ 315.0 $ 140.9 $ 65.5 $ 98.3 $ 10.3
Acquisition - Measurement period adjustment (see Note 3) (27.5) — (27.5) — —
Translation adjustments (1.3) (1.3) — — —
Balance at September 30, 2022 $ 286.2 $ 139.6 $ 38.0 $ 98.3 $ 10.3


	Total		DWS		CA&I		ECS		Other
Balance at December 31, 2022	$	287.1	$	140.5	$	38.0	$	98.3	$	10.3

Translation adjustments	0.2		0.2		—		—		—
Balance at June 30, 2023	$	287.3	$	140.7	$	38.0	$	98.3	$	10.3

At ~~September~~June 30, ~~2022, the amount of~~2023, there was no goodwill allocated to reporting units with negative net ~~assets within Other was $10.3 million.~~assets.

Intangible Assets, Net

Intangible assets, net at ~~September~~June 30, ~~2022~~2023, consists of the following:


		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount			Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Technology (i)	Technology (i)	$	10.0	$	4.2	$	5.8	Technology (i)	$	10.0	$	6.5	$	3.5
Customer relationships (ii)	Customer relationships (ii)	54.2		6.3		47.9		Customer relationships (ii)	54.2		11.0		43.2
Marketing (ii)	Marketing (ii)	1.3		0.2		1.1		Marketing (ii)	1.3		0.5		0.8
Total	Total	$	65.5	$	10.7	$	54.8	Total	$	65.5	$	18.0	$	47.5

(i) Amortization expense is included within cost of revenue - technology in the consolidated statements of income (loss).

(ii) Amortization expense is included within selling, general and administrative expense in the consolidated statements of income (loss). ~~See Note 3 for measurement period adjustment.~~

For the three months ended ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022, amortization expense was $2.4 million and ~~$1.2~~$2.9 million, respectively. For the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022, amortization expense was ~~$7.7~~$4.9 million and ~~$1.7~~$5.3 million, respectively.

The future amortization relating to acquired intangible assets at ~~September~~June 30, ~~2022~~2023, was estimated as follows:


		Future Amortization Expense			Future Amortization Expense
Remainder of 2022		$	2.4
2023		9.7
Remainder of 2023				Remainder of 2023	$	4.7
2024	2024	7.2		2024	7.2
2025	2025	4.3		2025	4.3
2026	2026	4.0		2026	4.0
2027				2027	4.0
Thereafter	Thereafter	27.2		Thereafter	23.3
Total	Total	$	54.8	Total	$	47.5

Note 1412 - Debt

Long-term debt is comprised of the following:


		September 30, 2022		December 31, 2021			June 30, 2023		December 31, 2022
6.875% senior secured notes due November 1, 2027 (Face value of $485.0 million less unamortized issuance costs of $6.0 and $6.9 million at September 30, 2022 and at December 31, 2021)		$	479.0	$	478.1
6.875% senior secured notes due November 1, 2027 (Face value of $485.0 million less unamortized issuance costs of $5.2 and $5.8 million at June 30, 2023 and at December 31, 2022)						6.875% senior secured notes due November 1, 2027 (Face value of $485.0 million less unamortized issuance costs of $5.2 and $5.8 million at June 30, 2023 and at December 31, 2022)	$	479.8	$	479.2
Finance leases	Finance leases	1.4		2.7		Finance leases	0.7		1.1
Other debt	Other debt	35.5		48.6		Other debt	22.5		32.8
Total	Total	515.9		529.4		Total	503.0		513.1
Less – current maturities	Less – current maturities	17.5		18.2		Less – current maturities	14.5		17.4
Total long-term debt	Total long-term debt	$	498.4	$	511.2	Total long-term debt	$	488.5	$	495.7


See Note 1210 for the fair value of the notes.

Senior Secured Notes due 2027

The company has outstanding $485.0 million aggregate principal amount of its 6.875% Senior Secured Notes due 2027 (the 2027 Notes). The 2027 Notes pay interest semiannually on May 1 and November 1 and will mature on November 1, 2027, unless earlier repurchased or redeemed. The 2027 Notes are fully and unconditionally guaranteed on a senior secured basis 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 2027 Notes and the related guarantees rank equally in right of payment with all of the existing and future senior debt of the company and its subsidiary guarantors and senior in right of payment to any future subordinated debt of the company and its subsidiary guarantors. The 2027 Notes and the related guarantees are structurally subordinated to all existing and future liabilities (including preferred stock, trade payables and pension liabilities) of the subsidiaries of the company that are not subsidiary guarantors. The 2027 Notes and the guarantees are secured by liens on substantially all assets of the company and the subsidiary guarantors, other than certain excluded assets (the collateral). The liens securing the 2027 Notes on certain ABL collateral are subordinated to the liens on ABL collateral in favor of the ABL secured parties and, in the future, the liens securing the 2027 Notes may be subordinated to liens on the collateral securing certain permitted first lien debt, subject to certain limitations and permitted liens.

Prior to November 1, 2023, the company may, at its option, redeem some or all of the 2027 Notes at any time, at a price equal to 100% of the principal amount of the 2027 Notes redeemed plus a “make-whole” premium, plus accrued and unpaid interest, if any. The company may also redeem, at its option, up to 40% of the 2027 Notes at any time prior to November 1, 2023, using the proceeds of certain equity offerings at a redemption price of 106.875% of the principal amount thereof, plus accrued and unpaid interest, if any. On or after November 1, 2023, the company may, on any one or more occasions, redeem all or a part of the 2027 Notes at specified redemption premiums, declining to par for any redemptions on or after November 1, 2025.

The indenture contains covenants that limit the ability of the company and its restricted subsidiaries to, among other things: (i) incur additional indebtedness and guarantee indebtedness; (ii) pay dividends or make other distributions or repurchase or redeem its capital stock; (iii) prepay, redeem or repurchase certain debt; (iv) make certain prepayments in respect of pension obligations; (v) issue certain preferred stock or similar equity securities; (vi) make loans and investments (including investments by the company and subsidiary guarantors in subsidiaries that are not guarantors); (vii) sell assets; (viii) create or incur liens; (ix) enter into transactions with affiliates; (x) enter into agreements restricting its subsidiaries’ ability to pay dividends; and (xi) consolidate, merge or sell all or substantially all of its assets. These covenants are subject to several important limitations and exceptions.

If the company experiences certain kinds of changes of control (as defined in the indenture), it will be required to offer to repurchase the 2027 Notes at 101% of the principal amount of the 2027 Notes, plus accrued and unpaid interest as of the repurchase date, if any. In addition, if the company sells assets, under certain circumstances it must apply the proceeds towards an offer to repurchase the 2027 Notes at a price equal to par plus accrued and unpaid interest, if any.

The indenture also provides for events of default, which, if any of them occur, would permit or require the principal, premium, if any, interest and any other monetary obligations on all the then outstanding 2027 Notes to be due and payable immediately.

Interest expense related to the 2027 Notes is comprised of the following:

Three Months Ended
September 30, Nine Months Ended
September 30,
2022 2021 2022 2021
Contractual interest coupon $ 8.3 $ 8.3 $ 25.0 $ 25.0
Amortization of issuance costs 0.3 0.3 0.9 0.9
Total $ 8.6 $ 8.6 $ 25.9 $ 25.9

~~Convertible Senior Notes Due 2021~~

On March 3, 2021, the company completed the conversion of $84.2 million aggregate principal amount of the 2021 Notes that remained outstanding for a combination of cash and shares of the company’s common stock. As a result of the conversion of the outstanding 2021 Notes, the company delivered to the holders (i) aggregate cash payments totaling approximately $86.5 million, which included an aggregate cash payment for outstanding principal of approximately $84.2 million, an aggregate cash payment for accrued interest of approximately $2.3 million and a nominal cash payment in lieu of fractional shares, and (ii) the issuance of 4,537,123 shares of the company’s common stock. The issuance of the common stock was made in exchange for the 2021 Notes pursuant to an exemption from the registration requirements provided by Section 3(a)(9) of the Securities Act of 1933, as amended.

The company also received 1,251,460 shares of its common stock, now held in treasury stock, from the settlement of the capped call transactions that the company had entered into with the initial purchasers and/or affiliates of the initial purchasers of the 2021 Notes in connection with the issuance of the 2021 Notes. As a result, the net number of outstanding shares of the company’s common stock following the conversion of the 2021 Notes increased by 3,285,663 shares.

~~Interest expense related to the 2021 Notes was as follows:~~


	~~Nine Months Ended September 30, 2021~~
~~Contractual interest coupon~~	$	~~0.8~~
~~Amortization of debt discount~~	~~0.5~~
~~Amortization of debt issuance costs~~	~~0.1~~
~~Total~~	$	~~1.4~~


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Contractual interest coupon	$	8.4	$	8.4	$	16.7	$	16.7
Amortization of issuance costs	0.3		0.3		0.6		0.6
Total	$	8.7	$	8.7	$	17.3	$	17.3

Other Debt

The company has a $27.7 million Installment Payment Agreement (IPA) maturing on December 20, 2023 with a syndicate of financial institutions to finance the acquisition of certain software licenses necessary for the provision of services to a client. Interest accrues at an annual rate of 7.0% and the company is required to make monthly principal and interest payments on each agreement in arrears. At ~~September~~June 30, 2023 and December 31, 2022, ~~$5.4~~$2.8 million ~~was~~and $5.5 million were reported in current maturities of long-term ~~debt.~~debt, respectively.

