UNISYS CORP

INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS

Certain statements contained in this report, including, without limitation, statements as to management expectations, assumptions and beliefs presented in Part I, Item 2. “Management's Discussion and Analysis of Financial Condition and Results of Operations,” Part I, Item 3. “Quantitative and Qualitative Disclosures About Market Risk,” Part II, Item 1. “Legal Proceedings” and in the notes to the financial statements are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Words such as “anticipates,” “estimates,” “expects,” “projects,” “may,” “will,” “intends,” “plans,” “believes,” “should” and similar expressions may identify forward-looking statements and such forward-looking statements are made based upon management’s current expectations, assumptions and beliefs as of this date concerning future developments and their potential effect on us. There can be no assurance that future developments will be in accordance with management's expectations, assumptions or beliefs, or that the effect of future developments on us will be those anticipated by management. Because actual results may differ materially from those expressed or implied by these forward-looking statements, we caution readers not to place undue reliance on these statements. Any forward-looking statement speaks only as of the date on which that statement is made. The company assumes no obligation to update any forward-looking statement to reflect events or circumstances that occur after the date on which the statement is made, except as required by applicable law.

The factors that could cause actual results to differ materially from our expectations, assumptions and beliefs include, but are not limited to, those discussed in Item 1A. Risk Factors of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as summarized below, our ability to:

Business and Operating

•maintain our installed base and sell new solutions and related services;

•grow revenue, expand profit margin and generate sufficient cash flows in our businesses;

•effectively anticipate and respond to rapid technological innovation, such as artificial intelligence among others, in our industry;

•manage cybersecurity incidents, security incidents and breaches and other disruptions in our IT systems;

•adapt to the adverse effects of volatile, negative or uncertain economic, geopolitical and political conditions, as well as acts of war, terrorism, natural disasters or the widespread outbreak of infectious diseases;

•work with government and public sector clients and additional risks inherent in the government contracting and public sector environment;

•respond to the potential adverse effects of aggressive competition;

•attract, retain, and develop skilled employees to align with global client demand and retain and develop strong leaders;

•achieve expected profitability or expected level of revenue from our commercial contracts;

•manage the pricing, performance and capabilities of third parties with whom we have commercial relationships;

•meet our underfunded defined benefit pension plan obligations;

•maintain our credit rating or access financing markets;

•comply with the terms of the credit agreement that governs the Amended and Restated Asset Based Lending Credit Facility and the 10.625% Senior Secured Notes due 2031 indenture;

•protect or enforce our intellectual property rights and defend against infringement claims;

•adapt to an evolving international trade and tariff environment;

•manage the business and financial risk in the completion of acquisitions or dispositions;

Legal and Regulatory

•comply with global legal and regulatory requirements;

•manage the legal risks related to artificial intelligence and other machine learning technology that are integrated into our services and solutions;

•manage exposure to legal proceedings, investigations compliance and environmental matters;

•meet global sustainability standards and expectations, achieve our sustainability goals and comply with sustainability laws and regulations;

•maintain an effective system of internal controls over financial reporting and disclosure controls and procedures;

Accounting

•mitigate a decrease in the value of our assets and an impairment of goodwill or intangible assets; and

•use our net operating loss carryforwards and certain other tax attributes.

Other factors discussed in this report, although not listed here, also could materially affect our future results.

Part I - FINANCIAL INFORMATION

CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Unaudited)

(Millions, except per share data)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

CONSOLIDATED BALANCE SHEETS (Unaudited)

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT) (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Dollars in millions, except share and per share amounts)

Note 1 -Basis of Presentation

The unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). These rules and regulations permit some of the information and footnote disclosures normally included in financial statements, prepared in accordance with generally accepted accounting principles in the United States of America (GAAP), to be condensed or omitted. In management’s opinion, the unaudited consolidated financial statements contain all adjustments that are of a normal recurring nature, necessary for a fair presentation of the results of operations and financial position of the company for the interim periods presented. These adjustments consist only of normal recurring accruals except as disclosed herein. Because of seasonal and other factors, results for interim periods are not necessarily indicative of the results to be expected for the full year.

These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the fiscal year ended December 31, 2025 and the notes thereto included in the company’s Annual Report on Form 10-K, filed with the SEC.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about future events. These estimates and assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities and the reported amounts of revenue and expenses. Such estimates include the valuation of estimated credit losses, contract assets, operating lease right-of-use assets, capitalized contract costs assets, marketable software, goodwill, purchased intangibles and other long-lived assets, legal and environmental contingencies, assumptions used in the calculation for systems integration projects, income taxes, and retirement and other post-employment benefits, among others. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ materially from these estimates. Any changes in those estimates resulting from changes in the economic environment such as inflation, tariffs, trade policy, fluctuation in interest rates and foreign exchange rates and conflicts, wars and other events of geopolitical significance, will be reflected in the financial statements in future periods.

The company’s accounting policies are set forth in detail in Note 1 of the Notes to Consolidated Financial Statements in the company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC. Such Annual Report also contains a discussion of the company’s critical accounting policies and estimates. The company believes that these critical accounting policies and estimates affect its more significant estimates and judgments used in the preparation of the company’s consolidated financial statements.

Reclassifications

Certain prior period amounts in the consolidated financial statements and accompanying notes have been reclassified to conform to the current period presentation.

Note 2 -Accounting Standards

Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures(ASU 2024-03) requiring additional disclosures about certain costs and expenses in the notes to the financial statements on an annual and interim basis. This update is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted on either a prospective or retrospective basis. ASU 2024-03 is not expected to have a material effect on the company’s consolidated financial statements.

In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (ASU 2025-06), which simplifies the capitalization guidance for internal-use software costs by removing all references to software development project stages. ASU 2025-06 is effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods, with early adoption permitted on either a prospective, retrospective or a modified transition approach. The company is currently evaluating the impact of the standard on its consolidated financial statements.

Note 3 -Cost-Reduction Actions

The company from time to time initiates cost reduction actions designed to improve operating efficiency, reduce costs and align the company’s workforce and facility structures to its overall business plan.

Cost-reduction charges (credits) and other costs recognized were as follows:

(i) Asset impairment charges and write-offs relate to assets associated with exited operations and facilities.

The charges (credits) were recorded in the following statement of income (loss) classifications:

Liabilities and expected future payments related to the company’s workforce reduction actions are as follows:

Note 4 -Pension and Postretirement Benefits

Net periodic pension expense is presented below:

(i) Service cost is reported in selling, general and administrative expense. All other components of net periodic pension expense are reported in other (expense), net in the consolidated statements of income (loss).

During the six months ended June 30, 2026, the company made cash contributions of $57.4 million to its global defined benefit pension plans. For the remainder of 2026, the company expects to make cash contributions of approximately $40 million, resulting in total expected cash contributions for 2026 of approximately $97 million to the company’s global defined benefit pension plans. These contributions are expected to include approximately $47 million to the company’s U.S. qualified defined benefit pension plans and approximately $50 million, primarily to the company’s international defined benefit pension plans.

During the six months ended June 30, 2025, the company made cash contributions of $287.2 million to its global defined benefit pension plans, including a discretionary contribution of $250 million to its U.S. defined benefit pension plans. In 2025, the company made cash contributions of $343.7 million to its global defined benefit pension plans.

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. 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.

Net periodic postretirement benefit expense (income) is presented below:

(i) Service cost is reported in selling, general and administrative expense. All other components of net periodic postretirement benefit expense (income) are reported in other (expense), net in the consolidated statements of income (loss).

The company expects to make cash contributions of $3 million to its postretirement benefit plan in 2026. In 2025, the company made cash contributions of $1.6 million to its postretirement benefit plan. For the six months ended June 30, 2026 and 2025, the company made cash contributions of $0.7 million and $0.4 million, respectively.

Note 5 -Stock Compensation

Under stockholder approved stock-based plans, stock options, stock appreciation rights, restricted stock and restricted stock units (RSUs) may be granted to officers, directors and other key employees.

As of June 30, 2026, the company has granted restricted stock and RSUs under these plans. The company recognizes compensation cost, net of a forfeiture rate, in selling, general and administrative expense, and recognizes compensation cost only for those awards expected to vest. The company estimates the forfeiture rate based on its historical experience and its expectations about future forfeitures.

During the six months ended June 30, 2026 and 2025, the company recorded $7.2 million and $9.7 million of share-based restricted stock and RSU compensation expense, respectively.

Restricted stock and RSU awards may contain time-based units, performance-based units, total shareholder return market-based units, or a combination of these units. Each performance-based and market-based unit will vest into zero totwo shares depending on the degree to which the performance or market conditions are met. Compensation expense for performance-based awards is recognized as expense ratably for each installment from the date of grant until the date the restrictions lapse and is based on the fair market value at the date of grant and the probability of achievement of the specific performance-related goals. Compensation expense for market-related awards is recognized as expense ratably over the measurement period, regardless of the actual level of achievement, provided the service requirement is met. RSU grants for the company’s directors vest upon award and compensation expense for such awards is recognized upon grant.

A summary of restricted stock and RSU activity for the six months ended June 30, 2026 follows (shares in thousands):

(i)Awards granted during the six months ended June 30, 2026 were time-based conditions awards.

(ii) Vested awards include 2023 and 2024 performance-based RSUs awards vested at zero percent payout.

The aggregate weighted-average grant-date fair value of restricted stock and RSUs granted during the six months ended June 30, 2026 and 2025 was $12.8 million and $15.9 million, respectively. The fair value of awards with time and performance conditions is determined based on the trading price of the company’s common shares on the date of grant. The fair value of awards with market conditions is estimated using a Monte Carlo simulation.

As of June 30, 2026, there was $20.8 million of total unrecognized compensation cost related to outstanding restricted stock and RSUs granted under the company’s plans. That cost is expected to be recognized over a weighted-average period of 2.1 years. The aggregate weighted-average grant-date fair value of restricted stock and RSUs vested during the six months ended June 30, 2026 and 2025 was $9.0 million and $15.3 million, respectively.

Common stock issued upon the lapse of restrictions on restricted stock and RSUs are newly issued shares. In light of its tax position, the company is currently not recognizing any tax benefits from the issuance of stock upon lapse of restrictions on restricted stock and RSUs.

Note 6 -Other (expense), net

Other (expense), net is comprised of the following:

(i) Foreign exchange (losses) gains include gains (losses) from remeasuring cash, receivables, payables and intercompany balances denominated in foreign currencies, as well as gains (losses) related to the substantial completion of liquidation of certain foreign subsidiaries of $0.2 million and $1.6 million in the three months ended June 30, 2026 and 2025, respectively, and $(0.1) million and $2.7 million in the six months ended June 30, 2026 and 2025, respectively. In the third quarter of 2025, the company ceased the use of foreign currency forward contracts used to mitigate the impact of exchange rate fluctuations in the intercompany balances denominated in foreign currencies. The gains (losses) on such forward contracts for the three and six months ended June 30, 2025 were included within foreign exchange (losses) gains. See Note 10 for details on the company’s foreign exchange forward contracts.

(ii)Interest income relates primarily to interest earned from cash and short-term investments.

(iii)Other, net generally consists of environmental costs related to previously disposed businesses and other miscellaneous items.

Note 7 -Income Taxes

For the three and six months ended June 30, 2026, the provision for income taxes was $15.8 million and $29.5 million, respectively, primarily driven by the geographic distribution of income. For the three and six months ended June 30, 2026, the effective tax rate was (19.8)% and (28.7)%, respectively, primarily driven by U.S. operating losses with no tax benefit as the deferred tax assets are subject to a full valuation allowance, non-creditable withholding taxes in the U.S., and jurisdictions with no valuation allowance that are subject to tax.

For the three and six months ended June 30, 2025, the provision for income taxes was $20.0 million and $30.6 million, respectively, primarily driven by the geographic distribution of income. For the three months ended June 30, 2025, the effective tax rate isnot a meaningful measure due to the lack of pre-tax income or loss. For the six months ended June 30, 2025, the effective tax rate was (153.0)%, primarily driven by non-creditable withholding taxes in the U.S., jurisdictions with no valuation allowance that are subject to tax, and U.S. operating losses with no tax benefit as the deferred tax assets are subject to a full valuation allowance.

Note 8 -Loss Per Share

The following table provides the calculations for the company’s earnings (loss) per common share attributable to Unisys Corporation (shares in thousands):

(i) Amounts represent shares excluded from the computation of diluted loss per share, as their effect, if included, would have been anti-dilutive for the periods presented.

Note 9 -Revenue

The following table presents the company’s revenue disaggregated by type of revenue:

(i) Technology represents hardware and software license revenue.

Contract Assets and Deferred Revenue

Contract assets represent rights to consideration in exchange for goods or services transferred to a customer when that right is conditional on something other than the passage of time. Deferred revenue represents contract liabilities.

Net contract assets (liabilities) are as follows:

(i) Reported in other long-term assets on the company’s consolidated balance sheets.

Significant changes in the above contract liability balances were as follows:

Capitalized Contract Costs

The company’s capitalized contract costs, net include the following:

For the three months ended June 30, 2026 and 2025, amortization expense related to capitalized contract costs, net was $7.7 million and $4.5 million, respectively. For the six months ended June 30, 2026 and 2025, amortization expense related to capitalized contract costs assets, net was $13.5 million and $7.5 million, respectively.

Remaining Performance Obligations

Remaining performance obligations represent the transaction price of firm orders for which work has not been performed and excludes (i) contracts with an original expected length of one year or less and (ii) contracts for which the company recognizes revenue at the amount to which it has the right to invoice for services performed. At June 30, 2026, the company had approximately $0.8 billion of remaining performance obligations of which approximately 23% is estimated to be recognized as revenue by the end of 2026,37% by the end of 2027,22% by the end of 2028,11% by the end of 2029 and 7% thereafter.

Note 10 -Financial Instruments and Fair Value Measurements

Due to its foreign operations, the company is exposed to the effects of foreign currency exchange rate fluctuations on the U.S. dollar, principally related to intercompany account balances. In the third quarter of 2025, the company ceased its use of foreign currency forward contracts, as such these contracts haveno remaining notional amounts since December 31, 2025. For the three and six months ended June 30, 2025, gains recognized on foreign currency exchange forward contracts were $38.0 million and $53.9 million, respectively, and included within other (expense), net in the consolidated statements of income (loss). These contracts were not designated as hedging instruments and the fair value was based on quoted prices for similar but not identical financial instruments; as such, the inputs were considered Level 2 inputs.

Financial assets with carrying values approximating fair value include cash and cash equivalents and accounts receivable. Financial liabilities with carrying values approximating fair value include accounts payable and other liabilities. The carrying amounts of these financial assets and liabilities approximate fair value due to their short maturities. Such financial instruments are not included in the following table that provides information about the estimated fair values of other financial instruments that are not measured at fair value in the consolidated balance sheets as of June 30, 2026 and December 31, 2025.

Long-term debt is carried at amortized cost and its estimated fair value is based on market prices classified as Level 2 in the fair value hierarchy.

Note 11 -Properties

The components of properties, net were as follows:

Note 12 -Goodwill and Intangible Assets

The net carrying value of goodwill by reporting unit was as follows:

Goodwill is presented net of accumulated impairment losses of $141.3 million and $94.1 million as of June 30, 2026 and December 31, 2025, respectively, attributable to the DWS reporting unit. For the three and six months ended June 30, 2026, the company recognized an impairment loss of $47.2 million on goodwill associated with the DWS reporting unit. The impairment charge was recorded within goodwill and intangible asset impairment in the consolidated statements of income (loss)

Goodwill Impairment

The company reviews goodwill for impairment annually, as well as whenever there are events or changes in circumstances (triggering events), which indicate that the carrying amount may not be recoverable. The company continuously monitors its revenue, gross profit and operating profit growth and evaluates other relevant events and circumstances including changes to U.S. treasury rates and equity risk premiums, tax rates, recent market valuations from transactions by comparable companies, volatility in the company’s market capitalization, and general industry, market and macro-economic conditions, that could unfavorably impact the recoverability of the goodwill carrying value.

During the second quarter of 2026, the company reviewed its estimated long-term expected future cash flows for the DWS reporting unit. DWS projected gross profit was below the previous estimated forecast primarily due to continued competitive pressure resulting from industry and macro-economic conditions. Based on this, the company concluded that a triggering event existed and conducted a quantitative goodwill assessment for DWS reporting unit as of June 30, 2026.

The fair value of the DWS reporting unit was estimated using both the income approach and the market approach using a weighted methodology to determine its fair value.

The income approach is a forward-looking approach to estimating fair value and relies primarily on internal forecasts. Within the income approach, the discounted cash flow method is used, which is considered a Level 3 nonrecurring fair value measurement. The company starts with a forecast of all expected net cash flows associated with the reporting unit, which includes the application of a terminal value, and then applies a reporting unit-specific discount rate to arrive at a net present value amount. Significant estimates and assumptions inherent in this approach include the amount and timing of projected net cash flows, long-term growth rate and the discount rate. Cash flow projections are based on management’s estimates of economic and market conditions, which drive key assumptions of revenue growth rates and operating margins. The discount rate, in turn, is based on various market factors and specific risk characteristics of each reporting unit.

The market approach relies primarily on external information for estimating the fair value. Significant estimates and assumptions inherent in this approach include the selection of appropriate guideline companies and the selected performance metric used in this approach.

Based on the goodwill impairment analysis performed during the second quarter of 2026, the carrying value of the DWS reporting unit exceeded its respective fair value, resulting in the recognition of a goodwill impairment charge of $47.2 million for both the three and six months ended June 30, 2026. The impairment charge represented the entire remaining goodwill balance allocated to the DWS reporting unit, resulting in a full write-off of the reporting unit's goodwill.

Intangible Assets, Net

Intangible assets, net at June 30, 2026, consisted of the following:

(i) Amortization expense is included within selling, general and administrative expense in the consolidated statements of income (loss).

For both the three months ended June 30, 2026 and 2025, amortization expense was $1.0 million. For the six months ended June 30, 2026 and 2025, amortization expense was $2.0 million and $2.1 million, respectively.

Finite-lived intangible assets are tested for impairment whenever events or changes in circumstances would indicate that the carrying value may not be recoverable. An impairment charge would be recognized if the carrying value exceeds fair value in the consolidated statement of income (loss) in the period the impairment is identified.

During both the three and six months ended June 30, 2026, the company recorded an impairment charge of $1.5 million related to a customer relationship intangible asset. The impairment was triggered by revised expectations regarding future cash flows. Fair value was determined using a discounted cash flow methodology and is classified as a Level 3 fair value measurement. The impairment charge was recorded within goodwill and intangible asset impairment in the consolidated statements of income (loss).

The future amortization relating to acquired intangible assets at June 30, 2026, was estimated as follows:

Note 13 -Debt

Long-term debt is comprised of the following:

(i) See Note 10 for the fair value of the notes.

Senior Secured Notes due 2031

In June 2025, the company completed a private placement offering of $700.0 million aggregate principal amount of its 10.625% Senior Secured Notes due 2031 (the 2031 Notes). The 2031 Notes pay interest semiannually on January 15 and July 15, and will mature on January 15, 2031, unless earlier repurchased or redeemed by the company. The 2031 Notes are fully and unconditionally guaranteed on a senior secured basis by Unisys Holding Corporation, Unisys AP Investment Company I and Unisys NPL, Inc., each a Delaware corporation that is directly or indirectly wholly owned by the company (the Subsidiary Guarantors).

During the six months ended June 30, 2026, the company repurchased $1.6 million of the 2031 Notes from the open market for $1.4 million. The company recorded a gain on debt extinguishment of $0.2 million, reported in other (expense), net.

Interest expense related to the 2031 Notes is comprised of the following:

Senior Secured Notes due 2027

In 2025, the company satisfied and discharged the indenture relating to the $485.0 million aggregate principal amount of the 6.875% Senior Secured Notes due November 1, 2027 (the 2027 Notes). The company paid an aggregate amount of $493.5 million, which was made up of the following: $485.0 million of principal amount, $3.0 million of early tender premium and $5.5 million of accrued but unpaid interest on the 2027 Notes to be redeemed to, but not including, the redemption date. In 2025, the company recorded a loss on debt extinguishment in relation to the satisfaction and discharge of the 2027 Notes of $7.0 million, reported in other (expense), net in the consolidated statements of income (loss), which included $4.0 million in unamortized debt issuance costs write-off and other expenses and an early tender premium of $3.0 million paid to repurchase a portion of the 2027 Notes.

Interest expense related to the 2027 Notes was comprised of the following:

Asset Based Lending (ABL) Credit Facility

The company has a secured revolving credit facility (the Amended and Restated ABL Credit Facility), which matures in June 2030. The Amended and Restated ABL Credit Facility provides for revolving loans and letters of credit up to an aggregate amount of $125.0 million (with a limit on letters of credit of $40.0 million), with an uncommitted accordion feature allowing for the aggregate amount available to be increased up to $155.0 million upon the satisfaction of certain specified conditions.

Availability under the Amended and Restated ABL Credit Facility is subject to a borrowing base calculated by reference to the company’s receivables. At June 30, 2026, the company hadno borrowings and $6.1 million of letters of credit outstanding. Availability under the Amended and Restated ABL Credit Facility was $99.7 million, net of letters of credit issued. Any borrowings under the Amended and Restated ABL Credit Facility will be subject to variable interest rates.

The Amended and Restated ABL Credit Facility is guaranteed by Unisys Holding Corporation, Unisys NPL, Inc. and Unisys AP Investment Company I, each of which is a U.S. corporation that is directly or indirectly owned by the company (the subsidiary guarantors) and any future material domestic subsidiaries. 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.

At June 30, 2026, the company has met all covenants and conditions under its various lending and funding agreements. For at least the next 12 months, the company expects to continue to meet these covenants and conditions.

Note 14 -Litigation and Contingencies

The company is involved in a wide range of lawsuits, claims, investigations and proceedings, which arise in the ordinary course of business, including actions with respect to commercial and government contracts, labor and employment, employee benefits, environmental matters, intellectual property and non-income tax matters. Further, given the rapidly evolving external landscape of cybersecurity, privacy, artificial intelligence, and data protection laws, regulations, threat actors, and heightened client expectations and demands, the company and its clients have been and will continue to be subject to actions or proceedings in various jurisdictions. These matters can involve a number of different parties, including competitors, clients, current or former employees, government and regulatory agencies, stockholders and representatives of the locations in which the company does business. Many of these matters are also highly complex and may seek recovery on behalf of a class or similarly large number of plaintiffs. It is therefore inherently difficult to predict the size or scope of potential future losses arising from these matters.

The company records a provision for these matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated and a gain contingency when the award or recovery is realized or realizable. Significant judgment is required in both the determination of probability and the determination as to whether an exposure is reasonably estimable. Because of uncertainties related to these matters, accruals are based only on the best information available at the time. Any provisions are reviewed at least quarterly and are adjusted to reflect the impact and status of settlements, rulings, advice of counsel and other information and events pertinent to a particular matter. These adjustments could have a material impact on our results of operations and financial position.

The company intends to defend itself vigorously with respect to any legal matters. Based on its experience, the company also believes that the damage amounts claimed against it in the matters disclosed below are not a meaningful indicator of the company’s potential liability.

Legal proceedings are inherently unpredictable and unfavorable resolutions have and could occur. Whether any losses, damages or remedies finally determined in any claim, suit, investigation or proceeding could reasonably have a material effect on the company’s business, financial condition, results of operations or cash flows will depend on a number of variables, including: the timing and amount of such losses or damages; the structure and type of any such remedies; the significance of the impact any such losses, damages or remedies may have in the company’s consolidated financial statements; and the unique facts and circumstances of the particular matter that may give rise to additional factors. Accordingly, it is possible that an adverse outcome from such matters could be material to the company’s financial condition, results of operations and cash flows in any particular reporting period.

Notwithstanding that the ultimate results of the lawsuits, claims, investigations and proceedings that have been brought or asserted against the company are not currently determinable, the company believes that at June 30, 2026, it has adequate provisions for any such matters.

The following is a summary of the more significant legal proceedings involving the company.

The company’s Brazilian operations, along with those of many other companies doing business in Brazil, are involved in various litigation matters, including numerous governmental assessments related to indirect and other taxes, as well as disputes associated with former employees and contract labor. The tax-related matters pertain to value-added taxes, customs, duties, sales and other non-income-related tax exposures. The labor-related matters include claims related to compensation. The company believes that appropriate accruals have been established for such matters based on information currently available. At June 30, 2026, excluding those matters that have been assessed by management as being remote as to the likelihood of ultimately resulting in a loss, the amount related to unreserved tax-related matters, inclusive of any related interest, is estimated to be approximately $100 million.

With respect to the specific legal proceedings and claims described above, except as otherwise noted, either (i) the amount or range of possible losses in excess of amounts accrued, if any, is not reasonably estimable or (ii) the company believes that the amount or range of possible losses in excess of amounts accrued that are estimable would not be material. Nonetheless, the company is unable to predict the outcome from such matters and it is possible that an adverse result could be material to the company’s financial conditions, results of operations and cash flows.

Environmental Matters

As of June 30, 2026, the company has an estimated environmental liability for a site that its predecessor company previously operated of approximately $18 million, of which $5 million is reported in other accrued liabilities and $13 million in other long-term liabilities on the company’s consolidated balance sheets. The company has an agreement related to this site, which provides for a partial reimbursement of certain costs when all cleanup work has been approved and finalized. As of June 30, 2026, the company expects to recover approximately $33 million, which is included in other long-term assets on the company’s consolidated balance sheets. As the company continues to perform investigation activities and if events and circumstances change, the company may incur future additional costs, which could have a material impact on the company’s results of operations, financial condition and cash flows.

Note 15 -Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss is as follows:

Amounts reclassified out of accumulated other comprehensive loss are as follows:

(i) Reported in other (expense), net in the consolidated statements of income (loss).

(ii)These items are included in net periodic pension and postretirement cost (see Note 4).

Note 16 -Supplemental Cash Flow Information

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the total of the amounts shown in the consolidated statements of cash flows.

Cash and cash equivalents subject to contractual restrictions, and are therefore not readily available, are classified as restricted cash. At June 30, 2026, the company maintains cash balances in various operating accounts in excess of federally insured limits. The company monitors this risk by evaluating the creditworthiness of the financial institutions.

Note 17 -Segment Information

The company’sreportable 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.

This segment structure reflects the financial information used by the company’s chief operating decision maker (CODM) to make decisions regarding the company’s business, including resource allocations and performance assessments, as well as the current operating focus.

The CODM evaluates the performance of the segments based on segment revenue and segment gross profit. The company’s CODM regularly reviews cost of revenues by segment and treats it as a significant segment expense. Segment revenue and segment gross profit are exclusive of certain activities and expenses that are not allocated to specific segments and reported in Other as described below. The company does not report assets by reportable segments as this information is not reviewed by the CODM on a regular basis.

Other, as presented in the reconciliation tables below, includes revenue and cost of revenue associated with the company’s United Kingdom business process outsourcing consolidated joint venture, which is a non-core business activity. Additionally, Other includes certain expenses within cost of revenue such as cost reduction charges, amortization of purchased intangibles and unusual and nonrecurring items that are not allocated to specific segments. These amounts are combined within other revenue and other gross profit (loss) to arrive at total consolidated revenue and total consolidated gross profit (loss) as reported in the reconciliations below.

The following table presents certain financial information by reportable segments:

Presented below is a reconciliation of total segment revenue to total consolidated revenue:

Presented below is a reconciliation of total segment gross profit to consolidated income (loss) before income taxes:

Geographic information about the company’s revenue, which is principally based on location of the selling organization, is presented below: