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					               3Q08 Financial Results
               October 30, 2008

                   Ed Coleman            Janet Haugen                Jack McHale
                 Chairman & CEO      Chief Financial Officer   Investor Relations Officer

                          Webcast available on

Jack McHale, Investor Relations Officer
Thanks, operator. Hello, everyone, and thank you for joining us this morning.
Earlier this morning Unisys released its third-quarter 2008 financial results. With us this
morning to discuss our results are Ed Coleman, our CEO, and Janet Haugen, our CFO.
Before we begin, I want to cover just a few housekeeping details.
First, today’s conference call and the Q&A session are being Webcast via the Unisys
Investor Web site.
Second, you can find on our Investor Website the earnings release and the associated
spreadsheets, as well as the presentation slides that we will be using this morning to guide
our discussion. These materials are available for viewing as well as downloading and
Third, today's presentation, which is complementary to the earnings press release, includes
some non-GAAP financial measures. Certain financial comparisons made in this call will
be with and without the impact of retirement expense and restructuring charges. In the
presentation we have provided a reconciliation of our reported results on a U.S. GAAP
basis compared with our results excluding the impact of restructuring charges and
retirement expense.
Finally, I'd like to remind you that all forward-looking statements made in 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 here’s Ed.

                     • Statements made by Unisys during today’s presentation that are not
                       historical facts, including those regarding future performance, are forward-
                       looking statements under the Private Securities Litigation Reform Act of
                       1995. These statements are based on current expectations and
                       assumptions and involve risks and uncertainties that could cause actual
                       results to differ from expectations. These risks and uncertainties are
                       discussed in the company’s reports filed with the SEC and in today’s
                       earnings release.

                     • These presentation materials can be accessed through a link on the
                       Unisys Investor Web site at Information in this
                       presentation is as of October 30, 2008 and Unisys undertakes no duty to
                       update this information.

                     • In this presentation, we will be presenting certain non-GAAP financial
                       measures of Unisys results. A reconciliation of these non-GAAP financial
                       measures to GAAP can be found in the back of this presentation.

Ed Coleman, Chief Executive Officer
Thank you, Jack.
Hello, everyone. I’m delighted to be here and to be speaking with you for the first time. I hope to meet many of you in
person in the months ahead. I thought I’d start this morning by taking a few moments to give you some background about
me and why I joined Unisys.
I’m extremely excited about taking on this role and the opportunity to lead this company. Unisys is one of the best known
and enduring brand names in IT. The company has tremendous assets to build on: our people, our global network, our
services and solutions, our technology and a 100-plus year history of innovation.
I come to this job with a great deal of optimism. Despite the ups and downs that Unisys has gone through in the past and
the current challenges facing the global economy, I see much unrealized value here. Working together, we can unleash
this potential and make Unisys a leader again in targeted areas where we can lead, grow, and command competitive
profit margins.
I have spent my entire 30-year career in the IT industry – first with IBM, then at Computer Sciences Corporation, and later
as CEO of CompuCom, president of the computing solutions business of Arrow Electronics, and most recently CEO at
Gateway. I love this industry. I have a passion for services and solutions, and for helping companies become market
leaders by targeting unmet needs in the market and delivering on those needs better than anyone else.
Most of all, I have a passion for leading IT companies through transformational change. By that, I mean change that
extends through every aspect of a company, from its strategy and business model … to its operations and go-to-market
approach … down to the person delivering a service or solution to a client.
As just one example of this kind of change, in a previous CEO role we transformed the company from a commodity
computer reseller with paper-thin margins … to a value-added provider of IT outsourcing services, recognized as a leader
by Gartner and highly regarded by other industry analysts and customers alike. It took some time for this change to
happen … and involved significant strategic, operational and cultural change, but it paid off.
In my experience, corporate change programs work when they are simply structured … clearly organized … consistently
communicated … and executed from top to bottom with straight forward lines of accountability. It’s not a complicated
formula. But as with anything, the hard part is in the execution, but when you get it right, the benefits can be tremendous
– for shareholders, clients, and employees.
I’ve only had a few weeks on the job here and certainly haven’t worked out the exact formula for Unisys, but this morning
I would like to share with you my initial impressions and priorities. Before I do this, our chief financial officer Janet Haugen
will review our third-quarter 2008 results.
                Slide 1
                3Q08 Overview
                • Difficult quarter for Unisys
                • Results impacted by economic uncertainties in key markets
                   – Primarily financial services … also softness in U.S. federal
                   – Reduced revenue volume impacted services margins

                • Key positives
                   – Growth in non-federal public sector business
                   – Strong sales of ClearPath driven by early deal closures
                   – Generated free cash flow

                • Expect market conditions to remain challenging in 4Q

Janet Haugen, Chief Financial Officer
Thanks, Ed. Hello, everyone.
To start, please turn to Slide 1 of the presentation for an overview of the quarter. This was
a difficult and disappointing quarter for the company. We did not execute well against our
priorities and our third-quarter demand was impacted by economic uncertainties in our key
commercial markets, particularly in financial services, and by a slowdown in our federal
business due to slower government spending.
Clients responded to tight credit conditions and recession concerns by reducing IT
spending. We saw the impact of that in both orders and revenue. Reduced revenue
volume against fixed costs led to lower-than-expected margins in our services business
and overall.
There were some positives in the quarter. We saw growth in our non-federal public sector
business, and we were able to close a number of key second-half ClearPath deals in the
third quarter. This resulted in growth in our ClearPath revenue and aided margins in our
technology business in the quarter. In addition, by tightly managing working capital, we
generated free cash flow in the quarter – a key focus for the company. We generated $114
million of operating cash flow and $36 million of free cash flow in the quarter. We expect
market conditions to remain challenging in the fourth quarter, and we will be reducing
expenditures as we work through this environment.
                Slide 2
                3Q08 Financial Results
                 $M                                    3Q08      3Q07      Y/Y Ch
                 Revenue                               $1,312    $1,393     -6%

                  Net Pre-Tax Cost Reduction Charges    $3.9     ($1.8)     $5.7

                  Retirement-Related Expense           ($3.7)    $22.8     ($26.5)

                 Operating Profit                      $37.9     $43.6     ($5.7)

                  Interest Expense                     $21.5     $18.5      $3.0

                  Other Income/(Expense)               ($6.1)    ($19.3)   $13.2

                 Pretax Income                         $10.3      $5.8      $4.5

                  Tax Expense                          $45.0     $36.8      $8.2

                 Net Loss                              ($34.7)   ($31.0)   ($3.7)

This morning I will provide more details on our third-quarter 2008 financial results, including
cash flow. To begin, please turn to Slide 2 for a summary of our third-quarter 2008 results.
At the top line, we reported revenue of $1.31 billion in the quarter, down 6% year over year.
Currency had a 2 percentage-point positive impact on our revenue in the quarter. Based
on today’s rates, which reflect recent currency movements, we anticipate a 7-8 percentage-
point negative impact on revenue in the fourth quarter.
Our results in the third quarter include $3.7 million of pretax retirement-related income
compared with $22.8 million of pretax retirement-related expense in the third quarter of
2007. We reported an operating profit of $37.9 million in the current quarter. This was
down from operating profit of $43.6 million in the year-ago quarter.
Interest expense increased by $3 million year-over-year primarily reflecting higher interest
rates on the $210 million of debt that we refinanced in December 2007. We reported $6.1
million of Other Expense in the quarter, compared with $19.3 million of Other Expense in
the year-ago quarter. Other Expense in the year-ago period included approximately $11
million to settle an escheat audit.
On a pre-tax basis, we reported income of $10.3 million in the quarter, up from pre-tax
income of $5.8 million a year ago. Tax expense was $45.0 million in the current quarter,
principally driven by income generated in international tax-paying jurisdictions. As a
reminder, our tax provision continues to be highly variable from quarter to quarter
depending on the geographic distribution of income.
At the bottom line after taxes, we reported a third-quarter 2008 net loss of $34.7 million, or
10 cents per share. By comparison, in the year-ago quarter, we reported a net loss of
$31.0 million, or 9 cents per share. As we’ve done in previous quarters, at the end of these
presentation slides, we have provided supplemental slides showing details on retirement-
related expense and our results on a pro forma basis excluding retirement-related expense.
               Slide 3
               Order & Revenue – Overview
                • Orders
                  – Double-digit decline in services orders
                  – Weakness across industries, geographies … slight order growth in
                    non-federal public sector

                • Revenue
                  – About half of revenue decline driven by declines in financial
                    services … federal also major contributor
                  – Revenue growth in global public sector, excluding federal

Slide 3 provides an overview of order and revenue trends in the quarter. Service orders
showed double-digit declines from year-ago levels. This order weakness was across our
industries and geographies, with the exception that we did see slight order growth in our
non-U.S. federal public sector business.
At September 30, 2008, we had $6.50 billion in services backlog, which was down 9% from
services backlog at June 30. On a constant currency basis, services backlog was down
3%. In terms of revenue, more than half of the year-over-year revenue decline was due to
declines in financial services. Revenue declines in federal was the other major contributor
to the revenue decline year-over-year. The only industry where we saw revenue growth in
the quarter was in worldwide public sector, excluding federal.
We also saw an impact on our strategic program revenue. As a reminder, our strategic
growth programs are outsourcing, enterprise security, open source, Microsoft solutions and
services, and real-time infrastructure. After growing in the 8-10% range over the past
couple years, overall strategic program revenue declined about 2% in the third quarter. We
saw continued growth in open source and RTI programs, but were impacted by declines in
outsourcing – which represents about two-thirds of the total strategic program revenue –
and in Microsoft and enterprise security. So we are clearly seeing an impact as financial
services firms and other organizations tighten IT spending in an uncertain economic
               Slide 4
               3Q08 Revenue by Geography

                              Customer Revenue: $1,312 Million

                         11%                                          3Q08          %
                                                                    Customer    Change
              Pacific Asia                                          Revenue     vs. 3Q07
                 12%                United States
                                        43%         United States      $560M          -8%

                                                    International      $752M          -4%
                        34%                         Overall           $1,312M         -6%

Please turn to Slide 4 for an overview of our third-quarter revenue by geography. Our U.S.
revenue declined 8% in the quarter, driven primarily by softness in financial services and
federal revenue. The U.S. represented 43% of our revenue in the quarter. International
revenue accounted for 57% of revenue in the quarter and declined 4%. On a constant
currency basis, international revenue declined 9% in the quarter. Internationally, we saw
growth in public sector revenue, which was more than offset by declines in financial
services and other commercial markets.
              Slide 5
              3Q08 Revenue by Business Segment

                            Customer Revenue: $1,312 Million

                                                             3Q08          %
                                                           Customer    Change
                                                           Revenue     vs. 3Q07

                                              Services       $1,152M         -5%
                   88%           Technology
                                    12%       Technology       $160M         -9%

                                              Overall        $1,312M         -6%

Slide 5 shows our third-quarter revenue by business segment. Services revenue declined
5% in the quarter and represented 88% of our third-quarter revenue. Technology revenue
declined 9% and represented 12% of our revenue in the quarter.
               Slide 6
               3Q08 Services Revenue

                               Customer Revenue: $1,152 Million

                          Core                                        3Q08            %
                          Maint.                                    Customer      Change
                           8%                                       Revenue       vs. 3Q07
                                                   Outsourcing           $515M         -2%
              Infrastructure       Systems Int./
              Services 16%          Consulting
                                                   SI/Consulting         $361M         -5%
                                                                         $182M        -13%

                          Outsourcing              Core
                                                                          $94M        -11%
                             45%                   Maintenance

                                                   Overall              $1,152M        -5%

For more detail on our services revenue, please turn to Slide 6. We saw volume declines
across our services businesses in the quarter, with the largest percentage declines in
infrastructure services and in core maintenance. The slight revenue decline in outsourcing
was driven by a decline in our BPO business, which as you know is focused primarily in the
financial services space. Our ITO business was essentially flat in the quarter. We expect
the weak demand environment to continue to impact our services revenue in the fourth
                Slide 7
                3Q08 Technology Revenue

                               Customer Revenue: $160 Million

                                                                   3Q08         %
                                                                 Customer   Change
                                                                 Revenue    vs. 3Q07
                                                                    $141M        +6%
                  Enterprise        Specialized
                   Servers         Technologies   Specialized
                     88%               12%                           $19M        -54%

                                                  Overall           $160M         -9%

Slide 7 provides more detail on our technology revenue in the quarter. The technology
revenue decline in the quarter primarily reflected the ending of the $18.8 million in quarterly
revenue from our licensing agreement with Nihon Unisys Limited, which ended March 31.
Excluding the NUL royalty revenue from the year-ago period, our technology customer
revenue grew about 2% in the quarter.
Enterprise server revenue grew 6% in the quarter. This was driven by growth in ClearPath
revenue as we were able to close a number of ClearPath deals in the third quarter.
However, we expect the secular decline in this business to continue, and against a very
tough compare in the fourth quarter of 2007 when we had unusually strong mainframe
sales, we expect ClearPath revenue to be down significantly in the fourth quarter.
Specialized equipment revenue declined 54% in the quarter, primarily reflecting the ending
of the NUL royalty revenue.
               Slide 8
               3Q08 Profit Margins – By Segment

                                                                                    GAAP                     Non-GAAP *

                                                                            3Q08                Y/Y bp       3Q08    Y/Y bp

                                                  Gross Margin            22.2%                     0        22.0%   -140
                                             Operating Margin              2.9%                   -20        2.9%    -170

                                                  Gross Margin            17.6%                   -10        17.4%   -160
                                             Operating Margin              3.1%                   -50        2.8%    -250

                                                  Gross Margin            47.5%                  +290        47.4%   +270
                                             Operating Margin             11.0%                  +700        10.8%   +590

                *Excludes retirement-related expenses and net cost reduction charges. See Schedules A & B.

Slide 8 shows a comparison of our margins in the quarter from the year-ago period. We
have shown our margins on a GAAP basis as well as on a non-GAAP basis excluding
retirement-related expense and cost-reduction charges. As you can see, non-GAAP gross
and operating margins were down for the company overall and for our services business.
The margin deterioration in services reflects lower revenue volumes. Additionally,
expansion of our offshore resources slowed in the third quarter. Given the weak demand
environment, particularly in financial services, we have revised our year-end goals for our
offshore resources. We now expect to have about 4,500 total offshore resources at year-
end 2008, versus our previously planned total of about 6,000 offshore resources.
In our technology segment, non-GAAP gross margins increased by nearly 300 basis points
year-over year, and our non-GAAP operating profit margin more than doubled from a year
ago. This margin improvement reflected the stronger ClearPath sales and revenue mix in
the quarter.
Given the tough demand picture, we are reducing expenses – especially controllable
operating expenses – as we work through the challenging current business environment.
                   Slide 9
                   Cash Flow Comparison

                    $M                                               3Q08           3Q07

                    Cash Flow From Operations                        $114             $7

                    Cash Restructuring Payments                        $6            $37

                    Capital Expenditures                              $78            $71

                    Free Cash Flow (Usage)                            $36           ($64)

                    Depreciation & Amortization                       $98            $87

                    Cash Balance                                     $494           $449

Now, please turn to Slide 9 for an overview of cash flow, which was a bright point in the quarter. We continue
to place a strong focus on enhancing cash flow. The company generated $114 million of cash from
operations and $36 million of free cash in the quarter. Cash on hand increased to $494 million.
Year-over-year, operating cash flow improved by $107 million … and free cash improved by $100 million year
over year. The improvement in cash flow was primarily driven by higher ClearPath sales, improved customer
collections, and lower restructuring payments. We used approximately $6 million of cash in the quarter for
restructuring payments compared with $37 million in the third quarter of 2007. Depreciation and amortization
was $98 million in the quarter.
Capital expenditures were $78 million for the third quarter compared with $71 million in the year-ago period.
The increase was due primarily to the build out of large outsourcing engagements awarded in 2007 and early
2008. We intend to tightly manage capital expenditures as we work through the tough economic environment
and business downturn.
Looking ahead, for full year 2008, we anticipate capital expenditures of around $280-300 million … and
depreciation and amortization in the $370 - $390 million range.
Finally, let me comment briefly on our pension plans relative to the current turmoil in the financial markets.
Our U.S. defined benefit pension plan was over 100% funded at the end of 2007, and even with the downturn
in the markets in 2008 through August of this year, we were not at a level that might require funding. As we all
know, the markets have taken a significant downturn over the last 60 days, and if the returns on our plans do
not improve significantly through the end of the year, we would most likely have pension expense in 2009 and
a funding requirement in 2010 for our U.S. defined benefit plan.
As we have mentioned in the past, projections of pension expense or pension income are very difficult until
very near the end of the year, since pension expense is highly dependent on the absolute level of plan assets
and the long-term discount rate, both for a GAAP basis are determined on December 31. Likewise, the
amount of any funding requirement in 2010 would be determined by the plan’s funding status on December
31, 2008. So the amount of possible pension expense or funding cannot be determined until the end of the
year. We will be able to give you a more definitive update on this on our January 2009 call.
 Slide 10
 Business Environment                                             Moving to Slide 10 … as we look to the fourth quarter, we expect
 • Expect current weak environment to continue in 4Q              the current weak economic environment to continue. Given this,
 • Taking actions to reduce operating expenses, especially SG&A
                                                                  we are taking actions to reduce operating expenses in the fourth
                                                                  quarter– particularly SG&A. Some of these actions have already
 • Focused on driving cost-efficiencies and free cash flow
                                                                  begun, and others will follow through the course of the quarter and
                                                                  continue into the next year.
                                                                  Based on the current business environment, we are no longer
                                                                  targeting an 8-10% operating profit margin for the second half of
                                                                  2008. Our focus will be on driving cost-efficiencies throughout the
                                                                  organization and generating free cash flow. We are moving
                                                                  quickly to do this … and I know Ed will provide some more color on
                                                                  our priorities for the organization.
                                                                  That concludes my comments this morning. Now I'd like to turn
                                                                  the call back over to Ed.
Ed Coleman, Chief Executive Officer
Thanks, Janet.
As these results indicate, we have a lot of work to do. While Unisys has many strengths to build on, the company clearly
is not meeting its potential and needs greater focus in how we apply our resources. To turn this picture around, we need
to move quickly, with a sense of urgency, but also in an informed way, with purpose and a clear plan.
As you know, this year the company has been reviewing options to drive shareholder value. That process continues.
Building on the work and analysis that’s already been done; I am taking a fresh look at all aspects of the company’s
strategy, operations, portfolio, and go-to-market approach.
Since joining Unisys I’ve talked with hundreds of employees, and clients and business partners. I plan to talk with many
more in the weeks ahead. In my conversations, over breakfast and lunch and in town hall meetings, I am asking people
for their ideas on what Unisys strengths are … what we do better than anyone else in the world … and what might be
keeping us from doing that work in a way that meets client needs and generates growing profits.
I’m still in the process of gathering information, but I want you to be aware of the principles that I think are key.
The first is that successful companies build on their strengths. Especially in a turnaround situation, it’s critical that we
build our foundation on what we’re good at, because those are the areas that clients value and where we can capture
reputation, mind share, and margin.
The second principle is successful companies build on exceptional customer service. It is my strong belief that the only
true and lasting differentiator in an IT services and solutions business is the quality of service as perceived by the
customer. If we’re not satisfying the needs of our customers in a way that drives long-term client loyalty, no company or
turnaround will be successful in the long run.
The third principle is that while success is measured from the outside with clients, turnarounds build from the inside out,
starting with employees. We must have highly skilled, focused, and motivated employees for this turnaround to work.
That’s why I’ve been spending so much time over the past three weeks talking with employees to get a direct, unfiltered
perspective on their views and concerns.
Finally, I am a big believer in organizational simplicity. A complex organization is a confused – and an expensive –
organization. Especially in this industry, successful companies have clear lines of accountability, are aligned around
common goals and tactics, and are efficient and streamlined from a cost perspective.
What are my early observations after three weeks on the job here at Unisys? I’m very impressed with the quality of the
people here – their skills, their capabilities and ideas, their commitment to clients. The company has some real strengths
to build on – such as our expertise in security, our federal government practice, our services and solutions for outsourcing
and real-time infrastructure, our understanding of high-end, mission-critical servers, and our capability to tackle and solve
large-scale, complex systems integration projects. These strengths are hard to come by in this industry. Along with our
people and our long-standing client relationships, they offer a strong foundation to build on.
At the same time, I can see that we are too diffused. Our people are working very hard and diligently, but our resources
and energies are spread across too many countries, offerings, initiatives and organizations. We need to have a clear
focus on the markets we want to serve. Our organization is too matrixed and complicated. And that leads to an expense
structure that’s too high. We need to simplify and significantly reduce costs and expenses and get ourselves into lean
fighting shape for the market.
As I mentioned earlier, given that I’ve only been on the job for 24 days, I haven’t yet determined the exact formula for
Unisys. But I do know that in an industry as vast, fragmented, and growing as this one, there is simply no reason why a
company with our people, assets and capabilities – a company with a nearly $5 billion services business and a sizeable
technology business serving some of the finest clients in the world – there’s no reason why we cannot be consistently
growing and profitable.
                     Slide 11
                     Unisys Near-Term Priorities

                      • Four levels of activity:
                          • Concentrate resources on fewer markets/offerings
                          • Create clear, differentiated value proposition
                          • Ensure highly utilized, cost-competitive labor pool
                          • Simplify organization and significantly reduce expenses
                      • Will be working on all levels … immediate focus: reducing
                        expense structure … plan to be aggressive
                      • Goal: create growing, profitable, financially consistent and
                        predictable company

To get there, we will be working on activities at four levels. I’ve highlighted these in Slide 11 of the presentation.
First, to drive the top line, we must concentrate our resources on fewer markets with a more focused set of offerings.
This will allow us to gain the critical mass we need to deliver the superior service and solutions that will stand out to
clients and keep them coming back to Unisys.
Second, in these chosen markets, we must ensure that we have a clear, differentiated value proposition that clients
recognize and value, delivered with a level of service quality that is recognized as best in the industry. I’m convinced that
with the kind of service and technological capabilities that are in this company’s DNA, we can achieve this market
differentiation if we pick our spots carefully and execute with precision.
Third, we must have a highly skilled, highly utilized, and cost-competitive labor force to deliver on our set of focused
offerings. Offshoring is certainly a part of this equation, but we must also be looking at the overall leverage we have in
our delivery model, including both offshore and onshore.
Finally, to be more competitive, we must simplify our organization and improve our expense structure. Every dollar of
expense matters in this industry and must be spent for the clear business purpose of driving revenue, margin and
customer satisfaction. Going forward, we will be managing our business to be lean. Having spent a number of years in
the PC industry and in distribution, I understand the critical importance of cost, expense and working capital
management. Given the environment that we’re facing right now, we will be placing a great deal of our immediate focus in
this last area of simplification and expense reduction We plan to be aggressive in this area and have already begun to
take actions.
So, sitting here today, I see four important ingredients to our success at Unisys: narrow our focus and concentrate our
resources; deliver a differentiated value proposition for our offerings; improve management of our labor model (both on
shore and offshore); and fourth, simplify our organization and reduce SG&A. We will be working all of these in the
coming weeks and months, with an aggressive immediate focus on reducing our expense structure.
This is about execution. I am optimistic that there are a number of things we can do to impact the financial performance
of the company in the short term as well as over the long term. It will not be easy, especially in the midst of an economic
downturn. But we have strong, tangible assets to take us through: a loyal, long-standing client base … a $2 billion stable,
annuity-based outsourcing business … a very solid legacy of data center leadership including hardware, software and
services … large scale system integration strengths…a committed and talented workforce … and we generated positive
free cash flow and have nearly $500 million in cash on hand.
Our goal is to create a financially consistent and predictable company that is growing, delivering outstanding services and
solutions to our clients, generating competitive profit margins, throwing off free cash flow, and delivering value to all of our
Once again, it is a pleasure to be speaking with you this morning. Thanks again for your time.
Questions & Answers

  Ed Coleman         Janet Haugen
Chairman & CEO   Chief Financial Officer
Reconciliation of
GAAP to Non-GAAP Financial Information

The following Schedules A and B present financial information with and without net
cost-reduction charges and retirement-related expense. Retirement-related expense is
defined as our defined benefit pension plan expense and our U.S. 401(k) Plan
expense. The company provides this information as a supplement to financial
information presented on a GAAP basis because the company believes it provides
investors with a meaningful comparison to operations in prior-year periods. Non-GAAP
information may have limitations as an analytical tool, and it should not be considered
in isolation or as a substitute for analysis of the company’s results as reported under
GAAP. The company is providing financial information without the restructuring
charges associated with its strategic repositioning program as supplemental
information to the financial information presented on a GAAP basis because the
company believes it provides investors with a meaningful comparison to operations in
prior-year periods. Non-GAAP information may have limitations as an analytical tool,
and it should not be considered in isolation or as a substitute for analysis of the
company’s results as reported under GAAP.
Schedule A
3Q08 vs. 3Q07 Gross Profit & Margins:
GAAP to Non-GAAP Reconciliation
$M                                                                             3Q08                              3Q07
Gross Profit – GAAP                                                    $292.0           22.2%            $309.1           22.2%

Retirement-related Expense (Income) (1)                                 ($3.3)          (0.2%)           $16.8            1.2%

Net Cost Reduction                                                      ($0.2)            0%              $0.3             0%
Gross Profit – Non-GAAP                                                $288.5           22.0%            $326.2           23.4%
Gross Profit – GAAP                                                    $204.0           17.6%            $216.1           17.7%
Retirement-Related Expense (Income)                                     ($3.0)          (0.2%)           $16.5            1.3%
Gross Profit – Non-GAAP                                                $201.0           17.4%            $232.6           19.0%
Gross Profit – GAAP                                                    $106.4           47.5%            $104.0           44.6%
Retirement-Related Expense (Income)                                     ($0.3)          (0.1%)            $0.3            0.1%
Gross Profit – Non-GAAP                                                $106.1           47.4%            $104.3           44.7%
(1) Retirement-related expense is defined as our defined benefit pension plan expense and our U.S. 401(k) Plan expense.
See retirement-related expense detail on Schedule E.
Schedule B
3Q08 vs. 3Q07 Operating Profit & Margins:
GAAP to Non-GAAP Reconciliation
$M                                                                             3Q08                              3Q07
Operating Profit – GAAP                                                $37.9            2.9%             $43.6            3.1%
Retirement-related Expense (Income)                    (1)             ($3.7)          (0.2%)            $22.8            1.6%
Net Cost Reduction                                                      $3.9            0.2%            ($1.8)            (0.1%)
Operating Profit – Non-GAAP                                            $38.1            2.9%             $64.6            4.6%
Operating Profit – GAAP                                                $35.5            3.1%             $43.6            3.6%
Retirement-Related Expense (Income)                                    ($3.1)          (0.3%)            $20.7            1.7%
Operating Profit – Non-GAAP                                            $32.4            2.8%             $64.3            5.3%
Operating Profit – GAAP                                                $24.7           11.0%             $9.4             4.0%
Retirement-Related Expense (Income)                                    ($0.6)          (0.2%)            $2.1             0.9%
Operating Profit – Non-GAAP                                            $24.1           10.8%             $11.5            4.9%
(1) Retirement-related expense is defined as our defined benefit pension plan expense and our U.S. 401(k) Plan expense.
See retirement-related expense detail on Schedule E.
Schedule C
P&L Detail: Net Cost-Reduction Expense (Income)

$M                               3Q08             3Q07

Cost of Revenue                  ($0.2)           $0.3

SG&A                              $3.8            ($1.8)

R&D                               $0.3            ($0.3)

Total                             $3.9            ($1.8)
Schedule D
Retirement-Related Expense (Income) Detail

$M                   1Q07    2Q07    3Q07    4Q07    FY07    1Q08      2Q08     3Q08

                     $10.6   $11.4   $11.4   $1.6    $35.0   ($11.5)   ($8.8)   ($15.0)

U.S. 401(k) Match    $12.9   $13.1   $11.4   $10.0   $47.4   $12.1     $14.6    $11.3

Total Pre-Tax
Retirement-Related   $23.5   $24.5   $22.8   $11.6   $82.4    $0.6     $5.8     ($3.7)
Expense (Income)
Schedule E
P&L Detail: Retirement-Related Expense (Income)

$M                                3Q08            3Q07

Cost of Revenue                   ($3.3)          $16.8

SG&A                              $0.3            $5.1

R&D                               ($0.7)          $0.9

Total                             ($3.7)          $22.8
Schedule F
Segment Detail: Retirement-Related Expense (Income)

$M           1Q07    2Q07    3Q07    4Q07    FY07    1Q08     2Q08   3Q08

Services     $21.1   $22.1   $20.7   $10.3   $74.2   $1.2     $5.6   ($3.1)

Technology   $2.4    $2.4    $2.1    $1.3    $8.2    ($0.6)   $0.2   ($0.6)

Total        $23.5   $24.5   $22.8   $11.6   $82.4   $0.6     $5.8   ($3.7)