The company has a vendor agreement in the amount of $19.3 million to finance the acquisition of certain software licenses used to provide services to our clients and for its own internal use. Interest accrues at an annual rate of 5.47% and the company is required to make annual principal and interest payments in advance with the last payment due on March 1, 2024. At ~~September~~June 30, 2023 and December 31, 2022, $4.2 million and $4.0 million ~~was~~were reported in current maturities of long-term ~~debt.~~debt, respectively.

Asset Based Lending (ABL) Credit Facility

The company has a secured revolving credit facility (the Amended and Restated ABL Credit Facility) that matures on October 29, 2025 and 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 the Amended and Restated ABL Credit Facility. The Amended and Restated ABL Credit Facility was amended on June 2, 2023, primarily to replace the reference rate from the London Interbank Offered Rate (LIBOR) to the Secured Overnight Financing Rate (SOFR). Availability under the credit facility is subject to a borrowing base calculated by reference to the company’s receivables. At ~~September~~June 30, ~~2022,~~2023, the company had no borrowings and ~~$6.3~~$6.6 million of letters of credit outstanding, and availability under the facility was ~~$66.3~~$56.5 million net of letters of credit issued.

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 the subsidiary guarantors and any future material domestic subsidiaries. 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 ~~September~~June 30, ~~2022,~~2023, the company has met all covenants and conditions under its various lending and funding agreements. For at least the next 12 months, the company expects to continue to meet these covenants and conditions.

Note 1513 - Litigation and Contingencies

~~There are various~~The company is involved in a wide range of 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 matters. Further, given the rapidly evolving external landscape of cybersecurity, privacy and data protection laws, regulations and threat actors, the company and its clients have been and will continue to be subject to actions or proceedings in various jurisdictions. These matters can involve a number of different parties, including competitors, clients, current or former employees, government and regulatory agencies, stockholders and representatives of the locations in which the company does business.

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. Significant judgment is required in both the determination of probability and the determination as to whether an exposure is reasonably estimable. Because of uncertainties related to these matters, accruals are based only on the best information available at the time. 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. These adjustments could have a material impact on our results of operations and financial position.

The company ~~believes that it has valid defenses~~intends to defend itself vigorously with respect to legal matters pending against it. Based on its experience, the company also believes that the damage amounts claimed in the ~~lawsuits~~matters disclosed below are not a meaningful indicator of the company’s potential liability.

Litigation is inherently unpredictable ~~however,~~ and ~~it is possible that~~unfavorable resolutions could occur. Whether any losses, damages or remedies finally determined in any claim, suit, investigation or proceeding could reasonably have a material effect on the company’s business, financial condition, results of operations or cash ~~flow~~flows will depend on a number of variables, including: the timing and amount of such losses or damages; the structure and type of any such remedies; the significance of the impact any such losses, damages

or remedies may have in the company’s consolidated financial statements; and the unique facts and circumstances of the particular matter that may give rise to additional factors. Accordingly, it is possible that an adverse outcome from such matters could be ~~materially affected~~material to the company’s financial condition, results of operations and cash flows in any particular ~~period by~~reporting period.

Notwithstanding that the ~~resolution of one or more~~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, 2023, it has adequate provisions for any such matters.

The following is a summary of the more significant legal matters ~~pending against it.~~involving the company.

The company’s Brazilian operations, along with those of many other companies doing business in Brazil, are involved in various litigation matters, including numerous governmental assessments related to indirect and other taxes, as well as disputes associated with former employees and contract labor. The tax-related matters pertain to value-added taxes, customs, duties, sales and other non-income-related tax exposures. The labor-related matters include claims related to compensation. The company believes that appropriate accruals have been established for such matters based on information currently available. At ~~September~~June 30, ~~2022,~~2023, excluding those matters that have been assessed by management as being remote as to the likelihood of ultimately resulting in a loss, the amount related to unreserved tax-related matters, inclusive of any related interest, is estimated to be up to approximately ~~$103.3~~$119 million.

On November 11, 2022, a purported stockholder of the company filed a putative securities class action complaint in the United States District Court for the Eastern District of Pennsylvania against the company and certain of its current officers, alleging violations of the Securities Exchange Act of 1934, as amended, based on allegedly false or misleading statements related to projections and certain other statements positively characterizing the company’s momentum, business, prospects and operations, and the effectiveness of the company’s internal control over financial reporting and the company’s disclosure controls and procedures. The plaintiff seeks an award of compensatory damages, among other relief, and costs and attorneys’ and experts’ fees.

With respect to the specific legal proceedings and claims described above, except as otherwise noted, either (i) the amount or range of possible losses in excess of amounts accrued, if any, is not reasonably estimable or (ii) the company believes that the amount or range of possible losses in excess of amounts accrued that are estimable would not be material.

Litigation is inherently unpredictable and unfavorable resolutions could occur. Accordingly, it is possible that an adverse outcome from such matters could exceed the amounts accrued in an amount that could be material to the company’s financial condition, results of operations and cash flows in any particular reporting period.

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 September 30, 2022, it has adequate provisions for any such matters.

Note 1614 - Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss is as follows:

Total Translation
Adjustments Postretirement
Plans
Balance at December 31, 2021 $ (3,264.1) $ (866.2) $ (2,397.9)
Other comprehensive (loss) income before reclassifications (84.3) (199.4) 115.1
Amounts reclassified from accumulated other comprehensive loss 116.2 4.8 111.4
Current period other comprehensive income (loss) 31.9 (194.6) 226.5
Balance at September 30, 2022 $ (3,232.2) $ (1,060.8) $ (2,171.4)


	Total		Translation Adjustments		Postretirement Plans
Balance at December 31, 2022	$	(3,076.0)	$	(977.4)	$	(2,098.6)
Other comprehensive income (loss) before reclassifications	16.2		57.5		(41.3)
Amounts reclassified from accumulated other comprehensive loss	217.2		(3.4)		220.6
Current period other comprehensive income	233.4		54.1		179.3
Balance at June 30, 2023	$	(2,842.6)	$	(923.3)	$	(1,919.3)

Amounts reclassified out of accumulated other comprehensive loss are as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Translation adjustments:	Translation adjustments:									Translation adjustments:
Adjustment for substantial completion of liquidation of foreign subsidiaries(i)	Adjustment for substantial completion of liquidation of foreign subsidiaries(i)	$	1.9	$	(1.3)	$	4.8	$	(2.9)	Adjustment for substantial completion of liquidation of foreign subsidiaries(i)	$	0.1	$	1.8	$	(3.4)	$	2.9
Postretirement plans(ii):	Postretirement plans(ii):									Postretirement plans(ii):
Amortization of prior service cost		(1.6)		(1.6)		(4.5)		(4.7)
Amortization of prior service benefit										Amortization of prior service benefit	(1.3)		(1.2)		(2.6)		(2.9)
Amortization of actuarial losses	Amortization of actuarial losses	40.0		44.3		120.5		134.3		Amortization of actuarial losses	19.3		40.1		40.8		80.5
Settlement losses	Settlement losses	—		—		—		300.7		Settlement losses	—		—		183.2		—
Total before tax	Total before tax	40.3		41.4		120.8		427.4		Total before tax	18.1		40.7		218.0		80.5
Income tax	Income tax	(1.4)		(1.4)		(4.6)		(40.0)		Income tax	(0.4)		(1.5)		(0.8)		(3.2)
Total reclassifications for the period	Total reclassifications for the period	$	38.9	$	40.0	$	116.2	$	387.4	Total reclassifications for the period	$	17.7	$	39.2	$	217.2	$	77.3


(i) Reported in other (expense), net in the consolidated statements of income (loss).
(ii)These items are included in net periodic postretirement cost (see Note 5)3).

Note 1715 - Supplemental Cash Flow Information


		Nine Months Ended September 30,					Six Months Ended June 30,
		2022		2021			2023		2022
Cash paid during the period for:	Cash paid during the period for:					Cash paid during the period for:
Income taxes, net of refunds	Income taxes, net of refunds	$	36.4	$	43.5	Income taxes, net of refunds	$	37.0	$	29.3
Interest	Interest	$	19.3	$	22.7	Interest	$	18.1	$	18.7

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the total of the amounts shown in the consolidated statements of cash flows.


		September 30, 2022		December 31, 2021			June 30, 2023		December 31, 2022
Cash and cash equivalents	Cash and cash equivalents	$	351.4	$	552.9	Cash and cash equivalents	$	423.2	$	391.8
Restricted cash	Restricted cash	13.6		7.7		Restricted cash	9.0		10.9
Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows	Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows	$	365.0	$	560.6	Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows	$	432.2	$	402.7

Cash and cash equivalents subject to contractual restrictions and are therefore not readily available are classified as restricted cash.

