DST Systems, Inc. Announces Second Quarter 2013 Financial Results

      DST Systems, Inc. Announces Second Quarter 2013 Financial Results

PR Newswire

KANSAS CITY, Mo., July 25, 2013

KANSAS CITY, Mo., July 25, 2013 /PRNewswire/ -- DST Systems, Inc. (NYSE: DST)
reported consolidated net income of $78.5 million ($1.77 per diluted share)
for the second quarter 2013 compared to $144.9 million ($3.17 per diluted
share) for the second quarter 2012. Consolidated net income for the six months
ended June 30, 2013 was $171.7 million ($3.81 per diluted share) compared to
$200.2 million ($4.40 per share) for the six months ended June 30, 2012.
Taking into account certain non-GAAP adjustments explained herein,
consolidated net income was $46.3 million ($1.04 per diluted share) for second
quarter 2013 compared to $35.4 million ($0.77 per diluted share) for second
quarter 2012, and $91.3 million ($2.03 per diluted share) for the six months
ended June 30, 2013 compared to $82.9 million ($1.82 per diluted share) for
the six months ended June 30, 2012.

The diluted EPS impact of non-GAAP adjustments for second quarter 2013 and
2012 are summarized as follows:

                                                           Three Months Ended
                                                           June 30,
                                                           2013       2012
Reported GAAP diluted EPS                                  $  1.77    $ 3.17
Net gain on securities and other investments               (0.32)     (0.10)
Net gain on sale of investment by unconsolidated affiliate (0.11)
Employee termination costs                                 0.02       0.05
Income tax benefits                                        (0.32)
Dividend and gain on sale of a private company investment             (2.56)
Other items, net                                                      0.21
Adjusted Non-GAAP diluted EPS                              $  1.04    $ 0.77

"DST's operating results for the second quarter continue to reflect the
progress we are making against our strategic initiatives. We recorded higher
operating revenues and operating income in our operating segments and are
realizing the benefits of our asset monetization activities," said Steve
Hooley, President and CEO of DST.

New Healthcare Services Segment

Beginning in second quarter 2013, DST created a new reportable segment
entitled Healthcare Services, by separating DST Healthcare (comprised of DST
Health Solutions and Argus Health Systems) from the previously reported
Financial Services Segment. The new segment presentation is reflective of how
management is now operating the business and making resource allocations.

Prior periods presented have been revised to reflect the new reportable
operating segments. Quarterly and annual revised segment information for 2012
and 2011 has been provided within the Supplemental Historical Segment
Information section at the end of this news release.

Consolidated Financial Highlights

Second quarter 2013 consolidated financial highlights, taking into account
non-GAAP adjustments, were as follows:

  oOperating revenues (excluding out-of-pocket reimbursements) increased
    $19.6 million or 4.2% to $485.1 million, as compared to second quarter
    2012. Financial Services operating revenues increased $8.3 million or
    3.5%, Healthcare Services operating revenues increased $6.2 million or
    8.2% and Customer Communications operating revenues increased $4.1 million
    or 2.6%.
  oIncome from operations increased $6.3 million or 9.3%, compared to second
    quarter 2012. Financial Services income from operations increased $1.2
    million or 2.3% during the quarter to $53.4 million attributable to
    increased operating revenues from DST Brokerage Solutions, ALPS, and DST
    Retirement Solutions which were partially offset by decreased operating
    revenues from mutual fund registered shareowner account servicing and
    approximately $2.8 million ($0.04 of diluted EPS) of closed-end fund
    launch expenses at ALPS. Healthcare Services income from operations
    increased $2.4 million primarily from higher pharmacy claim processing
    revenues. Customer Communications income from operations increased $2.5
    million during the quarter to $8.3 million from lower costs in the U.K.
    operations.

Asset Monetization Update

During the quarter, DST received $174.5 million of pretax cash proceeds,
consisting of a $125 million cash dividend from BFDS, $29.2 million from the
sales of marketable securities (including $12.1 million from the sale of
200,000 shares of State Street Corporation) and $20.3 million of distributions
from private equity funds and other investments. For the six months ended June
30, 2013, DST realized $274.6 million of pretax cash proceeds.

In addition, the Company's joint venture, IFDS U.K., sold its equity method
investment in Cofunds Ltd. during second quarter 2013. IFDS U.K. received
pretax proceeds of approximately $62.7 million, resulting in $5.7 million of
net incremental equity earnings to DST.

Income Tax Refund Claims

During second quarter 2013, the IRS completed its examination of the refund
claims filed for Domestic Manufacturing Deductions and Research and
Experimentation credits for the periods 2006 through 2009. As a result, the
Company will receive a refund on previously reserved tax positions resulting
in income tax benefits of $14.1 million or $0.32 of diluted EPS. The tax
benefit has been treated as a non-GAAP adjustment. This income tax benefit
relates only to the resolved claim years.

Share Repurchase Plan & Share Related Activity

During second quarter 2013, the Company spent $62.7 million to repurchase
approximately 908,000 shares of DST common stock. This leaves approximately
$137 million under DST's existing share repurchase plan. The Company had 43.3
million shares of common stock outstanding at June 30, 2013, a decrease of
approximately 800,000 shares as compared to March 31, 2013 and a decrease of
1.8 million shares as compared to June 30, 2012, both primarily attributable
to share repurchases.

Average diluted shares outstanding for second quarter 2013 were 44.5 million,
a decrease of 1.1 million shares or 2.4%, from first quarter 2013 and a
decrease of 1.2 million shares or 2.6% from second quarter 2012. The decrease
in average diluted shares outstanding from first quarter 2013 resulted
primarily from share repurchases and lower dilutive effects of equity
compensation awards and convertible debentures (due to conversions) during the
period. The decrease in average diluted shares outstanding from second quarter
2012 is mostly attributable to shares repurchases.

During June 2013, DST paid a quarterly cash dividend of $0.30 per share on its
common stock.

Cash and Debt Activity

At June 30, 2013, the Company's cash and cash equivalents were $177.9 million,
$89.6 million higher than December 31, 2012. Additionally, at June 30, 2013,
the Company's total debt outstanding was $951.6 million, a decrease of $60
million as compared to December 31, 2012.

In July 2013, DST announced that on August 15, 2013 it will redeem for cash
its outstanding convertible debentures. At June 30, 2013, the aggregate
remaining accreted principal balance of the convertible debentures was $62.4
million.

