8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report: January 20, 2006

CONVERGYS CORPORATION

(Exact name of registrant as specified in its charter)

Ohio	1-4379	31-1598292
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

201 East Fourth Street Cincinnati, Ohio	45202
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (513) 723-7000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Form 8-K Convergys Corporation

Item 1.01. Entry into a Material Definitive Agreement

and

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant – Subsection 2.03(a)

Convergys Corporation maintains a $200,000,000 accounts receivable securitization agreement (the Receivables Purchase Agreement) with Falcon Asset Securitization Corporation (“Falcon”) and Fifth Third Bank (“Fifth Third”). Pursuant to the terms of the Receivables Purchase Agreement, Convergys Funding Corporation, a wholly owned, consolidated subsidiary of Convergys Corporation, sells to Falcon and Fifth Third on a revolving basis an undivided percentage interest in designed pools of accounts receivable. As of January 20, 2006, there were no outstanding receivables sold under this agreement.

On January 20, 2006, the parties executed an amendment to the Receivables Purchase Agreement, effective January 20, 2006, that eliminated certain restrictions pertaining to Convergys’ ability to repurchase the receivables. As a result of this amendment, the Company believes that transfers made under this agreement can no longer be treated as sales. Accordingly, any future amounts transferred under this agreement will be treated as direct financing obligations. This amendment has no impact on the Company’s ability to utilize this facility for the full amount.

Item 2.02. Results of Operations and Financial Conditions

On January 24, 2006 Convergys Corporation reported its results for the fourth quarter ended December 31, 2005. The earnings release for the fourth quarter ended December 31, 2005 is attached as Exhibit 99.1. The attached exhibit is furnished pursuant to Item 9.01 of Form 8-K.

The earnings release contains non-GAAP financial measures, including free cash flow and other pro forma financial results, which are not prepared in accordance with GAAP. A reconciliation of these non-GAAP measures to the comparable GAAP measures is included in the financial tables that are part of the earnings release. These non-GAAP financial measures should not be construed as being more important than comparable GAAP measures. They are presented because Convergys Corporation management uses this information when evaluating the company’s results of operations and cash flow and believes that this information provides the users of the financial statements with an additional and useful comparison of the company’s current results of operations and cash flows with past and future periods.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits.

10	Amendment No. 6 to Receivables Purchase Agreement.
99.1	Earnings Release of Convergys Corporation dated January 24, 2006.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CONVERGYS CORPORATION
By:	/s/ William H. Hawkins II
	William H. Hawkins II
	Senior Vice President General Counsel
	and Secretary

Date: January 24, 2006

EXHIBIT INDEX

Exhibit No.
10	Amendment No. 6 to Receivables Purchase Agreement.
99.1	Earnings Release of Convergys Corporation dated January 24, 2006.

EX-10

Exhibit 10

AMENDMENT NO. 6 TO RECEIVABLES PURCHASE AGREEMENT

THIS AMENDMENT NO. 6 TO RECEIVABLES PURCHASE AGREEMENT, dated as of January 20, 2006 (this “Amendment”), is by and among Convergys Funding Corporation (the “Seller”), Convergys Corporation, as initial servicer (the “Servicer”), Falcon Asset Securitization Corporation (“Falcon”), Fifth Third Bank, an Ohio banking corporation (“Fifth Third”), and JPMorgan Chase Bank, N.A. as successor by merger to Bank One, NA, as successor by merger to Bank One, Michigan (together with Fifth Third and Falcon, the “Purchasers”), and as “Falcon Agent” and “Administrative Agent”.

W I T N E S S E T H:

WHEREAS, the Seller, the Servicer, the Purchasers, the Falcon Agent and the Administrative Agent are parties to that certain Amended and Restated Receivables Purchase Agreement dated as of November 20, 2003 (as heretofore amended, the “Agreement”); and

WHEREAS, the parties wish to amend the Agreement as hereinafter forth;

NOW, THEREFORE, in consideration of the premises herein contained, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:

1. Defined Terms. Capitalized terms used herein and not otherwise defined shall have their meanings as attributed to such terms in the Agreement

2. Amendment. Section 2.7 of the Agreement is hereby amended and restated in its entirety to read as follows:

Section 2.7 Clean Up Call. In addition to Seller’s rights pursuant to Section 1.3, Seller will have the right (after providing written notice to the Falcon Agent and Fifth Third in accordance with the Required Notice Period), at any time, to repurchase from the Purchasers all, but not less than all, of the then outstanding Purchaser Interests (a “Clean-up Call”). The aggregate purchase price in respect thereof will be an amount equal to the Aggregate Unpaids through the date of such repurchase, payable in immediately available funds. Such repurchase will be without representation, warranty or recourse of any kind by, on the part of, or against any of the Purchasers or Agents. Upon such payment in full of the Aggregate Unpaids following a Clean-up Call, this Agreement will terminate and be of no force and effect, except for provisions which expressly survive termination.

3. Absence of Amortization Event or Potential Amortization Event. In order to induce the Falcon Agent, the Administrative Agent and the Purchasers to enter into this Amendment, the Seller hereby represents and warrants to the Falcon Agent, the Administrative Agent and the Purchasers that, after giving effect to the amendment contained in Section 2

hereof, no Amortization Event or Potential Amortization Event exists and is continuing as of the Effective Date (as defined in Section 4 below) or as of the date of this Amendment.

4. Effective Date. This Amendment shall become retroactively effective as of January 20, 2006 (the “Effective Date”) upon (a) receipt by the Administrative Agent of counterparts hereof.

5. Ratification. Except as expressly modified hereby, the Agreement, as amended hereby, is hereby ratified, approved and confirmed in all respects.

6. Reference to Agreement. From and after the Effective Date hereof, each reference in the Agreement to “this Agreement” or to “hereof”, “hereunder” or words of like import, and all references to the Agreement in any and all agreements, instruments, documents, notes, certificates and other writings of every kind and nature shall be deemed to mean the Agreement as amended by this Amendment.

7. Costs and Expenses. The Seller agrees to pay all costs, fees, and out-of-pocket expenses (including reasonable attorneys’ fees and time charges of attorneys for the Administrative Agent, the Falcon Agent and the Purchasers) incurred in connection with the preparation, execution and delivery of this Amendment.

8. CHOICE OF LAW. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF OHIO.

9. Execution in Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

<Signature pages follow>

2

IN WITNESS WHEREOF, the Seller, the Servicer, the Purchasers, the Falcon and the Administrative Agent have executed this Amendment as of the date first above written.

CONVERGYS FUNDING CORPORATION
By:	/s/    DENNIS B. TAFFE
Name:	Dennis B. Taffe
Title:	Treasurer
CONVERGYS CORPORATION
By:	/s/    DENNIS B. TAFFE
Name:	Dennis B. Taffe
Title:	Vice President and Treasurer

3

FIFTH THIRD BANK, AS A PURCHASER

By:

Name:

Title:

4

FALCON ASSET SECURITIZATION CORPORATION, AS A PURCHASER

BY: JPMORGAN CHASE BANK, N.A., ITS ATTORNEY IN FACT

By:

Name:

Title:

JPMORGAN CHASE BANK, N.A., INDIVIDUALLY, AS FALCON AGENT AND AS ADMINISTRATIVE AGENT

By:

Name:

Title:

5

EX-99.1

Exhibit 99.1

NEWS RELEASE

CONVERGYS CORPORATION DELIVERS STRONG OPERATING

PERFORMANCE AND IMPORTANT WINS IN THE FOURTH QUARTER

• Convergys’ operating income on a GAAP basis more than doubled over the prior year, up 29 percent excluding restructuring charges.

• Customer Management Group improved its operating margin to 7.8 percent from 7.3 percent in the prior year. Excluding severance, operating margin improved to 9.3 percent from 7.1 percent.

• Employee Care signed a $1.1 billion contract with DuPont, the largest HR BPO agreement in the market today.

• Information Management Group improved its operating margin to 20.7 percent, its highest level in three years, and announced wins with four large clients.

• Convergys delivered very strong fourth quarter and full year free cash flow, almost doubling prior year levels.

