SECURITIES 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, 2005
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, 2005 and 2004
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, 2005 and 2004, 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, 2005 and 2004, 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, 2005 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 27, 2006
2
Unisys Savings Plan
Statements of Assets Available for Benefits
December 31
2005 2004
------------------------------------------------
(In Thousands)
Investments at fair value:
Fidelity Funds $ 1,880,392 $ 1,833,287
Unisys Common Stock Funds 98,890 168,130
Unisys Interest Income Fund 388,909 405,045
Participants' Loans 14,518 14,737
Frozen Investment Contracts 3 5
-----------------------------------------------
2,382,712 2,421,204
Employer contributions receivable 2,191 1,381
-----------------------------------------------
Assets available for benefits $ 2,384,903 $ 2,422,585
===============================================
See accompanying notes.
3
Unisys Savings Plan
Statements of Changes in Assets Available for Benefits
Year ended December 31
2005 2004
----------------------------------------
(In Thousands)
Additions:
Interest and dividend income $ 90,817 $ 59,552
Contributions:
Employer 18,847 19,998
Employee 95,108 97,019
----------------------------------------
113,955 117,017
Transfer in 0 4,820
----------------------------------------
Total additions 204,772 181,389
Deductions:
Benefit payments 239,078 194,775
Administrative and other expenses 91 104
----------------------------------------
Total deductions 239,169 194,879
Net (depreciation)/appreciation in
fair value of investments (3,285) 35,108
Net (decrease)/increase (37,682) 21,618
Assets available for benefits:
Beginning of year 2,422,585 2,400,967
----------------------------------------
End of year $ 2,384,903 $ 2,422,585
========================================
See accompanying notes.
4
Unisys Savings Plan
Notes to Financial Statements
December 31, 2005
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 30% 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 6% 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 2005 and 2004. 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. Transfers in to the
Plan include approximately $2.8 million from the BCC merger.
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.
5
1. PLAN DESCRIPTION (continued)
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.
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. Before January 1,
2000, participants were fully vested after five years of service, as defined in
the Plan document.
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
the balance of his or her account or elect to rollover his or her balance into
another qualified plan. Upon death, disability or retirement, a participant
may elect to receive payments in the form of an annuity or annual installments
payable to the participant or his or her estate over a period no greater than
the joint life expectancy of the participant and his or her beneficiary.
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.
6
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.
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. The fair value of the participation units owned in the commingled
pool fund are based on quoted redemption values on the last business day of the
Plan year. 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. Crediting interest rates
as of December 31, 2005 and 2004 ranged from 4.10% to 4.61% and from 1.90% to
4.80%, 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 4.60% and 4.89% for 2005 and 2004, 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, 2005 represents amounts that will be allocated to
Plan participants or applied to pay administrative expenses of the Plan.
7
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
INVESTMENT VALUATION AND INCOME RECOGNITION (continued)
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.
3. INVESTMENTS
The Plan's investments at December 31, 2005 and 2004 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 2005 and 2004, the Plan's investments (including investments purchased,
sold, as well as held during the year) appreciated (depreciated) in fair value
as follows (in thousands):
2005 2004
-----------------------------------------
Registered Investment Companies $ 66,057 $ 109,713
Unisys Common Stock Funds (70,606) (77,366)
Commingled Pool Fund 1,264 2,761
------------------------------------------
$ (3,285) $ 35,108
==========================================
Investments that represent 5% or more of fair value of the Plan's assets are as
follows (in thousands):
