Unisys Corporation New

Good day and welcome to the Unisys Corporation second quarter 2020 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Courtney Holben, Vice President of Investor Relations. Please go ahead.

Thank you, Operator. Good afternoon, everyone. This is Courtney Holben, Vice President of Investor Relations. Thank you for joining us. Earlier today, Unisys released its second quarter 2020 financial results. I'm joined this afternoon to discuss those results by Peter Altabeth, our Chairman and CEO, and Mike Thompson, our CFO. Before we begin, I'd like to cover a few details. Today's conference call and the Q&A session are being webcast via the Unisys investor website. Second, you can find the earnings press release in the presentation slides that we will be using this afternoon to guide our discussion, as well as other information related to our second quarter performance on our investor website, which we encourage you to visit. Third, today's presentation, which is complementary to the earnings press release, includes some non-GAAP financial measures. The non-GAAP measures have been reconciled to the related GAAP measures and we've provided reconciliations within the presentation. Although appropriate under generally accepted accounting principles, the company's results reflect charges that the company believes are not indicative of its ongoing operations and that can make its profitability and liquidity results difficult to compare to prior periods, anticipated future periods, or to its competitors' results. These items consist of pension, debt exchange and extinguishment, cost reduction and other expense. Management believes each of these items can distort the visibility of trends associated with the company's ongoing performance. Management also believes that the evaluation of the company's financial performance can be enhanced by use of supplemental presentation of its results that exclude the impact of these items in order to enhance consistency and comparativeness with prior or future period results. The following measures are often provided and utilized by the company's management Analysts and investors to enhance comparability of year-over-year results as well as to compare results to other companies in our industry. Non-GAAP operating profit, non-GAAP diluted earnings per share, free cash flow and adjusted free cash flow, EBITDA and adjusted EBITDA, and constant currency. In addition, this quarter we will be continuing to report non-GAAP adjusted revenue and related measures as a result of certain revenue relating to reimbursements from the company's check processing JV partners for restructuring expenses included as part of the company's restructuring program. For more information regarding these adjustments, please see our earnings release and our Form 10-Q. From time to time, Unisys may provide specific guidance or color regarding its expected future financial performance. Such information is effective only on the date given. Unisys generally will not update, reaffirm, or otherwise comment on any such information except as Unisys deems necessary and then only in a manner that complies with Regulation FD. And finally, I'd like to remind you that all forward-looking statements made during this conference call are subject to various risks and uncertainties that could cause the actual results to differ materially from our expectations. These factors are discussed more fully in the earnings release and in the company's SEC filings. Copies of those SEC reports are available from the SEC along with other materials I mentioned earlier on the Unisys investor website. And now I'd like to turn the call over to Peter.

Thanks very much, Courtney. And good afternoon, everyone. And thank you for joining us today. Since our last call, the world has continued to confront health, economic and social issues. And I'd like to start by saying that we hope you, your family and friends remain safe and healthy. Usually when I say that, which I do a lot now, I'm referring to COVID-19. This afternoon, I'm also referring to the hurricane and the hurricane conditions that are affecting those of you on the Eastern seaboard. 2020 has simply been that kind of year. Turning to the company's operations in the most challenging COVID-19 quarter, our revenue expectations are unchanged for the full year 2020 and we have increased visibility on profitability. Our client satisfaction is high represented by our industry leading net promoter score and our liquidity is strong with our cash balance at 782 million compared to 790 million at the end of the first quarter. I want to begin by highlighting some of the reasons why our revenue expectations for the year are unchanged. Despite the year-over-year declines we experienced in the quarter, approximately half of our revenue decline in the second quarter was due to COVID-19-related impacts to our services business. And the other half was driven by intra-year, inside-year shifts in clear path forward renewals, as well as currency and expected declines in our check processing joint ventures.