EXHIBIT 99.1
SECUTITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2001
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to _____________.
Commission file number 1-8729
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
UNISYS SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
UNISYS CORPORATION
Unisys Way
Blue Bell, Pennsylvania 19424
REQUIRED INFORMATION
Financial Statements and Supplemental Schedule
Unisys Savings Plan
Years ended December 31, 2001 and 2000
with Report of Independent Auditors
CONTENTS
Report of Independent Auditors 1
Audited Financial Statements:
Statements of Assets Available for Benefits 2
Statements of Changes in Assets Available for Benefits 3
Notes to Financial Statements 4
Supplemental Schedule:
Schedule H, Line 4i - Schedule of Assets (Held at End of Year) 10
Exhibit:
Consent of Independent Auditors
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934,
the Plan administrator has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
UNISYS SAVINGS PLAN
UNISYS CORPORATION
Date: June 10, 2002 By: /s/ Janet Brutschea Haugen
--------------------------
Janet Brutschea Haugen
Senior Vice President and
Chief Financial Officer
1
Report of Independent Auditors
Unisys Corporation
Employee Benefits Administrative Committee
We have audited the accompanying statements of assets available for benefits of
the Unisys Savings Plan (the "Plan") as of December 31, 2001 and 2000, and the
related statements of changes in assets available for benefits for the years
then ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provided
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets available for benefits of the Plan at
December 31, 2001 and 2000, and the changes in its assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying supplemental schedule
of assets (held at end of year) as of December 31, 2001, is presented for
purposes of additional analysis and is not a required part of the financial
statements but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
Ernst & Young LLP
Philadelphia, Pennsylvania
May 3, 2002
2
Unisys Savings Plan
Statements of Assets Available for Benefits
December 31
2001 2000
---------------------------------------
(In Thousands)
Investments at fair value:
Fidelity Mutual Funds $ 1,776,829 $ 2,059,840
Unisys Common Stock Funds 211,510 262,009
Unisys Interest Income Fund 391,456 377,906
Participants' Loans 17,372 20,255
Frozen Investment Contracts 23 23
---------------------------------------
Assets available for benefits $ 2,397,190 $ 2,720,033
=======================================
See accompanying notes.
3
Unisys Savings Plan
Statements of Changes in Assets Available for Benefits
Year ended December 31
2001 2000
-----------------------------------
(In Thousands)
Additions:
Interest and dividend income $ 69,014 $ 215,566
Contributions:
Employer 18,305 18,471
Employee 83,766 88,260
-----------------------------------
102,071 106,731
-----------------------------------
Total additions 171,085 322,297
-----------------------------------
Deductions:
Benefit payments 230,419 225,307
Administrative and other expenses 109 339
-----------------------------------
Total deductions 230,528 225,646
-----------------------------------
Net depreciation in fair value
of investments (263,434) (538,201)
Transfers from purchased plans 34 4,703
-----------------------------------
Net decrease (322,843) (436,847)
Assets available for benefits:
Beginning of year 2,720,033 3,156,880
-----------------------------------
End of year $ 2,397,190 $ 2,720,033
===================================
See accompanying notes.
4
Unisys Savings Plan
Notes to Financial Statements
December 31, 2001
1. PLAN DESCRIPTION
The Unisys Savings Plan (the Plan) is a defined contribution plan that covers
nonbargaining employees paid from a United States payroll of Unisys
Corporation (the Company) and bargaining unit employees whose collective
bargaining agreement provides for participation in the Plan. The Employee
Benefits Administrative Committee is the Plan administrator. The Plan is
subject to the provisions of the Employee Retirement Income Security Act of
1974 (ERISA).
Participants should refer to the Plan document, summary plan description and
their respective bargaining unit agreement, if applicable, for complete
information.
CONTRIBUTIONS
Non-highly compensated employees may contribute up to 20% of their pretax
compensation, as defined in the Plan. Highly compensated employees could
contribute up to 12% and 18% of their pretax compensation, in 2000 and 2001,
respectively, as defined in the Plan. The Plan allows the Company to make
discretionary matching contributions, as determined by the Company's Board of
Directors. The matching contribution is made in Company common stock and was
50% of the first 4% of pretax compensation contributed by the participant
during 2001 and 2000. The Plan also allows for rollover contributions from
other qualified defined contribution plans.
INVESTMENT OPTIONS
Participants may elect to have their current contributions and existing
account balances invested in any one or more of the investment options offered
and managed by Fidelity Management & Research Company and Fidelity Management
Trust Company (Fidelity). Information regarding the investment options is
provided to each participant through electronic media and prepared materials
provided by the Company and in each investment fund's prospectus made
available by Fidelity.
