Good day, and welcome to the Unisys Fourth Quarter 2013 Financial Results Conference Call. At this time, I'd like to turn the conference over to Mr. Niels Christensen, Vice President, Investor Relations at Unisys Corporation. Please go ahead.

Thank you, operator. Good afternoon, everyone, and thank you for joining us. Earlier today, Unisys released its fourth quarter and full year 2013 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. 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 the related GAAP measures, and we've provided reconciliation charts at the end of the presentation. 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 expectation. These factors are discussed more fully in the earnings release and in the company's SEC filings. Copies of those SEC reports are available from the SEC and from the Unisys Investor website. Now I'd like to turn the call over to Ed.

Thank you, Niels. Hello, everyone, and thank you for joining us today to discuss our fourth quarter and full year 2013 financial results. Please turn to Slide 4 to begin our discussion. We closed 2013 with a good fourth quarter, delivering significantly increased profits on higher revenue. Our revenue grew 2%, with growth in both our technology and services businesses. We are also pleased to see a third consecutive quarter of year-over-year services order growth. At the bottom line, we reported fourth quarter 2013 diluted earnings per share of $2.37, up from $1.67 in the year-ago quarter. We were particularly pleased with margin improvement in our services business, where we achieved an operating profit margin of 9.8%, at the high end of our targeted 8% to 10% range. This improvement was driven by a richer mix of higher-margin services and solutions, as well as continued progress in enhancing the cost efficiency of service delivery. Our technology business also turned in a solid profit performance in the quarter, although we were disappointed that we did not close all the ClearPath opportunities or at the size we had anticipated. This kept us from meeting our goal of maintaining flat ClearPath technology revenue for the full year of 2013 compared with 2012. Moving to Slide 5. As we review 2013 and our accomplishments over the past 3 years, we can see the progress we've made against our goals, as well as those areas that need further improvement. Overall, 2013 was our fifth consecutive year of profitability in free cash flow generation, a record we're proud of and it speaks to the progress we've made as a company. Over the past 3 years, we further simplified our operations and reduced costs, met our aggressive $1 billion debt reduction goal and built a much stronger,…

Thanks, Ed, and hello, everyone. After a challenging start to the year and a difficult third quarter, we ended 2013 with solid fourth quarter performance. In my comments today, I'll be referring to certain GAAP and non-GAAP comparisons. For the fourth quarter comparisons, the non-GAAP results exclude pension expense. For the full year comparisons, non-GAAP references exclude pension expense in both years and debt reduction charges in 2012. Now let me start with our overall fourth quarter and full year 2013 financial results. Please turn to Slide 10. At the top line, we reported revenue of $996 million in the quarter, which was up 2% year-over-year. Currency had minimal impact on the year-over-year comparison. For the full year, revenue of $3.5 billion was down 7%, with currency having a 1-point negative impact on the year-over-year comparison. Based on today's rates, we anticipate currency to have about a 2-percentage-point negative impact on the revenue in the first quarter of 2014 compared to the first quarter of 2013. At today's rate, we do not expect currency to have a significant impact on the full year comparisons in 2014. We reported an operating profit of $155.9 million for the fourth quarter of 2013. Our gross profit margin improved 250 basis points to 31.7%. Operating expenses declined 7% in the fourth quarter of 2013 compared to the year-ago quarter as lower SG&A and R&D expenses more than offset increased investments in growth programs like Stealth, Forward!, ITSM as a Service and Application Managed Services. I think it's important to note that we've reached a point with a number of our new solutions, notably Stealth and Forward!, where we believe it is appropriate to accelerate our sales, marketing and R&D investments in support of these revenue growth opportunities. As Ed mentioned in his comments, we…

Thank you, Janet, very much for that. Operator, we'd like to open the call up now for questions, if we may.

[Operator Instructions] We will go first to Glenn Mattson with Sidoti & Company. Glenn Mattson - Sidoti & Company, LLC: Real quick, before I forget, can you just tell us what that funding discount rate is for the cash contribution for 2015?

For the U.S. plan, the discount rate determined under the U.S. funding regulation is 5.70%. Glenn Mattson - Sidoti & Company, LLC: And what was it last year?

At June 30, it was about 5.72%. And Glenn, I am... Glenn Mattson - Sidoti & Company, LLC: You have to get that? Okay.

Yes. I'll have to get back to you. It's roughly around the same. Glenn Mattson - Sidoti & Company, LLC: Okay. Okay, great. And then maybe we could talk about the services business, the strength there a little bit. I guess, is the market getting better, and you guys are executing, or would you attribute it more to execution?

Yes. I think, as you saw, we had a good fourth quarter and our strength in our services business in that quarter -- and this quarter was really driven by certain projects and opportunities and deals that we won that included a significant amount of uses of intellectual property within those deals. So when we have Unisys' IP in a transaction or a project or an outsourcing engagement, it really helps the overall margin quite a bit. As Janet said, we're not ready to declare victory on being able to consistently deliver that 8% to 10% operating profit margin, but we are encouraged by this quarter and recognize, again, that driving service engagements that include Unisys' IP is really key to getting to that kind of successful conclusion. Glenn Mattson - Sidoti & Company, LLC: So it's more the mix, is that what you're saying?

Yes. Well, I think in this case is a strong mix of services. And again, as I mentioned in my comments, one of the things we're looking at is how do we continue to drive growth in that higher-margin services portion of our business. Glenn Mattson - Sidoti & Company, LLC: Okay. And then in Federal, how should we think about that space in general as far as the market backdrop? Is it a space that's kind of bottoming in your guys' view, or still declining or turning or anything? What's the general market picture there?

Yes. I think it continues to be a difficult market. But as Janet noted, 2013 represented a flattening of the environment for us as opposed to previous declines. So we feel good about some of the new business that we won. It felt like there's a bit more visibility than there was 12 or 24 months ago into that business. Glenn Mattson - Sidoti & Company, LLC: Okay. That's helpful. And the strength then in Asia Pacific, what do you attribute that to? Is it like 1 or 2 deals, or is it more broad-based or...

Right. Earlier in the year, we had a little bit of weakness in the Australian marketplace where we had the government change, particularly in public sector. So that's one of the areas that we saw improving sequentially in the -- particularly in the services business. Beyond that, we had a number of nice new opportunities, particularly in the outsourcing space in the Australia and New Zealand area and some continued financial services client wins in the China region. Glenn Mattson - Sidoti & Company, LLC: Okay. And if we could jump to the technology segment, if you don't mind, so things came in a little bit below what you had hoped for, I think. So is this another situation where things are kind of lumpy quarter-to-quarter and some stuff got pushed out into Q1, or is it more the things just kind of slipped through your fingers there? Is it...

Yes. I think it's the situation, again, where we had the opportunities in the pipeline, worked hard to close them, and there were a number that just did not close, either because we didn't get the decision -- the customer decision-making process at the right time. So we would again suggest not to look at that business on a quarter-to-quarter business -- quarter-to-quarter basis, but rather on a full year basis. Some of what we saw in the fourth quarter that we didn't get, we do think moves to Q1, but not necessarily all of it. So we think it's more of a 2014 play than necessarily a Q1 play. Glenn Mattson - Sidoti & Company, LLC: And then so you say -- in general, if you're looking for growth in the technology segment, would you say, I guess, in '14, it's going to be off an easy compare because of the 10% drop in technology? So now we think 2014 would be growth. But had you made like this quarter's tech numbers, do you think you'd still be seeing growth off of that level? Or is it...

Yes. I hesitate to say anything's ever an easy compare. But as Janet noted, 3 out of the last 4 years, we've kept that technology business, particularly the ClearPath business, either flat or we've grown it. And we want to get back to that foundational base in 2014 and then use products like Stealth and Forward! to be the emphasis for changing that technology curve from being a flat curve to an upward trajectory and a growth environment for us. Glenn Mattson - Sidoti & Company, LLC: Okay. Great. And then on Stealth, you have all these VARs signed up. And I guess, part of that strategy is to get them to become resellers of other products from Unisys' services and whatnot. Do you need to see some success from Stealth to get that channel really energized?

Well, yes. I mean, it's a key part of our strategy. And we want -- first of all, we think that having a reseller channel is important for us to address a broader set of customers and prospects than we can with our direct sales force. The first product that we have put into a channel, the reseller channel, is Stealth. And the resellers we've recruited to sell Stealth are security software specialists, by and large. So some of them, we think, can carry more of our products than just Stealth. But a large number of them, we've really selected them and signed them up really to drive the Stealth business. As we look at Forward! and taking that to market, we're also going to be looking at building a channel operation in support of Forward!. In some cases, that will be utilizing the same resellers. But in many cases, they'll be looking for a different type of reseller.

And today's final question will come from Bill Smith with William Smith Company.

Ed, maybe could you comment a little bit about the relationship with Amazon? And can you talk about Stealth? What kind of progress momentum have you seen there? In yesterday's news, Amazon talking about getting into the point-of-sale business and the concerns about breaches and everything with respect to security. It seems to play pretty well with Stealth. But could you comment a little bit on that Amazon relationship, and how that's playing out?

Yes. We're not in a position to break out Stealth as an individual product and the numbers on that or a particular use case like the use case where you can protect virtual machines in the Amazon cloud with Stealth. But the relationship is a good relationship. We've actually done some joint advertising in the Washington, D.C. area around Stealth and the Amazon Web Services cloud, and we're working together, looking at how we can design new solutions that work to both of our companies' advantage. And I guess I'll have to leave it at that.

Let's see. And on ClearPath, so some of that business may have flown through to the first quarter, but do you think there was any impact on -- that Forward! may have had on that business that people may have held back in anticipation of Forward!, or do we think about that as 2 separate services or products?

Yes. No, I don't think so, Bill. I think, what Forward! allows us to do within the ClearPath customer base is begin to look at non-ClearPath workloads that can be moved on to a Unisys platform. So I don't think it had any impact -- negative impact on the ClearPath business in the fourth quarter.

So that gets back to your point about the example you gave on moving that business off of the IBM on to Forward! then.

Well, that's right -- I mean, that's right. We think it's a great solution. If you're running a mission-critical application on an IBM AIX platform or Sun Solaris or HP-UX, this is a great opportunity to move it to an x86 Intel Xeon-based platform and still maintain those mission-critical attributes at a much lower price point than you were able to achieve with any of those other UNIX-based solutions.

Well, that's all incremental then to what you already have on Forward! because you're taking from a competitor and moving that on to x86.

That's correct. Okay. Well, operator, thank you very much for attending to us today. Thank you to everyone who participated and listened in on today's call. I just would like to close by saying again how excited we are about the opportunities in front of us, and we look forward to updating you on our progress on our next call. Thank you very much.

And this does conclude today's conference call. Thank you, again, for your participation, and have a wonderful day.