Welcome to the Unisys Second 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.

Earlier this morning Unisys released its second quarter 2008 financial results. 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 things with you. First, today's conference call and the Q&A session are being webcast via 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 and the associated spreadsheets as well as presentation slides that we will be using this morning to guide the 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 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.

Welcome to today’s call to discuss our Second Quarter 2008 Financial Results. Please turn to slide one to begin our discussion. This was a mixed quarter for Unisys. We made encouraging progress in a number of important areas while also seeing the effect of softer IT spending by our financial services clients. Our orders, revenue and non-GAAP operating profit all grew sequentially from the first quarter of 2008. Another clear positive was cash flow. Our cash flow from operations more than doubled over the year ago quarter as we continue to place a strong emphasis on enhancing our cash flow. In fact, if you take out a one time tax refund a year ago our cash from operations increased by nearly $90 million in the quarter. In our services business we saw good growth in our systems integration and consulting business, building on the improvement we’ve been seeing in this business. Our outsourcing business also continued to grow. Our other strategic growth programs including security, open source and real time infrastructure services grew double digits in the quarter as we continue to expand our business and reputation in these growing markets. In our technology business we saw stronger ClearPath sales and we are seeing positive initial results and returns from the new software and services based solutions that we’ve been rolling out this year. Our US Federal revenue grew in the second quarter after a tough first quarter. We also saw growth in our public sector business in the quarter. We were disappointed however at the bottom line. Over the past two plus years we’ve been making steady quarter by quarter progress in our profitability through our repositioning actions. That year over year profit progress slowed in the second quarter due to three primary factors. First, we saw an impact…

This morning I will provide more details on our second quarter 2008 financial results including cash flow. To begin please turn to slide eight for an overview of our second quarter 2008 results. At the top line we reported revenue of $1.34 billion in the quarter down 3% year over year. Currency had a four percentage point positive impact on our revenue in the quarter. We anticipate a similar four percentage point positive impact on revenue in the third quarter. Our second quarter 2008 results include $8 million of net cost reduction related charges compared with $24 million pre-tax cost reduction charge in the year ago quarter. Pre-tax retirement related expense was $5.8 million in the quarter compared to $24.5 million a year ago. We still expect full year pre-tax retirement related expense to be around zero for the full year. Including these items we reported second quarter 2008 operating income of $22.6 million compared with the second quarter 2007 operating income of $2.5 million. Interest expense increased by $2.5 million year over year primarily reflecting higher interest rates and debt levels. On a pre-tax basis we reported a pre-tax loss of $10.4 million in the quarter compared with a pre-tax loss of $24.9 million a year ago. Tax expense was $3.6 million in the quarter compared with $40.6 million of tax expense in the year ago period. At the bottom line after taxes we reported a second quarter 2008 net loss of $14 million or $0.04 per share. By comparison in the year ago quarter including the restructuring charge we reported a net loss of $65.5 million or $0.19 per share. As we have done in previous quarters at the end of these presentation slides we have provided supplemental slides showing details on the cost reduction charges and retirement…

Operator, could you please open the lines?

(Operator Instructions) Your first question comes from Jason Kupferberg – UBS. Jason Kupferberg – UBS: I wanted to start with a question on the strategic review in the portfolio rationalization I think you mentioned you used the phrase final stages there in terms of discussions you guys have been having with the Board. Can you give us a little more sense of when you think we’ll hear something on that exactly how soon and is this more likely to be a modest pruning of the portfolio around the edges or could we see something a bit more significant than that at the end of the day?

Let me deal with the second part first. Unfortunately we’re not going to be able to give you the specifics on that for obvious reasons. Let me just give you some color on that. Because of what these decisions may do in terms of impacting clients, employees and so on we’ve always been somewhat guarded in all of these areas and how broad we’re willing to communicate it. On the first part of the question though the reason we’ve been cautious there too and clearly the answer is we’ve targeted at a minimum the fourth quarter this year and we hope to be more aggressive than that. Again the impact on the business in the short term until we can give absolute laser clarity on precisely what we’re going to do in each of these. Rest assured the Board is very personally and actively involved. Rick Duques our Chairman is personally very actively involved. In fact, Rick and I probably have weekly discussions on many of the topics in this area. Very hands on, all Board members not a side exercise but a mainstream exercise and from what I know about it and what I know some of the issues you’ve raised I think you’ll find that the Board is really being aggressive here. Jason Kupferberg – UBS: On the TSA contract which you guys issued a statement on and didn’t make the down select there. What’s the timeframe for your protest to be decided upon? That seems like a key milestone we should be watching for.

It’s impossible for me to give you the actual dates on this. Just a little more color on it. We were debriefed Friday, July 11th. We found quite a number of issues that we took issue with in our debriefing that were the foundation of this protest. It’s always impossible to determine probability of success with the Government but you watch the Government very carefully yourself and you’ve seen that they’ve been much more receptive and you’ve seen it in both IDIQ contracts that you’ve seen a change as well as individual contracts like this. I’m even anxious in saying cautiously optimistic. In the debriefing we found quite a number of issues that we’ve used as the foundation of this protest and we’re just going to have to go through the normal Government process in resolving these. Jason Kupferberg – UBS: You must have some general sense of when you think you’ll hear something. Are we talking weeks, months, anything that you can point to there?

I’m reluctant to give you any more detail on it. Honor our commitment to the Government in terms of the things that we’ve discussed with them. Jason Kupferberg – UBS: Let me try one on the margins. I know you’re still targeting the low end of the 8% to 10% target to achieve that for the second half of this year you were at I think 2.7% in the second quarter. Where are we going to get 500 basis point from?

First of all in the second quarter we shared with you that the gross margin increased but the operating margin declined as a result of investments in pre-sales in a number of large Federal and public sector engagements. You saw that in a reflection of our increase in pipeline around the world. Some of the statistics we gave you an increase in a number of $100 million plus deals. To deal with some of the specifics we’re seeing continued improvement across nearly all our lines of business there, in terms of margins and system integration and consulting. We continue to see improvement in our outsourcing business. You will see improvement in our infrastructure services business as a result of both the stabilizing that business with the new leadership we’ve put in place. You heard me say a few minutes ago we’ve got new leaders in place now in North America and the UK and within continental Europe that we’ve recruited from IBM, CSC and EDS. We think that’s going to have a very positive impact. We also called out some of the details of reducing costs 80 full time equivalents a combination of contractors and employees that we’re not replacing as a result of productivity improvement and attrition management in some of these areas. We will continue to drive in all of these further and further work offshore, more and more work into what we call low cost subsidiaries those are virtual subsidiaries where we have lower salary rates, higher variable comp for higher productivity and lower benefit programs. It’s really a combination of those that will drive higher margins.

Your next question comes from Nathan Rosoff – Citigroup. Nathan Rosoff – Citigroup: Congratulations on the continued progress in the services backlog. Our question related to that is are you seeing any changes in transition or contract ramps related to new deal signings that may impact the flow of new revenues from those contracts?

No, not really. What you’ve really seen we put in starting at the end of last year a series of mega deal teams around the world. We started in Europe; we rolled them into North America an aggressive ramp about the first quarter this year and then rest of the world. That’s what’s resulted in this increased pipeline which we quoted earlier at $16 billion that’s all in our strategic growth areas. We’re excited that we have 35 deals worth more than $100 million in contract value. When you increase deal sizes you find that you have longer sales cycles so it’s been taking us longer for that to pay off just based on us shooting higher. You’ve seen some of that payoff in terms of some of the statistics I gave you in strategic program revenue growth which was 8% in the first six months of the year and 14% if we exclude outsourcing the largest business. You won’t see as you asked, I don’t think you’ll see and we haven’t seen a gap with certain rare exceptions between contract signing and revenue ramp and generally that’s around contract structure as opposed to anything else. Meaning how we originally contracted for those to ramp.

The only other comment I would make is that particularly in the area of transition operationally we are expanding the use of our internal blueprinting methodology to help to try to accelerate the transition timeline in deploying that in both the Federal and in our longer term outsourcing contracts. Thank you for recognizing the growth in our backlog which was up very nicely from the previous quarter. With regard to the transition if there is any softness happening in the market and delays and transitioning we’re anticipating being able to offset it by further expanding the use of our blueprinting in an enhanced methodology on the transition side. Nathan Rosoff – Citigroup: If the TSA protest doesn’t go your way can you comment on Unisys’ plans to absorb the associated personnel back into the business.

First of all the Bridge contract that we’re on still runs through December 31 of this year. In terms of some of the other contracts that we’ve written and some contracts that are in our pipeline that we feel good about we believe we can roll a lot of these resources onto these contracts. We’ve done a real nice job in our Federal business in the security business there’s a high number of secured people in that business. I think it amounts to about 2,000 people total. Those types of people are in very high demand there. Because we continue to have a very aggressive push on security in terms of both outsourcing of managed services type engagements as well as systems integration I believe we can roll those highly valuable, high security people onto those engagements. Nathan Rosoff – Citigroup: Lastly, any update on your progress in terms of increasing your offshore workforce?

As you know we’ve targeted 20% by the end of this year which is about 6,000 people total between India, China and Hungary. We continue to bid jobs with the right profile between putting call center people in low cost countries and often remote management in our outsourcing contracts. We’re attempting to be even more aggressive than we have been in our systems integration business. The last piece that’s going to help us get there by the end of the year is when we have voluntary attrition we’re working very hard to replace all of those people in the low cost countries. We believe although it’s a stretch we should be able to reach our 20% target by year end.

Your last question comes from Julio Quinteros – Goldman Sachs. Julio Quinteros – Goldman Sachs: The pre-tax cost reduction charges how are those allocated across the SG&A and cost of goods line?

We have included a chart in the supplemental information on the presentation package for you. It is Schedule E. The $8 million spreads predominantly in SG&A, $7.4 million in SG&A and then $3.3 in cost of revenue and in R&D. Julio Quinteros – Goldman Sachs: In terms of the linearity of the quarter itself as far as revenue growth can you walk us through how things might have transpired here in the quarter especially I think coming out of the March quarter a lot of the companies that we’ve spoken to so far felt obviously a lot better about the environment, new budgets etc. It seemed like as the June quarter transpired there was some softness probably towards the tail end of the June quarter can you talk a little bit about your own experiences as far as how the quarter transpired and what the linearity might have been there in terms of revenue contribution or revenue growth?

If you look across our business I think we saw different patterns in the services business from the technology business. The technology business continues to be skewed towards that third month, that last half of the quarter. This quarter was not that much different from other quarters we’ve seen in the technology area with regard to deals closing. In the services side I would say that we saw a slower beginning to the quarter. You didn’t see that normal consistent April, May and June that you would like to see. It did slow in April and May and we really did need to push to close out June. From an overall perspective that pattern was more pronounced in the financial services side as we’ve implied in our comments. Public sector was not as impacted by that pattern. Julio Quinteros – Goldman Sachs: Can you remind us in terms of your financial services clients, are we talking about the clients in securities or is it more commercial banking type clients?

We’re not on the securities side we’re more in the back office payment processing side. More retail banking and very limited if anything in the investment banking side or the securities side.

Thank you very much everyone. As I opened with we believe it was a mixed quarter. We’re encouraged by sequential growth in orders revenue and non-GAAP operating profit, encouraged in cash flow, growth in systems integration outsourcing and our strategic programs. Clearly disappointed in our services gross margin but we believe the actions that we’re taking in terms of the addition of strong new leaders the portfolio additions that we’re making within the next 30 days and the cost reductions that we’re making give us increased confidence in our second half. Thank you very much for joining us.