x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES |
Delaware | 43-1581814 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
333 West 11th Street, Kansas City, Missouri | 64105 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer x | Accelerated filer o | |
Non-accelerated filer o | Smaller reporting company o | |
(do not check if a smaller reporting company) | ||
Emerging growth company o |
Page | ||
DST Systems, Inc. Condensed Consolidated Balance Sheet (in millions, except share and per share amounts) (unaudited) | |||||||
September 30, 2017 | December 31, 2016 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 140.7 | $ | 195.5 | |||
Funds held on behalf of clients | 542.9 | 500.5 | |||||
Client funding receivable | 47.9 | 64.1 | |||||
Accounts receivable | 352.4 | 215.5 | |||||
Other assets | 79.7 | 70.0 | |||||
Assets held for sale | — | 72.6 | |||||
1,163.6 | 1,118.2 | ||||||
Investments | 199.6 | 377.4 | |||||
Unconsolidated affiliates | 80.7 | 331.2 | |||||
Properties, net | 340.5 | 235.7 | |||||
Intangible assets, net | 290.3 | 142.6 | |||||
Goodwill | 796.5 | 516.4 | |||||
Other assets | 131.0 | 50.3 | |||||
Total assets | $ | 3,002.2 | $ | 2,771.8 | |||
Liabilities | |||||||
Current liabilities | |||||||
Current portion of debt | $ | 133.6 | $ | 208.5 | |||
Client funds obligations | 590.8 | 564.6 | |||||
Accounts payable | 84.9 | 62.9 | |||||
Accrued compensation and benefits | 136.6 | 101.7 | |||||
Deferred revenues and gains | 24.4 | 23.5 | |||||
Income taxes payable | 6.2 | 22.0 | |||||
Other liabilities | 95.1 | 78.1 | |||||
Liabilities held for sale | — | 30.1 | |||||
1,071.6 | 1,091.4 | ||||||
Long-term debt | 511.2 | 299.7 | |||||
Income taxes payable | 64.1 | 69.8 | |||||
Deferred income taxes | 79.5 | 151.5 | |||||
Other liabilities | 51.7 | 22.9 | |||||
Total liabilities | 1,778.1 | 1,635.3 | |||||
Commitments and contingencies (Note 11) | |||||||
Redeemable Non-controlling Interest | — | 21.3 | |||||
Stockholders’ Equity | |||||||
Preferred stock, $0.01 par; 10 million shares authorized and unissued | — | — | |||||
Common stock, $0.01 par; 400 million shares authorized, 64.4 million and 82.0 million shares issued, respectively | 0.6 | 0.8 | |||||
Additional paid-in capital | 101.5 | 129.2 | |||||
Retained earnings | 1,418.8 | 2,379.2 | |||||
Treasury stock (3.9 million and 18.0 million shares, respectively), at cost | (289.1 | ) | (1,410.6 | ) | |||
Accumulated other comprehensive income (loss) | (7.7 | ) | 16.6 | ||||
Total stockholders’ equity | 1,224.1 | 1,115.2 | |||||
Total liabilities, redeemable non-controlling interest and stockholders’ equity | $ | 3,002.2 | $ | 2,771.8 |
DST Systems, Inc. Condensed Consolidated Statement of Income (in millions, except per share amounts) (unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Operating revenues | $ | 524.8 | $ | 365.5 | $ | 1,534.0 | $ | 1,100.7 | |||||||
Out-of-pocket reimbursements | 37.8 | 21.2 | 90.3 | 57.2 | |||||||||||
Total revenues | 562.6 | 386.7 | 1,624.3 | 1,157.9 | |||||||||||
Costs and expenses | 472.1 | 289.6 | 1,323.7 | 916.9 | |||||||||||
Depreciation and amortization | 34.7 | 22.8 | 92.7 | 69.1 | |||||||||||
Operating income | 55.8 | 74.3 | 207.9 | 171.9 | |||||||||||
Interest expense | (6.9 | ) | (5.4 | ) | (19.7 | ) | (18.0 | ) | |||||||
Other income, net | 8.7 | 6.7 | 217.2 | 20.0 | |||||||||||
Equity in earnings of unconsolidated affiliates | 4.2 | 7.0 | 27.3 | 23.9 | |||||||||||
Income from continuing operations before income taxes and non-controlling interest | 61.8 | 82.6 | 432.7 | 197.8 | |||||||||||
Income taxes | 13.0 | 31.6 | 66.3 | 73.8 | |||||||||||
Income from continuing operations before non-controlling interest | 48.8 | 51.0 | 366.4 | 124.0 | |||||||||||
Income (loss) from discontinued operations, net of tax | (0.3 | ) | 222.8 | 4.5 | 260.0 | ||||||||||
Net income | 48.5 | 273.8 | 370.9 | 384.0 | |||||||||||
Net (income) loss attributable to non-controlling interest | — | (0.5 | ) | (0.6 | ) | 0.4 | |||||||||
Net income attributable to DST Systems, Inc. | $ | 48.5 | $ | 273.3 | $ | 370.3 | $ | 384.4 | |||||||
Weighted average common shares outstanding | 60.7 | 65.4 | 61.9 | 66.5 | |||||||||||
Weighted average diluted shares outstanding | 61.6 | 66.1 | 62.7 | 67.3 | |||||||||||
Basic earnings per share: | |||||||||||||||
Continuing operations attributable to DST Systems, Inc. | $ | 0.81 | $ | 0.77 | $ | 5.91 | $ | 1.88 | |||||||
Discontinued operations | (0.01 | ) | 3.41 | 0.07 | 3.90 | ||||||||||
Basic earnings per share | $ | 0.80 | $ | 4.18 | $ | 5.98 | $ | 5.78 | |||||||
Diluted earnings per share: | |||||||||||||||
Continuing operations attributable to DST Systems, Inc. | $ | 0.79 | $ | 0.76 | $ | 5.84 | $ | 1.85 | |||||||
Discontinued operations | — | 3.37 | 0.07 | 3.87 | |||||||||||
Diluted earnings per share | $ | 0.79 | $ | 4.13 | $ | 5.91 | $ | 5.72 | |||||||
Cash dividends per share of common stock | $ | 0.18 | $ | 0.17 | $ | 0.54 | $ | 0.50 |
DST Systems, Inc. Condensed Consolidated Statement of Comprehensive Income (in millions) (unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income attributable to DST Systems, Inc. | $ | 48.5 | $ | 273.3 | $ | 370.3 | $ | 384.4 | |||||||
Other comprehensive income (loss), net of tax and reclassifications to earnings, derived from: | |||||||||||||||
