Convergys Reports Fourth Quarter Results

  Convergys Reports Fourth Quarter Results

                     Raises Quarterly Dividend 20 Percent

              Increases Share Repurchase Authorization to $250M

           Guides Continued Revenue and Profit Improvement in 2013

Business Wire

CINCINNATI -- February 7, 2013

Convergys Corporation (NYSE: CVG), a global leader in customer management,
today announced its financial results for the fourth quarter of 2012.

The Company also announced that the Board of Directors approved raising its
regular quarterly dividend 20 percent to $0.06 per share and increasing the
authorization for share repurchase to $250 million in the aggregate.

Fourth Quarter Summary

  *Total revenue from continuing operations of $509 million, up two percent
    compared with prior year;
  *GAAP EPS from continuing operations of $0.27; adjusted EPS from continuing
    operations of $0.25, compared with $0.21 in the prior year;
  *Adjusted EBITDA from continuing operations of $62 million, up five percent
    compared with adjusted EBITDA in the prior year;
  *Repurchased 3.7 million Convergys shares for $59 million, or $16.05 per
    share;
  *$639 million cash and short term investments on balance sheet at quarter
    end;
  *2013 outlook includes continuing revenue and profit improvement with EPS
    growth to exceed 10 percent compared with 2012 adjusted results.

“We delivered our seventh consecutive quarter of revenue growth and profit
improvement,” said Andrea Ayers, president and CEO. “Entering 2013, we
continue to execute our growth strategy and expect another year of performance
improvement. We repurchased $59 million of our stock in the fourth quarter
consistent with our disciplined capital deployment strategy. Our strong
capital position and confidence in the future allows us to pursue strategic
growth and return cash to investors. We are pleased to raise the quarterly
dividend 20 percent and increase our share repurchase authorization to $250
million.”

Fourth Quarter Results – Continuing Operations

Having completed the corporate simplification, the Company now reports results
as a single segment.

Revenue – Revenue from continuing operations was $509 million, a two percent
increase compared with $501 million in the same period last year. This
included transition services revenue related to discontinued operations in
both periods of $5 million and $1 million, respectively.

Operating Income – Adjusted operating income from continuing operations was
$38 million, compared with $37 million in the same period last year. Including
the Information Management sale impacts discussed below, GAAP operating income
from continuing operations was $31 million in both periods.

EBITDA – Adjusted EBITDA was $62 million, compared with $59 million in the
same period last year. Adjusted EBITDA excludes the Information Management
sale impacts discussed below, and includes non-cash long-term compensation
expense in both periods of $5 million and $4 million, respectively.

Net Income – Adjusted net income from continuing operations was $28 million,
or $0.25 per diluted share, compared with $26 million, or $0.21 per diluted
share, in the same period last year. Adjusted results exclude the Information
Management sale impacts and tax benefit items discussed below and apply a
normalized tax rate of 24 percent. GAAP net income from continuing operations
was $30 million, or $0.27 per diluted share, compared with $39 million, or
$0.33 per diluted share, in the same period last year.

Share Repurchase –  Convergys repurchased 3.7 million shares in the fourth
quarter at a cost of $59 million. For the full year 2012, the Company
repurchased 12.3 million shares at a cost of $184 million, or $15.04 per
share. The Board of Directors of the Company increased the current
authorization to purchase outstanding shares to $250 million.

Quarterly Dividend –  Convergys paid its regular quarterly dividend of $0.05
per share in January to holders of record at the close of business on December
21, 2012. The first raised dividend payment of $0.06 is scheduled to be made
on April 5, 2013, to shareholders of record at the close of business on March
22, 2013.

Free Cash Flow – Free cash flow was a net use of $26 million, including $35
million for pension liability reduction and Information Management sale tax
payments, compared with net cash inflows of $30 million, including
approximately $15 million contribution from Information Management, in the
same period last year.

Net Cash and Short Term Investments – At December 31, 2012, cash and short
term investments were $639 million, debt maturing in one year was $1 million
and long term debt was $60 million. Net cash and short term investments
totaled $578 million at December 31, 2012, compared with $668 million at
September 30, 2012, and $318 million at the end of the fourth quarter last
year.

Information Management Sale Impacts and Certain Other Tax Items – GAAP
fourth-quarter 2012 results from continuing operations include the expected $7
million non-cash pension plan settlement charge related to the Information
Management business sold last year, and a $6 million tax benefit largely to
reflect the mix of income by jurisdictions. GAAP fourth-quarter 2011 results
include $6 million Information Management-related costs that did not qualify
for presentation as discontinued operations and $17 million tax benefits from
international transactions and certain discrete items.

