Unisys Corporation 10-K Summary: Fiscal Year Ended December 31, 1999
Business Context and Reporting Period
This Form 10-K covers the fiscal year ended December 31, 1999 for Unisys Corporation, a worldwide information services and technology company. The Company operates through two primary segments: Services (integrating solutions, systems integration, outsourcing, and network services) and Technology (enterprise-class servers, storage, and payment systems). Unisys serves commercial businesses and governments globally, with principal executive offices in Blue Bell, Pennsylvania. As of year-end, the Company employed approximately 35,800 people.
Key Financial Metrics
The filing incorporates detailed financial statements by reference to the 1999 Annual Report to Stockholders; specific consolidated revenue, net income, and cash flow totals are not explicitly stated in the provided text. However, the following specific metrics are disclosed:
- Research & Development: $339.4 million in 1999 (up from $308.3 million in 1998).
- Services Backlog: $4.6 billion in firm orders at December 31, 1999.
- Unfunded Government Contracts: $2.3 billion in potential future value under multi-year U.S. government contracts.
- Allowance for Doubtful Accounts: Ended the year at $51.8 million.
- Stock Data: 310,582,112 shares of Common Stock outstanding; aggregate market value of non-affiliate voting stock was approximately $9.9 million.
- Dividends: No cash dividends have been declared or paid since 1990.
Material Changes and Operational Highlights
Significant operational changes and comparisons to the prior period include:
- Backlog Growth: Firm order backlog in the Services segment increased to $4.6 billion in 1999, compared to $3.4 billion in 1998.
- R&D Investment: R&D spending increased by approximately $31.1 million year-over-year.
- Government Exposure: Sales to U.S. government agencies represented 11% of total consolidated revenue in 1999.
- Leadership Changes: Several Executive Vice Presidents and Senior Vice Presidents assumed new titles effective January 2000, including Jack A. Blaine (Worldwide Sales and Services) and George R. Gazerwitz (Systems & Technology).
- Facilities: The Company held approximately 0.2 million square feet of U.S. facilities and 0.4 million square feet of international facilities in reserve or surplus status with disposition efforts in progress.
Outlook, Risks, and Contingencies
Management and risk disclosures highlight the following areas:
- Legal Proceedings: Multiple purported class action lawsuits were filed in late 1999 in the U.S. District Court for the Eastern District of Pennsylvania. Plaintiffs allege violations of federal securities laws regarding statements made about services contracts. The Company intends to defend these actions vigorously.
- Backlog Risks: While the $4.6 billion backlog is considered firm, orders may be cancelled for commercial reasons. Funded U.S. Government contracts are subject to termination at the government's convenience or if funding becomes unavailable.
- Competition: The business faces aggressive competition from domestic and foreign hardware, software, and services companies, competing primarily on service, performance, innovation, and price.
- Year 2000: The filing references Year 2000 readiness disclosures incorporated from the Annual Report, indicating the transition period was a material focus for the reporting year.
Investor Verification Checklist
- Verify the specific consolidated revenue and net income figures in the Consolidated Statement of Income (incorporated by reference, not detailed in this text).
- Review the Segment Information (Note 15) to understand the revenue split between Services and Technology segments.
- Assess the potential financial impact of the pending class action lawsuits regarding services contract disclosures.
- Monitor the realization rate of the $4.6 billion Services backlog, noting that 44% is expected to be filled in 2000.
- Confirm the status of unfunded U.S. government contracts ($2.3 billion) and associated funding risks.