(Cincinnati; January 24, 2006) — Convergys Corporation (NYSE: CVG), a global leader in providing customer care, human resources, and billing services, announced today its financial results for the fourth quarter of 2005.

Revenues of $669.6 million were relatively flat compared to the fourth quarter of 2004. Revenues were up 7 percent due to growth in both CMG and IMG, excluding the impact of lower revenues from Cingular. GAAP operating income more than doubled to $66.7 million compared with $30.8 million in the prior year. Excluding restructuring charges in both years, operating income increased 29 percent to $79.0 million versus $61.2 million in the fourth quarter of 2004. The improvement resulted from successful implementation of restructuring initiatives in both IMG and CMG.

Net income increased 16 percent to $23.4 million or $0.16 per diluted share versus $20.2 million or $0.14 per diluted share in the prior year. In addition to the improvement in core operating performance from both segments, the increase was driven by the impact of lower year-over-year restructuring expenses. Convergys recorded a pre-tax restructuring charge of $12.3 million ($7.8 million after tax or $0.05 per diluted share) in the fourth quarter of 2005 versus $30.4 million ($21.0 million after tax or $0.14 per diluted share) in the fourth quarter of 2004.

The operating improvements were partially offset by higher year-over-year income taxes. Income taxes included $11.4 million in additional tax expense ($0.08 per diluted share) resulting from the repatriation of foreign cash, inclusive of dividends distributed under the American Jobs Creation Act of 2004. Also impacting earnings was a pre-tax equity loss of $4.5 from Convergys’ investments in the cellular partnerships versus pre-tax equity earnings of $1.0 million in the prior year.

Page 1 of 14 Pages

“Despite Sprint Nextel’s decision last week to migrate its subscribers from the legacy Precedent 2000 [r] billing system, we have confidence that we can deliver continued revenue and earnings growth across Convergys,” said Jim Orr, Chairman and CEO of Convergys. “I am encouraged by our improved operating performance and the continuing diversification of our revenue sources. We anticipate strengthening margins as we begin to realize the annual effect of organizational changes made during 2005. Additionally, we have built a strong backlog, including the important wins we announced in the fourth quarter, which positions Convergys well for continued growth.”

For the full year 2005, Convergys’ revenues of $2,582.1 million were up 4 percent. Growth was balanced between both IMG and CMG. Operating income in 2005 was up 21 percent. Excluding restructuring charges in both years, operating income was up 13 percent. IMG delivered strong operating performance. CMG’s operating performance improved in the second half of 2005 as both Customer Care and Employee Care results improved. On a GAAP basis, diluted EPS for the year was up 12 percent to $0.86.

Operating Performance by Segment

Customer Management Group (CMG) - Customer Care and Employee Care

CMG’s revenues of $472.7 million were relatively flat compared to prior year. Reduced revenue from Cingular was offset by growth from several existing clients and revenues generated from recently implemented customer care and employee care client programs including the State of Texas.

CMG’s fourth quarter 2005 GAAP operating income and operating margin were $37.0 million and 7.8 percent, respectively, compared with $34.5 and 7.3 percent in the prior year. Excluding restructuring charges, CMG’s operating income increased 30 percent to $43.8 million versus $33.6 million in the prior year, while operating margin increased to 9.3 percent from 7.1 percent in the prior year. This reflects operational improvements with several client programs and savings realized through restructuring initiatives. Higher operating expenses caused by the impact of a weakened U.S. versus Canadian dollar partially offset these improvements.

Information Management Group (IMG)

IMG’s revenues were relatively flat at $196.9 million in the fourth quarter of 2005 versus $197.9 million in the same period last year. Professional and consulting revenues of $65.3 million increased 20 percent compared to the prior year. Increased spending by IMG’s largest wireless client as well as a large Latin American client largely drove this increase. Data processing revenues of $85.7 million decreased 12 percent from the prior year, primarily reflecting the changing billing relationship with Cingular as it migrates subscribers from outsourced to managed service environments. License and other revenues of $45.9 million were in line with prior year.

Page 2 of 14 Pages

IMG’s GAAP fourth quarter 2005 operating income was $40.8 million versus $5.3 million in the prior year. Excluding the $25.8 million restructuring charge recorded in the fourth quarter of 2004, operating income increased 31 percent from the prior year, while operating margin increased to 20.7 percent from 15.7 percent in the prior year. This reflects savings realized through the restructuring initiatives as well as other operational improvements.

Other Items

• Interest expense was $5.6 million versus $3.6 million in the prior year resulting from a higher debt balance and higher interest rates.

• Convergys recorded $7.0 million in non-cash stock compensation expense during the quarter. This includes $1.3 million incurred with the fourth quarter 2005 restructuring. During the fourth quarter of 2004, these amounts were $7.8 million and $3.3 million, respectively.

• Cash flow from operations for the fourth quarter of 2005 was $155 million. Free cash flow of $110 million in the fourth quarter increased by $57 million from the prior year. For the full year 2005, cash flow from operations was $237 million. Free cash flow for 2005 of $211 million increased by 85 percent from 2004. This is the eighth consecutive year Convergys has generated positive free cash flow.

• Days sales outstanding (DSO) declined to 72 days at December 31, 2005. This compares to 74 days at September 30, 2005.

• During the fourth quarter, Convergys repurchased 391,000 shares at a cost of $6.3 million and an average price of $16.06 per share. During 2005, Convergys repurchased a total of 3,643,000 shares at an average price of $13.59.

Financial Guidance

• For 2006, GAAP EPS is expected to be at least $1.07 per share. Excluding non-cash stock compensation expense, EPS is expected to be at least $1.20.

• For the first quarter 2006, Convergys’ CMG revenue is expected to be up over 5 percent and operating margin will be up from the prior year levels.

• For the first quarter 2006, Convergys’ IMG revenue will be relatively flat and operating margin will be down from the prior year levels.

• For the first quarter 2006, GAAP EPS is expected to be $0.24 to $0.25, up 10 to 15 percent from the prior year level. Excluding non-cash stock compensation expense, EPS is expected to be $0.27 to $0.28.

Page 3 of 14 Pages

FORWARD-LOOKING STATEMENTS DISCLOSURE AND “SAFE HARBOR” NOTE:

This news release contains forward-looking statements that reflect Convergys’ expectations as of January 24, 2006. Actual results of Convergys could differ materially from those discussed herein. Potential risk factors that could cause or contribute to actual results being materially different from those in the forward-looking statements include, but are not limited to, the loss of a significant client or significant business from a client, difficulties in completing a contract or implementing its provisions, difficulties in completing or implementing an acquisition, terrorist activities and the United States’ response, changes in the legal and regulatory environment in which Convergys and its clients operate, and competitive and other factors disclosed in the Form 10-K for the year ended December 31, 2004, and subsequent filings with the SEC by Convergys Corporation. The company has no current intention of updating any forward-looking statements that may be included herein, other than in publicly available statements.

NON-GAAP FINANCIAL MEASURES:

This news release contains non-GAAP financial measures including free cash flow and other pro forma financial results that are not prepared in accordance with GAAP. A reconciliation of these non-GAAP measures to the comparable GAAP measures is included in the attached financial tables.

These non-GAAP financial measures should not be construed as being more important than comparable GAAP measures. They are presented because Convergys’ management uses this information when evaluating current results of operations and cash flow, and believes that this information provides the users of the financial statements with an additional and useful comparison of Convergys’ current results of operations and cash flows with past and future periods.

CONFERENCE CALL NOTE:

Convergys will host a conference call on Tuesday, January 24, at 10:00 AM, EST, to discuss the company’s fourth quarter results. It will feature Jim Orr, Chairman and CEO, and Earl Shanks, CFO. This call will be carried live (with scheduled repeats) on the Internet. A link to the conference call is available at www.convergys.com

ABOUT CONVERGYS

Convergys Corporation (NYSE: CVG) is a global leader in providing customer care, human resources, and billing services. Convergys combines specialized knowledge and expertise with solid execution to deliver outsourced solutions, consulting services, and software support. Clients in more than 60 countries speaking nearly 30 languages depend on Convergys to manage the increasing complexity and cost of caring for customers and employees. Convergys serves the world’s leading companies in many industries including communications, financial services, technology, and consumer products.