2005 2004
------------------------------------------
*Unisys Stock Fund $ *** $ 158,897
Unisys Interest Income Fund 388,909 405,045
Fidelity Magellan Fund 231,906 258,737
Fidelity Asset Manager Fund 180,866 197,375
Fidelity Asset Manager Growth Fund 181,694 199,545
Fidelity Retirement Money Market
Portfolio Fund *** 123,480
Fidelity Contra Fund 128,402 **
* Predominantly non-participant-directed
** Fund was not 5% or more of fair market value of plan assets in prior year.
*** Fund is not 5% or more of fair market value of plan assets in current year.
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
2005 2004
-----------------------------------------
Investments, at fair value:
Unisys Stock Fund $ 94,032 $ 158,897
Unisys Common Stock Fund 4,857 9,202
Interest-Bearing Cash - 31
Frozen Investment Contracts 3 5
-----------------------------------------
Total $ 98,892 $ 168,135
==========================================
Year ended December 31
2005 2004
-----------------------------------------
Changes in assets:
Interest and dividends $ 39 $ 81
Net depreciation in fair value
of investments (70,550) (77,353)
Contributions 17,987 24,098
Benefit payments (7,528) (12,589)
Administrative and other expenses (11) (14)
Net transfers (9,180) (34,845)
------------------------------------------
Total $ (69,243) $(100,622)
==========================================
At December 31, 2005, the Plan held 830,144 and 15,950,068 shares of Unisys
Common Stock in the Unisys Common Stock Fund and Unisys Stock Fund,
respectively. 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.
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. Subsequent to this determination by the
Internal Revenue Service, the Plan was amended and restated. 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 registered investment companies 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.
7. SUBSEQUENT EVENT
On March 17, 2006, the Company adopted changes to the Plan whereby, effective
January 1, 2007, the Company will increase its matching contribution to 100% of
the first 6% of eligible pay contributed by participants, an increase from the
current matching contribution of 50% of the first 4% of eligible pay
contributed by participants.
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, 2005
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 Funds:
Fidelity Fund Registered Investment Company $ 12,557,907
Puritan Fund Registered Investment Company 21,187,981
Trend Fund Registered Investment Company 3,099,779
Ginnie Mae Portfolio Fund Registered Investment Company 7,921,102
Magellan Fund Registered Investment Company 231,905,983
Contra Fund Registered Investment Company 128,401,563
Equity Income Fund Registered Investment Company 20,053,490
Growth Company Fund Registered Investment Company 33,264,042
Growth & Income Portfolio Fund Registered Investment Company 36,723,603
Capital & Income Portfolio Fund Registered Investment Company 13,428,337
Value Fund Registered Investment Company 71,563,638
Mortgage Securities Portfolio Fund Registered Investment Company 4,269,145
Government Securities Fund Registered Investment Company 12,629,294
Independence Fund Registered Investment Company 9,019,567
Over-The-Counter Portfolio Fund Registered Investment Company 11,739,313
Overseas Fund Registered Investment Company 9,554,275
Europe Fund Registered Investment Company 11,876,155
Pacific Fund Registered Investment Company 7,627,845
Real Estate Investment Portfolio
Fund Registered Investment Company 31,769,543
Balanced Fund Registered Investment Company 35,239,636
International Growth & Income Fund Registered Investment Company 11,913,163
Capital Appreciation Fund Registered Investment Company 17,586,434
Conv. Securities Fund Registered Investment Company 11,031,730
Canada Fund Registered Investment Company 21,765,631
Utilities Fund Registered Investment Company 11,165,684
Blue Chip Fund Registered Investment Company 54,589,818
Asset Manager Fund Registered Investment Company 180,866,194
Disciplined Equity Fund Registered Investment Company 5,547,988
Low-Priced Fund Registered Investment Company 76,861,810
