Good day and welcome to the Unisys First Quarter 2015 Results Conference Call. At this time I would like to turn the conference over to Mr. Niels Christensen, Vice President of Investor Relationships at Unisys Corporation. Please go ahead, sir.

Thank you, operator. Good afternoon everyone and thank you for joining us. Earlier today Unisys released its first quarter 2015 financial results. With us this afternoon to discuss our results are Peter Altabef, our President and CEO and Janet Haugen, our CFO. Before we begin, I'd like to cover a few 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. And 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 provided reconciliations within 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 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 Web site. Now I'd like to turn the call over to Peter.

Thank you, Niels and thank you all for joining us today. When I spoke with you in January, 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 leadership team and associates, meeting with clients and developing an actionable program to drive improved performance and deliver greater shareholder value. I'm confident of Unisys capabilities and potentials but we must move aggressively to accomplish our goals of achieving competitive margins, enhanced cash flow and revenue growth. Our actions include an organizational redesign to better address our client needs. Optimization of our cost structure and implementation of a go-to-market approach with greater focus on vertical markets and integrated solutions. In the first quarter our overall revenue grew slightly on a constant currency basis, driven by growth in our U.S. federal business and an increased in technology sales. Our services revenue declined to 6% but was flat in constant currency. The company's overall gross profit margin declined from 17.5% to 16.2%. Profitability in our technology business improved with increases in revenue. However our services profitability decreased. Services gross margins declined from 15.8% in the first quarter of 2014 to 14.1% this year. This decline was principally the result of startup cost on new multiyear engagement and at lower project work. We're taking actions to improve our profitability and competitive positioning and I'll discuss those in detail shortly. First, let me highlight the steps we have already taken. We have realigned Unisys over the past several months. We have moved to an organization with two core client relationship focused teams, enterprise solutions and U.S. federal and two cores globally integrated delivery teams, services and technology. All supported by our sales and corporate support teams.…

Hello everyone, and thank you for joining us this afternoon. Before discussing the first quarter results I want to cover some reporting changes we made this quarter. These changes are consistent with changes we've made and how we managed the business. Within our services segment we have new sub segments that aligned more closely with our current business focus and are consistent with our new organizational structure. The new categories are, Cloud and Infrastructure Services, which is revenue from work we do in the data center and cloud area, technology consulting and technology based systems integration projects as well as global desk and our global field services. The second is Application Services, which is revenue from application managed services and application development, maintenance and support work. And then third, Business Process Outsourcing which is revenue from the management of client specific business processes. We have also made a change in certain revenue classifications between services and technology. Historical information has been reclassified to these new categories and is included in the appendix to the presentation accompanying this call. Additionally, these schedules will be available through the Investor Relations section of our website. All of my comments today are based on the new reporting classification. Please turn to Slide 3 for discussion of our first quarter 2015 financial results. We have reported revenue of $721 million in the quarter which was down 5% year-over-year, but up 1% on a constant currency basis. I will discuss revenue trends by segment geography and industry later in my comments. The major currency fluctuations impacting the year-over-year comparisons are the euro, sterling, Brazilian real and the Australian dollar. Based on today's rates we anticipate currency will have a 10 percentage points to 11 percentage points unfavorable impact on revenue comparisons for the second quarter of…

Janet, thank you very much. Niel, I think we should now open up the call.

Our first question comes from James Friedman with Susquehanna.

So let me start out with -- on the cash balance as we move across the restructuring what would you anticipate would be the forecasted low of the cash balance say at the end of 2015 for starters?

Jamie, we have identified the actions and we are in the process of working the timing of those actions. We have some places where we have freedom of movements and control, and when we do that in other places, we need to have discussions with local works groups and follow certain regulations. So at this point in time, we expect the expenditures to be in -- cash expenditures under the program to be more weighted until late into 2015 and into 2016. But beyond that this stage it's too early to tell.

Again when you say you would access the capital markets over the years we've seen you, your officers have a number of different creative strategies for that, convertibles, straight debt. Shall we be thinking those this time or is it more likely weighted towards equity?

At this point in time we are looking -- if we do need to access the capital market, we will look at market availability at that time and as we would expect we will look at every available option at the time and make a decision then. So we do not have that decision at this point in time.

Okay and then, Peter, when -- do you think that it's appropriate to start measuring the company at least in the restructuring phase more on the progress of your cost actions and your profitability as opposed to the cadence of the revenue?

Jamie, first of all I think you and the other analyst who follow us are -- will measure us anyway you wish. So I don’t necessary think it's for me to say. I will say and you saw this in my remarks that right now we are really focused on taking these costs out and on making sure from a go forward standpoint we’ve got the right solutions, and the right focus in the right markets. So I do believe that the cost will come out before the revenue will pick up which is why you heard me a couple of times refer to increased profitability and then increase revenue. It's not that we’re not going to focus on the revenue side, we’re focusing on the revenue side every day and kind of the purpose of me beginning to add for you guys flavor about the types of deals we’re winning was to tell you where in the market and we’re focused on winning business. At the same time, I think for us to do long-term what we need from a revenue growth standpoint, we still had some building to do. And that building is going to come over the next -- I really expect the building to come over the next 12 months as we really align our solutions going forward.

Okay that makes sense and then I just had one housekeeping so, Janet, you had commented about the year-over-year foreign exchange impact and I wasn't sure if I heard you right whether that number was positive or negative but if you could repeat what you said apropos of the second quarter I mean?

So Jamie, my comments were that in the second quarter based upon rates today, we expected to have 10 to 11 percentage points unfavorable impact on the revenue comparison and then I could 7% to 8% unfavorable for the full year.

[Operator Instructions] We’ll take our next question from Ned Davis with William Smith and Company.

I wanted to drill down a little bit more on some of your restructuring. First of all can you characterize in a little more detail is it sort of across the Board or is it to move head count form the U.S. to lower wage cost markets around the world. Can you give a little bit more flavor to it, because what you are saying is that this is something that has existed in Unisys for quite a while and you are not looking to have an immediate revenue impact from it, but it's something that is necessary to be competitive? So I am little bit in the fog about exactly what this involves?

This is Peter thanks very much for the question. I hope I will lift the fog but if I don't give me a follow-up question please or at least lift it as much as I can. So one of the things I mentioned on our last call which was my first call back in January was that we were really going to do a deep dive look at our cost basis and cost structure. I wanted to make sure we did from the bottom-up and not from the top-down. So we were launching that effort about the time of our analyst call in later January, and so over the past three months what you are seeing on this call is the result of those actions. So we really did combination of top-down and bottoms-up, obviously, Janet and I gave out targets to each of the organizations in the company. All of the SG&A units, all of the operating units. What we were targeting from an SG&A standpoint for this organization right now on our life cycle, the bottom of the top quartile of performance. If you look at the various [Hackett] surveys and all of those. So that’s where we were. So if you pick a 100 random companies in our market and our size we locked in at about 25, so the 25 best. That’s really the target we set especially for all of the SG&A unit. That’s a substantial move from where we are today. Where our SG&A as you know has historically been higher than that. So you have seen pretty significant cuts with this in the SG&A really across the Board in all our SG&A units. When it comes to the operating units and our delivery units the cuts are small. They are there, they are…

Thank you, very comprehensive answer it’s very helpful. Switching over to this important recent to hire of Mr. Gissler, it sounds like how Accenture has operated over the years. What's your expectation for what he can accomplish in your services marketing initiative? I mean what's going to change? You've mentioned, you want the shorten sales cycle, I think that certainly would be desirable but what other things, do you think our potentials out there for him and the team that he’s going to be running

Thanks for that question too. Let me back up with second and before I talk about deal particular, let me kind of deal with our approach to personal. So, it is really a blended approach. We've got some terrific leaders at Unisys, we have some terrific leaders who have been at Unisys and as you could see from my comments we're very much using those leaders in our go forward model. At the same time, we are really taking some outstanding people from the marketplace and bringing them in for really a couple of reasons. One is as we evolve we're going to need some talent that we don't necessarily have today, that's particularly true as we really focused on our go-to-market verticals. So, you're going to see us as we go forward bringing in some people that really have -- perhaps some more vertical focus and we necessarily had in the last two years. But it's also true about some of our capabilities that we have today. So in addition to Neil, we issued a press release about Tom Patterson who has a very significant background most recently at CSC in security, we issued a press release in last week about Kasey Coleman who has comment in our U.S. federal group and she is going to lead our civilian practice and has an outstanding background. And I think you see a lot of press about her. Even more recently we just brought in gentleman name Eric Hutto, I had worked with previously at Dell and at [Pro] Systems, who will working at enterprise solutions team in the U.S. and Canada. So it's not just Neil, it's a number of really qualified people from really all over the industry, we in particular about Neil. And you mentioned Accenture; he had…

Our next question comes from Brian Gesuale with Raymond James.

Peter, it's clear you took a really deep look at the company. Can you maybe talk to us from a strategic standpoint what your thoughts are on potential divestitures in the overall portfolio of the company, as well as how you'll interact with the potential liability going forward?

Let me try to cover both of those and also cover a little more of the strategy as you referenced. The company has had a pretty active history of divestitures for a long time. I won’t say that it has divested everything that it can divest, but at this point I think it's, while we’re going to be -- let me put it this way, I think we’re going to be less likely to go and sell specific units because frankly most of the units we have in this company are really integral to growing it going forward. We do have a couple of joint ventures; I don’t necessarily think we will sell those joint ventures, but there somewhat separate from the operations of the company and somewhat divorced from them. And I think we’ll talk more Brian going forward about exactly how that those joint ventures fit into the overall future of the company, what you can expect from those in terms of revenue and how they will play out. So let's just put that aside as a, as to come back to you on future calls. With that as the exception, I think what you’ll see from us rather than divestiture is looking very hard at our business from a profit, margin and cash flow standpoint. As we make decisions on how to reformulate and really focus on certain verticals, we’re not doing it based only on mass. We’re not doing it based on what business we have today. We're really doing it based off where are we truly distinctive, where can we truly drive value for our clients and I measure value in part by profit margin. What our clients will need to pay and why is that more than our cost? I would tell you that,…

Great, Peter. Thank you for that detail. That's very helpful. One just quick follow-up, I don't think it's been a surprise to many on the difficult macro and some of the currency headwinds but maybe on your Federal business, is that a business that's turning here with maybe a more positive budget cycle and maybe some of the positioning in hires that you've brought in? Is that a business that we should be fairly optimistic on over the short and intermediate term?

The short answer is yes, when I arrived in January that team -- I have to tell you by the time I arrive and sat down with the team I was impressed by it. The interim leader of the time Venkatapathi Puvvada, he really struck me somebody who is driving that team in a very focused way. You may know that he is otherwise known as PV in the commercial market wise, very well known. He is a three-time winner of the Fed 100 award and this year won the Eagle award, which is kind of the lifetime achievement award for Fed 100, it's a very big deal. I’ve had an opportunity to meet many of our federal clients and we’ll be meeting more and that team is very well respected. That said he is not standing still. KCs arrival as head of our civilian group is a big deal as well. So the federal marketplace is one where if you look at the peer group last year it was a tough-tough environment and I want to be careful that I don’t paint too picture -- too rosy a picture because stuff just happens. I mean you get sequestration, you get a ton of issues with respect to re-compete, you get issues with respect to government requirements for small, medium businesses. I will tell you we lost the ability on a not in-substantial government contract this year because it went small, medium business and we’re just not able to re-compete on it other than as a relatively modest sub. So I can’t tell you that all will always be rosy there, but I can tell you we expect to be fully competitive in the federal marketplace, we expect to win our share deals and we expect that share to go up. But it is the federal marketplace and it's kind of cyclical and lumpy.

That concludes today’s question-and-answer session. At this time I'll turn the conference back to our speakers for any additional or closing remarks.