Page 4 of 14 Pages

Convergys is a member of the S&P 500 and a Fortune Most Admired Company. Headquartered in Cincinnati, Ohio, Convergys has more than 62,000 employees in 68 customer contact centers, three data centers, and other facilities in the United States, Canada, Latin America, Europe, the Middle East, and Asia. For more information visit www.convergys.com

Convergys, Precedent 2000, and the Convergys logo are registered trademarks of Convergys Corporation.

Investor Contact:

David Stein, Vice President of Investor Relations

+1 513 723 7768 or investor@convergys.com

Media Contact:

John Pratt, Convergys Corporate Communications

+1 513 723 3333 or john.pratt@convergys.com

##

Page 5 of 14 Pages

Convergys Corporation

Revenues, Net Income and Earnings Per Common Share

In Millions Except Per Share Amounts

(Unaudited)

	Fourth Quarter											Twelve Months
							Change											Change
	2005			2004			Amount			%		2005			2004			Amount			%
Revenues:
Customer Management Group	$	472.7		$	474.3		$	(1.6	)	—		$	1,804.0		$	1,739.2		$	64.8		4
Information Management Group		196.9			197.9			(1.0	)	(1	)		778.1			748.5			29.6		4
Total	$	669.6		$	672.2		$	(2.6	)	—		$	2,582.1		$	2,487.7		$	94.4		4
Operating Income (Loss):
Customer Management Group	$	37.0		$	34.5		$	2.5		7		$	103.9		$	131.4		$	(27.5	)	(21	)
Information Management Group		40.8			5.3			35.5		—			145.1			73.0			72.1		99
Corporate and Other		(11.1	)		(9.0	)		(2.1	)	23			(25.4	)		(18.9	)		(6.5	)	34
Total	$	66.7		$	30.8		$	35.9		117		$	223.6		$	185.5		$	38.1		21
Net Income	$	23.4		$	20.2		$	3.2		16		$	122.6		$	111.5		$	11.1		10
Earnings Per Common Share
- Basic	$	0.17		$	0.14		$	0.03		21		$	0.88		$	0.79		$	0.09		11
- Diluted	$	0.16		$	0.14		$	0.02		14		$	0.86		$	0.77		$	0.09		12
Weighted Average Common Shares Outstanding
- Basic		139.2			140.6			(1.4	)	(1	)		140.0			141.4			(1.4	)	(1	)
- Diluted		142.6			144.9			(2.3	)	(2	)		142.9			145.4			(2.5	)	(2	)

The above amounts reflect the Company’s results of operations, as reported under U.S. Generally Accepted Accounting Principles (U.S. GAAP), that will be presented in the Convergys 10-K for the annual period ended December 31, 2005.

Page 6 of 14 Pages

Convergys Corporation

Consolidated Statements of Income

In Millions Except Per Share Amounts

(Unaudited)