Note 1816 - Segment Information

Effective January 1, 2022, the company changed the grouping of certain immaterial revenue streams. As a result, certain prior period segment revenue as well as the related cost of sales amounts have been reclassified to be comparable to the current period’s presentation. In addition, during the second quarter of 2022, the company renamed its Cloud and Infrastructure Solutions segment as Cloud, Applications & Infrastructure Solutions to better represent the nature of the segment’s operations. There was no change to the composition of the segment or its historical results.

The company’s reportable segments are as follows:

•Digital Workplace Solutions (DWS), which provides modern and traditional workplace solutions;

•Cloud, Applications & Infrastructure Solutions (CA&I), which provides digital platform, applications, and infrastructure solutions; and

•Enterprise Computing Solutions (ECS), which provides solutions that harness secure, continuous high-intensity computing and enable digital services through software-defined operating environments.

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 hardware and software 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. Also included in the ECS segment’s sales and gross profit are sales of hardware and software sold to other segments for internal use in their engagements. The amount of such profit included in gross profit of the ECS segment for the three and nine months ended September 30, 2021 was $0.3 million and $1.4 million, respectively. The sales and profit on these transactions are eliminated in consolidation.

The company evaluates segment performance based on gross profit exclusive of the service cost component of postretirement income or expense, restructuring charges, amortization of purchased intangibles and unusual and nonrecurring items, which are included in other gross profit.

A summary of the company’s operations by segment is presented below:

Total Segments DWS CA&I ECS
Three Months Ended September 30, 2022
Customer revenue $ 390.1 $ 130.1 $ 122.3 $ 137.7
Intersegment — — — —
Total revenue $ 390.1 $ 130.1 $ 122.3 $ 137.7
Gross profit $ 107.3 $ 19.7 $ 6.8 $ 80.8
Three Months Ended September 30, 2021
Customer revenue $ 410.4 $ 143.2 $ 115.9 $ 151.3
Intersegment — — — —
Total revenue $ 410.4 $ 143.2 $ 115.9 $ 151.3
Gross profit $ 123.2 $ 17.7 $ 6.8 $ 98.7


	Total Segments		DWS		CA&I		ECS
Three Months Ended June 30, 2023


Revenue	$	402.2	$	135.0	$	132.6	$	134.6
Gross profit	$	113.6	$	18.4	$	22.4	$	72.8

Three Months Ended June 30, 2022


Revenue	$	443.1	$	127.2	$	130.1	$	185.8
Gross profit	$	146.6	$	16.5	$	7.1	$	123.0

Total Segments DWS CA&I ECS
Nine Months Ended September 30, 2022
Customer revenue $ 1,207.7 $ 382.1 $ 381.5 $ 444.1
Intersegment — — — —
Total revenue $ 1,207.7 $ 382.1 $ 381.5 $ 444.1
Gross profit $ 339.7 $ 52.2 $ 20.9 $ 266.6
Nine Months Ended September 30, 2021
Customer revenue $ 1,284.9 $ 434.5 $ 358.3 $ 492.1
Intersegment 1.4 — — 1.4
Total revenue $ 1,286.3 $ 434.5 $ 358.3 $ 493.5
Gross profit $ 399.3 $ 59.7 $ 30.2 $ 309.4


	Total Segments		DWS		CA&I		ECS
Six Months Ended June 30, 2023


Revenue	$	847.4	$	266.0	$	258.6	$	322.8
Gross profit	$	271.1	$	34.0	$	38.8	$	198.3

Six Months Ended June 30, 2022


Revenue	$	817.6	$	252.0	$	259.2	$	306.4
Gross profit	$	232.4	$	32.5	$	14.1	$	185.8

Presented below is a reconciliation of total segment revenue to total consolidated revenue:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Total segment revenue	Total segment revenue	$	390.1	$	410.4	$	1,207.7	$	1,286.3	Total segment revenue	$	402.2	$	443.1	$	847.4	$	817.6
Other revenue	Other revenue	71.1		77.6		215.2		230.2		Other revenue	74.6		71.9		145.8		144.1
Elimination of intercompany revenue		—		—		—		(1.4)

Total consolidated revenue	Total consolidated revenue	$	461.2	$	488.0	$	1,422.9	$	1,515.1	Total consolidated revenue	$	476.8	$	515.0	$	993.2	$	961.7

Presented below is a reconciliation of total segment gross profit to consolidated loss before income taxes:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Total segment gross profit	Total segment gross profit	$	107.3	$	123.2	$	339.7	$	399.3	Total segment gross profit	$	113.6	$	146.6	$	271.1	$	232.4
Other gross profit	Other gross profit	(3.0)		3.7		0.1		9.0		Other gross profit	2.2		1.5		3.7		3.1
Total gross profit	Total gross profit	104.3		126.9		339.8		408.3		Total gross profit	115.8		148.1		274.8		235.5
Selling, general and administrative expense	Selling, general and administrative expense	(106.3)		(95.1)		(320.3)		(279.7)		Selling, general and administrative expense	(110.3)		(109.6)		(213.2)		(214.0)
Research and development expense	Research and development expense	(6.0)		(6.7)		(17.3)		(19.1)		Research and development expense	(5.4)		(4.8)		(11.6)		(11.3)
Interest expense	Interest expense	(7.9)		(8.5)		(24.6)		(27.0)		Interest expense	(7.5)		(8.3)		(15.1)		(16.7)
Other (expense), net	Other (expense), net	(23.3)		(24.2)		(66.2)		(434.6)		Other (expense), net	(16.7)		(21.9)		(213.6)		(42.9)
Total earnings (loss) before income taxes		$	(39.2)	$	(7.6)	$	(88.6)	$	(352.1)
Total (loss) income before income taxes										Total (loss) income before income taxes	$	(24.1)	$	3.5	$	(178.7)	$	(49.4)

Other revenue and other gross profit are comprised of an aggregation of a number of immaterial business activities ~~that~~and cost reductions charges. These businesses principally provide for the management of processes and functions for clients in select industries, helping them improve performance and reduce costs.

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
United States	United States	$	208.9	$	191.1	$	643.5	$	627.2	United States	$	212.2	$	235.6	$	413.2	$	434.6
United Kingdom	United Kingdom	59.0		53.1		181.7		225.2		United Kingdom	51.6		69.8		173.5		122.7
Other foreign	Other foreign	193.3		243.8		597.7		662.7		Other foreign	213.0		209.6		406.5		404.4
Total	Total	$	461.2	$	488.0	$	1,422.9	$	1,515.1	Total	$	476.8	$	515.0	$	993.2	$	961.7

Note 1917 - Remaining Performance Obligations

Remaining performance obligations represent the transaction price of firm orders for which work has not been performed and excludes (1) contracts with an original expected length of one year or less and (2) contracts for which the company recognizes revenue at the amount to which it has the right to invoice for services performed. At ~~September~~June 30, ~~2022,~~2023, the company had approximately ~~$0.5~~$0.6 billion of remaining performance obligations of which approximately 9%17% is estimated to be recognized as revenue by the end of ~~2022, 34% by the end of~~ 2023, ~~24%~~27% by the end of 2024, ~~13%~~22% by the end of 2025, 16% by the end of 2026 and ~~20%~~18% thereafter.

~~Note 20 - Subsequent Event~~

Subsequent to quarter-end and through the date of this filing, the company has experienced a significant decline in its market capitalization, from $0.5 billion to $0.3 billion. Management is evaluating whether this decline represents a triggering event for assessing the goodwill and intangible asset balances for impairment in the fourth quarter of 2022. As of September 30, 2022, the balances of the company’s goodwill and intangible asset were $286.2 million and $54.8 million, respectively.

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

This management’s discussion and analysis of ~~the company’s~~ financial condition and results of operations should be read in conjunction with the consolidated financial statements and the related notes included elsewhere in this quarterly report. In this discussion and analysis of the company’s financial condition and results of operations, the company has included information that may constitute “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 under “Risk Factors” in Part II, Item 1A. 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.

Overview

For the three months ended ~~September~~June 30, ~~2022,~~2023, the company reported net loss attributable to Unisys Corporation of ~~$40.1~~$40.0 million, or $0.59 per diluted share, compared with a loss of ~~$18.7~~$17.1 million, or ~~$0.28~~$0.25 per diluted share, for the three months ended ~~September~~June 30, ~~2021.~~2022.

For the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, the company reported net loss attributable to Unisys Corporation of ~~$114.5~~$215.4 million, or ~~$1.69~~$3.16 per diluted share, compared with a loss of ~~$317.3~~$74.4 million, or ~~$4.79~~$1.10 per diluted share, for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022. Included in the loss for the ~~nine~~six months ended ~~September~~June 30, ~~2021 were~~2023, was a U.S. pension plan settlement ~~losses~~loss net of tax of ~~$317.0~~$183.2 million.

In ~~February 2022, Russian military forces launched significant military action against Ukraine. In response~~March 2023, the company purchased a group annuity contract, with plan assets, for approximately $265 million to ~~this action, many governments around the world, including the U.S., imposed several financial and economic sanctions against Russia. While this conflict has not had a material impact~~transfer projected benefit obligations related to approximately 8,650 retirees of one of the company’s ~~business, financial condition, or results~~U.S. defined benefit pension plans resulting in a pre-tax settlement loss of ~~operation,~~$183.2 million for the ~~direct and indirect impacts of this evolving situation and its effect on global economies in future periods are difficult to predict.~~six months ended June 30, 2023.

Results of operations

Company results

Three months ended ~~September~~June 30, ~~2022~~2023 compared with the three months ended ~~September~~June 30, ~~2021~~2022

Revenue for the three months ended ~~September~~June 30, ~~2022~~2023 was ~~$461.2~~$476.8 million compared with ~~$488.0~~$515.0 million for the three months ~~of 2021,~~ended June 30, 2022, a decrease of ~~5.5%~~7.4% from the ~~prior year.~~prior-year period. The decrease was primarily due to lower software license renewals within the Enterprise Computing Solutions segment. Foreign currency fluctuations had a 61 percentage-point negative impact on revenue in the current period compared with the ~~year-ago~~prior-year period.

U.S. revenue ~~increased 9.3%~~decreased 9.9% in the current period compared with the ~~year-ago~~prior-year period. International revenue decreased ~~15.0%~~5.3% in the current period compared with the prior-year period, principally due to decreases in Europe ~~Asia/Pacific~~ and Latin America. Foreign currency had a 92 percentage-point negative impact on international revenue in the three months ended ~~September~~June 30, ~~2022~~2023 compared with the three months ended ~~September~~June 30, ~~2021.~~2022.

~~During the three months ended September 30, 2021,~~2023, the company recognized net cost-reduction charges and other costs of ~~$0.8~~$3.5 million. The net ~~credits~~charge related to ~~work-force~~workforce reductions ~~were $0.6~~was $2.1 million, principally related to severance costs, and were comprised of: (a) a charge of ~~$0.7~~$3.9 million and (b) a credit of ~~$1.3~~$1.8 million for changes in estimates. In addition, the company recorded ~~net~~ charges of $1.4 million comprised of ~~a charge~~$1.3 million for professional fees and other expenses related to cost-reduction efforts and $0.1 million for net foreign currency losses related to exiting foreign countries.

During the three months ended June 30, 2022, the company recognized net cost-reduction charges and other costs of ~~$1.3~~$3.1 million. The company recorded charges of $3.4 million comprised of $1.8 million for net foreign currency losses related to exiting foreign countries, ~~a charge of $0.5~~$0.9 million for asset impairments and ~~a credit of $0.4~~$0.7 million for other expenses related to other ~~cost reduction~~cost-reduction efforts.

In addition, the company recorded a credit related to workforce reductions of $0.3 million for changes in estimates.

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


		Three Months Ended September 30,				Three Months Ended June 30,
		2022		2021				2023		2022
Cost of revenue	Cost of revenue	$	3.9	$	(0.2)		Cost of revenue	$	2.8	$	0.8
Selling, general and administrative	Selling, general and administrative	2.4		(0.1)			Selling, general and administrative	0.5		0.5
Research and development	Research and development	(0.1)		(0.2)			Research and development	0.1		—
Other (expense), net	Other (expense), net	1.9		1.3			Other (expense), net	0.1		1.8
Total	Total	$	8.1	$	0.8		Total	$	3.5	$	3.1

Gross profit and gross profit margin ~~was 22.6%~~were $115.8 million and 24.3% in the three months ended ~~September~~June 30, ~~2022~~2023, respectively, compared with ~~26.0% in~~$148.1 million and 28.8% for the three months ended ~~September~~June 30, ~~2021.~~2022, respectively. The decrease was principally due to lower software license renewals.

Selling, general and administrative expense in the three months ended ~~September~~June 30, ~~2022~~2023 was ~~$106.3~~$110.3 million ~~(23.0%~~(23.1% of revenue) compared with ~~$95.1~~$109.6 million ~~(19.5%~~(21.3% of revenue) infor the ~~year-ago period. The change was primarily due one-time charges related to cost reduction activities and other non-recurring expenses.~~three months ended June 30, 2022.

Research and development ~~(R&D)~~ expense for the three months ended ~~September~~June 30, 2023 and 2022 ~~and 2021~~ was ~~$6.0~~$5.4 million and ~~$6.7~~$4.8 million, respectively.

For the three months ended ~~September~~June 30, ~~2022,~~2023, the company reported an operating ~~loss~~profit of ~~$8.0~~$0.1 million compared with an operating profit of ~~$25.1~~$33.7 million ~~for prior year period.~~in the three months ended June 30, 2022. The decrease was primarily driven by lower ~~software license renewals, one-time charges related to cost reduction activities~~revenue and ~~other non-recurring expenses.~~gross profit as discussed above.

Interest expense for the three months ended ~~September~~June 30, 2023 and 2022 was ~~$7.9~~$7.5 million ~~compared with $8.5~~and $8.3 million, ~~for the three months ended September 30, 2021.~~respectively.

Other (expense), net was expense of ~~$23.3~~$16.7 million for the three months ended ~~September~~June 30, ~~2022~~2023 compared with expense of ~~$24.2~~$21.9 million for the three months ended ~~September~~June 30, ~~2021. See Note 7 of the Notes to Consolidated Financial Statements for details of other (expense), net.~~2022.

The loss before income taxes for the three months ended ~~September~~June 30, ~~2022~~2023 was ~~$39.2~~$24.1 million compared with ~~a loss~~income of ~~$7.6~~$3.5 million for the three months ended ~~September~~June 30, ~~2021.~~2022.

The provision for income taxes was ~~$0.7~~$15.4 million for the three months ended ~~September~~June 30, ~~2022~~2023 compared with a provision of ~~$10.9~~$20.3 million for the three months ended ~~September~~June 30, ~~2021.~~2022. The change in the tax provision is a result of the geographic distribution of income as 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 ~~September~~June 30, ~~2022~~2023 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. Any increase or decrease in the valuation allowance would result in additional or lower income tax expense in that period and could have a significant impact on that period’s earnings. As a result of its projections of future taxable income, the company has determined that a portion of its non-U.S. net deferred tax assets no longer requires a valuation allowance as of September 30, 2022. The release of the valuation allowance for the three months ended September 30, 2022 was approximately $10.4 million, primarily in the United Kingdom and other European jurisdictions.

Net loss attributable to Unisys Corporation for the three months ended ~~September~~June 30, ~~2022~~2023 was ~~$40.1~~$40.0 million, or $0.59 per diluted share, compared with a loss of ~~$18.7~~$17.1 million, or ~~$0.28~~$0.25 per diluted share, for the three months ended ~~September~~June 30, ~~2021.~~2022.

~~Nine~~Six months ended June 30, 2023 compared with the six months ended June 30, 2022

Revenue for the six months ended June 30, 2023 was $993.2 million compared with $961.7 million for the six months ended September 30, 2022, ~~compared with the nine months ended September 30, 2021~~

~~Revenue for the nine months ended September 30, 2022 was $1,422.9 million compared with $1,515.1 million for the nine months ended September 30, 2021, a decrease~~an increase of ~~6.1%~~3.3% from the ~~prior year~~prior-year period. Foreign currency fluctuations had a 42 percentage-point negative impact on revenue in the current period compared with the ~~year-ago~~prior-year period.

U.S. revenue ~~increased 2.6%~~decreased 4.9% in the current period compared with the ~~year-ago~~prior-year period. International revenue ~~decreased 12.2%~~increased 10.0% in the current period compared with the prior-year period due to ~~decreases~~increases in Europe and ~~Asia/Pacific.~~Latin America. Foreign currency had a 64 percentage-point negative impact on international revenue in the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 compared with the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022.

During the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, the company recognized net cost-reduction charges and other costs of ~~$14.2~~$0.7 million. The ~~credit~~net charge related to work-force reductions was $0.4 million for changes in estimates. In addition, the company recorded charges of $14.6 million comprised of $4.8 million for net foreign currency losses related to exiting foreign countries, $9.4 million for asset impairments and a net charge of $0.4 million for other expenses related to cost-reduction efforts.

~~During the nine months ended September 30, 2021, the company recognized net cost-reduction charges and other costs of $14.4 million. The net credits related to work-force reductions were $2.5~~$2.8 million, principally related to severance ~~costs, and~~costs. These net charges were comprised of: (a) a charge of $6.5 million and (b) a credit of ~~$9.0~~$3.7 million for changes in estimates. In addition, the company recorded a net credit of $2.1 million comprised of a credit of $3.4 million for net foreign currency gains related to exiting foreign countries and a charge of $1.3 million for professional fees and other expenses related to cost-reduction efforts.

During the six months ended June 30, 2022, the company recognized net cost-reduction charges and other costs of $6.1 million. The company recorded net charges of ~~$16.9~~$7.0 million comprised of a charge of $2.9 million for net foreign currency losses related to exiting foreign countries, ~~$7.3~~a charge of $4.7 million for asset impairments and ~~$6.7~~a credit of $0.6 million for ~~other expenses~~changes in estimates related to cost-reduction efforts. In addition, the company recorded a credit related to work-force reductions of $0.9 million for changes in estimates.

