KANSAS CITY, MO. (August 9, 2005) – DST Systems, Inc. (NYSE: DST)
previously announced
financial results for the three and six month periods ended June 30, 2005
on July 25, 2005. In that
announcement, DST described a $154.4 million gain recorded upon completion
of the sale of
EquiServe to Computershare Ltd. (AUS: CPU) on June 17, 2005. In addition,
DST described a $34
million charge related to Fairway software, which was recorded as depreciation
and amortization
expense when the EquiServe transaction was closed. DST has determined that
the $34 million of
Fairway software should be considered in determining the overall gain on
the sale of EquiServe
rather than be recorded as depreciation and amortization expense. Under
the terms of the
acquisition agreement, DST provided a perpetual sourcecode license for Fairway
to CPU and
agreed to restrict DST’s use of the software. Upon the closing of
this transaction, Fairway software
was redesignated from software that was developed for internal use in the
Company’s stock transfer
business to software that will be for external use, in accordance with SOP
98-1, “Accounting for the
Costs of Software Obtained or Developed for Internal Use”. As a result,
the $34 million Fairway
software has now been taken into account in the determination of the $120.4
million pretax gain
(the net gain was approximately $70 million after taxes, deferrals and other
expenses) from the sale
of the EquiServe business during the three and six month periods ended June
30, 2005.
The table below presents the effect of the $34 million reclassification
on the consolidated statement
of income for the three and six months ended June 30, 2005, as compared
to amounts reported in
the second quarter earnings release on July 25, 2005 (amounts in millions,
except per share
amounts):
The revision described above only affects the Financial
Services Segment. The revision does not
change consolidated revenue, pretax income, net income, or basic and
diluted earnings per share.
The revision does not affect the consolidated balance sheet or net cash
provided by operating
activities. Attached to this release is a revised condensed consolidated
statement of income that
reflects this revision.
* * * *
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
actions or results could differ. There could be a number of factors affecting future actions or
results, including those set forth in DST's latest periodic financial report (Form 10-K or 10-Q) filed
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.
To learn more about DST Press Releases
, contact
us at ctgoldman@dstsystems.com |
