2q00 Earnings financial statements.
CONVERGYS CORPORATION
Revenues, Net Income and Earnings Per Common Share
In Millions Except Per Share Amounts
(Unaudited)
Second Quarter
Change
2000 1999 Amount %
Revenues:
- Information Mgmt. Grp. $ 188.4 $ 171.1 $ 17.3 10
- Customer Mgmt. Group 337.7 263.8 73.9 28
- Eliminations & Other (4.2) (8.7) 4.5 (52)
--------- --------- ------- ---
--Total $ 521.9 $ 426.2 $ 95.7 22
Operating Income:
- Information Mgmt. Grp. $ 38.2 $ 30.7 (a) $ 7.5 24
- Customer Mgmt. Group 41.3 25.2 16.1 64
- Eliminations & Other (1.9) (1.8) (0.1) 6
--------- --------- ------- ---
--Total $ 77.6 $ 54.1 (a) $ 23.5 43
Net Income $ 45.5 $ 32.8 (a) $ 12.7 39
Earnings Per Common Share
- Basic $0.30 $0.22 (a) $ 0.08 36
- Diluted $0.29 $0.21 (a) $ 0.08 38
Weighted Average Common Shares Outstanding
- Basic 152.4 151.6 0.8
- Diluted 158.1 154.1 4.0
Six Months
Change
2000 1999 Amount %
Revenues:
- Information Mgmt. Grp. $ 368.2 $ 328.2 $ 40.0 12
- Customer Mgmt. Group 677.7 515.5 162.2 31
- Eliminations & Other (10.4) (17.7) 7.3 (41)
--------- --------- ------- ---
--Total $1,035.5 $ 826.0 $209.5 25
Operating Income:
- Information Mgmt. Grp. $ 74.1 $ 61.0 (a) $ 13.1 21
- Customer Mgmt. Group 82.0 48.9 33.1 68
- Eliminations & Other (3.8) (3.0) (0.8) 27
--------- --------- ------- ---
--Total $ 152.3 $ 106.9 (a) $ 45.4 42
Net Income $ 90.0 $ 65.2 (a) $ 24.8 38
Earnings Per Common Share
- Basic $0.59 $0.43 (a) $ 0.16 37
- Diluted $0.57 $0.42 (a) $ 0.15 36
Weighted Average Common Shares Outstanding
- Basic 152.2 151.6 0.6
- Diluted 157.4 154.1 3.3
(a) Includes $2.0 million in acquired research and development costs
which reduced net income by $2.0. Excluding this special item,
earnings per diluted share were $0.23 and $0.44 for the three and
six month periods ended June 30, 1999.
Convergys Corporation
Consolidated Statements of Income
In Millions Except Per Share Amounts
(Unaudited)
For the Three Months For the Six Months
Ended Jun. 30, % Ended Jun. 30, %
2000 1999 Chg. 2000 1999 Chg.
Revenues:
Information Mgmt. Grp.
Data Processing $116.3 $100.8 15 $ 229.2 $195.1 17
Prof. & Consulting 34.1 37.5 (9) 68.0 75.0 (9)
License & Other 12.3 11.1 11 26.2 17.4 51
International 21.5 13.0 65 34.4 23.0 50
----- ------ -- ------ ----- --
External Revenues 184.2 162.4 13 357.8 310.5 15
Interco. Svcs. for CMG 4.2 8.7 (52) 10.4 17.7 (41)
----- ------ -- ------ ----- --
Total IMG Revenues 188.4 171.1 10 368.2 328.2 12
Customer Management Grp.
Dedicated Services 292.0 205.1 42 578.0 391.9 47
Traditional Services 32.8 44.3 (26) 73.5 94.0 (22)
International 12.9 14.4 (10) 26.2 29.6 (11)
----- ------ -- ------ ----- --
Total CMG Revenues 337.7 263.8 28 677.7 515.5 31
Eliminations & Other (4.2) (8.7) - (10.4) (17.7) -
----- ------ -- ------ ----- --
Total Revenues 521.9 426.2 22 1035.5 826.0 25
Costs & Expenses:
Cost of Providing
Services & Products Sold 296.7 243.3 22 588.9 470.8 25
Selling, General & Admin. 85.5 73.0 17 171.5 137.2 25
Research & Development 22.7 20.4 11 45.6 39.9 14
Depreciation 26.8 20.3 32 51.8 40.4 28
Amortization 12.6 10.3 22 25.1 19.8 27
Year 2000 Programming - 2.8 - 0.3 9.0 (97)
Purchased R&D Costs - 2.0 - - 2.0 -
----- ----- -- ------ ----- --
Total Costs and Expenses 444.3 372.1 19 883.2 719.1 23
Operating Income 77.6 54.1 43 152.3 106.9 42
Equity in Earnings of
Cellular Partnership 5.4 9.1 (41) 11.3 16.7 (32)
Other Income(Expense), Net - (0.5) - (0.1) (1.2)(92)
Interest Expense 8.8 8.5 4 16.9 16.0 6
----- ----- -- ------ ----- --
Income Before Inc. Taxes 74.2 54.2 37 146.6 106.4 38
Income Taxes 28.7 21.4 34 56.6 41.2 37
----- ------ -- ------ ----- --
Net Income $ 45.5 $ 32.8 39 $ 90.0 $ 65.2 38
----- ------ -- ------ ----- --
----- ------ -- ------ ----- --
Earnings Per Common Share
-Basic $ 0.30 $ 0.22 36 $ 0.59 $ 0.43 37
-Diluted $ 0.29 $ 0.21 38 $ 0.57 $ 0.42 36
Weighted Average Common Shares Outstanding (millions)
-Basic 152.4 151.6 152.2 151.6
-Diluted 158.1 154.1 157.4 154.1
Other Data
Operating Margin (a) 14.9% 13.2% 14.7% 13.2%
Market Price Per Share
High $ 51.922 $ 21.813 $ 51.922 $ 23.000
Low $ 30.500 $ 15.938 $ 26.625 $ 14.500
Close $ 51.875 $ 19.375 $ 51.875 $ 19.375
(a) Excludes purchased research and development costs of $2.0 million
for the three and six months ended June 30, 1999.
Convergys Corporation
Consolidated Balance Sheets
In Millions
(Unaudited)
Jun. 30, Dec. 31, Jun. 30,
2000 1999 1999
Assets
Cash and Cash Equivalents $ 31.8 $ 30.8 $ 20.3
Receivables - Net 192.8 214.8 339.6
Other Current Assets 77.3 52.3 48.0
Property & Equipment-Net 361.7 335.6 290.5
Other Assets 902.3 946.0 849.2
Total Assets $ 1,565.9 $ 1,579.5 $ 1,547.6
Liabilities and Shareowners' Equity
Debt Maturing in One Year $ 8.7 $ 48.0 $ 464.0
Other Current Liabilities 280.6 339.4 251.4
Other Liabilities 15.2 14.6 13.4
Long-Term Debt 252.2 250.3 -
Minority Interest - - 10.6
Common Shareowners' Equity 1,009.2 927.2 808.2
Total Liabilities
& Shareowners' Equity $ 1,565.9 $ 1,579.5 $ 1,547.6
Convergys Corporation
Information Management Group
Operating Segment Data
In Millions
(Unaudited)
For the Three Months For the Six Months
Ended Jun. 30, % Ended Jun. 30, %
2000 1999 Chg. 2000 1999 Chg.
Revenues:
Data Processing $116.3 $100.8 15 $229.2 $ 195.1 17
Prof. & Consulting 34.1 37.5 (9) 68.0 75.0 (9)
License & Other 12.3 11.1 11 26.2 17.4 51
International 21.5 13.0 65 34.4 23.0 50
----- ------ -- ----- ------ --
External Revenues 184.2 162.4 13 357.8 310.5 15
Interco. Svcs. for CMG 4.2 8.7 (52) 10.4 17.7 (41)
----- ------ -- ----- ------ --
Total IMG Revenues 188.4 171.1 10 368.2 328.2 12
Costs & Expenses:
Cost of Providing
Services & Products Sold 95.6 89.9 6 187.3 174.8 7
Selling, General & Admin. 21.6 19.6 10 41.1 36.5 13
Research & Development 18.9 16.8 13 37.6 30.3 24
Depreciation 9.4 7.1 32 18.5 13.9 33
Amortization 4.7 2.4 96 9.3 4.1 127
Year 2000 Programming - 2.6 - 0.3 5.6 (95)
Purchased R&D Costs - 2.0 - - 2.0 -
------ ------ -- ------ ------ --
Total Costs and Expenses 150.2 140.4 7 294.1 267.2 10
------ ------ -- ------ ------ --
Operating Income $ 38.2 $ 30.7 24 $ 74.1 $ 61.0 21
------ ------ ------ ------
------ ------ ------ ------
Note: The operating segment data for the Information Management Group
(IMG) shown above reflects the detailed revenue and expense
data for IMG that will be presented in the Convergys 10-Q for
the quarterly period ended June 30, 2000.
Convergys Corporation
Customer Management Group
Operating Segment Data
In Millions
(Unaudited)
For the Three Months For the Six Months
Ended Jun. 30, % Ended Jun. 30, %
2000 1999 Chg. 2000 1999 Chg.
Revenues:
Dedicated Services $292.0 $205.1 42 $ 578.0 $391.9 47
Traditional Services 32.8 44.3 (26) 73.5 94.0 (22)
International 12.9 14.4 (10) 26.2 29.6 (11)
------ ------ -- ------- ------ --
Total CMG Revenues 337.7 263.8 28 677.7 515.5 31
Costs & Expenses:
Cost of Providing
Services & Products Sold 205.4 161.9 27 411.8 313.6 31
Selling, General & Admin. 63.0 52.0 21 127.9 98.4 30
Research & Development 3.7 3.7 - 8.0 9.7 (18)
Depreciation 16.4 12.9 27 32.0 25.8 24
Amortization 7.9 7.8 1 15.8 15.7 1
Year 2000 Programming - 0.3 - 0.2 3.4 (94)
------ ------ -- ------- ------ --
Total Costs and Expenses 296.4 238.6 24 595.7 466.6 28
------ ------ -- ------- ------ --
Operating Income $ 41.3 $ 25.2 64 $ 82.0 $ 48.9 68
------ ------ ------- ------
------ ------ ------- ------
Note: The operating segment data for the Customer Management Group
(CMG) shown above reflects the detailed revenue and expense
data for CMG that will be presented in the Convergys 10-Q for
the quarterly period ended June 30, 2000.
Contact:
Convergys Corporation
Investor Contacts:
Steve Rolls, 513/723-3440 or 888/284-9900
Ron Harris, 513/723-2449 or 888/284-9900
Media Contacts:
John Pratt, 513/723-3333 or 888/284-9900
Heather Anthony, Edelman PR, 212/704-4536
convergys.com
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