Detailed Review of Financial Results

The following discussion of financial results takes into account the non-GAAP
adjustments described in the section entitled "Use of Non-GAAP Financial
Information" and detailed in the attached schedule titled "Description of
Non-GAAP Adjustments."

Segment Results

Financial Services Segment

The following table summarizes the financial results of the Financial Services
Segment (in millions):

                  Three Months Ended June 30,
                  2013            2012
Operating revenue $   248.7       $  240.4
Operating income  53.4            52.2

Operating revenues for the Financial Services Segment (excluding out-of-pocket
reimbursements) for second quarter 2013 increased $8.3 million or 3.5% to
$248.7 million as compared to second quarter 2012. Increased operating
revenues from DST Brokerage Solutions, ALPS and DST Retirement Solutions were
partially offset by lower operating revenues from mutual fund registered
shareowner account processing.

Total mutual fund shareowner accounts increased 700,000 to 95.7 million
accounts during second quarter 2013. Registered shareowner accounts processed
at June 30, 2013 were 73.3 million, a decrease of 1.7 million accounts from
March 31, 2013 and a decrease of 6.9 million accounts from June 30, 2012.

The following table summarizes changes in U.S. mutual fund registered accounts
and subaccounts serviced (in millions):

                                          Three Months Ended  Six Months Ended
                                          June 30, 2013       June 30, 2013
Registered Accounts
Beginning balance                         75.0                75.7
 New client conversions                                       0.3
 Subaccounting conversions to DST         (0.4)               (1.1)
 platforms
 Subaccounting conversions to non-DST     (1.3)               (2.0)
 platforms
 Conversions to non-DST platforms         (0.2)               (0.2)
 Organic growth                           0.2                 0.6
Ending balance                            73.3                73.3
Subaccounts
Beginning balance                         20.0                12.4
 New client conversions                                       5.7
 Conversions from DST's registered        0.4                 1.1
 accounts
 Conversions from non-DST registered      0.1                 0.6
 platforms
 Organic growth                           1.9                 2.6
Ending balance                            22.4                22.4
Total Accounts                            95.7                95.7

Tax-advantaged accounts were 41.3 million at June 30, 2013, were essentially
unchanged as compared to March 31, 2013. Tax-advantaged accounts represent
56.3% of total registered accounts serviced at June 30, 2013, as compared to
52.7% at June 30, 2012.

The Company currently expects conversions of registered accounts to
subaccounts for full year 2013 will total 5-6 million, of which approximately
25% of these accounts are expected to convert to DST's subaccounting platform.
The actual number of accounts estimated to convert to and from various DST
platforms, as well as the timing of those events, is dependent upon a number
of factors including information obtained from DST's clients. Actual results
could differ from the Company's estimates.

DST Brokerage Solutions operating revenues increased over second quarter 2012
as subaccounts processed increased 2.4 million during the quarter to 22.4
million at June 30, 2013, and increased 5.4 million as compared to June 30,
2012. Strong organic growth of 1.9 million subaccounts during the quarter
resulted from growth of existing clients.

ALPS operating revenues increased during second quarter 2013 from market
appreciation and new clients. During second quarter 2013, ALPS launched a new
closed-end fund that raised approximately $125 million of assets. ALPS
incurred $2.8 million of distribution expenses, including structuring fees,
finders' fees and referral fees paid to unaffiliated broker-dealers or
introducing parties for marketing and selling underlying fund shares of the
closed-end fund. ALPS will earn revenues in the future from advisory and
servicing arrangements with the new fund. While the fund launch expenses are
not significant percentages of DST's costs and expenses, they can
significantly impact earnings in the period in which they are recognized.

The following table summarizes ALPS operating statistics (in billions):

                                 June 30,
                                 2013     2012
Assets Under Active Distribution $ 78.1   $ 57.4
Assets Under Administration      117.7    94.3

DST Retirement Solutions operating revenues for the second quarter 2013
increased from second quarter 2012 from higher defined contribution
participants processed. During the second quarter 2013, there was an
anticipated decline in participants serviced from the annual removal of prior
year terminated participants. Total defined contribution participants
processed were 6.5 million at June 30, 2013, a decrease of 600,000
participants from March 31, 2013 and an increase of 1.6 million from June 30,
2012.

The following table summarizes changes in defined contribution participants
serviced (in millions):

                                        Three Months Ended  Six Months Ended
                                        June 30, 2013       June 30, 2013
Total Defined Contribution Participants
Beginning balance                       7.1                 6.1
         New client conversions         0.2                 1.3
         Organic decline                (0.8)               (0.9)
Ending balance                          6.5                 6.5

DST Retirement added 200,000 participants from conversion activities in second
quarter 2013. DST Retirement is incurring costs associated with 2013
participant conversions, as well as future conversions of previously announced
new client participants (totaling approximately 2.1 million participants).

AWD operating revenues during the second quarter 2013 increased as compared to
second quarter 2012 primarily due to higher professional services and
maintenance fee revenues. Active AWD users at June 30, 2013 were 208,400, an
increase of 3.7% from June 30, 2012.

DST Global Solutions investment management operating revenues during second
quarter 2013 increased from the same period in 2012. Increased operating
revenues were primarily the result of higher software licenses fees and higher
systems development and consulting services, partially offset by lower foreign
currency exchange rates.

Financial Services Segment software license fee revenues were approximately
$9.6 million in second quarter 2013, an increase of $1.4 million or 17.1% from
the same period in 2012 primarily reflecting increased revenue at DST Global
Solutions. While software license fee revenues are not a significant
percentage of DST's operating revenues, they can significantly impact earnings
in the period in which they are recognized. Revenues and operating results
from individual license sales depend heavily on the timing, size and nature of
the contract.

Financial Services costs and expenses for second quarter 2013, excluding
reimbursable operating costs and deferred compensation costs (the effect of
which is offset in other income, net), increased $3.8 million or 2.2% to
$178.2 million primarily from $2.8 million of ALPS fund launch expenses
discussed above.

Financial Services depreciation and amortization expense decreased $1.7
million in second quarter 2013 to $15.5 million, primarily from certain assets
becoming fully depreciated and lower capital expenditures.

Financial Services Segment income from operations increased $1.2 million
during second quarter 2013 to $53.4 million and operating margin for second
quarter 2013 was 21.5% as compared to 21.7% in 2012. Excluding deferred
compensation costs described above, operating margin was 22.1% for second
quarter 2013 as compared to 20.3% for second quarter 2012.

Healthcare Services Segment

Beginning with this quarter, the DST Healthcare operations (comprised of the
Argus Health Systems and DST Health Solutions businesses) are being reported
as a separate segment. The following table summarizes the financial results of
the Healthcare Services Segment (in millions):

                  Three Months Ended June 30,
                  2013             2012
Operating revenue $   82.0         $  75.8
Operating income  11.4             9.0

Healthcare Services Segment operating revenues during second quarter 2013
increased $6.2 million or 8.2% to $82 million as compared to second quarter
2012 primarily from an increase in pharmacy claims paid of 11.2 million or
11.3% in second quarter 2013 associated with increased Medicare and Medicaid
members, network fees and new pharmacy discount card services. In addition,
new operating revenues from new full service clients that successfully
converted to DST Healthcare's processing platform in first quarter 2013 were
partially offset by decreased volumes from other clients. Covered lives
increased 3.1% in second quarter 2013 principally from organic growth within
the existing customer base driven by Medicaid third party administration
processing as well as new clients. The following table summarizes Healthcare
Services operating statistics (in millions):

                                                   Three Months Ended June 30,
                                                   2013           2012
Pharmacy claims paid                               109.9          98.7
Covered lives using DST's medical processing       23.3           22.6
platform

Healthcare Services Segment software license fee revenues were approximately
$1.5 million in second quarter 2013, an increase of $500,000 from the same
period in 2012. While license fee revenues are not a significant percentage of
DST's operating revenues, they can significantly impact earnings in the period
in which they are recognized. Revenues and operating results from individual
license sales depend heavily on the timing, size and nature of the contract.

Healthcare Services costs and expenses for second quarter 2013, excluding
reimbursable operating costs, increased $3.3 million or 5.3% to $65.9 million,
primarily from increased personnel costs to support higher volumes of revenue.
Depreciation and amortization expense was $4.7 million for second quarter
2013, an increase of $500,000 or 11.9% as compared to second quarter 2012
primarily from increased depreciation of internally developed software.

Healthcare Services income from operations increased $2.4 million during
second quarter 2013 to $11.4 million. Operating margin for second quarter 2013
was 13.9% as compared to 11.9% in 2012. The increase in operating margin is
primarily driven from higher processing revenues.

In second quarter 2013, the Healthcare Services Segment received notice from
two pharmacy clients of their intent to terminate their processing agreements
when their contracts expire. These two clients, in aggregate, represent 25.6%
of the June 30, 2013 year-to-date pharmacy claims paid volumes. The Company
estimates that no conversions are expected to occur until 2014 and no
significant revenue loss will occur until 2015.

Customer Communications Segment

The following tables present the financial results and the operating
statistics of the Customer Communications Segment (in millions):

                   Three Months Ended June 30,
                   2013                             2012
                   Operating        Operating       Operating     Operating
                   Revenue          Income          Revenue       Income
                                                                  (Loss)
North America      $    115.1       $    8.2        $   110.8     $   9.1
United Kingdom     47.7             0.1             47.9          (3.3)
Customer
Communications     $    162.8       $    8.3        $   158.7     $   5.8
Segment

                                Three Months Ended
                                June 30,
                                2013      2012
Images Produced
 North America                  2,307.9   2,216.2
 United Kingdom                 487.5     544.1
 Total Customer Communications  2,795.4   2,760.3
Packages Mailed
 North America                  540.1     527.4
 United Kingdom                 162.0     183.3
 Total Customer Communications  702.1     710.7

North America operating revenues increased $4.3 million, or 3.9%, in second
quarter 2013 primarily from new client volumes. North America images produced
increased 4.1% and packages mailed increased 2.4% during the quarter, both as
compared to second quarter 2012.

U.K. operating revenues during the quarter were essentially flat as compared
with second quarter 2012, as a result of higher revenues per unit offset by
lower volumes from changes in the mix of clients serviced. U.K. images
produced decreased 10.4% and packages mailed decreased 11.6% during the
quarter, both as compared to second quarter 2012.

Customer Communications costs and expenses for second quarter 2013, excluding
reimbursable operating costs, increased $1.7 million or 1.2% to $143.5
million. Higher North America operating costs resulted from increased
personnel costs and other costs to support new clients. U.K. costs and
expenses decreased from facility consolidation and lower levels of employees.
Depreciation and amortization expense was $11 million for second quarter 2013,
a decrease of $100,000 as compared to second quarter 2012.

Customer Communications income from operations increased $2.5 million during
second quarter 2013 to $8.3 million. U.K. operating income increased $3.4
million and North America operating income decreased $900,000 during second
quarter 2013. North America operating margin was 7.1% in second quarter 2013
as compared to 8.2% in second quarter 2012.

Investments and Other Segment

The following table summarizes the financial results of the Investments and
Other Segment (in millions):

                  Three Months Ended, June 30
                  2013             2012
Operating revenue $   14.4         $  15.1
Operating income  3.1              3.1

Investments and Other Segment operating revenues for second quarter 2013
decreased $700,000 or 4.6% as compared to second quarter 2012 primarily due to
lower rental income as a result of properties sold. Income from operations was
$3.1 million for both second quarter 2013 and second quarter 2012. The decline
in operating revenue in second quarter 2013 was mostly offset by decreased
operating costs and depreciation expense attributable to the sold properties.

Other Financial Results

Equity in earnings of unconsolidated affiliates

The following table summarizes the Company's equity in earnings of
unconsolidated affiliates (in millions):

           Three Months Ended  Six Months Ended
           June 30,            June 30,
           2013        2012    2013      2012
BFDS       $  1.4      $ 2.3   $  3.2    $ 5.5
IFDS U.K.  0.9         0.2     1.7       1.8
IFDS L.P.  0.6         0.4     1.7       0.3
Other      0.9         0.8     2.8       1.4
           $  3.8      $ 3.7   $  9.4    $ 9.0

The decrease in equity in BFDS earnings from second quarter 2012 is primarily
from lower revenues associated with reduced levels of accounts serviced.

The increase in equity in IFDS U.K. earnings from second quarter 2012 is
primarily the result of higher revenues from increased accounts serviced,
partially offset by new product development and client conversion costs.
Shareowner accounts serviced by IFDS U.K. were 9.8 million at June 30, 2013,
an increase of 300,000 accounts from March 31, 2013 and an increase of 1.5
million accounts from June 30, 2012.