Worldwide Fund Registered Investment Company 6,560,820
Equity Income II Fund Registered Investment Company 37,845,789
Stock Selector Fund Registered Investment Company 6,798,734
Asset Manager Growth Fund Registered Investment Company 181,693,744
Emerging Markets Fund Registered Investment Company 11,423,728
Aggressive Growth Fund Registered Investment Company 24,994,743
Diversified International Fund Registered Investment Company 41,309,712
Asset Manager Income Fund Registered Investment Company 31,959,769
Diversified Growth Fund Registered Investment Company 35,358,082
New Markets Income Fund Registered Investment Company 21,064,426
Export & Multinational Fund Registered Investment Company 14,901,288
Global Balanced Fund Registered Investment Company 2,522,285
Aggressive International Fund Registered Investment Company 3,379,993
Small Capital Stock Fund Registered Investment Company 19,324,620
Mid-Capital Stock Fund Registered Investment Company 29,355,319
Large-Capital Stock Fund Registered Investment Company 3,514,341
Discovery Registered Investment Company 471,109
Europe Capital Appreciation
Stock Fund Registered Investment Company 2,977,245
Asset Mgr Aggressive Registered Investment Company 1,686,074
Latin America Fund Registered Investment Company 19,236,112
Japan Fund Registered Investment Company 10,043,067
Southeast Asia Fund Registered Investment Company 5,911,170
Strategic Income Registered Investment Company 9,500,724
Freedom Income Fund Registered Investment Company 749,117
Freedom 2000 Fund Registered Investment Company 704,080
Freedom 2010 Fund Registered Investment Company 7,075,369
Freedom 2020 Fund Registered Investment Company 7,842,227
Freedom 2030 Fund Registered Investment Company 4,236,923
Spartan Total Market Index Fund Registered Investment Company 9,910,521
Spartan Extended Market Index Fund Registered Investment Company 5,022,678
Spartan International Market
Index Fund Registered Investment Company 2,801,697
Fifty Fund Registered Investment Company 7,469,041
U.S. Bond Index Portfolio Fund Registered Investment Company 18,427,924
Institutional Short-Intermed.
Gov't. Portfolio Registered Investment Company 2,096,103
Inflation Pro Bond Registered Investment Company 4,980,283
FID Freedom 2040 Registered Investment Company 1,423,628
--------------
1,699,733,135
*Fidelity Institutional Funds
Institutional Money Market Fund Fidelity Institutional Fund 110,267,125
FMTC Short Duration Pool Fidelity Institutional Fund 4,178,741
FMTC Broad Market Duration Pool Fidelity Institutional Fund 9,216,326
FMTC Intermediate Duration Pool Fidelity Institutional Fund 7,027,616
--------------
130,689,808
*Fidelity Money Market Funds:
Retirement Money Market
Portfolio Fund Registered Investment Company 4,057,071
Retirement Gov't. Money Market
Portfolio Fund Registered Investment Company 19,923,359
--------------
23,980,430
*Fidelity U.S. Equity Index
Commingled Pool Fund Commingled Pool Fund 25,988,800
--------------
Total Fidelity Funds 1,880,392,173
*Unisys Common Stock Funds:
Unisys Common Stock Fund 284,105 units of Common Stock Fund $ 7,856,339 4,857,129
Unisys Stock Fund 15,950,068 units of Common Stock Fund 204,352,909 94,032,322
------------------------------
Total Unisys Common Stock Funds 98,889,451
*Unisys Interest Income Fund:
Fidelity STIF Cash Portfolio; 4.10% 2,372,889
JP Morgan Chase Manhattan Bank #430126; 4.54%; matures 9/12/06 96,865,607
Monumental Life Insurance Company #MDA00134TR; 4.53% 96,556,490
Rabobank Nederland #UNI-129901; 4.53% 96,557,200
UBS AG Act #3041; 4.53% 96,557,050
--------------
Total Unisys Interest Income Fund 388,909,236
*Participants' Loans Interest rates from 4.25% to 10.50% 14,517,953
Frozen Investment Contracts 2,681 2,681
--------------
Total $2,382,711,494
==============
* 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, 2006 By: /s/ Joseph M. Munnelly
--------------------------
Joseph M. Munnelly
Vice President and
Corporate Controller
12
EXHIBIT INDEX
Exhibit
Number Description
------- -----------
23 Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm