Convergys Corporation Earns $0.22 on Revenue Growth from Customer Care and Employee Care.To download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. high-resolution, print-ready JPEG JPEG in full Joint Photographic Experts Group Standard computer file format for storing graphic images in a compressed form for general use. JPEG images are compressed using a mathematical algorithm. images, click on the thumbnail A miniature representation of a page or image that is used to identify a file by its contents. Clicking the thumbnail opens the file. Thumbnails are an option in file managers, such as Windows Explorer, and they are found in photo editing and graphics program to quickly browse multiple image above. WARNING: these images are very large (800K+) Click here for caption Business Editors/High-Tech Writers MULTIMEDIA AVAILABLE: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=4620032 CINCINNATI--(BUSINESS WIRE)--April 20, 2004 Convergys Corporation (NYSE NYSE See: New York Stock Exchange :CVG CVG Convergys Corp CVG Corporación Venezolana de Guayana CVG Clear Vertical Grain (woodworking) CVG Carrier Group CVG Corporacion Venezolana de Guyana CVG Comprehensive Video Group (South Hackensack, NJ, USA) ): IN THE FIRST QUARTER: -- Convergys' revenues grew 2 percent over the first quarter of last year -- Convergys' Customer Management Group established a new BTO BTO British Trust for Ornithology BTO Business Technology Optimization BTO Bachman Turner Overdrive (band) BTO Business Transformation Outsourcing BTO Build-Transfer-Operate BTO Brutto (German: Gross [quantity]) agreement with IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) for customer care services for Sprint and grew revenue 7 percent from last year's first quarter -- Convergys' Information Management Group reaffirmed its long-standing relationship with AT&T Wireless, established a new relationship with Verizon Wireless Cellco Partnership, doing business as Verizon Wireless, owns and operates the second largest wireless telecommunications network in the United States, based on total wireless customers. , extended its relationship with Insight Communications Insight Communications is the ninth largest cable operator in the United States with approximately 1.4 million customer relationships in the four contiguous states of Illinois, Kentucky, Indiana and Ohio. , and signed five new international contracts -- Convergys' Employee Care announced agreement to expand HR outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. business further by acquiring DigitalThink Convergys Corporation (NYSE:CVG), the global leader in integrated billing, employee care, and customer care services, announced today its financial results for the first quarter of 2004. Total revenues increased 2 percent to $573.9 million compared to $560.4 million reported in the first quarter of 2003. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. and operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: were $54.9 million and 9.6 percent, respectively, versus $68.5 million and 12.2 percent in the prior year. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net income was $32.5 million or $0.22 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share compared with $34.9 million or $0.22 in the first quarter of 2003. On a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis, excluding the legal settlement by Convergys' cellular partnership, net income and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of were $41.3 million and $0.26 in the prior year. "Our first quarter clearly proved that we are winning in the market across our businesses. Our strategy for returning our Information Management business to growth in revenue and profit continues to be validated val·i·date tr.v. val·i·dat·ed, val·i·dat·ing, val·i·dates 1. To declare or make legally valid. 2. To mark with an indication of official sanction. 3. . In the last few months we reaffirmed our long-standing relationship with AT&T Wireless, established a new relationship with Verizon Wireless, expanded and extended our relationship with Sprint, extended our relationship with Insight Communications, and signed five new international license agreements," said Jim Orr, Chairman, President, and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Convergys. "Our Customer Management Group is continuing its pattern of growth supported by a strong pipeline in both Customer Care and Employee Care." Highlights Since Last Quarterly Report Contracts/Contract Extensions -- Convergys secured a multi-year agreement with Textron (NYSE: TXT TXT Text TXT Text File (filename extension) TXT Textile TXT Teletext TXT Tecnologia per a Tothom TXT Textron Corporation (stock symbol) ) to deliver HR outsourcing services on a global scale. Convergys will support and help manage approximately 40,000 Textron employees from 13 business units and in several languages including English, French, and German. Convergys will centralize cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. several of the company's HR and payroll functions. Textron selected Convergys because of its global scale and international infrastructure. -- AT&T Wireless (NYSE: AWE AWE - Advanced WavEffect ) announced the conclusion of its Request for Information for billing services and affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. its billing relationship with Convergys. AT&T Wireless said that, after an extensive review, it decided to continue to use Convergys to bill all of its subscribers. -- Convergys announced that Verizon Wireless has licensed Convergys' Infinys(TM) rating and billing software. The software will be implemented jointly by Convergys and Verizon Wireless and will be used to rate all of Verizon Wireless' data services. -- Convergys announced a 5-year Business Transformation Outsourcing (BTO) agreement with IBM (NYSE: IBM) to provide a range of customer care services to IBM as part of its agreement with Sprint (NYSE: FON Fon People of southern Benin and adjacent parts of Togo. They speak a dialect of Gbe, a Kwa language of the Niger-Congo language family. Numbering about 3 million, the Fon are mainly farmers. ). Convergys will play a key role with IBM in providing Sprint with better customer segmentation, more efficient call routing, reduced average call handle time, and a higher rate of first call resolution. -- Convergys announced that Indonesian mobile services operator P.T. Telekomunikasi (Telkomsel) has ordered a combination of Siemens' charge@once charging solution with Infinys software from Convergys. The coupling of the Infinys software application with the Siemens intelligent network platform enables Telkomsel to offer both pre- pre- word element [L.], before (in time or space). pre- pref. 1. Earlier; before; prior to: prenatal. 2. and post-paid customers new services using one billing solution. -- Convergys announced a five-year renewal of its ICOMS ICOMS Integrated Communications Operations Management system ICOMS Improved Conventional Mine System software license agreement with Insight Communications (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : ICCI ICCI Insight Communications Company Inc. (stock symbol) ICCI International Conference on Computing and Information ICCI International Conference on Cognitive Informatics ICCI Islamic Chamber of Commerce and Industry ), the nation's ninth-largest cable operator. Convergys' software is the industry-leading convergent voice, video, and high-speed data billing and subscriber management solution for satellite, cable, and broadband service providers An ISP, telephone company, cable company or other carrier that offers high-speed communications to homes and businesses, typically for Internet access. Cable modems, DSL and T1 lines are the common technologies. See broadband, cable modem, DSL and T1. . -- Convergys announced a billing and customer care contract for Infinys software with O2, a leading provider of a wide range of mobile services to approximately 12 million consumers and businesses in the United Kingdom. The mobile carrier will use the Infinys application for rating and billing for its postpaid post·paid adj. With the postage having been paid in advance. postpaid Adverb, adj with the postage prepaid Adj. 1. business. -- Convergys also announced these new international agreements: TV Cabo, Portugal's largest cable TV operator, selected the Infinys rating and billing engine to support the introduction of new interactive services. OTE OTE Chiefly Brit (esp. in job adverts) on target earnings: the minimum amount of money a salesman is expected to make OTE abbr (Comm) (= on-target earnings) → Einkommensziel nt , the national carrier of Greece, will use Infinys to support their ISP (1) See in-system programmable. (2) (Internet Service Provider) An organization that provides access to the Internet. Connection to the user is provided via dial-up, ISDN, cable, DSL and T1/T3 lines. business and the Olympic Community during the 2004 Olympic Games Olympic games, premier athletic meeting of ancient Greece, and, in modern times, series of international sports contests. The Olympics of Ancient Greece Although records cannot verify games earlier than 776 B.C. in Athens. And exTV, a Hong-Kong based satellite operator, licensed the WIZARD Instructional help in an application or system development environment that guides the user through a series of multiple choice questions to accomplish a task. For the most part, wizards are more effective than the help menus found in most applications, which often border on the atrocious. (R) solution to support its new all digital multi-channel TV service. Acquisitions/Expansions Convergys is expanding its global capabilities in learning outsourcing services to include innovative content development and delivery services by announcing an agreement to acquire San Francisco-based DigitalThink, Inc. (NASDAQ: DTHK). DigitalThink is a leader in custom e-learning for the Fortune 1000 and the largest custom e-learning company in the industry. Its learning solutions include consulting services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.) service - work done by one person or group that benefits another; "budget separately for goods and services" , cutting-edge simulations, custom online course development, and a scalable technology platform for on-demand course delivery. Recognition For the fourth consecutive year, Convergys was recognized as one of "America's Most Admired ad·mire v. ad·mired, ad·mir·ing, ad·mires v.tr. 1. To regard with pleasure, wonder, and approval. 2. To have a high opinion of; esteem or respect. 3. " companies in the Diversified diversified (di·verˑ·s Outsourcing industry by Fortune Magazine. Convergys rated Number One in three categories: Innovation, Employee Talent, and Social Responsibility - - and rated no less than third in any category. Operating Performance by Segment Customer Management Group (CMG CMG Coastal & Marine Geology (USGS) CMG Chipotle Mexican Grill, Inc. (stock symbol) CMG Companion (of the Order Of) St Michael and St George CMG Computer Measurement Group ) Convergys CMG's revenues were $390.9 million, a 7 percent increase from the first quarter of 2003. This reflects increased levels of business with many of Convergys' top 20 CMG clients, as well as customer care services provided to the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Postal Service postal service, arrangements made by a government for the transmission of letters, packages, and periodicals, and for related services. Early courier systems for government use were organized in the Persian Empire under Cyrus, in the Roman Empire, and in medieval and employee care services provided to the State of Florida. The growing demand for global sourcing also contributed to this increase. Convergys' CMG first quarter operating income and operating margin were $31.5 million and 8.1 percent, respectively, compared with $43.0 million and 11.8 percent in the prior year. This reflects increased startup costs associated with new clients, increased investment in employee care, pricing changes, and higher operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. resulting from the negative impact of a weakened weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. U.S. versus
Canadian dollar Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin"loonie dollar - the basic monetary unit in many countries; equal to 100 cents . Information Management Group (IMG IMG International medical graduate, see there ) Convergys IMG's revenues decreased 7 percent to $183.0 million in the first quarter of 2004 from $196.7 million in the same period last year. Data processing data processing or information processing, operations (e.g., handling, merging, sorting, and computing) performed upon data in accordance with strictly defined procedures, such as recording and summarizing the financial transactions of a revenues of $98.9 million decreased 17 percent from the prior year. This decrease reflects lower average wireless subscriber processing rates and the transition of subscribers from Convergys' billing system during the second quarter of 2003. Additionally, the decrease reflects the discontinuance Cessation; ending; giving up. The discontinuance of a lawsuit, also known as a dismissal or a non-suit, is the voluntary or involuntary termination of an action. DISCONTINUANCE, pleading. A chasm or interruption in the pleading. 2. of bill finishing services provided to a wireless client. This discontinuance had a minimal impact on the operating margin. This was partially offset by revenue from the acquisition of certain billing assets from ALLTEL in the fourth quarter 2003, the ramp of a new wireless client, and a 5 percent increase in wireless subscribers for the clients Convergys supports. Professional and consulting revenues of $28.7 million increased 7 percent from the prior year. This increase resulted from the acquisition of the ALLTEL billing business partially offset by lower spending from various wireless clients. License and other revenues increased 29 percent from the prior year to $17.6 million. This increase reflects a new license arrangement with a large North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. wireless provider and expanded relationships with several of Convergys' cable clients. International revenues of $37.8 million increased 1 percent from prior year. This increase was due to revenues generated from new or expanded license arrangements with several wireless, wireline, and cable clients. This was partially offset by lower revenues resulting from the previously announced decision by a large European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. client to suspend a system implementation. Convergys IMG's first quarter operating income and operating margin were $24.5 million and 13.4 percent, respectively, compared with $28.2 million and 14.3 percent in the prior year. Lower revenues contributed to these declines. Partially offsetting the lower revenues were lower IMG operating expenses realized through restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and other cost reduction initiatives. Non Operating Items -- Convergys' investments in the cellular partnerships contributed a pre-tax loss of $0.1 million. This compares to a pre-tax loss of $9.9 million from the prior year. -- Interest expense was $1.7 million versus $1.5 million in the prior year, resulting from lower interest rates on a higher debt balance. -- Average diluted shares outstanding decreased by 10.9 million shares to 145.3 million as a result of shares that were repurchased in 2003. Business Outlook The following forward looking-statements reflect Convergys' expectations as of April 20, 2004. Given the various risk factors discussed below, actual results may differ materially. The company intends to continue its practice of not updating forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. until its next quarterly results announcement, other than in publicly available statements. 2004 Financial Guidance For the full year 2004, Convergys CMG's revenue is expected to increase by 10 percent to 15 percent from the 2003 level, and operating margin will be down. For the full year 2004, Convergys IMG's revenue is expected to decline by 3 percent to 8 percent from the 2003 level, and operating margin will be down. For the full year 2004, EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. is expected to be in the range of $0.85 to $1.00. For the second quarter of 2004, Convergys CMG's revenue is expected to be up roughly 9 percent, and operating margin will be down from first quarter levels. For the second quarter of 2004, Convergys IMG's revenue and operating margin are expected to be roughly in line with first quarter levels. For the second quarter of 2004, EPS is expected to be in the range of $0.18 to $0.20. ABOUT CONVERGYS Convergys Corporation (NYSE: CVG), a member of the S&P 500 and a Fortune Most Admired Company, is the global leader in integrated billing, employee care, and customer care services provided through outsourcing or licensing. We serve top companies in telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. , Internet, cable and broadband services See broadband and broadband service provider. , technology, financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , and other industries in more than 40 countries. We also provide integrated, outsourced, human resource services to leading companies across a broad range of industries. We bring together world-class resources, software, and expertise to help create valuable relationships between our clients and their customers and their employees. This commitment is validated by the more than 1.5 million individual bills our software produces each day to support more than 100 million subscribers, and by the more than 1.7 million separate customer and employee contacts we manage each day, both live and via electronic interaction. Convergys(R) employs more than 55,000 people in 51 customer contact centers and in our data centers and other offices in the United States, Canada, Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. , Europe, the Middle East, and Asia. Convergys is on the net at www.convergys.com, and has world headquarters in Cincinnati. (Infinys is a trademark and Convergys, WIZARD, and the Convergys logo are registered trademarks of Convergys Corporation.) NON-GAAP MEASURES: This news release contains non-GAAP financial measures, including pro forma operating income, pro forma net income and pro forma diluted earnings per share, which are not prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP. A reconciliation of these non-GAAP measures to the comparable GAAP measures is included in the attached financial tables. For the periods reported, pro forma results exclude the effects of the first quarter 2003 equity loss of $9.9 million resulting from a legal settlement by the cellular partnership. These non-GAAP financial measures should not be construed as being more important than comparable GAAP measures. They are presented because Convergys' management uses this information when evaluating current results of operations and cash flow, and we believe that this information provides the users of the financial statements with an additional and useful comparison of Convergys' current results of operations and cash flows with past and future periods. CONFERENCE CALL NOTE: Convergys will host a one-hour conference call on Wednesday, April 21, at 10:00 AM, EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT , to discuss the company's first quarter results. It will feature Jim Orr, Chairman, President, & CEO, and Earl Shanks
The shanks and tattlers are wading bird species in a number of genera characterised by a medium length bill and long, often brightly coloured legs. , CFO See Chief Financial Officer. . This call will be carried live (with scheduled repeats) on the Internet. A link to the conference call is available at www.convergys.com. In addition to the non-GAAP financial measures contained in this news release, during this conference call Convergys will discuss free cash flow, which is a non-GAAP financial measure defined as cash flows from operations less the change in the balance of the accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. and capital expenditures. A reconciliation of these non-GAAP measures to the comparable GAAP measures is included in the attached financial tables. "SAFE HARBOR Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " NOTE: Information included in this news release may contain forward-looking statements that involve potential risks for Convergys Corporation. The future results of Convergys could differ materially from those discussed herein. Factors that could cause or contribute to such differences include, but are not limited to, the loss of a significant client or significant business from a client, difficulties in completing a contract or implementing its provisions, difficulties in completing or implementing an acquisition, potential terrorist activities and the United States' response thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. , changes in the legal and regulatory environment in which Convergys and its clients operate, and competitive and other factors disclosed in the Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2003, and subsequent filings with the SEC by Convergys Corporation. The company has no current intention of updating any forward-looking statements that may be included herein.
CONVERGYS CORPORATION
Revenues, Net Income and Earnings Per Common Share
In Millions Except Per Share Amounts
(Unaudited)
First Quarter
Change
2004 2003 Amount %
Revenues:
- Customer Mgmt. Group $ 390.9 $ 363.7 $ 27.2 7
- Information Mgmt. Grp. 183.0 197.8 (14.8) (7)
- Eliminations - (1.1) 1.1 -
--------- --------- ------- ---
--Total $ 573.9 $ 560.4 $ 13.5 2
Operating Income:
- Customer Mgmt. Group $ 31.5 $ 43.0 $(11.5) (27)
- Information Mgmt. Grp. 24.5 28.2 (3.7) (13)
- Corporate & Other (1.1) (2.7) 1.6 (59)
--------- --------- ------- ---
--Total $ 54.9 $ 68.5 $(13.6) (20)
Net Income $ 32.5 $ 34.9 $ (2.4) (7)
Earnings Per Common Share
- Basic $0.23 $0.23 - -
- Diluted $0.22 $0.22 - -
Weighted Average Common Shares Outstanding
- Basic 142.1 153.9 (11.8) (8)
- Diluted 145.3 156.2 (10.9) (7)
The above amounts reflect the Company's results of operations, as
reported under U.S. Generally Accepted Accounting Principles (U.S.
GAAP), that will be presented in the Convergys 10-Q for the three
months ended March 31, 2004.
Convergys Corporation
Consolidated Statements of Income
In Millions Except Per Share Amounts
(Unaudited)
For the Three Mo.s
Ended Mar. 31, %
2004 2003 Chg.
Revenues:
Customer Management Grp.
Communications $228.6 $232.6 (2)
Technology 43.7 47.8 (9)
Financial Services 36.3 29.6 23
Other 82.3 53.7 53
------ ------ --
Total CMG Revenues 390.9 363.7 7
Information Mgmt. Grp.
Data Processing 98.9 118.9 (17)
Prof. & Consulting 28.7 26.8 7
License & Other 17.6 13.6 29
International 37.8 37.4 1
------ ------ --
External Revenues 183.0 196.7 (7)
Interco. Svcs. for CMG - 1.1 -
------ ------ --
Total IMG Revenues 183.0 197.8 (7)
Eliminations & Other - (1.1) -
------ ------ --
Total Revenues 573.9 560.4 2
Costs & Expenses:
Cost of Providing
Services & Products 351.4 323.6 9
Selling, General & Admin. 117.0 113.4 3
Research & Development 18.5 23.2 (20)
Depreciation 27.5 28.0 (2)
Amortization 4.6 3.7 24
------ ------ --
Total Costs & Expenses 519.0 491.9 6
Operating Income 54.9 68.5 (20)
Equity in Losses of
Cellular Partnerships (0.1) (9.9) -
Other Expense, Net (1.7) (1.7) -
Interest Expense (1.7) (1.5) 13
------ ------ --
Income Before Tax 51.4 55.4 (7)
Income Taxes 18.9 20.5 (8)
------ ------ --
Net Income $ 32.5 $ 34.9 (7)
====== ====== ==
Earnings Per Common Share
-Basic $ 0.23 $ 0.23 -
-Diluted $ 0.22 $ 0.22 -
Weighted Average Common Shares Outstanding
-Basic 142.1 153.9
-Diluted 145.3 156.2
Other Data
-Operating Margin 9.6% 12.2%
Market Price Per Share
High $19.96 $16.50
Low $14.73 $11.30
Close $15.20 $13.20
The above amounts reflect the Company's results of operations, as
reported under U.S. Generally Accepted Accounting Principles (U.S.
GAAP), that will be presented in the Convergys 10-Q for the
three months ended March 31, 2004.
Convergys Corporation
Consolidated Balance Sheets
In Millions
(Unaudited)
Mar. 31, Dec. 31,
2004 2003
Assets
Cash and Cash Equivalents $ 40.3 $ 37.2
Receivables - Net 295.2 298.1
Other Current Assets 79.7 84.2
Property & Equipment - Net 366.3 363.8
Other Assets 1,018.5 1,026.9
--------- ---------
Total Assets $ 1,800.0 $ 1,810.2
Liabilities and Shareholders' Equity
Debt Maturing in One Year $ 54.2 $ 76.0
Other Current Liabilities 456.4 466.7
Other Liabilities 56.8 65.2
Long-Term Debt 57.3 58.8
Common Shareholders' Equity 1,175.3 1,143.5
--------- ---------
Total Liabilities
& Shareholders' Equity $ 1,800.0 $ 1,810.2
Convergys Corporation
Summarized Statement of Cash Flows
In Millions
(Unaudited)
For the Three Mo.s
Ended Mar. 31,
2004 2003
Cash provided by operating activities $ 55.5 $108.7
Cash used in investing activities (33.0)(a) (34.9)(a)
Cash used in financing activities (19.4) (57.7)
------ ------
Net increase in cash $ 3.1 $ 16.1
(a) Includes $36.3 and $20.1 of capital expenditures for the
three months ended March 31, 2004 and 2003, respectively.
Convergys Corporation
Customer Management Group
Operating Segment Data
In Millions
(Unaudited)
For the Three Mo.s
Ended Mar. 31, %
2004 2003 Chg.
Revenues:
Communications $228.6 $232.6 (2)
Technology 43.7 47.8 (9)
Financial Services 36.3 29.6 23
Other 82.3 53.7 53
------ ------ --
Total CMG Revenues 390.9 363.7 7
Costs & Expenses:
Cost of Providing
Services & Products 256.1 225.7 13
Selling, General & Admin. 81.6 73.1 12
Research & Development 2.1 1.3 62
Depreciation 17.4 18.4 (5)
Amortization 2.2 2.2 -
------ ------ --
Total Costs & Expenses 359.4 320.7 12
------ ------ --
Operating Income $ 31.5 $ 43.0 (27)
====== ======
The operating segment data for the Customer Management Group (CMG)
shown above reflects the detailed revenue and expense data for CMG,
as reported under U.S. GAAP, that will be presented in the Convergys
10-Q for the three months ended March 31, 2004.
Convergys Corporation
Information Management Group
Operating Segment Data
In Millions
(Unaudited)
For the Three Mo.s
Ended Mar. 31, %
2004 2003 Chg.
Revenues:
Data Processing $ 98.9 $118.9 (17)
Prof. & Consulting 28.7 26.8 7
License & Other 17.6 13.6 29
International 37.8 37.4 1
------ ------ --
External Revenues 183.0 196.7 (7)
Interco. Svcs. for CMG - 1.1 -
------ ------ --
Total IMG Revenues 183.0 197.8 (7)
Costs & Expenses:
Cost of Providing
Services & Products 95.4 99.0 (4)
Selling, General & Admin. 36.6 39.4 (7)
Research & Development 16.4 21.9 (25)
Depreciation 7.7 7.8 (1)
Amortization 2.4 1.5 60
------ ------ --
Total Costs & Expenses 158.5 169.6 (7)
------ ------ --
Operating Income $ 24.5 $ 28.2 (13)
====== ======
The operating segment data for the Information Management Group
(IMG) shown above reflects the detailed revenue and expense data
for IMG, as reported under U.S. GAAP, that will be presented in
the Convergys 10-Q for the three months ended March 31, 2004.
Convergys Corporation
Reconciliation of Pro Forma Operating Results
(In Millions Except Per Share Amounts)
Income Income
(Loss) Tax Net
Before (Expense)/ Income Diluted
Tax Benefit (Loss) EPS
------- -------- ------- -------
First Quarter 2004:
--------------------
Results as reported
under U.S. GAAP $ 51.4 $(18.9) $ 32.5 $ 0.22
Less: Special items - - - -
------ ------ ------ ------
Results excluding
special items
(a non-GAAP measure) $ 51.4 $(18.9) $ 32.5 $ 0.22
====== ====== ====== ======
First Quarter 2003:
--------------------
Results as reported
under U.S. GAAP $ 55.4 $(20.5) $ 34.9 $ 0.22
Less: Special items (a) (9.9) 3.5 (6.4) (0.04)
------ ------ ------ ------
Results excluding
special items
(a non-GAAP measure) $ 65.3 $(24.0) $ 41.3 $ 0.26
====== ====== ====== ======
The schedule above provides a reconciliation of the Company's
results of operations, as reported under U.S. Generally Accepted
Accounting Principles (U.S. GAAP), to the pro forma results of
operations (non-U.S. GAAP), which excludes special items.
(a) Reflects the $9.9 equity loss generated from the Company's
investment in Cincinnati SMSA LLP, that resulted from
the partnership's settlement of its lawsuit with West Side
Cellular Communications, Inc. during the first quarter
of 2003.
Convergys Corporation
Reconciliation of Cash Provided by Operating
Activities to Free Cash Flow
(In Millions)
For the Three Mo.s
Ended Mar. 31,
2004 2003
Cash provided by operating activities $ 55.5 $108.7
Accounts receivable securitization - -
Capital expenditures (36.3) (20.1)
------- -------
Free cash flows $ 19.2 $ 88.6
The schedule above provides a reconciliation of the Company's
cash flow from operations as reported under U.S. Generally
Accepted Accounting Principles (U.S. GAAP), to free cash flow,
which is a non-GAAP measure. Free cash flow is defined as cash
flow from operations less the change in the balance of the
accounts receivable securitization and capital expenditures.
Free cash flows are presented as an alternative measure of the
Company's ability to generate cash flows.
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