The increase in IFDS L.P. earnings from second quarter 2012 is primarily
attributable to higher revenues from a new client in Canada that converted 1.1
million accounts in fourth quarter 2012, partially offset by increased
operating costs to support the new client and decreased equity in earnings
from a Canadian real estate partnership that was sold in December 2012.
Shareowner accounts serviced by IFDS Canada were 11.5 million at June 30, 2013
which is unchanged from March 31, 2013 and an increase of 1.2 million accounts
as compared to June 30, 2012.

Other income, net

Other income, net during second quarter 2013 increased $4.6 million from
second quarter 2012 to $5.3 million. The increase in other income is primarily
attributable to unrealized gains on trading securities (the effect of which is
offset by increased deferred compensation costs in the Financial Services
Segment).

Interest expense

Interest expense for second quarter 2013 decreased $2.4 million, or 20.5% to
$9.3 million compared to second quarter 2012, principally from lower weighted
average debt balances outstanding and lower interest rates.

Income taxes

The Company's tax rate was 37.6% for second quarter 2013 as compared to 41.8%
in second quarter 2012. A change in the proportional mix of domestic and
international income caused a higher tax rate in 2012 as compared to 2013.
Excluding the effect of discrete period items, the Company expects its tax
rate to be approximately 36.4% for full year 2013, but the rate for the
remainder of the year will likely vary on a quarterly basis between 36% and
38% depending on the timing of estimated 2013 sources of taxable income (e.g.,
domestic consolidated, international, and/or joint venture).

Use of Non-GAAP Financial Information

In addition to reporting operating income, pretax income, net income, and
earnings per share on a GAAP basis, DST has also made certain non-GAAP
adjustments which are described in the attached schedule titled "Description
of Non-GAAP Adjustments" and are reconciled to the corresponding GAAP measures
in the attached financial schedules titled "Reconciliation of Reported Results
to Income Adjusted for Certain Non-GAAP Items" that accompany this earnings
release. In making these non-GAAP adjustments, the Company takes into account
the impact of items that are not necessarily ongoing in nature, that do not
have a high level of predictability associated with them or that are
non-operational in nature. Generally, these items include net gains on
dispositions of business units, net gains (losses) associated with securities
and other investments, restructuring and impairment costs and other similar
items. Management believes the exclusion of these items provides a useful
basis for evaluating underlying business unit performance, but should not be
considered in isolation and is not in accordance with, or a substitute for,
evaluating business unit performance utilizing GAAP financial information.

Management uses non-GAAP measures in its budgeting and forecasting processes
and to further analyze its financial trends and "operational run-rate," as
well as making financial comparisons to prior periods presented on a similar
basis. The Company believes that providing such adjusted results allows
investors and other users of DST's financial statements to better understand
DST's comparative operating performance for the periods presented.

DST's management uses each of these non-GAAP financial measures in its own
evaluation of the Company's performance, particularly when comparing
performance to past periods. DST's non-GAAP measures may differ from similar
measures by other companies, even if similar terms are used to identify such
measures. Although DST's management believes non-GAAP measures are useful in
evaluating the performance of its business, DST acknowledges that items
excluded from such measures may have a material impact on the Company's income
from operations, pretax income, net income and earnings per share calculated
in accordance with GAAP. Therefore, management typically uses non‑GAAP
measures in conjunction with GAAP results. Investors and users of our
financial information should also consider the above factors when evaluating
DST's results.

Safe Harbor Statement

Certain material presented in the press release includes forward-looking
statements intended to qualify for the safe harbor from liability established
by the Private Securities Litigation Reform Act of 1995. These forward-looking
statements include, but are not limited to, (i) all statements, other than
statements of historical fact, included in this press release that address
activities, events or developments that we expect or anticipate will or may
occur in the future or that depend on future events, or (ii) statements about
our future business plans and strategy and other statements that describe the
Company's outlook, objectives, plans, intentions or goals, and any discussion
of future operating or financial performance. Whenever used, words such as
"may," "will," "would," "should," "potential," "strategy," "anticipates,"
"estimates," "expects," "project," "predict," "intends," "plans," "believes,"
"targets" and other terms of similar meaning are intended to identify such
forward-looking statements. Forward-looking statements are uncertain and to
some extent unpredictable, and involve known and unknown risks, uncertainties
and other important factors that could cause actual results to differ
materially from those expressed or implied in, or reasonably inferred from,
such forward-looking statements. Factors that could cause results to differ
materially from those anticipated include, but are not limited to, the risk
factors and cautionary statements included in the Company's periodic and
current reports (Forms 10-K, 10-Q and 8-K) filed from time to time with the
Securities and Exchange Commission. All such factors should be considered in
evaluating any forward-looking statements. The Company undertakes no
obligation to update any forward-looking statements in this press release to
reflect new information, future events or otherwise.

*****

DST SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENT OF INCOME

(In millions, except per share amounts)

(Unaudited)
                                        Three Months Ended  Six Months Ended
                                        June 30,            June 30,
                                        2013      2012      2013      2012
Operating revenues                      $ 485.1   $ 465.5   $ 980.3   $ 941.4
Out-of-pocket reimbursements            172.0     167.3     359.2     344.6
Total revenues                          657.1     632.8     1,339.5   1,286.0
Costs and expenses                      551.3     539.6     1,125.9   1,098.7
Depreciation and amortization           33.1      42.3      66.3      76.3
Income from operations                  72.7      50.9      147.3     111.0
Interest expense                        (9.3)     (11.7)    (18.9)    (23.4)
Other income, net                       28.4      194.2     101.6     223.9
Equity in earnings of unconsolidated    9.5       1.4       15.1      6.7
affiliates
Income before income taxes              101.3     234.8     245.1     318.2
Income taxes                            22.8      89.9      73.4      118.0
Net income                              $ 78.5    $ 144.9   $ 171.7   $ 200.2
Average common shares outstanding       43.7      45.0      44.0      44.7
Average diluted shares outstanding      44.5      45.7      45.0      45.5
Basic earnings per share                $ 1.80    $ 3.22    $ 3.90    $ 4.48
Diluted earnings per share              $ 1.77    $ 3.17    $ 3.81    $ 4.40



DST SYSTEMS, INC.

STATEMENT OF INCOME FROM OPERATIONS BY SEGMENT

(In millions)

(Unaudited)
               Three Months Ended June 30, 2013
               Financial  Healthcare  Customer        Investments  Elimination  Consolidated
               Services   Services    Communications  / Other      Adjustments  Total
Operating      $  238.4   $  82.0     $   160.8       $  3.9       $            $   485.1
revenues
Intersegment
operating      10.3                   2.0             10.5         (22.8)
revenues
Out-of-pocket  11.1       1.4         161.2                        (1.7)        172.0
reimbursements
Total revenues 259.8      83.4        324.0           14.4         (24.5)       657.1
Costs and      192.6      67.3        304.7           8.7          (22.0)       551.3
expenses
Depreciation
and            15.5       4.7         11.0            2.6          (0.7)        33.1
amortization
Income (loss)
from           $  51.7    $  11.4     $   8.3         $  3.1       $  (1.8)     $   72.7
operations
               Three Months Ended June 30, 2012
               Financial  Healthcare  Customer        Investments  Elimination  Consolidated
               Services   Services    Communications  / Other      Adjustments  Total
Operating      $  229.6   $  75.8     $   156.5       $  3.6       $            $   465.5
revenues
Intersegment
operating      10.8                   2.2             11.5         (24.5)
revenues
Out-of-pocket  11.7       1.4         156.1                        (1.9)        167.3
reimbursements
Total revenues 252.1      77.2        314.8           15.1         (26.4)       632.8
Costs and      189.0      64.3        299.1           11.0         (23.8)       539.6
expenses
Depreciation
and            23.0       4.2         11.1            4.6          (0.6)        42.3
amortization
Income (loss)
from           $  40.1    $  8.7      $   4.6         $  (0.5)     $  (2.0)     $   50.9
operations



DST SYSTEMS, INC.

STATEMENT OF INCOME FROM OPERATIONS BY SEGMENT

(In millions)

(Unaudited)
               Six Months Ended June 30, 2013
               Financial  Healthcare  Customer        Investments  Elimination  Consolidated
               Services   Services    Communications  / Other      Adjustments  Total
Operating      $  476.4   $  162.0    $   334.0       $   7.9      $            $   980.3
revenues
Intersegment
operating      21.1                   4.0             20.8         (45.9)
revenues
Out-of-pocket  23.1       2.7         337.1                        (3.7)        359.2
reimbursements
Total revenues 520.6      164.7       675.1           28.7         (49.6)       1,339.5
Costs and      390.2      136.8       625.8           17.5         (44.4)       1,125.9
expenses
Depreciation
and            31.3       9.4         21.8            5.1          (1.3)        66.3
amortization
Income (loss)
from           $  99.1    $  18.5     $   27.5        $   6.1      $  (3.9)     $   147.3
operations
               Six Months Ended June 30, 2012
               Financial  Healthcare  Customer        Investments  Elimination  Consolidated
               Services   Services    Communications  / Other      Adjustments  Total
Operating      $  463.8   $  150.7    $   319.9       $   7.0      $            $   941.4
revenues
Intersegment
operating      21.6                   4.2             22.5         (48.3)
revenues
Out-of-pocket  24.9       2.7         320.8           0.1          (3.9)        344.6
reimbursements
Total revenues 510.3      153.4       644.9           29.6         (52.2)       1,286.0
Costs and      383.2      131.4       611.0           20.0         (46.9)       1,098.7
expenses
Depreciation
and            39.3       8.9         22.1            7.3          (1.3)        76.3
amortization
Income (loss)
from           $  87.8    $  13.1     $   11.8        $   2.3      $  (4.0)     $   111.0
operations



DST SYSTEMS, INC.

OTHER SELECTED FINANCIAL INFORMATION

(In millions)

(Unaudited)
                                    June 30,  December 31,
Selected Balance Sheet Information
                                    2013      2012
Cash and cash equivalents           $ 177.9   $    88.3
Debt                                951.6     1,011.6
                                    Six Months Ended
                                    June 30,
Capital Expenditures, by Segment    2013      2012
Financial Services                  $ 26.8    $    32.6
Healthcare Services                 6.1       5.1
Customer Communications             12.0      18.7
Investments and Other               2.7       1.7



DST Systems, Inc.
Description of Non-GAAP Adjustments

In addition to reporting operating income, pretax income, net income and
earnings per share on a GAAP basis, DST has also made certain non-GAAP
adjustments that are described below and are reconciled to the corresponding
GAAP measures in the attached financial schedules titled "Reconciliation of
Reported Results to Income Adjusted for Certain Non-GAAP Items" that accompany
this earnings release. DST's use of non-GAAP adjustments is further described
in the section entitled "Use of Non‑GAAP Financial Information."

The following items, which occurred during the quarter ended June 30, 2013,
have been treated as non-GAAP adjustments:

  oEmployee termination expenses of $1.7 million associated with reductions
    in workforce in the Financial Services Segment, which were included in
    costs and expenses. The aggregate income tax benefit associated with these
    costs was approximately $600,000.
  oNet gain on securities and other investments of $23.1 million, which were
    included in other income, net, is comprised of net realized gains from
    sales of available-for-sale securities of $15.7 million and net gains on
    private equity funds and other investments of $7.4 million. The income tax
    expense associated with the aggregate net gains on securities and other
    investments was approximately $8.8 million.
  oNet gain on sale of investment by unconsolidated affiliate, in the amount
    of $5.7 million, included in equity in earnings of unconsolidated
    affiliates. The aggregate pretax gain was recorded by IFDS U.K. ($4.6
    million) and BFDS ($1.1 million). The aggregate income tax expense
    associated with this gain was approximately $800,000.
  oIncome tax benefit of $14.1 million resulting from the resolution of
    historical domestic manufacturing deduction refund claims.

In addition to the items that occurred in the quarter ended June 30, 2013 as
described above, the following items, which occurred during the quarter ended
March 31, 2013, have been treated as non-GAAP adjustments:

  oContract termination payment in the amount of $6.0 million from the
    partial termination of a retirement business client in the Financial
    Services Segment, included in operating revenue. The partial contract
    termination payment occurred from DST's client not completing the
    contractual conversion of certain defined contribution participants to
    DST's retirement platform as a result of a business acquisition impacting
    DST's client. The income tax expense associated with this net gain was
    approximately $2.3 million.
  oIncremental loss accrual recorded for a previously disclosed regulatory
    inquiry regarding the processing of certain pharmacy claims during the
    period 2006 to 2009 in the Healthcare Services Segment, included in costs
    and expenses, in the amount of $2.5 million. There was no income tax
    benefit attributed to this loss accrual.
  oNet gain on securities and other investments of $72.3 million, which were
    included in other income, net, is comprised of net realized gains from
    sales of available-for-sale securities of $68.5 million and net gains on
    private equity funds and other investments of $3.8 million. The income tax
    expense associated with the aggregate net gains on securities and other
    investments was approximately $27.5 million.
  oIncome tax benefit of $2.2 million, primarily resulting from the
    resolution of historical research and experimentation credits.

The following items, which occurred during the quarter ended June 30, 2012,
have been treated as non-GAAP adjustments:

  oBusiness advisory expenses associated with an action by the DST Board of
    Directors to retain independent advisors to assist the Board with its
    ongoing review of DST's business plan, assets and investment portfolio,
    included in costs and expenses, in the amount of $500,000. The income tax
    benefit associated with these expenses was approximately $200,000.
  oEmployee termination expenses of $3.6 million associated with reductions
    in workforce in the Financial Services Segment ($2.5 million), the
    Healthcare Services Segment ($300,000) and the Customer Communications
    Segment ($800,000), which were included in costs and expenses. The
    aggregate income tax benefit associated with these costs was approximately
    $1.3 million.
  oLeased facility abandonment costs of $400,000, included in costs and
    expenses in the Customer Communications Segment, associated with
    properties not used in the U.K. operations. The aggregate income tax
    benefit associated with these costs was approximately $100,000.
  oImpairment charges on certain real estate assets not currently used in
    operations of $1.8 million, included in depreciation and amortization
    expense in the Investments & Other Segment. The charge was comprised of
    impairments in the U.S. of $1.2 million and internationally of $600,000.
    The aggregate income tax benefit associated with these costs was
    approximately $700,000.
  oLeased facility abandonment costs of $1.8 million, included in costs and
    expenses in the Investments & Other Segment, associated with exiting a
    leased office building. The aggregate income tax benefit associated with
    these costs was approximately $700,000.
  oPretax costs associated with ceasing the development of a processing
    solution for the insurance market, in the amount of $8.3 million. The
    costs were comprised of asset impairment charges of $5.8 million, which
    were included in depreciation and amortization expense, employee
    termination expenses of $1.9 million and other operating costs of $1.4
    million, which were both included in costs and expenses. These costs were
    partially offset by the recognition of previously deferred IFDS L.P.
    software license revenues of $800,000 (DST share), included in equity in
    earnings of unconsolidated affiliates, related to the 2011 sale of its
    Percana software license to DST. The aggregate income tax benefit
    associated with these net costs is $3.2 million.
  oCash dividend and gain on sale of a private company investment of $186.0
    million, which was included in other income, net. In May 2012, the Company
    received cash dividends of $47.3 million and realized a gain of $138.7
    million on the sale of a portion of its shares in a privately held company
    investment. A portion of the dividend is estimated to qualify for the
    dividends received deduction. The aggregate income tax expense associated
    with the dividend and gain was approximately $68.9 million.
  oOther net gain, in the amount of $7.5 million, associated with gains
    (losses) related to securities and other investments, which were included
    in other income, net. The income tax expense associated with this net gain
    was approximately $3.0 million. The $7.5 million of net gains on
    securities and other investments for second quarter 2012 was comprised of
    net realized gains from sales of available-for-sale securities of $7.3
    million and net gains on private equity funds and other investments of
    $1.8 million, partially offset by other than temporary impairments on
    available-for-sale securities of $1.6 million.
  oImpairment of unconsolidated affiliates, in the amount of $3.1 million,
    included in equity in earnings of unconsolidated affiliates. The aggregate
    income tax benefit associated with this expense was approximately $1.2
    million.

In addition to the items that occurred in the quarter ended June 30, 2012 as
described above, the following items, which occurred during the quarter ended
March 31, 2012, have been treated as non-GAAP adjustments:

  oBusiness advisory expenses associated with an action by the DST Board of
    Directors to retain independent advisors to assist the Board with its
    ongoing review of DST's business plan, assets and investment portfolio,
    included in costs and expenses, in the amount of $500,000. The income tax
    benefit associated with these expenses was approximately $200,000.
  oEmployee termination expenses of $4.0 million associated with reductions
    in workforce in the Financial Services Segment ($2.1 million), the
    Healthcare Services Segment ($500,000), and the Customer Communications
    Segment ($1.4 million), which were included in costs and expenses. The
    aggregate income tax benefit associated with these costs was approximately
    $1.3 million.
  oOther net gain, in the amount of $17.5 million, associated with gains
    (losses) related to securities and other investments, which were included
    in other income, net. The income tax expense associated with this net gain
    was approximately $6.7 million. The $17.5 million of net gains on
    securities and other investments for first quarter 2012 was comprised of
    net realized gains from sales of available-for-sale securities of $15.4
    million and net gains on private equity funds and other investments of
    $2.4 million, partially offset by other than temporary impairments on
    available-for-sale securities of $300,000.



DST SYSTEMS, INC.

RECONCILIATION OF REPORTED RESULTS TO INCOME ADJUSTED FOR CERTAIN NON-GAAP
ITEMS

Three Months Ended June 30,

(Unaudited- in millions, except per share amounts)
                                        2013
                                        Operating  Pretax    Net       Diluted
                                        Income     Income    Income    EPS
Reported GAAP income                    $  72.7    $ 101.3   $ 78.5    $ 1.77
 Adjusted to remove:
 Included in operating income:
 Employee termination expenses          1.7        1.7       1.1       0.02
 Included in non-operating income:
 Net gain on securities and other                  (23.1)    (14.3)    (0.32)
 investments
 Gain on sale of investment by                     (5.7)     (4.9)     (0.11)
 unconsolidated affiliates
 Income tax refunds                                          (14.1)    (0.32)
Adjusted Non-GAAP income                $  74.4    $ 74.2    $ 46.3    $ 1.04
                                        2012
                                        Operating  Pretax    Net       Diluted
                                        Income     Income    Income    EPS
Reported GAAP income                    $  50.9    $ 234.8   $ 144.9   $ 3.17
 Adjusted to remove:
 Included in operating income:
 Business advisory expenses             0.5        0.5       0.3       0.01
 Employee termination expenses          3.6        3.6       2.3       0.05
 Leased facility abandonment costs      2.2        2.2       1.4       0.03
 Impairment of real estate assets       1.8        1.8       1.1       0.02
 Included in operating income and
 non-operating income:
 Asset impairment, employee termination
 and other expenses from insurance      9.1        8.3       5.1       0.11
 processing business
 Included in non-operating income:
 Net gain on securities and other                  (7.5)     (4.5)     (0.10)
 investments
 Dividend and gain on sale of a private            (186.0)   (117.1)   (2.56)
 company investment
 Impairment of unconsolidated                      3.1       1.9       0.04
 affiliates
Adjusted Non-GAAP income                $  68.1    $ 60.8    $ 35.4    $ 0.77

Note: See the "Description of Non-GAAP Adjustments" section for a description
of each of the above adjustments and see the Use of Non-GAAP Financial
Information section for management's reasons for providing non-GAAP financial
information.



DST SYSTEMS, INC.

RECONCILIATION OF REPORTED RESULTS TO INCOME ADJUSTED FOR CERTAIN NON-GAAP
ITEMS

Six Months Ended June 30,

(Unaudited- in millions, except per share amounts)
                                        2013
                                        Operating  Pretax    Net       Diluted
                                        Income     Income    Income    EPS
Reported GAAP income                    $  147.3   $ 245.1   $ 171.7   $ 3.81
 Adjusted to remove:
 Included in operating income:
  Employee termination expenses      1.7        1.7       1.1       0.02
  Contract termination payment       (6.0)      (6.0)     (3.7)     (0.08)
  Loss accrual                       2.5        2.5       2.5       0.06
 Included in non-operating income:
 Net gain on securities and other                  (95.4)    (59.1)    (1.30)
 investments
  Gain on sale of investment by                   (5.7)     (4.9)     (0.11)
 unconsolidated affiliates
 Income tax refunds                                          (16.3)    (0.37)
Adjusted Non-GAAP income                $  145.5   $ 142.2   $ 91.3    $ 2.03
                                        2012
                                        Operating  Pretax    Net       Diluted
                                        Income     Income    Income    EPS
Reported GAAP income                    $  111.0   $ 318.2   $ 200.2   $ 4.40
 Adjusted to remove:
 Included in operating income:
  Business advisory expenses         1.0        1.0       0.6       0.02
  Employee termination expenses      7.6        7.6       5.0       0.11
  Leased facility abandonment costs  2.2        2.2       1.4       0.03
  Impairment of real estate assets   1.8        1.8       1.1       0.02
 Included in operating income and
 non-operating income:
  Asset impairment, employee
 termination and other expenses from    9.1        8.3       5.1       0.11
 insurance processing business
 Included in non-operating income:
  Net gain on securities and other              (25.0)    (15.3)    (0.34)
 investments
  Dividend and gain on sale of a                (186.0)   (117.1)   (2.57)
 private company investment
  Impairment of unconsolidated                  3.1       1.9       0.04
 affiliates
Adjusted Non-GAAP income                $  132.7   $ 131.2   $ 82.9    $ 1.82

Note: See the "Description of Non-GAAP Adjustments" section for a description
of each of the above adjustments and see the Use of Non-GAAP Financial
Information section for management's reasons for providing non-GAAP financial
information.

Supplemental Historical Segment Information

DST SYSTEMS, INC.

STATEMENT OF INCOME FROM OPERATIONS BY SEGMENT (REVISED)

(In millions)

(Unaudited)
               Year Ended December 31, 2012
               Financial  Healthcare  Customer        Investments  Elimination  Consolidated
               Services   Services *  Communications  / Other      Adjustments  Total
               *                                                   *
Operating      $  935.0   $  300.6    $   642.0       $  14.8      $            $  1,892.4
revenues
Intersegment
operating      43.6                   8.0             44.1         (95.7)
revenues
Out-of-pocket  49.7       5.1         636.7           0.3          (7.6)        684.2
reimbursements
Total revenues 1,028.3    305.7       1,286.7         59.2         (103.3)      2,576.6
Costs and      777.0      255.9       1,214.9         47.9         (92.8)       2,202.9
expenses
Depreciation
and
amortization   74.3       17.7        107.4           19.6         (2.6)        216.4
(including
goodwill
impairment)
Income (loss)
from           $  177.0   $  32.1     $   (35.6)      $  (8.3)     $  (7.9)     $  157.3
operations
               Year Ended December 31, 2011
               Financial  Healthcare  Customer        Investments  Elimination  Consolidated
               Services   Services *  Communications  / Other      Adjustments  Total
               *                                                   *
Operating      $  858.8   $  270.8    $   602.1       $  12.3      $            $  1,744.0
revenues
Intersegment
operating      40.4                   7.7             44.0         (92.1)
revenues
Out-of-pocket  36.8       5.3         607.0           1.6          (6.0)        644.7
reimbursements
Total revenues 936.0      276.1       1,216.8         57.9         (98.1)       2,388.7
Costs and      657.2      240.5       1,148.9         38.0         (87.6)       1,997.0
expenses
Depreciation
and            56.9       19.6        46.7            11.0         (2.6)        131.6
amortization
Income (loss)
from           $  221.9   $  16.0     $   21.2        $  8.9       $  (7.9)     $  260.1
operations

* Historically reported segment results have been revised as a result of the
creation of the new Healthcare Services Segment.

DST SYSTEMS, INC.

STATEMENT OF INCOME FROM OPERATIONS BY SEGMENT (REVISED)

(In millions)

(Unaudited)
               Three Months Ended December 31, 2012
               Financial  Healthcare  Customer        Investments  Elimination  Consolidated
               Services   Services *  Communications  / Other      Adjustments  Total
               *                                                   *
Operating      $  239.8   $  78.7     $   164.4       $  4.1       $            $   487.0
revenues
Intersegment
operating      11.2                   1.9             10.2         (23.3)
revenues
Out-of-pocket  13.1       1.2         159.0           0.1          (1.8)        171.6
reimbursements
Total revenues 264.1      79.9        325.3           14.4         (25.1)       658.6
Costs and      203.9      61.8        309.2           7.3          (22.4)       559.8
expenses
Depreciation
and
amortization   17.6       4.5         74.1            4.1          (0.7)        99.6
(including
goodwill
impairment)
Income (loss)
from           $  42.6    $  13.6     $   (58.0)      $  3.0       $  (2.0)     $   (0.8)
operations
               Three Months Ended September 30, 2012
               Financial  Healthcare  Customer        Investments  Elimination  Consolidated
               Services   Services *  Communications  / Other      Adjustments  Total
               *                                                   *
Operating      $  231.4   $  71.2     $   157.7       $  3.7       $            $   464.0
revenues
Intersegment
operating      10.8                   1.9             11.4         (24.1)
revenues
Out-of-pocket  11.7       1.2         156.9           0.1          (1.9)        168.0
reimbursements
Total revenues 253.9      72.4        316.5           15.2         (26.0)       632.0
Costs and      189.9      62.7        294.7           20.6         (23.5)       544.4
expenses
Depreciation
and            17.4       4.3         11.2            8.2          (0.6)        40.5
amortization
Income (loss)
from           $  46.6    $  5.4      $   10.6        $  (13.6)    $  (1.9)     $   47.1
operations

* Historically reported segment results have been revised as a result of the
creation of the new Healthcare Services Segment.



DST SYSTEMS, INC.

STATEMENT OF INCOME FROM OPERATIONS BY SEGMENT (REVISED)

(In millions)

(Unaudited)
               Three Months Ended June 30, 2012
               Financial  Healthcare  Customer        Investments  Elimination  Consolidated
               Services   Services *  Communications  / Other      Adjustments  Total
               *                                                   *
Operating      $  229.6   $  75.8     $   156.5       $  3.6       $            $   465.5
revenues
Intersegment
operating      10.8                   2.2             11.5         (24.5)
revenues
Out-of-pocket  11.7       1.4         156.1                        (1.9)        167.3
reimbursements
Total revenues 252.1      77.2        314.8           15.1         (26.4)       632.8
Costs and      189.0      64.3        299.1           11.0         (23.8)       539.6
expenses
Depreciation
and            23.0       4.2         11.1            4.6          (0.6)        42.3
amortization
Income (loss)
from           $  40.1    $  8.7      $   4.6         $  (0.5)     $  (2.0)     $   50.9
operations
               Three Months Ended March 31, 2012
               Financial  Healthcare  Customer        Investments  Elimination  Consolidated
               Services   Services *  Communications  / Other      Adjustments  Total
               *                                                   *
Operating      $  234.2   $  74.9     $   163.4       $  3.4       $            $   475.9
revenues
Intersegment
operating      10.8                   2.0             11.0         (23.8)
revenues
Out-of-pocket  13.2       1.3         164.7           0.1          (2.0)        177.3
reimbursements
Total revenues 258.2      76.2        330.1           14.5         (25.8)       653.2
Costs and      194.2      67.1        311.9           9.0          (23.1)       559.1
expenses
Depreciation
and            16.3       4.7         11.0            2.7          (0.7)        34.0
amortization
Income (loss)
from           $  47.7    $  4.4      $   7.2         $  2.8       $  (2.0)     $   60.1
operations

* Historically reported segment results have been revised as a result of the
creation of the new Healthcare Services Segment.

DST SYSTEMS, INC.

STATEMENT OF INCOME FROM OPERATIONS BY SEGMENT (REVISED)

(In millions)

(Unaudited)
               Three Months Ended December 31, 2011
               Financial  Healthcare  Customer        Investments  Elimination  Consolidated
               Services   Services *  Communications  / Other      Adjustments  Total
               *                                                   *
Operating      $  223.9   $  70.1     $   160.1       $   3.2      $            $   457.3
revenues
Intersegment
operating      10.3                   1.9             11.0         (23.2)
revenues
Out-of-pocket  10.6       1.2         155.8           0.1          (1.6)        166.1
reimbursements
Total revenues 244.8      71.3        317.8           14.3         (24.8)       623.4
Costs and      182.7      60.5        300.6           9.0          (22.2)       530.6
expenses
Depreciation
and            17.3       4.4         12.3            3.1          (0.6)        36.5
amortization
Income (loss)
from           $  44.8    $  6.4      $   4.9         $   2.2      $  (2.0)     $   56.3
operations
               Three Months Ended September 30, 2011
               Financial  Healthcare  Customer        Investments  Elimination  Consolidated
               Services   Services *  Communications  / Other      Adjustments  Total
               *                                                   *
Operating      $  208.7   $  65.9     $   155.4       $   3.1      $            $   433.1
revenues
Intersegment
operating      10.7                   1.8             11.2         (23.7)
revenues
Out-of-pocket  8.2        1.3         150.1           0.1          (1.4)        158.3
reimbursements
Total revenues 227.6      67.2        307.3           14.4         (25.1)       591.4
Costs and      156.8      59.5        292.6           10.0         (22.4)       496.5
expenses
Depreciation
and            13.5       5.4         12.8            2.7          (0.7)        33.7
amortization
Income (loss)
from           $  57.3    $  2.3      $   1.9         $   1.7      $  (2.0)     $   61.2
operations

* Historically reported segment results have been revised as a result of the
creation of the new Healthcare Services Segment.

DST SYSTEMS, INC.

STATEMENT OF INCOME FROM OPERATIONS BY SEGMENT (REVISED)

(In millions)

(Unaudited)
               Three Months Ended June 30, 2011
               Financial  Healthcare  Customer        Investments  Elimination  Consolidated
               Services   Services *  Communications  / Other      Adjustments  Total
               *                                                   *
Operating      $  212.0   $  66.8     $   142.4       $   2.9      $            $   424.1
revenues
Intersegment
operating      9.0                    1.9             10.8         (21.7)
revenues
Out-of-pocket  8.9        1.3         148.6           0.8          (1.5)        158.1
reimbursements
Total revenues 229.9      68.1        292.9           14.5         (23.2)       582.2
Costs and      157.8      57.9        273.0           9.5          (20.6)       477.6
expenses
Depreciation
and            13.3       5.0         11.0            2.6          (0.6)        31.3
amortization
Income (loss)
from           $  58.8    $  5.2      $   8.9         $   2.4      $  (2.0)     $   73.3
operations
               Three Months Ended March 31, 2011
               Financial  Healthcare  Customer        Investments  Elimination  Consolidated
               Services   Services *  Communications  / Other      Adjustments  Total
               *                                                   *
Operating      $  214.2   $  68.0     $   144.2       $   3.1      $            $   429.5
revenues
Intersegment
operating      10.4                   2.1             11.0         (23.5)
revenues
Out-of-pocket  9.1        1.5         152.5           0.6          (1.5)        162.2
reimbursements
Total revenues 233.7      69.5        298.8           14.7         (25.0)       591.7
Costs and      159.9      62.6        282.7           9.5          (22.4)       492.3
expenses
Depreciation
and            12.8       4.8         10.6            2.6          (0.7)        30.1
amortization
Income (loss)
from           $  61.0    $  2.1      $   5.5         $   2.6      $  (1.9)     $   69.3
operations

* Historically reported segment results have been revised as a result of the
creation of the new Healthcare Services Segment.



SOURCE DST Systems, Inc.

Contact: Kenneth V. Hager, (816) 435-8603, DST Systems, Inc. Vice President
and Chief Financial Officer
 
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