5
1. PLAN DESCRIPTION (continued)
PARTICIPANT ACCOUNTS
Participant accounts are credited with requested pre-tax, after-tax, rollover,
participant contributions, Company contributions and an allocation of
investment income (losses), and they are charged with an allocation of
administrative expenses. Allocations are based on participant earnings or
account balances, as determined. The benefit to which a participant is
entitled is equal to the vested portion of their account.
VESTING AND FORFEITURES
Plan participants are immediately vested in their account balances at all times.
DISTRIBUTIONS/WITHDRAWALS
On termination of service, a participant may receive a lump-sum amount equal
to his or her account, or upon death, disability or retirement, elect to
receive payments in the form of an annuity or annual installments over the
participant's actuarially determined lifetime. Plan participants also may
receive in-service withdrawals in certain circumstances as defined in the
Plan. Loans are also available to Plan participants in accordance with Plan
rules and procedures.
PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its matching contributions and/or to terminate
the Plan at any time subject to the provisions of ERISA.
2. SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
6
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value, except for the Unisys
Interest Income Fund which includes investments in guaranteed investment
contracts issued principally by insurance companies and financial institutions
which are valued at contract value as estimated by the insurance companies.
Contract value represents contributions and reinvested income, less any
withdrawals plus accrued interest, because these investments have fully benefit
responsive features. All participant initiated transactions with the fund are
permitted at contract value with no conditions, limits or restrictions.
However, withdrawals influenced by Company-initiated events, such as in
connection with the sale of a business, may result in a distribution at other
than contract value. No reserves have been provided or are considered
necessary against contract values for credit risk of contract issuers or
otherwise. Contract value of these investment contracts approximates their
fair value. Interest accrued on the contract balances, during 2001 and 2000,
at rates ranging from 2.12% to 6.35% and from 5.02% to 8.71%, respectively.
Interest rates are set at the time the contract is negotiated and, depending
on the terms of the contract, are fixed through the maturity date or are
re-set quarterly, semi-annually or annually. The average yield on the
contracts was 6.51% and 6.24% for 2001 and 2000, respectively.
As of December 31, 2001 and 2000, because of the large number of investment
contracts with numerous counterparties, the Plan had no significant
concentrations of credit risk.
Shares of registered investment companies are valued at quoted market prices,
which represent net asset values of shares held by the Plan at year-end.
Shares of Unisys common stock are valued at the closing market price on the
last day of the Plan year. Participant loans are valued at the outstanding
principal balance, which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is reported on the accrual basis. Dividends are recorded on the ex-
dividend date. Realized gains and losses from securities sold are reported on
an average cost basis.
Investments in Frozen Investment Contracts represent the cash balance from
payments made to the Plan from the Conservation Estate of the Executive Life
Insurance Company (ELIC) and from state guaranty associations in settlement of
claims made by the Plan as a result of the insolvency of ELIC. The remaining
cash balance at December 31, 2001 represents amounts that will be allocated to
Plan participants or applied to pay administrative expense of the Plan.
7
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
RECLASSIFICATIONS
Certain prior-year amounts have been reclassified to conform with the 2001
presentation.
3. INVESTMENTS
The Plan's investments at December 31, 2001 and 2000 were held in trusts with
Fidelity Management Trust Company, First Union National Bank, and Oriental Bank
& Trust, each of which was established for the investment of the Plan's assets.
During 2001 and 2000, the Plan's investments (including investments purchased,
sold, as well as held during the year) (depreciated) appreciated in fair value
as follows (in thousands):
2001 2000
--------------------------------------
Fidelity Mutual Funds $ (229,354) $ (313,144)
Unisys Common Stock Funds (30,740) (242,693)
Unisys U.S. Equity Index
Commingled Pool Fund (3,528) (3,108)
Frozen Investment Contracts 188 20,744
--------------------------------------
$ (263,434) $ (538,201)
======================================
Investments that represent 5% or more of fair value of the Plan's assets are
as follows:
2001 2000
--------------------------------------
*Unisys Stock Fund $ 197,407 $ 244,215
Unisys Interest Income Fund 391,456 377,906
Fidelity Magellan Fund 320,384 393,232
Fidelity Asset Manager Fund 222,673 254,566
Fidelity Asset Manager Growth Fund 228,110 269,618
Fidelity Retirement Money Market
Portfolio Fund 153,369 140,912
*Nonparticipant-directed
8
3. INVESTMENTS (continued)
The assets and significant components of the changes in assets relating to the
non-participant-directed investments are as follows:
December 31
2001 2000
--------------------------------------
(In Thousands)
Investments, at fair value:
Unisys Stock Fund $ 197,407 $ 244,215
Unisys Common Stock Fund 14,044 17,731
Interest-Bearing Cash 59 62
Frozen Investment Contracts 23 23
--------------------------------------
Total $ 211,533 $ 262,031
======================================
Year ended December 31
2001 2000
--------------------------------------
(In Thousands)
Changes in assets:
Interest and dividends $ 203 $ 829
Net depreciation in
fair value of investments (30,553) (222,034)
Contributions 21,583 23,859
Benefit payments (13,400) (19,717)
Administrative and other expenses (12) (14)
Net transfers (28,319) (20,661)
--------------------------------------
Total $ (50,498) $ (237,738)
======================================
At December 31, 2001, the Plan held 1,124,633 and 15,736,804 shares of Unisys
Common Stock in the Unisys Common Stock Fund and Unisys Stock Fund,
respectively. At December 31, 2000, the Plan held 1,212,376 and 16,411,373
shares of Unisys Common Stock in the Unisys Common Stock Fund and Unisys Stock
Fund, respectively.
9
4. TAX STATUS OF THE PLAN
The Plan has received a determination letter from the Internal Revenue Service
dated June 24, 1996, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code and, therefore, the related trusts are exempt
from taxation. Once qualified, the Plan is required to operate in conformity
with the Code to maintain its qualification. The Plan Administrator believes
the Plan is being operated in compliance with the applicable requirements of
the Code and, therefore, believes that the Plan is qualified and the related
trusts are tax-exempt.
10
Supplemental Schedule
Unisys Savings Plan
EIN 38-0387840 Plan-004
Schedule H, Line 4i-
Schedule of Assets (Held at End of Year)
December 31, 2001
Description of Investment
Including Maturity Date,
Identity of Issue, Borrower, Rate of Interest, Par or Current
Lessor or Similar Party Maturity Value Cost Value
- ----------------------------------------------------------------------------------------------------
*Fidelity Mutual Funds:
Fidelity Fund 691,165 shares $ 22,932,610 $ 19,960,838
Puritan Fund 956,092 shares 17,046,229 16,894,140
Trend Fund 68,737 shares 4,008,723 3,370,876
Ginnie Mae Portfolio Fund 754,551 shares 8,130,872 8,194,427
Magellan Fund 3,074,112 shares 283,120,316 320,383,901
Contra Fund 1,852,550 shares 85,704,564 79,233,578
Equity Income Fund 305,207 shares 14,371,477 14,884,940
Growth Company Fund 797,440 shares 54,833,097 42,439,756
Investment Grade Bond Fund 1,137,390 shares 8,270,657 8,348,445
Growth & Income Portfolio Fund 1,259,407 shares 45,846,611 47,076,620
Intermediate Bond Fund 601,042 shares 6,136,229 6,202,751
Capital & Income Portfolio Fund 800,662 shares 7,163,962 5,428,491
Value Fund 530,391 shares 25,806,939 27,320,466
Mortgage Securities
Portfolio Fund 341,365 shares 3,695,671 3,717,462
Government Securities Fund 1,060,843 shares 10,473,914 10,576,601
Independence Fund 760,966 shares 17,632,810 12,000,437
Over-The-Counter Portfolio Fund 723,898 shares 32,708,048 22,563,907
Overseas Fund 249,373 shares 8,403,388 6,837,812
Europe Fund 294,625 shares 8,563,253 7,294,911
Pacific Fund 292,224 shares 5,203,484 4,047,299
Real Estate Investment
Portfolio Fund 405,192 shares 7,110,798 7,504,156
Balanced Fund 822,081 shares 12,122,105 12,249,003
International Growth &
Income Fund 299,860 shares 6,376,710 5,625,372
Capital Appreciation Fund 347,639 shares 7,739,474 7,143,989
Conv. Securities Fund 547,781 shares 11,698,964 10,900,834
Canada Fund 57,900 shares 1,168,044 1,098,367
Utilities Fund 949,618 shares 18,186,197 12,810,340
Blue Chip Fund 1,720,760 shares 69,802,383 73,889,426
Asset Manager Fund 14,365,981 shares 234,400,547 222,672,699
Disciplined Equity Fund 240,387 shares 6,123,835 5,312,557
Low-Priced Fund 1,156,970 shares 28,262,315 31,724,122
Worldwide Fund 410,042 shares 6,323,365 6,011,212
Equity Income II Fund 1,729,329 shares 40,767,571 36,367,787
Stock Selector Fund 408,975 shares 10,213,531 8,641,644
Asset Manager Growth Fund 15,907,236 shares 254,355,373 228,109,767
Emerging Markets Fund 155,160 shares 1,689,812 1,210,250
Emerging Markets Growth Fund 1,850,971 shares 81,004,292 35,205,474
Diversified International Fund 681,976 shares 12,882,375 13,012,103
Asset Manager Income Fund 2,958,271 shares 33,932,713 33,517,211
Diversified Growth Fund 1,548,985 shares 41,961,536 43,882,752
New Markets Income Fund 330,333 shares 3,758,574 3,603,936
Export & Multinational Fund 240,691 shares 4,521,929 4,084,534
Global Balanced Fund 59,105 shares 909,643 944,491
