Jack McHale – Vice President Investor Relations Joe McGrath – President, Chief Executive Officer Janet Haugen – Chief Financial Officer

Jason Kupferberg – UBS Julio Quinteros – Goldman Sachs Eric Boyer – Wachovia Securities

Good day everyone and welcome to the Unisys first quarter 2008 results conference call. At this time I would like to turn the conference over to Mr. Jack McHale, Vice President of Investor Relations at Unisys Corporation. Please go ahead sir.

Well thank you operator. Hello, everyone and thank you for joining us this morning. Earlier Unisys released its first quarter 2008 financial results and with us this morning to discuss our results are Unisys President and CEO Joe McGrath and our Chief Financial Officer Janet Haugen. Before we begin I want to cover just a few housekeeping details. First, today's conference call and the Q&A sessions are being webcast by the Unisys investor website. This webcast including the question and answer session is being recorded and will be available as a replay on our website shortly after the conclusion of the live event. Second, you can find on our investor website the earnings release as well as presentation slides that will be used this morning to guide our discussion. These materials are available for viewing as well as downloading and printing. Third, today's presentation, which is complimentary to the earnings press release, includes some non-GAAP financial measures. Certain financial comparisons made in this call will be with and without the impact of retirement expense and restructuring charges. In the presentation we have provided a reconciliation of our reported results on a US GAAP basis compared with our results excluding the impact of restructuring charges and retirement expense. Finally, I'd like to remind you that all forward-looking statements made in this conference call are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. These factors are discussed more fully in the earnings release and in the company's periodic reports as filed with the SEC. Copies of these SEC reports are available from the SEC and from the Unisys investor website. Let me now turn the call over to Joe.

Thanks Jack. Hello everyone, welcome to today’s call to discuss our first quarter 2008 financial results. Please turn to slide 1 to begin our discussion. We continued to enhance the profitability of our operations in the first quarter. We were pleased by the continued steady margin improvement of our services business which represented 87% of our revenue in the quarter. In services, we were able to drive continued year over year improvement in our margins as a result of the portfolio repositioning and cost actions that we’ve been taking. There were other important points of progress in the quarter. Our annuity based outsourcing business continued to grow as clients saw value in our outsourcing portfolio as a way to reduce costs and enhance client service in a difficult business environment. Our services order grew by a double digit rate in the quarter. It was driven by gains for outsourcing and systems integration and consulting services. We saw stabilization of our systems integration and consulting revenue in the quarter and believe that we are beginning to see improvement in this business. We were able to eliminate the remaining excess temporary contractor costs that have been impacting our margins and this issue is now behind us. Outside of our Federal business, our strategic program revenue continued to grow at a double digit rate. Our revenue in the quarter came in lighter than we expected due to some softness in our US business. The most significant revenue decline was in our US Federal business, which was impacted by contracting delays at certain agencies. We also saw some impact in our US technology sales as some clients tightened spending on IT projects in an uncertain economic environment. The Federal revenue decline in the quarter was, we believe, a timing issue and we look for…

Thank you Joe and hello everyone. This morning I will provide more details on our first quarter 2008 financial results, including cash flow. To begin, let me start with an overall summary of our first quarter 2008 financial results compared to the first quarter of 07. So please turn to slide 12. At the top line, we reported revenue of $1.3 billion for the first quarter of 2008. This was down 3% from the year ago quarter, driven by a double digit decline in our technology business. Currency had a 5% positive impact on our revenue in the quarter. We anticipate a similar 4-5% positive impact on revenue in the second quarter. As a reminder, our first quarter 2007 results included a $32.7 million pretax restructuring charge. Pretax retirement related expense was $600,000 in the current quarter compared to $23.5 million a year ago. Including these items, we reported first quarter 2008 operating income of $28 million compared with a first quarter 2007 operating loss of $29.6 million. Interest expense increased by $2.7 million year over year primarily due to increased interest rates and debt related to the refinancing of the $200 million 7.875 senior notes that were repaid in January 2008. We reported $6 million of other expense in the current quarter compared with other income of $25.5 million in the year ago period. The principle reasons for the year over year change was that the prior period benefited from a $23.7 million gain on the sale of a business. On a pretax basis, we were slightly positive in the quarter compared with a $23 million pretax loss a year ago. On taxes, as you know, since the write off of our US deferred tax assets in the third quarter of 2005, our tax provision can vary significantly from…

Well thank you Janet, thank you Joe. Operator we’d now like to open the call up for questions please.

