UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported) January 25, 2002
(Exact name of registrant as specified in its charter)
DST Systems, Inc.
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
Delaware 1-14036 43-1581814
333 West 11th Street, Kansas City, Missouri 64105
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (816) 435-6568
Not Applicable
(Former name or former address, if changed since last report.)
FORM 8-K
DST SYSTEMS, INC.
ITEM 1 CHANGES IN CONTROL OF REGISTRANT
Not applicable.
ITEM 2 ACQUISITION OR DISPOSITION OF ASSETS
Not applicable.
ITEM 3 BANKRUPTCY OR RECEIVERSHIP
Not applicable.
ITEM 4 CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 5 OTHER EVENTS
See attached as an Exhibit to this Form 8-K a News Release released January 25,
2002 concerning the announcement of financial results.
ITEM 6 RESIGNATIONS OF REGISTRANT'S DIRECTORS
Not applicable.
ITEM 7 FINANCIAL STATEMENTS AND EXHIBITS
Not applicable.
ITEM 8 CHANGE IN FISCAL YEAR
Not applicable.
ITEM 9 REGULATION FD DISCLOSURE
Not applicable.
SIGNATURE
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.
DST Systems, Inc.
/s/ Robert C. Canfield
Senior Vice President, General Counsel,
Secretary
Date: January 28, 2002
DST SYSTEMS, INC. ANNOUNCES FOURTH QUARTER AND FULL YEAR 2001
FINANCIAL RESULTS
KANSAS CITY, MO. (January 25, 2002) - Excluding non-recurring items recorded in
the fourth quarters of 2001 and 2000, DST's consolidated net income for the
quarter ended December 31, 2001 was $49.8 million ($0.41 per diluted share)
compared to fourth quarter 2000 net income of $47.9 million ($0.37 per diluted
share), a 4.0% increase in net income and a 10.8% increase in diluted earnings
per share. Fourth quarter 2001 and 2000 results include net non-recurring after
tax income of $1.5 million and $19.7 million, respectively. Fourth quarter 2001
non-recurring items include after tax income of $13.5 million related to a state
sales tax refund and $3.3 million related to net gains on securities, reduced by
after tax losses of $12.7 million related to software and intangible asset
impairments and $2.6 million related to joint venture lease abandonment charges.
Fourth quarter 2000 non-recurring items include $19.7 million of net gains on
securities. Including these non-recurring items, DST's consolidated net income
for the fourth quarter 2001 was $51.3 million ($0.42 per diluted share) compared
to fourth quarter 2000 net income of $67.6 million ($0.52 per diluted share).
For the full year, excluding non-recurring items, DST's consolidated net income
was $201.2 million ($1.60 per diluted share) in 2001 compared to $181.5 million
($1.40 per diluted share) in 2000, a 10.9% increase in net income and a 14.3%
increase in diluted earnings per share. Full year 2001 and 2000 results include
net non-recurring after tax income of $27.0 million and $34.3 million,
respectively. Full year 2001 non-recurring items include after tax income of
$20.0 million related to the gain on the sale of DST's Portfolio Accounting
Systems ("PAS") business, $13.5 million related to a state sales tax refund, and
$8.8 million related to net gains on securities, reduced by after tax losses of
$12.7 million related to software and intangible asset impairments and $2.6
million related to joint venture lease abandonment charges. Full year 2000
non-recurring gain items include $27.3 million related to net gains on
securities and $7.0 million in connection with the settlement of a legal dispute
related to a former equity investment. For the full year, including these
non-recurring items, DST's consolidated net income in 2001 was $228.2 million
($1.81 per diluted share) compared to $215.8 million ($1.67 per diluted share)
in 2000, an increase of 5.7% in net income and 8.4% in earnings per share.
The following table summarizes the Company's revenues and income from operations
by segment (dollars in millions):
Three months ended Year ended
December 31, December 31,
-------------------- -----------------------
2001 2000 2001 2000
--------- --------- --------- ---------
Revenues
Financial Services $ 239.7 $ 161.7 $ 903.7 $ 621.0
Output Solutions 143.0 151.5 611.7 592.2
Customer Management 47.4 47.3 198.8 195.0
Investments and Other 11.1 8.8 40.1 33.2
Eliminations (24.6) (20.1) (94.3) (79.3)
--------- --------- --------- ---------
$ 416.6 $ 349.2 $1660.0 $1,362.1
========= ========= ========= =========
Income from operations
Financial Services $ 64.7 $ 50.0 $ 222.4 $ 179.3
Output Solutions 14.3 14.0 65.5 65.0
Customer Management (14.2) 5.2 (1.5) 15.1
Investments and Other 3.3 1.7 7.1 5.2
--------- --------- --------- ---------
$ 68.1 $ 70.9 $ 293.5 $ 264.6
========= ========= ========= =========
Certain non-recurring items discussed above impacted 2001 segment income from
operations. The Financial Services Segment recognized a $4.9 million reduction
of costs and expenses and an $8.7 million reduction in depreciation and
amortization associated with the state sales tax refund. Software and intangible
asset impairments were recognized as additional depreciation and amortization of
$3.7 million in the Output Solutions Segment and $15.8 million in the Customer
Management Segment. Net gains on securities and $7.2 million from the 2001 state
sales tax refund are included in other income. Joint venture lease abandonment
charges of $4.0 million are included in equity in earnings of unconsolidated
affiliates. The following table summarizes the Company's adjusted income from
operations by segment after excluding the applicable non-recurring items
discussed above (dollars in millions):
Excludes non-recurring items
Three months ended Year ended
December 31, December 31,
------------------- -------------------
2001 2000 2001 2000
-------- -------- -------- ---------
Adjusted income from
operations
Financial Services $ 51.1 $ 50.0 $ 208.8 $ 179.3
Output Solutions 18.0 14.0 69.2 65.0
Customer Management 1.6 5.2 14.3 15.1
Investments and Other 3.3 1.7 7.1 5.2
-------- -------- -------- ---------
$ 74.0 $ 70.9 $ 299.4 $ 264.6
======== ======== ======== =========
Consolidated revenues for the quarter increased $67.4 million or 19.3% over the
prior year quarter and for the year increased $297.9 million or 21.9% over the
prior year, principally from higher Financial Services Segment revenues which
includes revenues from EquiServe, in which DST acquired controlling ownership on
March 30, 2001. Adjusted consolidated income from operations, which excludes
non-recurring items, totaled $74.0 million for the quarter and $299.4 million
for the year ended December 31, 2001, an increase of $3.1 million or 4.4% over
the fourth quarter 2000 and $34.8 million or 13.2% over the prior year,
primarily from increased operating earnings in the Financial Services Segment.
Including the non-recurring items, consolidated income from operations totaled
$68.1 million for the quarter and $293.5 million for the year ended December 31,
2001, compared to $70.9 million for the quarter and $264.6 million for the year
ended December 31, 2000.
Financial Services Segment
Financial Services Segment revenues for the fourth quarter 2001 were $239.7
million, an increase of $78.0 million or 48.2% over the fourth quarter 2000.
Financial Services revenues in 2001 were affected by the inclusion of revenues
from EquiServe. Financial Services Segment revenues for the 2000 fourth quarter
and year include revenues from DST Canada, which as previously reported was
contributed to a joint venture (International Financial Data Services) in
January 2001. Financial Services fourth quarter 2000 revenues also include
revenues from DST's PAS business, which was sold on June 29, 2001. Adjusting for
the effect of these items resulted in a $11.1 million or 7.3% increase in
revenues over the prior year quarter and a $68.8 million or 11.8% increase over
the prior year as shown below (dollars in millions):
Three months ended Year ended
December 31, December 31,
-------------------- -----------------------
2001 2000 2001 2000
------- ------- ------- -------
Reported revenues $239.7 $161.7 $903.7 $621.0
EquiServe revenues 77.3 251.0
DST Canada revenues 5.8 27.5
PAS revenues 4.6 9.6
------- -------- ------- -------
Adjusted revenues $162.4 $151.3 $652.7 $583.9
======= ======== ======= =======
U.S. Financial Services Segment revenues increased $82.6 million in the fourth
quarter 2001 or 62.2% over the prior year quarter, primarily from the inclusion
of EquiServe revenues and increases in mutual fund shareowner accounts
processed. Excluding EquiServe from the 2001 quarter and the PAS business from
the 2000 quarter, U.S. revenues increased $9.9 million or 7.7% over the prior
year quarter. U.S. mutual fund shareowner accounts processed totaled 75.6
million at December 31, 2001, an increase of 0.4 million or 0.5% from the 75.2
million serviced at September 30, 2001 and an increase of 3.5 million or 4.9%
from the 72.1 million serviced at December 31, 2000. During the quarter,
approximately 0.7 million accounts were converted for the transfer agency
business of U.S. Bancorp (formerly Firstar).
Retirement plan accounts (which also include 529 savings plan accounts) totaled
28.0 million at December 31, 2001, an increase of 1.1 million or 4.1% from the
26.9 million serviced at September 30, 2001 and an increase of 4.0 million or
16.7% from the 24.0 million serviced at December 31, 2000. Net new IRA accounts
for the fourth quarter 2001 were 0.5 million. 401(k) accounts serviced increased
0.4 million or 5.7% during the quarter to 7.4 million accounts at December 31,
2001 and increased 1.5 million or 25.4% compared to the 5.9 million accounts
serviced at December 31, 2000. 529 savings plan accounts increased 0.2 million
or 40.0% during the quarter to 0.7 million at December 31, 2001, and increased
0.5 million or 250.0% from the 0.2 million at December 31, 2000.
DST has preliminary commitments from three new clients to convert approximately
8.8 million mutual fund shareowner accounts to TA2000, of which 1.8 million are
scheduled to convert in the first quarter 2002, 0.5 million are scheduled to
convert in the third quarter 2002 and 6.5 million are scheduled to convert in
the first quarter 2003. There continues to be activity in requests for proposals
from potential new U.S. and international mutual fund customers.
EquiServe shareowner accounts serviced totaled 27.7 million at December 31,
2001, which includes 4.6 million accounts from the Prudential demutualization
completed in fourth quarter 2001. The Company believes that the number of
Prudential shareowner accounts serviced may decline to approximately 3.4 million
by the end of 2002 as a result of Prudential plans to offer redemption programs
for small investors. U.S. AWD(R) workstations licensed were 57,800 at December
31, 2001, an increase of 5.1% from September 30, 2001 and an increase of 20.7%
over year end 2000 levels, principally from workstations for Comcast Cable
Communications, Inc. and insurance industry clients.
International Financial Services Segment revenues totaled $24.3 million for the
fourth quarter 2001. Excluding DST Canada revenues from the 2000 quarter,
international revenues for the fourth quarter 2001 increased $1.2 million or
5.2% over the prior year. The increase is attributable to an increase in
investment management processing and software maintenance revenues. Including
DST Canada revenues for the 2000 quarter, international revenues for the fourth
quarter 2001 decreased $4.6 million or 15.9% compared to the prior year quarter.
International AWD workstations licensed were 27,700 at December 31, 2001, an
increase of 4.1% from September 30, 2001 and an increase of 9.5% over year end
2000 levels.
Excluding non-recurring items, Financial Services Segment adjusted income from
operations for the fourth quarter 2001 increased $1.1 million or 2.2% over the
prior year quarter to $51.1 million, resulting in an adjusted operating margin
of 21.3% compared to 30.9% for the prior year. Operating margin was affected by
the inclusion of EquiServe and the absence of DST Canada and the PAS business in
2001. Adjusted costs and expenses increased 76.9%, primarily from the addition
of EquiServe. Adjusted depreciation and amortization costs increased $4.5
million or 25.6%, primarily as a result of the EquiServe acquisition. Including
non-recurring items, Financial Services Segment income from operations for the
fourth quarter 2001 increased $14.7 or 29.4% million over the prior year quarter
to $64.7 million.
Financial Services Segment revenues for the year ended December 31, 2001 were
$903.7 million, an increase of $282.7 million or 45.5% over the prior year,
principally from the inclusion of EquiServe and higher mutual fund and AWD
revenues. Excluding non-recurring items, Financial Services Segment adjusted
income from operations for the year ended December 31, 2001 increased $29.5
million or 16.5% over the prior year to $208.8 million. Adjusted costs and
expenses increased 64.1%, principally from EquiServe and increased personnel
costs to support revenue growth. Adjusted depreciation and amortization
increased 21.0% in 2001 compared to 2000 to $83.6 million, primarily
attributable to EquiServe. Including non-recurring items, Financial Services
Segment income from operations for the year ended December 31, 2001 increased
$43.1 million over the prior year period to $222.4 million.
Output Solutions Segment
Output Solutions Segment revenues for the quarter ended December 31, 2001 were
$143.0 million, a decrease of $8.5 million or 5.6% from fourth quarter 2000. The
revenue decline resulted from the loss of a telecommunications customer and the
decline in brokerage related marketing fulfillment and trade confirmation
volumes, partially offset by increased volumes from the financial service and
video service industries. Output Solutions Segment images produced in the fourth
quarter 2001 increased 10.5% to 2.1 billion and items mailed decreased 4.2% to
437 million compared to fourth quarter 2000.
Excluding non-recurring items, Output Solutions Segment adjusted income from
operations for the fourth quarter increased $4.0 million or 28.6% over the prior
year quarter to $18.0 million, resulting in an operating margin of 12.6%
compared to 9.2% in the prior year quarter. Costs and expenses decreased 12.7%
principally due to decreased personnel and purchased material costs, partially
offset by higher Internet-based electronic bill and statement product
development and selling costs. Adjusted depreciation and amortization increased
2.0% to $10.3 million in the fourth quarter 2001 from additional capital
equipment to support volume growth. Including non-recurring items, Output
Solutions Segment income from operations for the fourth quarter 2001 increased
$0.3 million over the prior year quarter to $14.3 million.
Output Solutions Segment revenues for the year ended December 31, 2001 were
$611.7 million, an increase of $19.5 million or 3.3% over the prior year.
Excluding non-recurring items, Output Solutions Segment adjusted income from
operations for the year ended December 31, 2001 increased $4.2 million or 6.5%
over the prior year period to $69.2 million. Including non-recurring items,
Output Solutions Segment income from operations for the year ended December 31,
2001 increased $0.5 million over the prior year period to $65.5 million.
Customer Management Segment
Customer Management Segment revenues for the quarter ended December 31, 2001
were $47.4 million, an increase of $0.1 million or 0.2% over the 2000 quarter.
Processing and software service revenues for the quarter increased $1.4 million
or 3.2% and equipment sales decreased $1.3 million or 38.2% compared to fourth
quarter 2000. Total cable and satellite subscribers serviced were 40.9 million
at December 31, 2001, a decrease of 5.8% compared to year end 2000 levels,
principally from the loss of MediaOne subscribers and lower international cable
subscribers serviced, partially offset by higher U.S. satellite subscribers. As
previously reported, MediaOne, which was acquired by AT&T, discontinued its
processing agreement with DST and removed all remaining MediaOne subscribers as
of December 31, 2001.
Excluding non-recurring items, Customer Management Segment adjusted income from
operations for the fourth quarter decreased $3.6 million or 69.2% over the prior
year quarter to $1.6 million, resulting in an operating margin of 3.4% compared
to 11.0% in the prior year quarter. Costs and expenses increased $4.2 million or
11.1% from the fourth quarter 2000, primarily attributable to higher software
and equipment costs. Adjusted depreciation and amortization decreased $0.5
million or 12.2%. Including non-recurring items of $15.8 million, Customer
Management Segment loss from operations for the fourth quarter 2001 was $14.2
million, compared to income from operations of $5.2 million for the prior year
quarter.
Customer Management Segment revenues for the year ended December 31, 2001 were
$198.8 million, an increase of $3.8 million or 1.9% over the prior year period.
Excluding non-recurring items, Customer Management Segment adjusted income from
operations for the year ended December 31, 2001 decreased $0.8 million or 5.3%
over the prior year period to $14.3 million. Including non-recurring items,
Customer Management Segment had a loss from operations for the year ended
December 31, 2001 of $1.5 million, compared to income from operations of $15.1
million for the prior year period.
Investments and Other
Investments and Other Segment revenues, primarily rental income for facilities
leased to the Company's operating segments, were $11.1 million for the quarter
ended December 31, 2001, an increase of $2.3 million from the prior year
quarter, primarily from increased real estate leasing activity. Investments and
Other Segment income from operations was $3.3 million and $1.7 million for the
quarters ended December 31, 2001 and 2000, respectively.
Equity in earnings of unconsolidated affiliates
The following table summarizes the Company's equity in earnings (losses) of
unconsolidated affiliates (dollars in millions):
Three months ended Year ended
December 31, December 31,
-------------- -------------
2001 2000 2001 2000
------ ------ ------ ------
Boston Financial Data Services, Inc. ("BFDS") $ 0.2 $ 2.4 $ 3.5 $12.5
International Financial Data Services (UK)
("IFDS UK")(formerly EFDS) (3.7) (1.2) (3.5) (2.1)
International Financial Data Services LP ("IFDS") 2.0 5.0
Other (1.7) 0.4 (6.5) 1.0
------ ------ ------ ------
$(3.2) $ 1.6 $(1.5) $11.4
====== ====== ====== ======
Decreased earnings at BFDS resulted from a non-recurring charge of $1.0 million
related to lease abandonment charges, a decline in brokerage industry
transaction revenue and a lack of mutual fund revenue growth. Decreased earnings
at IFDS (UK) resulted primarily from a non-recurring charge of $3.0 million
related to lease abandonment charges as IFDS (UK) is relocating from four
building sites to a single location. Accounts serviced at IFDS (UK) increased to
3.1 million at December 31, 2001, which is 0.4 million or 14.8% above year end
2000 levels. IFDS results include the results of DST Canada, which as previously
mentioned was contributed to the joint venture in January 2001. The loss
reported in Other is primarily the result of losses in exchange-America. The
exchange-America venture was discontinued in the fourth quarter of 2001.
Other income, net
Other income was $16.8 million for the fourth quarter 2001, compared to $34.1
million for the fourth quarter 2000. Fourth quarter 2001 results include $4.6
million primarily related to interest and dividend income, $7.2 million of
interest related to a state sales tax refund and $5.0 million related primarily
to net gains on securities. Fourth quarter 2000 results include $3.4 million
primarily related to interest and dividend income and $30.7 million related
primarily to net gains on securities.
Other income was $36.2 million for the year ended December 31, 2001, compared to
$66.3 million for the comparable prior year period. Other income includes $13.5
million for 2001 and $42.8 million for 2000 of net gains on securities and $15.5
million for 2001 and $12.7 million for 2000 primarily related to interest and
dividend income. Year to date 2001 Other income also includes $7.2 million of
interest related to a state sales tax refund, while 2000 Other income includes
$10.8 million pretax relating to the settlement of a legal dispute related to a
former equity investment.
Interest expense
Interest expense was $2.7 million for the quarter ended December 31, 2001 and
$7.5 million for the year ended 2001, an increase of $1.6 million from the $1.1
million in the prior year quarter and an increase of $1.9 million from the $5.6
million in the prior year period. Average debt balances were higher in 2001
compared to 2000 primarily as a result of common stock repurchases and the
EquiServe acquisition. Average interest rates were lower in 2001 compared to
2000.
Income taxes
DST's effective tax rate was 35.1% for the quarter and 35.4% for the year ended
December 31, 2001, compared to 35.9% for the prior year quarter and the prior
year period. Excluding the taxes provided on the PAS transaction, the effective
tax rate would have been 35.1% for the year ended December 31, 2001. The 2001
and 2000 tax rates were affected by tax benefits relating to certain
international operations and recognition of state tax benefits associated with
income apportionment rules.
Other Actions
Stock Repurchase Program
During the quarter and year ended December 31, 2001, DST purchased 863,163 and
6,766,192 shares, respectively, of its common stock under previously announced
share repurchase programs which total 16,350,000 shares. During 2001, the shares
were purchased at an average price of $36.99 per share, with 5,356,500 shares
acquired under forward purchase agreements and 901,692 acquired in private
transactions. As of December 31, 2001, the cost to settle a remaining forward
purchase agreement, which expires in September 2002, would be approximately
$42.3 million for approximately 1.0 million shares. The agreement allows the
Company to elect net cash or net share settlement in lieu of physical settlement
of the shares. As of December 31, 2001, DST had purchased 13,426,192 shares
since the programs commenced and had 120.4 million shares outstanding.
EquiServe Acquisition
On March 30, 2001, DST completed the acquisition of a 75% interest in EquiServe
by purchasing interests held by FleetBoston Financial and Bank One Corporation.
On July 31, 2001, DST completed the acquisition of the remaining 25%, which was
owned by BFDS, on essentially the same terms provided to FleetBoston and Bank
One. EquiServe is one of the nation's largest corporate transfer agency service
providers, maintaining and servicing the shareowner records of approximately
1,400 publicly traded companies.
The acquisitions were accounted for as a purchase, and the results of
EquiServe's operations are included in DST's 2001 consolidated financial
statements beginning March 30, 2001. The minimum purchase price of $186.7
million is to be paid in four installments. The first installment of
approximately $58.5 million was paid at the closings. The remaining three
minimum installments, which total approximately $128.2 million (discounted to
$117.8 million for accounting purposes) are payable annually in varying amounts
beginning February 28, 2002. The remaining minimum purchase price installments
can increase pursuant to a formula that provides for additional consideration to
be paid in cash if EquiServe's revenues for the years ending 2001, 2002 and 2003
exceed certain targeted levels. The minimum purchase price (discounted to $176.3
million for accounting purposes) will be allocated to the net assets acquired
based upon their fair values upon completion of an independent valuation.