	For the Three Months Ended Dec. 31,						% Change		For the Twelve Months Ended Dec. 31,						% Change
	2005			2004					2005			2004
Revenues:
Customer Management Group
Communications	$	226.2		$	256.6		(12	)	$	902.1		$	986.6		(9	)
Technology		40.7			45.0		(10	)		157.0			168.8		(7	)
Financial Services		67.1			63.9		5			262.9			197.5		33
Other		138.7			108.8		27			482.0			386.3		25
Total CMG Revenues		472.7			474.3		—			1,804.0			1,739.2		4
Information Management Group
Data Processing		85.7			97.3		(12	)		340.5			389.9		(13	)
Professional and Consulting		65.3			54.3		20			267.6			191.3		40
License and Other		45.9			46.3		(1	)		170.0			167.3		2
Total IMG Revenues		196.9			197.9		(1	)		778.1			748.5		4
Total Revenues		669.6			672.2		—			2,582.1			2,487.7		4
Costs and Expenses:
Cost of Providing Services and Products Sold		399.7			418.4		(4	)		1,583.0			1,542.0		3
Selling, General and Administrative		134.1			136.3		(2	)		530.1			511.1		4
Research and Development Costs		19.6			18.6		5			76.9			77.5		(1	)
Depreciation		32.3			31.5		3			126.1			119.1		6
Amortization		4.9			6.2		(21	)		21.2			22.1		(4	)
Restructuring Charges		12.3			30.4		(60	)		21.2			30.4		(30	)
Total Costs and Expenses		602.9			641.4		(6	)		2,358.5			2,302.2		2
Operating Income		66.7			30.8		117			223.6			185.5		21
Equity in Earnings (Losses) of Cellular Partnerships		(4.5	)		1.0		—			12.5			2.0		—
Other Expense, net		(0.4	)		0.8		—			(1.5	)		(3.8	)	(61	)
Interest Expense		(5.6	)		(3.6	)	56			(21.2	)		(10.3	)	—
Income Before Income Taxes		56.2			29.0		94			213.4			173.4		23
Income Taxes		32.8			8.8		—			90.8			61.9		47
Net Income	$	23.4		$	20.2		16		$	122.6		$	111.5		10
Earnings Per Common Share
Basic	$	0.17		$	0.14		21		$	0.88		$	0.79		11
Diluted	$	0.16		$	0.14		14		$	0.86		$	0.77		12
Weighted Average Common Shares Outstanding
Basic		139.2			140.6					140.0			141.4
Diluted		142.6			144.9					142.9			145.4
Market Price Per Share
High	$	17.90		$	15.31				$	17.90		$	19.96
Low	$	13.58		$	12.42				$	12.57		$	12.30
Close	$	15.85		$	14.99				$	15.85		$	14.99

The above amounts reflect the Company’s results of operations, as reported under U.S. Generally Accepted Accounting Principles (U.S. GAAP), that will be presented in the Convergys 10-K for the annual period ended December 31, 2005.

Page 7 of 14 Pages

Convergys Corporation

Consolidated Balance Sheets

In Millions

(Unaudited)

	Dec. 31, 2005		Dec. 31, 2004
Assets
Cash and Cash Equivalents	$	200.2	$	58.4
Receivables - Net		521.1		447.3
Other Current Assets		88.8		87.1
Property and Equipment - Net		404.7		416.6
Other Assets		1,158.9		1,198.7
Total Assets	$	2,373.7	$	2,208.1
Liabilities and Shareholders’ Equity
Debt Maturing in One Year	$	134.7	$	49.5
Other Current Liabilities		489.5		527.9
Other Liabilities		96.9		43.2
Long-Term Debt		297.5		302.2
Common Shareholders’ Equity		1,355.1		1,285.3
Total Liabilities and Shareholders’ Equity	$	2,373.7	$	2,208.1

Page 8 of 14 Pages

Convergys Corporation

Overview of Cash Flows

In Millions

(Unaudited)

Summarized Statement of Cash Flows

	Three Months Ended Dec. 31,						Twelve Months Ended Dec. 31,
	2005			2004			2005			2004
Cash provided by operating activities	$	155.0		$	6.8		$	236.8		$	195.4
Cash used in investing activities		(45.1	)		(66.2	)		(138.2	)		(364.9	)
Cash provided by financing activities		41.0			67.8			43.2			190.7
Net increase in cash	$	150.9		$	8.4		$	141.8		$	21.2

Reconciliation of Operating Cash Flows to Free Cash Flows

	Three Months Ended Dec. 31,						Twelve Months Ended Dec. 31,
	2005			2004			2005			2004
Cash provided by operating activities	$	155.0		$	6.8		$	236.8		$	195.4
Decrease in securitization		—			90.0			100.0			75.0
Capital expenditures, net of proceeds from disposals		(45.1	)		(43.6	)		(125.9	)		(156.2	)
Free cash flow	$	109.9		$	53.2		$	210.9		$	114.2

The schedule above provides a reconciliation of the Company’s cash flow from operations as reported under U.S. Generally Accepted Accounting Principles (U.S. GAAP), to free cash flow, which is a non- GAAP measure. Free cash flow is defined as cash flow from operations less the change in the balance of the accounts receivable securitization and capital expenditures. Free cash flow is presented as an alternative measure of the Company’s ability to generate cash flow.

Page 9 of 14 Pages

Convergys Corporation

Customer Management Group

Operating Segment Data

In Millions

(Unaudited)

	For the Three Months Ended Dec. 31,					% Change		For the Twelve Months Ended Dec. 31,					% Change
	2005		2004					2005		2004
Revenues:
Communications	$	226.2	$	256.6		(12	)	$	902.1	$	986.6		(9	)
Technology		40.7		45.0		(10	)		157.0		168.8		(7	)
Financial Services		67.1		63.9		5			262.9		197.5		33
Other		138.7		108.8		27			482.0		386.3		25
Total CMG Revenues		472.7		474.3		—			1,804.0		1,739.2		4
Costs and Expenses:
Cost of Providing Services and Products Sold		301.9		311.2		(3	)		1,182.6		1,140.0		4
Selling, General and Administrative		100.3		103.1		(3	)		398.8		370.8		8
Research and Development Costs		2.7		2.9		(7	)		10.3		10.2		1
Depreciation		20.6		20.1		2			80.1		76.3		5
Amortization		3.4		3.4		—			13.2		11.4		16
Restructuring Charges		6.8		(0.9	)	—			15.1		(0.9	)	—
Total Costs and Expenses		435.7		439.8		(1	)		1,700.1		1,607.8		6
Operating Income	$	37.0	$	34.5		7		$	103.9	$	131.4		(21	)

The operating segment data for the Customer Management Group (CMG) shown above reflects the detailed revenue and expense data for CMG, as reported under U.S. GAAP, that will be presented in the Convergys 10-K for the annual period ended December 31, 2005.

Page 10 of 14 Pages

Convergys Corporation

Information Management Group

Operating Segment Data

In Millions

(Unaudited)

	For the Three Months Ended Dec. 31,				% Change		For the Twelve Months Ended Dec. 31,				% Change
	2005		2004				2005		2004
Revenues:
Data Processing	$	85.7	$	97.3	(12	)	$	340.5	$	389.9	(13	)
Professional and Consulting		65.3		54.3	20			267.6		191.3	40
License and Other		45.9		46.3	(1	)		170.0		167.3	2
Total IMG Revenues		196.9		197.9	(1	)		778.1		748.5	4
Costs and Expenses:
Cost of Providing Services and Products Sold		97.7		107.4	(9	)		400.2		403.0	(1	)
Selling, General and Administrative		31.8		32.2	(1	)		125.9		135.9	(7	)
Research and Development Costs		16.9		15.7	8			66.6		67.2	(1	)
Depreciation		8.2		8.7	(6	)		32.3		32.9	(2	)
Amortization		1.5		2.8	(46	)		8.0		10.7	(25	)
Restructuring Charges		—		25.8	—			—		25.8	—
Total Costs and Expenses		156.1		192.6	(19	)		633.0		675.5	(6	)
Operating Income	$	40.8	$	5.3	—		$	145.1	$	73.0	99

The operating segment data for the Information Management Group (IMG) shown above reflects the detailed revenue and expense data for IMG, as reported under U.S. GAAP, that will be presented in the Convergys 10-K for the annual period ended December 31, 2005. Additionally, total international revenues consisted of $46.8 and $43.0 for the three months ended December 31, 2005 and December 31, 2004, respectively. Total international revenues consisted of $165.0 and $159.7 for the twelve months ended December 31, 2005 and December 31, 2004, respectively.

Page 11 of 14 Pages

Convergys Corporation

Reconciliation of Pro Forma Operating Results

In Millions Except Per Share Amounts

(Unaudited)

	CMG Operating Income (Loss)			IMG Operating Income (Loss)			Corporate Operating Income (Loss)			Consolidated Operating Income (Loss)
Fourth Quarter 2005
Results as reported under U.S. GAAP	$	37.0		$	40.8		$	(11.1	)	$	66.7
Adjustments:
Reconciling items (a)		(6.8	)		—			(5.5	)		(12.3	)
Pro forma results (a non-GAAP measure)	$	43.8		$	40.8		$	(5.6	)	$	79.0
Year to Date 2005
Results as reported under U.S. GAAP	$	103.9		$	145.1		$	(25.4	)	$	223.6
Adjustments:
Reconciling items (b)		(15.1	)		—			(6.1	)		(21.2	)
Pro forma results (a non-GAAP measure)	$	119.0		$	145.1		$	(19.3	)	$	244.8
Fourth Quarter 2004
Results as reported under U.S. GAAP	$	34.5		$	5.3		$	(9.0	)	$	30.8
Adjustments:
Reconciling items (c)		0.9			(25.8	)		(5.5	)		(30.4	)
Pro forma results (a non-GAAP measure)	$	33.6		$	31.1		$	(3.5	)	$	61.2
Year to Date 2004
Results as reported under U.S. GAAP	$	131.4		$	73.0		$	(18.9	)	$	185.5
Adjustments:
Reconciling items (c)		0.9			(25.8	)		(5.5	)		(30.4	)
Pro forma results (a non-GAAP measure)	$	130.5		$	98.8		$	(13.4	)	$	215.9

The schedule above provides a reconciliation of the Company’s results of operations, as reported under U.S. Generally Accepted Accounting Principles (U.S. GAAP), to the pro forma results of operations (non- U.S. GAAP).

(a) Reflects the net restructuring charge of $12.3 recorded in the fourth quarter of 2005.

(b) Reflects the net restructuring charge of $8.9 recorded in the second quarter of 2005 as well as the $12.3 recorded in the

fourth quarter of 2005.

(c) Reflects the net restructuring charge of $30.4 recorded in the fourth quarter of 2004.

Page 12 of 14 Pages

Convergys Corporation

Reconciliation of GAAP Revenues to Revenues Excluding Cingular

In Millions Except Per Share Amounts

(Unaudited)

	Consolidated
Fourth Quarter 2005
Revenues as reported	$	669.6
Adjustments:
Revenues from Cingular		87.0
Revenues excluding Cingular (a non-GAAP measure)	$	582.6
Year to Date 2005
Revenues as reported	$	2,582.1
Adjustments:
Revenues from Cingular		418.3
Revenues excluding Cingular (a non-GAAP measure)	$	2,163.8
Fourth Quarter 2004
Revenues as reported	$	672.2
Adjustments:
Revenues from Cingular		127.8
Revenues excluding Cingular (a non-GAAP measure)	$	544.4
Year to Date 2004
Revenues as reported	$	2,487.7
Adjustments:
Revenues from Cingular		500.8
Revenues excluding Cingular (a non-GAAP measure)	$	1,986.9

The schedule above provides a reconciliation of the Company’s revenues, as reported under U.S. Generally Accepted Accounting Principles (U.S. GAAP), to revenues excluding Cingular (non-U.S. GAAP).

Page 13 of 14 Pages

Convergys Corporation

Reconciliation of Pro Forma Net Income and Diluted Earnings Per Share

In Millions Except Per Share Amounts

(Unaudited)

	Income (Loss) Before Tax		Income Tax (Expense)/ Benefit			Net Income (Loss)		Diluted EPS
Full Year 2005
Results as reported under U.S. GAAP	$	213.4	$	(90.8	)	$	122.6	$	0.86
Adjustments:
Additional tax resulting from repatriation of foreign funds		—		11.4			11.4		0.08
Restructuring Expense		21.2		(7.9	)		13.3		0.09
Stock Compensation (excluding amounts included in restructuring)		21.0		(7.7	)		13.3		0.09
Pro forma results (a non-GAAP measure)	$	255.6	$	(95.0	)	$	160.6	$	1.12
Full Year 2004
Results as reported under U.S. GAAP	$	173.4	$	(61.9	)	$	111.5	$	0.77
Adjustments:
Restructuring Expense		30.4		(9.4	)		21.0		0.14
Stock Compensation (excluding amounts included in restructuring)		15.9		(5.9	)		10.0		0.07
Pro forma results (a non-GAAP measure)	$	219.7	$	(77.2	)	$	142.5	$	0.98

The schedule above provides a reconciliation of the Company’s net income and diluted earnings per share, as reported under U.S. Generally Accepted Accounting Principles (U.S. GAAP), to the pro forma results net income and diluted earnings per share (non-U.S. GAAP).

Page 14 of 14 Pages