ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Large accelerated filer | ý | Accelerated filer | ¨ | |
Non-accelerated filer | ¨ | Smaller reporting company | ¨ |
Page | ||
ITEM 1. | ||
ITEM 2. | ||
ITEM 3. | ||
ITEM 4. | ||
ITEM 1 | ||
ITEM 1A. | ||
ITEM 2. | ||
ITEM 6. | ||
Three Months Ended | |||||||
March 31, | |||||||
(In millions, except per share amounts) | 2013 | 2012 | |||||
Revenues | $ | 493.5 | $ | 497.5 | |||
Costs and Expenses: | |||||||
Cost of providing services and products sold | 318.2 | 317.7 | |||||
Selling, general and administrative | 114.6 | 124.7 | |||||
Research and development costs | 2.1 | 3.9 | |||||
Depreciation | 20.9 | 20.3 | |||||
Amortization | 1.2 | 1.9 | |||||
Total costs and expenses | 457.0 | 468.5 | |||||
Operating Income | 36.5 | 29.0 | |||||
Other income, net | 2.3 | 1.4 | |||||
Interest expense | (2.9 | ) | (3.6 | ) | |||
Income before Income Taxes | 35.9 | 26.8 | |||||
Income tax expense | 5.7 | 5.4 | |||||
Income from Continuing Operations, net of tax | 30.2 | 21.4 | |||||
(Loss) Income from Discontinued Operations, net of tax | (5.1 | ) | 4.7 | ||||
Net Income | $ | 25.1 | $ | 26.1 | |||
Basic Earnings Per Common Share: | |||||||
Continuing operations | $ | 0.28 | $ | 0.19 | |||
Discontinued operations | (0.04 | ) | 0.04 | ||||
Basic Earnings per Common Share | $ | 0.24 | $ | 0.23 | |||
Diluted Earnings Per Common Share: | |||||||
Continuing operations | $ | 0.27 | $ | 0.18 | |||
Discontinued operations | (0.04 | ) | 0.04 | ||||
Diluted Earnings per Common Share | $ | 0.23 | $ | 0.22 | |||
Weighted Average Common Shares Outstanding: | |||||||
Basic | 105.7 | 115.9 | |||||
Diluted | 110.3 | 118.9 | |||||
Cash dividends declared per share | $ | 0.06 | $ | — |
Three Months Ended | |||||||
March 31, | |||||||
(In millions) | 2013 | 2012 | |||||
Net Income | $ | 25.1 | $ | 26.1 | |||
Other Comprehensive (Loss) Income, net of tax: | |||||||
Foreign currency translation adjustments | (1.8 | ) | 6.6 | ||||
Unrealized holding (loss) gain on hedging activities | (1.8 | ) | 8.4 | ||||
Total other comprehensive (loss) income | (3.6 | ) | 15.0 | ||||
Total Comprehensive Income | $ | 21.5 | $ | 41.1 |
March 31, 2013 | December 31, 2012 | ||||||
(In Millions) | |||||||
ASSETS | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 525.0 | $ | 554.7 | |||
Short term investments | 78.0 | 83.8 | |||||
Receivables, net of allowances of $7.0 and $5.9 | 325.7 | 319.8 | |||||
Deferred income tax assets | 12.1 | 8.9 | |||||
Prepaid expenses | 35.6 | 33.2 | |||||
Other current assets | 61.9 | 65.6 | |||||
Current assets – held for sale | 35.2 | 34.6 | |||||
Total current assets | 1,073.5 | 1,100.6 | |||||
Property and equipment, net | 268.4 | 279.2 | |||||
Goodwill | 577.7 | 577.7 | |||||
Other intangibles, net | 17.7 | 18.9 | |||||
Deferred income tax assets | 16.9 | 19.2 | |||||
Other assets | 39.9 | 42.3 | |||||
Total Assets | $ | 1,994.1 | $ | 2,037.9 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current Liabilities | |||||||
Debt and capital lease obligations maturing within one year | $ | 0.8 | $ | 0.7 | |||
Payables and other current liabilities | 260.7 | 285.8 | |||||
Total current liabilities | 261.5 | 286.5 | |||||
Long-term debt and capital lease obligations | 59.8 | 59.9 | |||||
Deferred income tax liabilities | 134.5 | 136.5 | |||||
Accrued pension liabilities | 112.9 | 109.2 | |||||
Other long-term liabilities | 73.8 | 73.9 | |||||
Total liabilities | 642.5 | 666.0 | |||||
Shareholders’ Equity | |||||||
Preferred shares – without par value, 5.0 authorized; none outstanding | — | — | |||||
Common shares – without par value, 500.0 authorized; 188.7 and 187.5 issued, 105.1 and 105.9 outstanding, as of March 31, 2013 and December 31, 2012, respectively | 1,132.3 | 1,133.0 | |||||
Treasury stock – 83.6 and 81.6 as of March 31, 2013 and December 31, 2012, respectively | (1,363.5 | ) | (1,329.2 | ) | |||
Retained earnings | 1,596.9 | 1,578.6 | |||||
Accumulated other comprehensive loss | (14.1 | ) | (10.5 | ) | |||
Total shareholders’ equity | 1,351.6 | 1,371.9 | |||||
Total Liabilities and Shareholders’ Equity | $ | 1,994.1 | $ | 2,037.9 |
Three Months Ended | |||||||
March 31, | |||||||
(In Millions) | 2013 | 2012 | |||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Net income | $ | 25.1 | $ | 26.1 | |||
(Loss) Income from discontinued operations, net of tax | (5.1 | ) | 4.7 | ||||
Income from continuing operations, net of tax | 30.2 | 21.4 | |||||
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities of continuing operations: | |||||||
Depreciation and amortization | 22.1 | 22.2 | |||||
Deferred income tax expense | 3.5 | 4.2 | |||||
Stock compensation expense | 4.5 | 4.4 | |||||
Changes in assets and liabilities: | |||||||
Change in receivables | (6.6 | ) | 5.4 | ||||
Change in other current assets | 4.1 | (5.6 | ) | ||||
Change in other assets and liabilities | (8.3 | ) | (13.4 | ) | |||
Change in payables and other current liabilities | (26.8 | ) | (33.6 | ) | |||
Net cash provided by operating activities of continuing operations | 22.7 | 5.0 | |||||
Net cash provided by operating activities of discontinued operations | — | 6.9 | |||||
Net cash provided by operating activities | 22.7 | 11.9 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Capital expenditures | (12.1 | ) | (17.0 | ) | |||
Purchase of short-term investments | (28.3 | ) | — | ||||
Proceeds from maturity of short-term investments | 27.8 | — | |||||
Net cash used in investing activities of continuing operations | (12.6 | ) | (17.0 | ) | |||
Net cash used in investing activities of discontinued operations | — | (3.0 | ) | ||||
Net cash used in investing activities | (12.6 | ) | (20.0 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Repayments of credit facilities and other debt, net | — | (5.3 | ) | ||||
Repurchase of common shares | (38.8 | ) | (0.9 | ) | |||
Proceeds from exercise of stock options | 2.4 | 3.0 | |||||
Payments of dividends | (5.2 | ) | — | ||||
Excess tax benefits from share-based payment arrangements | 1.8 | — | |||||
Net cash used in financing activities of continuing operations | (39.8 | ) | (3.2 | ) | |||
Net decrease in cash and cash equivalents | (29.7 | ) | (11.3 | ) | |||
Cash and cash equivalents at beginning of period | 554.7 | 421.8 | |||||
Cash and cash equivalents at end of period | $ | 525.0 | $ | 410.5 |
Three Months Ended March, 31, | ||||||
2013 | 2012 | |||||
Revenue | $ | — | $ | 82.0 | ||
Income before tax - Information Management operations(1) | — | 7.7 | ||||
Loss on disposition | (8.0 | ) | — | |||
(Loss) Income before income taxes | (8.0 | ) | 7.7 | |||
Income tax expense | ||||||
Expense related to Information Management operations | — | 3.0 | ||||
Benefit related to gain on disposition | (2.9 | ) | — | |||
(Loss) Income from discontinued operations, net of tax | $ | (5.1 | ) | $ | 4.7 |
(1) | Includes $4.9 of transaction costs related to the sale for the three months ended March 31, 2012 and excludes costs previously allocated to Information Management that did not meet the criteria for presentation within discontinued operations of $6.0 for the three months ended March 31, 2012. |
Continuing Operations | Discontinued Operations | Total | |||||||||||||||||||||
Three Months Ended March 31, 2013 | Shares | Income | Per Share Amount | Income | Per Share Amount | Per Share Amount | |||||||||||||||||
Basic EPS | 105.7 | $ | 30.2 | $ | 0.28 | $ | (5.1 | ) | $ | (0.04 | ) | $ | 0.24 | ||||||||||
Effect of dilutive securities: | |||||||||||||||||||||||
Stock-based compensation arrangements | 1.4 | — | — | — | — | — | |||||||||||||||||
Convertible Debt | 3.2 | — | (0.01 | ) | — | — | (0.01 | ) | |||||||||||||||
Diluted EPS | 110.3 | $ | 30.2 | $ | 0.27 | $ | (5.1 | ) | $ | (0.04 | ) | $ | 0.23 | ||||||||||
Three Months Ended March 31, 2012 | |||||||||||||||||||||||
Basic EPS | 115.9 | $ | 21.4 | $ | 0.19 | $ | 4.7 | $ | 0.04 | $ | 0.23 | ||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||||
Stock-based compensation arrangements | 2.0 | — | (0.01 | ) | — | — | (0.01 | ) | |||||||||||||||
Convertible Debt | 1.0 | — | — | — | — | — | |||||||||||||||||
Diluted EPS | 118.9 | $ | 21.4 | $ | 0.18 | $ | 4.7 | $ | 0.04 | $ | 0.22 |
Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Interest cost on projected benefit obligation | $ | 2.8 | $ | 3.0 | |||
Service cost | 1.8 | 1.4 | |||||
Expected return on plan assets | (2.6 | ) | (3.0 | ) | |||
Amortization and deferrals - net | 3.5 | 2.8 | |||||
Pension cost | $ | 5.5 | $ | 4.2 |
Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Interest cost on projected benefit obligation | $ | 0.1 | $ | 0.2 | |||
Service cost | — | 0.1 | |||||
Amortization and deferrals - net | 0.1 | — | |||||
Pension cost | $ | 0.2 | $ | 0.3 |
Shares in Millions Except Per Share Amounts | Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | Weighted Average Fair Value at Date of Grant (per share) | ||||||||
Options outstanding at January 1, 2013 | 1.2 | $ | 12.91 | 6.6 | $ | 4.73 | ||||||
Options exercisable at January 1, 2013 | 0.3 | $ | 11.86 | 0.8 | $ | 3.99 | ||||||
Exercised | (0.2 | ) | 11.98 | |||||||||
Forfeited | (0.1 | ) | 13.18 | |||||||||
Options outstanding at March 31, 2013 | 0.9 | $ | 13.16 | 7.8 | $ | 3.77 | ||||||
Options exercisable at March 31, 2013 | 0.3 | $ | 13.29 | 6.2 | $ | 4.09 |
Shares in Millions Except Per Share Amounts | Number of Shares | Weighted Average Fair Value at Date of Grant | ||||
Non-vested at December 31, 2012 | 1.6 | $ | 13.04 | |||
Granted | 0.5 | 16.15 | ||||
Vested | (0.5 | ) | 13.17 | |||
Forfeited | — | — | ||||
Non-vested at March 31, 2013 | 1.6 | $ | 14.05 |
Shares in Millions Except Per Share Amounts | Number of Shares | Weighted Average Fair Value at Date of Grant | ||||
Non-vested at December 31, 2012 | 0.9 | $ | 12.69 | |||
Granted | 0.1 | 16.45 | ||||
Vested | (0.7 | ) | 13.23 | |||
Forfeited | — | — | ||||
Non-vested at March 31, 2013 | 0.3 | $ | 12.94 |
March 31, 2013 | December 31, 2012 | ||||||
Revolving credit facilities | $ | — | $ | — | |||
2029 Convertible Debentures | 58.6 | 58.4 | |||||
Capital Lease Obligations | 2.0 | 2.2 | |||||
Accounts Receivable Securitization | — | — | |||||
Total debt | 60.6 | 60.6 | |||||
Less current maturities | 0.8 | 0.7 | |||||
Long-term debt | $ | 59.8 | $ | 59.9 |
Remainder of 2013 and 2014 | $ | 1.3 | |
2015 | 0.7 | ||
2016 | — | ||
2017 | — | ||
2018 | — | ||
Thereafter | 125.0 | ||
Total | $ | 127.0 |
March 31, 2013 | Quoted Prices In Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Derivatives | |||||||||||||||
Foreign currency forward contracts (asset position) | $ | 23.8 | $ | — | $ | 23.8 | $ | — | |||||||
Foreign currency forward contracts (liability position) | $ | 9.0 | $ | — | $ | 9.0 | $ | — |
December 31, 2012 | Quoted Prices In Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Derivatives | |||||||||||||||
Foreign currency forward contracts (asset position) | $ | 28.0 | $ | — | $ | 28.0 | $ | — | |||||||
Foreign currency forward contracts (liability position) | $ | 9.6 | $ | — | $ | 9.6 | $ | — |
March 31, 2013 | Quoted Prices In Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Investment securities: | |||||||||||||||
Mutual funds | $ | 10.0 | $ | 10.0 | $ | — | $ | — | |||||||
Convergys common stock | 2.4 | 2.4 | — | — | |||||||||||
Money market accounts | 0.8 | 0.8 | — | — | |||||||||||
Total | $ | 13.2 | $ | 13.2 | $ | — | $ | — |
December 31, 2012 | Quoted Prices In Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Investment securities: | |||||||||||||||
Mutual funds | $ | 13.3 | $ | 13.3 | $ | — | $ | — | |||||||
Convergys common stock | 4.9 | 4.9 | — | — | |||||||||||
Money market accounts | 1.3 | 1.3 | — | — | |||||||||||
Total | $ | 19.5 | $ | 19.5 | $ | — | $ | — |
March 31, 2013 | Quoted Prices In Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Short Term Investments: | |||||||||||||||
Cash Time Deposits | $ | 64.8 | $ | — | $ | 64.8 | $ | — | |||||||
Total | $ | 64.8 | $ | — | $ | 64.8 | $ | — |
December 31, 2012 | Quoted Prices In Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Short Term Investments: | |||||||||||||||
Cash Time Deposits | $ | 64.3 | $ | — | $ | 64.3 | $ | — | |||||||
Total | $ | 64.3 | $ | — | $ | 64.3 | $ | — |
March 31, 2013 | December 31, 2012 | ||||||
Forward exchange contracts and options designated as hedging instruments: | |||||||
Included within other current assets | $ | 14.4 | $ | 16.4 | |||
Included within other non-current assets | 9.4 | 11.6 | |||||
Included within other current liabilities | 5.3 | 6.0 | |||||
Included within other long-term liabilities | 2.8 | 3.5 |
Gain (Loss) Recognized in OCL on Derivative (Effective Portion) | Gain (Loss) Reclassified from Accumulated OCL into Income (Effective Portion) | Location of Gain (Loss) Reclassified from Accumulated OCL into Income (Effective Portion) | |||||||