Reconciliation tables of GAAP to non-GAAP results are attached.

2013 Business Outlook

Convergys expects continuing revenue growth and profit improvement for the
full year 2013 compared with 2012 adjusted results, including:

  *Revenue to exceed $2,045 million, increasing from prior year $2,005
    million;
  *Adjusted EBITDA to exceed $245 million, improving from prior year adjusted
    EBITDA of $240 million;
  *Effective tax rate to approximate 22 percent;
  *Diluted shares outstanding to approximate 112 million, compared with prior
    year average of 117 million shares;
  *Adjusted EPS to exceed $1.00, improving from prior year adjusted EPS of
    $0.91;
  *Free cash flow to approximate adjusted net income.

The Company expects second-half 2013 results to exceed first-half 2013
results.

Not included in this guidance is the impact of any future strategic
acquisitions or share repurchase activities. Also not included in this
guidance are results classified within discontinued operations, including the
impact of the sale of the Information Management business as well as other
costs that may be incurred related to, or as a result of, the transaction.
Costs that may be incurred as a result of the transaction include an expected
2013 pension settlement charge.

To provide a relevant comparison of 2013 guidance with 2012 underlying
performance from continuing operations, a table is attached that reconciles
2012 GAAP results to 2012 non-GAAP and adjusted EBITDA, excluding Information
Management business sale impacts and certain other tax items.

Forward-Looking Statements Disclosure and "Safe Harbor" Note

This news release contains statements, estimates, or projections that
constitute "forward-looking statements" as defined under U.S. federal
securities laws. In some cases, one can identify forward looking statements by
terminology such as "will," "expect," "estimate," "think," "forecast,"
"guidance, "outlook," "plan," "lead," "project" or other comparable
terminology. Forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from our
historical experience and our present expectations or projections. These risks
include, but are not limited to: (i) the loss of a significant client or
significant business from a client; (ii) the future financial performance of
major industries that we serve; (iii) our inability to protect personally
identifiable data against unauthorized access or unintended release; (iv) our
inability to maintain and upgrade our technology and network equipment in a
timely manner; (v) international business and political risks, including
economic weakness and operational disruption as a result of natural events,
political unrest, war, terrorist attacks or other civil disruption; (vi) the
failure to meet expectations regarding the tax treatment of the Information
Management transaction; (vii) higher than expected costs of providing
transition services and other support to the Information Management business
and (viii) those factors contained in our periodic reports filed with the SEC,
including in the "Risk Factors" section of our most recent Annual Report on
Form 10-K and Quarterly Report on Form 10-Q. The forward-looking information
in this document is given as of the date of the particular statement and we
assume no duty to update this information. Our filings and other important
information are also available on the investor relations page of our web site
at www.convergys.com.

Non-GAAP Financial Measures

This news release contains non-GAAP financial measures as defined by the
Securities and Exchange Commission Regulation G; pursuant to the requirements
of this regulation, reconciliations of these non-GAAP measures to their
comparable GAAP measures are included in the attached financial tables. To
assess the underlying operational performance of the continuing operations of
the business for the quarter and to have a basis to compare underlying
operating results to prior and future periods, management uses 2012 operating
income, net income from continuing operations and diluted earnings per share
from continuing operations metrics excluding asset impairment charges,
corporate restructuring costs, certain Information Management-related costs,
interest expense for debt reduction, net non-cash post-employment benefit plan
charges, and tax benefits from certain discrete and other adjustments, and
2011 operating income excluding the Information Management-related costs as
well as net income from continuing operations and diluted earnings per share
from continuing operations also excluding contributions from the Company's
investments in the Cellular Partnerships, including the gain on the sale of
our interests in these investments, the gain on the sale of the Finance and
Accounting Outsourcing line of business and tax benefits from certain
international transactions and discrete items.

These charges are relevant in evaluating the overall performance of the
business. Limitations associated with the use of these non-GAAP measures
include that these measures do not include all of the amounts associated with
our results as determined in accordance with GAAP. Management compensates for
these limitations by using the non-GAAP measures, operating income, income
from continuing operations, net of tax and diluted earnings per share
excluding the items above, and the GAAP measures, operating income, income
from continuing operations, net of tax and diluted earnings per share, in its
evaluation of performance. There is no material purpose for which we use these
non-GAAP measures beyond those described above.

The Company presents the non-GAAP financial measure Adjusted EBITDA because
management uses this measure to monitor and evaluate the performance of the
business and believes the presentation of these measures will enhance the
investors' ability to analyze trends in the business and evaluate the
Company's underlying performance relative to other companies in the industry.

