DST SYSTEMS, INC. KANSAS CITY, Mo., July 24, 2014 /PRNewswire/ -- DST Systems, Inc. (NYSE: DST) reported consolidated net income of $137.8 million ($3.34 per diluted share) for the second quarter 2014 compared to $78.5 million ($1.77 per diluted share) for the second quarter 2013. Consolidated net income for the six months ended June 30, 2014 was $238.2 million ($5.70 per diluted share) compared to $171.7 million ($3.81 per diluted share) for the six months ended June 30, 2013.
Taking into account certain non-GAAP adjustments, consolidated net income was $49.5 million ($1.20 per diluted share) for second quarter 2014 compared to $46.3 million ($1.04 per diluted share) for second quarter 2013, and $97.0 million ($2.33 per diluted share) for the six months ended June 30, 2014 compared to $91.3 million ($2.03 per diluted share) for the six months ended June 30, 2013.
"Our second quarter results continue to reflect the positive momentum at DST in driving steady operating revenue and EPS growth," said Steve Hooley, President and CEO of DST. "We remain focused and are making strong progress against our strategic initiatives, including growing our customer base, completing client conversions, driving operational efficiencies and delivering new capabilities to the markets. In addition to investments focused on delivering capabilities we also continue to invest heavily on regulatory, compliance and security capabilities. Combined with our strong balance sheet, we expect these activities to position DST to continue driving recurring revenue and earnings growth while delivering enhanced value to shareholders."
Consolidated Financial Highlights
Operating Results
Second quarter 2014 diluted earnings per share increased $0.16 or 15.4% from second quarter 2013, taking into account non-GAAP adjustments, principally from the following:
-- Consolidated operating revenues (excluding out-of-pocket reimbursements)
increased $24.5 million or 5.1% to $509.6 million, as compared to second
quarter 2013.
-- Consolidated income from operations increased $1.2 million or 1.6% to
$75.6 million, as compared to second quarter 2013.
-- The tax rate for second quarter 2014 was 35.0%, as compared to 37.6% in
second quarter 2013, primarily from a higher mix of international
earnings as well as higher foreign tax credits in 2014.
-- Weighted average diluted shares outstanding for second quarter 2014 were
41.2 million, a decrease of 3.3 million shares or 7.4% from second
quarter 2013, primarily as a result of share repurchases throughout 2013
pursuant to our previous share repurchase plan and a 2.4 million block
share repurchase during second quarter 2014.
Monetization Activity
-- DST received $118.5 million of pretax cash proceeds from the
monetization of investment assets during second quarter 2014, primarily
from private equity funds and other private company investments
(including proceeds and a related gain of $103.6 million from the sale
of DST's remaining investment in a private company). Additionally during
the second quarter 2014, DST received proceeds of $6.5 million from the
sale of an unconsolidated affiliate.
Share Repurchase
-- During the second quarter 2014, DST repurchased 2.4 million shares of
its common stock for $200.0 million ($82.32 per share). In connection
with this share repurchase, DST recorded a non-cash gain of $18.1
million resulting from the change in stock price between the date the
share repurchase price became fixed and the settlement date. In
accordance with the Internal Revenue Code, a corporation recognizes no
gain or loss on a redemption of its own stock for cash, therefore, no
tax expense is associated with this transaction.
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 "Reconciliation of Reported Results to Income Adjusted for Certain Non-GAAP Items."
Segment Results
Financial Services Segment
Operating revenues for the Financial Services Segment (excluding out-of-pocket reimbursements) for second quarter 2014 increased $17.9 million or 7.2% to $266.6 million as compared to second quarter 2013. The increase in operating revenues was primarily driven from increased revenues at ALPS due to organic growth at existing clients and favorable market conditions and from increased revenues at DST Bluedoor associated with higher professional services fees for the implementation and configuration of new clients. The Financial Services Segment had software license revenues of $12.6 million in second quarter 2014, an increase of $3.0 million as compared to second quarter 2013 primarily from higher international business process management license revenues recognized during second quarter 2014. DST Brokerage Solutions' operating revenues also increased due to organic growth from existing clients. These operating revenue increases were partially offset by declines in mutual fund registered shareowner account processing due to lower registered accounts primarily as a result of subaccounting conversions.