Three Months Ended March 31, 2013 | |||||||||
Foreign exchange contracts | $ | 1.3 | $ | 4.2 | - Cost of providing services and products sold and Selling, general and administrative | ||||
Three Months Ended March 31, 2012 | |||||||||
Foreign exchange contracts | $ | 16.1 | $ | 2.3 | - Cost of providing services and products sold and Selling, general and administrative |
Gross Carrying Value | Accumulated Amortization | Net | |||||||||
Software (classified with Property, Plant & Equipment) | $ | 41.3 | $ | (27.7 | ) | $ | 13.6 | ||||
Trademarks | 10.0 | (10.0 | ) | — | |||||||
Customer relationships and other intangibles | 119.5 | (101.8 | ) | 17.7 | |||||||
Total | $ | 170.8 | $ | (139.5 | ) | $ | 31.3 |
2014 | $ | 3 | |
2015 | 3 | ||
2016 | 2 | ||
2017 | 2 | ||
2018 | 2 | ||
Thereafter | 3 |
At March 31, 2013 | At December 31, 2012 | ||||||
Accounts payable | $ | 37.0 | $ | 50.6 | |||
Accrued income and other taxes | 24.8 | 21.2 | |||||
Accrued payroll-related expenses | 80.8 | 85.6 | |||||
Derivative liabilities | 6.2 | 6.1 | |||||
Accrued expenses | 80.6 | 85.7 | |||||
Deferred revenue and government grants | 29.7 | 31.1 | |||||
Restructuring and exit costs | 1.6 | 5.5 | |||||
$ | 260.7 | $ | 285.8 |
Changes in Accumulated Other Comprehensive Income (Loss) by Component | |||||||||||||||||
For the Three Months Ended March 31, 2013 | |||||||||||||||||
Foreign Currency | Derivative Financial Instruments | Pension Liability | Total | ||||||||||||||
Balance at December 31, 2012 | $ | 36.4 | $ | 11.4 | $ | (58.3 | ) | $ | (10.5 | ) | |||||||
Other comprehensive (loss) income before reclassifications | (1.8 | ) | 0.8 | — | (1.0 | ) | |||||||||||
Amounts reclassified from accumulated other comprehensive loss | — | (2.6 | ) | — | (2.6 | ) | |||||||||||
Net current-period other comprehensive loss | (1.8 | ) | (1.8 | ) | — | (3.6 | ) | ||||||||||
Balance at March 31, 2013 | $ | 34.6 | $ | 9.6 | $ | (58.3 | ) | $ | (14.1 | ) |
Reclassifications out of Accumulated Other Comprehensive Income (Loss) | |||||
For the Three Months Ended March 31, 2013 | |||||
Details about Accumulated Other Comprehensive Income (Loss) Components | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | Affected Line Item in the Consolidated Statements of Income | |||
Gain (loss) on derivative instruments | 4.2 | Cost of providing services and products sold and Selling, general and administrative | |||
(1.6 | ) | Tax expense | |||
2.6 | Net of tax |
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
2013 | 2012 | Change | % | |||||||||||
Revenues: | ||||||||||||||
Communications | $ | 292.8 | $ | 295.2 | $ | (2.4 | ) | (1 | ) | |||||
Technology | 44.6 | 41.8 | 2.8 | 7 | ||||||||||
Financial Services | 46.1 | 52.6 | (6.5 | ) | (12 | ) | ||||||||
Other | 110.0 | 107.9 | 2.1 | 2 | ||||||||||
Total Revenues | $ | 493.5 | $ | 497.5 | $ | (4.0 | ) | (1 | ) |
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
2013 | 2012 | Change | % | |||||||||||
Operating Costs: | ||||||||||||||
Cost of providing services and products sold | $ | 318.2 | $ | 317.7 | $ | 0.5 | — | |||||||
Selling, general and administrative | 114.6 | 124.7 | (10.1 | ) | (8 | ) | ||||||||
Research and development costs | 2.1 | 3.9 | (1.8 | ) | (46 | ) | ||||||||
Depreciation | 20.9 | 20.3 | 0.6 | 3 | ||||||||||
Amortization | 1.2 | 1.9 | (0.7 | ) | (37 | ) | ||||||||
Total costs and expenses | $ | 457.0 | $ | 468.5 | $ | (11.5 | ) | (2 | ) |
Three Months Ended | |||||||||||||
March 31, | |||||||||||||
2013 | 2012 | Change | % | ||||||||||
Operating Income | $ | 36.5 | $ | 29.0 | $ | 7.5 | 26 | ||||||
Operating Margin | 7.4 | % | 5.8 | % | |||||||||
Information Management costs not qualifying as discontinued operations | — | 6.0 | |||||||||||
Adjusted Operating Income (a non-GAAP measure) | $ | 36.5 | $ | 35.0 | $ | 1.5 | 4 | ||||||
Adjusted Operating Margin | 7.4 | % | 7.0 | % |
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
2013 | 2012 | Change | % | |||||||||||
Operating Income | $ | 36.5 | $ | 29.0 | $ | 7.5 | 26 | |||||||
Other Income, net | 2.3 | 1.4 | 0.9 | 64 | ||||||||||
Interest Expense | (2.9 | ) | (3.6 | ) | 0.7 | (19 | ) | |||||||
Income before Income Taxes | $ | 35.9 | $ | 26.8 | $ | 9.1 | 34 |
Three Months Ended | |||||||||||||
March 31, | |||||||||||||
2013 | 2012 | Change | % | ||||||||||
Income before Income Taxes | $ | 35.9 | $ | 26.8 | $ | 9.1 | 34 | ||||||
Income Tax Expense | 5.7 | 5.4 | 0.3 | 6 | |||||||||
Income from Continuing Operations, net of tax | $ | 30.2 | $ | 21.4 | $ | 8.8 | 41 |
Three Months Ended | |||||||||||||
March 31, | |||||||||||||
2013 | 2012 | Change | % | ||||||||||
Income from Continuing Operations, net of tax | $ | 30.2 | $ | 21.4 | $ | 8.8 | 41 | ||||||
Total operating charges from above, net of tax | — | 4.8 | (4.8 | ) | NM | ||||||||
Adjusted Income from Continuing Operations, net of tax (a non-GAAP measure) | $ | 30.2 | $ | 26.2 | $ | 4.0 | 15 | ||||||
Diluted Earnings Per Common Share: | |||||||||||||
Continuing Operations | $ | 0.27 | $ | 0.18 | $ | 0.09 | 50 | ||||||
Impact of net charges above included in continuing operations, net of tax | — | 0.04 | (0.04 | ) | NM | ||||||||
Adjusted diluted earnings per common share from continuing operations (a non-GAAP measure) | $ | 0.27 | $ | 0.22 | $ | 0.05 | 23 |
Three Months Ended | ||||||||||||||
March 31, | ||||||||||||||
2013 | 2012 | Change | % | |||||||||||
Income from Continuing Operations, net of tax | $ | 30.2 | $ | 21.4 | $ | 8.8 | 41 | |||||||
Income from Discontinued Operations, net of tax (benefit) expense of ($2.9) and $3.0 for the three months ended March 31, 2013 and 2012, respectively | (5.1 | ) | 4.7 | (9.8 | ) | (209 | ) | |||||||
Net Income | $ | 25.1 | $ | 26.1 | $ | (1.0 | ) | (4 | ) | |||||
Diluted Earnings per Common Share: | ||||||||||||||
Continuing Operations | $ | 0.27 | $ | 0.18 | $ | 0.09 | 50 | |||||||
Discontinued Operations | (0.04 | ) | 0.04 | (0.08 | ) | (200 | ) | |||||||
Net Diluted Earnings per Common Share | $ | 0.23 | $ | 0.22 | $ | 0.01 | 5 |
Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Income from Continuing Operations, net of tax under U.S. GAAP | $ | 30.2 | $ | 21.4 | |||
Depreciation and Amortization | 22.1 | 22.2 | |||||
Interest expense | 2.9 | 3.6 | |||||
Income tax expense | 5.7 | 5.4 | |||||
EBITDA (a non-GAAP measure) | 60.9 | 52.6 | |||||
Information Management related costs not qualifying as Discontinued Operations | — | 6.0 | |||||
Adjusted EBITDA (a non-GAAP measure) | $ | 60.9 | $ | 58.6 | |||
Adjusted EBITDA Margin | 12.3 | % | 11.8 | % |
Three Months Ended March 31, | ||||||||
2013 | 2012 | |||||||
Net cash provided by operating activities under U.S. GAAP | $ | 22.7 | $ | 11.9 | ||||
Capital expenditures, net | (12.1 | ) | (20.0 | ) | ||||
Free cash flow (a non-GAAP measure) | $ | 10.6 | $ | (8.1 | ) |
Shares Repurchased | Average price per share | |||||
January 2013 | 14,000 | $ | 16.53 | |||
February 2013 | 1,265,171 | 16.51 | ||||
March 2013 | 847,474 | 16.85 | ||||
Total | 2,126,645 | $ | 16.65 |
(a) | Exhibits. |
Exhibit Number | ||
3.1 | Amended Articles of Incorporation of the Company. (Incorporated by reference from Exhibit 3.1 to Form 10-Q filed on May 5, 2010.) | |
3.2 | Amended and Restated Code of Regulations of the Company. (Incorporated by reference from Exhibit 3.1 to Form 8-K filed on May 2, 2011.) | |
10.1 | 2013 Form of Time-Based Restricted Stock Unit Award Agreement. | |
10.2 | 2013 Form of Performance-Based Restricted Stock Unit Award Agreement. | |
10.3 | Convergys Corporation Amended and Restated Long-Term Incentive Plan, effective January 31, 2013. | |
21 | Subsidiaries of the Company. | |
31.1 | Rule 13a - 14(a) Certification by Chief Executive Officer. | |
31.2 | Rule 13a - 14(a) Certification by Chief Financial Officer. | |
32.1 | Certification by Chief Executive Officer of Periodic Financial Reports Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2 | Certification by Chief Financial Officer of Periodic Financial Reports Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101 | The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, filed on April 30, 2013, formatted in XBRL: (i) Consolidated Statements of Income, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Cash Flows, (v) the Notes to Condensed Consolidated Financial Statements. |
Convergys Corporation | ||
Date: | April 30, 2013 | /s/ Andre S. Valentine |
Andre S. Valentine | ||
Chief Financial Officer |
2. | Forfeiture of Award. |
a. | Your right to receive any Shares that are the subject of this Award that have not yet been delivered (and any dividend equivalents that have not yet been paid) shall be forfeited automatically and without further notice if you cease to be an employee of the Company and its affiliates prior to a Vest Date for any reason other than death, Disability, or involuntary termination without Cause. For purposes of this Agreement: |
(i) | “Disability” has the same meaning as in the Company's long-term disability plan; and |
(ii) | “Cause” means a determination by the Company that you have been involved in fraud, misappropriation, embezzlement, commission of a crime or an act of moral turpitude, or have violated the Code of Business Conduct, recklessly or willfully injured an employee, company property, business, or reputation, or have acted recklessly in the performance of your duties. |
b. | If the Company determines that you engaged in any Detrimental Activity during your employment with Convergys Corporation or during the two-year period following the termination of such employment for any reason, (i) to the extent all or some of the Shares (and dividend equivalents) subject to this Award have not yet been delivered, your right to receive such Shares (and dividend equivalents) shall be forfeited and (ii) to the extent that Shares (and dividend equivalents) have been delivered to you pursuant to this Award, the Company, in its sole discretion, may require you to pay back to it an amount equal to the income recognized for federal income tax purposes, as reflected on form W-2, by reason of the issuance of such Shares (and dividend equivalents) to you, provided that such Shares (and dividend equivalents) were delivered within the six-month period immediately preceding the termination of your employment or at any time following your termination of employment. For purposes of this Section 2b, “Detrimental Activity” shall include: (1) disclosing proprietary, confidential or |
a. | “Good Cause” means your conviction of, or plea of nolo contendere to, a felony or misdemeanor involving moral turpitude; your willful misconduct resulting in material harm to the Company and its affiliates (or any successor thereto); your willful breach of your duties or responsibilities; or your fraud, embezzlement, theft or dishonesty against the Company or any of its affiliates (or any successor thereto), resulting in material harm to the Company and its affiliates (or any successors thereto); |
b. | “Good Reason” means actions taken by the Company resulting in a material negative change in the employment relationship. For these purposes, a “material negative change in the employment relationship” shall include: |
(i) | your assignment to any duties materially inconsistent with your position (including titles and reporting requirements), authority, duties or responsibilities as in effect immediately prior to a Change of Control or as subsequently enhanced, or any other material diminution in such position, authority, duties or responsibilities (whether or not occurring solely as a result of the Company's ceasing to be a publicly traded entity); |
(ii) | any material reduction in your annual base salary, short-term incentive opportunities or long-term incentive opportunities from those in effect immediately prior to a Change of Control; |
(iii) | any material reduction in your aggregate employee benefits from those in effect immediately prior to a Change of Control; |
(iv) | the relocation of your principal location of employment by more than 50 miles; or |
(v) | any failure by the Company to cause a successor to assume this Agreement. |
1. | Earning of Award - Initial Performance Objective. |
2. | Compensation Committee Discretion to Reduce Award - Additional Performance Objectives. |
b. | If the Company determines that you engaged in any Detrimental Activity during your employment with Convergys Corporation or during the two-year period following the termination of such employment for any reason, (i) to the extent the Shares (and dividend equivalents) subject to this Award have not yet been delivered, your right to receive such Shares (and dividend equivalents) shall be forfeited and (ii) to the extent that Shares (and dividend equivalents) have been delivered to you pursuant to this Award, the Company, in its sole discretion, may require you to pay back to it an amount equal to the income recognized for federal income tax purposes, as reflected on form W-2, by reason of the issuance of such Shares (and dividend equivalents) to you, provided that such Shares (and dividend equivalents) were delivered within the six-month period immediately preceding the termination of your employment or at any time following your termination of employment. For purposes of this Section 4(b), “Detrimental Activity” shall include: (1) disclosing proprietary, confidential or trade secret information; (2) becoming involved in any business activity in competition with Convergys Corporation in the geographical area where Convergys Corporation is engaged in such business activity; (3) interfering with Convergys Corporation's relationships with any person or entity or attempting to divert or change any such relationship to the detriment of Convergys Corporation or the benefit of any other person or entity; (4) failing to disclose and assign to Convergys Corporation any ideas, inventions, discoveries and other developments conceived by you during your employment, whether or not during working hours, which are within the scope of or related to Convergys Corporation's existing or planned business activities; (5) disparaging or acting in any manner which may damage the business of Convergys Corporation or which would adversely affect the goodwill, reputation or business relationships of Convergys Corporation; (6) inducing any employee of Convergys Corporation to terminate his or her employment relationship with Convergys Corporation; (7) taking or retaining without authorization any property of Convergys Corporation; or, (8) intentionally or fraudulently providing any inaccurate information causing any financial reports of Convergys Corporation to have to be restated or reported. Convergys Corporation shall be entitled to set-off against any payment called for under this paragraph any amount otherwise owed to you by the Company, provided that such set-off may only be made at the time the amount otherwise owed to you would normally be paid to you. Nothing in this Section is intended to supersede or otherwise affect any Non-Disclosure and Non-Competition agreement or other employment-related agreement between you and Convergys Corporation. References to Convergys Corporation in this paragraph shall include all direct and indirect subsidiaries of Convergys Corporation. |
a. | If you cease to be an employee of the Company and its affiliates after this Award was granted to you and prior to the end of the Performance Period due to death or Disability, then (i) the number of Shares that are covered by this Award shall be automatically reduced to a number of Shares (the “Adjusted Shares”) that bears the same ratio to the target number of Shares indicated on your Notice of Award as (A) the number of days from the first day of the Performance Period through the date your employment terminates bears to (B) 1095, and (ii) notwithstanding Section 1 hereof, the Adjusted Shares will be delivered within 30 days following the date your employment terminates (together with dividend equivalents as provided pursuant to Section 7 of this Agreement), except as otherwise provided pursuant to Section 11 below. The remaining Shares shall be forfeited automatically and without further notice as of the date of your termination. |
b. | If you cease to be an employee of the Company and its affiliates after this Award was granted to you and prior to the end of the Performance Period due to Retirement or involuntary termination without Cause, then (i) the number of Shares that are covered by this Award shall be automatically reduced to the Adjusted Shares, and (ii) provided that the Company achieves the Initial Performance Objective set forth in Section 1 hereof for the Performance Period, you shall be credited with a number of Shares equal to ____% of the Adjusted Shares, or such lesser number of Shares as may be determined by the Compensation Committee, in its discretion, in accordance with Section 2 of this Agreement, which discretion the Compensation Committee intends to exercise based upon the Company's achievement of the cumulative annual EPS objectives for the three years during the Performance Period. If the Initial Performance Objective is achieved for the Performance Period, any Shares determined not to be payable to you by the Compensation Committee after the exercise of its discretion pursuant to Section 2 hereof shall be forfeited automatically and without further notice. Shares earned, if any, pursuant to the provisions of this section 5(b) will be delivered following the end of the Performance Period and the Compensation Committee's certifications pursuant to Sections 1(c) and 2(e) hereof and on or prior to ________ (together with dividend equivalents as provided pursuant to Section 7 of this Agreement), except as otherwise provided pursuant to Section 11 below. |
c. | If, prior to the end of the Performance Period and while you are employed by the Company and its affiliates, a Change of Control of the Company occurs, then (i) the number of Shares that are covered by this Award shall be automatically reduced to a number of Shares (the “COC Adjusted Shares”) that bears the same ratio to the target number of Shares indicated on your Notice of Award as (A) the number of days from the first day of the Performance Period through the date of the Change of Control bears to (B) 1095, and (ii) notwithstanding Section 1 hereof, the COC Adjusted Shares will be delivered within 30 days following the date of the Change of Control (together with dividend equivalents as provided pursuant to Section 7 of this Agreement), except as otherwise provided pursuant to Section 11 below. The remaining Shares shall be forfeited automatically and without further notice as of the date of the Change of Control. |
1. | Purpose. |
2. | Administration. |
3. | Types of Awards. |
4. | Shares Subject to Plan. |
5. | Stock Options. |
6. | Stock Appreciation Rights. |
8. | Performance Shares and Units. |
9. | Other Stock Awards. |
11. | Nonassignability of Awards. |
12. | Deferrals of Awards. |
13. | Provisions Upon Change of Control. |
14. | Adjustments. |
15. | Amendments and Terminations. |
16. | Withholding. |
17. | Forfeiture and Recoupment of Awards. |
18. | Governing Law. |
Exhibit 21 to 2013 10-Q | |||||||||||||||||||||||
Convergys Corporation Direct and Indirect Subsidiaries | |||||||||||||||||||||||
March 31, 2013 | |||||||||||||||||||||||
Entity Name | Jurisdiction | ||||||||||||||||||||||
Convergys Corporation | Ohio | ||||||||||||||||||||||
Asset Ohio Fourth Street LLC | Ohio | ||||||||||||||||||||||
Convergys Software Service (Beijing) Ltd. | Peoples Republic of China | ||||||||||||||||||||||
Convergys Government Solutions LLC | Ohio | ||||||||||||||||||||||
Convergys Customer Management Group Inc. | Ohio | ||||||||||||||||||||||
Convergys Customer Management Australia Pty Ltd | Australia | ||||||||||||||||||||||
Convergys Customer Management Colombia S.A.S. | Colombia | ||||||||||||||||||||||
Convergys Cyprus Limited | Cyprus | ||||||||||||||||||||||
Nodisko Trading Limited | Cyprus | ||||||||||||||||||||||
Rosas Limited | Cyprus | ||||||||||||||||||||||
Convergys EC Inc. | Ohio | ||||||||||||||||||||||
Convergys Funding Inc. | Kentucky | ||||||||||||||||||||||
Convergys Customer Management International Inc. | Ohio | ||||||||||||||||||||||
Convergys Customer Management Group Canada Holding Inc. (99.84%) | Delaware | ||||||||||||||||||||||
CCM Limited Partner ULC | Nova Scotia, Canada | ||||||||||||||||||||||
Convergys CMG Canada Limited Partnership (99% LP) | Manitoba, Canada | ||||||||||||||||||||||
Convergys New Brunswick, Inc. | New Brunswick, Canada | ||||||||||||||||||||||
Convergys CMG Canada Limited Partnership (1% GP) | Manitoba, Canada | ||||||||||||||||||||||
Convergys Customer Management Delaware LLC | Delaware | ||||||||||||||||||||||
Convergys Services Denmark ApS | Denmark | ||||||||||||||||||||||
Convergys Korea Limited (51%) | Korea | ||||||||||||||||||||||
Convergys Customer Management Mexico S. de R.L. de C.V. (1%) | Mexico | ||||||||||||||||||||||
Convergys Mexico S. de R. L. de C. V. (0.03%) | Mexico | ||||||||||||||||||||||
Convergys Customer Management Netherlands B.V. | Netherlands | ||||||||||||||||||||||
Convergys CMG UK Limited | United Kingdom | ||||||||||||||||||||||
PT Convergys Customer Management Indonesia (1%) | Indonesia | ||||||||||||||||||||||
Convergys International B.V. | Netherlands | ||||||||||||||||||||||
Convergys Philippines Services Corporation | Philippines | ||||||||||||||||||||||
Convergys Singapore Holdings Pte. Ltd. | Singapore | ||||||||||||||||||||||
Intervoice, LLC (30%) | Texas | ||||||||||||||||||||||
Encore Receivable Management, Inc. | Kansas | ||||||||||||||||||||||
Convergys India Services Private Limited | India | ||||||||||||||||||||||
Convergys International Solutions (Mauritius) Limited | Mauritius | ||||||||||||||||||||||
Convergys CMG Insurance Services LLC | Ohio | ||||||||||||||||||||||
Convergys Learning Solutions Inc. | Delaware | ||||||||||||||||||||||
DigitalThink (India) Pvt. Ltd. | India | ||||||||||||||||||||||
Convergys Customer Management Group Canada Holding Inc. (0.16%) | Delaware | ||||||||||||||||||||||
Convergys Customer Management Mexico S. de R.L. de C.V. (99%) | Mexico | ||||||||||||||||||||||
Convergys Employee Care Puerto Rico, LLC | Puerto Rico |
Intervoice, LLC (70%) | Texas | ||||||||||||||||||||||
Edify LLC | Delaware | ||||||||||||||||||||||
Edify Holding Company, Inc. | Delaware | ||||||||||||||||||||||
Intervoice-Brite Inc. | Texas | ||||||||||||||||||||||
Intervoice GP, Inc. | Nevada | ||||||||||||||||||||||
Intervoice Limited Partnership (1%) | Nevada | ||||||||||||||||||||||
Intervoice LP, Inc. | Nevada | ||||||||||||||||||||||
Intervoice Limited Partnership (99%) | Nevada | ||||||||||||||||||||||
Intervoice Acquisition Subsidiary II, Inc. | Nevada | ||||||||||||||||||||||
Intervoice Acquisition Subsidiary, Inc. | Nevada | ||||||||||||||||||||||
Intervoice Colombia Ltda. (6%) | Colombia | ||||||||||||||||||||||
Intervoice do Brasil Comerico Servicos e Partipacoes Ltda. (0.1%) | Brazil | ||||||||||||||||||||||
Intervoice Colombia Ltda. (94%) | Colombia | ||||||||||||||||||||||
Intervoice do Brasil Comerico Servicos e Partipacoes Ltda. (99.9%) | Brazil | ||||||||||||||||||||||
Brite Voice Systems, LLC | Kansas | ||||||||||||||||||||||
Intervoice Pte Ltd. | Singapore | ||||||||||||||||||||||
Intervoice Brite (Pty) Ltd. | South Africa | ||||||||||||||||||||||
BVSI, Inc. | Delaware | ||||||||||||||||||||||
Intervoice Limited | United Kingdom | ||||||||||||||||||||||
Intervoice GmbH | Germany | ||||||||||||||||||||||
PT Convergys Customer Management Indonesia (99%) | Indonesia | ||||||||||||||||||||||
• All subsidiaries conduct business under their legal name. |
1. | I have reviewed this quarterly report on Form 10-Q of Convergys Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | April 30, 2013 | /s/ Andrea J. Ayers | |
Andrea J. Ayers | |||
Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Convergys Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | April 30, 2013 | /s/ Andre S. Valentine | |
Andre S. Valentine | |||
Chief Financial Officer |
/s/ Andrea J. Ayers |
Andrea J. Ayers Chief Executive Officer |
/s/ Andre S. Valentine |
Andre S. Valentine Chief Financial Officer |
Employee Benefit Plans (Schedule Of Components Of Pension Cost) (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Pension Plans, Defined Benefit [Member]
|
||
Service cost | $ 1.8 | $ 1.4 |
Interest cost on projected benefit obligation | 2.8 | 3.0 |
Expected return on plan assets | (2.6) | (3.0) |
Amortization and deferrals - net | 3.5 | 2.8 |
Pension cost | 5.5 | 4.2 |
Unfunded Executive Pension Plans [Member]
|
||
Service cost | 0 | 0.1 |
Interest cost on projected benefit obligation | 0.1 | 0.2 |
Amortization and deferrals - net | 0.1 | 0 |
Pension cost | $ 0.2 | $ 0.3 |
Financial Instruments (Fair Value of Derivative Instruments) (Details) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Other Current Assets [Member]
|
||
Forward exchange contracts and options designated as hedging instruments, assets | $ 14.4 | $ 16.4 |
Other Assets [Member]
|
||
Forward exchange contracts and options designated as hedging instruments, assets | 9.4 | 11.6 |
Other Current Liabilities [Member]
|
||
Forward exchange contracts and options designated as hedging instruments, liabilities | 5.3 | 6.0 |
Other Liabilities [Member]
|
||
Forward exchange contracts and options designated as hedging instruments, liabilities | $ 2.8 | $ 3.5 |
Debt And Capital Lease Obligations (Other) (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Dec. 31, 2012
|
|
Debt Instrument | ||
Asset Securitization Facility | $ 150.0 | |
Asset Securitization Facility, Expiration Date | June 2014 | |
Accounts Receivable Securitization | 0 | 0 |
Capital Lease Obligations | $ 2.0 | $ 2.2 |
Financial Instruments (Effect Of Derivative Instruments On Consolidated Financial Statements) (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Derivative Instruments, Gain (Loss) | ||
Derivative Instruments, Gain Reclassified from Accumulated OCI into Income, Effective Portion | $ (4.2) | |
Operating Expense [Member]
|
||
Derivative Instruments, Gain (Loss) | ||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | 1.3 | 16.1 |
Derivative Instruments, Gain Reclassified from Accumulated OCI into Income, Effective Portion | $ 4.2 | $ 2.3 |
Debt And Capital Lease Obligations (Revolving Credit Facility) (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2013
|
Dec. 31, 2012
|
Mar. 31, 2013
2011 Credit Facility [Member]
|
Mar. 11, 2011
2011 Credit Facility [Member]
|
Mar. 11, 2011
2006 Credit Facility [Member]
|
|
Line of credit, maximum borrowing capacity | $ 300 | $ 400 | |||
Credit facility, amount outstanding | $ 0 | $ 0 | |||
Line of Credit Facility, Expiration Date | Mar. 11, 2015 |
Background And Basis Of Presentation (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
Dec. 31, 2012
|
|
Aggregate sale of business segment | $ 449.0 | ||
Discontinued Operation, Gain (Loss) from Disposal of Discontinued Operation, before Income Tax | (8.0) | 0 | 99.8 |
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax | 16.2 | ||
Proceeds from Divestiture of Businesses | 462.6 | ||
Elimination of goodwill and intangible assets from sale of business segment | $ 201.7 | ||
Maximum period of agreement for earning transition services revenues for services provided to the buyer (in months) | 24 |
Goodwill And Other Intangible Assets (Narrative) (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
Dec. 31, 2013
|
Dec. 31, 2012
|
|
Goodwill, net | $ 577.7 | $ 577.7 | ||
Intangible assets, net | 31.3 | 33.7 | ||
Amortization | 1.2 | 1.9 | 4.7 | |
Software [Member]
|
||||
Intangible assets, net | 13.6 | |||
Weighted average depreciation period | 3 years 3 months 18 days | |||
Trademarks [Member]
|
||||
Intangible assets, net | 0 | |||
Intangible assets, useful life | 4 years | |||
Customer Relationships And Other Intangibles [Member]
|
||||
Intangible assets, net | 17.7 | |||
Other Intangible Assets [Member]
|
||||
Weighted average amortization period | 6 years 3 months 18 days | |||
Minimum [Member] | Software [Member]
|
||||
Intangible assets, useful life | 5 years | |||
Minimum [Member] | Customer Relationships And Other Intangibles [Member]
|
||||
Intangible assets, useful life | 7 years | |||
Maximum [Member] | Software [Member]
|
||||
Intangible assets, useful life | 8 years | |||
Maximum [Member] | Customer Relationships And Other Intangibles [Member]
|
||||
Intangible assets, useful life | 12 years | |||
Office Building [Member]
|
||||
Real Estate Held-for-sale | 35.2 | |||
Long Lived Assets Held-for-sale, Impairment Charge | 42.6 | |||
Long Lived Assets Held for Sale Impairment Charge, net of tax | $ 27.0 |
Employee Benefit Plans (Tables)
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension Plans, Defined Benefit [Member]
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Components Of Pension Cost |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unfunded Executive Pension Plans [Member]
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Components Of Pension Cost |
|
Debt And Capital Lease Obligations (Schedule Of Future Minimum Payments) (Details) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
---|---|
Long-term Debt and Capital Lease Obligations [Abstract] | |
Remainder of 2013 and 2014 | $ 1.3 |
2015 | 0.7 |
2016 | 0 |
2017 | 0 |
2018 | 0 |
Thereafter | 125.0 |
Total | $ 127.0 |
Stock-Based Compensation Plans (Narrative) (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified |
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
|
|
Long-term incentive plan expense | $ 4.5 | $ 5.3 |
Long-term incentive plan expense related to discontinued operations | 0.8 | |
Stock compensation expense | 4.5 | 5.2 |
Stock Options [Member]
|
||
Stock compensation expense | 0.3 | |
Restricted Stock Units (RSUs) [Member]
|
||
Granted, shares | 0.9 | 1.4 |
Restricted stock units granted, weighted average fair value at date of grant | $ 16.45 | $ 12.92 |
Performance Shares [Member]
|
||
Granted, shares | 0.1 | 0.6 |
Total unrecognized compensation cost related to non-vested restricted stock and restricted stock units | 3.6 | |
Restricted stock units granted, weighted average fair value at date of grant | $ 12.93 | |
Weighted average recognition period (in years) | 0.5 | |
Performance Shares [Member] | Maximum [Member]
|
||
Payout range | 200.00% | |
Performance Shares [Member] | Minimum [Member]
|
||
Payout range | 50.00% | |
Time-Based Restricted Stock [Member]
|
||
Granted, shares | 0.5 | |
Total unrecognized compensation cost related to non-vested restricted stock and restricted stock units | $ 15.3 | |
Restricted stock units granted, weighted average fair value at date of grant | $ 16.15 | |
Weighted average recognition period (in years) | 1.2 | |
2013 Performance grants [Domain] | Performance Shares [Member]
|
||
Granted, shares | 0.4 | |
Restricted stock units granted, weighted average fair value at date of grant | $ 16.22 | |
2013 time-based grants [Member]
|
||
Time-based RSUs granted vesting period | 2 years | |
2013 time-based grants [Member] | Maximum [Member]
|
||
Time-based RSUs granted vesting period | 3 years | |
2013 time-based grants [Member] | Minimum [Member]
|
||
Time-based RSUs granted vesting period | 1 year | |
2012 time-based grants [Member] | Maximum [Member]
|
||
Time-based RSUs granted vesting period | 3 years | |
2012 time-based grants [Member] | Minimum [Member]
|
||
Time-based RSUs granted vesting period | 2 years | |
2011 time-based grants [Member] | Maximum [Member]
|
||
Time-based RSUs granted vesting period | 3 years | |
2011 time-based grants [Member] | Minimum [Member]
|
||
Time-based RSUs granted vesting period | 2 years | |
Performance-based grants that provide for payout contingent upon certain EPS targets [Member] | 2013 Performance grants [Domain] | Performance Shares [Member]
|
||
Granted, shares | 0.3 |
Fair Value Disclosures (Details) (USD $)
In Millions, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Assets, Fair Value Disclosure | $ 78.0 | $ 83.8 |
Debt instrument, principal outstanding | 125.0 | |
Convertible debentures, fair value | 211.4 | |
Estimate Of Fair Value, Fair Value Disclosure [Member]
|
||
Foreign currency forward contracts (asset position) | 23.8 | 28.0 |
Foreign currency forward contracts (liability position) | 9.0 | 9.6 |
Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
|
||
Foreign currency forward contracts (asset position) | 0 | 0 |
Foreign currency forward contracts (liability position) | 0 | 0 |
Significant Other Observable Inputs (Level 2) [Member]
|
||
Assets, Fair Value Disclosure | 0 | 0 |
Foreign currency forward contracts (asset position) | 23.8 | 28.0 |
Foreign currency forward contracts (liability position) | 9.0 | 9.6 |
Significant Unobservable Inputs (Level 3) [Member]
|
||
Assets, Fair Value Disclosure | 0 | 0 |
Foreign currency forward contracts (asset position) | 0 | 0 |
Foreign currency forward contracts (liability position) | 0 | 0 |
Interest-bearing Deposits [Member]
|
||
Assets, Fair Value Disclosure | 64.8 | 64.3 |
Interest-bearing Deposits [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
|
||
Assets, Fair Value Disclosure | 0 | 0 |
Interest-bearing Deposits [Member] | Significant Other Observable Inputs (Level 2) [Member]
|
||
Assets, Fair Value Disclosure | 64.8 | 64.3 |
Interest-bearing Deposits [Member] | Significant Unobservable Inputs (Level 3) [Member]
|
||
Assets, Fair Value Disclosure | 0 | 0 |
Equity Funds [Member]
|
||
Assets, Fair Value Disclosure | 10.0 | 13.3 |
Equity Funds [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
|
||
Assets, Fair Value Disclosure | 10.0 | 13.3 |
Equity Funds [Member] | Significant Other Observable Inputs (Level 2) [Member]
|
||
Assets, Fair Value Disclosure | 0 | 0 |
Equity Funds [Member] | Significant Unobservable Inputs (Level 3) [Member]
|
||
Assets, Fair Value Disclosure | 0 | 0 |
Common Stock [Member]
|
||
Assets, Fair Value Disclosure | 2.4 | 4.9 |
Common Stock [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
|
||
Assets, Fair Value Disclosure | 2.4 | 4.9 |
Common Stock [Member] | Significant Other Observable Inputs (Level 2) [Member]
|
||
Assets, Fair Value Disclosure | 0 | 0 |
Common Stock [Member] | Significant Unobservable Inputs (Level 3) [Member]
|
||
Assets, Fair Value Disclosure | 0 | 0 |
Money Market Funds [Member]
|
||
Assets, Fair Value Disclosure | 0.8 | 1.3 |
Money Market Funds [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
|
||
Assets, Fair Value Disclosure | 0.8 | 1.3 |
Money Market Funds [Member] | Significant Other Observable Inputs (Level 2) [Member]
|
||
Assets, Fair Value Disclosure | 0 | 0 |
Money Market Funds [Member] | Significant Unobservable Inputs (Level 3) [Member]
|
||
Assets, Fair Value Disclosure | 0 | 0 |
Investment Securities Class [Domain]
|
||
Assets, Fair Value Disclosure | 13.2 | 19.5 |
Investment Securities Class [Domain] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
|
||
Assets, Fair Value Disclosure | $ 13.2 | $ 19.5 |
Debt And Capital Lease Obligations (Convertible Debentures) (Details) (USD $)
|
3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|---|
Mar. 31, 2013
|
Dec. 31, 2012
|
Mar. 31, 2013
5.75% Junior Subordinated Convertible Debentures [Member]
|
Dec. 31, 2009
5.75% Junior Subordinated Convertible Debentures [Member]
|
Mar. 31, 2013
4.875% Unsecured Senior Notes [Member]
|
Dec. 31, 2009
4.875% Unsecured Senior Notes [Member]
|
|
Debt Instrument | ||||||
Terms of exchange offer | $ 1,020 | $ 1,000 | ||||
Debt Instrument, Face Amount | 125,000,000 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 5.75% | 4.875% | ||||
Debt Instrument, Maturity Date | Sep. 15, 2029 | Dec. 15, 2009 | ||||
Extinguishment of Debt, Amount | 122,500,000 | |||||
Liability component of convertible debt recognized at issuance | 56,300,000 | |||||
Deferred tax impact on convertible debt | $ 134,500,000 | $ 136,500,000 | $ 32,700,000 | |||
Debt Instrument, Convertible, Conversion Price | $ 12.07 | |||||
Debt Instrument, Convertible, Conversion Ratio | 82.82 | |||||
Debt Instrument, Convertible, Terms of Conversion Feature | 1000 | |||||
Contingent Interest | 0.0075 |
Divestitures
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2013
|
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Divestitures | DIVESTITURES AND DISCONTINUED OPERATIONS On May 16, 2012, the Company completed the sale of its Information Management line of business to NEC Corporation for $449.0 in cash. The Company recorded a gain of $99.8 pretax and $16.2, net of taxes in 2012. The sale of Information Management was a taxable transaction that resulted in $83.6 being recorded for the combined federal, state and foreign income tax obligation. The high effective tax rate is primarily due to a lower basis in net assets, including goodwill, for tax purposes compared to their book basis. The gain on sale included the elimination of $201.7 of goodwill and intangible assets. The results of the Information Management business have been classified as discontinued operations for the first quarter of 2012. Certain costs previously allocated to the Information Management segment that do not qualify for discontinued operations accounting treatment are now reported as costs from continuing operations. These costs were $6.0 for the three months ended March 31, 2012. The Company is taking actions to reduce these costs and expects transition services revenue from services provided to the buyer subsequent to completion of the sale to offset a significant portion of these costs. During the three months ended March 31, 2013, we earned $4.9 in revenue under these transition services agreements. While the transition services agreements vary in duration up to 24 months from the date of sale depending upon the type of service provided, our expectation is that we will substantially eliminate the underlying costs as the transition services are completed. The results of the Information Management business included in discontinued operations for the three months ended March 31, 2013 and 2012 are summarized as follows:
|
Accumulated Other Comprehensive Income/(Loss) Reclassifications out of Accumulated Other Comprehensive Income (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended |
---|---|
Mar. 31, 2013
|
|
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, before Tax | $ 4.2 |
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, Tax | (1.6) |
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, Net of Tax | $ 2.6 |