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


		Nine Months Ended September 30,					Six Months Ended June 30,
			2022		2021				2023		2022
Cost of revenue	Cost of revenue		$	7.4	$	0.9		Cost of revenue	$	3.4	$	3.5
Selling, general and administrative	Selling, general and administrative		2.2		8.7			Selling, general and administrative	0.5		(0.2)
Research and development	Research and development		(0.2)		1.9			Research and development	0.2		(0.1)
Other (expense), net	Other (expense), net		4.8		2.9			Other (expense), net	(3.4)		2.9
Total	Total		$	14.2	$	14.4		Total	$	0.7	$	6.1

Gross profit and gross profit margin ~~was 23.9%~~were $274.8 million and 27.7% in the ~~nine~~six months ended ~~September~~June 30, 2023, respectively, compared with $235.5 million and 24.5% in the six months ended June 30, 2022, ~~compared with 26.9% in the nine months ended September 30, 2021.~~respectively. The ~~decrease~~increase was primarily due to ~~lower software license renewals.~~higher gross profit in the company’s Cloud, Applications & Infrastructure Solutions and Enterprise Computing Solutions segments.

Selling, general and administrative expense in the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 was ~~$320.3~~$213.2 million ~~(22.5%~~(21.5% of revenue) compared with ~~$279.7~~$214.0 million ~~(18.5%~~(22.3% of revenue) in the ~~year-ago~~prior-year period. ~~The change was primarily due to increased investments in marketing, one-time charges related to cost reduction activities and other non-recurring expenses.~~

Research and development ~~(R&D)~~ expense for the ~~nine~~six months ended ~~September~~June 30, 2023 and 2022 ~~and 2021~~ was ~~$17.3~~$11.6 million and ~~$19.1~~$11.3 million, respectively.

For the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, the company reported an operating profit of ~~$2.2~~$50.0 million compared with an operating profit of ~~$109.5~~$10.2 million for the prior-year period. The ~~decrease~~increase was primarily driven by ~~lower software license renewals and the increased selling, general and administrative expenses~~higher gross profit as discussed above.

Interest expense for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 was ~~$24.6~~$15.1 million compared with ~~$27.0~~$16.7 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022.

Other (expense), net was expense of ~~$66.2~~$213.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 compared with expense of ~~$434.6~~$42.9 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022. Other (expense), net for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2023 included ~~$368.7~~$183.2 million of a U.S. pension ~~plan~~ settlement ~~losses.~~loss. See Note 75 of the Notes to Consolidated Financial ~~Statements.~~Statements for details of other (expense), net.

The loss before income taxes for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 was ~~$88.6~~$178.7 million compared with a loss of ~~$352.1~~$49.4 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022. Included in the loss for the ~~nine~~six months ended ~~September~~June 30, ~~2021 were~~2023 was a U.S. pension plan settlement ~~losses~~loss of ~~$368.7~~$183.2 million.

The provision for income taxes was ~~$25.1~~$35.3 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 compared with a ~~benefit~~provision of ~~$33.8~~$24.4 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021. Included~~2022. The change in the tax provision ~~for the nine months ended September 30, 2022 was~~is a ~~partial release of valuation allowances of approximately $12.1 million. See Note 8~~result of the ~~Notes to the Consolidated Financial Statements. The prior year period included income tax benefits~~geographic distribution of ~~$51.7 million related to the pension plan settlement losses in the Netherlands and Switzerland.~~income.

Net loss attributable to Unisys Corporation for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 was ~~$114.5~~$215.4 million, or ~~$1.69~~$3.16 per diluted share, compared with a loss of ~~$317.3~~$74.4 million, or ~~$4.79~~$1.10 per diluted share, for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022. Included in the loss for the ~~nine~~six months ended ~~September~~June 30, ~~2021 were~~2023 was the U.S. pension ~~plan~~ settlement ~~losses net~~loss of ~~tax of $317.0~~$183.2 million.

Segment results

The company’s reportable segments are as follows:

•Digital Workplace Solutions (DWS), which provides modern and traditional workplace solutions;

•Cloud, Applications & Infrastructure Solutions (CA&I), which provides digital platform, applications, and infrastructure solutions; and

•Enterprise Computing Solutions (ECS), which provides solutions that harness secure, continuous high-intensity computing and enable digital services through software-defined operating environments.

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 hardware and software 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, 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. Also included in the ECS segment’s sales and gross profit are sales of hardware and software sold to other segments for internal use in their engagements. The amount of such profit included in gross profit of the ECS segment for the three and nine months ended September 30, 2021 was $0.3 million and $1.4 million, respectively. The sales and profit on these transactions are eliminated in consolidation.

Three months ended ~~September~~June 30, ~~2022~~2023 compared with the three months ended ~~September~~June 30, ~~2021~~2022

A summary of the company’s operations by segment is presented below:

Total Segments DWS CA&I ECS
Three Months Ended September 30, 2022
Customer revenue $ 390.1 $ 130.1 $ 122.3 $ 137.7
Intersegment — — — —
Total revenue $ 390.1 $ 130.1 $ 122.3 $ 137.7
Gross profit percent 27.5 % 15.1 % 5.6 % 58.7 %
Three Months Ended September 30, 2021
Customer revenue $ 410.4 $ 143.2 $ 115.9 $ 151.3
Intersegment — — — —
Total revenue $ 410.4 $ 143.2 $ 115.9 $ 151.3
Gross profit percent 30.0 % 12.4 % 5.9 % 65.2 %


	Total Segments			DWS			CA&I			ECS
Three Months Ended June 30, 2023


Revenue	$	402.2		$	135.0		$	132.6		$	134.6
Gross profit percent	28.2		%	13.6		%	16.9		%	54.1		%

Three Months Ended June 30, 2022


Revenue	$	443.1		$	127.2		$	130.1		$	185.8
Gross profit percent	33.1		%	13.0		%	5.5		%	66.2		%


~~Gross profit percent is as a percent of total revenue.~~

DWS revenue was ~~$130.1~~$135.0 million for the three months ended ~~September~~June 30, ~~2022, a decline~~2023, an increase of ~~9.1%~~6.1% compared with the three months ended ~~September~~June 30, ~~2021. Revenue for the three months ended September 30, 2022~~2022. The increase in revenue was ~~negatively impacted~~primarily driven by ~~the run-off effect of certain non-strategic contracts that the company exited in 2021.~~recent contract signings and additional scope with existing clients. Foreign currency fluctuations had a 52 percentage-point negative impact on DWS revenue in the current period compared with the ~~year-ago~~prior-year period. Gross profit percent was ~~15.1%~~13.6% in the current period compared with ~~12.4%~~13.0% in the year-ago period.

CA&I revenue was $132.6 million for the three months ended June 30, 2023, an increase of 1.9% compared with the three months ended June 30, 2022. Foreign currency fluctuations had a 1 percentage-point negative impact on CA&I revenue in the current period compared with the prior-year period. Gross profit percent was 16.9% in the current period compared with 5.5% in the prior-year period. The increase in gross profit ~~for~~was primarily due to additional cost incurred in the ~~three months ended September 30, 2022 compared~~prior-year period associated with ~~the year-ago period reflected automation and productivity~~certain contracts as well as delivery improvements.

~~CA&I~~ECS revenue was ~~$122.3~~$134.6 million for the three months ended ~~September~~June 30, ~~2022, an increase~~2023, a decline of ~~5.5%~~27.6% compared with the three months ended ~~September~~June 30, ~~2021.~~2022. Foreign currency fluctuations had a 1 percentage-point negative impact on ECS revenue in the current period compared with the prior-year period. Gross profit percent was 54.1% in the current period compared with 66.2% in the prior-year period. The decrease in revenue and gross profit was driven by lower software license renewals.

Six months ended June 30, 2023 compared with the six months ended June 30, 2022

A summary of the company’s operations by segment is presented below:


	Total Segments			DWS			CA&I			ECS
Six Months Ended June 30, 2023


Revenue	$	847.4		$	266.0		$	258.6		$	322.8
Gross profit percent	32.0		%	12.8		%	15.0		%	61.4		%

Six Months Ended June 30, 2022


Revenue	$	817.6		$	252.0		$	259.2		$	306.4
Gross profit percent	28.4		%	12.9		%	5.4		%	60.6		%

DWS revenue was $266.0 million for the six months ended June 30, 2023, an increase of 5.6% compared with the six months ended June 30, 2022. The increase in revenue was primarily driven by recent contract signings and additional scope with existing clients. Foreign currency fluctuations had a 2 percentage-point negative impact on DWS revenue in the current period compared with the prior-year period. Gross profit percent was 12.8% in the current period compared with 12.9% in the prior-year period.

CA&I revenue was $258.6 million for the six-months ended June 30, 2023, a decline of 0.2% compared with the six months ended June 30, 2022. Foreign currency fluctuations had a 1 percentage-point negative impact on CA&I revenue in the current period compared with the prior-year period. Gross profit percent was 15.0% in the current period compared with 5.4% in the prior-year period. The increase in gross profit was primarily due to additional cost incurred in the prior-year period associated with certain contracts as well as delivery improvements.

ECS revenue was $322.8 million for the six months ended June 30, 2023, an increase of 5.4% compared with the six months ended June 30, 2022. The increase in revenue was driven by higher software license renewals. Foreign currency fluctuations

~~revenue in the current period compared with the year-ago period. Gross profit percent was 5.6% in the current period compared with 5.9% in the year-ago period.~~

~~ECS revenue was $137.7 million for the three months ended September 30, 2022, a decline of 9.0% compared with the three months ended September 30, 2021. Foreign currency fluctuations~~ had a 62 percentage-point negative impact on ECS revenue in the current period compared with the ~~year-ago~~prior-year period. Gross profit percent was ~~58.7%~~61.4% in the current period compared with ~~65.2%~~60.6% in the ~~year-ago~~prior-year period. ~~The decrease in both revenue and gross profit was principally due to lower software license renewals.~~

~~Nine months ended September 30, 2022 compared with the nine months ended September 30, 2021~~

~~A summary of the company’s operations by segment is presented below:~~

Total Segments DWS CA&I ECS
Nine Months Ended September 30, 2022
Customer revenue $ 1,207.7 $ 382.1 $ 381.5 $ 444.1
Intersegment — — — —
Total revenue $ 1,207.7 $ 382.1 $ 381.5 $ 444.1
Gross profit percent 28.1 % 13.7 % 5.5 % 60.0 %
Nine Months Ended September 30, 2021
Customer revenue $ 1,284.9 $ 434.5 $ 358.3 $ 492.1
Intersegment 1.4 — — 1.4
Total revenue $ 1,286.3 $ 434.5 $ 358.3 $ 493.5
Gross profit percent 31.0 % 13.7 % 8.4 % 62.7 %

~~Gross profit percent is as a percent of total revenue.~~

DWS revenue was $382.1 million for the nine months ended September 30, 2022, a decline of 12.1% compared with the nine months ended September 30, 2021. Revenue for the nine months ended September 30, 2022 was negatively impacted by the run-off effect of certain non-strategic contracts that the company exited in 2021. Foreign currency fluctuations had a 3 percentage-point negative impact on DWS revenue in the current period compared with the year-ago period. Gross profit percent was 13.7% in both the nine months ended September 30, 2022 and 2021.

CA&I revenue was $381.5 million for the nine-months ended September 30, 2022, an increase of 6.5% compared with the nine months ended September 30, 2021. Foreign currency fluctuations had a 2 percentage-point negative impact on CA&I revenue in the current period compared with the year-ago period. Gross profit percent was 5.5% in the current period compared with 8.4% in the year-ago period. The decrease in gross profit was primarily due to higher labor costs and additional expense recognized associated with certain contracts.

ECS revenue was $444.1 million for the nine months ended September 30, 2022, a decline of 9.8% compared with the nine months ended September 30, 2021. Foreign currency fluctuations had a 3 percentage-point negative impact on ECS revenue in the current period compared with the year-ago period. Gross profit percent was 60.0% in the current period compared with 62.7% in the year-ago period. The decrease in both revenue and gross profit was principally due to lower software license renewals.

Financial condition

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 for at least the next 12twelve months.

Cash and cash equivalents at ~~September~~June 30, ~~2022~~2023 were ~~$351.4~~$423.2 million compared to ~~$552.9~~$391.8 million at December 31, ~~2021.~~2022.

As of ~~September~~June 30, ~~2022, $276.7~~2023, $264.4 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 to~~approximately 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.

During the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, cash ~~used for~~provided by operations was ~~$22.2~~$55.3 million compared to cash ~~provided $64.5~~usage of $66.7 million during the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, primarily ~~driven by~~due to the ~~change in accounts receivable.~~timing of Technology collections.

Cash used for investing activities during the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 was ~~$124.4~~$23.5 million compared to cash usage of ~~$236.0~~$74.4 million during the ~~nine~~six months ended ~~September~~June 30, ~~2021. Cash usage during the nine months ended September 30, 2021 included $150.4 million for acquisitions.~~2022. Net ~~purchases~~proceeds of investments were ~~$58.4~~$15.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 compared with net purchases of ~~$8.2~~$29.6 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. In the current period, the investment in marketable software was ~~$35.2~~$21.3 million compared with ~~$42.1~~$23.6 million in the ~~year-ago~~prior-year period, capital additions of properties were ~~$21.5~~$11.9 million compared with ~~$19.7~~$14.0 million in the ~~year-ago~~prior-year period and capital additions of outsourcing assets were ~~$8.1~~$4.9 million compared with ~~$14.7~~$6.5 million in the ~~year-ago~~prior-year period.

Cash used for financing activities during the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 was ~~$18.4~~$11.0 million compared to cash used of ~~$100.8~~$15.0 million during the ~~nine~~six months ended ~~September~~June 30, ~~2021. The decrease~~2022.

In March 2023, the company purchased a group annuity contract, with plan assets, for approximately $265 million to transfer projected benefit obligations related to approximately 8,650 retirees of one of the company’s U.S. defined benefit pension plans resulting in ~~cash used was principally due to redemptions~~a pre-tax settlement loss of ~~debt~~$183.2 million for the six months ended June 30, 2023. After considering this most recent group annuity contract purchase, the company has successfully reduced its global defined benefit pension obligations since December 2020 by $1.7 billion, including $1.0 billion in the ~~prior year period.~~U.S. The company will continue to evaluate opportunities for additional reductions in future periods depending on overall market conditions.

In ~~2022,~~2023, the company expects to make cash contributions of approximately ~~$38.5~~$41 million primarily for its international defined benefit pension plans. In ~~2021,~~2022, the company made cash contributions of ~~$52.4~~$39.3 million to its worldwide defined benefit pension plans. For the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, the company made cash contributions of ~~$30.9~~$28.4 million and ~~$40.3~~$23.3 million, respectively.

At the end of each year, the company estimates its future cash contributions to its U.S. qualified defined benefit pension plans based on year-end pension data and assumptions. Based upon our most current estimates, the company does not expect to make mandatory cash contributions to its U.S. qualified defined benefit pension plans until 2025. Any material deterioration in the value of the company’s U.S. qualified defined benefit pension plan assets, as well as changes in pension legislation, discount rate changes, asset return changes, or changes in economic or demographic trends, could require the company to make cash contributions to its U.S. qualified defined benefit pension ~~plans. Based upon current estimates, the company does not expect to make mandatory cash contributions to its U.S. qualified defined benefit pension~~ plans ~~until 2025.~~in different amounts and on a different schedule than previously contemplated.

At ~~September~~June 30, ~~2022,~~2023, total debt was ~~$515.9~~$503.0 million compared to ~~$529.4~~$513.1 million at December 31, ~~2021.~~2022.

In March 2021, the company completed the conversion of $84.2 million aggregate principal amount of the 2021 Notes that remained outstanding for a combination of cash and shares of the company’s common stock. As a result of the conversion of the outstanding 2021 Notes, the company delivered to the holders (i) aggregate cash payments totaling approximately $86.5 million, which included an aggregate cash payment for outstanding principal of approximately $84.2 million, an aggregate cash payment for accrued interest of approximately $2.3 million and a nominal cash payment in lieu of fractional shares, and (ii) the issuance of 4,537,123 shares of the company’s common stock. The issuance of the common stock was made in exchange for the 2021 Notes pursuant to an exemption from the registration requirements provided by Section 3(a)(9) of the Securities Act of 1933, as amended.

The company has a secured revolving credit facility (the Amended and Restated ABL Credit Facility) that expires on October 29, 2025 that 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 the Amended and Restated ABL Credit Facility. The Amended and Restated ABL Credit Facility was amended on June 2, 2023 primarily to replace the reference rate from the London Interbank Offered Rate (LIBOR) to the Secured Overnight Financing Rate (SOFR). Availability under the credit facility is subject to a borrowing base calculated by reference to the company’s receivables. At ~~September~~June 30, ~~2022,~~2023, the company had no borrowings and ~~$6.3~~$6.6 million of letters of credit outstanding, and availability under the facility was ~~$66.3~~$56.5 million net of letters of credit issued.

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 Restated 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.

From time to time, the company may explore a variety of ~~institutional~~additional debt and equity sources to fund its liquidity and capital needs.

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 does not have any off-balance sheet arrangements that are material or reasonably likely to become material to its financial condition or results of operations.

Critical accounting policies and estimates

There have been no significant changes to the company’s critical accounting policies and estimates as reported in its Annual Report on Form 10-K for the year ended December 31, 2022.

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 ~~2021~~Annual Report on Form ~~10-K.~~10-K for the year ended December 31, 2022.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report, management performed, with the participation of the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO), an evaluation of the effectiveness of the company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the Exchange Act).

~~The company has evaluated~~ In designing and evaluating the ~~effectiveness~~disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Based upon that evaluation, the CEO and the CFO concluded that due to material weaknesses in our disclosure controls and procedures and in our internal control over financial reporting, the company’s disclosure controls and procedures ~~and identified material weaknesses in~~were not effective as of June 30, 2023 at the ~~company’s disclosure controls and procedures and internal control over financial reporting.~~reasonable assurance level. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.

~~The CEO and CFO concluded that our~~As previously reported in the company’s Annual Report on Form 10-K for the year ended December 31, 2022 in connection with the company’s assessment of the effectiveness of its internal control over financial reporting at the end of its last fiscal year, management identified the following material weaknesses in the company’s disclosure controls and procedures ~~were not effective as of September 30, 2022 as~~and in the ~~company did not design and maintain effective formal policies and procedures~~company’s internal control over ~~information being communicated by the IT function and the legal and compliance function to those responsible for governance, including the CEO and CFO, to allow timely decisions related to both~~ financial reporting as ~~further described below,~~of December 31, 2022 and ~~other non-financial reporting~~is in the ~~reports that the company files or submits under the Exchange Act.~~process of remediating them as of June 30, 2023.

The company did not design and maintain effective formal policies and procedures to ensure appropriate information is communicated from the IT function and the legal and compliance function to the accounting function and those responsible for governance on a timely basis ~~so as~~ 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. These material weaknesses did not result in a misstatement of the company’s financial ~~statements,~~statements; however, they could have resulted in misstatements of interim or annual consolidated financial statements and disclosures that would result in a material misstatement that would not be prevented or detected.

~~Notwithstanding such material weaknesses, the CEO~~This section of Item 4, “Controls and ~~CFO have concluded that the company’s consolidated financial statements~~Procedures,” should be read in conjunction with Item 9A, “Controls and Procedures,” included in the ~~Quarterly~~company’s Annual Report ~~are fairly stated~~on Form 10-K for the year ended December 31, 2022, for additional information on Management’s Report on Internal Control over Financial Reporting.

To address the material weaknesses referenced above, the company performed additional analysis and performed other procedures in ~~all material respects~~order to prepare the unaudited quarterly consolidated financial statements in accordance with generally accepted accounting ~~principles~~principles. Accordingly, management believes that the consolidated financial statements included in ~~the United States~~this Quarterly Report on Form 10-Q present, in all material respects, our financial condition, results of ~~America~~operations and cash flows for ~~each of~~ the periods presented.

Remediation Plan for ~~Remediation of~~ Material Weaknesses

Management ~~is actively engaged in the planning for, and implementation of, remediation efforts~~has implemented measures designed to ~~address~~ensure that the material weaknesses inare remediated. The company took the ~~company’s disclosure controls and procedures and internal control over financial reporting identified above. Management intends to implement~~following remediation steps ~~including~~during the ~~following:~~

fourth quarter of 2022:

•The company ~~will enhance~~enhanced its written policy regarding information escalation for cyber-incidents. In addition, the company completed an assessment of staffing within the company’s incident response team.

•The company ~~will enhance~~enhanced its disclosure committee (the Disclosure Committee) and the disclosure working group that supports the Disclosure Committee.

•The company ~~will require~~is requiring all direct reports to the CEO to confirm that they have made the Disclosure Committee aware of any matters under their purview that the Disclosure Committee should be considering in advance of applicable SEC filings.

•The company ~~will provide~~provided training and policies (including any policy revisions) to non-finance executives regarding escalation of significant matters related to SEC reporting requirements.

•Procedures ~~will be~~were drafted to address the proper handling of information so that the Security &and Risk Committee and Audit and Finance Committee are properly informed.

•Management has revised its Speak Up Policy to make all associates aware that they have direct access to, and may approach, company executives and the Board of Directors, and that they have access to the ~~company's~~company’s whistleblower hotline.

~~Management believes the measures~~As of June 30, 2023, management has implemented all remedial actions described above ~~and others that have been, or may be, implemented will remediate~~in respect to the material weaknesses ~~that we have identified.~~relating to policies and procedures within the IT function and the legal and compliance function to the accounting function. Due

to the timing of the design and implementation of these remediation efforts implemented during the fourth quarter of 2022, there has been insufficient time for the company to demonstrate consistent execution against all newly implemented actions. As such, management ~~continues~~is unable to ~~evaluate and improve our disclosure~~conclude on the operating effectiveness of implemented remediations at June 30, 2023. We expect to continue to enhance these controls and procedures and internal control over financial reporting, the company may decide to take additional measures to address control deficiencies or determine to modify, or in appropriate circumstances not to complete, certain of the remediation measures identified.assess their operating effectiveness throughout 2023.

Changes in Internal Control Over Financial Reporting

~~No change~~Except as described above with respect to our remediation plan, there have been no changes in our internal control over financial reporting ~~occurred~~ during the quarter ended ~~September~~June 30, ~~2022,~~2023, that ~~has~~have materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting.

Part II - OTHER INFORMATION

Item 1. Legal Proceedings

Information with respect to litigation is set forth in Note 1513 of the Notes to Consolidated Financial Statements, and such information is incorporated herein by reference.

Item 1A. Risk Factors

There have been no ~~significant~~material changes to the “Risk Factors” in Part I, Item 1A of the company’s ~~2021~~Annual Report on Form 10-K ~~filed with the SEC on February 22, 2022, except~~ for the ~~following:~~year ended December 31, 2022.

~~We have identified material weaknesses~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 5. Other Information

During the three months ended June 30, 2023, none of our directors or officers (as defined in our disclosure controls and procedures and internal control over financial reporting. Failure to remediate the material weaknesses or any other material weaknesses that we identify in the future could result in material misstatements in our financial statements.

~~Pursuant to Section 404~~Rule 16a-1(f) of the ~~Sarbanes-Oxley~~Securities Exchange Act of ~~2002,~~1934, as ~~amended, our management is required to report on, and our independent registered public accounting firm is required to attest to, the effectiveness~~amended) adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of our internal control over financial reporting. The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation. Annually, we perform activities that include reviewing, documenting and testing our internal control over financial reporting. In addition, if we fail to maintain the adequacy of our internal control over financial reporting, we will not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404Regulation S-K of the ~~Sarbanes-Oxley~~Securities Act of 2002. If we fail to achieve and maintain an effective internal control environment, we could suffer misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could result in significant expenses to remediate any internal control deficiencies and lead to a decline in our stock price.

Following an investigation by the company’s Audit & Finance Committee (Audit Committee) into the company’s internal control environment, the company has reevaluated the effectiveness of the company’s disclosure controls and procedures and internal control over financial reporting and identified material weaknesses in the company’s disclosure controls and procedures and internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis. Our management may be unable to conclude in future periods that our disclosure controls and procedures are effective due to the effects of various factors, which may, in part, include unremediated material weaknesses in internal control over financial reporting.

Management is committed to maintaining a strong internal control environment and believes its remediation efforts will represent an improvement in existing controls. Management anticipates that the new controls, as implemented and when tested for a sufficient period of time, will remediate the material weaknesses. We may not be successful in promptly remediating the material weaknesses identified by management, or be able to identify and remediate additional control deficiencies, including material weaknesses, in the future. If not remediated, our failure to establish and maintain effective disclosure controls and procedures and internal control over financial reporting could result in material misstatements in our financial statements and a failure to meet our reporting and financial obligations, each of which could have a material adverse effect on our financial condition and the trading price of our common stock.

The company has received, and may receive in the future, regulatory, investigative and enforcement inquiries, subpoenas or demands arising from, related to, or in connection with these matters. Professional costs resulting from the investigation that resulted in the identification of the material weaknesses have been significant and are expected to continue to be significant, in particular if litigation costs relating to these regulatory, investigative and enforcement inquiries, subpoenas and demands grow. Although we believe that no significant business has been lost to date, it is possible that a change in the perceptions of our business partners could occur as a result of the investigation and the material weaknesses. In addition, as a result of the investigation and remediation efforts, certain operational changes have occurred and may continue to occur in the future. Any or all of these impacts based on the findings of the investigation and related matters and the surrounding circumstances could exacerbate the other risks described herein and directly or indirectly have a material adverse effect on our operations and/or financial performance.1933).

~~Cybersecurity incidents could result in the company incurring significant costs and could harm the company’s business and reputation.~~

The company’s business includes managing, processing, storing and transmitting proprietary and confidential data, including personal information, intellectual property and proprietary business information, within the company’s own IT systems and those that the company designs, develops, hosts or manages for clients. These systems are critical to the company’s business activities, and shutdowns or disruptions of, and cybersecurity attacks on, these systems pose increasing risks. Cybersecurity incidents and network security incidents may include, but are not limited to, attempts to access or unauthorized access of information, exploitation of vulnerabilities (including those of third-party software or systems), computer viruses, ransomware, denial of service and other electronic security incidents. Attacks also include social engineering and cyber extortion to induce customers, contractors, business partners, vendors, employees and other third parties to disclose information, transfer funds, or unwittingly provide access to systems or data. Cyberattacks from computer hackers and cyber criminals and other malicious internet-based activity continue to increase generally, and the company’s services and systems, including the systems of the company’s outsourced service providers, have been and may in the future continue to be the target of various forms of cybersecurity incidents such as DNS attacks, wireless network attacks, viruses and worms, malicious software, ransomware, cyber extortion, misconfigurations, supply chain attacks, application centric attacks, peer-to-peer attacks, phishing attempts, backdoor trojans and distributed denial of service attacks.