Financial Services Segment income from operations increased $1.6 million or 3.0% during second quarter 2014 to $55.0 million primarily from higher operating revenues partially offset by increased processing costs to support the incremental revenues as well as higher costs associated with new business initiatives and increased personnel costs. Also impacting the change in operating income quarter over quarter were distribution expenses incurred in 2013 related to the launch of a new closed-end fund by ALPS that did not recur in 2014. Operating margin for second quarter 2014 was 20.6% as compared to 21.5% in 2013. Excluding deferred compensation costs (which are offset within other income), the operating margin was 20.9% for second quarter 2014 as compared to 22.1% for second quarter 2013.
Total mutual fund shareowner accounts increased by 0.4 million to 98.5 million accounts during second quarter 2014. Registered shareowner accounts processed at June 30, 2014 were 70.9 million, a decrease of 0.2 million accounts from March 31, 2014 and a decrease of 2.4 million accounts from June 30, 2013. For the six months ended June 30, 2014, 0.9 million registered accounts have converted to subaccounts. Conversions of registered accounts to subaccounts are currently estimated to be three to four million accounts during 2014, a decline from the Company's previous guidance of four to five million accounts. The number of accounts estimated to convert from various DST platforms is based upon information obtained from clients. There are a number of factors that will affect the number of registered accounts converted to subaccounts and the timing of those conversions.
Healthcare Services Segment
Healthcare Services Segment operating revenues (excluding out-of-pocket reimbursements) during second quarter 2014 increased $10.9 million or 13.3% to $92.9 million as compared to second quarter 2013, primarily as a result of increased medical claims transaction volume from growth at existing clients as well as transactions for new clients. Pharmacy claims processing revenues also increased due to increased Medicare, Medicaid and healthcare exchange members. Additionally, revenues were higher than the prior year as a result of increases in discount card services and other ancillary services.
Healthcare Services Segment income from operations decreased $4.7 million during second quarter 2014 to $6.7 million primarily due to an incremental $5.7 million ($0.09 per diluted share) estimated liability recorded during second quarter 2014 related to processing errors involving certain pharmacy claim transactions when a specific set of circumstances were present. Excluding this expense, operating income increased by $1.0 million during second quarter 2014. On this basis, the increase in operating income was the result of increased operating revenue partially offset by increased expenses related to client conversion and implementations and higher claims processing costs due to the increased volume and complexity of transactions processed. Operating margin for second quarter 2014 was 7.2% compared to 13.9% in the second quarter 2013. Absent the $5.7 million expense recorded in 2014 discussed above, adjusted operating margin would have been 13.3% in the second quarter 2014.
Customer Communications Segment
Customer Communications Segment operating revenues (excluding out-of-pocket reimbursements) were $160.6 million in second quarter 2014, a decrease of $2.2 million from second quarter 2013. North America operating revenues decreased $5.0 million, or 4.3%, to $110.1 million in second quarter 2014 primarily from reduced volumes as a result of previously announced client losses and a client moving certain print production in-house during 2014 partially offset by higher postal services revenues. U.K. operating revenues increased $2.8 million, or 5.9%, to $50.5 million in second quarter 2014, primarily from favorable foreign currency exchange rates and higher volumes from new and existing clients.
Customer Communications Segment income from operations increased $3.9 million during second quarter 2014 to $12.2 million. Operating income in North America increased $2.2 million to $10.4 million and the U.K. increased $1.7 million to $1.8 million as compared to the same period in 2013. Reduced operating costs contributed to higher North America operating income. The U.K. operating income increase is the result of increased revenues partially offset by higher operating costs to support the new revenues and lower depreciation. Customer Communications Segment operating margin for second quarter 2014 was 7.6% as compared to 5.1% in 2013. North America operating margin was 9.4% in second quarter 2014 as compared to 7.1% in second quarter 2013, while the U.K. operating margin was 3.6% in second quarter 2014 as compared to 0.2% in second quarter 2013.
Investments and Other Segment
Investments and Other Segment operating revenues for second quarter 2014 increased $0.3 million, or 2.1%, as compared to second quarter 2013. Investments and Other Segment income from operations increased $0.7 million during second quarter 2014 to $3.8 million primarily from lower depreciation expense attributable to real estate sold or held for sale.
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,
-------- --------
2014 2013 2014 2013
---- ---- ---- ----
BFDS $1.2 $1.4 $3.0 $3.2
IFDS 1.0 1.5 3.1 3.4
Other 1.7 0.9 3.2 2.8
--- ---
$3.9 $3.8 $9.3 $9.4
BFDS equity in earnings declined from second quarter 2013. Lower shareowner processing revenues associated with reduced levels of accounts serviced were partially offset by higher earnings from other ancillary services.
The decrease in IFDS equity in earnings from second quarter 2013 is primarily the result of higher infrastructure costs and generic platform development costs being incurred in preparation of the migration of the previously announced new wealth management clients. As mentioned in previous quarters, the expenses for the wealth management conversion activities will be recognized as incurred, however the revenue under these contracts will be recognized when various contractual milestones are satisfied.
The increase in other equity in earnings is primarily the result of higher earnings from real estate and other investments.
Use of Non-GAAP Financial Information
In addition to reporting financial information on a GAAP basis, DST has disclosed non-GAAP financial information which has been reconciled to the corresponding GAAP measures in the following financial schedules titled "Reconciliation of Reported Results to Non-GAAP Results." In making these adjustments to determine the non-GAAP results, 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 financial information calculated in accordance with GAAP. Therefore, management typically uses non-GAAP measures in conjunction with GAAP results. These factors should be considered 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,
-------- --------
2014 2013 2014 2013
---- ---- ---- ----
Operating revenues $509.6 $485.1 $1,014.8 $980.3
Out-of-pocket
reimbursements 169.9 172.0 348.5 359.2
----- ----- ----- -----
Total revenues 679.5 657.1 1,363.3 1,339.5
Costs and expenses 576.1 551.3 1,159.8 1,125.9
Depreciation and
amortization 32.1 33.1 64.1 66.3
---- ---- ---- ----
Income from operations 71.3 72.7 139.4 147.3
Interest expense (7.0) (9.3) (13.6) (18.9)
Other income, net 131.2 28.4 224.8 101.6
Equity in earnings of
unconsolidated
affiliates 9.6 9.5 15.0 15.1
--- --- ---- ----
Income before income
taxes 205.1 101.3 365.6 245.1
Income taxes 67.3 22.8 127.4 73.4
---- ---- ----- ----
Net income $137.8 $78.5 $238.2 $171.7
====== ===== ====== ======
Weighted average common
shares outstanding 40.9 43.7 41.4 44.0
Weighted average
diluted shares
outstanding 41.2 44.5 41.8 45.0
Basic earnings per
share $3.37 $1.80 $5.75 $3.90
Diluted earnings per
share $3.34 $1.77 $5.70 $3.81
Cash dividends per
share of common stock $0.30 $0.30 $0.60 $0.60
DST SYSTEMS, INC.
SEGMENT FINANCIAL INFORMATION
(In millions) (Unaudited)
Three Months Ended June 30, 2014
--------------------------------
Financial Healthcare Customer
Services Communications Investments Elimination Consolidated
Services /Other Adjustments Total
-------- ------ ----------- -----
Operating revenues $254.6 $92.9 $158.3 $3.8 $ - $509.6
Intersegment operating
revenues 12.0 - 2.3 10.9 (25.2) -
Out-of-pocket
reimbursements 12.6 1.6 158.2 0.1 (2.6) 169.9
---- --- ----- --- ---- -----
Total revenues 279.2 94.5 318.8 14.8 (27.8) 679.5
Costs and expenses 211.6 83.0 297.5 9.0 (25.0) 576.1
Depreciation and
amortization 16.6 4.8 9.4 2.0 (0.7) 32.1
---- --- --- --- ---- ----
Income from operations $51.0 $6.7 $11.9 $3.8 $(2.1) $71.3
===== ==== ===== ==== ===== =====
Capital expenditures $18.4 $2.3 $6.2 $0.3 $ - $27.2
Three Months Ended June 30, 2013
--------------------------------
Financial Healthcare Customer
Services Communications Investments Elimination Consolidated
Services /Other Adjustments Total
