Good day and welcome to the Unisys fourth quarter and full year 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.

Good morning everyone and thank you for joining us this morning. About an hour ago Unisys released its fourth quarter and full year 2008 financial results. With us this morning to discuss these results are Ed Coleman, our CEO; and Janet Haugen our CFO. Before we begin I want to cover just a few items. First today’s conference call and the Q-and-A session are being webcast by the Unisys investor website. Second you can find on our investor website, the earnings release, and the 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 complementary 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 cost reduction 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 SEC filings. Copies of these SEC reports are available from the SEC and also from the Unisys investor website. Now, let me turn the call over to Ed.

Thanks Jack, hello everyone, thank you for joining us today. As we begin our discussion this morning please turn to slide one. When I spoke with you in October shortly after joining Unisys, I shared with you my initial impressions of the company and our priorities for the business going forward. Since that time I’ve been working with our management team and employees to analyze the business and develop an actionable program for driving improved financial results and getting the company profitable again. I told you back in October that I wanted to move thoughtfully but with urgency and a clear sense of purpose. The deterioration in the global economy since has added urgency to this task. As you’ll see when Janet takes you through the numbers, the economic downturn had a significant impact on our results in the fourth quarter. While our public sector business held up fairly well, we saw an impact on the commercial side of our house especially in our financial services business. There are encouraging points of progress in the quarter, our US federal revenue grew double-digits. We generated free cash flow for the second consecutive quarter and our cash balance also grew for the second straight quarter. But we are clearly disappointed by our revenue and bottom line results. It is unacceptable to me and to our entire management team that this company be operating at a net loss and we’re determined to change that. Despite what’s happened in the broader economy I am no less impressed now as to the capabilities and potential of Unisys. I am no less optimistic about our future. But we must move aggressively to get the company onto a profitable course and that’s what we’re doing. The program that we’re pursuing for Unisys is focused on turning around…

Thanks Ed, hello everyone. As Ed mentioned this was a challenging quarter for Unisys. The fourth quarter is usually our strongest of the year, especially in the technology business as we benefit from year-end budget spending from our clients. However we didn’t see the typical seasonal strength this past quarter as clients contained spending in response to weak economic conditions and the tight credit environment. The falloffs in our revenue volume clearly impacted our margins in the quarter. However there were some encouraging points of progress in the quarter. Our US federal business had a strong quarter with double-digit revenue growth and high single-digit order growth. Another bright spot was our US state Medicaid business where we continue to grow orders and revenue. We reduced our operating expenses with actions underway for further reductions, and finally we improved our working capital management in this tough macro environment. We generated $138 million of operating cash flow and $58 million of free cash flow in the quarter and we were able to increase our cash balance at the end of the quarter to $544 million. For the full year of 2008 we generated $255 million of operating cash flow, up 47% from the full year 2007. This morning I will walk through our results for the quarter and for the year, I will also update you on our restructuring activities, discuss our capital structure, and pensions. To start our financial review please turn to slide four for an overview of order trends in the quarter. Services orders showed double-digit declines as clients delayed decisions on new IT projects. We saw order declines across most of our industries and geographies with the exception of our US federal government business which as I mentioned earlier had a strong quarter in terms of both order…

Thanks Janet, as we work to improve our financial picture we must begin with focus. The company has great strengths, excellent people, a rich portfolio of solutions, a strong client base, that our resources and investments have been too defused. We have been trying to do too many things in to many areas and we can't expect to succeed and we haven't been doing enough of the things we should be doing in those areas where we can reasonably expect to be successful. To enhance our margins and make it the company consistently profitable we need to better concentrate our resources and investments. We need to focus on what we do best and size the organization appropriately. Then as we get ourselves into profitable fighting shape we can look to expand from that core base. Turning to slide 20 the turnaround program we are driving at Unisys is built on the principles of focus, service quality, and cost efficiency. Unisys will offer a portfolio of IT services, software, and technology, it solves critical problems for clients. We will focus this portfolio on serving if you were high potential markets where we can be consistently profitable and can grow. Within this focused market area we will provide high-quality services and solutions that are perceived by our clients as being first-class and clearly differentiated from our competitors. And to ensure we are competitive we will deliver those solutions in a cost-efficient manner with a highly skilled and utilized labor force and a streamlined overhead structure. As I said it all begins with focus, as we have analyzed the core strengths of Unisys and matched up those strengths against growing areas of need in the market we have identified four key areas of strength that we will be building on. You can see…

(Operator Instructions) Your first question comes from the line of Jason Kupferberg - UBS

On cash flow and the expectations there for 2009, it sounded there at the end you do expect positive free cash flow in 2009 but I wanted to confirm if that is actually the case and can you quantify that at all, are we talking about slightly positive, or any numbers or ranges that you are guys are thinking about both including and excluding the restructuring and severance payments that you are projecting for the year.

Let me go through some of the components again on the cash flow for 2009, as we said it is our goal is to get to free cash flow positive in 2009. Given this current environment it is really difficult to exactly predict where that range is going to be. As I mentioned we expect about $65 to $68 million for restructuring and we are significantly reducing our capital expenditures next year. I gave the range in the $200 to $250 million range. So it is our goal to get to free cash flow positive. It is what we are building and planning and driving the operations to. I think in this environment it’s a bit hard to call exactly how much over the line do we get with that free cash flow number.

How much cash do you need to run the business on an annual basis.

What I will say is that the ending cash balance of $544 million is significantly more then what we believe we need to run the business. The number is substantially lower then that. Depending upon the geographic mix of the operations and the seasonality within any given quarter that minimum cash number can vary but we remain comfortable with the $544 million of cash providing us with the adequate liquidity to get through the environment we see in 2009.

Can you tell us geographically where the cash is held?

The geographic concentration of the cash roughly approximates our operations with a slightly disproportionate amount in the US because against our requirements for cash all of our debt is in the US and therefore the interest payments on the debt are made in the US and as well corporate center costs more skewed towards the US then they are on a global basis. But the cash generally approximates the revenue concentration of the company. We do manage our cash on a global basis, we don’t try to set up each country as its own standalone we do use global cash planning and global cash sweeps to make sure that we have the most efficient use of the cash around the world.

Is the Board looking at any strategic alternatives currently, I didn’t hear any mention of that this morning or has the decision been made that you’re going at it as, the organization as its currently constituted.

Our focus is on improving the business and making this a consistently and predictably profitable enterprise and if we were to do something else we’d certainly announce that.

And timing on the TSA rebid, any update there? The timing of the decision there, I think you got a bridge contract but I’m not certain when that ends.

We have submitted the response to the RFP, I think we’re expecting a decision sometime in the second quarter and the bridge contract runs through to the end of June.

If you can’t renew the credit facility which I guess you did highlight as a potential outcome here, what’s your perception of what the impact on your customer base is going to be as you are out there in the market trying to win new deals particularly multiyear outsourcing contracts.

I think we’ve been consistent in our message for at least the past couple of months and in the last quarter earnings release that given the current quarter it is, current credit environment, it is next to impossible to think that we would be able to get the same terms and conditions on the revolver that we had entered into about three years ago. We continue to discuss with our customers and clients the amount of cash that we have on hand and that that revolver was used as a backup source of liquidity and was not used to run the business. This is a topic of discussion that we’ve had since the third quarter earnings release and some of our customer calls with our significant customers and we’ve been very consistent with the message that that is a backup source of liquidity, that we have, are running with more cash on the balance sheet then the minimum requirement, and we expect to work through this tough credit environment with continuing to make sure that we are maximizing the cash flow from the operations. I do point out that we have continued during this time period to make investments in the area of the business, for example in the clear path operating systems or in certain outsourcing assets and I have participated in a number of phone calls with our customers and it is a question that we have to answer but it is a question that we feel very good about our position on this. Would like to see the credit markets come back but the reality is, its not there right now.

Your next question comes from the line of Joseph Vafi – Jeffries & Company Joseph Vafi – Jeffries & Company : On the SG&A side, we’re looking at a new round of SG&A efficiencies now and I was wondering if we could reconcile the new strategy on SG&A versus what we’ve seen in the past which has been other continued cost rationalization efforts on that level. What exactly is new here in terms of looking at the cost structure and what are the potential positives and negatives to the company in a more aggressive efficiency approach here.

Fundamentally I think it gets back to unwinding the matrix management system that we had in place here. And again I think that may have been an approach that was relevant a necessary for a much bigger company but for a company our size it was just more overhead then was necessary or desirable so we had a management system that had multiple dimensions. We’d manage by business unit, we’d manage by geography, by industry vertical, in some cases we’d manage by corporate staff. What we elected to do was make a clear statement that we’re going to manage the business through our business unit and everyone else is really there in a support role and when they move back from being a, viewing themselves as a line management role to being really a support role to the business units, there’s an awful lot of staff in management and associated processes and work load, that goes away. I think that’s the fundamental difference. Joseph Vafi – Jeffries & Company : On service provision and looking at that matrix structure before do you see, what challenges do you see moving away from that structure.

The intent here again is to hit the overhead hard and reduce it, not to impact service delivery to our clients which really falls into more the direct costs as opposed to overhead. So this is really reducing non-customer facing, non-customer [effecting] overhead expenses. I’m a big believer that the differentiation in a service organization is quality of services, delivered as perceived by the customer and that’s a key metric for us and a key management focus and frankly you find in a lot of cases when you eliminate overhead, and internal looking at each other, you can spend more time with customers and actually improve your service delivery. Joseph Vafi – Jeffries & Company : I like the idea of focusing on these four areas and start growing around these service offerings, in the security area it seems like security is still intertwined in larger deals, is it an area that’s standalone enough for a company of your size to be able to create practice areas and show growth in security rather then security being bundled in a larger outsourcing initiative.

