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January 6, 1987

FASTER-THAN-EXPECTED DIVESTITURES SET UNISYS CORP UP FOR A BRIGHT 1987

By CBR Staff Writer

Unisys Corp says that it is ahead of its initial schedule for merging Sperry and Burroughs, and enters 1987 with its balance sheet strengthened by divestiture of more than $1,800m in non-strategic assets a year ahead of plan, and a unified organisational structure at more levels than though possible at the time of ther merger. The company is still estimating a net charge against earnings for the restructuring costs so far of $250m to $275m. Chairman Michael Blumenthal declares himself particularly pleased at the success of the divestiture programme. At the time of the merger we indicated we would divest $1,500m by December 1987: as of December 31 1986, one year early, we have executed agreements to divest more than $1,800m, substantially all for cash. Debt is being repaid from these funds as planned so that Unisys is well ahead of plan in its debt reduction programme. The expected sale of Sperry Marine early this year will substantially complete the divestiture programme. The annual cost savings are expected to be substantially in excess of the $150m target for 1987, with most of the benefits coming in the second half of the year. Of 1987, Blumenthal says that the company’s plans assume that revenue and order growth will be modest, reflecting continuing weakness in the computer industry, particularly in the US, so that anticipated profit growth will come from lower costs.

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