-------- ------ ----------- -----
Operating revenues $238.4 $82.0 $160.8 $3.9 $ - $485.1
Intersegment operating
revenues 10.3 - 2.0 10.5 (22.8) -
Out-of-pocket
reimbursements 11.1 1.4 161.2 - (1.7) 172.0
---- --- ----- --- ---- -----
Total revenues 259.8 83.4 324.0 14.4 (24.5) 657.1
Costs and expenses 192.6 67.3 304.7 8.7 (22.0) 551.3
Depreciation and
amortization 15.5 4.7 11.0 2.6 (0.7) 33.1
---- --- ---- --- ---- ----
Income from operations $51.7 $11.4 $8.3 $3.1 $(1.8) $72.7
===== ===== ==== ==== ===== =====
Capital expenditures $13.4 $3.8 $5.6 $1.0 $ - $23.8
Six Months Ended June 30, 2014
------------------------------
Financial Healthcare Customer
Services Communications Investments Elimination Consolidated
Services /Other Adjustments Total
-------- ------ ----------- -----
Operating revenues $498.9 $184.9 $323.7 $7.3 $ - $1,014.8
Intersegment operating
revenues 24.1 - 4.4 21.6 (50.1) -
Out-of-pocket
reimbursements 26.3 3.0 324.2 0.1 (5.1) 348.5
---- --- ----- --- ---- -----
Total revenues 549.3 187.9 652.3 29.0 (55.2) 1,363.3
Costs and expenses 427.5 159.8 604.6 17.8 (49.9) 1,159.8
Depreciation and
amortization 33.3 9.7 18.4 4.0 (1.3) 64.1
---- --- ---- --- ---- ----
Income from operations $88.5 $18.4 $29.3 $7.2 $(4.0) $139.4
===== ===== ===== ==== ===== ======
Capital expenditures $34.0 $4.7 $13.9 $0.6 $ - $53.2
Six Months Ended June 30, 2013
------------------------------
Financial Healthcare Customer
Services Communications Investments Elimination Consolidated
Services /Other Adjustments Total
-------- ------ ----------- -----
Operating revenues $476.4 $162.0 $334.0 $7.9 $ - $980.3
Intersegment operating
revenues 21.1 - 4.0 20.8 (45.9) -
Out-of-pocket
reimbursements 23.1 2.7 337.1 - (3.7) 359.2
---- --- ----- --- ---- -----
Total revenues 520.6 164.7 675.1 28.7 (49.6) 1,339.5
Costs and expenses 390.2 136.8 625.8 17.5 (44.4) 1,125.9
Depreciation and
amortization 31.3 9.4 21.8 5.1 (1.3) 66.3
---- --- ---- --- ---- ----
Income from operations $99.1 $18.5 $27.5 $6.1 $(3.9) $147.3
===== ===== ===== ==== ===== ======
Capital expenditures $26.8 $6.1 $12.0 $2.7 $ - $47.6
DST SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In millions)
(Unaudited)
June 30, December 31,
2014 2013
---- ----
ASSETS
Current assets
Cash and cash
equivalents $83.3 $62.5
Funds held on
behalf of clients 330.2 316.3
Client funding
receivable 37.7 50.2
Accounts
receivable 356.9 343.4
Other assets 57.1 70.0
---- ----
865.2 842.4
Investments 766.0 881.3
Unconsolidated
affiliates 297.2 288.1
Properties 412.7 445.2
Intangible assets 129.8 137.4
Goodwill 423.3 423.7
Other assets 99.1 72.4
---- ----
Total assets $2,993.3 $3,090.5
======== ========
LIABILITIES AND EQUITY
Current liabilities
Current portion of
debt $207.2 $283.6
Client funds
obligations 367.9 366.5
Accounts payable 94.8 86.7
Accrued
compensation and
benefits 128.0 154.3
Deferred revenues
and gains 69.9 71.6
Income taxes
payable 5.4 -
Other liabilities 112.1 110.1
----- -----
985.3 1,072.8
Long-term debt 464.5 399.4
Income taxes
payable 133.1 124.2
Deferred income
taxes 221.6 255.4
Other liabilities 36.9 54.9
---- ----
Total liabilities 1,841.4 1,906.7
------- -------
Stockholders'
equity 1,151.9 1,183.8
------- -------
Total liabilities
and stockholders'
equity $2,993.3 $3,090.5
======== ========
Common shares
outstanding 39.7 41.8
DST SYSTEMS, INC.
