Unisys Achieves High End of Financial Guidance for Fourth-Quarter 2005; Company Reports Strong Growth in Orders and Cash Flow Over Year-Ago Period; Company Updates Progress on Repositioning Effort

Business Wire, Jan 26, 2006

--Identified potential non-core areas for divestiture and began exploratory discussions with interested parties on some of the divestiture candidates;

--Identified areas where the company expects to make headcount reductions, which are expected to begin as funding from the divestiture program becomes available;

--Continued to enhance its sales and marketing efforts by naming new global industry sales leaders, in addition to the geographic and technology sales leadership added in the third quarter; focusing sales efforts on increasing business with the company's top 500 accounts and top 10 countries worldwide; and announcing new compensation programs, starting in 2006, designed to drive greater cross-business and cross-portfolio sales to selected named accounts.

The company also announced earlier this week that it had reached agreement with its equity partners to restructure its joint venture check processing operation, iPSL, in the United Kingdom. Under the new agreement Unisys will continue to process checks for its partner banks in the U.K. but at new tariff arrangements that are expected to result in an increase in revenue to Unisys of approximately $150 million over the 2006-2010 timeframe. The new agreement is expected to significantly improve the financial results of the iPSL operation in 2006 versus 2005.

Fourth-Quarter Company Results

The company reported double-digit growth in overall orders in the fourth-quarter. Services orders showed strong double-digit gains in the quarter, reflecting substantial order gains in outsourcing, partially offset by order declines in systems integration and consulting. Technology orders showed single-digit gains in the quarter, driven by order gains for ClearPath and ES7000 enterprise servers.

Significant contracts signed in the quarter included:

--Transportation Security Administration. A bridge contract from the U.S. Transportation Security Administration (TSA) to continue providing managed services to TSA and the Department of Homeland Security; the contract is for a one-year base period, with an estimated value of about $308 million, and two additional one-year options, with the total ceiling value of the entire three-year period estimated at $750 million;

--Capgemini/Metropolitan Police Service. The U.K.'s Metropolitan Police Service awarded Capgemini U.K. a seven-year, approximately 350 million pound ($620 million) contract to provide a range of IT services; under this contract, Unisys was awarded a significant subcontract to provide applications management and support, some data center services, and desktop support;

--Major European Financial Institution. A contract valued at over $70 million from a major European financial institution for new ClearPath software, hardware, and multi-year support services for running the client's retail and mortgage operations;

--Countrywide Financial. A significant three-year contract extension from Countrywide Financial Corporation, a leading provider of diversified financial services, for Unisys to continue providing outsourced management and support services for more than 80,000 devices used by more than 30,000 Countrywide employees throughout the United States; the contract extension continues the company's three-year relationship with Countrywide Financial;