CORRECTING AND REPLACING Unisys Announces Second-Quarter 2006 Financial Results; Company Makes Significant Progress in Cost-Reduction Efforts

The corrected release reads:

UNISYS ANNOUNCES SECOND-QUARTER 2006 FINANCIAL RESULTS; COMPANYMAKES SIGNIFICANT PROGRESS IN COST-REDUCTION EFFORTS

Unisys Corporation (NYSE: UIS) today announced its second-quarter2006 financial results and reported significant progress in itspreviously announced cost-reduction efforts as part of its plan toreposition the company for long-term profitable growth.

Unisys reported a second-quarter 2006 net loss of $194.6 million,or 57 cents per share. The results included a pre-tax charge of $141.2million to cover a planned workforce reduction of approximately 1,900people. These second-quarter 2006 results compared with asecond-quarter 2005 net loss of $27.1 million, or 8 cents per share.Pre-tax pension expense in the second quarter of 2006 was $40.5million compared with pre-tax pension expense of $45.8 million in theyear-ago quarter.

Revenue for the second quarter of 2006 declined 2% to $1.41billion from $1.44 billion in the year-ago quarter.

Comments from President and CEO Joseph W. McGrath

"This was a mixed quarter for Unisys," said Joseph W. McGrath,Unisys president and chief executive officer. "We moved aggressivelyin the quarter to implement planned headcount reductions as part ofour global cost-reduction program. Based on a continuing analysis ofthe business and efforts to reengineer processes, we also identifiedopportunities to reduce our global headcount by an additionalapproximately 1,900 people. These reductions, along with those weannounced in the first quarter of 2006, bring the total number ofplanned worldwide headcount reductions to approximately 5,500. Weexpect these reductions to yield net annualized cost savings of morethan $325 million by the second half of 2007.

"As we implemented these reductions and other elements of ourrepositioning program, we saw short-term disruptions in ouroperations, which impacted our financial results for the quarter,"McGrath said. "We remain confident, however, that the repositioningeffort will significantly enhance our profitability andcompetitiveness over the long term."

McGrath said that of the total 5,500 planned workforce reductions,the company completed approximately 2,200 reductions in the secondquarter, and expects to complete another 1,300 reductions in the thirdquarter of 2006. By the end of 2006, Unisys expects to completeapproximately 90% of the total planned headcount reductions, with theremaining reductions targeted for the first half of 2007. The companyplans to reinvest some of these cost savings into increasedinvestments in its growth initiatives, global sourcing, and employeedevelopment programs. Net of these reinvestments, the company expectsthe headcount actions to yield annualized cost savings in excess of$325 million by the second half of 2007.

"We continue to see 2006 as a transitional year as we work throughour repositioning actions," McGrath said. "As these initiatives takehold, we expect to realize significant benefits in our profitabilityin 2007 and 2008."

Second-Quarter Company Results

The company reported a double-digit decline in overall orders inthe second quarter. Services orders showed a double-digit decrease,while Technology orders declined by a single-digit percentage comparedto the year-ago quarter.

Revenue in the U.S. declined 6% in the quarter to $628 million.Revenue in international markets increased 2% in the quarter to $779million.

The company's gross profit margin and operating profit margin inthe second quarter of 2006 were 11.6% and (13.1%), respectively, whichinclude the cost-reduction charge. These compared with gross andoperating profit margins of 19.3% and (3.9%), respectively, in thesecond quarter of 2005.

Second-Quarter Business Segment Results

Unisys has a long-standing policy to evaluate business segmentperformance on operating income exclusive of restructuring charges andunusual and non-recurring items. Therefore, the comparisons belowexclude the second-quarter 2006 cost-reduction charge discussed above.

Customer revenue in the company's services segment declined 1% inthe second quarter of 2006 compared with the year-ago period. Thecompany reported growth in infrastructure services and outsourcing,which was offset by revenue declines in consulting and systemsintegration and in core maintenance. Gross profit margin in theservices business improved to 14.3% from 12.2% a year ago, while theservices operating margin improved to (0.9%) compared with (3.7%) ayear ago.

Customer revenue in the company's technology segment declined 8%in the second quarter of 2006 driven by double-digit declines inenterprise servers. Reflecting lower sales volume of high-marginenterprise server products, technology gross profit margin declined to37.6% from 44.6% a year ago while operating margins declined to(12.2%) from (4.8%) a year ago.

In late June, Unisys made major announcements regarding itsenterprise server family aimed at improving demand for these products.The company announced a next-generation architecture that will allowmultiple operating systems and applications, including proprietaryClearPath systems and Microsoft and Linux, to run simultaneously onthe same platform using Intel processor technology. Innovative Unisyssoftware will enable these systems to share application workloadsdynamically based on business requirements. Unisys also announced newhigh-end ClearPath models and software tools that provide up to a 40%performance increase over previous models.

Cash Flow and Balance Sheet Highlights

Unisys used $193 million of cash from operations in the currentquarter. The cash usage in the quarter reflected a reduction ofapproximately $73 million in the amount of receivables sold throughthe company's securitization program. The company also used $34million of cash in the second quarter of 2006 for restructuringpayments. In the second quarter of 2005, the company generated $64million of cash from operations, including a tax refund ofapproximately $39 million. The year-ago period included $20 million ofcash used for restructuring payments. Capital expenditures in thesecond quarter of 2006 were $65 million compared to $112 million inthe year-ago quarter. After deducting for capital expenditures, Unisysused $258 million of free cash in the quarter compared with usage of$48 million in the second quarter of 2005.

During the second quarter Unisys repaid all of its outstanding$57.9 million 8.125% notes due June 1, 2006.

The company ended the second quarter of 2006 with $655 million ofcash on hand.

Year-to-Date Results

For the six months ended June 30, 2006, Unisys reported a net lossof $222.5 million, or 65 cents per share. These results includedpre-tax charges of $287.1 million for headcount reductions in thefirst and second quarters of 2006, a first-quarter 2006 pre-tax gainof $149.9 million on the sale of the company's shares in Nihon UnisysLimited, and a first-quarter 2006 pre-tax curtailment gain of $45.0million related to changes in the company's U.S. defined benefitpension plans. Pre-tax pension expense in the first half of 2006,including the first-quarter curtailment gain, was $48.4 millioncompared with pre-tax pension expense of $92.6 million in the firsthalf of 2005. In the first half of 2005, the company reported a netloss of $72.6 million, or 21 cents per share. Revenue for the firstsix months of 2006 was $2.8 billion compared to revenue of $2.8billion in the first half of 2005.

Conference Call

Unisys will hold a conference call today at 8:15 a.m. Eastern Timeto discuss its results. The listen-only Webcast, as well as theaccompanying presentation materials, can be accessed via a link on theUnisys Investor Web site at www.unisys.com/investor. Following thecall, an audio replay of the Webcast, and accompanying presentationmaterials, can be accessed through the same link.

About Unisys

Unisys is a worldwide technology services and solutions company.Our consultants apply Unisys expertise in consulting, systemsintegration, outsourcing, infrastructure, and server technology tohelp our clients achieve secure business operations. We build moresecure organizations by creating visibility into clients' businessoperations. Leveraging Unisys 3D Visible Enterprise, we make visiblethe impact of their decisions--ahead of investments, opportunities andrisks. For more information, visit www.unisys.com.

Forward-Looking Statements

Any statements contained in this release that are not historicalfacts are forward-looking statements as defined in the PrivateSecurities Litigation Reform Act of 1995. Forward-looking statementsinclude, but are not limited to, any projections of earnings,revenues, contract values or other financial items; any statements ofthe company's plans, strategies or objectives for future operations;statements regarding future economic conditions or performance; andany statements of belief or expectation. All forward-lookingstatements rely on assumptions and are subject to various risks anduncertainties that could cause actual results to differ materiallyfrom expectations. Statements in this release concerning the company'scost reduction plan are subject to the risk that the company may notimplement the planned headcount reductions as quickly as currentlyplanned, which could affect the timing of anticipated cost savings.The amount of anticipated cost savings is also subject to currencyexchange rate fluctuations with regard to actions taken outside theU.S. Other risks and uncertainties that could affect the company'sfuture results include general economic and business conditions; theeffects of aggressive competition in the information services andtechnology markets on the company's revenues, pricing and margins andon the competitiveness of its product and services offerings; thelevel of demand for the company's products and services and thecompany's ability to anticipate and respond to changes in technologyand customer preferences; the company's ability to grow outsourcingand infrastructure services and its ability to effectively and timelycomplete the related solutions implementations, client transitions tothe new environment and work force and facilities rationalizations;the company's ability to effectively address its challengingoutsourcing operations through negotiations or operationally and tofully recover the associated outsourcing assets; the company's abilityto drive profitable growth in consulting and systems integration; thelevel of demand for the company's high-end enterprise servers; thecompany's ability to effectively rightsize its cost structure; therisks of doing business internationally and the potential forinfringement claims to be asserted against the company or its clients.Additional discussion of these and other factors that could affectUnisys future results is contained in its periodic filings with theSecurities and Exchange Commission. Unisys assumes no obligation toupdate any forward-looking statements.

RELEASE NO.: 0719/8693

http://www.unisys.com/about__unisys/news_a_events/07198693.htm

Unisys is a registered trademark of Unisys Corporation. All otherbrands and products referenced herein are acknowledged to betrademarks or registered trademarks of their respective holders.
UNISYS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Millions, except per share data)

Three Months Six Months
Ended June 30 Ended June 30
------------------ ------------------
2006 2005 2006 2005
-------- -------- -------- --------
Revenue
Services $1,224.5 $1,236.0 $2,400.9 $2,343.7
Technology 182.8 199.5 394.2 458.4
-------- -------- -------- --------
1,407.3 1,435.5 2,795.1 2,802.1
Costs and expenses
Cost of revenue:
Services 1,136.3 1,063.4 2,212.8 2,044.8
Technology 108.1 94.7 217.5 219.6
-------- -------- -------- --------
1,244.4 1,158.1 2,430.3 2,264.4
Selling, general and
administrative 282.7 267.4 578.1 529.0
Research and development 63.9 66.6 139.2 131.5
-------- -------- -------- --------
1,591.0 1,492.1 3,147.6 2,924.9
-------- -------- -------- --------
Operating loss (183.7) (56.6) (352.5) (122.8)

Interest expense 19.1 15.2 38.9 27.8
Other income
(expense), net (0.7) 32.0 152.7 32.5
-------- -------- -------- --------
Loss before income taxes (203.5) (39.8) (238.7) (118.1)
Benefit for income taxes (8.9) (12.7) (16.2) (45.5)
-------- -------- -------- --------
Net loss ($194.6) ($27.1) ($222.5) ($72.6)
======== ======== ======== ========
Loss per share
Basic ($ .57) ($ .08) ($ .65) ($ .21)
======== ======== ======== ========
Diluted ($ .57) ($ .08) ($ .65) ($ .21)
======== ======== ======== ========
Shares used in the per share
computations (thousands):
Basic 343,414 340,047 342,936 339,147
======== ======== ======== ========
Diluted 343,414 340,047 342,936 339,147
======== ======== ======== ========

UNISYS CORPORATION
SEGMENT RESULTS
(Millions)

Elimi-
Total nations Services* Technology*
-------- -------- -------- ----------
Three Months Ended
June 30, 2006
------------------
Customer revenue $1,407.3 $1,224.5 $182.8
Intersegment ($53.2) 3.8 49.4
-------- -------- -------- --------
Total revenue $1,407.3 ($53.2) $1,228.3 $232.2
======== ======== ======== ========

Gross profit percent 11.6% 14.3% 37.6%
======== ======== ========
Operating loss
percent (13.1%) (0.9%) (12.2%)
======== ======== ========
Three Months Ended
June 30, 2005
------------------
Customer revenue $1,435.5 $1,236.0 $199.5
Intersegment ($75.7) 4.9 70.8
-------- -------- -------- --------
Total revenue $1,435.5 ($75.7) $1,240.9 $270.3
======== ======== ======== ========

Gross profit percent 19.3% 12.2% 44.6%
======== ======== ========
Operating loss
percent (3.9%) (3.7%) (4.8%)
======== ======== ========

Six Months Ended
June 30, 2006
------------------
Customer revenue $2,795.1 $2,400.9 $394.2
Intersegment ($95.8) 7.2 88.6
-------- -------- -------- --------
Total revenue $2,795.1 ($95.8) $2,408.1 $482.8
======== ======== ======== ========

Gross profit percent 13.1% 14.7% 39.8%
======== ======== ========
Operating loss
percent (12.6%) (0.9%) (8.7%)
======== ======== ========
Six Months Ended
June 30, 2005
------------------
Customer revenue $2,802.1 $2,343.7 $458.4
Intersegment ($135.6) 9.7 125.9
-------- -------- -------- --------
Total revenue $2,802.1 ($135.6) $2,353.4 $584.3
======== ======== ======== ========

Gross profit percent 19.2% 11.6% 46.2%
======== ======== ========
Operating profit
(loss) percent (4.4%) (5.2%) 1.1%
======== ======== ========

* 2006 results exclude charges for cost reductions and
related actions booked in March 2006 and June 2006

UNISYS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Millions)

June 30, December 31,
2006 2005
------------ ------------
Assets
Current assets
Cash and cash equivalents $655.1 $642.5
Accounts and notes receivable, net 1,082.2 1,111.5
Inventories
Parts and finished equipment 103.4 103.4
Work in process and materials 80.2 90.7
Deferred income taxes 110.2 68.2
Prepaid expense and other
current assets 155.7 137.0
---------- ----------
Total 2,186.8 2,153.3
---------- ----------
Properties 1,346.6 1,320.8
Less accumulated depreciation
and amortization 984.9 934.4
---------- ----------
Properties, net 361.7 386.4
---------- ----------
Outsourcing assets, net 420.6 416.0
Marketable software, net 317.0 327.6
Investments at equity 1.1 207.8
Prepaid pension cost 1,318.3 66.1
Deferred income taxes 138.4 138.4
Goodwill 192.1 192.0
Other long-term assets 138.7 141.3
---------- ----------
Total $5,074.7 $4,028.9
========== ==========
Liabilities and stockholders' equity (deficit)
Current liabilities
Notes payable $10.7 $18.1
Current maturities of long-term debt 0.8 58.8
Accounts payable 390.0 444.6
Other accrued liabilities 1,393.9 1,293.3
---------- ----------
Total 1,795.4 1,814.8
---------- ----------
Long-term debt 1,049.2 1,049.0
Accrued pension liabilities 352.4 506.9
Other long-term liabilities 684.5 690.8
Stockholders' equity (deficit)
Common stock 3.5 3.4
Accumulated deficit (2,330.6) (2,108.1)
Other capital 3,931.6 3,917.0
Accumulated other comprehensive loss (411.3) (1,844.9)
---------- ----------
Stockholders' equity (deficit) 1,193.2 (32.6)
---------- ----------
Total $5,074.7 $4,028.9
========== ==========

UNISYS CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(Millions)

Six Months Ended
June 30
------------------
2006 2005
------- -------
Cash flows from operating activities
Net loss ($222.5) ($72.6)
Add (deduct) items to reconcile
net loss to net cash (used for)
provided by operating activities:
Equity loss (income) 4.3 (11.6)
Employee stock compensation
expense 3.2
Depreciation and amortization
of properties 58.5 61.8
Depreciation and amortization of
outsourcing assets 66.7 65.6
Amortization of marketable software 66.2 59.2
Gain on sale of NUL shares
and other investments (153.2)
Increase in deferred income taxes, net (41.9) (.6)
Decrease in receivables, net 66.7 73.6
Decrease in inventories 10.2 10.4
Increase (decrease) in accounts payable
and other accrued liabilities 8.0 (249.3)
(Decrease) increase in other
liabilities (44.5) 122.6
Decrease (increase) in other assets 1.2 (24.8)
Other 11.1 56.4
------- -------
Net cash (used for) provided by
operating activities (166.0) 90.7
------- -------
Cash flows from investing activities
Proceeds from investments 3,729.3 3,709.4
Purchases of investments (3,731.3) (3,698.8)
Investment in marketable software (55.3) (63.3)
Capital additions of properties (32.7) (59.4)
Capital additions of outsourcing assets (50.1) (86.3)
Purchases of businesses (.5)
Proceeds from sale of NUL shares
and other investments 380.6
------- -------
Net cash provided by (used for)
investing activities 240.5 (198.9)
------- -------
Cash flows from financing activities
Net (reduction in) proceeds from
short-term borrowings (7.4) .5
Proceeds from employee stock plans .9 12.8
Payments of long-term debt (57.9) (150.7)
Costs of credit agreement (4.6)
------- -------
Net cash used for financing
activities (69.0) (137.4)
------- -------
Effect of exchange rate changes on cash
and cash equivalents 7.1 (16.0)
------- -------
Increase (decrease) in cash
and cash equivalents 12.6 (261.6)
Cash and cash equivalents, beginning of
period 642.5 660.5
------- -------
Cash and cash equivalents, end of period $655.1 $398.9
======= =======