(Operator instructions) Your first question comes from Jason Kupferberg – UBS. Jason Kupferberg – UBS: I had a question on the services margin to clarify it to start. If we look at first quarter 07 versus first quarter 08 and if we exclude retirement expense and restructuring, can you give us the true apples to apples comparison in the services margins so we can really see what’s happening with core operations there?

The services operating margin excluding retirement expenses and the restructuring in the first quarter of 08 was $9.6 million or 0.8%. In the first quarter of 08 it’s $27.8 million, 2.4%. Jason Kupferberg – UBS: So 160 basis points of improvement stripping out both those items?

That’s correct. Jason Kupferberg – UBS: As far as the services growth outlook, I know you talked about a return to growth and a potential inflection point, are we thinking 2Q here or is this more of a second half event?

In outsourcing as you saw, we’ve continued to climb and that’s a fairly predictable business for us. And so you’ll see that increase, or you’ll see the growth in that business continue. What you saw in this quarter was the stabilization which we’ve been working on for some time. Remember we’ve tried to work ourselves out of marginal portfolio items to a much greater focus on a vital few key set of portfolio items. The same thing was true in terms of customers, trying to move toward our top 500 and top 50 away from a much wider, broader, unfocused customer set. We believe that stabilization has occurred in systems integration and you’ll start to see that business improve over time. The same thing’s true of infrastructure services and if you remember we talked about a lot of low, unprofitable, unfocused engagements in infrastructure services. We believe as you’ve heard because of three consecutive quarters now of stabilized revenue in there, although the year over year compares are off, that business has stabilized. So the only declining business now if you look across the various services segments is core maintenance which is in secular decline and that’s very predictable. You’ve been able to watch that over the last couple of years and I think it’s easy for you to incorporate that into your models. So all things considered, that’s why we talked about this inflection point. I think you’ll start to see that increase over the second half of the year. Jason Kupferberg – UBS: A two-parter, first is there a plan for any further restructuring charges that you guys could call out this year and can you give us any update on your pursuit of potential portfolio rationalization or other types of strategic alternatives that you had announced earlier this year?

Let me start with the restructuring, we’re about 95% of our way through the initial restructuring efforts. And as you’ve heard, I think it was around 325 this quarter and there’s 300 plus for the remainder of the year. Each of the businesses continue some additional restructuring, as long as they are short term paybacks. So we’re not calling out reserves for restructuring if they can do it in the current quarter and so on. And so we’ve gotten into a cadence where we’re trying not to call out reserves. People were doing it as part of a normal operational cadence. The second part of that is we’ve used a very careful management process around voluntary attrition, what I mean by that. And certain of our populations, whether they’re call centers, break fix analysts in the field, systems integration people, even headquarters people, when there is voluntary attrition we’ve developed the systems, some clear targets in back fill rates. So instead of having to continue to restructure, we’ve tried to manage through this very careful management attrition program and continuing to right size targeted areas of our company. Now there’s two parts to it, so it might be a two for one replacement of a particular job code. But more importantly for us, we’re trying to manage a fair amount of that voluntary attrition in a movement to offshore locations. So if it might be a call center in Austin, Texas or Salt Lake City or somewhere around the United States, we carefully try to manage that attrition where we have higher voluntary attrition rates to continue to move to our higher percentage of global sourcing. In terms of strategic reconfiguration, I think that was the semantics you used, let me deal with that in two ways. One, you avoid…

Your next question comes from Julio Quinteros – Goldman Sachs. Julio Quinteros – Goldman Sachs: Joe, can you go back through the comments that you made on slide 10 regarding the model changes in technology, help us understand what the impact would be from the shift to a software based model from a revenue perspective and then any incremental expenses that would be required to actually drive the change in the technology segment.

Let me start at a very high level and kind of zoom down. The technology business has been an entirely new strategy and a new business model. And there’s a number of elements that we didn’t talk about today because we had done this work starting a number of years ago. And that is, at the high end of the market, if you really look, most of the major players there have really gone to standardizing on standard chips. We came to the conclusion that producing our own custom CMOS chips a number of years ago didn’t make any sense any longer. And we chose to exit the customer semiconductor business. Now we used other peoples to fabricate, we designed those chips and a number of years ago we announced the strategy with NEC at our high end on an all Intel based strategy, because we came to the conclusion, once you exited the chip business, it was very hard to differentiate yourself on the high end of the hardware business. We’ve licensed a lot of our proprietary technology to NEC to build a whole next generation platform there. Once you’ve crossed that bridge that you’re going to choose to, A, exit the semiconductor design and manufacturing business, B, exit the design. Now we’re still involved in co-designing with NEC the high end of our product line. But we will by the end of this year introduce the first model in that family of the joint effort and they will do all the manufacturing for us. We’re frankly going to exit manufacturing, we’ve closed our plant, we’ve moved temporarily to another plant that’s an R&D lab in Southern California. And you’ll see NEC manufacturing our high end. Once you cross that bridge, you’ll notice that if you look at the…

Normally when people think of it as being deflationary, they think of, for the sake of argument, four servers going to one and that’s deflationary in terms of revenue on the hardware side. We believe that’s going to be true, you see those kind of economics. The reason there’s a bit of schizophrenia in the market between the mid and high end server manufacturers is this is the hottest trend in the market and they’re schizophrenic because they know hardware sales will decline. Right, because if you’re going form machines at 20% utilization to 80% utilization, I mean there’s a theoretical 4:1 case there. So most people don’t know if they should accelerate that or put the brakes on this if you’re a hardware provider. For us, because we’re exiting the hardware business, we’re agnostic in that argument of 4:1 because it isn’t going to be our hardware. And so we expect to see software to grow, we see services to grow. In our core technology business which is Clear Path, it frankly has no impact. Now, some of the, remember we exited hardware manufacturing so you know we’ve taken what used to be fixed costs, manufacturing and made them variable costs and they’re imbedded in the unit manufacturing costs we get from a company like NEC. Do we have R&D in this space, yes. The majority of our R&D today is still in support of our Clear Path base. And so you almost have to create two different models for this, what’s happening to our Clear Path business which is in secular decline and what’s happening to this business which is in a ramp over the next few months. Julio Quinteros – Goldman Sachs: I didn’t hear you mention ES7000.

ES7000 is being refreshed as part of the NEC relationship later in this year. There will be other ES7000 family members introduced in the interim. And you will see a much broader family that I don’t want to give an early introduction to these May announcements for the technology business. But you’ll see a much broader ES7000 family, knowing full well that the high end co-designed by us and the low end designed to our specifications. Julio Quinteros – Goldman Sachs: For Janet, do you have the segment constant currency numbers for services and technology?

The segments generally follow the pattern from the overall company standpoint. That’s pretty much true on the services side. And so the trends on revenue and orders, about the 5%, little bit less than technology than you see for the services company. The services at 87% of the total business, really right now because of the size of that, it is very much consistent with what our overall currency rate is. And the technology business, historically and what we would anticipate going forward based upon the mix of revenue, that can be about one point different. But it’s generally in line with total company.