The intent here is not necessarily to break it out as a standalone but to look for ways to take the experience we have in different elements of security across the entire company and bring that together in a way that creates solutions for our clients. So in some cases that could be a managed security offering that looks a lot like an outsourcing engagement, but in other cases it could be much more of a systems integration around biometrics technology. It’s a lot of different things, I agree it can be an amorphous term that means lots of different things to lots of different people but when you bring it all together and leverage it across our entire company we think we have a lot of capability there to win some of these large engagements that I mentioned. Joseph Vafi – Jeffries & Company : If you look at these four areas of focus and if we move down the line here and these do become some of the drivers for growth over the next couple of years would you expect your services portfolio to become less CapEx intensive then it is now if these are the focus areas.

I don’t really know the answer to that.

From a CapEx standpoint overall I think the real challenge is going to be how does the outsourcing business evolve overall. And so I can clearly see us not increasing the capital intensity of the business. Right now the BPO business is amongst our biggest CapEx requirement within the outsourcing business and that’s not one of the key focus areas as we’ve gone through. So I don’t expect it to increase and I do think there is the opportunity for that to decrease over time. We’ll just have to see how the markets evolve. But you do know that we focus on the, looking at new deals, we do focus on the cash flow structure of the deals so we’re not going into this new focus area with the intention of increasing the capital expenditure in the deal structure.

Your next question comes from the line of Unspecified Analyst – Deutsche Bank Unspecified Analyst – Deutsche Bank : Of the $99 million of charges you took this quarter could you quantify what portion of that was amortization and asset write-downs as opposed to charges for cost reduction expenses that could be paid out in cash. I saw your D&A was up about $25 million or so this quarter so was part of that in the $99 million charge.

Yes, exactly. In the charge there were the three components, and approximately $30 million of that charge related to the asset write-downs that went through the amortization line. Unspecified Analyst – Deutsche Bank : As far as your cash performance is concerned from a seasonal standpoint your fourth quarter is the strongest and then you see a significant decline in the first quarter, do you expect that to pretty much play through in 2009 as well or do you have cash outflows in the first half and then you start building back in the second half.

The cash flow is driven by the seasonality in our technology business, and we would absolutely expect to see that seasonality as we go into 2009. As you saw in our performance in the third quarter where we were able to improve the cash performance in the third quarter better then we had done historically particularly in the area of working capital management, we continue to make that progress into the fourth quarter and we would intend to do that as we go through each of the quarters of 2009. But you’re right that the first portion, particularly the first quarter does have a negative pattern of cash usage in it predominantly driven by the technology business seasonality. Unspecified Analyst – Deutsche Bank : On the pension front you did mention that you have an underfunded status and you talked about a $1.6 billion charge to equity through comprehensive income but could you give a sense for what the underfunded balance is at the end of 2008, is it equal to that $1.6 billion, greater or smaller.

The number that I mentioned was $1.6 billion and as we go forward in looking at the financial statements clearly when we file our K-K we will give the full expanded information with regard to the plans but the US plans are roughly underfunded by about $1.15 billion of that $1.6 billion and the remaining amount in the international plans. Unspecified Analyst – Deutsche Bank : The $225 million or so of savings is it fair to say that 45 or 50 of that savings is basically the reduction in the 401K match and the other 175 would represent real cash savings or is that $225 excluding the $47 or $48 million savings of the 401K match.

The $225 million of savings does include the 401K match so you’re correct on that. I do want to point out that the $225 million of savings obviously does not have anything in there for the effect of freezing salaries as we go into 2009. So the $225 is made up of the headcount, the facilities reductions, benefits going forward, the 401K make up the $225. As I said we expect the cash requirements for that to be about $65 to $68 million in 2009 and then we did mention the additional action that we announced in December that we were freezing salaries as we go forward in most geographic markets where we can. Unspecified Analyst – Deutsche Bank : This $225 how should we look compared to, is that the fourth quarter 2008 run rate or full 2008 run rate, or what’s the base over which we should start factoring in these savings.

We did announce the $225 million of cost reductions in November and we started taking actions in the fourth quarter with regard to those actions as I mentioned, 550 of the heads had gone out in the fourth quarter so the cost base that we were looking at was predominantly 2008 expect for the small adjustment for the headcount that we were able to take out in the fourth quarter. Unspecified Analyst – Deutsche Bank : Is there any incremental savings that are still yet to be realized from your previous transformation plans or does this $225 pretty much encompass everything that’s going to be recognized on an incremental basis.

You’re right that there is a small amount that comes forward, but its very small and it relates predominantly to the facilities roll out over time. Unspecified Analyst – Deutsche Bank : On the cash which is overseas, you did say you have a global cash management mechanism but are you able to freely repatriate cash without any tax leakage or is there any restrictions, typically we’ve seen a few companies even though they have large cash balances because of tax consequences they really don’t have access to all of that cash, how would you characterize your access to that entire $500 million plus cash on the balance sheet.

As we have disclosed previously and we you will see our updated disclosure when we file our K with the financial statements, we do not view the tax situation as a constraint in us moving cash. We do have certain countries where we have earnings permanently invested, that’s equivalent with the cash balance that we have in those countries but it is not a major constraint in us moving cash to where we need it to be.

There are no additional questions at this time; I would like to turn it back over to management for any additional or closing comments.

Let me thank everyone for joining us on the call today and I appreciate your time and your questions and look forward to talking with you again soon.