Unisys Corporation 10-K Summary: Fiscal Year Ended December 31, 2009
Business Context and Reporting Period
This Form 10-K covers the fiscal year ended December 31, 2009 for Unisys Corporation, a worldwide information technology (IT) company. Unisys operates in two primary segments: Services (outsourcing, systems integration, infrastructure, and maintenance) and Technology (high-end servers and related software). The company serves commercial organizations and government agencies globally, with approximately 20% of 2009 revenue derived from U.S. government contracts. As of December 31, 2009, the company employed approximately 25,600 people worldwide.
Key Financial Metrics
The provided filing text incorporates detailed financial statements by reference to the 2009 Annual Report to Stockholders and does not explicitly list consolidated revenue, net income, cash flow, or debt totals within the text body. However, the following specific metrics are disclosed:
- Research and Development (R&D): $101.9 million in 2009 (down from $129.0 million in 2008).
- Services Segment Backlog: $6.5 billion at December 31, 2009 (up from $6.1 billion in 2008).
- Backlog Fill Rate: Approximately $2.6 billion (41%) of the 2009 backlog is expected to be filled in 2010.
- Valuation and Qualifying Accounts: Ended the period at $45.7 million (down from $51.0 million in 2008).
- Market Capitalization: Approximately $557.9 million as of June 30, 2009.
- Shares Outstanding: 42,286,963 as of December 31, 2009.
- Dividends: No cash dividends have been declared or paid since 1990.
Material Changes and Operational Updates
- Backlog Growth: The Services segment backlog increased by $0.4 billion year-over-year.
- R&D Reduction: R&D spending decreased by approximately $27.1 million compared to 2008, reflecting a reduction in investment levels.
- Asset Disposition: The company sold a major facility in Michigan (approx. 0.9 million square feet) in the first quarter of 2010. As of year-end, approximately 0.7 million square feet of U.S. facilities were declared surplus.
- Legal Settlement: A lawsuit with Lufthansa Systems regarding passenger management software was settled in Q4 2009. The settlement was deemed immaterial to the company's financial position.
Outlook, Risks, and Contingencies
Strategic Focus: Unisys is focusing resources on four targeted market areas: security, data center transformation (including servers), end-user outsourcing, and applications modernization.
Divestiture: In January 2010, Unisys entered into an agreement to sell its Health Information Management (HIM) business. This transaction includes approximately $0.4 billion of firm order backlog, with completion expected in the first half of 2010 subject to regulatory approvals.
Risks and Contingencies:
- Government Contract Risk: Funded government contracts in the backlog are subject to termination at the convenience of the government or if funding becomes unavailable.
- Supplier Concentration: The company relies on a single or limited number of suppliers for certain technology products, creating supply chain risks.
- Competition: The company faces aggressive competition from systems integrators, outsourcing providers, and hardware manufacturers.
Investor Verification Checklist
- Financial Statements: Verify consolidated revenue, net income, and cash flow figures in the "Unisys 2009 Annual Report to Stockholders" as the 10-K text incorporates these by reference.
- HIM Divestiture: Confirm the closing status and financial impact of the Health Information Management business sale expected in H1 2010.
- Debt Structure: Review the indentures for the 12 3/4% Senior Secured Notes due 2014 and 14 1/4% Senior Secured Notes due 2015 (issued July 2009) to understand current leverage and interest obligations.
- Backlog Realization: Monitor the actual conversion of the $6.5 billion Services backlog into revenue, noting the risk of government contract terminations.
- Facility Rationalization: Track the progress of disposing surplus facilities to assess cost-saving initiatives.