Good day everyone and welcome to the Unisys fourth quarter and full year 2009 results conference call. At this time, I would like to turn the conference over to Niels Christensen at Unisys Corporation. Please go ahead, sir.

Thank you, operator. Good morning everyone and thank you for joining us. About an hour ago, Unisys released its fourth quarter and full-year 2009 financial results. With us this morning to discuss our results are Ed Coleman, our CEO; and Janet Haugen, our CFO. Before we begin, I want to cover just a few housekeeping details. First, today's conference call and the Q&A session are being webcast via the Unisys Investor website. Second, you can find the earnings press release and the presentation slide that we will be using this morning to guide our discussion on our investor website. 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 cost reduction charges taken during 2008. We also make certain comparisons between periods on a constant currency basis for excluding the impact of foreign exchange. In the presentation, we have provided a reconciliation on a U.S. GAAP basis compared with our results, excluding the impact of the cost reduction charges and an explanation of the basis for the constant currency calculations. Finally, I'd like to remind you that all forward-looking statements made during 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 from the Unisys investor website. Now, I'd like to hand it over to Ed.

Thanks, Niels. Hello, everyone. Thank you for joining us today for our fourth quarter and full-year 2009 earnings call. As we begin our discussion, this morning please turn to slide one for highlights of our results. We came into 2009 with a clear plan and goal to turn around the business, achieve profitability and generate free cash flow. The economic environment over the past year made it more critical that we move quickly and with urgency to execute on our business priorities, reduce costs and strengthen our balance sheet. As you can see in our results, our people rose to the challenge. Despite lower revenue in 2009, as we narrowed our focus and worked through the downturn, we reported three consecutive quarters of significantly improved profitability and cash flow. For the fourth quarter, we delivered an operating profit margin of 10.8% and net income of $115 million versus a year ago loss. We also generated $163 million of free cash flow in the quarter, which was up more than $100 million year-over-year. As Janet will show you when she goes through the results in more detail, our services business doubled its operating profit margin in the fourth quarter despite lower revenue. And our technology business grew revenue 19% in the fourth quarter, driven by strong sales and ClearPath systems. We are focused on delivering continued product innovation and value to our ClearPath client base and it is good to see these results in the quarter. For the full-year of 2009, we reported an operating profit margin of 7.5% and net income of $189 million, compared to a year ago loss of $130 million. Equally important, we generated $196 million of free cash flow in 2009, a $236 million year-over-year improvement and our cash balance at year-end 2009 improved by more…

Thanks, Ed and hello, everyone. We closed out 2009 with a strong fourth quarter that demonstrated our continued discipline in enhancing our costs efficiency and optimizing cash at all levels of the company. As Ed mentioned, we made good initial progress in strengthening our balance sheet and capital structure, and we are focusing on continuing that progress in 2010. This morning, I will provide more details on our fourth quarter and full year 2009 financial results. I will also update you on our capital structures and pension funding expectations for 2010. To start our financial review, please turn to slide four, for an overview of order trends in the quarter. Global economic conditions and competitive pressures remain challenging in the fourth quarter, although we did see some positive indicators. While services orders declined in mid single-digits year-over-year, we saw growth in outsourcing orders for the second consecutive quarter. Outsourcing order growth was more than offset by double-digit declines in orders for shorter-term systems integration and consulting projects. In the term of geographic trends, we saw double-digit order growth in our U.S. commercial business. Orders for our U.S. federal government business declined largely due to reductions from our TSA and GSA same contracts. Internationally, we saw order declines on a constant currency basis across all of our overseas markets in Europe, Latin America and Asia-Pacific. We closed 2009 with $6.5 billion in services backlog, up 1% sequentially since September 30, 2009, and up 7% from December 31, 2008. The increase was principally due to currency movements. Slide five highlights our financial results in the fourth quarter. At the top line we reported revenue of $1.21 billion in the quarter, which was down 5% year-over-year. Currency had a five percentage point positive impact on our revenue in the quarter. Based on today's…

Thanks very much, Janet. Operator, we would like to open the call up to questions from the analyst at this time if we could.

(Operator Instructions) And we'll first hear from Joseph Vafi of Jefferies. Joseph Vafi – Jefferies & Company: Hi, everyone. Good morning and congratulations on the strong margins and cash flow. I thought maybe we could start and talk a little bit about some of the ClearPath strength that we saw here. And I guess it's really was announced full second half of the year. Maybe a little more color on where the pockets of strength may -- where you saw the pockets of strength there? And secondly, what you see as an outlook for that business? I know we've kind of always looked at that business as being kind of a secular decliner, but has that at all changed, or were we just seeing a little bit of strong budget flush here in Q4?

Thanks, Joe. The ClearPath business has been in secular decline for us. And we're happy with the progress that's been made in improving client satisfaction and in making the investment to support and innovate the ClearPath client base, as Ed mentioned. We do think that consistent with the mainframe environment and industry trends, we will continue to see declines in that business, although our focus will remain on customer satisfaction and innovation to keep that client base as profitable to us as we can.

And I think we want to be careful that we don't create a self-fulfilling prophecy by talking about decline. ClearPath continues to be a platform that supports close to 1800 customers worldwide. In many cases it's running mission-critical applications for those customers. And I think we've done an excellent job of making sure that we maintain ClearPath as being a modern mainframe, an open mainframe, a mainframe that continues to meet our client requirements by opening it up. It runs state-of-the-art industry-standard hardware, it supports state-of-the-art middleware, supports state-of-the-art modern development languages and we continue to innovate around ClearPath to make sure that customers can take advantage of those modern technologies within the ClearPath environment. And it becomes an opportunity for us, one, to continue to provide mission-critical support to key customers around the world, but also to help those customers modernize their application to take advantage of new innovations in ClearPath. So I don't want to presume declines in ClearPath because I think it's a very strong platform, an open platform, and more and more it is a modern platform to meet our customer needs. Joseph Vafi – Jefferies & Company: Okay. Thanks. And then I guess secondly talking about some of the divestitures and I guess, particularly the -- well, I guess first on the equipment divestiture, I know we didn't get a lot of color there. Is there a number that you would like to throw out in terms of modeling there in terms of the size of that business and where it kind of stacked up on the March contribution? And then secondly, I guess on the claims processing, divestitures that, I mean it seem like it was relatively profitable business, is that something we should take into account when we think about your longer-term operating margin goals and services or is that -- is this a piece of business that we shouldn't really think about affecting those goals?

Joe, first on the check and cash automation equipment business and the related maintenance. As we said in our press release last night, we are not going to disclose the terms of that. But what I would say to -- is that the revenue from that is not material to Unisys as a whole and that business contribution has been relatively break-even for us. With regard to the HIM business, we did disclose the revenue base for that. As we said previously, that has been a profitable business for us. Though we don't believe by divesting that business that will change our goal or our objective for the services operating business and it doesn't change the trajectory that we've been on in improving the services operating margins. Joseph Vafi – Jefferies & Company: Okay. That's helpful. And then finally I know, Janet, you talked about CapEx guidance being flat for 2010 or more or less at the low end of the guidance, I guess. Is there -- if we kind of look at CapEx versus 2008, is there -- I mean, are we just -- are we seeing less capital intensity in your business as you change your service offerings? Is it tighter control on CapEx? Shall we kind of be thinking about kind of a fundamental change in the business here or just more focus and maybe a little bit of fine-tuning on where the service offerings are going?

It's the latter, Joe. We've definitely been focused on looking at the business -- cash requirements and the business model making sure we're as efficient as possible. We also have looked at the amount of capital that's be employed internally and looking for opportunities to be more cost efficient or cash efficient in how we spend it. So I think what you've seen is a -- as you referred to at the end of your comment, a change for us in the model. Joseph Vafi – Jefferies & Company: Very good. Thanks a lot, Janet.

Thanks, Joe.

Next we'll hear from Eric Boyer, Wells Fargo. Eric Boyer – Wells Fargo Securities: Hi. Good morning. Ed, I think you said you've taken out 220 million of the 250 million you targeted as far as expenses in the cost of services line, and then 240 million of the 250 million for SG&A, if I have that correct. Should we expect you to achieve the remainder of that target in 2010? And could you quantify any additional expense reductions that you've identified and you think you'll be able to make progress on in 2010?

Sure. To the first part of your question, Eric, the question is yes. I think we'll get to those initial targets in 2010. I think we ended 2009 pretty close to making a lot of progress in both areas. So we'll get there in 2010. But we'll have to go beyond that. I mean, the real purpose of setting those targets was recognition that we needed to improve about five points in our gross margins, in our services business and we need to improve about five points in reducing our SG&A as a percent of revenue. And as the revenues come down, certainly, those improvements we've made to date have been a big contributor to improved profitability and cash flow. But we still haven't hit the gross margin percentage in SG&A percentage goals that we need to get to, to really a competitive in the marketplace or more competitive in the marketplace and get to that 8 to 10% operating margin that we want to get to in the services business. Eric Boyer – Wells Fargo Securities: And then back to the ClearPath sales. I mean, two quarters really strong growth there, should we think about the typical seasonality entering 2010 or is there something else going on just as far as -- kind of a backup in demand there?

I think you have to assume the normal seasonality where ClearPath has been typically a stronger second half performer in the year than in the first half. Eric Boyer – Wells Fargo Securities: I just -- any comments on kind of Oracle's recent announcement that they're entering kind of the market and what that may say about the market going forward?

Well, it may say that Oracle thinks it's a good market, too. And I guess I keep coming back to the fact that we have two of the finest best known high availability systems in the industry supporting governments and financial services and airlines companies around the world, in mission-critical applications. So it's not a bad business to be in and we've got a great solution there. Janet, I think you want to add something on the seasonality question.

Right. Eric, the other thing to keep in mind, in the first half of 2009 we were going through the debt exchange program and as we saw across all of our portfolio, customers did hesitate a little bit till we got finished with that. So I just wanted to comment that perhaps we saw a little bit more seasonality skewed to the second half of the year, this year in technology. And then lastly on seasonality, in this technology business it's really easier for us to look at first half versus second half, and I would also ask you to take a look at that when you're looking at modeling going forward. Eric Boyer – Wells Fargo Securities: All right. Thanks. That's helpful. And then could you give us a sense of the overall revenue that you may be targeting to divest?

No. Really can't, Eric. I mean, I understand the question but what we're -- we're taking it from the standpoint and what are the four areas of strength that we have real differentiated value to bring to the marketplace. And then those things that fall outside of that really fall into a kind of a maintain mode or if market opportunities arise for a good divestiture. We will take advantage of that. But we're not starting out with a targeted divestment of x amount of revenue. Eric Boyer – Wells Fargo Securities: Okay. And then just I guess on the 2010, anymore color on just kind of the expectations. I know you gave FX impact for Q1, but just kind of expecting the same type of 2009 performance or maybe a slight improvement due to the economy?

Well, I think as we go into 2010, both Ed and I commented we think we're going to be seeing continued difficult environment particularly in the first half of 2010. We haven't given any guidance beyond what you mentioned for 2010 other than our commitment to move the company towards consistent and predictable, profitability and cash flow generation. Eric Boyer – Wells Fargo Securities: All right. Thanks a lot.

Thanks, Eric.

Thank you, Eric.

Next we'll hear from Tony Venturino from Federated Investors. Tony Venturino – Federated Investors: Good morning for taking my call. Just a couple of quick questions, quick follow-ups. So you in the past you had talked about your long-term goals, are those still in place? I think you said the 8 to 10%, is there any change to that?

No. That's what we want to get the services business to. Tony Venturino – Federated Investors: Okay. And do you -- do you have a timeframe for that? Do you expect to kind of solidly be there within 2010?

I would be careful we don't fall into giving guidance when we're not giving guidance at this point. But we want to keep making progress against it. We doubled the operating margins in that business in 2009, which we thought was good progress. We have more to do, but we also as a part of this I think need to start demonstrating that we can deliver profitable growth at the top line in the areas, in the markets that we're targeting. So we're going to continue to work that operating margin goal from the bottom in terms of managing costs, managing expenses aggressively. But the flipside of it is -- we need to start driving some top line growth, as well. Tony Venturino – Federated Investors: Okay. And then you talked about the 20% of the workforce that is in low cost centers. Do you -- you mentioned you have 35 to 40% for competitors. I mean do you expect to be at that level or are you targeting to be at that level 35 to 40%?

We recognize that we have to work towards that level in order to get our costs of service delivery down to the point where we can improve our gross margins and services by four or five points, versus where we were a year ago. So we're somewhat constrained by the amount of public sector work we do, which is in excess I think it is 45% was what Janet just showed. Public sector accounts are in many cases reluctant to allow service delivery to be performed in offshore locations. So it provides a little bit of a constraint for us there. But it's a recognition that that's where the industry is at and we have to be getting there and moving towards that aggressively in order to have a competitive cost structure. Tony Venturino – Federated Investors: Now do the public sector customers realize that that there is maybe additional costs if they don't offshore, can you get a premium for them for that service?

I mean, they understand -- they understand if we were to use offshore resource. It's not like we are hiding something from them. So we had that open discussion with the client before you decide how you're going to deliver the service. And in some cases they certainly recognize that it could be less expensive for them if they utilized offshore resources but for a variety of reasons, in many cases, they decided that's not what they want to do. Tony Venturino – Federated Investors: Okay. And then what would be involved to kind of move to that? Is it just more customers reluctance or is it investment of the time to get the assets up and running and trained and how long would that take to get to the 20% level now to a 40% level?

It depends on lots of different factors. It is the ability to move work customers being willing to allow you to move existing work and it's also tied very closely to winning new deals where you implement, where you bid the work, bid the project, bid the outsourcing engagement, with that as your service delivery model and you transition and implement. So it's tied very closely to winning new work. Tony Venturino – Federated Investors: Okay. And then Janet, you just said, when you were talking about the seasonality, you talked about customers holding off last year. Just curious about the conversations you're having with customers now, how it has changed since, first half of last year when the capital structure was an issue. Can you comment on that?

Yes. I think the good news is that the conversations with the customers from right now are about the areas of strength, the innovation, the changes in enhancements we've made to the portfolio. And the conversations don't start with the discussion about our capital structure, which was the case in the first half of 2009. Tony Venturino – Federated Investors: So you're not seeing customers reluctant to move forward with…

Not at this time. We've had very good response from our customer base and reaction to the improvements that we've made in our capital structure. They have focused on the fact that with the combination of the debt exchange and as we go through the repaying the 65 million that's coming due has also reduced the amount of receivables from the securitization. So they see against the capital structure that we had before $240 million reduction in our overall outstanding debt. At the same time, we're increasing cash balance, we're increasing profitability, we're moving towards the goal of predictable and consistent profitability and cash flow. At the same time, they don't see us compromising in the areas of innovation because I think in 2009 what we're hearing from the customers is very strong response to the innovation that has come out across our areas of strength. Tony Venturino – Federated Investors: And what was the balance on the AR facility, did you say that earlier? I think I missed that?

The AR facility at December 31, 2009 was 100 million and that compared to 140 million at year-end last year, 2008. Tony Venturino – Federated Investors: Just a couple -- last questions. Regarding cash flow for 2010, do you expect to, for your tax -- taxes to change materially from 2009?

No. We expect it to be from our tax position overall, we do have the benefit of net operating losses and credits that shelters some of our profits as we continue to return to profitability. So we would expect our cash payments to be relatively the same as what we experienced in 2009. Tony Venturino – Federated Investors: And how about working capital, should working capital change materially?

I don't -- we haven't given any guidance with regard to full year of 2010. What I can tell you is that as evidenced by our results in the quarter, we've continued to improve our DSOs by one day and in the fourth quarter compared to a year ago. And you'll continue to see that focus on working capital across the company and demonstrated in our results. So the working capital will be a function of where the revenue ends up in the seasonality for the full year. You won't see us going back in metric. Tony Venturino – Federated Investors: Great. Appreciate it. Thank you very much.

Thank you.

Thanks, Tony.

Next we'll hear from John Moore, KDP Investment Advisors. John Moore – KDP Investment Advisors: Hi. Good morning, guys.

Hi, John. John Moore – KDP Investment Advisors: The first one, just with -- with the increasing services backlog. Do you think that that should translate into outsourcing revenue growth in 2010 or would some of these things going on, like the TSA as well as to I guess to a lesser degree the HIM sale, whether that will be a drag on the revenue performance?

John, you're right that both the sale of the HIM business and the potential changes in the TSA contract will affect our outsourcing number. And so that is a negative factor. What we are -- we do as an offset is two quarters of growth in the outsourcing orders and the question is, does that compensate for that and what rate do we sign orders in the first half of the year. John Moore – KDP Investment Advisors: Okay. And then on the HIM sale, at this point what's the status for regulatory and state approvals and what more do you need there?

I don't really want to comment on the specific elements of it, just to say that we are continuing to go through that process and our expectations as we said in the release and said earlier on the call, is that it closes in the first half of the year. John Moore – KDP Investment Advisors: Okay. And then just a -- and at the, what were the aggregate cash taxes for '09?

I’m sorry? I didn't hear you. John Moore – KDP Investment Advisors: What were the cash taxes paid in '09?

Sure. Roughly $58 million. John Moore – KDP Investment Advisors: Great. Thank you.

Thanks, John.

And that does conclude our question-and-answer session. I'll turn the conference back over to our presenters for any closing comments.

Sure. Thank you everyone for joining today. This is Janet Haugen. I wanted to make sure that one of the comments I made came through clearly. And that's with regard to my comment on the under-funded position of our U.S. pension plan. We ended 2009 in an under-funded position on our U.S. pension plan of approximately $1 billion, which is a decline compared with our under-funded position of $1.2 billion at year-end 2008.

Janet, thanks very much for the clarification. Let me just also thank everyone for joining us on the call today and for participating. For all of the Unisys's colleagues around the world who are listening in on this call, I would like to thank you very much for all of your hard work in 2009 and for the progress that we've shown. We still have a lot to do in 2010 and beyond. But thank you again very much. Have a great day.

That does conclude today's teleconference. Thank you all for your participation.