SECUTITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2004
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to _____________.
Commission file number 1-8729
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
UNISYS SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
UNISYS CORPORATION
Unisys Way
Blue Bell, Pennsylvania 19424
REQUIRED INFORMATION
Unisys Savings Plan
Financial Statements and Supplemental Schedule
Years ended December 31, 2004 and 2003
with Report of Independent Registered Public Accounting Firm
CONTENTS
Report of Independent Registered Public Accounting Firm 1
Audited Financial Statements:
Statements of Assets Available for Benefits 2
Statements of Changes in Assets Available for Benefits 3
Notes to Financial Statements 4
Supplemental Schedule:
Schedule H, Line 4i - Schedule of Assets (Held at End of Year) 10
Exhibit Index 12
1
Report of Independent Registered Public Accounting Firm
To the Plan Administrator of
Unisys Savings Plan
We have audited the accompanying statements of assets available for
benefits of the Unisys Savings Plan as of December 31, 2004 and 2003,
and the related statements of changes in assets available for benefits
for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. We were not engaged to perform an audit of the Plan's
internal control over financial reporting. Our audits included
consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Plan's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the assets available for benefits of
the Plan at December 31, 2004 and 2003, and the changes in its assets
available for benefits for the years then ended, in conformity with
U.S. generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying supplemental
schedule of assets (held at end of year) as of December 31, 2004 is
presented for purposes of additional analysis, and is not a required
part of the financial statements but is supplementary information
required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security
Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the
auditing procedures applied in our audits of the financial statements
and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
June 17, 2005
2
Unisys Savings Plan
Statements of Assets Available for Benefits
December 31
2004 2003
-----------------------------------------
(In Thousands)
Investments at fair value:
Fidelity Mutual Funds $ 1,833,287 $ 1,708,723
Unisys Common Stock Funds 168,130 268,747
Unisys Interest Income Fund 405,045 406,585
Participants' Loans 14,737 14,704
Frozen Investment Contracts 5 10
-----------------------------------------
2,421,204 2,398,769
Employer contributions receivable 1,381 2,198
-----------------------------------------
Assets available for benefits $ 2,422,585 $ 2,400,967
=========================================
See accompanying notes.
3
Unisys Savings Plan
Statements of Changes in Assets Available for Benefits
Year ended December 31
2004 2003
-----------------------------------------
(In Thousands)
Additions:
Interest and dividend income $ 59,552 $ 48,649
Contributions:
Employer 19,998 20,065
Employee 97,019 89,137
-----------------------------------------
117,017 109,202
Transfer in 4,820 -
-----------------------------------------
Total additions 181,389 157,851
Deductions:
Benefit payments 194,775 141,054
Administrative and other expenses 104 81
-----------------------------------------
Total deductions 194,879 141,135
Net appreciation in fair value of
Investments 35,108 369,446
Net increase 21,618 386,162
Assets available for benefits:
Beginning of year 2,400,967 2,014,805
-----------------------------------------
End of year $2,422,585 $2,400,967
=========================================
See accompanying notes.
4
Unisys Savings Plan
Notes to Financial Statements
December 31, 2004
1. PLAN DESCRIPTION
The Unisys Savings Plan (the Plan) is a defined contribution plan that
covers non-bargaining employees paid from a United States payroll of
Unisys Corporation (the Company) and bargaining unit employees whose
collective bargaining agreement provides for participation in the Plan.
The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
Participants should refer to the Plan document, summary plan
description and their respective bargaining unit agreement, if
applicable, for complete information.
CONTRIBUTIONS
Each plan year, participants may contribute up to 20% or 18% of their
pretax compensation up to the prescribed Internal Revenue Code limit,
depending on their classification as a non-highly compensated or highly
compensated employee, respectively. Participants who are age fifty or
older may make catch-up contributions to the Plan. Participants may
also make after-tax contributions up to 5% of their eligible
compensation. The Company makes a nondiscretionary matching
contribution in Company Common Stock equal to 50% of the first 4% of
eligible compensation deferred by the participant during 2004 and 2003.
The Plan also allows for rollover contributions from other qualified
defined contribution plans.
In 2004, the Company acquired Baesch Computer Consulting (BCC). On September
15, 2004, the BCC Retirement Plan was merged into the Plan resulting in a
transfer of funds into the Plan of approximately $2.8 million.
INVESTMENT OPTIONS
Participants may elect to have their current contributions and existing
account balances invested in any one or more of the investment options
offered and managed by Fidelity Management & Research Company and
Fidelity Management Trust Company (Fidelity). Information regarding the
investment options is provided to each participant through electronic
media and prepared materials provided by the Company and in each
investment fund's prospectus made available by Fidelity.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's
contributions, matching contributions from the Company and allocations
of Plan earnings, and is charged with an allocation of administrative
expenses. Allocations are based on participant earnings or account
balances, as defined in the Plan document. The benefit to which a
participant is entitled is equal to the vested portion of his or her
account.
5
1. Plan Description (continued)
VESTING AND FORFEITURES
Plan participants who were actively employed on January 1, 2000 or
later are immediately vested in their account balances at all times.
PARTICIPANT LOANS
Participants may borrow from their fund accounts up to a maximum equal
to the lesser of $50,000 or 50% of their vested account balance. Loan
terms range from one to five years, or up to fifteen years for the
purchase of a primary residence. The loans are secured by the balance
in the participant's account and bear interest at a fixed rate of
interest that is commercially reasonable, as determined by the
Administrative Committee. A participant may not have more than one loan
outstanding. Principal and interest is paid ratably through payroll
deductions.
PAYMENT OF BENEFITS
On termination of service, a participant may receive a lump-sum amount
equal to his or her account, or upon death, disability or retirement,
elect to receive payments in the form of an annuity or annual
installments over the participant's actuarially determined lifetime.
Plan participants also may receive in-service withdrawals in certain
circumstances as defined in the Plan.
PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its matching contributions and/or
to terminate the Plan at any time subject to the provisions of ERISA.
In the event of Plan termination, participants remain 100% vested in
their accounts.
2. SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with
U.S. generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could
differ from those estimates.
6
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
INVESTMENT VALUATION AND INCOME RECOGNITION
Except for the Unisys Interest Income Fund, the Plan's investments are
stated at fair value, which equals the quoted market price on the last
business day of the Plan year. Shares of registered investment
companies are valued at quoted market prices, which represent net asset
values of shares held by the Plan at year-end. Shares of Unisys common
stock are valued at the closing market price on the last day of the
Plan year. Participant loans are valued at their outstanding balances,
which approximate fair value.
The Unisys Interest Income Fund includes investments in guaranteed
investment contracts issued principally by insurance companies and
financial institutions and are valued at contract value as estimated by
the issuer. Contract value represents contributions and reinvested income,
less any withdrawals plus accrued interest, because these investments have
fully benefit-responsive features. All participant-initiated transactions
with the fund are permitted at contract value with no conditions, limits or
restrictions. However, withdrawals influenced by Company-initiated events,
such as in connection with the sale of a business, may result in a
distribution at other than contract value. No reserves have been provided or
are considered necessary against contract values for credit risk of
contract issuers or otherwise. The contract value of these investment
contracts approximates their fair value. Interest accrued on the
contract balances, during 2004 and 2003, at rates ranging from 1.90% to
4.80% and from 1.00% to 5.40%, respectively. Interest rates are set at
the time the contract is negotiated and, depending on the terms of the
contract, are fixed through the maturity date or are re-set quarterly,
semiannually or annually. The average yield on the contracts was 4.89%
and 5.34% for 2004 and 2003, respectively.
Investments in Frozen Investment Contracts represent the cash balance
from payments made to the Plan from the Conservation Estate of the
Executive Life Insurance Company (ELIC) and from state guaranty
associations in settlement of claims made by the Plan as a result of
the insolvency of ELIC. The remaining cash balance at December 31, 2004
represents amounts that will be allocated to Plan participants or
applied to pay administrative expenses of the Plan.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is reported on the accrual basis. Dividends are
recorded on the ex-dividend date. Realized gains and losses from
securities sold are reported on an average cost basis.
7
3. INVESTMENTS
The Plan's investments at December 31, 2004 and 2003 were held in
trusts with Fidelity Management Trust Company and Wachovia Bank N.A.,
each of which was established for the investment of the Plan's assets.
During 2004 and 2003, the Plan's investments (including investments
purchased, sold, as well as held during the year) appreciated
(depreciated) in fair value as follows (in thousands):
2004 2003
---------------------------------
Fidelity Mutual Funds $ 109,713 $ 275,730
Unisys Common Stock Funds (77,366) 88,291
Unisys U.S. Equity Index Commingled
Pool Fund 2,761 5,425
---------------------------------
$ 35,108 $ 369,446
=================================
Investments that represent 5% or more of fair value of the Plan's
assets are as follows (in thousands):
2004 2003
---------------------------------
*Unisys Stock Fund $ 158,897 $ 254,246
Unisys Interest Income Fund 405,045 406,585
Fidelity Magellan Fund 258,737 264,985
Fidelity Asset Manager Fund 197,375 203,763
Fidelity Asset Manager Growth Fund 199,545 204,354
Fidelity Retirement Money Market
Portfolio Fund 123,480 124,955
* Predominantly non-participant-directed
8
3. INVESTMENTS (continued)
Employer matching contributions to the Plan are invested in the Unisys
Stock Fund. Participants who have reached age fifty are eligible to
diversify their investment in the Unisys Stock Fund to other funds
available within the Plan. The assets and significant components of the
changes in assets relating to the predominantly non-participant-
directed investments are as follows (in thousands):
December 31
2004 2003
---------------------------------
Investments, at fair value:
Unisys Stock Fund $ 158,897 $ 254,246
Unisys Common Stock Fund 9,202 14,456
Interest-Bearing Cash 31 45
Frozen Investment Contracts 5 10
---------------------------------
Total $ 168,135 $ 268,757
=================================
Year ended December 31
2004 2003
---------------------------------
Changes in assets:
Interest and dividends $ 81 $ 108
Net (depreciation) appreciation in fair
value of investments (77,353) 88,291
Contributions 24,098 20,771
Benefit payments (12,589) (10,573)
Administrative and other expenses (14) (14)
Net transfers (34,845) (7,814)
---------------------------------
Total $ (100,622) $ 90,769
=================================
At December 31, 2004, the Plan held 906,928 and 15,601,865 shares of
Unisys Common Stock in the Unisys Common Stock Fund and Unisys Stock
Fund, respectively. At December 31, 2003, the Plan held 973,441 and
16,859,543 shares of Unisys Common Stock in the Unisys Common Stock
Fund and Unisys Stock Fund, respectively.
9
4. TAX STATUS OF THE PLAN
The Plan has received a determination letter from the Internal Revenue
Service dated September 25, 2002, stating that the Plan is qualified
under Section 401(a) of the Internal Revenue Code (the Code) and,
therefore, the related trusts are exempt from taxation. Once qualified,
the Plan is required to operate in conformity with the Code to maintain
its qualification, and the Plan sponsor will take the necessary steps to
maintain the tax status of the Plan.
5. RISKS AND UNCERTAINTIES
The Plan invests in various investment securities. Investment
securities are exposed to various risks such as interest rate, market
and credit risks. Due to the level of risk associated with certain
investment securities, it is at least reasonably possible that changes
in the values of investment securities will occur in the near term and
that such changes could materially affect participants' account
balances and the amounts reported in the statements of assets available
for benefits.
6. RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by Fidelity
Management Trust Company, the Trustee. The Plan also holds shares of
common stock of the Company. These transactions qualify as party-in-
interest transactions and are exempt from the prohibited transaction
rules.
10
Supplemental Schedule
Unisys Savings Plan
EIN: 38-0387840 Plan: 004
Schedule H, Line 4i-
Schedule of Assets (Held at End of Year)
December 31, 2004
Description of Investment
Including Maturity Date,
Identity of Issue, Borrower, Rate of Interest, Par or Current
Lessor or Similar Party Maturity Value Cost** Value
----------------------------------------------------------------------------------------------------
*Fidelity Mutual Funds:
Fidelity Fund Registered Investment Company $ 13,718,546
Puritan Fund Registered Investment Company 21,506,379
Trend Fund Registered Investment Company 3,233,280
Ginnie Mae Portfolio Fund Registered Investment Company 9,491,394
Magellan Fund Registered Investment Company 258,737,034
Contra Fund Registered Investment Company 100,877,562
Equity Income Fund Registered Investment Company 19,335,218
Growth Company Fund Registered Investment Company 35,594,683
Investment Grade Bond Fund Registered Investment Company 9,871,488
Growth & Income Portfolio Fund Registered Investment Company 40,323,060
Intermediate Bond Fund Registered Investment Company 7,937,877
Capital & Income Portfolio
Fund Registered Investment Company 11,138,997
Value Fund Registered Investment Company 53,085,872
Mortgage Securities
Portfolio Fund Registered Investment Company 4,749,853
Government Securities Fund Registered Investment Company 12,729,990
Independence Fund Registered Investment Company 9,911,468
Over-The-Counter Portfolio
Fund Registered Investment Company 15,058,795
Overseas Fund Registered Investment Company 8,523,185
Europe Fund Registered Investment Company 9,698,010
Pacific Fund Registered Investment Company 5,173,211
Real Estate Investment
Portfolio Fund Registered Investment Company 27,657,407
Balanced Fund Registered Investment Company 24,390,806
International Growth &
Income Fund Registered Investment Company 9,742,099
Capital Appreciation Fund Registered Investment Company 17,524,896
Conv. Securities Fund Registered Investment Company 12,029,485
Canada Fund Registered Investment Company 8,367,592
Utilities Fund Registered Investment Company 10,666,068
Blue Chip Fund Registered Investment Company 61,677,264
Asset Manager Fund Registered Investment Company 197,374,558
Disciplined Equity Fund Registered Investment Company 5,057,368
Low-Priced Fund Registered Investment Company 78,960,387
Worldwide Fund Registered Investment Company 6,261,688
Equity Income II Fund Registered Investment Company 39,872,957
Stock Selector Fund Registered Investment Company 7,403,277
Asset Manager Growth Fund Registered Investment Company 199,544,669
Emerging Markets Fund Registered Investment Company 4,001,913
Aggressive Growth Fund Registered Investment Company 27,730,932
Diversified International Fund Registered Investment Company 29,804,704
Asset Manager Income Fund Registered Investment Company 33,440,366
Diversified Growth Fund Registered Investment Company 41,779,874
New Markets Income Fund Registered Investment Company 14,905,696
Export & Multinational Fund Registered Investment Company 8,549,420
Global Balanced Fund Registered Investment Company 1,909,471
Aggressive International Fund Registered Investment Company 2,694,064
Small Capital Stock Fund Registered Investment Company 16,013,921
Mid-Capital Stock Fund Registered Investment Company 26,235,873
Large-Capital Stock Fund Registered Investment Company 3,612,332
Discovery Registered Investment Company 425,992
Europe Capital Appreciation
Stock Fund Registered Investment Company 2,696,476
Asset Mgr Aggressive Registered Investment Company 1,414,095
Latin America Fund Registered Investment Company 3,834,122
Japan Fund Registered Investment Company 5,581,850
Southeast Asia Fund Registered Investment Company 2,393,974
Strategic Income Registered Investment Company 8,150,183
Freedom Income Fund Registered Investment Company 938,565
Freedom 2000 Fund Registered Investment Company 966,617
Freedom 2010 Fund Registered Investment Company 6,238,067
Freedom 2020 Fund Registered Investment Company 6,029,352
Freedom 2030 Fund Registered Investment Company 3,544,212
Spartan Total Market
Index Fund Registered Investment Company 7,913,205
Spartan Extended Market
Index Fund Registered Investment Company 3,025,400
Spartan International
Market Index Fund Registered Investment Company 1,648,717
Short-Term Bond Fund Registered Investment Company 5,037,159
Fifty Fund Registered Investment Company 7,369,298
U.S. Bond Index Portfolio Fund Registered Investment Company 20,091,083
Institutional Short-Intermed.
Gov't. Portfolio Registered Investment Company 2,234,218
Inflation Pro Bond Registered Investment Company 3,806,429
FID Freedom 2040 Registered Investment Company 886,722
--------------
1,662,130,725
*Fidelity Money Market Funds:
Retirement Money Market
Portfolio Fund Registered Investment Company 123,479,554
Retirement Gov't. Money
Market Portfolio Fund Registered Investment Company 19,316,627
--------------
142,796,181
*Fidelity U.S. Equity Index
Commingled Pool Fund Registered Investment Company 28,359,955
--------------
Total Fidelity Mutual Funds 1,833,286,861
*Unisys Common Stock Funds:
Unisys Common Stock Fund 310,551 units of Common
Stock Fund $ 8,587,205 9,201,641
Unisys Stock Fund 10,153,174 units of Common
Stock Fund 221,853,092 158,897,180
Interest-Bearing Cash 31,234 31,234
--------------
Total Unisys Common Stock Funds 168,130,055
*Unisys Interest Income Fund:
Fidelity STIF Cash Portfolio; 1.90% 5,517,831
Chase Manhattan Bank #430126; 4.80% 99,890,874
Monumental Life Insurance
Company #MDA134TR; 4.80% 99,879,094
Rabobank Nederland #UNI-129901; 4.80% 99,878,891
UBS AG Act #3041; 4.80% 99,878,748
--------------
Total Unisys Interest Income Fund 405,045,438
*Participants' Loans Interest rates from 5.0% to
9.0% 14,737,196
Frozen Investment Contracts 5,137 5,137
--------------
Total $2,421,204,687
==============
* Party-In-Interest.
** Cost is not applicable for participant-directed investments.
11
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934,
the Plan administrator has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
UNISYS SAVINGS PLAN
UNISYS CORPORATION
Date: June 27, 2005 By: /s/ Janet Brutschea Haugen
--------------------------
Janet Brutschea Haugen
Senior Vice President and
Chief Financial Officer
12
EXHIBIT INDEX
Exhibit
Number Description
------- -----------
23 Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm