What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-23 compared with 2022-08-03 · 99 added, 103 removed, 122 unchanged (62% of the section changed)

8 unchanged sentences

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.

For the three months ended June 30, 2022, the company reported net loss attributable to Unisys Corporation of $17.1 million, or $0.25 per diluted share, compared with a loss of $140.8 million, or $2.10 per diluted share, for the three months ended June 30, 2021.

Included in the loss for the three months ended June 30, 2021 were pension plan settlement losses net of tax of $159.0 million.

For the six months ended June 30, 2022, the company reported net loss attributable to Unisys Corporation of $74.4 million, or $1.10 per diluted share, compared with a loss of $298.6 million, or $4.54 per diluted share, for the six months ended June 30, 2021.

Included in the loss for the six months ended June 30, 2021 were pension plan settlement losses net of tax of $317.0 million.

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

For the nine months ended September 30, 2022, the company reported net loss attributable to Unisys Corporation of $114.5 million, or $1.69 per diluted share, compared with a loss of $317.3 million, or $4.79 per diluted share, for the nine months ended September 30, 2021.

Included in the loss for the nine months ended September 30, 2021 were pension plan settlement losses net of tax of $317.0 million.

In February 2022, Russian military forces launched significant military action against Ukraine.

3 unchanged sentences

Company results

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

Revenue for the three months ended June 30, 2022 was $515.0 million compared with $517.3 million for the three months of 2021, a decrease of 0.4% from the prior year.

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

Revenue for the three months ended September 30, 2022 was $461.2 million compared with $488.0 million for the three months of 2021, a decrease of 5.5% from the prior year.

Foreign currency fluctuations had a 6 percentage-point negative impact on revenue in the current period compared with the year-ago period.

revenue increased 9.3% in the current period compared with the year-ago period.

International revenue decreased 11.5% in the current period compared with the prior-year period principally due to decreases in Europe and Asia/Pacific.

Foreign currency had a 5 percentage-point negative impact on international revenue in the three months ended June 30, 2022 compared with the three months ended June 30, 2021.

During the three months ended June 30, 2022, the company recognized net cost-reduction charges and other costs of $3.1 million.

The credit related to work-force reductions was $0.3 million for changes in estimates.

In addition, the company recorded net charges of $3.4 million comprised of a charge of $1.8 million for net foreign currency losses related to exiting foreign countries, a charge of $0.9 million for asset impairments and a charge of $0.7 million for other expenses related to cost-reduction efforts.

During the three months ended June 30, 2021, the company recognized net cost-reduction charges and other costs of $5.1 million.

International revenue decreased 15.0% 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 9 percentage-point negative impact on international revenue in the three months ended September 30, 2022 compared with the three months ended September 30, 2021.

During the three months ended September 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, the company recognized net cost-reduction charges and other costs of $0.8 million.

The net credits related to work-force reductions were $0.6 million, principally related to severance costs, and were comprised of:

(a) a charge of $0.7 million and (b) a credit of $1.3 million for changes in estimates.

In addition, the company recorded net charges of $5.4 million comprised of a credit of $0.7 million for net foreign currency gains related to exiting foreign countries, a charge of $4.4 million for asset impairments and a charge of $1.7 million for other expenses related to cost reduction efforts.

In addition, the company recorded net charges of $1.4 million comprised of a charge of $1.3 million for net foreign currency losses related to exiting foreign countries, a charge of $0.5 million for asset impairments and a credit of $0.4 million related to other cost reduction efforts.

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

Three Months Ended June 30,

Three Months Ended September 30,

Cost of revenue $ 3.9 $ (0.2)

3 unchanged sentences

Total $ 8.1 $ 0.8

Gross profit margin was 28.8% in the three months ended June 30, 2022 compared with 27.5% in the three months ended June 30, 2021.

The increase was principally due to higher software license renewals.

Selling, general and administrative expense in the three months ended June 30, 2022 was $109.6 million (21.3% of revenue) compared with $94.6 million (18.3% of revenue) in the year-ago period.

The change was primarily due to increased investments in sales and marketing.

Research and development (R&D) expense for the three months ended June 30, 2022 and 2021 was $4.8 million and $6.8 million, respectively.