RECONCILIATION OF REPORTED RESULTS TO NON-GAAP RESULTS
Three Months Ended June 30,
(Unaudited - in millions, except per share amounts)
2014
----
Operating Operating Pretax Net Diluted
Revenue Income Income Income EPS
------- ------ ------ ------ ---
Reported GAAP results $509.6 $71.3 $205.1 $137.8 $3.34
Adjusted to remove:
Employee termination expenses -
Financial Services - 0.5 0.5 0.3 0.01
Employee termination expenses -Customer
Communications - 0.3 0.3 0.2 0.01
Advisory and other transaction costs -
Financial Services (1) - 3.5 3.5 2.2 0.05
Gain on contract to repurchase common
stock (2) - - (18.1) (18.1) (0.44)
Net gain on securities and other
investments (3) - - (109.4) (67.7) (1.64)
Net gain from unconsolidated affiliates
(5) - - (5.7) (3.6) (0.09)
Income tax items (6) - - - (1.6) (0.04)
Adjusted Non-GAAP results $509.6 $75.6 $76.2 $49.5 $1.20
====== ===== ===== ===== =====
2013
----
Operating Operating Pretax Net Diluted
Revenue Income Income Income EPS
------- ------ ------ ------ ---
Reported GAAP results $485.1 $72.7 $101.3 $78.5 $1.77
Adjusted to remove:
Employee termination expenses -
Financial Services - 1.7 1.7 1.1 0.02
Net gain on securities and other
investments (3) - - (23.1) (14.3) (0.32)
Net gain from unconsolidated affiliates
(5) - - (5.7) (4.9) (0.11)
Income tax items (6) - - - (14.1) (0.32)
------------
Adjusted Non-GAAP results $485.1 $74.4 $74.2 $46.3 $1.04
====== ===== ===== ===== =====
Note: 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 NON-GAAP RESULTS
Six Months Ended June 30,
(Unaudited - in millions, except per share amounts)
2014
----
Operating Operating Pretax Net Diluted
Revenue Income Income Income EPS
------- ------ ------ ------ ---
Reported GAAP results $1,014.8 $139.4 $365.6 $238.2 $5.70
Adjusted to remove:
Employee termination expenses -
Financial Services - 3.0 3.0 1.9 0.05
Employee termination expenses -Customer
Communications - 0.3 0.3 0.2 0.01
Advisory and other transaction costs -
Financial Services (1) - 5.6 5.6 3.5 0.08
Gain on contract to repurchase common
stock (2) - - (18.1) (18.1) (0.43)
Net gain on securities and other
investments (3) - - (199.4) (123.5) (2.95)
Net gain from unconsolidated affiliates
(5) - - (5.7) (3.6) (0.09)
Income tax items (6) - - - (1.6) (0.04)
Adjusted Non-GAAP results $1,014.8 $148.3 $151.3 $97.0 $2.33
======== ====== ====== ===== =====
2013
----
Operating Operating Pretax Net Diluted
Revenue Income Income Income EPS
------- ------ ------ ------ ---
Reported GAAP results $980.3 $147.3 $245.1 $171.7 $3.81
Adjusted to remove:
Employee termination expenses -
Financial Services - 1.7 1.7 1.1 0.02
Contract termination payment -Financial
Services (6.0) (6.0) (6.0) (3.7) (0.08)
Loss accrual - Healthcare Services (4) - 2.5 2.5 2.5 0.06
Net gain on securities and other
investments (3) - - (95.4) (59.1) (1.30)
Net gain from unconsolidated affiliates
(5) - - (5.7) (4.9) (0.11)
Income tax items (6) - - - (16.3) (0.37)
-------------
Adjusted Non-GAAP results $974.3 $145.5 $142.2 $91.3 $2.03
====== ====== ====== ===== =====
Note: See the "Use of Non-GAAP Financial Information" section for management's reasons for providing non-GAAP financial information.
Descriptions of Non-GAAP Adjustments
(1) Advisory and other transaction costs
incurred in connection with a matter
involving a significant shareholder
are recorded in the Condensed
Consolidated Statement of Income
within the Costs and expenses line
item.
(2) DST recorded a gain of $18.1 million
on the contract to repurchase 2.4
million shares of DST common stock
resulting from the change in stock
price between the date the share
repurchase price became fixed and the
settlement date. This gain was
recorded in the Condensed
Consolidated Statement of Income
within the Other income, net line
item. There is no income tax expense
associated with this income as the
gain is related to the repurchase of
the Company's own stock.
(3) Net gain on securities and other
investments is comprised of net
realized gains from sales of
available-for-sale securities,
other than temporary impairments on
available-for-sale securities and
net gains on private equity funds and
other investments. These net gains
were recorded in the Condensed
Consolidated Statement of Income
within the Other income, net line
item.
(4) Loss accruals are recorded in the
Condensed Consolidated Statement of
Income within the Costs and expenses
line item. An incremental loss
accrual was recorded in 2013 for a
previously disclosed regulatory
inquiry regarding the processing of
certain pharmacy claims during the
period 2006 to 2009 in the Healthcare
Services Segment.
(5) The net gain from unconsolidated
affiliates are included in the
Condensed Consolidated Statement of
Income within the Equity in earnings
of unconsolidated affiliates line
item. The net gain recorded in 2013
relates to the sale of an
unconsolidated affiliate by IFDS
($4.6 million) and BFDS ($1.1
million). During 2014, the net gain
from unconsolidated affiliates
relates to the sale of DST's
investment in an unconsolidated
affiliate ($5.7 million).
(6) Income tax items relate to benefits
resulting from the resolution of
refund claims for historical domestic
manufacturing deductions, research
and experimentation credits and other
similar items. These items are
included in the Condensed
Consolidated Statement of Income
within the Income taxes line item.
DST SYSTEMS, INC.
STATISTICAL INFORMATION
(Unaudited - in millions, except as noted)
June 30, December 31, June 30,
2014 2013 2013
---- ---- ----
U.S. mutual fund shareowner
accounts processed:
Registered accounts - non tax-
advantaged 30.7 30.6 32.0
Registered accounts - tax-
advantaged 40.2 40.6 41.3
---- ---- ----
70.9 71.2 73.3
Subaccounts 27.6 25.7 22.4
---- ---- ----
Total 98.5 96.9 95.7
==== ==== ====
International mutual fund
shareowner accounts processed:
IFDS U.K. 11.0 10.2 9.8
IFDS L.P. (Canada) 12.5 11.6 11.5
Defined contribution participant
accounts 6.7 6.9 6.5
ALPS (in billions of U.S. dollars):
Assets Under Management $14.8 $11.8 $9.9
Assets Under Administration 174.8 147.7 117.7
Automatic Work Distributor
workstations (in thousands) 211.5 209.7 208.4
DST Health Solutions covered lives 23.8 23.5 23.3
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2014 2013 2014 2013
---- ---- ----
Argus pharmacy paid claims 119.6 109.9 237.0 219.1
Customer Communications Images
Produced:
North America 2,025.0 2,307.9 4,279.6 4,905.9
United Kingdom 542.2 487.5 1,097.3 1,031.0
Total 2,567.2 2,795.4 5,376.9 5,936.9
Customer Communications Packages
Mailed:
North America 451.7 540.1 940.3 1,140.7
United Kingdom 204.4 162.0 401.0 354.5
Total 656.1 702.1 1,341.3 1,495.2
DST SYSTEMS, INC.
STATISTICAL INFORMATION
(Unaudited - in millions, except as noted)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2014 2013 2014 2013
---- ---- ---- ----
Changes in Registered Accounts:
Beginning balance 71.1 75.0 71.2 75.7
New client conversions - - - 0.3
Subaccounting conversions to DST platforms - (0.4) - (1.1)
Subaccounting conversions to non-DST
platforms (0.4) (1.3) (0.9) (2.0)
Conversions to non-DST platforms - (0.2) (0.1) (0.2)
Organic growth 0.2 0.2 0.7 0.6
--- --- --- ---
Ending balance 70.9 73.3 70.9 73.3
==== ==== ==== ====
Changes in Subaccounts:
Beginning balance 27.0 20.0 25.7 12.4
New client conversions - - - 5.7
Conversions from non-DST registered
platforms - 0.1 0.6 0.6
Conversions from DST's registered accounts - 0.4 - 1.1
Organic growth 0.6 1.9 1.3 2.6
--- --- --- ---
Ending balance 27.6 22.4 27.6 22.4
==== ==== ==== ====
Defined contribution participant accounts:
Beginning balance 7.1 7.1 6.9 6.1
New client conversions 0.3 0.2 0.3 1.3
Organic decline (0.7) (0.8) (0.5) (0.9)
---- ---- ---- ----
Ending balance 6.7 6.5 6.7 6.5
=== === === ===
Contact:
Gregg Wm. Givens
Senior Vice President, Chief Financial Officer and Treasurer
DST Systems, Inc.
333 West 11th Street
Kansas City, MO 64105-1594
(816) 435-5503
Logo - http://photos.prnewswire.com/prnh/20131023/CG03088LOGO
SOURCE DST Systems, Inc.