Aggressive International Fund 102,818 shares 1,647,343 1,241,011
Small Capital Stock Fund 690,534 shares 10,099,417 11,600,973
Mid-Capital Stock Fund 1,137,872 shares 27,468,075 25,681,767
Large-Capital Stock Fund 238,300 shares 4,447,921 3,469,653
Europe Capital Appreciation
Stock Fund 145,150 shares 2,747,641 2,394,980
Latin America Fund 73,043 shares 1,025,557 877,243
Japan Fund 444,987 shares 7,356,164 4,049,378
Southeast Asia Fund 96,049 shares 1,183,940 1,054,613
Freedom Income Fund 62,201 shares 693,679 679,858
Freedom 2000 Fund 53,299 shares 638,880 614,010
Freedom 2010 Fund 243,502 shares 3,341,323 3,070,566
Freedom 2020 Fund 157,803 shares 2,375,474 1,985,165
Freedom 2030 Fund 147,501 shares 2,237,286 1,852,616
Target Timeline 2003 Fund 110,842 shares 1,046,179 1,055,219
Spartan Total Market Index Fund 105,648 shares 3,542,420 3,122,950
Spartan Extended Market
Index Fund 53,422 shares 1,612,722 1,266,104
Spartan International
Market Index Fund 29,034 shares 937,716 709,579
Short-Term Bond Fund 452,827 shares 3,971,456 3,984,877
Global Bond Fund 232,806 shares 2,191,091 1,857,796
Fifty Fund 212,790 shares 4,162,079 3,430,170
U.S. Bond Index Portfolio Fund 1,731,779 shares 18,434,715 18,703,215
Institutional Short-Intermed.
Gov't. Portfolio 247,610 shares 2,311,474 2,339,911
-----------------------------------
1,668,837,492 1,567,341,338
*Fidelity Money Market Funds:
Retirement Money Market
Portfolio Fund 153,369,266 shares 153,369,266 153,369,266
Retirement Gov't. Money
Market Portfolio Fund 30,741,002 shares 30,741,002 30,741,002
-----------------------------------
184,110,268 184,110,268
*Fidelity U.S. Equity Index
Commingled Pool Fund 751,943 units 20,067,959 25,378,086
-----------------------------------
Total Fidelity Mutual Funds 1,873,015,719 1,776,829,692
*Unisys Common Stock Funds:
Unisys Common Stock Fund 1,119,949 shares 10,677,459 14,044,162
Unisys Stock Fund 10,133,827 shares 251,416,277 197,406,952
Interest-Bearing Cash 59,094 shares 59,094 59,094
-----------------------------------
Total Unisys Common Stock Funds 262,152,830 211,510,208
*Unisys Interest Income Fund:
CDC #BR-137-02; 5.62% 6,018,904 6,018,904
Comb Ins #CG-1086; 6.35% 7,587,873 7,587,873
Fidelity Stif Cash Portfolio; 2.12% 6,795,518 6,795,518
Chase Manhattan Bank #400971; 6.09% 5,004,938 5,004,938
Chase Manhattan Bank #430126; 6.19% 86,578,054 86,578,054
Monumental Life
Insurance Company #MDA134TR; 6.18% 86,634,330 86,634,330
Rabobank Nederland #UNI-119802; 5.69% 4,500,040 4,500,040
Radobank Nederland #UNI-119801; 5.59% 5,033,892 5,033,892
Rabobank Nederland #UNI-129901; 6.18% 86,635,729 86,635,729
State Street Bank &
Trust Company #98152; 5.99% 6,005,005 6,005,005
UBS Warburg #2530; 5.72% 4,025,933 4,025,933
UBS Warburg #3041; 6.18% 86,635,616 86,635,616
-----------------------------------
391,455,832 391,455,832
*Participants' Loans - 17,371,633
Frozen Investment Contracts 22,600 22,600
-----------------------------------
Total $2,526,646,981 $2,397,189,965
===================================
*Party-In-Interest.
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statements
(Form S-8 No. 333-56038 and Form S-8 No. 333-87411) pertaining to the Unisys
Savings Plan of Unisys Corporation of our report dated May 3, 2002, with
respect to the financial statements and schedule of the Unisys Savings Plan
included in this Annual Report (Form 11-K) for the year ended December 31, 2001.
Ernst & Young LLP
Philadelphia, Pennsylvania
June 6, 2002