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What changed in UNISYS CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of UNISYS CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+351 added−328 removedSource: 10-K (2025-02-21) vs 10-K (2024-02-26)

Top changes in UNISYS CORP's 2024 10-K

351 paragraphs added · 328 removed · 246 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

66 edited+52 added−44 removed14 unchanged
Biggest changeA key application of AI is automation, with organizations deploying AI to streamline or eliminate repetitive tasks, enhance productivity and reduce operational costs. Customer and employee experience is being transformed through generative AI-powered chatbots and virtual assistants, providing personalized and responsive interactions. Research and development costs and development timelines are being reduced through code generation technologies leveraging large language models.
Biggest changeCustomer and employee experience is being transformed through generative AI agents and chatbots, providing personalized and responsive interactions. Research and development costs and development timelines are being reduced through code generation technologies leveraging Large Language Models (LLMs). In marketing, for example, AI and generative AI enable targeted campaigns, personalized recommendations and customer segmentation, leading to more effective and data-driven strategies.
Thomson worked for Towers Perrin as Director of Financial Systems from 2001 to 2004 and then Assistant Controller from 2004 to 2007. Prior to joining Towers Perrin, Mr. Thomson was with RCN Corporation, where he served as Director of Financial Reporting & Financial Systems from 1997 to 2001. Mr. Thomson has been an executive officer since 2015. Ms.
Thomson worked for Towers Perrin as Director of Financial Systems from 2001 to 2004 and then Assistant Controller from 2004 to 2007. Prior to joining Towers Perrin, Mr. Thomson was with RCN Corporation, where he served as Director of Financial Reporting & Financial Systems from 1997 to 2001. Mr. Thomson has been an executive officer since 2015.
Brown served in various accounting roles of increasing responsibility at DuPont de Nemours, Inc., a multinational chemical company, from 2011 to September 2021, most recently as Assistant Corporate Controller. He also held various positions at Ernst & Young, LLP from 2000 to 2011. Mr. Brown has been an executive officer since August 2023. 13
Brown served in various accounting roles of increasing responsibility at DuPont de Nemours, Inc., a multinational chemical company, from 2011 to September 2021, most recently as Assistant Corporate Controller. He also held various positions at Ernst & Young, LLP from 2000 to 2011. Mr. Brown has been an executive officer since August 2023. 14
McCann was at Dun & Bradstreet, Inc., a global provider of business decisioning data and analytics, from 2009 until April 2022, where she held roles of increasing responsibility, including as Treasury Director, Assistant Treasurer, and most recently as Treasurer and Senior Vice President, Investor Relations and Corporate Financial Planning and Analysis. Prior to Dun & Bradstreet, Ms.
McCann was at Dun & Bradstreet, Inc., a global provider of business decisioning data and analytics, from 2009 until April 2022, where she held roles of increasing responsibility, including as Treasury Director, Assistant Treasurer, and Treasurer and Senior Vice President, Investor Relations and Corporate Financial Planning and Analysis. Prior to Dun & Bradstreet, Ms.
Go-to-Market We market our products and solutions primarily through a direct sales force and a central marketing department focused on increasing awareness and visibility for our portfolio of solutions and services within the industry, including managing our relationships with industry analysts and consultants who can influence client decisions.
Go-to-Market We market our solutions and products primarily through a direct sales force and a central marketing department focused on increasing awareness and visibility for our portfolio of solutions and services, including managing our relationships with industry analysts and consultants who can influence client decisions.
However, certain of our enterprise computing and business process solutions have a more concentrated client base, particularly in the areas of travel and transportation, financial services and healthcare. In 2023, no single client accounted for more than 10% of our revenue.
However, certain of our enterprise computing and business process solutions have a more concentrated client base, particularly in the areas of travel and transportation, financial services and healthcare. In 2024, no single client accounted for more than 10% of our revenue.
We also make available on our website our Restated Certificate of Incorporation, Amended and Restated Bylaws, Guidelines on Significant Corporate Governance Issues, the charters of the Audit and Finance Committee, Compensation and Human Resources Committee, Nominating and Corporate Governance Committee and Security and Risk Committee of our board of directors, and our Code of Ethics and Business Conduct.
We also make available on our website our Restated Certificate of Incorporation, Amended and Restated Bylaws, Guidelines on Significant Corporate Governance Issues, the charters of the Audit and Finance Committee, Compensation and Human Resources Committee, Nominating and Corporate Governance Committee and Security and Risk Committee of our Board of Directors, the Insider Trading Policy and our Code of Ethics and Business Conduct.
We also advise clients on their AI strategies for investing, rationalizing, and measuring AI investments and infuse analytics and AI into many of our CA&I solutions, with a focus on delivering business outcomes. • Cybersecurity. We provide advisory, implementation, and management services to streamline security environments and meet rapidly evolving security challenges.
We also advise clients on their AI strategies for investing, rationalizing, and measuring AI investments and infuse analytics and AI into many of our CA&I solutions, with a focus on delivering business outcomes. • Cybersecurity. We provide transformation, implementation and managed services to streamline security environments and meet rapidly evolving security challenges.
This information is also available in print to stockholders upon request. We do not intend for information on our website to be part of this Annual Report on Form 10-K. 11 INFORMATION ABOUT OUR EXECUTIVE OFFICERS Information concerning the executive officers of Unisys as of February 15, 2024, is set forth below.
This information is also available in print to stockholders upon request. We do not intend for information on our website to be part of this Annual Report on Form 10-K. 12 INFORMATION ABOUT OUR EXECUTIVE OFFICERS Information concerning the executive officers of Unisys as of February 15, 2025, is set forth below.
He also served as Treasurer for Evraz North America, Inc., a manufacturer of engineered steel products for rail, energy and industrial end markets, from 2011 to 2012 and held the roles of Senior Vice President and Corporate Treasurer from 2007 to 2011, Vice President and Assistant Treasurer from 2005 to 2007 and Managing Director, Capital Markets, Pensions, Foreign Exchange from 2004 to 2005 at Sara Lee Corporation.
He also served as Treasurer for Evraz North America, Inc., a manufacturer of engineered steel products for rail, energy and industrial end markets, from 2011 to 2012, and held the roles of Senior Vice President and Corporate Treasurer from 2007 to 2011, Vice President and Assistant Treasurer from 2005 to 2007 and Managing Director, Capital Markets, Pensions, Foreign Exchange from 2004 to 2005 at Sara Lee Corporation, an American consumer goods company.
Name Age Officer Since Position with Unisys Peter A. Altabef 64 2015 Chair and Chief Executive Officer Michael M.
Name Age Officer Since Position with Unisys Peter A. Altabef 65 2015 Chair and Chief Executive Officer Michael M.
We believe our breadth of solutions, industry expertise, expanding partner ecosystem and agile delivery model position us to fill skills gaps and simplify digital transformation at scale for mid-market clients whom our larger market competitors may underserve. • Land and Expand .
We believe our breadth of solutions, industry expertise, expanding partner ecosystem and agile delivery model position us to fill skills gaps and simplify digital transformation at scale for mid-size clients for whom our larger market competitors may underserve. • Solution Development .
To support collaboration and cross-selling across our global client teams, our commission structure is based on a combination of individual targets aligned with our business objectives such as growing revenue with existing clients and prospects, expanding our Next-Gen Solutions and generating in-year revenue, among others.
To support collaboration and cross-selling across our global client teams, our commission structure is based on a combination of individual targets aligned with our business objectives such as growing revenue with existing clients and prospects, improving delivery efficiency and generating in-year revenue, among others.
For more information on the risks associated with purchasing components and supplies, see “Risk Factors” (Part I, Item 1A of this Form 10-K). Patents, Trademarks and Licenses As of January 31, 2024, Unisys owns over 420 active U.S. patents and over 35 active patents granted in eight non-U.S. jurisdictions.
For more information on the risks associated with purchasing components and supplies, see “Risk Factors” (Part I, Item 1A of this Form 10-K). 10 Patents, Trademarks and Licenses As of January 31, 2025, Unisys owns over 380 active U.S. patents and over 29 active patents granted in seven non-U.S. jurisdictions.
Prior to joining Unisys, she served as Vice President, Deputy General Counsel, Chief Compliance Officer and Corporate Secretary at ITT Inc., a manufacturer of highly engineered critical components and customized technology for the transportation, industrial and energy markets, from July 2021 to July 2023. Prior to that, Ms.
Prohl has been Senior Vice President, General Counsel, Secretary and Chief Administration Officer since August 2023. Prior to joining Unisys, she served as Vice President, Deputy General Counsel, Chief Compliance Officer and Corporate Secretary at ITT Inc., a manufacturer of highly engineered critical components and customized technology for the transportation, industrial and energy markets, from July 2021 to July 2023.
Our business is not materially dependent upon any single patent, patent license or related group thereof. Unisys also maintains 25 U.S. trademark and service mark registrations, and over 285 additional trademark and service mark registrations in fifty-four non-U.S. jurisdictions as of January 31, 2024.
Our business is not materially dependent upon any single patent, patent license or related group thereof. Unisys also maintains 15 U.S. trademark and service mark registrations, and over 250 additional trademark and service mark registrations in 42 non-U.S. jurisdictions as of January 31, 2025.
We also develop cloud-native, tailored applications and implement enterprise software and applications of our technology partners. • Data and AI . We provide services and data engineering capabilities to migrate and modernize data and efficiently manage, govern and analyze it for improved insight and performance.
We also develop cloud-native, tailored applications and implement enterprise software and applications of our technology partners. • Data Services . We provide services and data engineering capabilities to transform and modernize data at scale. Our data services efficiently integrate, manage, govern and analyze enterprise data and data models for improved insight and performance.
He previously served as Senior Advisor to 2M Companies, Inc. in 2012, and served as a director of Belo Corporation from 2011 through 2013. Mr. Altabef has been an executive officer since 2015. Mr. Thomson has been President and Chief Operating Officer since May 2022. Prior to this role, Mr.
He previously served as Senior Advisor to 2M Companies, Inc. in 2012, and served as a director of Belo Corporation from 2011 through 2013. Mr. Altabef has been an executive officer since 2015. Mr.
Approximately $1.3 billion (44%) of 2023 backlog is expected to be converted to revenue in 2024. Although we believe that this backlog will be executed, the orders may be canceled, in some cases with or without penalty.
Backlog At December 31, 2024, backlog was $2.8 billion, compared to $3.0 billion at December 31, 2023. Approximately $1.2 billion (42%) of 2024 backlog is expected to be converted to revenue in 2025. Although we believe that this backlog will be executed, the orders may be canceled, in some cases with or without penalty.
In addition to technical proficiency, our clients look to us for industry-specific expertise to help maximize the impact of their technology investments. We believe our portfolio of solutions is aligned with the markets we serve and the secular trends shaping market demand.
Organizations across the globe are harnessing technology to reimagine their business models and create competitive advantages. In addition to technical proficiency, our clients look to us for industry-specific expertise to help maximize the impact of their technology investments. We believe our portfolio of solutions is aligned with the secular trends shaping demand in the areas of the market we serve.
Mr. Gupta also previously held treasury roles at Delphi Corporation and General Motors Corporation. Mr. Gupta has been an executive officer since 2017. Mr. Brown has been Vice President, Chief Accounting Officer and Corporate Controller since August 2023.
Mr. Gupta also previously held treasury roles at Delphi Corporation, a global supplier of automotive parts and electronics, and General Motors Corporation, an American multinational automotive manufacturing company. Mr. Gupta has been an executive officer since 2017. Mr. Brown has been Vice President, Chief Accounting Officer and Corporate Controller since August 2023.
Thomson 55 2015 President and Chief Operating Officer Debra McCann 51 2022 Executive Vice President and Chief Financial Officer Dwayne Allen 62 2021 Senior Vice President and Chief Technology Officer Katie Ebrahimi 54 2018 Senior Vice President and Chief Human Resources Officer Teresa Poggenpohl 62 2021 Senior Vice President and Chief Marketing Officer Kristen Prohl 50 2023 Senior Vice President, General Counsel, Secretary and Chief Administration Officer Shalabh Gupta 62 2017 Vice President, Tax and Treasurer David Brown 45 2023 Vice President, Chief Accounting Officer and Corporate Controller There is no family relationship among any of the above-named executive officers.
Thomson 56 2015 President and Chief Operating Officer Debra McCann 52 2022 Executive Vice President and Chief Financial Officer Ruchi Kulhari 43 2024 Senior Vice President and Chief Human Resources Officer Teresa Poggenpohl 63 2021 Senior Vice President and Chief Marketing Officer Kristen Prohl 51 2023 Senior Vice President, General Counsel, Secretary and Chief Administration Officer Shalabh Gupta 63 2017 Vice President, Tax and Treasurer David Brown 46 2023 Vice President, Chief Accounting Officer and Corporate Controller There is no family relationship among any of the above-named executive officers.
Prohl was a corporate associate at Proskauer Rose LLC. Ms. Prohl has been an executive officer since August 2023. Mr. Gupta has been Vice President, Tax and Treasurer since 2017. Prior to Unisys, Mr. Gupta served as Vice President and Corporate Treasurer for Avon Products, an American-British multinational cosmetics, skin care, perfume and personal care company from 2012 until 2016.
Gupta has been Vice President, Tax and Treasurer since 2017. Prior to Unisys, Mr. Gupta served as Vice President and Corporate Treasurer for Avon Products, an American-British multinational cosmetics, skin care, perfume and personal care company from 2012 until 2016.
These solutions often involve a high level of customization, automation, and in many cases, technology and knowledge that is proprietary to Unisys. Many of our business process solutions clients seek to meet requirements for 24x7 operations or to increase business flexibility and operational efficiency through process automation, especially for high-volume or labor and time-intensive workflows.
Many of our business process solutions clients seek to meet requirements for 24x7 operations or to increase business flexibility and operational efficiency through process automation, especially for high-volume or labor and time-intensive workflows.
Prior to joining Unisys, she ran a consulting firm, Poggenpohl Consulting, which she founded in January 2020. Ms. Poggenpohl served as the Chief Marketing and Communications Officer for North America at Accenture, a global professional services company, from 2016 to September 2019. Prior to this role, Ms. Poggenpohl held senior leadership positions within Accenture for more than twenty years. Ms.
Poggenpohl served as the Chief Marketing and Communications Officer for North America at Accenture, a global professional services company, from 2016 to 2019. Prior to this role, Ms. Poggenpohl held senior leadership positions within Accenture for more than twenty years. Ms. Poggenpohl has been an executive officer since May 2021. Ms.
We provide services to manage and modernize infrastructure, applications and mission-critical systems that run on or integrate with our proprietary ClearPath Forward operating system or sit within the broader technology stacks of our ECS client base.
We provide services to manage and modernize infrastructure, and mission-critical systems that run on or integrate with our proprietary ClearPath Forward operating system or sit within the broader technology stacks of our ECS client base. • Next-Generation Computing. We help clients explore and diversify computing capabilities in areas including high-performance computing to optimize workload execution in diverse environments.
We believe that our investment in enhancing and expanding our Next-Gen Solutions portfolio, coupled with investment in our go-to-market capabilities, will favor our competitive position. F or more information on the competitive risks we face, see “Risk Factors” (Part I, Item 1A of this Form 10-K). Materials Unisys purchases components and supplies from a number of suppliers around the world.
F or more information on the competitive risks we face, see “Risk Factors” (Part I, Item 1A of this Form 10-K). Materials Unisys purchases components and supplies from a number of suppliers around the world.
Government and Enterprise Digitization Citizens and businesses are beginning to expect a digital experience when engaging government services such as voter registration, tax filing and application processes for licenses, permits, visas or passports.
Government and Enterprise Digitization Citizens increasingly expect a digital experience when engaging government services such as voter registration, tax filing and application processes for licenses, permits, visas or passports. Governments and law enforcement agencies are also seeking to automate processes, leverage data to make better decisions and improve transparency and data sharing.
Altabef is a member of the boards of directors of NiSource Inc. and Petrus Trust Company, L.T.A., and the advisory board of Merit Energy Company, LLC.
Altabef is a member of the boards of directors of NiSource Inc. and Petrus Trust Company, L.T.A., and the advisory board of Merit Energy Company, LLC. He is also a member of the President’s National Security Telecommunications Advisory Committee (NSTAC) and a trustee of the Committee for Economic Development (CED) of The Conference Board.
Other Solutions We also provide clients with a wide range of micro-market and business process solutions. Through local market teams, we enable mission critical functions spanning digital mortgage processing for financial services clients, integrated portfolio and investment management for clients with large capital investments, and data aggregation and presentation solutions for public and local law enforcement agencies, among other solutions.
These solutions are typically delivered through local market teams and span mission critical functions such as digital mortgage processing for financial services clients, integrated portfolio and investment management for clients with large capital investments, and data aggregation and presentation solutions for public and local law enforcement agencies.
Our direct global sales force consists of sales executives focused on attracting new clients and client executives responsible for account retention, services growth and client satisfaction. Our sales teams work and collaborate closely with industry solution specialists, solution architects and technologists with domain expertise from each segment.
Our direct global sales force consists of sales executives focused on attracting new clients and client executives responsible for account retention, services growth and client satisfaction.
Our Strategy Our primary objective is to increase the value we create for our clients to support our financial objectives of improving our revenue growth, profitability and free cash flow.
Our Strategy Our primary objective is to increase the value we create for our clients to support our financial objectives of improving our revenue growth, profitability and free cash flow. In that spirit, we evolve our solutions and services to enable our clients to continue making breakthroughs, optimizing their processes and furthering our mission to grow through our clients’ successes.
Our solutions accelerate multi-cloud adoption and help our clients leverage the flexibility and efficiency of the cloud to deliver business growth. Our in-house developers also design and build customized enterprise applications that address our clients’ needs with long-term support to manage and evolve applications over time. Our CA&I offerings often incorporate cybersecurity services and solutions to enable secure environments.
We protect compute and operating environments via our cybersecurity solutions and services. Our in-house developers also design and build customized enterprise applications that address our clients’ needs with long-term support to manage and evolve applications over time. Our CA&I solutions include: • Cloud Services.
Our organizational structure aligns with our clients’ evolving needs, reflected in three reportable segments: • Digital Workplace Solutions • Cloud, Applications & Infrastructure Solutions • Enterprise Computing Solutions Digital Workplace Solutions (DWS) We help clients shape the future of their workplace – in-office, remote, or hybrid – to help employees be more efficient and productive, which improves retention, collaboration and company performance.
Our organizational structure aligns with our clients’ evolving needs, reflected in three reportable segments: • Digital Workplace Solutions • Cloud, Applications & Infrastructure Solutions • Enterprise Computing Solutions Digital Workplace Solutions (DWS) We help clients empower their workforce, while providing end-to-end IT support resulting in improved retention, collaboration and performance.
Changes in timing or terms of renewals from client to client can lead to fluctuations in software license revenue from period to period since accounting rules require that software license revenue be recognized when the license term begins. 10 Backlog At December 31, 2023, firm order backlog was $3.0 billion, compared to $2.9 billion at December 31, 2022.
Seasonality generally has not resulted in material quarterly revenue changes. Changes in timing or terms of renewals from client to client can lead to fluctuations in software license revenue from period to period since accounting rules require that software license revenue be recognized when the license term begins.
McCann has been Executive Vice President and Chief Financial Officer since May 2022. Prior to joining Unisys, Ms.
Effective April 1, 2025, Mr. Thomson will serve as Chief Executive Officer and President and a member of the Board of Directors. Ms. McCann has been Executive Vice President and Chief Financial Officer since May 2022. Prior to joining Unisys, Ms.
Our Solutions We provide our global clients with advice and essential capabilities to architect, develop, modernize, implement and integrate the technologies that power their organizations. Our solutions may be delivered on a standalone basis or through integrated offerings that may incorporate proprietary Unisys products, a Unisys-managed service offering, and/or offerings of our trusted partners.
Our Solutions We provide our global clients with advice and essential capabilities to architect, develop, modernize, implement and integrate the technologies that power their organizations.
Through a combination of digital experience monitoring software, automation services, AI and machine learning technologies, experience-level agreements and XMO, XaaS proactively identifies employee experience issues and delivers actionable insights for improvement. In addition to implementing automated workflows to prevent issues from recurring, XaaS can also predict and resolve issues before they occur. • Modern Device Management.
In addition to implementing automated workflows to prevent issues from recurring, XaaS can also predict and resolve issues before they occur to deliver a consistent employee experience. • Modern Device Management.
Our solutions in areas such as traditional service desk, device management and field services help clients elevate employee experience and productivity while reducing the cost of support. Cloud, Applications & Infrastructure Solutions (CA&I) We accelerate digital transformation in the critical areas of cloud migration and management, as well as application and infrastructure transformation and modernization.
Cloud, Applications & Infrastructure Solutions (CA&I) We accelerate digital transformation in the critical areas of cloud migration and management, as well as application and infrastructure transformation and modernization. Our solutions accelerate multi-cloud adoption and help our clients leverage the flexibility and efficiency of the cloud to deliver business growth.
Our Market The markets in which we operate are broad and rapidly evolving, encompassing a wide range of technologies, services and solutions aimed at helping organizations leverage technology to improve their operations and achieve their business objectives. Organizations across the globe are harnessing technology to reimagine their business models and create competitive advantages.
We have a long track record of helping clients navigate technological change and architecting innovative solutions that simplify and accelerate digital transformation. Our Market The market in which we operate is broad and rapidly evolving, encompassing a wide range of technologies, services and solutions aimed at helping organizations improve their operations and achieve their business objectives.
In contrast, our Traditional Workplace solutions typically seek to deliver cost efficiencies for our clients. Our Modern Workplace offerings include: • Communication and Collaboration. We support communication with solutions for designing, deploying, managing and governing complex client ecosystems of unified communications and collaboration (UCC) applications, meeting rooms and third-party productivity tools. • Intelligent Workplace Services.
We support communication with solutions and managed services for designing, deploying, managing and governing complex client ecosystems of unified communications and collaboration applications, productivity applications, meeting rooms and third-party productivity tools. We integrate advanced technologies to deliver engaging and collaborative experiences that simplify workflows and enhance user satisfaction.
McCann held leadership roles at Cegedim, a technology and services company, and AT&T, Inc., an American multinational telecommunications and technology holding company. Ms. McCann has been an executive officer since May 2022. Mr. Allen has been Senior Vice President and Chief Technology Officer since April 2021. Prior to joining Unisys, Mr.
McCann held leadership roles at Cegedim, a technology and services company, and AT&T, Inc., an American multinational telecommunications and technology holding company. She has been a member of the board of directors and the audit committee of VeriSign, Inc. (NASDAQ: VRSN) since October 2024. Ms. McCann has been an executive officer since May 2022. 13 Ms.
Prohl served as Associate General Counsel and Assistant Secretary at American International Group, Inc., a global insurance organization from June 2019 to July 2021. From 2006 to 2018, Ms. Prohl held increasingly senior legal roles at CA Inc. (aka CA Technologies) and Starwood Hotels & Resorts Worldwide, Inc. Earlier in her career, Ms.
Prior to that role, Ms. Prohl served as Associate General Counsel and Assistant Secretary at American International Group, Inc., a global insurance organization from June 2019 to July 2021. From 2016 to 2018, Ms. Prohl served as Senior Vice President, Chief Counsel, Corporate Law and Assistant Secretary at CA Inc. (d/b/a CA Technologies), a multinational enterprise software developer and publisher.
We provide unified endpoint management, virtual desktop infrastructure, and hardware and software asset management solutions for remotely provisioning, tracking, managing and protecting smartphones, tablets, laptops, and Internet of Things devices. Our Traditional Workplace solutions deliver convenient, efficient technology support services at scale.
We provide unified endpoint management, virtual desktop infrastructure, and hardware and software asset management solutions for remotely provisioning, tracking, managing and protecting smartphones, tablets, laptops, and Internet of Things (IoT) devices. These offerings allow clients to flexibly manage and optimize device investments according to shifting organizational priorities and needs.
To effectively execute advanced analytics and AI at scale, organizations must develop diverse, advanced computing capabilities such as quantum, edge and serverless computing to support workloads across these layers. They must also move quickly to deploy new techniques, such as post-quantum encryption, to protect data being processed across environments.
This involves complex orchestration of data, computing and security across multi-cloud environments. To effectively execute advanced analytics and AI at scale, organizations must develop diverse, advanced computing capabilities such as quantum, high-performance computing and hybrid compute architectures to support workloads across these layers.
We also seek to minimize capital expenditure and working capital commitments within our client engagements and pursue a research and development strategy that leverages co-investment with innovation partners where possible. Competitive Landscape We operate in a highly competitive market that is affected by rapid changes in technology in the information services and technology industries.
We strive for operational excellence through initiatives to reduce operating expenses by streamlining centralized corporate functions, rationalizing our real-estate footprint and centralizing technology costs. We also seek to minimize capital expenditure and working capital commitments within our client engagements and pursue a research and development strategy that leverages co-investment with innovation partners where possible.
We face competition from many domestic and foreign companies. Our primary competitors are systems integrators, consulting and other professional services firms, outsourcing providers, infrastructure services providers, computer hardware manufacturers and software providers. We compete primarily based on service quality, product performance, technological innovation, price and reputation, among other factors.
Competitive Landscape We operate in a highly competitive market that is affected by rapid changes in technology in the information services and technology industries. We face competition from many domestic and foreign companies. Our primary competitors are systems integrators, consulting and other professional services firms, outsourcing providers, infrastructure services providers, computer hardware manufacturers and software providers.
We believe our blend of industry, data and computing expertise, as well as our experience leveraging advanced technologies such as machine learning and AI, gives us an ability to develop high-value programs and solutions for our ECS client base. Depending on client needs and preferences, we deploy our solutions in the cloud, in hosted environments, as a service, or on-premises.
We believe our blend of industry, data and computing expertise, as well as our experience leveraging AI, gives us an ability to develop high-value solutions for our ECS client base.Our portfolio includes a suite of cargo management solutions targeting the travel and transportation vertical serving cargo carriers, freight forwarders and third-party logistics companies.
Our go-to-market is focused on landing typically smaller-scale engagements with prospective clients and then expanding our relationships across additional solutions, segments and geographies. We sometimes 9 begin with shorter-term project and advisory contracts with accelerated paths to value and return on investment.
Our go-to-market involves landing initial engagements with prospective clients and subsequently expanding our relationships across additional solutions, segments and geographies to fortify client relationships. Initial engagements may be shorter-term projects or advisory work with accelerated paths to value or longer-term recurring, managed service contracts.
We use industry expertise to create data-intensive, AI-enabled solutions to provide next-level business outcomes in financial services, travel and transportation, telecommunications, and other industries. We classify our solutions within ECS as either “License and Support” or “Specialized Services and Next-Gen Compute.” 7 Our License and Support solutions include ClearPath Forward® and other Unisys IP-related licenses and associated support services.
We classify our solutions within ECS as either “License and Support” or “Specialized Services and Next-Gen Compute.” Our License and Support solutions include ClearPath Forward® and other Unisys IP-related licenses and associated support services. • ClearPath Forward is a flexible collection of products and platforms that provide secure, scalable operating environments for high-intensity enterprise computing.
We utilize strategic account management processes to proactively lead clients using our traditional solutions on a pathway of transformation into higher-value solutions. • Operational Excellence . We strive for operational excellence through initiatives to reduce operating expenses by streamlining centralized corporate functions, rationalizing our real-estate footprint and centralizing technology costs.
We are also centralizing our application development capabilities to achieve efficiencies of scale, standardization, and training that will enhance client value. We utilize strategic account management processes to proactively lead clients using our traditional solutions on a pathway of transformation into higher-value solutions for them and us. • Operational Excellence .
ITEM 1. BUSINESS General Unisys Corporation, a Delaware corporation (Unisys, we, our, or the company), is a global information technology (IT) solutions company that powers breakthroughs for the world’s leading organizations. Our clients rely on us to help solve many of their toughest business and technology challenges in highly complex, regulated and heterogeneous environments.
ITEM 1. BUSINESS General Unisys Corporation, a Delaware corporation (Unisys, we, our, or the company), is a global information technology (IT) solutions company that powers breakthroughs for the world’s leading organizations. We transform and manage mission-critical IT systems, software, applications and devices that power enterprises, financial institutions and public sector organizations around the world.
Enterprise IT organizations must evaluate myriad technologies, software platforms and tools to manage and optimize their technology infrastructure and environments that support mission-critical workloads to meet these expectations while maintaining business continuity. 5 Data and AI The growing use of digital platforms, connected devices and enterprise digitization generates vast amounts of structured and unstructured data, often from disparate sources or stored within disconnected environments.
Enterprise IT organizations must evaluate a myriad of technologies, software platforms and tools to manage and optimize their technology infrastructure and multi-cloud environments that support mission-critical workloads to meet these expectations. 5 Proliferation of Data Data has always been a critical enabler of informed decision-making for enterprises.
In recent decades, enterprise and government interactions with customers, suppliers, employees and citizens have shifted increasingly to digital channels. Cloud computing, artificial intelligence (AI), machine learning and quantum computing have pushed the required pace of innovation and led to a proliferation of data.
From our origins dating back to 1873 through the formation of Unisys in 1986, we have built a legacy of innovation and a reputation of trust. In recent decades, enterprise and government interactions with customers, suppliers, employees and citizens have shifted increasingly to digital channels.
Our solutions and services are provided through global delivery capabilities, which allows us to execute large-scale, rapid technology migration and modernization projects. From our origins dating back to 1873 through the formation of Unisys in 1986, we have built a legacy of innovation and a reputation of trust.
Our clients rely on us to help solve many of their toughest business and technology challenges in highly complex, regulated and heterogeneous environments. Our solutions and services are provided through global delivery capabilities, which allows us to execute large-scale, rapid technology migration and modernization projects.
We are committed to our culture of Diversity, Equity and Inclusion not only as the “right thing to do,” but also as a business imperative. We believe creating an equitable workplace improves our organization, local communities and society. At Unisys, we are focused on having a workforce that represents the diverse communities in which we live and serve.
We are focused on having a workforce that represents the communities in which we live and serve. Integrity is at the core of our business practices. We are committed to promoting a culture of ethical behavior and integrity.
At the same time, organizations face rising costs and complexity of managing IT infrastructure, data, security and compliance while integrating new technologies. We have a long track record of helping clients navigate technological change and architecting innovative solutions that simplify and accelerate digital transformation.
Cloud computing, artificial intelligence (AI), machine learning and quantum computing have pushed the required pace of innovation and led to a proliferation of data. At the same time, organizations face rising costs and complexity of managing IT infrastructure, data, security and compliance while integrating new technologies.
ClearPath Forward ® A secure, scalable operating environment for high-intensity enterprise computing, ClearPath Forward ® is hardware-independent. It provides a tested, integrated stack of software products that run on a range of modern, commonly deployed Intel x86 server platforms and select virtualization environments.
It provides a tested integrated stack of software products that run on a range of modern commonly deployed Intel x86 server platforms, selected cloud and virtualization environments. Clients can deploy it as a Unisys-provided integrated system in their private cloud via software services or in commonly used public cloud environments.
These engagements allow our associates to rapidly build an understanding of client organizations, technology ecosystems, and operational challenges and objectives, which inform our solution expansion efforts. • Solution Development. Our approach to solution development draws from the tools and technologies of our alliance partners, our expertise in solution integration and orchestration, in-house development capabilities and industry expertise.
Our approach to solution development draws from the tools and technologies of our alliance partners, our expertise in solution integration and orchestration, in-house development capabilities and industry expertise. Continually evolving each of these key solution development components is important to architect outcome-based or industry-relevant solutions.
Human Capital At December 31, 2023, we employed approximately 16,500 professionals, of which 2,600 are located in the United States and 13,900 are located in other countries around the world. We are committed to providing a productive, ethical, diverse and safe working environment for our employees. We welcome qualified employees and do not discriminate on any legally protected characteristics.
Human Capital People At December 31, 2024, Unisys employed approximately 15,900 professionals across the globe, of which 2,500 were located in the United States and 13,400 were located in other countries around the world. Culture At Unisys, we champion our employees in every phase of their career.
We provide our employees a wide range of offerings through a range of benefits and resources, including health and welfare benefits, flexible time-off and employee assistance programs. We also promote a culture of ethics and integrity through our Code of Ethics and Business Conduct, policies and training, and all employees must adhere to our Code.
Aside from developing our talent and providing career growth, we are committed to the health, safety and wellness of our employees. We provide our employees a wide variety of benefits and resources, including health and welfare benefits, flexible time-off and employee assistance programs.
We regularly collaborate with our global network of partners, to develop joint solution offerings and to build, market and co-sell these joint solutions.
Our partner ecosystem enables collaborative innovation and development of joint solutions and services that enhance the performance, cost controls and competitive advantages our clients can achieve. We regularly collaborate to build, market and co-sell with this global network of partners spanning leading technology, software and services companies.
Advanced Computing Maximizing the value of data requires organizations to process their structured and unstructured data rapidly and at scale, across disparate environments. This involves complex orchestration across storage and encryption, data integration and extraction, and data execution.
Overall, integrating AI and embedding LLMs into business processes enhance decision-making, operational agility and customer service, which we believe contribute to a competitive advantage in the modern business landscape. Advanced Computing Maximizing the value of data requires organizations to process their structured and unstructured data and embedded LLMs rapidly and at scale, across disparate environments.
We are also focused on growing our footprint beyond our core enterprise, financial and public sector clients by expanding our share of mid-market clients having revenue between $2 billion and $5 billion.
In addition to our large enterprise and government clients, we are also focused on expanding our market share with mid-sized clients.
We help transform and manage our client’s IT infrastructure, whether they are modernizing their existing infrastructure, integrating with cloud platforms or fully migrating to new platforms. • Modern Applications. We transform and manage enterprise applications with capabilities to refactor, rebuild, or rearchitect legacy applications for cloud environments.
Leveraging our advanced Cloud AI services and portfolio, clients can enhance decision-making, automate processes and power business acceleration. • Application Services. We help clients design and execute their application strategies. We develop, transform and manage enterprise applications with capabilities to refactor, rebuild, or rearchitect legacy applications for hybrid, multi-cloud environments.
Poggenpohl has been an executive officer since May 2021. Ms. Prohl has been Senior Vice President, General Counsel, Secretary and Chief Administration Officer since August 2023.
Kulhari has been an executive officer since April 2024. Ms. Poggenpohl has been Senior Vice President and Chief Marketing Officer since April 2021. Prior to joining Unisys, she ran a consulting firm, Poggenpohl Consulting, which she founded in January 2020. Ms.
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Some examples of those trends are as follows: Future of Work Hybrid work has become the new standard of working. However, organizations are challenged by the constantly evolving workforce dynamics and finding the right balance between flexibility, collaboration, corporate culture, employee morale, productivity and financial results.
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Increasing Stakes of the IT Estate Organizations are becoming increasingly reliant on the IT estate to achieve critical business and organizational outcomes. A well-built IT estate can prevent or minimize interruption and security vulnerabilities that can lead to catastrophic operational, competitive or reputational impact on organizations.
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Organizations are urgently looking to technology solutions to help them facilitate a work-from-anywhere environment where collaboration, culture and productivity are not sacrificed. Multi-Cloud Organizations are migrating workloads to the cloud to seek flexibility in their deployments.
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At the same time, the accelerating pace of innovation has necessitated perpetual evolution throughout the technology stack at an increased pace while complex factors, like increased regulation, technical debt and skill gaps, become more pronounced.
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This flexibility enables organizations to modernize incrementally and strike the most appropriate balance between resiliency, cost, scalability and security for their unique data and applications. Designing, maintaining and modernizing hybrid infrastructures require deep expertise in traditional IT infrastructure (e.g., data centers, servers and networking hardware).
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In this context, outsourcing to IT service providers is of increasing strategic importance, allowing clients to focus on their core businesses while leveraging external expertise to innovate, build, manage and optimize their IT estate both efficiently and effectively.
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Governments and law enforcement agencies are also seeking to automate processes, leverage data to make better decisions and improve transparency, and better share information across agencies and localities. Governments are prioritizing digital transformation and strategies for evaluating and measuring their IT investments. Similarly, customers, employees, suppliers and alliance partners expect a digital experience when interacting with enterprises.
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Multi-Cloud Enterprises are increasingly adopting a multi-cloud strategy often leveraging a combination of public, private and SaaS clouds based on business and security needs, type of applications and cost considerations. Multi-cloud offers speed, flexibility and new technology adoption but introduces governance, workforce, financial and operational complexities. Navigating these challenges requires strong cloud governance, upskilled talent and dynamic cost controls.
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Collecting, cleaning, structuring and governing disparate data has become critical to maximizing the value of an organization’s data while meeting complex compliance and regulatory standards. As a result, data engineering, data infrastructure and next-generation computing capabilities have become progressively more important.
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As artificial intelligence and digital initiatives continue to advance, businesses must focus on enabling rapid adoption of multi-cloud as a foundation to achieve these goals. Doing so requires deep expertise to manage and operate at scale, including expertise in more traditional IT infrastructure (e.g., data centers, servers and networking hardware).
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Predictive analytics is increasingly utilized for forecasting trends, optimizing supply chain management, enhancing user experience and productivity, and minimizing risk. AI and machine learning play pivotal roles in enabling companies to derive meaningful insights from large datasets and make informed decisions, which recent advancements in generative AI have augmented.
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Similarly, customers, employees, suppliers and partners expect a digital experience when interacting with enterprises.
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In marketing, AI and generative AI enable targeted campaigns, personalized recommendations and customer segmentation, leading to more effective and data-driven strategies. Overall, integrating AI and generative AI into business processes enhances decision-making, operational agility and customer service, contributing to a competitive advantage in the modern business landscape.
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Today, vast amounts of data are being transferred and processed to generate actionable insights, often from disparate sources or stored within disparate environments. The explosive growth in data volume and variety, coupled with the compliance and regulatory environment and ethical and privacy standards, are driving enterprises to set up or modernize their data ecosystems.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe have experienced, and will continue to experience, cybersecurity attacks and other security breaches that have and, in the future, could result in access to, or in some instances, loss or disclosure of, sensitive information that would require significant human and financial resources to respond.
Biggest changeIn addition, negligent, intentional or improper conduct of our employees or third parties working on our behalf with access to our IT systems and systems we use to manage our clients and the sensitive information housed therein have and may in the future adversely affect our business and reputation. 15 We have experienced, and will continue to experience, cybersecurity attacks and other security incidents and breaches that have and, in the future, could result in access to, or in some instances, loss or disclosure of, sensitive information that would require significant human and financial resources to respond.
Because we operate globally and have significant businesses in many markets, an economic slowdown in any of key markets such as in the United States or Europe could adversely affect our results of operations.
Because we operate globally and have significant businesses in many markets, an economic slowdown in any key markets such as in the United States or Europe could adversely affect our results of operations.
If we do not invest in new technology, adapt to industry developments, evolve and expand our business at sufficient speed and scale, or if we do not make the right strategic investments to respond to these developments and successfully drive innovation, our services and solutions, our results of operations and our ability to develop and maintain a competitive advantage and to execute on our growth strategy could be adversely affected.
If we do not invest in new technology, adapt to industry developments, evolve and expand our business at sufficient speed and scale, or if we do not make the right strategic investments to respond to these 17 developments and successfully drive innovation, our services and solutions, our results of operations and our ability to develop and maintain a competitive advantage and to execute on our growth strategy could be adversely affected.
This work carries various inherent risks, including, but not limited to, the right to audit our contract costs and conduct inquiries and investigations of our business practices and compliance with government and public sector contract requirements, such as security clearance, and the inherent limitations of internal controls may not prevent or detect all improper or illegal activities.
This work carries various inherent risks, including, but not limited to, the right to audit our contract costs and conduct inquiries and investigations of our business practices and compliance with government and public sector contract requirements, such as security clearance, certifications, and the inherent limitations of internal controls may not prevent or detect all improper or illegal activities.
Disruption, termination or substandard provision of services could be the result of localized conditions (such as power outages, telecommunications failures, fire or explosion), failure of our systems to function as designed, or as the result of events or circumstances of broader geographic impact (such as storms, earthquakes, floods, epidemics, strikes, acts of war, civil unrest 14 or terrorist acts).
Disruption, termination or substandard provision of services could be the result of localized conditions (such as power outages, telecommunications failures, fire or explosion), failure of our systems to function as designed, or as the result of events or circumstances of broader geographic impact (such as storms, earthquakes, floods, epidemics, strikes, acts of war, civil unrest or terrorist acts).
In addition, several jurisdictions where we operate have proposed legislation regulating AI and non-personal data that may impose significant requirements on how we design, build and deploy AI and handle non-personal data for ourselves and our clients. For example, some jurisdictions have established extensive new standards for AI safety and security.
In addition, several jurisdictions where we operate have legislation regulating AI and non-personal data that may impose significant requirements on how we design, build and deploy AI and handle non-personal data for ourselves and our clients. For example, some jurisdictions have established extensive new standards for AI safety and security.
If we are unable to continue to meet these requirements, we may not be able to remain listed on the New York Stock Exchange (NYSE). In addition, testing and maintaining internal controls may divert our management’s attention from other matters that are important to our business.
If we are unable to continue to meet these requirements, we may not be able to remain listed on the New York Stock Exchange. In addition, testing and maintaining internal controls may divert our management’s attention from other matters that are important to our business.
Our inability to replace such software, hardware or intellectual property effectively or in a timely and cost-effective manner could materially adversely affect our results of operations. 19 We could face business and financial risk through the completion of acquisitions or dispositions.
Our inability to replace such software, hardware or intellectual property effectively or in a timely and cost-effective manner could materially adversely affect our results of operations. We could face business and financial risk through the completion of acquisitions or dispositions.
For example, in 2022, the company disclosed a cyber attack involving our software lab environment, which caused no service disruptions for our operations or, to our knowledge, to our clients, but resulted in the exfiltration of source code for our cybersecurity and product and platform software.
For example, in 2022, the company disclosed a cybersecurity attack involving our software lab environment, which caused no service disruptions for our operations or, to our knowledge, to our clients, but resulted in the exfiltration of source code for our cybersecurity and product and platform software.
Some may be better able to compete for skilled professionals, innovate and/or provide new services and solutions faster than us, or may be able to anticipate the need for services and solutions before we do. Our competitors may also team together to create competing offerings.
Some may be better able to compete for skilled professionals, innovate and/or provide new services and solutions faster than us, or may be 19 able to anticipate the need for services and solutions before we do. Our competitors may also team together to create competing offerings.
Economic and political volatility and uncertainty is particularly challenging because it may take time for the effects and changes in demand patterns resulting from these and other factors to manifest themselves in our business and results of operations.
Economic, geopolitical and political volatility and uncertainty is particularly challenging because it may take time for the effects and changes in demand patterns resulting from these and other factors to manifest themselves in our business and results of operations.
Our services and solutions are continually evolving because of as machine learning and AI, including generative AI, augmented and virtual reality, automation, Internet of Things, hybrid computing architectures like quantum, high performance and edge computing, infrastructure and network engineering and intelligent connected solutions.
Our services and solutions are continually evolving because of machine learning and AI, including generative AI, augmented and virtual reality, automation, Internet of Things, hybrid computing architectures like quantum, high performance and edge computing, infrastructure and network engineering and intelligent connected solutions.
As we expand our services and solutions, we may be exposed to operational, legal, regulatory, ethical, technological and other risks specific to these new areas, which may negatively affect our results of operations, cash flows, reputation and demand for our services and solutions.
As we expand our services and solutions, we may be exposed to operational, legal, regulatory, compliance, ethical, technological and other risks specific to these new areas, which may negatively affect our results of operations, cash flows, reputation and demand for our services and solutions.
A corporation’s ability to deduct its U.S. federal NOL carryforwards and utilize certain other available tax attributes can be substantially constrained under the general annual limitation rules of Section 382 of the U.S.
A corporation’s ability to deduct its U.S. federal NOL carryforwards and utilize certain other available tax 23 attributes can be substantially constrained under the general annual limitation rules of Section 382 of the U.S.
Our equity-based incentive compensation plans and other variable 17 cash compensation programs, as well as promotions, are designed to reward high-performing employees for their contributions and provide incentives for them to remain with us.
Our equity-based incentive compensation plans and other variable cash compensation programs, as well as promotions, are designed to reward high-performing employees for their contributions and provide incentives for them to remain with us.
Ongoing economic and political volatility and uncertainty and changing demand patterns affect our business in several ways, including making it more difficult to accurately forecast client demand and effectively build our revenue and resource plans.
Ongoing economic, geopolitical and political volatility and uncertainty and changing demand patterns affect our business in several ways, including making it more difficult to accurately forecast client demand and effectively build our revenue and resource plans.
Our business may not generate cash flows from operations sufficient to pay off these notes and we expect that we will need to refinance these notes prior to maturity or explore additional sources of debt and/or equity to repay theses notes. The agencies rating our indebtedness regularly evaluate us and determine our credit ratings based on several factors.
Our business may not generate cash flows from operations sufficient to pay off these notes and we 18 expect that we will need to refinance these notes prior to maturity or explore additional sources of debt and/or equity to repay these notes. The agencies rating our indebtedness regularly evaluate us and determine our credit ratings based on several factors.
Violations of these laws or regulations by us, our employees or any of these third parties could subject us to criminal or civil enforcement actions (whether or not we participated or knew about the actions leading to the violations), including fines or penalties, disgorgement of profits and suspension or disqualification from work, any of which could materially adversely affect our business, including our results of operations and our reputation.
Violations of these laws or regulations by us, our employees, any of these third parties or our clients could subject us to investigations or criminal and civil enforcement actions (whether or not we participated or knew about the actions leading to the violations), including fines or penalties, disgorgement of profits and suspension or disqualification from work, any of which could materially adversely affect our business, including our results of operations and our reputation.
If we are unable to compete successfully, we could lose market share and clients to competitors, which could materially adversely affect our results of operations. We also may face greater competition due to consolidation of companies in the technology sector through strategic mergers, acquisitions or teaming arrangements.
If we are unable to compete successfully, we could lose market share and clients to competitors, which could materially adversely affect our results of operations. We also may face greater competition due to consolidation of companies in the technology sector including due to strategic mergers, acquisitions or teaming arrangements.
Internal Revenue Code (Section 382) if it undergoes an “ownership change” as defined in Section 382 (generally where cumulative stock ownership changes among material shareholders exceed 50 percent during a rolling three-year period). Similar rules may apply under state tax laws.
Internal Revenue Code (Section 382) if it undergoes an “ownership change” as defined in Section 382 (generally where cumulative stock ownership changes among material stockholders exceed 50 percent during a rolling three-year period). Similar rules may apply under state tax laws.
If we are unable to differentiate our offerings from those of our competitors and renew and expand on existing contracts and win new contracts, our revenues may significantly decline. Some of our competitors may develop competing solutions and services that offer better price for performance or that reach the market before our offerings.
If we are unable to differentiate our offerings from our competitors, renew and expand existing contracts, and win new contracts, our revenues may significantly decline. Some of our competitors may develop competing solutions and services that offer better price for performance or that reach the market before our offerings.
Cyber incidents, security breaches and other disruptions in our IT systems have exposed, and in the future could expose, us to liability, litigation and regulatory or other government action, which could result in the loss of existing or potential clients, damage to our brand and reputation, damage to our competitive position and financial loss.
Cybersecurity incidents, security incidents and breaches and other disruptions in our IT systems have exposed, and in the future could expose, us to liability, litigation and regulatory or other government action, which could result in the loss of existing or potential clients, damage to our brand and reputation, damage to our competitive position and financial loss.
We face aggressive competition, which could lead to reduced demand for our solutions and related services and could have an adverse effect on our business. Our future performance is largely dependent on our ability to compete successfully and expand in the markets we currently serve.
We face aggressive competition, which could lead to reduced demand for our solutions and related services and could have an adverse effect on our business. Our future performance is largely dependent on our ability to compete successfully and expand in the market we currently serve.
Legal proceedings and environmental matters have and may continue to impact our results of operations and cash flows.
Legal proceedings and environmental matters have and may continue to impact our results of operations, cash flows and business.
In addition, the cost and operational consequences of responding to cyber incidents and security breaches and implementing remediation measures is and could continue to be significant. These financial consequences include the costs associated with obtaining and maintaining cyber insurance.
In addition, the cost and operational consequences of responding to cybersecurity incidents and security breaches and implementing remediation measures is and could continue to be significant. These financial consequences include the costs associated with obtaining and maintaining cybersecurity insurance.
Methodologies for reporting ESG data may be updated and previously reported ESG data may be adjusted to reflect improvement in availability and quality of third-party data, changing assumptions, changes in the nature and scope of our operations, and other changes in circumstances.
Methodologies for reporting sustainability data may be updated and previously reported sustainability data may be adjusted to reflect improvement in availability and quality of third-party data, changing assumptions, changes in the nature and scope of our operations, and other changes in circumstances.
As part of our business strategy, we have and may acquire complementary technologies, solutions, services and businesses, or dispose of existing technologies, solutions, services and businesses, including transactions of a material size. We may not have the cash sufficient to make such opportunistic acquisitions. Accordingly, any acquisitions may result in the incurrence of substantial additional indebtedness or contingent liabilities.
As part of our business strategy, we have and may acquire complementary technologies, solutions, services and businesses, or dispose of existing technologies, solutions, services and businesses, including transactions of a material size. In the event we do not have cash sufficient to make such opportunistic acquisitions, any acquisitions may result in the incurrence of substantial additional indebtedness or contingent liabilities.
Growth in some markets we serve has slowed and could continue to slow, stagnate or contract. The same could occur in other markets where we do business or plant to do business.
Growth in some markets we serve has slowed and could continue to slow, stagnate or contract. The same could occur in other markets where we do business or plan to do business.
In the ordinary course of business, we have had findings in connection with audits, investigations and inquiries related to government work and public sector clients.
In the ordinary course of business, we have had findings in connection with client requests, audits, investigations and inquiries related to government work and public sector clients.
We must reskill, retain and inspire appropriate numbers of talented employees with diverse skills in order to serve our clients, respond quickly to rapid and ongoing changes in demand, technology, industry and the macroeconomic environment, and continuously innovate to grow our business.
We must re-skill, retain and inspire appropriate numbers of talented employees with diverse skills in order to serve our clients, respond quickly to rapid and ongoing changes in demand, technology, industry and the macroeconomic environment, and continuously innovate to grow our business.
Negative findings in such audits, investigations or inquiries could affect our future sales and profitability due to a wide range of consequences, including termination of contracts, forfeiture of profits, suspension of payments, fines and suspensions or debarment from doing business with new and existing government 16 and public sector clients.
Negative findings in such audits, investigations or inquiries could affect our future sales and profitability due to a wide range of consequences, including breach and termination of contracts, forfeiture of profits, suspension of payments, loss of certifications, fines and suspensions or debarment from doing business with new and existing government and public sector clients.
We have received, and may receive in the future, regulatory, investigative and enforcement inquiries, subpoenas or demands arising from, related to, or in connection with these matters, including as disclosed in Note 18, “Litigation and contingencies” in Part II, Item 8 of this Form 10-K.
We have received, and may receive in the future, regulatory, investigative and enforcement inquiries, subpoenas or demands arising from, related to, or in connection with these matters, including as disclosed in Note 18, “Litigation and contingencies” of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K.
Evolving stakeholder expectations and our efforts and ability to manage these issues and accomplish our goals, commitments, and targets present numerous operational, regulatory, reputational, financial, legal, and other risks, any of which may be outside of our control or could have adverse impacts on our business, including on our stock price.
Evolving stakeholder expectations and our efforts and ability to manage these issues present numerous operational, regulatory, reputational, financial, legal, and other risks, any of which may be outside of our control or could have adverse impacts on our business, including on our stock price.
Given our global operations, macroeconomic conditions, like foreign currency exchange rate fluctuations, currency restrictions and devaluations, increases in inflation rates and weaker intellectual property protections in some jurisdictions, as well as geopolitical conditions affect us, our 15 clients’ businesses and the markets they serve.
Given our global operations, macroeconomic conditions - like foreign currency exchange rate fluctuations, currency restrictions and devaluations, increases in inflation rates, potential recessions and weaker intellectual property protections in some jurisdictions - as well as geopolitical and political conditions, affect us, our clients’ businesses and the markets they serve.
Additionally, our business has been, and can in the future be, adversely impacted by acts of war, terrorism, natural disasters and the widespread outbreak of infectious diseases, like the COVID-19 pandemic, as such events have unpredictable consequences on the world economy and our operations.
Additionally, our business has been, and can in the future be, adversely impacted by acts of war, terrorism, natural disasters and the widespread outbreak of infectious diseases, as such events have unpredictable consequences on the world economy and our operations.
Any disruption, termination or substandard provision of services, including by us or third-party cloud providers, could materially and adversely affect our business by disrupting normal IT operations, customer service, accounting and technology functions, affecting our ability to comply with our financing arrangements and otherwise impacting our ability to manage our business.
Any disruption, termination or substandard provision of services, including by us or third-party cloud providers, has affected, and in the future could materially and adversely affect, our business by disrupting normal IT operations, customer service, accounting and technology functions, affecting our ability to comply with our financing arrangements and otherwise impacting our ability to manage our business.
Changes in government or political developments, including changes in administrations or regimes, government closures or shutdowns, budget deficits, shortfalls or uncertainties, government spending reductions or other debt constraints could result in our projects being reduced in price or scope or terminated altogether, which also could limit our recovery of incurred costs, reimbursable expenses and profits on work completed prior to the termination.
Changes in government or political developments, including changes in administrations or regimes, like the recent administration change in the United States, government closures or shutdowns, budget deficits, shortfalls or uncertainties, government spending reductions or other debt constraints could result in our projects being reduced in price or scope or terminated altogether, which also could limit our recovery of incurred costs, reimbursable expenses and profits on work completed prior to the termination.
ACCOUNTING Our ability to use our net operating loss (NOL) carryforwards and certain other tax attributes may be limited. As of December 31, 2023, we had $1.7 billion in U.S. federal NOL carryforwards, for which we currently maintain a full valuation allowance.
Our ability to use our net operating loss (NOL) carryforwards and certain other tax attributes may be limited. As of December 31, 2024, we had $1.6 billion in U.S. federal NOL carryforwards, for which we currently maintain a full valuation allowance.
In addition, we rely on our suppliers’ tools and services to adequately detect, report and respond to cyber incidents and security breaches, which could affect our ability to report or address these incidents effectively or in a timely manner.
In addition, we rely on our suppliers’ tools and services to adequately detect, report and respond to cybersecurity incidents, cybersecurity attacks and other security incidents and breaches, which could affect our ability to report or address these incidents effectively or in a timely manner.
These include cyberattacks from computer hackers, cyber criminals, including nation states and nation state-sponsored actors, insiders and other malicious internet-based adversaries.
These include cybersecurity attacks from computer hackers, cyber criminals, including nation states and nation state-sponsored actors, insiders and other malicious internet-based adversaries.
Political and economic factors such as pending elections, the outcome of recent elections, changes in leadership among key executive or legislative decision makers, revisions to governmental tax or other policies and reduced tax revenues could affect the number and terms of new government and public sector contracts signed or the speed at which new contracts are signed, decrease future levels of spending and authorizations for programs that we bid, shift spending priorities to programs in areas for which we do not provide services and/or lead to changes in enforcement or how compliance with relevant rules or laws is assessed.
Political and economic factors such as changes in leadership or key executive, legislative or regulatory bodies and decision makers, revisions to governmental tax, tax policies or other regulatory regimes could affect the number and terms of new government and public sector contracts signed or the speed at which new contracts are signed, decrease future levels of spending and authorizations for programs that we bid, shift spending priorities to programs in areas for which we do not provide services and/or lead to changes in enforcement or how compliance with relevant rules or laws is assessed.
Inflation may lead to higher labor and other costs charged by these third parties, and supply chain disruptions 18 may cause the inability by them to deliver in a timely manner, which could adversely affect our results of operations.
Inflation may lead to higher labor and other costs charged by these third parties, and supply chain disruptions may make them unable to deliver in a timely manner, which could adversely affect our results of operations.
The occurrence of cybersecurity attacks and other security breaches continue to increase globally, and our systems, including the systems of our outsourced service providers, have been and may in the future be targeted by attacks such as denial of service attacks, wireless network attacks, viruses and worms, malicious software, ransomware, malware, misconfigurations, supply chain attacks, application centric attacks, peer-to-peer attacks, phishing, vishing and smishing attempts, backdoor trojans, distributed denial of service attacks, social engineering, business email compromises and cyber-extortion, among other cybersecurity threats.
The sophistication and occurrence of cybersecurity attacks and other security breaches continue to increase globally, and our systems, including the systems of our outsourced service providers, have been and may in the future be targeted by attacks such as infiltration of “fake employees” enabling laptop farming schemes, Internet of Things, cybersecurity attacks, denial of service attacks, wireless network attacks, viruses and worms, malicious software, ransomware, malware, misconfigurations, software supply chain attacks, application centric attacks, peer-to-peer attacks, phishing, vishing and smishing attempts, backdoor trojans, distributed denial of service attacks, social engineering, including deepfake attacks, business email compromises and cybersecurity-extortion, among other cybersecurity threats.
Our strategy places an emphasis on growing revenue, including specifically from higher-value and higher-margin offerings and our ability to profitably grow revenue and generate cash flows in our businesses depends on our ability to win contracts with clients for higher growth and higher-margin solutions. This in turn depends on our ability to offer solutions that meet client needs.
Our strategy places an emphasis on growing revenue, including specifically from higher-value and higher-margin offerings and our ability to profitably grow revenue and generate cash flows in our businesses depends on our ability to win contracts with clients for higher growth and higher-margin solutions.
Chargeability is also affected by several factors, including our ability to transition resources from completed projects to new engagements and across geographies, and our ability to forecast demand for services and thereby maintain appropriate resource levels.
Chargeability is also affected by several factors, including our ability to transition resources from completed projects to new engagements, leveraging low cost locations, and our ability to forecast demand for services and thereby maintain appropriate resource levels.
We are subject to numerous, changing, and sometimes conflicting, legal and regulatory regimes on matters as diverse as anticorruption, import/export controls, content requirements, trade restrictions, tariffs, taxation, sanctions, immigration, internal and disclosure control obligations, securities regulation, including ESG regulation and reporting requirements, anti-competition, anti-money-laundering, data privacy and protection such as those in the United States and the European Union with the General Data Protection Regulation (GDPR), government compliance, wage-and-hour standards, employment and labor relations, product liability, health and safety, environmental, human rights and AI regulations.
We are subject to numerous, changing, and sometimes conflicting, legal and regulatory regimes on matters as diverse as anti-corruption, import/export controls, content requirements, trade restrictions, tariffs, taxation, sanctions, immigration, internal and disclosure control obligations, securities regulation, including climate and other sustainability regulations and reporting requirements, anti-competition, anti-money-laundering, data privacy and protection such as those in the United States and the European Union with the General Data Protection Regulation (GDPR), cybersecurity directives in the European Union such as the Network and Information Security Directive, government compliance, wage-and-hour standards, employment and labor relations, product liability, health and safety, environmental, human rights and AI regulations, including the European Union Artificial Intelligence Act.
Professional costs resulting from litigation and contingencies have been significant and are expected to continue to be significant, in particular, if litigation costs grow. Although we believe that no significant business has been lost to date, it is possible that a change in the perceptions of our clients could occur as a result.
Professional costs resulting from litigation and contingencies have been significant and may be significant in the future. Although we believe that no significant business has been lost to date, it is possible that a change in the perceptions of our clients could occur as a result.
In addition, our selection of voluntary disclosure frameworks and standards, and the interpretation or application of 21 those frameworks and standards, may change from time to time or may not meet the expectations of investors or other stakeholders. Our ability to achieve our ESG commitments is subject to numerous risks, many of which are outside of our control.
For example, our selection of voluntary environmental disclosure frameworks and standards, and the interpretation or application of those frameworks and standards, may change from time to time or may not meet the expectations of investors or other stakeholders. Our ability to achieve our environmental sustainability commitments is subject to numerous risks, many of which are outside of our control.
In addition, as a result of the investigation and remediation efforts, certain operational changes have occurred and may continue to occur in the future. Any or all of these could directly or indirectly have a material adverse effect on our operations and/or financial performance.
In addition, as a result of the investigation and remediation efforts, certain operational changes have occurred and may continue to occur in the future. Any or all of these could directly or indirectly have a material adverse effect on our operations and/or financial performance. ACCOUNTING Impairment of goodwill or intangible assets has negatively impacted our results of operations.
Future results depend in part on the pricing, performance and capabilities of third parties with whom we have commercial relationships. We maintain business relationships and transact with our alliance partners, suppliers and other third parties that have complementary solutions, services or skills. Future results will depend, in part, on the pricing, performance and capabilities of these third parties.
We maintain business relationships and transact with our alliance partners, suppliers and other third parties that have complementary solutions, services or skills. Future results will depend, in part, on the pricing, performance and capabilities of these third parties, including the use of services and solutions involving emerging technologies like AI.
In 2023, we made cash contributions of $42.4 million, primarily for our international defined benefit pension plans. Based on current legislation, global regulations, recent interest rates and expected returns, we estimate cash contributions of approximately $21 million in 2024, primarily for our international defined benefit pension plans.
In 2024, we made cash contributions of $21.9 million, primarily for our international defined benefit pension plans. Based on current legislation, global regulations, recent interest rates, expected returns and current funding agreements, we estimate cash contributions of approximately $92 million in 2025, primarily for our U.S defined benefit pension plans.
Treasury Department’s Office of Foreign Assets Control. Our employees, alliance partners and third parties, including companies we acquire and their employees, subcontractors, vendors and agents, and other third parties with which we work, could take actions that violate policies or procedures designed to promote legal and regulatory compliance or applicable anticorruption laws or regulations.
Our employees, alliance partners and third parties, including companies we acquire and their employees, subcontractors, vendors and agents, other third parties 21 with which we work and our clients, could take actions that violate policies or procedures designed to promote legal and regulatory compliance or applicable anti-corruption laws or regulations.
Similarly, the threat of malicious cyber activity from nation states and other sophisticated actors continues to increase, particularly with the rise of global conflicts like in the Ukraine.
Similarly, the threat of malicious cybersecurity activity from nation states and other sophisticated actors continues to increase, particularly with geopolitical turmoil and global conflicts like those in the Ukraine and Middle East.
These claims could harm our reputation, cause us to incur substantial costs or prevent us from offering some services or solutions in the future. Any related proceedings could require us to expend significant resources over an extended period of time.
Our use of emerging technologies like AI could also expose us to intellectual property disputes and litigation. These claims could harm our reputation, cause us to incur substantial costs or prevent us from offering some services or solutions in the future. Any related proceedings could require us 20 to expend significant resources over an extended period of time.
Our processes and controls for reporting ESG matters across our operations are evolving along with multiple disparate standards for identifying, measuring, and reporting ESG metrics, including ESG and climate-related disclosures that may soon be required by the SEC, the new California climate legislation and European Union climate legislation, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future.
Our processes and controls for reporting sustainability matters across our operations are evolving along with multiple disparate standards for identifying, measuring, and reporting sustainability metrics, including climate-related disclosures that may soon be required by the California climate legislation and European Union climate legislation, which will require reporting disclosures on the Corporate Sustainability Report Directive starting as early as 2026 for the fiscal year ending December 31, 2025, which could result in significant revisions to our current environmental goals, reported progress in achieving such goals, or ability to achieve such goals in the future.
In addition, standards for tracking and reporting on ESG matters, including climate change and human rights related matters, have not been harmonized and continue to evolve.
In addition, standards for tracking and reporting on sustainability matters, including climate change and greenhouse gas emissions, have not been harmonized and continue to evolve.
A downgrade of our credit ratings could adversely affect our access to liquidity and capital; particularly as we plan to refinance the 2027 Notes prior to maturity, an adverse change in our credit rating could significantly increase our cost of funds, decrease the number of investors and counterparties willing to lend to us or purchase our securities and impact our ability to utilize surety bonds or other financial instruments we use to run our business.
A further adverse change in our credit ratings could significantly increase our cost of funds, decrease the number of investors and counterparties willing to lend to us or purchase our securities and impact our ability to utilize surety bonds or other financial instruments we use to run our business.
For information on our cybersecurity risk management, strategy and governance, see Item 1C. - Cybersecurity. A significant portion of our revenue is derived from our installed base. Future results may be adversely impacted if we are unable to maintain our installed base and sell new solutions and related services to existing and new clients.
BUSINESS AND OPERATING RISKS A significant portion of our revenue is derived from our installed base. Future results may be adversely impacted if we are unable to maintain our installed base and sell new solutions and related services to existing and new clients.
It also depends on an efficient utilization of delivery personnel and the ability to meet our clients’ technological needs. Revenue and profit margin in these businesses are a function of both the portfolio of solutions sold and the rates we charge.
This in turn depends on our ability to offer solutions that meet demand, efficiently utilize delivery personnel and meet our clients’ technology needs. Revenue and profit margin in these businesses are a function of both the portfolio of solutions sold and the rates we charge.
These obligations may make it harder for us to conduct our business using AI, lead to regulatory fines or penalties, require us to 20 change our solutions and services offerings or business practices, or prevent or limit our use of AI.
Other jurisdictions may decide to adopt similar or more restrictive legislation that may render the use of such technologies challenging. These obligations may make it harder for us to conduct our business using AI, lead to regulatory fines or penalties, require us to change our solutions and services offerings or business practices, or prevent or limit our use of AI.
Our business includes managing, processing, storing and transmitting information, including proprietary, confidential, client, employee and personal information, intellectual property and proprietary business information. This information is housed within our own information systems (made of a combination of on-premise and third-party cloud providers), the cloud and those that we design, develop, host or manage for clients.
This information is housed within our own information systems (a combination of on-premise and third-party cloud providers), the cloud and those that we design, develop, host or manage for clients.
In many parts of the world, including countries in which we operate and/or seek to expand, practices in the local business community might not conform to international business standards and could violate anticorruption laws or regulations, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010, or economic and trade restrictions administered by the U.S.
In many parts of the world, including countries in which we operate and/or seek to expand, we may be unable to conform to practices in the local business community as they might be inconsistent with international business standards and could violate anti-corruption laws or regulations, including the U.S. Foreign Corrupt Practices Act and the U.K.
In many of our long-term solutions and services contracts, revenue is based on the volume of solutions and services provided. As a result, revenue levels anticipated at contract inception are not guaranteed.
Our commercial contracts have not been, and in the future may not be, as profitable as expected or provide the expected level of revenue. In many of our long-term solutions and services contracts, revenue is based on the volume of solutions and services provided. As a result, revenue anticipated at contract signing are not guaranteed.
We are also subject to a variety of legal and environmental compliance risk, including with respect to predecessor company operations, which have led or may lead to environmental remedial actions at former or third-party sites. Significant current matters are disclosed in Note 18, “Litigation and contingencies” in Part II, Item 8 of this Form 10-K.
We are also subject to a variety 22 of legal and environmental compliance risk, including with respect to predecessor company operations, which have led or may lead to lawsuits and environmental remedial actions at former or third-party sites.
The occurrences or conditions described above have had an adverse impact on our results of operations and could have a material adverse effect on our business or our results of operations in the future. If we are unable to maintain our credit rating or access the financing markets, it may adversely impact our business and liquidity.
The occurrences or conditions described above have had an adverse impact on our results of operations and could have a material adverse effect on our business or our results of operations in the future.
Additionally, the financial condition of, and our relationship with, distributors and other indirect partners can impact our ability to serve current and potential clients and end users effectively and efficiently. Our commercial contracts have not been, and in the future may not be, as profitable as expected or provide the expected level of revenue.
Additionally, the financial condition of, and our relationship with, distributors and other indirect partners can impact our ability to serve current and potential clients and end users effectively and efficiently.
Regardless of the outcome of any individual matter, litigation and environmental matters have impacted and could continue to impact our results of operations, cash flows and business. In addition, legal proceedings or environmental matters may arise in the future with respect to our existing and legacy operations that may adversely affect our business.
In addition, legal proceedings or environmental matters may arise in the future with respect to our existing and legacy operations that may adversely affect our business.
We estimate that cash contributions to our U.S. defined benefit pension plans will begin to increase in 2025, increasing the total estimated contributions for our U.S. and non-U.S. defined benefit pension plans to approximately $110 million in 2025 and approximately $770 million in the aggregate from 2026 through 2033.
We estimate total cash contributions to our U.S. and non-U.S. defined benefit pension plans of approximately $120 million in 2026 and approximately $750 million in the aggregate from 2027 through 2034.
BUSINESS AND OPERATING RISKS Cyber incidents, security breaches and other disruptions in our IT systems have occurred and will continue to occur that could result in the incurrence of significant costs as well as harm to our business.
Cybersecurity incidents, security incidents and breaches and other disruptions in our IT systems have occurred and will continue to occur and could result in the incurrence of significant costs as well as harm to our business. Our business includes managing, processing, storing and transmitting information, including proprietary, confidential, client, employee and personal information, intellectual property and proprietary business information.
A future tax “ownership change” pursuant to Section 382 or future changes in tax laws that impose tax attribute utilization limitations may severely limit or effectively eliminate our ability to utilize our NOL carryforwards and other tax attributes. Impairment of goodwill or intangible assets may negatively impact our results of operations.
A future tax “ownership change” pursuant to Section 382 or future changes in tax laws that impose tax attribute utilization limitations may severely limit or effectively eliminate our ability to utilize our NOL carryforwards and other tax attributes. Other factors discussed in this report, although not listed here, also could materially affect our future results. 24 ITEM 1B.
In such cases, we have not, and in the future may not, achieve expected revenue and profit from certain commercial contracts.
In such cases, we have not, and in the future may not, achieve expected revenue and profit from certain commercial contracts. Future results depend in part on the pricing, performance and capabilities of third parties with whom we have commercial relationships.
An increase in consumption of public cloud services also elevates the risk to our environment, as securing cloud workload regularly involves new skills, tools and processes. The introduction of AI and quantum computing is also raising the risk level as it opens new possibilities for threat actors to launch complex attacks combining social engineering and classic hacking techniques.
The introduction of AI and quantum computing is also raising the risk level as it opens new possibilities for threat actors to launch complex attacks combining social engineering and new and classic hacking techniques, including quantum computing enabled “steal now decrypt later” schemes.
If new laws or regulations are more stringent than current legal or regulatory requirements, we may experience increased compliance burdens and costs to meet such obligations.
Increasing focus on business responsibility matters has resulted in, and is expected to continue to result in, the adoption of legal and regulatory requirements related to environmental, social and governance matters. If new laws or regulations are more stringent than current legal or regulatory requirements, we may experience increased compliance burdens and costs to meet such obligations.
Our results of operations have been, and may in the future be, adversely affected by volatile, negative or uncertain economic and political conditions as well as acts of war, terrorism, natural disasters or the widespread outbreak of infectious diseases. Approximately 56% of our total revenue for 2023 was derived from international operations.
For information on our cybersecurity risk management, strategy and governance, see “Cybersecurity” (Part I, Item 1C of this Form 10-K). 16 Our results of operations have been, and may in the future be, adversely affected by volatile, negative or uncertain economic, geopolitical or political conditions as well as acts of war, terrorism, natural disasters or the widespread outbreak of infectious diseases.
As of December 31, 2023, we had $485 million aggregate principal amount of our 6.875% Senior Secured Notes due November 1, 2027 (the 2027 Notes).
If we are unable to maintain our credit rating or access the financing markets, it may adversely impact our business and liquidity. As of December 31, 2024, we had $485 million aggregate principal amount of our 6.875% Senior Secured Notes due November 1, 2027 (the 2027 Notes).
These systems are critical to our and our clients’ business activities and unauthorized access to, disruption of, or attacks on these systems pose serious risks, including inadvertent loss or disclosure of company, information and employee and client data.
These systems are critical to business activities for Unisys and our clients’ and unauthorized access to, disruption of, or attacks on these systems pose serious risks, which have and may in the future compromise confidentiality, integrity and availability of data.
On an annual basis, and whenever circumstances arise, we review goodwill and intangible assets for impairment. The impairment test is based on several factors, estimates and assumptions, including macroeconomic conditions, industry and market consideration, overall financial performance, market capitalization and relevant entity-specific events.
The impairment test is based on several factors, estimates and assumptions, including macroeconomic conditions, industry and market considerations, overall financial performance, market capitalization and relevant entity-specific events. Significant changes to these factors could impact the assumptions used in calculating the fair value of goodwill or intangible assets and may indicate potential impairment.
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In addition, negligent or improper conduct of our employees or third parties working on our behalf with access to these systems and the sensitive information housed therein have and may in the future adversely affect our business and reputation.
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Additionally, limitations in the ability of our IT teams to remain up-to-date with the volume of common vulnerabilities and exposures that require constant patching that often compete with the availability of service to our customers.
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Additionally, limitations in the ability of our IT teams to remain up-to-date with the tools necessary to thwart these threat actors could lead to attacks not being detected until after the attack has occurred.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWhen the MSSP has validated a true positive event, it is communicated to the internal SIRT team for deeper investigation and response; • a written policy provided to all associates regarding identification, classification of severity and escalation of cybersecurity incidents; • perimeter and endpoints firewalls, intrusion prevention systems, endpoint detection and response, Attack Surface Management, multi-factor authentication and email protection; • annual and ongoing cybersecurity awareness training for our associates — including regular training on information security and data privacy policies. • routine testing of and training on our IT systems, including test phishing emails and awareness training opportunities; 23 • cybersecurity policies, standards and practices that follow recognized frameworks established by the National Institute of Standards and Technology, the International Organization for Standardization and other applicable industry standards, and follow evolving information security regulatory guidance for countries in which we operate; • automation and alerts via embedded tools and procedures to monitor data and notify us of threats or other potential unauthorized occurrences on or conducted through our systems; • sharing threat intelligence daily with each business unit; • multiple mechanisms by which employees can report cybersecurity and data privacy concerns, including a “Report Phish” button in the email application; • internal audits on our cybersecurity and data privacy practices; • a vulnerability management program designed to protect our external and internal networks and critical assets; • an ongoing process of identifying, assessing, reporting on, managing and remediating cybersecurity vulnerabilities across endpoints, workloads and systems; and • a level of cybersecurity insurance that Unisys believes is appropriate, taking into consideration the material risks from cybersecurity threats.
Biggest changeOur physical and technological cybersecurity controls include, among other items: • perimeter and endpoints firewalls, intrusion prevention systems, endpoint detection and response, Attack Surface Management, multi-factor authentication and email protection; • routine testing of and training on our IT systems, including test phishing emails and awareness training opportunities; • automation and alerts via embedded tools and procedures to monitor data and notify us of threats or other potential unauthorized occurrences on or conducted through our systems; • multiple mechanisms by which employees can report cybersecurity and data privacy concerns, including a “Report Phish” button in the email application; • a vulnerability management program designed to protect our external and internal networks and critical assets; • bug bounty capability, enabling ethical hackers to simulate real-world attacks to identify and report vulnerabilities; • secure coding and development; and • security and operations framework and tools.
Taking into consideration the processes established by the GIS, our GPO has developed a framework of policies, procedures and other initiatives that are implemented across Unisys to help meet data privacy requirements.
Taking into consideration the processes established by GIS and CIT, our GPO has developed a framework of policies, procedures and other initiatives that are implemented across Unisys to help meet data privacy requirements.
As of December 31, 2023, our financial condition, results of operations or business strategy have not been materially affected by risks from cybersecurity threats, including as a result of previously identified cybersecurity incidents, but we cannot provide assurance that they will not be materially affected in the future by such risks or any future material incidents.
As of December 31, 2024, our financial condition, results of operations or business strategy have not been materially affected by risks from cybersecurity threats, including as a result of previously identified cybersecurity incidents, but we cannot provide assurance that they will not be materially affected in the future by such risks or any future material incidents.
The information set forth under “Risk Factors” (Part I, Item 1A of this Form 10-K) — “We have been and could be vulnerable to disruption in our IT systems, cybers incidents, security breaches and loss of data (associate and client) that have occurred, and may continue to occur, and have resulted in and could continue to result in the incurrence of significant costs and harm to our business and reputation.” — on page 14 of this Annual Report on Form 10-K is hereby incorporated by reference.
The information set forth under “Risk Factors” (Part I, Item 1A of this Form 10-K) — “We have been and could be vulnerable to disruption in our IT systems, cyber incidents, security breaches and loss of data (associate and client) that have occurred, and may continue to occur, and have resulted in and could continue to result in the incurrence of significant costs and harm to our business and reputation.” — on page 15 of this Annual Report on Form 10-K is hereby incorporated by reference.
The Disclosure Committee assists in fulfilling our obligations to maintain disclosure controls and procedures and coordinates and oversees the process of preparing our periodic securities filings with the Securities and Exchange Commission. Cybersecurity incidents, based on their severity, are escalated to the Disclosure Committee by the SIRT.
The Disclosure Committee, a senior executive leadership committee, assists in fulfilling our obligations to maintain disclosure controls and procedures and oversees the process of preparing our periodic securities filings with the Securities and Exchange Commission. Cybersecurity incidents, based on their severity, are escalated to the Disclosure Committee by the SIRT.
Our GIS manages Unisys’ cybersecurity risk identification, assessment, response, remediation and mitigation processes, and interfaces with other departments, including business units, the information technology department and enterprise risk management, to facilitate the risk processes and ensure the policies and procedures established by the GIS are integrated into our overall enterprise risk management system.
Our Global Information Security organization (GIS), led by our Chief Information Security Officer (CISO), manages Unisys’ cybersecurity risk identification, detection, assessment, response, mitigation and remediation processes, and interfaces with other departments, including business units, the information technology and legal departments, and enterprise risk management, to facilitate the risk management processes and ensure the policies and procedures established by GIS are integrated into our overall enterprise risk management system.
Our GPO: • is supported by a network of data protection officers, attorneys and privacy specialists across Unisys; • manages privacy management software that is used across Unisys to facilitate privacy impact assessments, record data processing activities and map data flows; and • follows evolving privacy regulatory guidance for countries in which it operates and adjusts standards, as necessary.
Our GPO is supported by a network of data protection officers, attorneys and privacy specialists; and manages privacy software that is used across Unisys to facilitate privacy impact assessments. The GPO also records data processing activities, maps data flows and follows evolving privacy regulatory guidance for countries in which we operate and adjusts standards as necessary.
The S&RC’s responsibilities include: • reviewing crisis preparedness and incident response plans; • monitoring Unisys’ enterprise risk profile and its ongoing and potential exposure to risks of various types; 24 • reviewing summaries of any incidents or activities; • reviewing reports or presentations from management or advisors, including third-party experts, regarding the management of enterprise risk programs; • periodically meeting with the CISO and Chief Privacy Officer (CPO); and • periodically briefing the full Board of Directors on cybersecurity matters.
The S&RC’s responsibilities include monitoring Unisys’ enterprise risk profile and its ongoing and potential exposure to risks of various types and reviewing crisis preparedness; incident response plans; summaries of any incidents or activities; and reports or presentations from management or advisors, including third-party experts, regarding the management of enterprise risk program.
We have a Third Party Risk Management (TPRM) program, which is integrated into our procurement process and involves cybersecurity risk oversight and identification components. Our TPRM program includes policies and standards requiring that we perform cybersecurity due diligence reviews on our vendors based on the risk profile of a particular supplier or service provider or the service they provide.
Our TPRM program includes policies and standards requiring that we perform cybersecurity due diligence reviews on our vendors based on the risk profile of a particular supplier or service provider or the service they provide.
We also monitor certain of our principal suppliers and service providers on an ongoing basis by conducting additional periodic reviews. Whether any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect Unisys, including its business strategy, results of operations, or financial condition and if so, how.
Whether any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect Unisys, including its business strategy, results of operations, or financial condition and if so, how.
The Disclosure Committee meets on a quarterly basis and more often, if necessary, and invites subject matter experts to meetings, as appropriate.
The Disclosure Committee is comprised of the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, General Counsel, Chief Compliance Officer and Chief Accounting Officer. The Disclosure Committee meets on a quarterly basis and more often, if necessary, and invites subject matter experts to meetings as appropriate.
Additionally, the A&FC has general oversight over Unisys’ cybersecurity as it relates to responsibility for Unisys’ internal audit function, including cybersecurity practices, compliance with legal and regulatory requirements and internal control over financial reporting.
The Security and Risk Committee (S&RC), a Board committee comprised entirely of independent directors, assists the Board of Directors in these oversight responsibilities. Additionally, the Audit and Finance Committee has general oversight over Unisys’ cybersecurity as it relates to responsibility for Unisys’ internal audit function, including cybersecurity practices, compliance with legal and regulatory requirements, and internal control over financial reporting.
The GIS’s processes also work in tandem with the processes maintained by our Global Privacy Office (GPO). Through our GPO, we deploy functional and business unit-specific approaches to data and privacy compliance.
GIS processes also work in tandem with the processes maintained by our Global Privacy Office (GPO). Through our GPO, we deploy functional and business unit-specific approaches to data and privacy compliance sharing threat intelligence daily and collaborate closely with the Corporate Information Technology (CIT) organization to build process and playbooks for cyber-resiliency.
ITEM 1C. CYBERSECURITY Cybersecurity Risk Management and Strategy Unisys’ process for assessing, identifying and managing material risks from cybersecurity threats . Protecting information, including information of our clients, is a top priority. We have expertise, dedicated resources and technology to identify, assess, respond to and mitigate material risks from cybersecurity threats.
ITEM 1C. CYBERSECURITY Cybersecurity Risk Management and Strategy Unisys’ process for assessing, identifying and managing material risks from cybersecurity threats . Protecting information, including that of our clients, is a top priority. Our overall cybersecurity and privacy strategy is to protect our customers’ information and assets as well as ours to enable agility in the business.
We engage third-party service providers to assist us with our cybersecurity risk management system Third-party cybersecurity experts regularly supplement our cybersecurity risk management efforts, including those we engage to conduct periodic cybersecurity risk assessments.
We regularly engage third-party cybersecurity experts to supplement our cybersecurity risk management efforts, including those we engage to conduct periodic cybersecurity risk assessments. During 2024, Unisys engaged an external security firm to 25 conduct several cybersecurity tabletop exercises. Additionally, we worked with an audit firm and directed several audits related to cybersecurity.
In addition to the oversight of the Board of Directors, members of our management are responsible for assessing and managing material cybersecurity risks. Our CISO served as the CISO for Hertz Global Holdings, Inc. (Hertz), and prior to joining Hertz, held progressively senior information security roles at Hitachi Vantara LLC, Hewlett-Packard Company, Symantec Corp. and Marketo, Inc.
In addition to the oversight by the Board of Directors, members of our management are responsible for assessing and managing material cybersecurity risks. Our CISO has over 34 years of experience in cybersecurity, applications, infrastructure and networks in information security.
Our Chief Information Officer (CIO) has over 20 years at Unisys with experience and knowledge of IT infrastructure, systems and operations; and previously our CIO spent two years as the CIO for Whitney, Bradley & Brown, Inc. (n.k.a. Serco Inc.). At Unisys, the CIO partners with our CISO and CPO on cybersecurity risk management matters.
Our CPO has over 8 years of experience serving as a Global Data Privacy Officer and practicing law specializing in data privacy among other areas. Our Chief Information Officer (CIO) has over 20 years at Unisys with experience and knowledge of IT infrastructure, systems and operations.
We have also adopted physical, technological and administrative cybersecurity controls including, among other items: • a dedicated cybersecurity incident response team, the Security Incident Response Team (SIRT), which is comprised of internal resources and an external vendor, Managed Security Services Provider (MSSP). The MSSP triages based on a combination of predetermined rules.
Our dedicated cybersecurity incident response team, the Security Incident Response Team (SIRT), is comprised of internal resources and an external vendor, Managed Security Services Provider (MSSP). The MSSP triages and validates true positive events and then communicates to the internal SIRT team for deeper investigation and response.
This resulted in significant changes to our security technical stack and improvements to our processes and organization. Our processes to oversee and identify risks from cybersecurity threats associated with our use of third-party service providers Unisys recognizes the importance of overseeing and identifying material risks from cybersecurity threats associated with our use of third-party service providers.
Unisys recognizes the importance of overseeing and identifying material risks from cybersecurity threats associated with our use of third-party service providers. We have a Third Party Risk Management (TPRM) program, which is integrated into our procurement process and involves cybersecurity risk oversight and identification components.
Our S&RC chair previously served as the Chief Information Officer of a large healthcare company from 2011 to 2020 and as a Global Chief Information Officer at another company from 2004 to 2011. Other members of the S&RC have over forty years of executive and operational leadership experience at several global technology and telecommunications companies.
Other members of the S&RC have extensive years of executive and operational leadership experience at several global technology and telecommunications companies. Management’s Role in Assessing and Managing the Company’s Material Risks from Cybersecurity Threats.
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Our Global Information Security organization (GIS), led by our Chief Information Security Officer (CISO), establishes and maintains our company-wide information security management program and provides guidance for information security activities and controls at Unisys.
Added
We have expertise, dedicated resources and technology to identify, assess, respond to and mitigate material risks from cybersecurity threats.
Removed
Through our GIS, we: • establish and maintain corporate information security policies and procedures for identifying, assessing and addressing cybersecurity events; • track and analyze data as it moves through the information systems; • analyze the overall cybersecurity risk to information and systems (including the physical security and cybersecurity); • remediate known cybersecurity vulnerabilities; and • follow evolving information security regulatory guidance for countries in which we operate and adjust internal policies, processes and remediation actions, as necessary.
Added
We design and assess our cybersecurity policies, standards and practices following recognized frameworks established by the National Institute of Standards and Technology, the International Organization for Standardization and other applicable industry standards.
Removed
Our process for integrating cybersecurity risk management into our overall risk management system Our overall cybersecurity and privacy strategy is to protect and enable the business. We aim to protect ours and our customers’ information and assets to enable agility in the business.
Added
We have established written policies that are provided to all associates regarding identification, classification of severity and escalation of cybersecurity incidents and we provide annual and ongoing cybersecurity awareness training for our associates — including regular training on information security and data privacy policies. We also perform internal audits on our cybersecurity and data privacy practices.
Removed
During 2023, Unisys engaged cybersecurity risk experts and external legal counsel to conduct a review of, and advise us on, our cybersecurity risk management processes, current cybersecurity risk environment, leading board governance practices, strategic cyber reporting and cyber resiliency.
Added
We also monitor certain of our principal suppliers and service providers on an ongoing basis by using an outside-in, hacker perspective of a company’s cybersecurity posture through an external service provider.
Removed
Following the review, we have further revised our processes for identifying material cybersecurity incidents and enhanced our written policy regarding identification, classification of severity and escalation of cybersecurity incidents. In 2023, Unisys engaged a leading cybersecurity firm to consult on several technical matters relating to cyber resiliency.
Added
The S&RC periodically meets with the CISO and Chief Privacy Officer (CPO) and briefs the full Board of Directors on cybersecurity matters. Our S&RC chair has previously served in the role of Chief Information Officer at two large companies for over 15 years.
Removed
The Security and Risk Committee (S&RC), a Board committee comprised entirely of independent directors, assists the Board in these oversight responsibilities.
Added
At Unisys, the CIO partners with our CISO and CPO on cybersecurity risk management matters. 26
Removed
In November 2023, the A&FC charter was amended to ensure that it, in conjunction with the S&RC, reviews Unisys’ cybersecurity and other information technology controls and procedures no less than annually. Management’s Role in Assessing and Managing the Company’s Material Risks from Cybersecurity Threats.
Removed
The Disclosure Committee is comprised of the Chief Executive Officer (CEO), Chief Operating Officer (COO), Chief Financial Officer, General Counsel, Chief Compliance Officer and Chief Accounting Officer. The COO represents the business units of the company and the CISO reports to the COO.
Removed
Our CPO previously served as the Global Data Privacy Officer for Hitachi Vantara LLC and prior to that practiced at the law firm of Littler Mendelson, P.C. as an attorney specializing in data privacy among other areas.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS Information with respect to litigation is set forth in Note 18, “Litigation and contingencies,” of the Notes to Consolidated Financial Statements and is incorporated herein by reference. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 25 PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS Information with respect to litigation is set forth in Note 18, “Litigation and contingencies,” of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K and is incorporated herein by reference. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 27 PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 25 Part II Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 26 Item 6. Reserved 27 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 28 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 36 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 27 Part II Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 28 Item 6. Reserved 29 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 30 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 40 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe comparison assumes $100 was invested on December 31, 2018, in Unisys common stock and in each of such indices and assumes reinvestment of any dividends. 2018 2019 2020 2021 2022 2023 Unisys Corporation $ 100 $ 102 $ 169 $ 177 $ 44 $ 48 S&P 500 $ 100 $ 131 $ 156 $ 200 $ 164 $ 207 S&P 500 IT Services $ 100 $ 141 $ 172 $ 181 $ 147 $ 197
Biggest changeThe comparison assumes $100 was invested on December 31, 2019, in Unisys common stock and in each of such indices and assumes reinvestment of any dividends. 2019 2020 2021 2022 2023 2024 Unisys Corporation $ 100 $ 166 $ 173 $ 43 $ 47 $ 53 S&P 500 $ 100 $ 118 $ 152 $ 125 $ 158 $ 197 S&P 500 IT Services $ 100 $ 123 $ 129 $ 105 $ 141 $ 159
Repurchase of Equity Securities None. 26 Stock Performance The following graph compares the cumulative total stockholder return on Unisys common stock during the five fiscal years ended December 31, 2023, with the cumulative total return on the Standard & Poor’s 500 Stock Index and the Standard & Poor’s 500 IT Services Index.
Repurchase of Equity Securities None. 28 Stock Performance The following graph compares the cumulative total stockholder return on Unisys common stock during the five fiscal years ended December 31, 2024, with the cumulative total return on the Standard & Poor’s 500 Stock Index and the Standard & Poor’s 500 IT Services Index.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Unisys Common Stock is listed for trading on the New York Stock Exchange (trading symbol “UIS”). Holders of Record At January 31, 2024, there were approximately 4,000 stockholders of record.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Unisys Common Stock is listed for trading on the New York Stock Exchange (trading symbol “UIS”). Holders of Record At January 31, 2025, there were approximately 3,800 stockholders of record.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeInformation by reportable segment is presented below: (millions) Total Segments DWS CA&I ECS 2023 Revenue $ 1,725.1 $ 546.1 $ 531.0 $ 648.0 Gross profit percent 32.2 % 14.0 % 15.4 % 61.2 % 2022 Revenue $ 1,699.9 $ 509.9 $ 520.3 $ 669.7 Gross profit percent 32.4 % 14.0 % 9.1 % 64.5 % DWS revenue was $546.1 million in 2023 and $509.9 million in 2022.
Biggest changeSee Note 20, “Segment information,” of the Notes to Consolidated Financial Statements for the reconciliations of segment revenue to total consolidated revenue and segment gross profit to total consolidated loss before income taxes. 32 Information by reportable segment is presented below: (millions) Total Segments DWS CA&I ECS 2024 Revenue $ 1,701.7 $ 523.5 $ 526.9 $ 651.3 Gross profit percent 33.0 % 15.7 % 16.5 % 60.2 % 2023 Revenue $ 1,725.1 $ 546.1 $ 531.0 $ 648.0 Gross profit percent 32.2 % 14.0 % 15.4 % 61.2 % DWS revenue was $523.5 million in 2024 and $546.1 million in 2023, a decrease of 4.1%.
Any profit or loss recorded for the company’s U.S. operations will have no provision or benefit associated with it due to the company’s valuation allowance, except with respect to refundable tax credits and withholding taxes not creditable against future taxable income.
Any profit or loss recorded for the company’s U.S. operations will have no provision or benefit associated with it due to the company’s valuation allowance, except with respect to refundable tax credits and withholding taxes not creditable against future taxable income.
If amortization is required, the minimum amortization is that excess above the 10 percent divided by the average remaining life expectancy of the plan participants. For the company’s U.S. qualified defined benefit pension plans and the company’s non-U.S. pension plans, that period is approximately 14 and 21 years, respectively.
If amortization is required, the minimum amortization is that excess above the 10 percent divided by the average remaining life expectancy of the plan participants. For the company’s U.S. qualified defined benefit pension plans and non-U.S. pension plans, that period is approximately 14 and 21 years, respectively.
A substantial portion of the company’s pension plan assets relates to its qualified defined benefit plans in the United States. 33 Funding requirements for its U.S. qualified pension plans are calculated by the plan’s actuaries based on certain assumptions as permitted under current regulations.
A substantial portion of the company’s pension plan assets relates to its qualified defined benefit plans in the United States. Funding requirements for its U.S. qualified pension plans are calculated by the plan’s actuaries based on certain assumptions as permitted under current regulations.
As permitted for purposes of computing pension expense, the company uses a calculated value of plan assets (which is further described below). This allows the effects of the performance of the pension plan’s assets on the company’s computation of pension income or expense to be amortized over future periods.
As permitted for purposes of computing pension expense, the company uses a calculated value of plan assets (which is further described below). This allows the effects of the performance of the pension plan’s assets on the company’s computation of 36 pension income or expense to be amortized over future periods.
While it is uncertain whether the U.S. will enact legislation to adopt Pillar Two, certain countries in which the company operates have adopted legislation, and other countries are in the process of introducing legislation to implement this minimum tax directive.
While it is uncertain whether the U.S. will enact legislation to adopt Pillar Two, certain countries in which the company operates have adopted such legislation, and other countries are in the process of introducing legislation to implement this minimum tax directive.
Events of default include non-payment, failure to comply with covenants, materially incorrect representations and warranties, change of control and default under other debt aggregating at least $50.0 million, subject to relevant cure periods, as applicable. At December 31, 2023, the company had met all covenants and conditions under its various lending and funding agreements.
Events of default include non-payment, failure to comply with covenants, materially incorrect representations and warranties, change of control and default under other debt aggregating at least $50.0 million, subject to relevant cure periods, as applicable. At December 31, 2024, the company had met all covenants and conditions under its various lending and funding agreements.
As a result, the company’s provision or benefit for taxes may vary significantly period to period depending on the geographic distribution of income. The realization of the company’s net deferred tax assets as of December 31, 2023, is primarily dependent on the ability to generate sustained taxable income in various jurisdictions.
As a result, the company’s provision or benefit for taxes may vary significantly period to period depending on the geographic distribution of income. The realization of the company’s net deferred tax assets as of December 31, 2024 is primarily dependent on the ability to generate sustained taxable income in various jurisdictions.
The company may not be able to readily transfer approximately one-third of these funds out of the country in which they are located as a result of local restrictions, contractual or other legal arrangements or commercial considerations.
The company may not be able to readily transfer approximately one-fifth of these funds out of the country in which they are located as a result of local restrictions, contractual or other legal arrangements or commercial considerations.
The company is required to maintain a minimum fixed charge coverage ratio if the availability under the Amended and Restated ABL Credit Facility falls below the greater of 10% of the lenders’ commitments under the facility and $14.5 million.
The company is required to maintain a minimum fixed charge coverage ratio if the availability under the Amended and Restated ABL Credit Facility falls below the greater of 10% of the lenders’ commitments under the facility and $12.5 million.
At December 31, 2023, total debt was $504.2 million compared with $513.1 million at December 31, 2022. See Note 15, “Debt,” of the Notes to Consolidated Financial Statements for more detailed discussion of the company’s debt financing agreements including maturities by fiscal year. The company has commitments under operating leases for certain facilities and equipment used in its operations.
At December 31, 2024, total debt was $493.2 million compared with $504.2 million at December 31, 2023. See Note 15, “Debt,” of the Notes to Consolidated Financial Statements for more detailed discussion of the company’s debt financing agreements including maturities by fiscal year. The company has commitments under operating leases for certain facilities and equipment used in its operations.
The facility is secured by the assets of the company and the subsidiary guarantors, other than certain excluded assets, under a security agreement entered into by the company and the subsidiary guarantors in favor of JPMorgan Chase Bank, N.A., as agent for the lenders under the credit facility.
The facility is secured by the assets of the company and the subsidiary guarantors, other than certain excluded assets, under a security agreement entered into by the company and the subsidiary guarantors in favor of Bank of America, N.A., as agent for the lenders under the credit facility.
As a result of the ownership change in 2011, utilization for certain of the company’s Tax Attributes, U.S. net operating losses and tax credits, is subject to an overall annual limitation of $70.6 million. The cumulative limitation as of December 31, 2023 is approximately $488 million.
As a result of the ownership change in 2011, utilization for certain of the company’s Tax Attributes, U.S. net operating losses and tax credits, is subject to an overall annual limitation of $70.6 million. The cumulative limitation as of December 31, 2024 is approximately $405 million.
A change of 25 basis points in the expected long-term rate of return for the company’s U.S. and non-U.S. pension plans causes a change of approximately $5 million and $4 million, respectively, in 2024 pension expense.
A change of 25 basis points in the expected long-term rate of return for the company’s U.S. and non-U.S. pension plans causes a change of approximately $4 million and $4 million, respectively, in 2025 pension expense.
The company expects to continue to meet these covenants and conditions through at least the next twelve months. At December 31, 2023, the company had outstanding standby letters of credit and surety bonds totaling approximately $232 million related to performance and payment guarantees.
The company expects to continue to meet these covenants and conditions through at least the next twelve months. At December 31, 2024, the company had outstanding standby letters of credit and surety bonds totaling approximately $194 million related to performance and payment guarantees.
Due to the company’s significant postretirement plans accumulated other comprehensive losses, future group annuity contract purchases could result in material non-cash settlement losses. At the end of each year, the company estimates its future cash contributions to its U.S. qualified defined benefit pension plans based on year-end pension data and assumptions.
Due to the company’s significant pension and postretirement plans accumulated other comprehensive losses, future group annuity contract purchases could result in material non-cash settlement losses. At the end of each year, the company estimates its future cash contributions to its global defined benefit pension plans based on year-end pension data, assumptions and agreements.
After considering these most recent group annuity contract purchases, the company has successfully reduced its global defined benefit pension obligations since December 2020 by approximately $2.0 billion, including approximately $1.3 billion in the U.S. The company will continue to evaluate opportunities for additional reduction of its global defined benefit pension obligations in future periods depending on overall market conditions.
After considering the most recent group annuity contract purchase, the company has successfully reduced its global defined benefit pension obligations since December 2020 by approximately $2.2 billion, including approximately $1.5 billion in the U.S. The company will continue to evaluate opportunities for additional reduction of its global defined benefit pension obligations in future periods depending on overall market conditions.
These rules also require that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or the entire deferred tax asset will not be realized. At December 31, 2023 and 2022, the company had deferred tax assets in excess of deferred tax liabilities of $1,263.2 million and $1,218.9 million, respectively.
These rules also require that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or the entire deferred tax asset will not be realized. At December 31, 2024 and 2023, the company had deferred tax assets in excess of deferred tax liabilities of $1,236.5 million and $1,263.2 million, respectively.
At December 31, 2023, for the company’s U.S. qualified defined benefit pension plans, the calculated value of plan assets was $2.08 billion and the fair value was $1.82 billion. Gains and losses are defined as changes in the amount of either the projected benefit obligation or plan assets resulting from experience different from that assumed and from changes in assumptions.
At December 31, 2024, for the company’s U.S. qualified defined benefit pension plans, the calculated value of plan assets was $1.61 billion and the fair value was $1.38 billion. Gains and losses are defined as changes in the amount of either the projected benefit obligation or plan assets resulting from experience different from that assumed and from changes in assumptions.
The company believes that it will have adequate sources of liquidity to meet its expected cash requirements through at least the next twelve months. Cash and cash equivalents at December 31, 2023 were $387.7 million compared with $391.8 million at December 31, 2022.
The company believes that it will have adequate sources of liquidity to meet its expected cash requirements through at least the next twelve months. Cash and cash equivalents at December 31, 2024 were $376.5 million compared with $387.7 million at December 31, 2023.
Any material deterioration in the value of the company’s U.S. qualified defined benefit pension plan assets, as well as changes in pension legislation, volatility in the capital markets, discount rate changes, asset return changes, or changes in economic or demographic trends, could require the company to make cash contributions to its U.S. qualified defined benefit pension plans in different amounts and on a different schedule than previously contemplated.
Any material deterioration in the value of the company’s global defined benefit pension plan assets, as well as changes in pension legislation, volatility in the capital markets, discount rate changes, asset return changes, or changes in economic or demographic trends, could require the company to make cash contributions in different amounts and on a different schedule than previously estimated.
As of December 31, 2023, $232.2 million of cash and cash equivalents were held by the company’s foreign subsidiaries and branches operating outside of the U.S.
As of December 31, 2024, $265.2 million of cash and cash equivalents were held by the company’s foreign subsidiaries and branches operating outside of the U.S.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (For a discussion of 2022 compared with 2021, refer to Part II, Item 7 contained in the company’s Form 10-K for the fiscal year ended December 31, 2022.) Overview In 2023, the company recorded a net loss attributable to Unisys Corporation of $430.7 million, or $6.31 per diluted share, compared with a loss of $106.0 million, or $1.57 per diluted share, in 2022.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (For a discussion of 2023 compared with 2022, refer to Part II, Item 7 contained in the company’s Form 10-K for the fiscal year ended December 31, 2023.) Overview In 2024, the company recorded a net loss attributable to Unisys Corporation of $193.4 million, or $2.79 per diluted share, compared with a loss of $430.7 million, or $6.31 per diluted share, in 2023.
Any borrowings under the facility will be subject to variable interest rates. 31 The Amended and Restated ABL Credit Facility is subject to a springing maturity, under which the Amended and Restated ABL Credit Facility will immediately mature 91 days prior to any date on which contributions to pension funds in the United States in an amount in excess of $100.0 million are required to be paid unless the company is able to meet certain conditions, including that the company has the liquidity (as defined in the Amended and Restated ABL Credit Facility) to cash settle the amount of such pension payments, no default or event of default has occurred under the Amended and Restated ABL Credit Facility, the company’s liquidity is above $130.0 million and the company is in compliance with the then applicable fixed charge coverage ratio on a pro forma basis.
The Amended and Restated ABL Credit Facility is subject to a springing maturity, under which the Amended and Restated ABL Credit Facility will immediately mature 91 days prior to the maturity of the company’s 6.875% Senior Secured Notes due 2027 (the 2027 Notes) or any date on which contributions to pension funds in the United States in an amount in excess of $100.0 million are required to be paid unless the company is able to meet certain conditions, including that the company has the liquidity (as defined in the Amended and Restated ABL Credit Facility) to cash settle the remaining outstanding balance of the 34 2027 Notes or the amount of such pension payments, as applicable, no default or event of default has occurred under the Amended and Restated ABL Credit Facility, the company’s liquidity is above $130.0 million and the company is in compliance with the then applicable fixed charge coverage ratio on a pro forma basis.
The cost reduction charges (credits) were recorded in the following statement of income (loss) classifications: Year ended December 31, 2023 2022 Cost of revenue Services $ 4.9 $ 19.1 Technology 0.7 7.6 Selling, general and administrative 6.9 24.7 Research and development 0.5 0.6 Other (expenses), net (3.7) 2.9 Total $ 9.3 $ 54.9 Gross profit and gross profit margin were $551.3 million and 27.4% in 2023, respectively, and $529.6 million and 26.7% in 2022, respectively.
The cost reduction charges (credits) were recorded in the following statement of income (loss) classifications: Year ended December 31, 2024 2023 Cost of revenue Services $ 8.0 $ 4.9 Technology 4.1 0.7 Selling, general and administrative 6.0 6.9 Research and development (0.1) 0.5 Other (expenses), net 2.6 (3.7) Total $ 20.6 $ 9.3 Gross profit and gross profit margin were $585.9 million and 29.2% in 2024, respectively, and $551.3 million and 27.4% in 2023, respectively.
See Note 6, “Other (expense), net,” of the Notes to Consolidated Financial Statements for details of other (expense), net. Pension expense in 2023 was $391.3 million compared with $47.1 million in 2022. Pension expense in 2023 included $348.9 million of settlement losses primarily related to the company’s U.S. defined benefits plans.
See Note 6, “Other (expense), net,” of the Notes to Consolidated Financial Statements for details of other (expense), net. Pension expense in 2024 was $182.8 million compared with $391.3 million in 2023. Pension expense in 2024 and 2023 included $130.6 million and $348.9 million, respectively, of settlement losses primarily related to the company’s U.S. defined benefits plans.
The net charges related to workforce reductions were $8.3 million, principally related to severance costs, and were comprised of: (a) a charge of $15.2 million and (b) a credit of $6.9 million for changes in estimates.
During 2023, the company recognized cost-reduction charges and other costs of $9.3 million. The net charges related to workforce reductions were $8.3 million, principally related to severance costs, and were comprised of: (a) a charge of $15.2 million and (b) a credit of $6.9 million for changes in estimates.
For 2024, the company has assumed that the expected long-term rate of return on U.S. plan assets will be 7.00%, and on the company’s non-U.S. plan assets will be 4.82%.
For 2025, the company has assumed that the expected long-term rate of return on U.S. plan assets will be 7.00%, and on the company’s non-U.S. plan assets will be 5.32%.
For the reasons cited below, at December 31, 2023 and 2022, management determined that it is more likely than not that $113.1 million and $108.4 million, respectively, of such assets will be realized, resulting in a valuation allowance of $1,150.1 million and $1,110.5 million, respectively.
For the reasons cited below, at December 31, 2024 and 2023, management determined that it is more likely than not that $67.9 million and $113.1 million, respectively, of such assets will be realized, resulting in a valuation allowance of $1,168.6 million and $1,150.1 million, respectively.
At December 31, 2023, the estimated unrecognized loss for the company’s U.S. qualified defined benefit pension plans and the company’s non-U.S. pension plans was $1.02 billion and $400 million, respectively.
At December 31, 2024, the estimated unrecognized loss for the company’s U.S. qualified defined benefit pension plans and non-U.S. pension plans was approximately $1.00 billion and $490 million, respectively.
Pillar Two is not expected to have a material effect on the company’s global effective tax rate and its consolidated financial statements. Net loss attributable to Unisys Corporation for 2023 was $430.7 million, or $6.31 per diluted share, compared with a net loss of $106.0 million, or $1.57 per diluted share in 2022.
Pillar Two did not have a material effect on the company’s global effective tax rate and its consolidated financial statements. The net loss attributable to Unisys Corporation for 2024 was $193.4 million, or $2.79 per diluted share, compared with a net loss of $430.7 million, or $6.31 per diluted share in 2023.
The net charges related to workforce reductions were $7.5 million, principally related to severance costs, and were comprised of: (a) a charge of $7.1 million and (b) a charge of $0.4 million for changes in estimates.
The net charges related to workforce reductions were $13.5 million, principally related to severance costs, and were comprised of: (a) a charge of $23.7 million and (b) a credit of $10.2 million for changes in estimates.
In 2023, we made cash contributions of $42.4 million, primarily for our international defined benefit pension plans. Based on current legislation, global regulations, recent interest rates and expected returns, the company estimates future cash contributions of approximately $21 million in 2024, primarily for our international defined benefit pension plans.
In 2024, the company made cash contributions of $21.9 million, primarily for its international defined benefit pension plans. Based on current legislation, global regulations, recent interest rates and expected returns, the company estimates future cash contributions of approximately $92 million in 2025, primarily for its U.S. defined benefit pension plans.
In addition, capital additions of properties were $21.3 million in 2023 compared with $31.0 million in 2022, capital additions of outsourcing assets were $11.4 million in 2023 compared with $8.6 million in 2022 and the investment in marketable software was $46.0 million in 2023 compared with $46.3 million in 2022. 30 Cash used for financing activities during 2023 was $17.3 million compared with cash used for financing activities of $21.6 million during 2022.
In addition, capital additions of properties were $16.0 million in 2024 compared with $21.3 million in 2023, capital additions of outsourcing assets were $16.3 million in 2024 compared with $11.4 million in 2023 and the investment in marketable software was $47.5 million in 2024 compared with $46.0 million in 2023. 33 Cash used for financing activities during 2024 was $18.1 million compared with cash used for financing activities of $17.3 million during 2023.
The company considers the current expectations for future returns and the actual historical returns of each asset class. Also, because the company’s investment policy is to actively manage certain asset classes where the potential exists to outperform the broader market, the expected returns for those asset classes are adjusted to reflect the expected additional returns.
Also, because the company’s investment policy is to actively manage certain asset classes where the potential exists to outperform the broader market, the expected returns for those asset classes are adjusted to reflect the expected additional returns.
Included in the loss in 2023 was $348.9 million of after-tax settlement losses related to the company’s defined benefit pension plans.
The net loss in 2024 and 2023 included $130.6 million and $348.9 million, respectively, of settlement losses, net of tax, related to the company’s defined benefit pension plans.
Results of operations Company results Revenue for 2023 was $2.02 billion compared with $1.98 billion for 2022, an increase of 1.8%. Foreign currency fluctuations had a negligible impact on revenue in 2023 compared with 2022. Revenue from international operations for both 2023 and 2022 was $1.13 billion.
Results of operations Company results Revenue for 2024 was $2.01 billion compared with $2.02 billion for 2023, a decrease of 0.3%. Foreign currency fluctuations had a negligible impact on revenue in 2024 compared with 2023. Revenue from international operations for 2024 was $1.14 billion compared with $1.13 billion for 2023, an increase of 1.6%.
Foreign currency had a negligible impact on international revenue in 2023 compared with 2022. Revenue from U.S. operations was $889.0 million for 2023 compared with $854.9 million for 2022, an increase of 4.0%. During 2023, the company recognized cost-reduction charges and other costs of $9.3 million.
Foreign currency had a negligible impact on international revenue in 2024 compared with 2023. Revenue from U.S. operations was $864.1 million for 2024 compared with $889.0 million for 2023, a decrease of 2.8%. During 2024, the company recognized cost-reduction charges and other costs of $20.6 million.
As of December 31, 2023, the company’s operating lease liabilities were $44.7 million. The company also has a number of finance leases for equipment, with lease liabilities totaling $0.3 million as of December 31, 2023.
As of December 31, 2024, the company’s operating lease liabilities were $43.9 million. The company also has a number of finance leases for equipment, with lease liabilities totaling $2.8 million as of December 31, 2024.
It is reasonably possible that the judgments and estimates described above could change in future periods, which could have a significant impact on the fair value of the related reporting units. During the fourth quarter of 2023, the company performed a quantitative goodwill impairment test for each reporting unit.
It is reasonably possible that the judgments and estimates described above could change in future periods, which could have a significant impact on the fair value of the related reporting units.
Included in the 2023 results were defined benefit pension plan settlement losses of $348.9 million compared with zero in 2022. During 2023, the company purchased two group annuity contracts, with pension plan assets, for approximately $516 million to transfer projected benefit obligations related to approximately 12,550 retirees of the company’s U.S. defined benefit pension plans.
During 2023, the company purchased two group annuity contracts, with pension plan assets, for approximately $516 million to transfer projected benefit obligations related to the company’s U.S. defined benefit pension plans. These actions resulted in pre-tax settlement losses of $348.2 million in 2023.
In addition, the company recorded charges of $47.4 million comprised of $35.8 million for asset impairments, $8.7 million for other expenses related to cost-reduction efforts and $2.9 million for net foreign currency losses related to exiting foreign countries.
In addition, the company recorded net charges of $7.1 million comprised of a charge of $4.4 million for an asset impairment, a charge of $2.6 million for net foreign currency losses related to exiting foreign countries and a net charge of $0.1 million for other expenses and changes in estimates related to other cost-reduction efforts.
See Note 17, “Employee plans,” of the Notes to Consolidated Financial Statements for details of the settlement losses. The loss before income taxes in 2023 was $347.8 million compared with a loss of $62.6 million in 2022. Included in the loss in 2023 were $348.9 million of settlement losses related to the company’s defined benefit pension plans.
See Note 17, “Employee plans,” of the Notes to Consolidated Financial Statements for details of the settlement losses. The loss before income taxes in 2024 was $75.3 million compared with a loss of $347.8 million in 2023.
The company has a secured revolving credit facility (the Amended and Restated ABL Credit Facility), which matures on October 29, 2025, and provides for revolving loans and letters of credit up to an aggregate amount of $145.0 million (with a limit on letters of credit of $40.0 million), with an accordion feature provision allowing for the aggregate amount available under the credit facility to be increased up to $175.0 million upon the satisfaction of certain specified conditions.
Among other things, the Amendment extended the maturity from October 29, 2025 to October 29, 2027 and reduced the aggregate amount of loans and letters of credit available under the Amended and Restated ABL Credit Facility to $125.0 million (with a limit on letters of credit of $40.0 million), with an accordion feature provision allowing for the aggregate amount available under the credit facility to be increased up to $155.0 million upon the satisfaction of certain specified conditions.
The quantitative assessment indicated that each reporting unit’s fair value exceeded its carrying value, as such no impairment charge was recognized as of December 31, 2023. We estimated the fair value of the reporting units using a combination of discounted cash flows and market-based valuation methodologies as noted above. These methodologies involve significant assumptions that are subject to variability.
The fair value of the reporting units was estimated using a combination of discounted cash flows and market-based valuation methodologies as noted above. These methodologies involve significant assumptions that are subject to variability.
The company records a tax provision or benefit for those international subsidiaries that do not have a full valuation allowance against their deferred tax assets.
The company evaluates quarterly the realizability of its deferred tax assets by assessing its valuation allowance and by adjusting such amount, if necessary. The company records a tax provision or benefit for those international subsidiaries that do not have a full valuation allowance against their deferred tax assets.
At December 31, 2023, the company determined this rate to be 5.70% for its U.S. defined benefit pension plans, a decrease of 34 basis points from the rate used at December 31, 2022, and 4.24% for the company’s non-U.S. defined benefit pension plans, a decrease of 56 basis points from the rate used at December 31, 2022.
At December 31, 2024, the company determined this rate to be 6.09% for its U.S. defined benefit pension plans, an increase of 39 basis points from the rate used at December 31, 2023, and 5.10% for the company’s non-U.S. defined benefit pension plans, an increase of 86 basis points from the rate used at December 31, 2023.
Goodwill The company reviews goodwill for impairment annually in the fourth quarter using data as of September 30 of that year, as well as whenever there are events or changes in circumstances (triggering events), which indicate that the carrying amount may not be recoverable.
Goodwill The company reviews goodwill for impairment annually in the fourth quarter using data as of September 30 of that year, as well as whenever there are events or changes in circumstances (triggering events), which indicate that the carrying amount may not be recoverable. 37 The company initially assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
Segment results The company’s reportable segments are as follows: • Digital Workplace Solutions (DWS), which provides modern and traditional workplace solutions; • Cloud, Applications & Infrastructure Solutions (CA&I), which provides digital platform, applications and infrastructure solutions; and • Enterprise Computing Solutions (ECS), which provides solutions that harness secure, continuous high-intensity computing and enable digital services through software-defined operating environments.
Segment results The company’s reportable segments are as follows: • Digital Workplace Solutions (DWS), which provides workplace solutions featuring intelligent workplace services, proactive experience management and collaboration tools to support business growth; • Cloud, Applications & Infrastructure Solutions (CA&I), which provides digital transformation in the areas of cloud migration and management, applications and infrastructure transformation and modernization solutions; and • Enterprise Computing Solutions (ECS), which provides solutions that harness secure, high-intensity enterprise computing and enable digital services through software-defined operating environments.
As a result, significant contract interpretation is sometimes required to determine the appropriate accounting, including how many performance obligations are present in an arrangement, whether 32 they should be treated as separate performance obligations and when to recognize revenue and under what method for each performance obligation.
As a result, significant contract interpretation is sometimes required to determine the appropriate accounting, including how many performance obligations are present in an arrangement, whether they should be treated as separate performance obligations and when to recognize revenue and under what method for each performance obligation. 35 Income Taxes Accounting rules governing income taxes require that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities.
Net proceeds from investments were $11.2 million in 2023 compared with net purchases of $44.3 million in 2022. Proceeds from investments and purchases of investments represent derivative financial instruments used to manage the company’s currency exposure to market risks from changes in foreign currency exchange rates.
Proceeds from foreign exchange forward contracts and purchases of foreign exchange forward contracts represent derivative financial instruments used to manage the company’s currency exposure to market risks from changes in foreign currency exchange rates.
Any increase or decrease in the valuation allowance would result in additional or lower income tax expense in that period and could have a significant impact on that period’s earnings. During 2023, the company determined that a portion of its non-U.S. net deferred tax assets required an additional valuation allowance.
Any increase or decrease in the valuation allowance would result in additional or lower income tax expense in such period and could have a significant impact on that period’s earnings.
The methodology used to determine the fair values using the income and market approaches, as described below, are weighted to determine the fair value for each reporting unit. The income approach is a forward-looking approach to estimating fair value and relies primarily on internal forecasts. Within the income approach, the method used is the discounted cash flow method.
The income approach is a forward-looking approach to estimating fair value and relies primarily on internal forecasts. Within the income approach, the method used is the discounted cash flow method.
Additionally, as described in Note 4, “Cost-reduction actions,” of the Notes to Consolidated Financial Statements, the company expects to make payments of approximately $9.4 million in 2024 related to the company’s workforce reduction actions.
Additionally, as described in Note 4, “Cost-reduction actions,” of the Notes to Consolidated Financial Statements, the company expects to make payments of approximately $13.0 million in 2025 related to the company’s workforce reduction actions. The company has a secured revolving credit facility (the Amended and Restated ABL Credit Facility), which was amended in October 2024 (the Amendment).
ECS revenue was $648.0 million in 2023 and $669.7 million in 2022. Foreign currency fluctuations had a negligible impact on ECS revenue in 2023 compared with 2022. Gross profit percent was 61.2% in 2023 and 64.5% in 2022. The decrease in revenue and gross profit percent was driven by the timing of software license renewals.
ECS revenue was $651.3 million in 2024 and $648.0 million in 2023, an increase of 0.5%. Foreign currency fluctuations had a negligible impact on ECS revenue in 2024 compared with 2023. Gross profit percent was 60.2% in 2024 and 61.2% in 2023.
This qualitative assessment considers all relevant factors specific to the reporting units, including macroeconomic conditions, industry and market considerations, overall financial performance, changes in share price and relevant entity-specific events. 34 If, after completing the qualitative assessment, the company determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the company proceeds to perform a subsequent quantitative goodwill impairment test.
If, after completing the qualitative assessment, the company determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the company proceeds to perform a subsequent quantitative goodwill impairment test. Alternatively, the company may elect to bypass the qualitative assessment and perform the quantitative impairment test.
Judgment is required to estimate forecasted future taxable income, which may be impacted by future business developments, actual results, strategic operational and tax initiatives, legislative, and other economic factors and developments.
Judgment is required to estimate forecasted future taxable income, which may be impacted by future business developments, actual results, strategic operational and tax initiatives, legislative, and other economic factors and developments. During 2024 and 2023, the company determined that a portion of its non-U.S. net deferred tax assets required an additional valuation allowance.
For the year ended December 31, 2023, the company recognized consolidated pension expense of $391.3 million (which includes $348.9 million of settlement losses) compared with $47.1 million for the year ended December 31, 2022. For 2024, the company expects to recognize pension expense of approximately $57.7 million. See Note 17, “Employee plans,” of the Notes to Consolidated Financial Statements.
For the year ended December 31, 2024, the company recognized consolidated pension expense of $182.8 million (which included $130.6 million of settlement losses) compared with $391.3 million for the year ended December 31, 2023 (which included $348.9 million of settlement losses). For 2025, the company expects to recognize pension expense of approximately $87.0 million.
The increase in revenue in 2023 was primarily driven by new business with existing clients. Foreign currency fluctuations had a negligible impact on DWS revenue in 2023 compared with 2022. Gross profit percent was 14.0% in both 2023 and 2022. CA&I revenue was $531.0 million in 2023 and $520.3 million in 2022.
Foreign currency fluctuations had a negligible impact on CA&I revenue in 2024 compared with 2023. Gross profit percent was 16.5% in 2024 and 15.4% in 2023. The increase in gross profit percent in 2024 compared with 2023 was primarily driven by labor cost savings initiatives.
However, if a reporting unit’s fair value is less than its carrying value, then an impairment charge is recorded in the amount of the excess. When the company performs the quantitative goodwill impairment test for a reporting unit, it estimates the fair value of the reporting unit using both the income approach and the market approach.
The quantitative goodwill impairment test compares each reporting unit’s fair value to its carrying value. If the reporting unit’s fair value exceeds its carrying value, no further procedures are required. However, if a reporting unit’s fair value is less than its carrying value, then an impairment charge is recorded in the amount of the excess.
A change of 25 basis points in the U.S. and non-U.S. discount rates causes a change in 2024 pension expense of approximately $500 thousand and $800 thousand, respectively, and a change of approximately $42 million and $48 million, respectively, in the benefit obligation. These estimates are intended to be illustrative based on a single 25 basis point change.
A change of 25 basis points in the U.S. and non-U.S. discount rates causes a change in 2025 pension expense of approximately $300 thousand in the U.S. and a nominal change in the non-U.S pension expense, and a change in the U.S. and non-U.S. benefit obligation of approximately $35 million and $39 million, respectively.
Selling, general and administrative expenses were $450.3 million in 2023 (22.3% of revenue) and $453.2 million in 2022 (22.9% of revenue). 28 Research and development (R&D) expenses in 2023 were $24.1 million compared with $24.2 million in 2022. In 2023, the company reported an operating profit of $76.9 million compared with an operating profit of $52.2 million in 2022.
Selling, general and administrative expenses were $424.2 million in 2024 (21.1% of revenue) and $450.3 million in 2023 (22.3% of revenue). The decrease was primarily driven by lower professional services. Research and development (R&D) expenses in 2024 were $25.2 million compared with $24.1 million in 2023.
If the company is not able to generate sufficient cash flows from operations, we may need to obtain additional funding in order to make these contributions.
The company estimates totaled cash contributions to its U.S. and non-U.S. defined benefit pension plans of approximately $120 million in 2026 and approximately $750 million in the aggregate from 2027 through 2034. If the company is not able to generate sufficient cash flows from operations, it may need to obtain additional funding in order to make these contributions.
It is possible that future changes in such circumstances or in the inputs and assumptions used in estimating the fair value of the reporting units, could require the company to record a non-cash impairment charge.
It is possible that future changes in such circumstances or in the inputs and assumptions used in estimating the fair value of the reporting units, could require the company to record an additional non-cash impairment charge. 38 Goodwill by reporting unit at December 31, 2024, was as follows: Reporting unit Carrying Amount DWS $ 101.3 CA&I 38.0 ECS 98.3 Other 10.3 Total $ 247.9 39
The sensitivity to rate changes is not linear and additional changes in rates may result in a different impact on the pension liability. The net effect of changes in the discount rate, as well as the net effect of other changes in actuarial assumptions and experience, has been deferred, as permitted.
The net effect of changes in the discount rate, as well as the net effect of other changes in actuarial assumptions and experience, has been deferred, as permitted. A significant element in determining the company’s pension income or expense is the expected long-term rate of return on plan assets.
Additionally, any transfers of these funds to the U.S. in the future may require the company to accrue or pay withholding or other taxes on a portion of the amount transferred. See Note 7, “Income taxes,” of the Notes to Consolidated Financial Statements regarding the company’s intention to indefinitely reinvest earnings of foreign subsidiaries.
Additionally, any transfers of these funds to the U.S. in the future may require the company to accrue or pay withholding or other taxes on a portion of the amount transferred. At December 31, 2024, the company maintained cash balances in various operating accounts in excess of federally insured limits.
A significant element in determining the company’s pension income or expense is the expected long-term rate of return on plan assets. The company sets the expected long-term rate of return based on the expected long-term return of the various asset categories in which it invests.
The company sets the expected long-term rate of return based on the expected long-term return of the various asset categories in which it invests. The company considers the current expectations for future returns and the actual historical returns of each asset class.
At December 31, 2023, the company had no borrowings and $7.1 million of letters of credit outstanding, and availability under the facility was $88.6 million net of letters of credit issued.
Availability under the credit facility is subject to a borrowing base calculated by reference to the company’s receivables. At December 31, 2024, the company had no borrowings and no letters of credit outstanding, and availability under the facility was $117.1 million. Any borrowings under the facility will be subject to variable interest rates.
Foreign currency fluctuations had a negligible impact on CA&I revenue in 2023 compared with 2022. Gross profit percent was 15.4% in 2023 and 9.1% in 2022. The increase in revenue and gross profit percent in 2023 compared with 2022 was primarily due to certain prior year contract exits and new business with existing clients.
The decline in revenue in 2024 was primarily driven by lower volume with existing clients, partially offset by revenue from expansion and new scope for existing clients and new logo contracts, as compared to the prior-year period. Foreign currency fluctuations had a negligible impact on DWS revenue in 2024 compared with 2023.
During 2023, cash provided by operating activities was $74.2 million compared with cash provided by operations of $12.7 million during 2022. The increase in operating cash in 2023 was primarily due to improvements in working capital. Cash used for investing activities during 2023 was $69.6 million compared with cash used for investing activities of $131.4 million during 2022.
The company monitors this risk by evaluating the creditworthiness of the financial institutions. During 2024, cash provided by operating activities was $135.1 million compared with cash provided by operations of $74.2 million during 2023. The increase in operating cash in 2024 was primarily due to lower international pension contributions and favorable settlements of legal and other matters.
The net change in the valuation allowances impacting the effective tax rate in 2022 was approximately $9.8 million of a tax benefit, primarily in the United Kingdom and other foreign jurisdictions.
The change in the tax provision was primarily driven by a provision of $27.3 million established for certain foreign subsidiaries for which the company is no longer asserting indefinite reinvestment of earnings, the geographic distribution of income and the net change in the valuation allowances of approximately $7.9 million, primarily in the United Kingdom.
The provision for income taxes in 2023 was $79.3 million compared with a provision of $42.3 million in 2022. The change in the tax provision is described below. The company evaluates quarterly the realizability of its deferred tax assets by assessing its valuation allowance and by adjusting such amount, if necessary.
The provision for income taxes in 2024 was $117.9 million compared with a provision of $79.3 million in 2023.
Removed
As a result of these actions, the company recorded pre-tax settlement losses of $348.2 million for the year ended December 31, 2023. Additionally in 2023, the company recorded cost-reduction charges and other costs of $9.3 million compared with $54.9 million in 2022.
Added
The net loss in 2024 and 2023 included $130.6 million and $348.9 million, respectively, of defined benefit pension plan settlement losses.
Removed
See Note 4, “Cost-reduction actions,” of the Notes to Consolidated Financial Statements for details of the cost reduction activities. During 2022, the company recognized cost-reduction charges and other costs of $54.9 million.
Added
The net loss in 2024 included a goodwill impairment charge of $39.1 million within the Digital Workplace Solutions (DWS) reportable segment and a tax provision established for certain foreign subsidiaries of $27.3 million as the company is no longer asserting indefinite reinvestment of the earnings of those foreign subsidiaries.
Removed
The increase in gross profit and gross profit margin in 2023 were primarily due lower cost reduction charges in 2023 and gross profit improvement in the Cloud, Applications & Infrastructure Solutions (CA&I) segment, partially offset by lower gross profit in Enterprise Computing Solutions (ECS) segment.
Added
During 2024, the company purchased a group annuity contract, with plan assets, for approximately $192 million to transfer projected benefit obligations related to one of the company’s U.S. defined benefit pension plans. This action resulted in a pre-tax settlement loss of $130.1 million in 2024.
Removed
The increase in 2023 was primarily driven by higher gross profit as discussed above. Interest expense was $30.8 million in 2023 compared with $32.4 million in 2022. Other (expense), net was expense of $393.9 million in 2023 compared with expense of $82.4 million in 2022. Other (expense), net in 2023 includes $348.9 million of pension settlement losses.
Added
The increases in gross profit and gross profit margin in 2024 were primarily due to delivery modernization 30 and labor cost savings initiatives, partially offset by higher cost reduction charges in 2024. Prior year gross profit margin was negatively impacted by certain adjustments related to a previously exited contract.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeForeign currency exchange rate risk The company is also exposed to foreign currency exchange rate risks. The company is a net receiver of currencies other than the U.S. dollar and, as such, can benefit from a weaker dollar, and can be adversely affected by a stronger dollar relative to currencies worldwide, primarily the euro and British pound sterling.
Biggest changeThe company is a net receiver of currencies other than the U.S. dollar and, as such, can benefit from a weaker dollar and can be adversely affected by a stronger dollar relative to currencies worldwide, primarily the Australian dollar, Brazilian real, British pound sterling and euro.
As of December 31, 2023, substantially all of the company’s total long-term debt is at a fixed rate and therefore does not expose the company to risk related to rising interest rates. See Note 15, “Debt,” of the Notes to Consolidated Financial Statements.
As of December 31, 2024, substantially all of the company’s total long-term debt is at a fixed rate and therefore does not expose the company to risk related to rising interest rates. See Note 15, “Debt,” of the Notes to Consolidated Financial Statements.
Based on changes in the timing and amount of interest rate and foreign currency exchange rate movements and the company’s actual exposures and hedges, actual gains and losses in the future may differ from the above analysis. 36
Based on changes in the timing and amount of interest rate and foreign currency exchange rate movements and the company’s actual exposures and hedges, actual gains and losses in the future may differ from the above analysis. 40
Although at December 31, 2023 the company had no outstanding borrowings under the Amended and Restated ABL Credit Facility, future borrowings, if any, will be subject to variable interest rates. As of December 31, 2023, the company had outstanding $480.4 million ($485.0 million face value) of 6.875% senior secured notes due 2027 (the 2027 Notes).
Although at December 31, 2024 the company had no outstanding borrowings under the Amended and Restated ABL Credit Facility, future borrowings, if any, will be subject to variable interest rates. As of December 31, 2024, the company had outstanding $481.6 million ($485.0 million face value) of 6.875% senior secured notes due 2027 (the 2027 Notes).
The company has performed a sensitivity analysis assuming a hypothetical 10% adverse movement in foreign currency exchange rates applied to these derivative financial instruments described above. As of December 31, 2023 and 2022, the analysis indicated that such market movements would have reduced the estimated fair value of these derivative financial instruments by approximately $49 million and $54 million, respectively.
The company has performed a sensitivity analysis assuming a hypothetical 10% adverse movement in foreign currency exchange rates applied to these derivative financial instruments described above. As of December 31, 2024 and 2023, the analysis indicated that such market movements would have reduced the estimated fair value of these derivative financial instruments by approximately $49 million each period.
As the 2027 Notes have a fixed interest rate, the company does not have financial and economic exposure related to rising interest rates with respect to the 2027 Notes. However, the fair value of fixed rate instruments fluctuates when interest rates change. As of December 31, 2023, the fair value of the 2027 Notes was $437.5 million.
As the 2027 Notes have a fixed interest rate, the company does not have financial and economic exposure related to rising interest rates with respect to the 2027 Notes. However, the fair value of fixed rate instruments fluctuates when interest rates change. As of December 31, 2024, the fair value of the 2027 Notes was $471.3 million.
Added
Foreign currency exchange rate risk The company is also exposed to foreign currency exchange rate risks.

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