Management uses free cash flow to assess the financial performance of the
Company. Convergys' management believes that free cash flow is useful to
investors because it relates the operating cash flow of the Company to the
capital that is spent to continue and improve business operations, such as
investment in the Company's existing businesses. Further, free cash flow
facilitates management's ability to strengthen the Company's balance sheet, to
repurchase the Company's stock, and to repay the Company's debt obligations.
Management also believes the presentation of this measure will enhance the
investors' ability to analyze trends in the business and evaluate the
Company's underlying performance relative to other companies in the industry.
Limitations associated with the use of free cash flow include that it does not
represent the residual cash flow available for discretionary expenditures as
it does not incorporate certain cash payments including payments made on
capital lease obligations or cash payments for business acquisitions.
Management compensates for these limitations by using both the non-GAAP
measure, free cash flow, and the GAAP measure, cash flow from operating
activities, in its evaluation of performance. There is no material purpose for
which we use these non-GAAP measures beyond the purposes described above.

These non-GAAP measures should be considered supplemental in nature and should
not be considered in isolation or be construed as being more important than
comparable GAAP measures. The non-GAAP financial information that we provide
may be different from that provided by our competitors or other companies.

Webcast Presentation:

Convergys will hold its Fourth Quarter Financial Results webcast presentation
at 10:00 a.m., Eastern time, Thursday, February 7. It will feature its
President and CEO Andrea Ayers and CFO Andre Valentine. The webcast
presentation will take place live and will then be available for replay at
this link - http://tinyurl.com/4Q12ConferenceCall. This link will replay the
webcast presentation through March 7. You may also access the webcast or the
recording via the Convergys website, www.convergys.com. Click “Company,” then
“Investor Relations,” then “Events and Webcasts.”

Supporting Resources:

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About Convergys

As a leader in customer management for over 30 years, Convergys Corporation
(NYSE: CVG) is uniquely focused on helping companies find new ways to enhance
the value of their customer relationships and deliver consistent customer
experiences across all channels and geographies. Every day, our nearly 75,000
employees help our clients balance the demands of increasing revenue,
improving customer satisfaction, and reducing overall cost using an optimal
mix of agent, technology, and analytics solutions. Our actionable insight
stems from handling billions of customer interactions annually for our
clients. Visit www.convergys.com to learn more.

(Convergys and the Convergys logo are registered trademarks of Convergys
Corporation.)

Contacts:

David Stein, Investor Relations
+1 513 723 7768 or investor@convergys.com

Krista Boyle, Public/Media Relations
+1 513 723 2061 or krista.boyle@convergys.com

                                                                               
                                                                                          
CONVERGYS CORPORATION
Consolidated Statements of Income
(Unaudited)
  
                           For the Three Months               For the Twelve Months
                           Ended Dec 31,           %          Ended Dec 31,               %
(In millions
except per share           2012        2011        Change     2012          2011          Change
amounts)
Revenues:
    Communications           302.6       303.5     (0   )       1,205.4       1,147.6     5
    Technology               46.3        41.6      11           172.7         170.0       2
    Financial                48.0        46.6      3            203.3         208.0       (2   )
    Services
    Other                   111.9     108.8    3           423.6       407.6      4
       Total               $ 508.8     $ 500.5     2          $ 2,005.0     $ 1,933.2     4
       Revenues
                                                                                          
Costs and
Expenses:
    Cost of
    Providing                329.6       323.6     2            1,289.5       1,240.4     4
    Services and
    Products Sold
    Selling,
    General and              120.4       121.3     (1   )       477.2         483.8       (1   )
    Administrative
    Research and
    Development              2.1         3.1       (32  )       10.8          14.0        (23  )
    Costs
    Depreciation             21.9        19.8      11           82.4          76.3        8
    Amortization             1.2         1.8       (33  )       6.3           7.4         (15  )
    Restructuring            2.6         -         NM           11.6          1.2         NM
    Charges
    Asset                   -         -        NM          88.6        -          NM
    Impairment
       Total Costs
       and                  477.8     469.6    2           1,966.4     1,823.1    8
       Expenses
    Operating                31.0        30.9      0            38.6          110.1       (65  )
    Income
                                                                                          
Earnings and gain
from Cellular                -           -         NM           -             285.2       NM
Partnerships, net
Other Income, net            1.4         0.8       75           4.3           9.8         (56  )
Interest Expense            (2.8  )    (3.6  )   (22  )      (13.6   )    (16.1   )   (16  )
    Income Before
    Income Taxes
    and                      29.6        28.1      5            29.3          389.0       (92  )
    Discontinued
    Operations
Income Tax                  (0.6  )    (11.2 )   (95  )      1.1         106.5      (99  )
(Benefit) Expense
    Income from
    Continuing               30.2        39.3      (23  )       28.2          282.5       (90  )
    Operations,
    net of tax
    Income from
    Discontinued
    Operations,
    net of tax
    (benefit)
    expense of
    ($0.5) and
    $10.1 for the
    three months
    ended December          1.8       15.2     (88  )      72.4        52.3       38
    31, 2012 and
    2011,
    respectively,
    and $51.1 and
    $12.4 for the
    twelve months
    ended December
    31, 2012 and
    2011,
    respectively
Net Income                 $ 32.0     $ 54.5     (41  )      100.6       334.8      (70  )
                                                                                          
Basic Earnings Per
Common Share
    Continuing             $ 0.28      $ 0.33                 $ 0.25        $ 2.35
    Operations
    Discontinued           $ 0.02     $ 0.13                $ 0.65       $ 0.44    
    Operations
    Net Basic
    Earnings Per           $ 0.30     $ 0.46                $ 0.90       $ 2.79    
    Common Share
                                                                                          
Diluted Earnings
Per Common Share
    Continuing             $ 0.27      $ 0.33                 $ 0.24        $ 2.30
    Operations
    Discontinued           $ 0.02     $ 0.12                $ 0.62       $ 0.42    
    Operations
    Net Diluted
    Earnings Per           $ 0.29     $ 0.45                $ 0.86       $ 2.72    
    Common Share
                                                                                          
Weighted Average
Common Shares
Outstanding
    Basic                    107.0       117.9                  112.2         120.2
    Diluted                  112.0       120.6                  117.1         122.9
                                                                                          
Market Price Per
Share
    High                   $ 17.42     $ 13.02                $ 17.42       $ 15.00
    Low                    $ 14.68     $ 8.49                 $ 12.13       $ 8.49
    Close                  $ 16.41     $ 12.77                $ 16.41       $ 12.77
                                                                                          

                                                              
                                                                     
CONVERGYS CORPORATION
Reconciliation of GAAP EPS from Continuing Operations to non-GAAP EPS from
Continuing Operations
(In Millions Except Per Share Amounts)
    
                                                       Three Months Ended
                                                       Ended Dec 31,
                                                       2012          2011
Revenue                                                $ 508.8       $ 500.5
Operating income as reported under U.S. GAAP           $ 31.0        $ 30.9
         Operating Margin                                6.1   %       6.2   %
         Information Management costs not
         qualifying as Discontinued Operations           -             5.8
         ^(a)
         Pension plan settlement charges ^(b)           6.8         -     
         Total charges                                  6.8         5.8   
Adjusted operating income (a non-GAAP measure)         $ 37.8       $ 36.7  
         Adjusted Operating Margin                       7.4   %       7.3   %
                                                                     
                                                                     
Income Before Income Taxes and Discontinued            $ 29.6        $ 28.1
Operations as reported under U.S. GAAP
         Operating charges above                        6.8         5.8   
Adjusted Income Before Income Taxes and                $ 36.4       $ 33.9  
Discontinued Operations (a non-GAAP measure)
                                                                     
                                                                     
Income from continuing operations, net of tax,         $ 30.2        $ 39.3
as reported under U.S. GAAP
         Total operating charges from above,             4.2           3.6
         net of tax
         Adjustment of tax to normalized rate           (6.7  )      (17.0 )
         ^(c)
Adjusted net income from continuing operations         $ 27.7       $ 25.9  
(a non-GAAP measure)
                                                                     
                                                                     
Diluted EPS from continuing operations as              $ 0.27        $ 0.33
reported under U.S. GAAP
         Net impact of total charges included           (0.02 )      (0.11 )
         in continuing operations
Adjusted diluted EPS from continuing                   $ 0.25       $ 0.21  
operations (a non-GAAP measure)
                                                                     

(a) In March 2012, the Company signed a definitive agreement to sell the
Information Management business and the sale substantially closed in May 2012.
The results of operations of this business met the criteria for presentation
as discontinued operations and therefore are presented on this basis for all
periods presented. Certain costs previously allocated to the Information
Management business do not qualify for discontinued operations accounting
treatment and are required to be reported as costs within continuing
operations. The Company classified $5.8 of these costs which previously would
have been presented within the Information Management segment within
continuing operations for the three months ended December 31, 2011.

(b) During the fourth quarter of 2012, the Company recorded a pension
settlement charge of $6.8 due to a high volume of lump sum payouts as a result
of the sale of the Information Management business.

(c) In the fourth quarter of 2012 and 2011, the Company recognized net tax
benefits from international transactions, certain discrete items and state
apportionment. At a normalized tax rate of 24%, the Company would have
recognized tax expense in excess of the expense reported under U.S. GAAP.

Management uses operating income, income from continuing operations, net of
tax and earnings per share from continuing operations excluding the above
items to assess the underlying operational performance of the continuing
operations of the business for the year and to have a basis to compare
underlying operating results to prior and future periods. These charges and
credits are relevant in evaluating the overall performance of the business.

Limitations associated with the use of these non-GAAP measures include that
these measures do not include all of the amounts associated with our results
as determined in accordance with GAAP. Management compensates for these
limitations by using the non-GAAP measures, operating income, income from
continuing operations, net of tax and diluted earnings per share excluding the
charges, and the GAAP measures, operating income, income from continuing
operations, net of tax and diluted earnings per share, in its evaluation of
performance. There are no material purposes for which we use these non-GAAP
measures beyond those described above.



CONVERGYS CORPORATION
Reconciliation of GAAP EPS from Continuing Operations to non-GAAP EPS from
Continuing Operations
(In Millions Except Per Share Amounts)
                                                          
                                                   For the Twelve Months
                                                   Ended Dec 31,
                                                   2012            2011
Revenue                                            $ 2,005.0       $ 1,933.2
Operating income as reported under U.S.            $ 38.6          $ 110.1
GAAP
      Operating Margin                               1.9     %       5.7     %
      Restructuring ^(a)                             6.4             -
      Asset impairment ^(b)                          88.6            -
      Net pension and other post                     4.1             -
      employment benefit plan charges ^(c)
      Information Management costs not
      qualifying as Discontinued                     8.8             23.6
      Operations ^(d)
      Total charges                                $ 107.9        $ 23.6    
Adjusted operating income (a non-GAAP              $ 146.5        $ 133.7   
measure)
      Adjusted Operating Margin                      7.3     %       6.9     %
                                                                   
                                                                   
Income Before Income Taxes and
Discontinued Operations as reported under          $ 29.3          $ 389.0
U.S. GAAP
                                                                   
      Total operating charges from above             107.9           23.6
      Gain on sale of F&A line of business           -               (7.0    )
      ^(e)
      Earnings from investments in                   -               (20.2   )
      Cellular Partnerships, net ^(f)
      Gain on sale of interests in                   -               (265.0  )
      Cellular Partnerships ^(f)
      Orlando financing fees ^(g)                   1.1           -       
      Total charges (benefits)                       109.0           (268.6  )
Adjusted Income Before Income Taxes and
Discontinued Operations (a non-GAAP                $ 138.3        $ 120.4   
measure)
                                                                   
                                                                   
Income from continuing operations, net of          $ 28.2          $ 282.5
tax, as reported under U.S. GAAP
      Total operating charges from above,            84.5            15.7
      net of tax
      Gain on sale of F&A line of business           -               (4.3    )
      of $7.0, net of tax ^(e)
      Earnings from investments in
      Cellular Partnerships of $20.2, net            -               (13.1   )
      of tax ^ (f)
      Gain on sale of interests in
      Cellular Partnerships, net of tax              -               (171.8  )
      ^(f)
      Orlando financing fees of $1.1, net            0.7             -
      of tax ^(g)
      Adjustment of tax to normalized rate          (6.7    )      (17.0   )
      ^(h)
Adjusted income from continuing
operations, net of tax (a non-GAAP                 $ 106.7        $ 92.0    
measure)
                                                                   
                                                                   
Diluted EPS from continuing operations as          $ 0.24          $ 2.30
reported under U.S. GAAP
      Net impact of total charges
      (benefits) included in continuing             0.67          (1.55   )
      operations
Adjusted diluted EPS from continuing               $ 0.91         $ 0.75    
operations (a non-GAAP measure)
                                                                             

(a) The results for the twelve months ended December 31, 2012 include $6.4 of
restructuring charges to reflect the change in our executive team and to
reflect the impact of the sale of the Information Management business.

(b) During the twelve months ended December 31, 2012, the Company recorded an
impairment charge of $46.0 for the goodwill of the Customer Interaction
Technology reporting unit. In addition, as the result of a decision to
monetize certain real estate assets, these assets were reclassified to Held
for Sale and the Company recorded an impairment charge of $42.6 to reduce the
carrying value to estimated fair value less cost to sell.

(c) During the twelve months ended December 31, 2012, the Company recorded net
pension and other post employment benefit plan charges of $4.1, including $4.1
of curtailment credits from pension and other post employment benefits plans,
$1.4 of post-retirement benefits costs related to changes in the executive
management team, and $6.8 pension settlement charge due to a high volume of
lump sum payouts as a result of the sale of the Information Management
business.

(d) In March 2012, the Company signed a definitive agreement to sell the
Information Management business and the sale substantially closed in May 2012.
The results of operations met the criteria for presentation as discontinued
operations and therefore are presented on this basis for all periods
presented. Certain costs previously allocated to the Information Management
segment do not qualify for discontinued operations accounting treatment and
are required to be reported as costs within continuing operations. The Company
classified $8.8 and $23.6 of these costs which previously would have been
presented within the Information Management segment within continuing
operations for the twelve months ended December 31, 2012 and 2011,
respectively.

(e) In the first quarter of 2011, the Company completed the sale of the
Finance and Accounting outsourcing line of business for approximately $10,
resulting in a pre-tax gain of $7.0 and an after tax gain of $4.3.

(f) In July 2011, Convergys completed the sale of its 33.8% interest in the
Cincinnati SMSA Limited Partnership and its 45.0% interest in Cincinnati SMSA
Tower Holdings LLC (together the Cellular Partnerships) for $320. The Company
recognized a pre-tax gain on the sale of these investments of $265 in the
third quarter of 2011. In addition, upon completion of the sale, the Company
no longer reports ongoing income from this investment. For comparability, we
are excluding the impact of $20.2 of earnings from the investment in the
Cellular Partnerships, net of tax for the twelve months ended December 31,
2011.

(g) In the second quarter of 2012, the Company exercised its option to
purchase its leased office facility in Orlando, Florida by discharging the
related lease financing obligation in the aggregate principal amount of $55.0.
In connection with the purchase, the Company expensed $1.1 of previously
deferred financing fees as interest expense.

(h) In the fourth quarter of 2012 and 2011, the Company recognized net tax
benefits from international transactions, certain discrete items and state
apportionment. At a normalized tax rate of 24%, the Company would have
recognized tax expense in excess of the expense reported under U.S. GAAP.

Management uses operating income, income from continuing operations, net of
tax and earnings per share data excluding the items above to assess the
underlying operational performance of the continuing operations of the
business for the year and to have a basis to compare underlying operating
results to prior and future periods. These charges and credits are relevant in
evaluating the overall performance of the business.

Limitations associated with the use of these non-GAAP measures include that
these measures do not include all of the amounts associated with our results
as determined in accordance with GAAP. Management compensates for these
limitations by using the non-GAAP measures, operating income, income from
continuing operations, net of tax and diluted earnings per share excluding the
charges, and the GAAP measures, operating income, income from continuing
operations, net of tax and diluted earnings per share, in its evaluation of
performance. There are no material purposes for which we use these non-GAAP
measures beyond those described above.

                                                                              
                                                                                         
CONVERGYS CORPORATION
Reconciliation of Net Income from Continuing Operations to Adjusted EBITDA
(Unaudited)
   
                              For the Three Months              For the Twelve Months
                              Ended Dec 31,          %          Ended Dec 31,            %
(In millions)                 2012       2011        Change     2012        2011         Change
Income from
Continuing                    $ 30.2     $ 39.3      NM         $ 28.2      $ 282.5      NM
Operations, net of
tax
        Depreciation
        and                     23.1       21.6      7            88.7        83.7       6
        Amortization
        Interest                2.8        3.6       (22  )       13.6        16.1       (16  )
        expense
        Income tax             (0.6 )    (11.2 )   NM          1.1       106.5     NM
        expense
    EBITDA (a                 $ 55.5     $ 53.3      4            131.6       488.8      NM
    non-GAAP measure)
                                                                                         
        Asset
        impairment              -          -         NM           88.6        -          NM
        charges
        Earnings from
        investments
        in Cellular             -          -         NM           -           (20.2  )   NM
        Partnerships,
        net
        Gain on sale
        of F&A line             -          -         NM           -           (7.0   )   NM
        of business
        Gain on sale
        of interests
        in Cellular             -          -         NM           -           (265.0 )   NM
        Partnerships,
        net
        Restructuring           -          -         NM           6.4         -          NM
        Information
        Management
        costs not               -          5.8       NM           8.8         23.6       (63  )
        qualifying as
        Discontinued
        Operations
        Net pension
        and other
        post                   6.8      -        NM          4.1       -         NM
        employment
        benefit plan
        charges
    Adjusted EBITDA
    (a non-GAAP               $ 62.3    $ 59.1     5          $ 239.5    $ 220.2     9
    measure)
                                                                                         
    EBITDA Margin               10.9 %     10.6  %                6.6   %     25.3   %
    Adjusted EBITDA             12.2 %     11.8  %                11.9  %     11.4   %
    Margin
                                                                                         

The Company presents the non-GAAP financial measures EBITDA and Adjusted
EBITDA because management uses these measures to monitor and evaluate the
performance of the business and believes the presentation of these measures
will enhance the investors' ability to analyze trends in the business and
evaluate the Company's underlying performance relative to other companies in
the industry.

These non-GAAP measures should not be considered in isolation or as a
substitute for income from continuing operations, net of tax or other income
statement data prepared in accordance with GAAP and our presentation of these
measures may not be comparable to similarly-titled measures used by other
companies. Management uses both these non-GAAP measures and the GAAP measure,
income from continuing operations, net of tax, in evaluation of its underlying
performance. There are no material purposes for which we use these non-GAAP
measures beyond the purposes described above. These non-GAAP measures should
be considered supplemental in nature and should not be considered in isolation
or be construed as being more important than comparable GAAP measures.

                                                          
                                                                 
CONVERGYS CORPORATION
Consolidated Balance Sheets
(Unaudited)
                                                                 
                                                   Dec. 31,      Dec. 31,
(In millions)                                      2012          2011
Assets
Cash and Cash Equivalents                          $ 554.7       $ 421.8
Short Term Investments                               83.8          22.7
Receivables - Net                                    319.8         305.9
Other Current Assets                                 107.7         113.4
Current Assets - Held for Sale                       34.6          87.3
Property and Equipment - Net                         279.2         343.9
Other Assets                                         658.1         716.1
Other Assets - Held for Sale                        -            319.7
Total Assets                                       $ 2,037.9     $ 2,330.8
                                                                 
Liabilities and Shareholders' Equity
Debt Maturing in One Year                          $ 0.7         $ 6.2
Other Current Liabilities                            285.8         297.7
Current Liabilities - Held for Sale                  -             68.3
Other Liabilities                                    319.6         374.5
Long-Term Debt                                       59.9          120.9
Other Liabilities - Held for Sale                    -             51.7
Common Shareholders' Equity                         1,371.9      1,411.5
Total Liabilities and Shareholders' Equity         $ 2,037.9     $ 2,330.8
                                                                   

                                              
                                                                               
Convergys Corporation
Summarized Statement of Cash Flow
(Unaudited)
                                                                               
                   For the Three Months             For the Twelve Months
                   Ended Dec 31,                    Ended Dec 31,
(In                2012            2011             2012            2011
millions)
Net cash
provided
by                 $ 10.1          $ 61.6           $ 113.0         $ 196.6
operating
activities
Net cash
(used in)
provided             (95.7  ) ^(a)   (54.0 ) ^(a)     262.6    ^(b)   222.1    ^(b)
by
investing
activities
Net cash
used in             (57.0  )       (58.3 )         (242.7 )       (183.0 )
financing
activities
Net
(decrease)         $ (142.6 )      $ (50.7 )        $ 132.9        $ 235.7  
increase
in cash
                                                                               

(a) Includes $36.1 and $31.3 of capital expenditures, net of proceeds for
disposals, for the three months ended December 31, 2012 and 2011,
respectively.

(b) Includes $104.6 and $88.3 of capital expenditures, net of proceeds for
disposals, for the twelve months ended December 31, 2012 and 2011,
respectively.

                                                            
                                                                     
CONVERGYS CORPORATION
Reconciliation of Cash Provided by Operating Activities to Free Cash Flow
(Unaudited)
                                                                     
                              For the Three Months      For the Twelve Months
                              Ended Dec 31,             Ended Dec 31,
(In millions)                 2012        2011          2012         2011
Net cash provided by          $ 10.1      $ 61.6        $ 113.0      $ 196.6
operating activities
Capital expenditures,         (36.1 )    (31.3 )      (104.6 )    (88.3 )
net
Free cash flow (a             $ (26.0 )   $ 30.3       $ 8.4       $ 108.3 
non-GAAP measure)
                                                                             

Management uses free cash flow to assess the financial performance of the
Company. Convergys' Management believes that free cash flow is useful to
investors because it relates the operating cash flow of the Company to the
capital that is spent to continue and improve business operations, such as
investment in the Company’s existing businesses. Further, free cash flow
facilitates Management’s ability to strengthen the Company’s balance sheet, to
repay the Company’s debt obligations and to repurchase the Company’s common
shares. Management also believes the presentation of this measure will enhance
the investors' ability to analyze trends in the business and evaluate the
Company's underlying performance relative to other companies in the industry.

Limitations associated with the use of free cash flow include that they do not
represent the residual cash flow available for discretionary expenditures as
they do not incorporate certain cash payments including payments made on
capital lease obligations or cash payments for business acquisitions.
Management compensates for these limitations by using both the non-GAAP
measure, free cash flow, and the GAAP measure, cash from operating activities,
in its evaluation of performance. There are no material purposes for which we
use this non-GAAP measure beyond the purposes described above. This non-GAAP
measure should be considered supplemental in nature and should not be
considered in isolation or be construed as being more important than
comparable GAAP measures.

                                                                 
                                                                              
CONVERGYS CORPORATION
Reconciliation of GAAP results from Continuing Operations

to non-GAAP metrics for Comparison to 2013 Guidance
(In Millions Except Per Share Amounts)
 
                          2012
                          Q1          Q2            Q3          Q4            YTD
Operating Income
(Loss) under U.S.         $ 29.0      $ (60.5 )     $ 39.1      $ 31.0        $ 38.6
GAAP
    Restructuring           -           6.4           -           -             6.4
    Asset                   -           88.6          -           -             88.6
    impairment
    Net pension
    and other
    post                    -           (2.7  )       -           6.8           4.1
    employment
    benefit plan
    charges
    Information
    Management
    costs not              6.0        2.8         -          -           8.8   
    qualifying as
    Discontinued
    Operations
Adjusted
Operating Income           35.0       34.6        39.1       37.8        146.5 
(a non-GAAP
measure)
                                                                              
                                                                              
Net Income (Loss)
from Continuing           $ 21.4      $ (53.7 )     $ 30.3      $ 30.2        $ 28.2
Operations under
U.S GAAP
    Total
    operating
    charges from            4.8         75.5          -           4.2           84.5
    above, net of
    tax
    Orlando
    financing               -           0.7           -           -             0.7
    fees of $1.1,
    net of tax
    Impact of
    normalization
    of effective
    tax rate for           -          -           -          (6.7  )      (6.7  )
    discrete and
    other items
    ^(1)
Adjusted Net
Income from
Continuing                $ 26.2      $ 22.5       $ 30.3      $ 27.7       $ 106.7 
Operations (a
non-GAAP measure)
                                                                              
                                                                              
Earnings (Loss)
Per Share from
Continuing                $ 0.18      $ (0.47 )     $ 0.26      $ 0.27        $ 0.24
Operations under
U.S. GAAP
    Net impact of
    items above            0.04       0.66        -          (0.02 )      0.67  
    per adjusted
    diluted share
                                                                                      
Adjusted Earnings
Per Share from
Continuing                $ 0.22      $ 0.19       $ 0.26      $ 0.25       $ 0.91  
Operations (a
non-GAAP measure)
                                                                              
Diluted Shares              118.9       115.4         115.5       112.0         117.1
under U.S. GAAP
                                                                              
                                                                              
Net Income (Loss)
from Continuing           $ 21.4      $ (53.7 )     $ 30.3      $ 30.2        $ 28.2
Operations under
U.S. GAAP
    Depreciation
    and                     22.2        22.3          21.1        23.1          88.7
    Amortization
    Interest                3.6         4.4           2.8         2.8           13.6
    expense
    Income tax
    expense                5.4        (10.5 )      6.8        (0.6  )      1.1   
    (benefit)
EBITDA (a                 $ 52.6      $ (37.5 )     $ 61.0      $ 55.5        $ 131.6
non-GAAP measure)
                                                                              
    Asset
    impairment              -           88.6          -           -             88.6
    charges
    Restructuring           -           6.4           -           -             6.4
    Net pension
    and other
    post                    -           (2.7  )       -           6.8           4.1
    employment
    benefit plan
    charges
    Information
    Management
    costs not              6.0        2.8         -          -           8.8   
    qualifying as
    Discontinued
    Operations
Adjusted EBITDA
(a non-GAAP               $ 58.6      $ 57.6       $ 61.0      $ 62.3       $ 239.5 
measure)
                                                                              
                                                                              
    (1) We define a normalized tax rate for the 4th quarter of 2012 as 24%.
    

Contact:

Convergys Corporation
David Stein, Investor Relations
+1 513 723 7768 or investor@convergys.com
or
Krista Boyle, Public/Media Relations
+1 513 723 2061 or krista.boyle@convergys.com
 
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