Available-for-sale securities | 0.3 | 21.7 | (93.6 | ) | (0.7 | ) | |||||||||
Cash flow hedges | — | — | 0.2 | 0.2 | |||||||||||
Foreign currency translation adjustments | 16.0 | (1.1 | ) | 69.1 | (24.3 | ) | |||||||||
Other comprehensive income (loss) | 16.3 | 20.6 | (24.3 | ) | (24.8 | ) | |||||||||
Comprehensive income | $ | 64.8 | $ | 293.9 | $ | 346.0 | $ | 359.6 |
DST Systems, Inc. Condensed Consolidated Statement of Changes in Stockholders’ Equity (in millions) (unaudited) | ||||||||||||||||||||||||||
Common Stock | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||||
Shares Outstanding | Par Value | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Total Stockholders’ Equity | |||||||||||||||||||||
December 31, 2015 | 68.6 | $ | 0.8 | $ | 136.4 | $ | 1,996.6 | $ | (1,129.7 | ) | $ | 41.9 | $ | 1,046.0 | ||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||
Net income attributable to DST Systems, Inc. | — | — | — | 384.4 | — | — | 384.4 | |||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | (24.8 | ) | (24.8 | ) | |||||||||||||||||
Dividends | — | — | 1.0 | (33.8 | ) | — | — | (32.8 | ) | |||||||||||||||||
Amortization of share based compensation | — | — | 16.7 | — | — | — | 16.7 | |||||||||||||||||||
Issuance of common stock | 0.6 | — | (25.2 | ) | — | 34.2 | — | 9.0 | ||||||||||||||||||
Repurchase of common stock | (3.9 | ) | — | — | — | (240.7 | ) | — | (240.7 | ) | ||||||||||||||||
Other | — | — | (0.3 | ) | — | — | — | (0.3 | ) | |||||||||||||||||
September 30, 2016 | 65.3 | $ | 0.8 | $ | 128.6 | $ | 2,347.2 | $ | (1,336.2 | ) | $ | 17.1 | $ | 1,157.5 | ||||||||||||
Common Stock | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||||
Shares Outstanding | Par Value | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Total Stockholders’ Equity | |||||||||||||||||||||
December 31, 2016 | 64.0 | $ | 0.8 | $ | 129.2 | $ | 2,379.2 | $ | (1,410.6 | ) | $ | 16.6 | $ | 1,115.2 | ||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||
Net income attributable to DST Systems, Inc. | — | — | — | 370.3 | — | — | 370.3 | |||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | (24.3 | ) | (24.3 | ) | |||||||||||||||||
Dividends | — | — | 1.0 | (34.0 | ) | — | — | (33.0 | ) | |||||||||||||||||
Amortization of share based compensation | — | — | 31.8 | — | — | — | 31.8 | |||||||||||||||||||
Issuance of common stock | 0.4 | — | (20.0 | ) | — | 22.6 | — | 2.6 | ||||||||||||||||||
Repurchase of common stock | (3.9 | ) | — | — | — | (239.0 | ) | — | (239.0 | ) | ||||||||||||||||
Distribution of treasury stock for stock split | — | (0.2 | ) | (40.5 | ) | (1,297.2 | ) | 1,337.9 | — | — | ||||||||||||||||
Other | — | — | — | 0.5 | — | — | 0.5 | |||||||||||||||||||
September 30, 2017 | 60.5 | $ | 0.6 | $ | 101.5 | $ | 1,418.8 | $ | (289.1 | ) | $ | (7.7 | ) | $ | 1,224.1 |
DST Systems, Inc. Condensed Consolidated Statement of Cash Flows (in millions) (unaudited) | |||||||
Nine Months Ended | |||||||
September 30, | |||||||
2017 | 2016 | ||||||
Cash flows — operating activities: | |||||||
Net income | $ | 370.9 | $ | 384.0 | |||
Less: income from discontinued operations | 4.5 | 260.0 | |||||
Income from continuing operations | 366.4 | 124.0 | |||||
Depreciation and amortization | 92.7 | 69.1 | |||||
Net gains on investments | (151.9 | ) | (2.8 | ) | |||
Gain recognized on step-up of unconsolidated affiliates | (43.8 | ) | — | ||||
Amortization of share-based compensation | 31.2 | 11.0 | |||||
Equity in earnings of unconsolidated affiliates | (27.3 | ) | (23.9 | ) | |||
Cash dividends from unconsolidated affiliates | 1.8 | 0.3 | |||||
Deferred income taxes | (7.2 | ) | (0.1 | ) | |||
Changes in accounts receivable | 23.1 | 1.3 | |||||
Changes in other assets | (61.8 | ) | (0.9 | ) | |||
Changes in client funds obligations | (16.2 | ) | 7.5 | ||||
Changes in client funding receivable | 16.2 | (7.5 | ) | ||||
Changes in accounts payable and accrued liabilities | (81.5 | ) | 11.6 | ||||
Changes in income taxes payable | 3.9 | 8.2 | |||||
Changes in deferred revenues and gains | (33.1 | ) | (10.0 | ) | |||
Changes in accrued compensation and benefits | (16.0 | ) | (32.4 | ) | |||
Other, net | 1.7 | (7.8 | ) | ||||
Net cash provided from continuing operating activities | 98.2 | 147.6 | |||||
Net cash provided from (used in) discontinued operating activities | (12.1 | ) | 14.1 | ||||
Net cash provided from operating activities | 86.1 | 161.7 | |||||
Cash flows — investing activities: | |||||||
Cash paid for capital expenditures | (61.7 | ) | (42.7 | ) | |||
Investments in securities | (51.6 | ) | (198.3 | ) | |||
Proceeds from (advances to) unconsolidated affiliates | 31.7 | (25.0 | ) | ||||
Proceeds from sales/maturities of investments | 87.3 | 257.5 | |||||
Net change in funds held to satisfy client funds obligations | (42.4 | ) | 167.9 | ||||
Proceeds from sale of properties | — | 5.7 | |||||
Acquisition of businesses, net of cash and cash equivalents acquired | (38.9 | ) | (93.5 | ) | |||
Proceeds from sale of business, net of cash and cash equivalents sold | 0.8 | 9.5 | |||||
Other, net | 0.5 | 1.0 | |||||
Net cash provided from (used in) continuing investing activities | (74.3 | ) | 82.1 | ||||
Net cash provided from discontinued investing activities | 40.6 | 409.4 | |||||
Net cash provided from (used in) investing activities | (33.7 | ) | 491.5 | ||||
Cash flows — financing activities: | |||||||
Proceeds from issuance of common stock | 2.4 | 4.6 | |||||
Principal payments on debt | (106.8 | ) | (4.9 | ) | |||
Net borrowings (repayments) on revolving credit facilities | 250.0 | (216.1 | ) | ||||
Net borrowings (repayments) on accounts receivable securitization program | (37.6 | ) | 88.6 | ||||
Net change in client funds obligations | 42.4 | (167.9 | ) |
DST Systems, Inc. Condensed Consolidated Statement of Cash Flows (continued) (in millions) (unaudited) | |||||||
Nine Months Ended | |||||||
September 30, | |||||||
2017 | 2016 | ||||||
Common stock repurchased | (235.4 | ) | (240.7 | ) | |||
Payment of cash dividends | (33.0 | ) | (32.8 | ) | |||
Excess tax benefits from share-based compensation | — | 3.7 | |||||
Receipt of third party capital in investment fund | 0.8 | 6.7 | |||||
Net cash used in continuing financing activities | (117.2 | ) | (558.8 | ) | |||
Net cash used in discontinued financing activities | (0.2 | ) | — | ||||
Net cash used in financing activities | (117.4 | ) | (558.8 | ) | |||
Effect of exchange rates on cash and cash equivalents | 6.2 | — | |||||
Net increase (decrease) in cash and cash equivalents, including cash within assets held for sale | (58.8 | ) | 94.4 | ||||
Cash and cash equivalents, beginning of period | 199.5 | 89.6 | |||||
Cash and cash equivalents, end of period | 140.7 | 184.0 | |||||
Less: cash and cash equivalents held for sale | — | 3.1 | |||||
Cash and cash equivalents of continuing operations, end of period | $ | 140.7 | $ | 180.9 |
Consideration | |||
Fair value of common stock used to acquire the remaining equity interests in BFDS, certain investments and real estate | $ | 163.4 | |
Estimated fair value of DST’s previously-held equity interests (1) | 151.1 | ||
Effective settlement of pre-existing relationships | (5.9 | ) | |
Total consideration transferred | $ | 308.6 | |
Recognized amounts of identifiable assets acquired and liabilities assumed | |||
Cash and cash equivalents | $ | 96.8 | |
Accounts receivable | 81.6 | ||
Other current assets | 3.6 | ||
Investments (2) | 35.8 | ||
Properties (3) | 22.6 | ||
Intangible assets | 57.2 | ||
Goodwill | 68.7 | ||
Deferred income taxes | 2.4 | ||
Other assets | 3.2 | ||
Total assets | 371.9 | ||
Accounts payable | 5.2 | ||
Accrued compensation and benefits | 15.4 | ||
Deferred revenue | 2.1 | ||
Other current liabilities | 7.6 | ||
Other liabilities | 33.0 | ||
Total liabilities | 63.3 | ||
Net assets acquired | $ | 308.6 |
Fair Value | Weighted-Average Useful Life | ||||
Customer relationships | $ | 57.2 | 13 years |
Consideration | |||
Cash paid to acquire the remaining equity interests in IFDS U.K. and other related interests (1) | $ | 234.9 | |
Estimated fair value of previously-held equity interests (2) | 136.8 | ||
Effective net settlement of pre-existing relationships | 54.5 | ||
Total consideration transferred | $ | 426.2 | |
Recognized amounts of identifiable assets acquired and liabilities assumed | |||
Cash and cash equivalents | $ | 99.2 | |
Accounts receivable | 101.7 | ||
Other current assets | 14.4 | ||
Properties (3) | 95.6 | ||
Intangible assets | 104.0 | ||
Goodwill | 195.9 | ||
Deferred income taxes | 11.5 | ||
Other assets | 2.1 | ||
Total assets | 624.4 | ||
Current portion of long-term debt | 2.8 | ||
Accounts payable | 29.1 | ||
Accrued compensation and benefits | 23.6 | ||
Deferred revenue | 31.1 | ||
Other current liabilities | 61.7 | ||
Long-term debt | 26.3 | ||
Other liabilities | 23.6 | ||
Total liabilities | 198.2 | ||
Net assets acquired | $ | 426.2 |
Fair Value | Weighted-Average Useful Life | ||||
Customer relationships | $ | 104.0 | 10 years |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Total revenues | $ | 562.6 | $ | 564.6 | $ | 1,772.4 | $ | 1,707.8 | |||||||
Net income attributable to DST Systems, Inc. | 48.5 | 263.2 | 191.8 | 350.8 | |||||||||||
Diluted earnings per share | 0.79 | 3.98 | 3.06 | 5.21 |
December 31, 2016 | |||
Assets | |||
Cash and cash equivalents | $ | 4.0 | |
Accounts receivable | 38.9 | ||
Unconsolidated affiliates | 0.2 | ||
Properties, net | 9.9 | ||
Intangible assets, net | 11.2 | ||
Other assets | 8.4 | ||
Total assets held for sale | $ | 72.6 | |
Liabilities | |||
Current portion of debt | $ | 0.4 | |
Accounts payable | 13.2 | ||
Accrued compensation and benefits | 3.8 | ||
Deferred revenues and gains | 0.8 | ||
Long-term debt | 1.7 | ||
Income taxes payable | 1.0 | ||
Other liabilities | 9.2 | ||
Total liabilities held for sale | $ | 30.1 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Operating revenues | $ | — | $ | 38.2 | $ | 53.4 | $ | 349.7 | |||||||
Out-of-pocket reimbursements | — | 9.9 | 12.8 | 399.3 | |||||||||||
Total revenues | — | 48.1 | 66.2 | 749.0 | |||||||||||
Costs and expenses | — | 53.7 | 63.8 | 703.5 | |||||||||||
Depreciation and amortization | — | — | — | 11.9 | |||||||||||
Operating income (loss) | — | (5.6 | ) | 2.4 | 33.6 | ||||||||||
Equity in earnings of unconsolidated affiliates | — | 0.1 | 0.2 | 0.3 | |||||||||||
Net gain (loss) on business disposition | (0.3 | ) | 340.1 | 2.6 | 340.1 | ||||||||||
Income (loss) before income taxes | (0.3 | ) | 334.6 | 5.2 | 374.0 | ||||||||||
Income taxes | — | 111.8 | 0.7 | 114.0 | |||||||||||
Income (loss) from discontinued operations, net of tax | $ | (0.3 | ) | $ | 222.8 | $ | 4.5 | $ | 260.0 |