Your final question comes from Eric Boyer – Wachovia. Eric Boyer – Wachovia Securities: I just wanted to dovetail on that last question if you could break out the US non-Federal commercial services revenue growth in the quarter.

We had commented that the US business overall is down 11% and the main driver in that was the Federal business. While we’re not going to break that between the Federal and the commercial side of the business, we did have declines in both businesses, but the percentage decline was larger in the Federal business than it was in the rest of the US commercial business. Eric Boyer – Wachovia Securities: You talked about order growth being driven by the public sector I guess in the quarter, can you comment on the commercial sector services pipeline?

I think the public sector pipeline is the strongest for us, both Federal as well as other Federal governments around the world and state and local governments. So that’s pretty broad based and isn’t tied to one segment within public sector. In terms of commercial, it’s a bit weaker than the public sector business, but it’s still a pretty strong pipeline. Eric Boyer – Wachovia Securities: Janet what was the drag on the quarter from the temporary labor costs?

The drag in the quarter on the temporary labor cost as Joe mentioned in his comments, we have gotten through that. There may be a residual amount of that in the quarter itself but we believe from where we were when we first started talking about this problem in the second quarter of 07, we have worked our way through it and only have a residual amount of an impact in the quarter. Eric Boyer – Wachovia Securities: But you can’t be any more specific as far as the sequential decline?

The sequential decline, I guess what we had talked about last year about roughly a $20 million impact. And so in the quarter on a year over year basis, we probably have about $18 of that $20 improvement. Eric Boyer – Wachovia Securities: You also talked about Federal delays. I was just wondering which agencies you saw some of those delays?

Based on our relationship with our clients, we’re really not prepared which agencies. But one of the things that you often find in the end of an administration, there’s often jobs that remain open in things like contracting and so on. And so you’ll find it pretty pervasive across the government these days. And so it’s not as though people are deferring or pushing out contracts, it’s actually a resource constraint in the contracting part of the major agencies. We’re not prepared to tell you who they are for confidentiality reasons with those clients. Eric Boyer – Wachovia Securities: And finally just an update on the TSA contract and where that rebid stands.

As you’re probably aware, April 17, the first phase of the RFP, it’s called information technology infrastructure program. As you might imagine we’re excited about the opportunity because it actually expands beyond the original opportunity. It’s actually over the life of the contract up to a $2 billion opportunity. The first response is due May 14, we’ve been preparing for this for over nine months. We have an excellent team in place ourselves. We’ve recruited other great team members, Booz Allen, Nortel and many other key partners. From our perspective, it’s the most comprehensive re-compete effort at least in my memory since we’ve been here and the memory of most of the people in our Federal government unit. In parallel, we’ve worked very hard to drive what we call a sea of green. As you might imagine, sometimes when people are re-competing for their own contract they don’t put the right level of effort to ensure that service level agreements are 100% green. Our customer satisfaction are at the highest levels that you could drive and so we’ve had two parallel teams, one trying to drive the highest service levels and customer satisfaction we’ve ever had and we reached that. And the other team is a dedicated team just around this re-compete. That said, we have some very tough competition, this is one of the largest contracts in the government in the last few years and will be in the next few years. So as you might imagine, everyone is going to compete in this one. And so we knew that and that’s the reason we’ve made an investment where we essentially dedicated an entire floor of our Reston facility to pre-work everything from technology and innovation strategies, HR strategies, governance and so on. So we expect a final decision in August or September or so. And we’re doing everything in our power to win this re-compete. We’ve run out time so let me just summarize briefly. As you’ve heard we continue to drive our multi-year repositioning effort. And we’re encouraged by this steady year over year progress in our services margins. We’re encouraged by outsourcing continuing to grow. Double digit order growth which is really going to drive this inflection point comment I made in services. We do have a challenge in our technology business but we expect to drive improved results and expect that at the end of the year and we continue to target this 8-10% operating profit margin for our business. Thank you very much.

That does conclude today’s teleconference, thank you all for your participation, you may now disconnect.