For the three months ended June 30, 2022, the company reported an operating profit of $33.7 million compared with an operating profit of $40.8 million for prior year period.

The decrease was largely driven by increased investments in sales and marketing as noted above.

Interest expense for the three months ended June 30, 2022 was $8.3 million compared with $8.4 million for the three months ended June 30, 2021.

Other (expense), net was expense of $21.9 million for the three months ended June 30, 2022 compared with expense of $227.8 million for the three months ended June 30, 2021.

Other (expense), net for the three months ended June 30, 2021 included $210.7 million of pension settlement losses.

Gross profit margin was 22.6% in the three months ended September 30, 2022 compared with 26.0% in the three months ended September 30, 2021.

The decrease was principally due to lower software license renewals.

Selling, general and administrative expense in the three months ended September 30, 2022 was $106.3 million (23.0% of revenue) compared with $95.1 million (19.5% of revenue) in the year-ago period.

The change was primarily due one-time charges related to cost reduction activities and other non-recurring expenses.

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

For the three months ended September 30, 2022, the company reported an operating loss of $8.0 million compared with an operating profit of $25.1 million for prior year period.

The decrease was primarily driven by lower software license renewals, one-time charges related to cost reduction activities and other non-recurring expenses.

Interest expense for the three months ended September 30, 2022 was $7.9 million compared with $8.5 million for the three months ended September 30, 2021.

Other (expense), net was expense of $23.3 million for the three months ended September 30, 2022 compared with expense of $24.2 million for the three months ended September 30, 2021.

See Note 7 of the Notes to Consolidated Financial Statements for details of other (expense), net.

The income before income taxes for the three months ended June 30, 2022 was $3.5 million compared with a loss of $195.4 million for the three months ended June 30, 2021.

Included in the loss for the three months ended June 30, 2021 were pension plan settlement losses of $210.7 million.

The provision for income taxes was $20.3 million for the three months ended June 30, 2022 compared with a benefit of $53.1 million for the three months ended June 30, 2021.

The prior year period included income tax benefits of $51.7 million related to the pension plan settlement losses in the Netherlands and Switzerland.

Net loss attributable to Unisys Corporation for the three months ended June 30, 2022 was $17.1 million, or $0.25 per diluted share, compared with a loss of $140.8 million, or $2.10 per diluted share, for the three months ended June 30, 2021.

Included in the loss for the three months ended June 30, 2021 were pension plan settlement losses net of tax of $159.0 million.

Six months ended June 30, 2022 compared with the six months ended June 30, 2021

Revenue for the six months ended June 30, 2022 was $961.7 million compared with $1,027.1 million for the six months of 2021, a decrease of 6.4% from the prior year period.

The decrease was primarily due to lower software license renewals.

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

The provision for income taxes was $0.7 million for the three months ended September 30, 2022 compared with a provision of $10.9 million for the three months ended September 30, 2021.

The change in the tax provision is 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 30, 2022 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 30, 2022 was $40.1 million, or $0.59 per diluted share, compared with a loss of $18.7 million, or $0.28 per diluted share, for the three months ended September 30, 2021.

Nine 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 of 6.1% from the prior year period.

Foreign currency fluctuations had a 4 percentage-point negative impact on revenue in the current period compared with the year-ago period.

revenue decreased 0.3% in the current period compared with the year-ago period.

revenue increased 2.6% in the current period compared with the year-ago period.

International revenue decreased 12.2% in the current period compared with the prior-year period due to decreases in Europe and Asia/Pacific.

Foreign currency had a 5 percentage-point negative impact on international revenue in the six months ended June 30, 2022 compared with the six months ended June 30, 2021.

During the six months ended June 30, 2022, the company recognized net cost-reduction charges and other costs of $6.1 million.

Foreign currency had a 6 percentage-point negative impact on international revenue in the nine months ended September 30, 2022 compared with the nine months ended September 30, 2021.

During the nine months ended September 30, 2022, the company recognized net cost-reduction charges and other costs of $14.2 million.

The credit related to work-force reductions was $0.4 million for changes in estimates.

In addition, 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 $4.7 million for asset impairments and a credit of $0.6 million for changes in estimates related to cost-reduction efforts.