New Accounting Standards
Effective January 1, 2002, the Company adopted, as required, SFAS No. 142,
Goodwill and Other Intangible Assets. This statement addresses, among other
things, how goodwill and other intangible assets should be accounted for after
they have been initially recognized in the financial statements. Under SFAS No.
142, goodwill and intangible assets that have indefinite useful lives will not
be amortized but rather will be tested at least annually for impairment.
Intangible assets that have finite lives will continue to be amortized over
their useful lives. At December 31, 2001, the Company had approximately $163
million of goodwill and intangible assets that have indefinite useful lives.
Amortization of these amounts will cease beginning January 1, 2002, and will be
subject to periodic impairment tests. The Company estimates that the favorable
2002 after tax impact of ceasing goodwill and intangible amortization is
approximately $6.8 million.
Effective January 1, 2002, the Company adopted, as required EITF Topic No.
D-103, Income Statement Characterization of Reimbursements received for
"Out-of-Pocket" Expenses Incurred. Prior to the issuance of EITF Topic No.
D-103, the Company netted the Out-of-Pocket reimbursements from customers with
the applicable Out-of-Pocket expenditures. The Company's significant
Out-of-Pocket expenses at the consolidated level include postage and
telecommunication expenditures and at the Segment level include print mail
services between the Financial Services Segment and the Output Solutions
Segment. Under EITF Topic No. D-103, the Company will record the reimbursements
received for Out-of-Pocket expenses incurred as revenue on an accrual basis. The
Company estimates that annual consolidated revenues and consolidated costs and
expenses will increase approximately $800 million to $1 billion as a result of
adopting the EITF. Because these additional revenues are offset by the
reimbursable expenses incurred, adoption of EITF Topic No. D-103 will not impact
income from operations or net income. The EITF requires that comparative
financial statements for prior periods be reclassified to comply with the new
guidance, unless it is impracticable to reclassify prior-period financial
statements. DST is considering its ability to reclassify prior-period financial
statements as required by the EITF Topic No. D-103.
DST believes that the implementation of this revised accounting treatment will
negatively affect the reporting of operating margins of the Company's business
segments.
The estimated impact of these two new accounting standards reflects the
Company's current views. There may be material differences between these
estimates and the actual impact of these standards.
* * * *
The information and comments above may include forward-looking statements
respecting DST and its businesses. Such information and comments are based on
DST's views as of today, and actual results could differ. There could be a
number of factors affecting future results, including those set forth in Form
8-K/A dated March 25, 1999 filed by DST with the Securities and Exchange
Commission. All such factors should be considered in evaluating any
forward-looking comment. The Company will not update any forward-looking
statements in this press release to reflect future events.
DST SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(In millions, except per share amounts)
(Unaudited)
For the Three Months For the Year
ended December 31, ended December 31,
2001 2000 2001 2000
------- ------- --------- ---------
Revenues $416.6 $349.2 $1,660.0 $1,362.1
Costs and expenses 299.5 244.6 1,207.1 968.9
Depreciation and amortization 49.0 33.7 159.4 128.6
------- ------- --------- ---------
Income from operations 68.1 70.9 293.5 264.6
Interest expense (2.7) (1.1) (7.5) (5.6)
Other income, net 16.8 34.1 36.2 66.3
Gain on sale of PAS 32.8
Equity in earnings (losses) of
unconsolidated affiliates (3.2) 1.6 (1.5) 11.4
------- ------- --------- ---------
Income before income taxes 79.0 105.5 353.5 336.7
Income taxes 27.7 37.9 125.3 120.9
------- ------- --------- ---------
Net income $ 51.3 $ 67.6 $ 228.2 $ 215.8
======= ======== ========= =========
Average common shares outstanding 120.4 124.8 122.6 125.3
Diluted shares outstanding 122.9 129.6 126.0 129.4
Basic earnings per share $ 0.43 $ 0.54 $ 1.86 $ 1.72
Diluted earnings per share $ 0.42 $ 0.52 $ 1.81 $ 1.67
* * * * * *
Net income before non-recurring items $ 49.8 $ 47.9 $ 201.2 $ 181.5
Diluted earnings per share before non-
recurring items $ 0.41 $ 0.37 $ 1.60 $ 1.40
DST Systems, Inc.
333 West 11th Street
Kansas City, MO
64105-1594
NYSE & CHX Symbol: DST
Contact:
Thomas A. McDonnell (816) 435-8684
President and Chief Executive Officer
Kenneth V. Hager (816) 435-8603
Vice President and Chief Financial Officer