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, and these new techniques generally are not detected until after an incident has occurred. Cybersecurity incidents involving the company’s systems, despite established security controls, could result in disruption of the company’s services, misappropriation, misuse, alteration, theft, loss, corruption, leakage, falsification, and accidental or premature release or improper disclosure or misuse of confidential or other information, including intellectual property and personal information (of the company, third parties, employees, clients or others). The company could be exposed to liability, litigation, and regulatory or other government action, as well as the loss of existing or potential customers, damage to the company’s brand and reputation, damage to the company’s competitive position, and other financial loss, any of which could have a material adverse effect on the company’s business, financial condition and results of operations. In addition, the cost and operational consequences of responding to cybersecurity incidents and implementing remediation measures could be significant. In the company’s industry, security vulnerabilities are increasingly discovered, publicized and exploited across a broad range of hardware, software or other infrastructure, elevating the risk of attacks and the potential cost of response and remediation for the company.

Although the company continuously takes significant steps to mitigate cybersecurity risk across a range of functions, such measures can never eliminate the risk entirely or provide absolute security, and the company has experienced and expects to continue to experience cyberattacks on its information systems. While there have not been cybersecurity incidents or vulnerabilities that have had a material adverse effect on the company, there is no assurance that there will not be cybersecurity incidents or vulnerabilities that will have a material adverse effect in the future.

~~The company has significant underfunded pension obligations.~~

The company has significant underfunded obligations under its U.S. and non-U.S. defined benefit pension plans. In 2021, the company made cash contributions of $52.4 million, primarily for its international defined benefit pension plans. Based on current legislation, global regulations, recent interest rates and expected returns, in 2022 the company expects to make cash contributions of approximately $38.5 million, primarily for its international defined benefit pension plans. Estimates for future cash contributions are likely to change based on a number of factors including market conditions and changes in discount rates. The company may need to obtain additional funding in order to make future contributions. In this event, there is no assurance that the company would be able to obtain such funding or that the company will have enough cash on hand to pay the required cash contributions.

Deterioration in the value of the company’s worldwide defined benefit pension plan assets, as well as discount rate changes, asset return changes, or changes in economic or demographic trends, could require the company to make cash contributions to its defined benefit pension plans in the future in an amount larger than currently anticipated. Increased cash contribution requirements or an acceleration in the due date of such cash contributions would further reduce the cash available for working capital, capital expenditures and other corporate uses and may worsen the adverse impact on the company’s operations, financial condition and liquidity.

~~CAUTIONARY STATEMENT PURSUANT TO THE U.S. PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995~~

~~Risks and uncertainties that could cause the company’s future results to differ materially from those expressed in “forward-looking” statements include:~~

~~Implementation of Business Strategy in Information Technology Market~~

•~~our ability to attract and retain experienced personnel in key positions;~~

•~~our ability to grow revenue and expand margin in our Digital Workplace Solutions and Cloud, Applications & Infrastructure Solutions businesses;~~

•~~our ability to maintain our installed base and sell new solutions and related services;~~

•~~the business and financial risk in implementing acquisitions or dispositions;~~

•~~the potential adverse effects of aggressive competition in the information services and technology market;~~

•~~our ability to effectively anticipate and respond to rapid technological innovation in our industry;~~

•~~our ability to retain significant clients and attract new clients;~~

•~~our contracts may not be as profitable as expected or provide the expected level of revenues;~~

•~~our ability to develop or acquire the capabilities to enhance the company’s solutions;~~

~~Defined Benefit Pension Plans~~

•~~we have significant underfunded pension obligations;~~

~~General Business Risks~~

•~~the impact of the Audit & Finance Committee’s investigation;~~

•the impact of management’s conclusion, in consultation with the Audit & Finance Committee, that material weaknesses existed in our disclosure controls and procedures and internal control over financial reporting;

•~~the evaluation and implementation of remediation efforts designed and implemented to enhance our control environment;~~

•~~the potential identification of one or more additional material weaknesses in our internal control over financial reporting of which we are not currently aware or that have not been detected;~~

•~~the impact of COVID-19 on our business, growth, reputation, projections, financial condition, operations, cash flows and liquidity;~~

•~~the performance and capabilities of third parties with whom we have commercial relationships;~~

•~~cybersecurity incidents could result in incurring significant costs and could harm our business and reputation;~~

•~~a failure to meet standards or expectations with respect to the company’s environmental, social and governance practices;~~

•~~the risks of doing business internationally when a significant portion of our revenue is derived from international operations;~~

•~~our ability to access financing markets;~~

•~~a reduction in our credit rating;~~

•~~the adverse effects of global economic conditions, acts of war, terrorism, natural disasters or the widespread outbreak of infectious diseases;~~

•~~a significant disruption in our IT systems could adversely affect our business and reputation;~~

•~~we may face damage to our reputation or legal liability if our clients are not satisfied with our services or products;~~

•~~the potential for intellectual property infringement claims to be asserted against us or our clients;~~

•~~the possibility that legal proceedings could affect our results of operations or cash flow or may adversely affect our business or reputation; and~~

~~Tax Assets~~

•~~our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.~~

~~Other factors discussed in this report, although not listed here, also could materially affect our future results.~~

Item 6. Exhibits

See Exhibit Index

3533

EXHIBIT INDEX



Exhibit Number	Description


10.1	~~3.1~~	Amendment No.1 dated as of June 2, 2023 to Amended and Restated ~~Certificate~~Credit Agreement dated as of ~~Incorporation of~~October 29, 2020 by and among Unisys Corporation, ~~(incorporated by reference~~Unisys Holding Corporation, Unisys AP Investment Company I, Unisys NPL, Inc., the lenders from time to ~~Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on April 30, 2010)~~time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent

~~3.2~~	Certificate of Amendment of the Restated Certificate of Incorporation of Unisys Corporation (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on April 28, 2011)31.1

~~3.3~~	Certificate of Amendment of the Restated Certificate of Incorporation of Unisys Corporation (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on April 28, 2017)

~~3.4~~	~~Bylaws of Unisys Corporation, as amended through May 10, 2019 (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on May 15, 2019)~~

~~31.1~~	Certification of Peter A. Altabef required by Rule 13a-14(a) or Rule 15d-14(a)

31.2	~~31.2~~	Certification of Debra McCann required by Rule 13a-14(a) or Rule 15d-14(a)

32.1	~~32.1~~	Certification of Peter A. Altabef required by Rule 13a-14(b) or Rule 15d-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350

32.2	~~32.2~~	Certification of Debra McCann 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	The following financial information from Unisys Corporation’s Quarterly Report on Form 10-Q for the quarter ended ~~September~~June 30, ~~2022~~2023 formatted in ~~iXBRL (Inline Extensible~~Inline XBRL (Extensible Business Reporting Language): includes: (i) the Consolidated Statements of Income (Loss), (ii) the Consolidated Statements of Comprehensive Income (Loss), (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of ~~Deficit,~~Equity (Deficit), and (vi) Notes to Consolidated Financial Statements

104	Cover page Interactive Data File ~~(the cover page~~(formatted as Inline XBRL ~~tags are embedded within the iXBRL (Inline Extensible Business Reporting Language) document)~~and contained in Exhibit 101)

3634

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: ~~November 23, 2022~~August 2, 2023	By:	/s/ Debra McCann
		Debra McCann
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)



			By:			/s/ ~~Erin Mannix~~William Reinheimer
						~~Erin Mannix~~
						~~Vice President and Chief Accounting Officer~~William Reinheimer
						(Principal Accounting Officer)

3735


	Weighted Average Amortization Period in Years	Fair Value

Customer relationships	12.0	$	44.6
Trademark	4.0	1.3
Total		$	45.9


	Total Segments		DWS		CA&I		ECS
Three Months Ended September 30, 2022
Customer revenue	$	390.1	$	130.1	$	122.3	$	137.7
Intersegment	—		—		—		—
Total revenue	$	390.1	$	130.1	$	122.3	$	137.7
Gross profit	$	107.3	$	19.7	$	6.8	$	80.8

Three Months Ended September 30, 2021
Customer revenue	$	410.4	$	143.2	$	115.9	$	151.3
Intersegment	—		—		—		—
Total revenue	$	410.4	$	143.2	$	115.9	$	151.3
Gross profit	$	123.2	$	17.7	$	6.8	$	98.7


	Total Segments		DWS		CA&I		ECS
Nine Months Ended September 30, 2022
Customer revenue	$	1,207.7	$	382.1	$	381.5	$	444.1
Intersegment	—		—		—		—
Total revenue	$	1,207.7	$	382.1	$	381.5	$	444.1
Gross profit	$	339.7	$	52.2	$	20.9	$	266.6

Nine Months Ended September 30, 2021
Customer revenue	$	1,284.9	$	434.5	$	358.3	$	492.1
Intersegment	1.4		—		—		1.4
Total revenue	$	1,286.3	$	434.5	$	358.3	$	493.5
Gross profit	$	399.3	$	59.7	$	30.2	$	309.4