Unisys Corporation 10-K Summary (Fiscal Year Ended Dec 31, 1998)
Business Context and Reporting Period
This Form 10-K covers the fiscal year ended December 31, 1998, for Unisys Corporation, a worldwide information services and technology company. The Company operates through two primary segments: Services (systems integration, outsourcing, maintenance) and Technology (high-end servers, storage, and payment systems). As of year-end, Unisys employed approximately 33,200 people and maintained 28 major facilities in the U.S. and 30 internationally.
Key Financial Metrics
The filing text incorporates detailed financial statements by reference and does not explicitly state consolidated revenue, net income, or cash flow totals within the provided text. However, the following specific metrics are disclosed:
- Research & Development: $296.6 million in 1998.
- Services Backlog: $3.4 billion (firm orders) as of December 31, 1998.
- Unfunded Government Contracts: $2.4 billion in potential future value under multi-year U.S. government contracts.
- Allowance for Doubtful Accounts: Ended the year at $50.5 million.
- Stockholders: Approximately 28,600 stockholders of record with 256.6 million shares outstanding.
- Dividends: No cash dividends declared or paid since 1990.
Material Changes vs. Prior Period
- Backlog Growth: Firm order backlog in the Services segment increased to $3.4 billion in 1998, up from $2.9 billion in 1997.
- Unfunded Contracts: Potential future value from unfunded multi-year U.S. government contracts rose to $2.4 billion in 1998, compared to $2.0 billion in 1997.
- R&D Spending: Research and development costs decreased slightly to $296.6 million in 1998 from $302.3 million in 1997.
- Bad Debt Provision: The allowance for doubtful accounts decreased from $69.5 million at the beginning of 1998 to $50.5 million at year-end, reflecting net write-offs of $22.7 million.
Outlook, Risks, and Contingencies
Legal Proceedings: Unisys is involved in significant litigation with Ceska Sporitelna, a Czech savings bank.
- U.S. Lawsuit: The Bank alleges fraudulent misrepresentations, seeking over $100 million plus punitive damages. Unisys has filed a counterclaim seeking over $100 million. Trial is scheduled for March 1999.
- Arbitration: Unisys is seeking approximately $21.1 million for delivered hardware and software. Hearings are scheduled for June 1999.
Year 2000 Readiness: The filing incorporates a Year 2000 readiness disclosure by reference, indicating the Company is addressing the issue, though specific status details are not in the provided text.
Competition: The Company faces aggressive competition from domestic and foreign hardware manufacturers and service providers, competing on service, performance, innovation, and price.
Investor Verification Checklist
- Verify the full consolidated revenue, net income, and cash flow figures in the referenced 1998 Annual Report to Stockholders (pages 38-40).
- Review the "Management's Discussion and Analysis" section for specific guidance on 1999 performance and margin trends.
- Monitor the outcome of the Ceska Sporitelna litigation (trial March 1999) for potential material financial impact.
- Confirm the status of Year 2000 remediation efforts in the referenced Annual Report.
- Assess the collectability of the $3.4 billion Services backlog given the $22.7 million in bad debt write-offs during the year.