During the six months ended June 30, 2021, the company recognized net cost-reduction charges and other costs of $13.6 million.

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:

2 unchanged sentences

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

Six Months Ended June 30,

Nine Months Ended September 30,

Cost of revenue $ 7.4 $ 0.9

3 unchanged sentences

Total $ 14.2 $ 14.4

Gross profit margin was 24.5% in the six months ended June 30, 2022 compared with 27.4% in the six months ended June 30, 2021.

Gross profit margin was 23.9% in the nine months ended September 30, 2022 compared with 26.9% in the nine months ended September 30, 2021.

The decrease was primarily due to lower software license renewals.

Selling, general and administrative expense in the six months ended June 30, 2022 was $214.0 million (22.3% of revenue) compared with $184.6 million (18.0% of revenue) in the year-ago period.

The change was primarily due to increased investments in sales and marketing.

Research and development (R&D) expense for the six months ended June 30, 2022 and 2021 was $11.3 million and $12.4 million, respectively.

For the six months ended June 30, 2022, the company reported an operating profit of $10.2 million compared with an operating profit of $84.4 million for the prior-year period.

The decrease was due in part by lower software license renewals and increased investments in sales and marketing.

Interest expense for the six months ended June 30, 2022 was $16.7 million compared with $18.5 million for the six months ended June 30, 2021.

Other (expense), net was expense of $42.9 million for the six months ended June 30, 2022 compared with expense of $410.4 million for the six months ended June 30, 2021.

Other (expense), net for the six months ended June 30, 2021 included $368.7 million of pension plan settlement losses.

Selling, general and administrative expense in the nine months ended September 30, 2022 was $320.3 million (22.5% of revenue) compared with $279.7 million (18.5% of revenue) in the year-ago 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 months ended September 30, 2022 and 2021 was $17.3 million and $19.1 million, respectively.

For the nine months ended September 30, 2022, the company reported an operating profit of $2.2 million compared with an operating profit of $109.5 million for the prior-year period.

The decrease was primarily driven by lower software license renewals and the increased selling, general and administrative expenses discussed above.

Interest expense for the nine months ended September 30, 2022 was $24.6 million compared with $27.0 million for the nine months ended September 30, 2021.

Other (expense), net was expense of $66.2 million for the nine months ended September 30, 2022 compared with expense of $434.6 million for the nine months ended September 30, 2021.

Other (expense), net for the nine months ended September 30, 2021 included $368.7 million of pension plan settlement losses.

See Note 7 of the Notes to Consolidated Financial Statements.

The loss before income taxes for the six months ended June 30, 2022 was $49.4 million compared with a loss of $344.5 million for the six months ended June 30, 2021.

Included in the loss for the six months ended June 30, 2021 were pension plan settlement losses of $368.7 million.

The provision for income taxes was $24.4 million for the six months ended June 30, 2022 compared with a benefit of $44.7 million for the six months ended June 30, 2021.

The loss before income taxes for the nine months ended September 30, 2022 was $88.6 million compared with a loss of $352.1 million for the nine months ended September 30, 2021.

Included in the loss for the nine months ended September 30, 2021 were pension plan settlement losses of $368.7 million.

The provision for income taxes was $25.1 million for the nine months ended September 30, 2022 compared with a benefit of $33.8 million for the nine months ended September 30, 2021.

Included in the provision for the nine months ended September 30, 2022 was a partial release of valuation allowances of approximately $12.1 million.

See Note 8 of the Notes to the Consolidated Financial Statements.

The prior year period included income tax benefits of $51.7 million related to the pension plan settlement losses in the Netherlands and Switzerland.

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.

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 June 30, 2022 is primarily dependent on the ability to generate sustained taxable income in various jurisdictions.

It is at least reasonably possible that the company’s judgment about the need for, and level of, existing valuation allowances could change in the near term based on changes in objective evidence such as further sustained income or loss in certain jurisdictions, as well as the other factors discussed above, primarily in certain jurisdictions outside of the United States.

As such, the company will continue to monitor income levels and mix among jurisdictions, potential changes to the company’s operating and tax model, and other legislative or global developments in its determination.

It is reasonably possible that such changes could result in a material impact to the company’s valuation allowance within the next 12 months.

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.

Net loss attributable to Unisys Corporation for the six months ended June 30, 2022 was $74.4 million, or $1.10 per diluted share, compared with a loss of $298.6 million, or $4.54 per diluted share, for the six months ended June 30, 2021.

Included in the loss for the six months ended June 30, 2021 were pension plan settlement losses net of tax of $317.0 million.

Net loss attributable to Unisys Corporation for the nine months ended September 30, 2022 was $114.5 million, or $1.69 per diluted share, compared with a loss of $317.3 million, or $4.79 per diluted share, for the nine months ended September 30, 2021.

Included in the loss for the nine months ended September 30, 2021 were pension plan settlement losses net of tax of $317.0 million.

Segment results

1 unchanged sentence

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 and Infrastructure Solutions to better represent the nature of the segment’s operations.

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.

1 unchanged sentence

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

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

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

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

5 unchanged sentences

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 six months ended June 30, 2021 was $0.4 million and $1.1 million, respectively.

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.

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

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

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

Total Segments DWS CA&I ECS

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Customer revenue $ 390.1 $ 130.1 $ 122.3 $ 137.7

2 unchanged sentences

Gross profit percent 27.5 % 15.1 % 5.6 % 58.7 %

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Customer revenue $ 410.4 $ 143.2 $ 115.9 $ 151.3

3 unchanged sentences

Gross profit percent is as a percent of total revenue.

DWS revenue was $127.2 million for the three months ended June 30, 2022, a decline of 14.3% compared with the three months ended June 30, 2021.

Revenue for the three months ended June 30, 2022 was negatively impacted by the run-off effect of certain non-strategic contracts that the company exited in 2021.

DWS revenue was $130.1 million for the three months ended September 30, 2022, a decline of 9.1% compared with the three months ended September 30, 2021.

Revenue for the three 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 5 percentage-point negative impact on DWS revenue in the current period compared with the year-ago period.

Gross profit percent was 15.1% in the current period compared with 12.4% in the year-ago period.

The decrease in gross profit for the three months ended June 30, 2022 compared with the year-ago period was largely driven by higher cost of labor due to the competitive talent market.

CA&I revenue was $130.1 million for the three months ended June 30, 2022, an increase of 6.9% compared with the three months ended June 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.

The increase in gross profit for the three months ended September 30, 2022 compared with the year-ago period reflected automation and productivity improvements.

CA&I revenue was $122.3 million for the three months ended September 30, 2022, an increase of 5.5% compared with the three 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 5.6% in the current period compared with 5.9% in the year-ago period.

The decrease in gross profit was primarily due to higher labor costs.

ECS revenue was $185.8 million for the three months ended June 30, 2022, an increase of 8.3% compared with the three months ended June 30, 2021.

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 6 percentage-point negative impact on ECS revenue in the current period compared with the year-ago period.

Gross profit percent was 58.7% in the current period compared with 65.2% in the year-ago period.

The increase in both revenue and gross profit was principally due to higher software license renewals.

Six months ended June 30, 2022 compared with the six months ended June 30, 2021

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

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Customer revenue $ 1,207.7 $ 382.1 $ 381.5 $ 444.1

2 unchanged sentences

Gross profit percent 28.1 % 13.7 % 5.5 % 60.0 %

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Customer revenue $ 1,284.9 $ 434.5 $ 358.3 $ 492.1

3 unchanged sentences

Gross profit percent is as a percent of total revenue.

DWS revenue was $252.0 million for the six months ended June 30, 2022, a decline of 13.5% compared with the six months ended June 30, 2021.

Revenue for the six months ended June 30, 2022 was negatively impacted by the run-off effect of certain non-strategic contracts that the company exited in 2021.

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 12.9% in the current period compared with 14.4% in the year-ago period.

The decrease in gross profit for the six months ended June 30, 2022 compared with the year-ago period was largely driven by higher cost of labor due to the competitive talent market.

CA&I revenue was $259.2 million for the six-months ended June 30, 2022, an increase of 6.9% compared with the six months ended June 30, 2021.

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.

1 unchanged sentence

The decrease in gross profit was primarily due to higher labor costs and additional expense recognized associated with certain contracts.

ECS revenue was $306.4 million for the six months ended June 30, 2022, an decline of 10.1% compared with the six months ended June 30, 2021.

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.

5 unchanged sentences

The company believes that it will have adequate sources of liquidity to meet its expected cash requirements for at least the next 12 months.

Cash and cash equivalents at June 30, 2022 were $380.1 million compared to $552.9 million at December 31, 2021.

As of June 30, 2022, $294.9 million of cash and cash equivalents were held by the company’s foreign subsidiaries and branches operating outside of the U.S.

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

As of September 30, 2022, $276.7 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 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.

1 unchanged sentence

in the future may require the company to accrue or pay withholding or other taxes on a portion of the amount transferred.

During the six months ended June 30, 2022, cash used for operations was $66.7 million compared to cash usage of $1.0 million during the six months ended June 30, 2021.

Cash used for investing activities during the six months ended June 30, 2022 was $74.4 million compared to cash usage of $201.7 million during the six months ended June 30, 2021.

Cash usage during the six months ended June 30, 2021 included $150.1 million for acquisitions.

Net purchases of investments were $29.6 million for the six months ended June 30, 2022 compared with net purchases of $0.8 million in the prior-year period.

During the nine months ended September 30, 2022, cash used for operations was $22.2 million compared to cash provided $64.5 million during the nine months ended September 30, 2021, primarily driven by the change in accounts receivable.

Cash used for investing activities during the nine months ended September 30, 2022 was $124.4 million compared to cash usage of $236.0 million during the nine months ended September 30, 2021.

Cash usage during the nine months ended September 30, 2021 included $150.4 million for acquisitions.

Net purchases of investments were $58.4 million for the nine months ended September 30, 2022 compared with net purchases of $8.2 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 million compared with $42.1 million in the year-ago period, capital additions of properties were $21.5 million compared with $19.7 million in the year-ago period and capital additions of outsourcing assets were $8.1 million compared with $14.7 million in the year-ago period.

Cash used for financing activities during the six months ended June 30, 2022 was $15.0 million compared to cash used of $97.9 million during the six months ended June 30, 2021.

Cash used for financing activities during the nine months ended September 30, 2022 was $18.4 million compared to cash used of $100.8 million during the nine months ended September 30, 2021.

The decrease in cash used was principally due to redemptions of debt in the prior year period.

1 unchanged sentence

In 2021, the company made cash contributions of $52.4 million to its worldwide defined benefit pension plans.

For the six months ended June 30, 2022 and 2021, the company made cash contributions of $23.3 million and $30.3 million, respectively.

For the nine months ended September 30, 2022 and 2021, the company made cash contributions of $30.9 million and $40.3 million, respectively.

At the end of each year, the company estimates its future cash contributions to its U.S.

2 unchanged sentences

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.

At June 30, 2022, total debt was $519.6 million compared to $529.4 million at December 31, 2021.

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.

At September 30, 2022, total debt was $515.9 million compared to $529.4 million at December 31, 2021.

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.

3 unchanged sentences

Availability under the credit facility is subject to a borrowing base calculated by reference to the company’s receivables.

At June 30, 2022, the company had no borrowings and $6.3 million of letters of credit outstanding, and availability under the facility was $74.7 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 Restarted 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.

At September 30, 2022, the company had no borrowings and $6.3 million of letters of credit outstanding, and availability under the facility was $66.3 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., Unisys AP Investment Company I, CompuGain LLC and CompuGain Public Services, LLC, each of which is a U.S.

6 unchanged sentences

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 June 30, 2022, the company has met all covenants and conditions under its various lending and funding agreements.

At September 30, 2022, 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.

The company maintains a shelf registration statement with the Securities and Exchange Commission that covers the offer and sale of debt or equity securities.

Subject to the company’s ongoing compliance with securities laws, the company may offer and sell debt and equity securities from time to time under the shelf registration statement.

In addition, from time to time, the company may explore a variety of institutional debt and equity sources to fund its liquidity and capital needs.

From time to time, the company may explore a variety of institutional 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.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis