Good day, ladies and gentlemen, and welcome to Unisys' Third Quarter 2012 Results Conference Call. At this time, I'd like to turn the conference over to Mr. Niels Christensen, Vice President of Investor Relations at Unisys Corporation. Please go ahead, sir.

Thank you, operator. Good afternoon, everyone, and thank you for joining us. Earlier today, Unisys released its third quarter 2012 financial results. With us this afternoon to discuss our results are Ed Coleman, our CEO; and Janet Haugen, our CFO. Before we begin, I want to cover 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 slides that we will be using this afternoon 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 complementary to the earnings press release, includes some non-GAAP financial measures. These have been provided in an effort to give investors additional information. The non-GAAP measures have been reconciled to their related GAAP measures, and we've provided reconciliation charts at the end of the presentation. And 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. And now I'd like to turn the call over to Ed.

Thanks, Niels. Hello everyone, and thank you for joining us today to discuss our third quarter 2012 financial results. Please turn to Page 4 of the presentation to begin our discussion. Following strong results in the first half of the year, our third quarter results were impacted by softer demand in our services business, particularly for shorter-term project business sold and billed within the quarter. We also saw lower revenue in our U.S. Federal business as we continue to work through softness in that market. The lower services revenue contributed to a 14% overall revenue decline in the quarter. On a constant currency basis, our revenue was down 10% after being up 3% in the first half of the year. Although services revenue was down, new services order signings, measured in constant currency, were flat year-over-year. At the bottom line, our results were impacted by higher pension expense and debt reduction charges, which led to a third quarter net loss of $12.4 million or $0.28 per diluted share. On an operating basis, we remain solidly profitable, reporting operating profit of $61 million in the quarter. Excluding debt reduction charges and pension expense, our non-GAAP diluted earnings per share was $0.85 compared with $1.77 in the third quarter of 2011. Despite the lower profit in the third quarter through the first 9 months of the year, we've increased our profitability over the same period of 2011. Free cash flow, excluding pension contributions, was also up significantly year-to-date, as Janet will show when she goes through her remarks. Turning to Page 5, we saw important points of continued progress within the quarter. We grew revenue in our International business on a constant currency basis and continued to show good cost discipline across the company. Our technology business delivered a strong margin performance…

Thanks, Ed, and hello, everyone. Let me start with our overall third quarter 2012 financial results. Please turn to Page 9. At the top line, we reported revenue of $877 million in the quarter, which was down 14% year-over-year. Currency had a 4 percentage point negative impact on our revenue in the quarter. So on a constant currency basis, revenue declined 10%, particularly impacted by lower services revenue. Year-to-date, our revenue of over $2.7 billion was down 5%, down 2% on a constant currency basis. Based on today's rates, we anticipate currency to have about 0.5 percentage point negative impact on revenue in the fourth quarter of 2012 compared to the fourth quarter of 2011. Interest expense decreased by more than 1/3 from $12.5 million in the third quarter of 2011 to $7.8 million in the third quarter of 2012, reflecting the impact of our debt reduction. As a result of the debt reductions and the recent refinancing, we have reduced our annual interest expense from about $102 million in 2010 to approximately $10 million going forward. The fourth quarter of 2012 represents the first quarter at this new run rate. Other income expense for the third quarter of 2012 was $25.8 million of other expense, which included $23.1 million related to debt reduction charges and $3.4 million of expense associated with unfavorable currency impacts in the quarter. This compares to $16.6 million of other income in the year-ago quarter. The year-over-year negative swing of $42.4 million was primarily caused by the $23 million of increased debt reduction charges and the difference between foreign exchange gains a year ago and losses in this quarter. In the third quarter of 2012, there were $3.4 million of FX losses. In the third quarter of 2011, there were $12.9 million of foreign exchange…

Great. Thanks, Janet, very much. Operator, if we may, we'd like to open the call up to questions, please.

[Operator Instructions] We'll take our first question from James Friedman with SIG.

Ed, I wanted to ask my first question about the Slide 13, which is rather fascinating. It's the one about the technology revenue by portfolio. So I was wondering, Ed -- and if you don't have the slide in front of you, you can probably just answer otherwise. But other technology, as a percentage of your technology revenue, continues to decline, which is favorable to your margin trajectory. I'm just wondering, is that by design or is this related to architectural shifts? Why is this going this way? And will it eventually fade completely?

Yes. I don't think it will fade completely, Jamie. Again, as Janet mentioned, this is third-party resell activity, primarily, of either hardware or software. And we tend to do this really as part of other solutions that we're providing to our clients where we think it makes good economic sense to do so. And the margins in this part of the business are not particularly great. So we'd like to be careful about where we're pursuing this business and making sure that we're doing it in places where it's important to the customer relationship and where we can get a descent margin on it.

Okay. And I just wanted to follow up, Ed, in that regard, with the pipeline that you perceived for ClearPath. How comfortable are you with the pipeline? And more generally, what are you seeing out there in terms of the conversion of pipeline to revenue?

I think on -- in the case of ClearPath, again, most of these clients are clients have been with us for a number of years. And as we've talked about before, this is becoming more and more of a software business where they license the software, the ClearPath operating environment and associated software for a number of years. And as those years go by, they need to renew that software. And based on the capacity requirements that they have and whether they're moving additional workloads onto ClearPath into that environment, it can change what the size of that renewal opportunity is. So we think we have pretty good visibility into that pipeline, and we think we convert a high percentage of it.

Okay. And then maybe the last question before I go back into the queue. This is one that came into me from a client, so I don't want to force it, but I figured I'd better voice it. You got $11 of cash per share now, Janet. I mean, what generally -- how would you force rank your options between buying back stock or buying back the pension or potentially issuing a dividend or none of the above?

Jamie, I think it's fair to say that what we look at today is that we have options to evaluate all of those alternatives that we didn't have a handful of years ago. And we're aware of what those options are, and I think we have fulsome discussion and analysis around all of those. And at the time that we make a decision, we'll be proud to announce it.

[Operator Instructions]

Well, operator, if there are no other questions or comments, let me just take a moment again to thank all of you for participating in the call, and we look forward to speaking with you again when we report our fourth quarter results. Thank you all very much.