Carrying Value | ||||||||
September 30, 2017 | December 31, 2016 | |||||||
Available-for-sale securities: | ||||||||
State Street Corporation | $ | — | $ | 169.6 | ||||
Other available-for-sale securities | 11.9 | 10.9 | ||||||
11.9 | 180.5 | |||||||
Other: | ||||||||
Trading securities | 34.1 | 7.9 | ||||||
Seed capital investments, at fair value | 11.7 | 61.0 | ||||||
Cost method, private equity and other investments | 141.9 | 128.0 | ||||||
187.7 | 196.9 | |||||||
Total investments | $ | 199.6 | $ | 377.4 |
September 30, 2017 | December 31, 2016 | ||||||
Book cost basis | $ | 9.2 | $ | 28.4 | |||
Gross unrealized gains | 2.7 | 152.1 | |||||
Market value | $ | 11.9 | $ | 180.5 |
Carrying Value | |||||||||
Ownership Percentage (1) | September 30, 2017 | December 31, 2016 | |||||||
International Financial Data Services U.K. | — | $ | — | $ | 133.3 | ||||
International Financial Data Services L.P. | 50% | 43.1 | 73.2 | ||||||
Boston Financial Data Services, Inc. | — | — | 91.2 | ||||||
Unconsolidated real estate and other affiliates | 37.6 | 33.5 | |||||||
Total | $ | 80.7 | $ | 331.2 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
International Financial Data Services U.K. | $ | — | $ | 3.4 | $ | 0.9 | $ | 8.2 | |||||||
International Financial Data Services L.P. | 2.4 | 0.9 | 15.8 | 3.9 | |||||||||||
Boston Financial Data Services, Inc. | — | 1.2 | 3.6 | 5.5 | |||||||||||
Unconsolidated real estate and other affiliates | 1.8 | 1.5 | 7.0 | 6.3 | |||||||||||
Total | $ | 4.2 | $ | 7.0 | $ | 27.3 | $ | 23.9 |
Fair Value Measurements at Reporting Date Using | |||||||||||||||
September 30, 2017 | Quoted prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Money market funds (1) | $ | 260.2 | $ | 260.2 | $ | — | $ | — | |||||||
Equity securities (2) | 46.0 | 46.0 | — | — | |||||||||||
Seed capital investments (2) | 11.7 | 11.7 | — | — | |||||||||||
Deferred compensation liabilities (3) | (34.1 | ) | (34.1 | ) | — | — | |||||||||
Derivative instruments (3) | (0.4 | ) | — | (0.4 | ) | — | |||||||||
Total | $ | 283.4 | $ | 283.8 | $ | (0.4 | ) | $ | — |
Fair Value Measurements at Reporting Date Using | |||||||||||||||
December 31, 2016 | Quoted prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Money market funds (1) | $ | 437.0 | $ | 437.0 | $ | — | $ | — | |||||||
Equity securities (2) | 188.4 | 188.4 | — | — | |||||||||||
Seed capital investments (2) | 61.0 | 61.0 | — | — | |||||||||||
Deferred compensation liabilities (3) | (7.9 | ) | (7.9 | ) | — | — | |||||||||
Securities sold short (3) | (8.2 | ) | (8.2 | ) | — | — | |||||||||
Derivative instruments (3) | (0.4 | ) | — | (0.4 | ) | — | |||||||||
Total | $ | 669.9 | $ | 670.3 | $ | (0.4 | ) | $ | — |
September 30, 2017 | December 31, 2016 | ||||||||||||||
Carrying Amount | Accumulated Amortization | Carrying Amount | Accumulated Amortization | ||||||||||||
Amortizable intangible assets | |||||||||||||||
Customer relationships | $ | 372.4 | $ | 89.9 | $ | 203.6 | $ | 71.0 | |||||||
Other | 28.3 | 20.5 | 28.5 | 18.5 | |||||||||||
Total | $ | 400.7 | $ | 110.4 | $ | 232.1 | $ | 89.5 |
Remainder of 2017 | $ | 8.1 | |
2018 | 32.2 | ||
2019 | 31.1 | ||
2020 | 28.7 | ||
2021 | 28.3 | ||
Thereafter | 161.9 | ||
Total | $ | 290.3 |
December 31, 2016 | Acquisitions | Disposals | Other | September 30, 2017 | |||||||||||||||
Domestic Financial Services | $ | 345.8 | $ | 68.7 | $ | — | $ | 1.0 | $ | 415.5 | |||||||||
International Financial Services | 15.6 | 195.9 | — | 14.5 | 226.0 | ||||||||||||||
Healthcare Services | 155.0 | — | — | — | 155.0 | ||||||||||||||
Total | $ | 516.4 | $ | 264.6 | $ | — | $ | 15.5 | $ | 796.5 |
September 30, 2017 | December 31, 2016 | ||||||
Accounts receivable securitization program | $ | 65.6 | $ | 103.2 | |||
Revolving credit facilities | 325.0 | 75.0 | |||||
Senior notes | 225.0 | 330.0 | |||||
Other indebtedness | 29.2 | — | |||||
644.8 | 508.2 | ||||||
Less current portion of debt | 133.6 | 208.5 | |||||
Long-term debt | $ | 511.2 | $ | 299.7 |
September 30, 2017 | December 31, 2016 | ||||||||||||||
Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | ||||||||||||
Senior notes - Series B | $ | — | $ | — | $ | 105.0 | $ | 106.7 | |||||||
Senior notes - Series C | 65.0 | 66.0 | 65.0 | 67.5 | |||||||||||
Senior notes - Series D | 160.0 | 169.0 | 160.0 | 172.1 | |||||||||||
U.K. mortgage | 29.5 | 29.8 | — | — | |||||||||||
Total | $ | 254.5 | $ | 264.8 | $ | 330.0 | $ | 346.3 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Income from continuing operations attributable to DST Systems, Inc. | $ | 48.8 | $ | 50.5 | $ | 365.8 | $ | 124.4 | |||||||
Income (loss) from discontinued operations | (0.3 | ) | 222.8 | 4.5 | 260.0 | ||||||||||
Net income attributable to DST Systems, Inc. | $ | 48.5 | $ | 273.3 | $ | 370.3 | $ | 384.4 | |||||||
Weighted average common shares outstanding | 60.7 | 65.4 | 61.9 | 66.5 | |||||||||||
Incremental shares from restricted stock units and stock options | 0.9 | 0.7 | 0.8 | 0.8 | |||||||||||
Weighted average diluted shares outstanding | 61.6 | 66.1 | 62.7 | 67.3 | |||||||||||
Basic earnings per share | |||||||||||||||
Continuing operations attributable to DST Systems, Inc. | $ | 0.81 | $ | 0.77 | $ | 5.91 | $ | 1.88 | |||||||
Discontinued operations | (0.01 | ) | 3.41 | 0.07 | 3.90 | ||||||||||
Basic earnings per share | $ | 0.80 | $ | 4.18 | $ | 5.98 | $ | 5.78 | |||||||
Diluted earnings per share | |||||||||||||||
Continuing operations attributable to DST Systems, Inc. | $ | 0.79 | $ | 0.76 | $ | 5.84 | $ | 1.85 | |||||||
Discontinued operations | — | 3.37 | 0.07 | 3.87 | |||||||||||
Diluted earnings per share | $ | 0.79 | $ | 4.13 | $ | 5.91 | $ | 5.72 |
Unrealized Gain on Available-for-Sale Securities | Unrealized Gain (Loss) on Cash Flow Hedges | Foreign Currency Translation Adjustments | Accumulated Other Comprehensive Income | ||||||||||||
Balance, December 31, 2016 | $ | 94.1 | $ | (0.1 | ) | $ | (77.4 | ) | $ | 16.6 | |||||
Net current period other comprehensive income (loss) | (93.6 | ) | 0.2 | 69.1 | (24.3 | ) | |||||||||
Balance, September 30, 2017 | $ | 0.5 | $ | 0.1 | $ | (8.3 | ) | $ | (7.7 | ) |
Three Months Ended | |||||||||||||||
September 30, | |||||||||||||||
2017 | 2016 | ||||||||||||||
Pretax | Net of Tax | Pretax | Net of Tax | ||||||||||||
Available-for-sale securities | |||||||||||||||
Unrealized gains (losses) on available-for-sale securities | $ | 0.7 | $ | 0.3 | $ | 35.0 | $ | 21.7 | |||||||
Reclassification of (gains) losses into net earnings on available-for-sale securities (1) | (0.1 | ) | — | (0.1 | ) | — | |||||||||
Net change in available-for-sale securities | 0.6 | 0.3 | 34.9 | 21.7 | |||||||||||
Cash flow hedges | |||||||||||||||
Unrealized gains (losses) on cash flow hedges | (0.2 | ) | (0.1 | ) | (0.1 | ) | (0.1 | ) | |||||||
Reclassification of (gains) losses into net earnings on foreign currency cash flow hedges (2) | 0.2 | 0.1 | 0.2 | 0.1 | |||||||||||
Net change in cash flow hedges | — | — | 0.1 | — | |||||||||||
Cumulative translation adjustments (3) | |||||||||||||||
Current period translation adjustments | 16.1 | 16.0 | (1.1 | ) | (1.1 | ) | |||||||||
Net cumulative translation adjustments | 16.1 | 16.0 | (1.1 | ) | (1.1 | ) | |||||||||
Total other comprehensive income (loss) | $ | 16.7 | $ | 16.3 | $ | 33.9 | $ | 20.6 |
Nine Months Ended | |||||||||||||||
September 30, | |||||||||||||||
2017 | 2016 | ||||||||||||||
Pretax | Net of Tax | Pretax | Net of Tax | ||||||||||||
Available-for-sale securities | |||||||||||||||
Unrealized gains (losses) on available-for-sale securities | $ | 6.4 | $ | 4.0 | $ | 0.8 | $ | 0.5 | |||||||
Reclassification of (gains) losses into net earnings on available-for-sale securities (1) | (155.8 | ) | (97.6 | ) | (2.0 | ) | (1.2 | ) | |||||||
Net change in available-for-sale securities | (149.4 | ) | (93.6 | ) | (1.2 | ) | (0.7 | ) | |||||||
Cash flow hedges | |||||||||||||||
Unrealized gains (losses) on cash flow hedges | — | — | 0.4 | 0.2 | |||||||||||
Reclassification of (gains) losses into net earnings on foreign currency cash flow hedges (2) | 0.3 | 0.2 | — | — | |||||||||||
Net change in cash flow hedges | 0.3 | 0.2 | 0.4 | 0.2 | |||||||||||
Cumulative translation adjustments (3) | |||||||||||||||
Current period translation adjustments | 31.5 | 31.4 | (24.3 | ) | (24.3 | ) | |||||||||
Reclassification into net earnings upon disposition of a foreign business (4) | (3.3 | ) | (3.3 | ) | — | — | |||||||||
Reclassification into net earnings upon step-acquisition of foreign entities (5) | 41.0 | 41.0 | — | — | |||||||||||
Net cumulative translation adjustments | 69.2 | 69.1 | (24.3 | ) | (24.3 | ) | |||||||||
Total other comprehensive income (loss) | $ | (79.9 | ) | $ | (24.3 | ) | $ | (25.1 | ) | $ | (24.8 | ) |
(1) | Realized gains and losses on available-for-sale securities are recognized in Other income, net on the Condensed Consolidated Statement of Income. |
(2) | Reclassification to net earnings of foreign currency cash flow hedges are recognized in Costs and expenses on the Condensed Consolidated Statement of Income. |
(4) | Reclassification to net earnings upon disposition of net assets classified as held for sale are recognized in Income from discontinued operations, net of tax on the Condensed Consolidated Statement of Income. |
(5) | Reclassification to net earnings upon step-acquisition of previously-held equity interests in foreign entities are recognized in Other income, net on the Condensed Consolidated Statement of Income. |
September 30, 2017 | December 31, 2016 | ||||||
Domestic Financial Services | $ | 2,332.4 | $ | 2,234.9 | |||
International Financial Services | 749.5 | 430.0 | |||||
Healthcare Services | 500.2 | 552.2 | |||||
Assets held for sale | — | 72.6 | |||||
Elimination Adjustments | (579.9 | ) | (517.9 | ) | |||
$ | 3,002.2 | $ | 2,771.8 |
Three Months Ended September 30, 2017 | |||||||||||||||||||
Domestic Financial Services | International Financial Services | Healthcare Services | Elimination Adjustments | Consolidated Total | |||||||||||||||
Operating revenues | $ | 291.4 | $ | 129.2 | $ | 104.2 | $ | — | $ | 524.8 | |||||||||
Intersegment operating revenues | 13.9 | 0.2 | — | (14.1 | ) | — | |||||||||||||
Out-of-pocket reimbursements | 28.8 | 7.1 | 1.9 | — | 37.8 | ||||||||||||||
Total revenues | 334.1 | 136.5 | 106.1 | (14.1 | ) | 562.6 | |||||||||||||
Costs and expenses | 275.9 | 125.0 | 85.3 | (14.1 | ) | 472.1 | |||||||||||||
Depreciation and amortization | 22.6 | 9.7 | 2.4 | — | 34.7 | ||||||||||||||
Operating income | 35.6 | 1.8 | 18.4 | — | 55.8 | ||||||||||||||
Other income (loss), net | 8.8 | (0.3 | ) | 0.2 | — | 8.7 | |||||||||||||
Equity in earnings of unconsolidated affiliates | 1.7 | 2.4 | 0.1 | — | 4.2 | ||||||||||||||
Earnings from continuing operations before interest, income taxes and non-controlling interest | $ | 46.1 | $ | 3.9 | $ | 18.7 | $ | — | $ | 68.7 |
Three Months Ended September 30, 2016 | |||||||||||||||||||
Domestic Financial Services | International Financial Services | Healthcare Services | Elimination Adjustments | Consolidated Total | |||||||||||||||
Operating revenues | $ | 232.6 | $ | 26.8 | $ | 106.1 | $ | — | $ | 365.5 | |||||||||
Intersegment operating revenues | 14.8 | 0.1 | — | (14.9 | ) | — | |||||||||||||
Out-of-pocket reimbursements | 19.2 | 0.2 | 1.8 | — | 21.2 | ||||||||||||||
Total revenues | 266.6 | 27.1 | 107.9 | (14.9 | ) | 386.7 | |||||||||||||
Costs and expenses | 194.9 | 23.6 | 86.0 | (14.9 | ) | 289.6 | |||||||||||||
Depreciation and amortization | 18.0 | 1.0 | 3.8 | — | 22.8 | ||||||||||||||
Operating income | 53.7 | 2.5 | 18.1 | — | 74.3 | ||||||||||||||
Other income, net | 4.1 | 2.5 | 0.1 | — | 6.7 | ||||||||||||||
Equity in earnings of unconsolidated affiliates | 2.5 | 4.4 | 0.1 | — | 7.0 | ||||||||||||||
Earnings from continuing operations before interest, income taxes and non-controlling interest | $ | 60.3 | $ | 9.4 | $ | 18.3 | $ | — | $ | 88.0 |
Nine Months Ended September 30, 2017 | |||||||||||||||||||
Domestic Financial Services | International Financial Services | Healthcare Services | Elimination Adjustments | Consolidated Total | |||||||||||||||
Operating revenues | $ | 827.9 | $ | 392.9 | $ | 313.2 | $ | — | $ | 1,534.0 | |||||||||
Intersegment operating revenues | 43.4 | 0.4 | — | (43.8 | ) | — | |||||||||||||
Out-of-pocket reimbursements | 77.6 | 7.4 | 5.5 | (0.2 | ) | 90.3 | |||||||||||||
Total revenues | 948.9 | 400.7 | 318.7 | (44.0 | ) | 1,624.3 | |||||||||||||
Costs and expenses | 783.6 | 328.1 | 256.0 | (44.0 | ) | 1,323.7 | |||||||||||||
Depreciation and amortization | 63.3 | 21.3 | 8.1 | — | 92.7 | ||||||||||||||
Operating income | 102.0 | 51.3 | 54.6 | — | 207.9 | ||||||||||||||
Other income (loss), net | 229.2 | (12.2 | ) | 0.2 | — | 217.2 | |||||||||||||
Equity in earnings of unconsolidated affiliates | 10.1 | 16.8 | 0.4 | — | 27.3 | ||||||||||||||
Earnings from continuing operations before interest, income taxes and non-controlling interest | $ | 341.3 | $ | 55.9 | $ | 55.2 | $ | — | $ | 452.4 |
Nine Months Ended September 30, 2016 | |||||||||||||||||||
Domestic Financial Services | International Financial Services | Healthcare Services | Elimination Adjustments | Consolidated Total | |||||||||||||||
Operating revenues | $ | 704.3 | $ | 82.1 | $ | 314.3 | $ | — | $ | 1,100.7 | |||||||||
Intersegment operating revenues | 43.3 | 0.3 | — | (43.6 | ) | — | |||||||||||||
Out-of-pocket reimbursements | 50.5 | 0.8 | 6.3 | (0.4 | ) | 57.2 | |||||||||||||
Total revenues | 798.1 | 83.2 | 320.6 | (44.0 | ) | 1,157.9 | |||||||||||||
Costs and expenses | 629.9 | 72.9 | 258.1 | (44.0 | ) | 916.9 | |||||||||||||
Depreciation and amortization | 54.9 | 2.2 | 12.0 | — | 69.1 | ||||||||||||||
Operating income | 113.3 | 8.1 | 50.5 | — | 171.9 | ||||||||||||||
Other income, net | 11.9 | 8.0 | 0.1 | — | 20.0 | ||||||||||||||
Equity in earnings of unconsolidated affiliates | 11.4 | 12.3 | 0.2 | — | 23.9 | ||||||||||||||
Earnings from continuing operations before interest, income taxes and non-controlling interest | $ | 136.6 | $ | 28.4 | $ | 50.8 | $ | — | $ | 215.8 |
For the Year Ended December 31, 2016 | |||||||||||||||||||
Domestic Financial Services | International Financial Services | Healthcare Services | Elimination Adjustments | Consolidated Total | |||||||||||||||
Operating revenues | $ | 937.7 | $ | 110.5 | $ | 426.2 | $ | — | $ | 1,474.4 | |||||||||
Intersegment operating revenues | 58.1 | 0.4 | — | (58.5 | ) | — | |||||||||||||
Out-of-pocket reimbursements | 73.0 | 1.2 | 8.5 | (0.4 | ) | 82.3 | |||||||||||||
Total revenues | 1,068.8 | 112.1 | 434.7 | (58.9 | ) | 1,556.7 | |||||||||||||
Costs and expenses | 829.0 | 98.2 | 345.1 | (58.9 | ) | 1,213.4 | |||||||||||||
Depreciation and amortization | 77.3 | 3.1 | 15.6 | — | 96.0 | ||||||||||||||
Operating income | 162.5 | 10.8 | 74.0 | — | 247.3 | ||||||||||||||
Other income, net | 13.9 | 8.7 | 0.1 | — | 22.7 | ||||||||||||||
Gain on sale of business | — | 5.5 | — | — | 5.5 | ||||||||||||||
Equity in earnings of unconsolidated affiliates | 14.3 | 12.4 | 0.5 | — | 27.2 | ||||||||||||||
Earnings from continuing operations before interest, income taxes and non-controlling interest | $ | 190.7 | $ | 37.4 | $ | 74.6 | $ | — | $ | 302.7 |
For the Year Ended December 31, 2015 | |||||||||||||||||||
Domestic Financial Services | International Financial Services | Healthcare Services | Elimination Adjustments | Consolidated Total | |||||||||||||||
Operating revenues | $ | 936.8 | $ | 91.8 | $ | 376.4 | $ | — | $ | 1,405.0 | |||||||||
Intersegment operating revenues | 46.3 | 1.6 | — | (47.9 | ) | — | |||||||||||||
Out-of-pocket reimbursements | 60.7 | 1.7 | 8.2 | (1.6 | ) | 69.0 | |||||||||||||
Total revenues | 1,043.8 | 95.1 | 384.6 | (49.5 | ) | 1,474.0 | |||||||||||||
Costs and expenses | 792.3 | 86.1 | 321.3 | (49.5 | ) | 1,150.2 | |||||||||||||
Depreciation and amortization | 67.7 | 4.8 | 18.6 | — | 91.1 | ||||||||||||||
Operating income | 183.8 | 4.2 | 44.7 | — | 232.7 | ||||||||||||||
Other income (loss), net | 207.2 | (2.6 | ) | (0.1 | ) | — | 204.5 | ||||||||||||
Equity in earnings of unconsolidated affiliates | 23.8 | 21.3 | 0.3 | — | 45.4 | ||||||||||||||
Earnings from continuing operations before interest, income taxes and non-controlling interest | $ | 414.8 | $ | 22.9 | $ | 44.9 | $ | — | $ | 482.6 |
• | the effects of competition in the businesses in which we operate; |
• | changes in customer demand and our ability to provide products and services on terms that are favorable to us; |
• | changes in law, economic and financial conditions; |
• | the impacts of breaches or potential breaches of network, information technology or data security, natural disasters, terrorist attacks or acts of war or significant litigation and any resulting financial impact not covered by insurance; |
• | the effectiveness of our risk management framework; |
• | the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, including the impact of financial services regulation and litigation and SEC or DOL regulations impacting third-party distributors of mutual funds; |
• | our investments in funds and other companies may decline; |
• | our ability to successfully complete acquisitions or integrate acquired businesses; and |
• | the other factors that are described in Part II, Item 1A, “Risk Factors” within this Quarterly Report on Form 10-Q and within “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016. |
Three Months Ended | Change | |||||||||||||
September 30, | 2017 vs 2016 | |||||||||||||
2017 | 2016 | $ | % | |||||||||||
Operating revenues | $ | 524.8 | $ | 365.5 | $ | 159.3 | 43.6 | % | ||||||
Out-of-pocket reimbursements | 37.8 | 21.2 | 16.6 | 78.3 | % | |||||||||
Total revenues | 562.6 | 386.7 | 175.9 | 45.5 | % | |||||||||
Costs and expenses | 472.1 | 289.6 | 182.5 | 63.0 | % | |||||||||
Depreciation and amortization | 34.7 | 22.8 | 11.9 | 52.2 | % | |||||||||
Operating income | 55.8 | 74.3 | (18.5 | ) | (24.9 | )% | ||||||||
Interest expense | (6.9 | ) | (5.4 | ) | (1.5 | ) | (27.8 | )% | ||||||
Other income, net | 8.7 | 6.7 | 2.0 | 29.9 | % | |||||||||
Equity in earnings of unconsolidated affiliates | 4.2 | 7.0 | (2.8 | ) | (40.0 | )% | ||||||||
Income from continuing operations before income taxes and non-controlling interest | 61.8 | 82.6 | (20.8 | ) | (25.2 | )% | ||||||||
Income taxes | 13.0 | 31.6 | (18.6 | ) | (58.9 | )% | ||||||||
Income from continuing operations before non-controlling interest | 48.8 | 51.0 | (2.2 | ) | (4.3 | )% | ||||||||
Income (loss) from discontinued operations, net of tax | (0.3 | ) | 222.8 | (223.1 | ) | (100.1 | )% | |||||||
Net income | 48.5 | 273.8 | (225.3 | ) | (82.3 | )% | ||||||||
Net (income) loss attributable to non-controlling interest | — | (0.5 | ) | 0.5 | (100.0 | )% | ||||||||
Net income attributable to DST Systems, Inc. | $ | 48.5 | $ | 273.3 | $ | (224.8 | ) | (82.3 | )% |
Nine Months Ended | Change | |||||||||||||
September 30, | 2017 vs 2016 | |||||||||||||
2017 | 2016 | $ | % | |||||||||||
Operating revenues | $ | 1,534.0 | $ | 1,100.7 | $ | 433.3 | 39.4 | % | ||||||
Out-of-pocket reimbursements | 90.3 | 57.2 | 33.1 | 57.9 | % | |||||||||
Total revenues | 1,624.3 | 1,157.9 | 466.4 | 40.3 | % | |||||||||
Costs and expenses | 1,323.7 | 916.9 | 406.8 | 44.4 | % | |||||||||
Depreciation and amortization | 92.7 | 69.1 | 23.6 | 34.2 | % | |||||||||
Operating income | 207.9 | 171.9 | 36.0 | 20.9 | % | |||||||||
Interest expense | (19.7 | ) | (18.0 | ) | (1.7 | ) | (9.4 | )% | ||||||
Other income, net | 217.2 | 20.0 | 197.2 | 986.0 | % | |||||||||
Equity in earnings of unconsolidated affiliates | 27.3 | 23.9 | 3.4 | 14.2 | % | |||||||||
Income from continuing operations before income taxes and non-controlling interest | 432.7 | 197.8 | 234.9 | 118.8 | % | |||||||||
Income taxes | 66.3 | 73.8 | (7.5 | ) | (10.2 | )% | ||||||||
Income from continuing operations before non-controlling interest | 366.4 | 124.0 | 242.4 | 195.5 | % | |||||||||
Income from discontinued operations, net of tax | 4.5 | 260.0 | (255.5 | ) | (98.3 | )% | ||||||||
Net income | 370.9 | 384.0 | (13.1 | ) | (3.4 | )% | ||||||||
Net (income) loss attributable to non-controlling interest | (0.6 | ) | 0.4 | (1.0 | ) | (250.0 | )% | |||||||
Net income attributable to DST Systems, Inc. | $ | 370.3 | $ | 384.4 | $ | (14.1 | ) | (3.7 | )% |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net realized gains from available-for-sale securities | $ | 0.1 | $ | 0.1 | $ | 155.8 | $ | 2.2 | |||||||
Net gain on previously held equity interests | — | — | 43.8 | — | |||||||||||
Net gain on other investments | 6.7 | 4.7 | 13.3 | 19.0 | |||||||||||
Dividend income | 0.5 | 1.4 | 1.6 | 3.9 | |||||||||||
Miscellaneous items | 1.4 | 0.5 | 2.7 | (5.1 | ) | ||||||||||
Other income, net | $ | 8.7 | $ | 6.7 | $ | 217.2 | $ | 20.0 |
Three Months Ended | Change | ||||||||||||||
September 30, | 2017 vs 2016 | ||||||||||||||
2017 | 2016 | $ | % | ||||||||||||
Operating revenues | $ | 305.3 | $ | 247.4 | $ | 57.9 | 23.4 | % | |||||||
Out-of-pocket reimbursements | 28.8 | 19.2 | 9.6 | 50.0 | % | ||||||||||
Total revenues | 334.1 | 266.6 | 67.5 | 25.3 | % | ||||||||||
Costs and expenses | 275.9 | 194.9 | 81.0 | 41.6 | % | ||||||||||
Depreciation and amortization | 22.6 | 18.0 | 4.6 | 25.6 | % | ||||||||||
Operating income | $ | 35.6 | $ | 53.7 | $ | (18.1 | ) | (33.7 | )% | ||||||
Operating margin | 11.7 | % | 21.7 | % |
Nine Months Ended | Change | ||||||||||||||
September 30, | 2017 vs 2016 | ||||||||||||||
2017 | 2016 | $ | % | ||||||||||||
Operating revenues | $ | 871.3 | $ | 747.6 | $ | 123.7 | 16.5 | % | |||||||
Out-of-pocket reimbursements | 77.6 | 50.5 | 27.1 | 53.7 | % | ||||||||||
Total revenues | 948.9 | 798.1 | 150.8 | 18.9 | % | ||||||||||
Costs and expenses | 783.6 | 629.9 | 153.7 | 24.4 | % | ||||||||||
Depreciation and amortization | 63.3 | 54.9 | 8.4 | 15.3 | % | ||||||||||
Operating income | $ | 102.0 | $ | 113.3 | $ | (11.3 | ) | (10.0 | )% | ||||||
Operating margin | 11.7 | % | 15.2 | % |
September 30, | ||||||||
2017 | 2016 | |||||||
Domestic mutual fund shareowner accounts processed: | ||||||||
Registered accounts - non tax-advantaged | 24.8 | 26.4 | ||||||
IRA mutual fund accounts | 20.8 | 21.3 | ||||||
Other retirement accounts | 7.8 | 8.1 | ||||||
Section 529 and Educational IRAs | 7.7 | 7.6 | ||||||
Registered accounts - tax-advantaged | 36.3 | 37.0 | ||||||
Total registered accounts | 61.1 | 63.4 | ||||||
Subaccounts | 44.5 | 41.3 | ||||||
Total Domestic mutual fund shareowner accounts processed | 105.6 | 104.7 | ||||||
Defined contribution participant accounts | 6.8 | 6.5 | ||||||
ALPS (in billions of U.S. dollars): | ||||||||
Assets Under Management | $ | 17.9 | $ | 16.1 | ||||
Assets Under Administration | $ | 218.4 | $ | 176.1 | ||||
Automatic Work Distributor workstations (in thousands): | ||||||||
Domestic | 167.8 | 171.7 |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
Changes in registered accounts: | ||||||||||||
Beginning balance | 59.7 | 64.2 | 61.9 | 65.4 | ||||||||
New client conversions | 2.6 | — | 2.9 | — | ||||||||
Subaccounting conversions to DST platforms | (0.3 | ) | — | (0.4 | ) | (0.1 | ) | |||||
Subaccounting conversions to non-DST platforms | (0.3 | ) | — | (0.9 | ) | (0.4 | ) | |||||
Conversions to non-DST platforms | (0.2 | ) | (0.4 | ) | (0.2 | ) | (0.6 | ) | ||||
Organic decline | (0.4 | ) | (0.4 | ) | (2.2 | ) | (0.9 | ) | ||||
Ending balance | 61.1 | 63.4 | 61.1 | 63.4 | ||||||||
Changes in subaccounts: | ||||||||||||
Beginning balance | 44.0 | 30.4 | 42.1 | 31.3 | ||||||||
New client conversions | — | 10.5 | — | 10.7 | ||||||||
Conversions from non-DST registered platforms | 0.1 | — | 1.1 | — | ||||||||
Conversions from DST’s registered accounts | 0.3 | — | 0.4 | 0.1 | ||||||||
Conversions to non-DST platforms | — | — | (0.4 | ) | — | |||||||
Organic growth (decline) | 0.1 | 0.4 | 1.3 | (0.8 | ) | |||||||
Ending balance | 44.5 | 41.3 | 44.5 | 41.3 | ||||||||
Changes in defined contribution participant accounts: | ||||||||||||
Beginning balance | 6.6 | 6.4 | 6.8 | 7.0 | ||||||||
New client conversions | — | — | 0.3 | — | ||||||||
Organic growth (decline) | 0.2 | 0.1 | (0.3 | ) | (0.5 | ) | ||||||
Ending balance | 6.8 | 6.5 | 6.8 | 6.5 |
Three Months Ended | Change | ||||||||||||||
September 30, | 2017 vs 2016 | ||||||||||||||
2017 | 2016 | $ | % | ||||||||||||
Operating revenues | $ | 129.4 | $ | 26.9 | $ | 102.5 | 381.0 | % | |||||||
Out-of-pocket reimbursements | 7.1 | 0.2 | 6.9 | 3,450.0 | % | ||||||||||
Total revenues | 136.5 | 27.1 | 109.4 | 403.7 | % | ||||||||||
Costs and expenses | 125.0 | 23.6 | 101.4 | 429.7 | % | ||||||||||
Depreciation and amortization | 9.7 | 1.0 | 8.7 | 870.0 | % | ||||||||||
Operating income | $ | 1.8 | $ | 2.5 | $ | (0.7 | ) | (28.0 | )% | ||||||
Operating margin | 1.4 | % | 9.3 | % |
Nine Months Ended | Change | ||||||||||||||
September 30, | 2017 vs 2016 | ||||||||||||||
2017 | 2016 | $ | % | ||||||||||||
Operating revenues | $ | 393.3 | $ | 82.4 | $ | 310.9 | 377.3 | % | |||||||
Out-of-pocket reimbursements | 7.4 | 0.8 | 6.6 | 825.0 | % | ||||||||||
Total revenues | 400.7 | 83.2 | 317.5 | 381.6 | % | ||||||||||
Costs and expenses | 328.1 | 72.9 | 255.2 | 350.1 | % | ||||||||||
Depreciation and amortization | 21.3 | 2.2 | 19.1 | 868.2 | % | ||||||||||
Operating income | $ | 51.3 | $ | 8.1 | $ | 43.2 | 533.3 | % | |||||||
Operating margin | 13.0 | % | 9.8 | % |
September 30, | ||||||
2017 | 2016 | |||||
International mutual fund shareowner accounts processed: | ||||||
IFDS U.K. | 8.6 | 9.0 | ||||
IFDS L.P. (Unconsolidated affiliate principally based in Canada) | 14.0 | 13.4 | ||||
Total international mutual fund shareowner accounts processed | 22.6 | 22.4 | ||||
Automatic Work Distributor workstations (in thousands): | ||||||
International | 39.1 | 40.5 |
Three Months Ended | Change | ||||||||||||||
September 30, | 2017 vs 2016 | ||||||||||||||
2017 | 2016 | $ | % | ||||||||||||
Operating revenues | $ | 104.2 | $ | 106.1 | $ | (1.9 | ) | (1.8 | )% | ||||||
Out-of-pocket reimbursements | 1.9 | 1.8 | 0.1 | 5.6 | % | ||||||||||
Total revenues | 106.1 | 107.9 | (1.8 | ) | (1.7 | )% | |||||||||
Costs and expenses | 85.3 | 86.0 | (0.7 | ) | (0.8 | )% | |||||||||
Depreciation and amortization | 2.4 | 3.8 | (1.4 | ) | (36.8 | )% | |||||||||
Operating income | $ | 18.4 | $ | 18.1 | $ | 0.3 | 1.7 | % | |||||||
Operating margin | 17.7 | % | 17.1 | % |
Nine Months Ended | Change | ||||||||||||||
September 30, | 2017 vs 2016 | ||||||||||||||
2017 | 2016 | $ | % | ||||||||||||
Operating revenues | $ | 313.2 | $ | 314.3 | $ | (1.1 | ) | (0.3 | )% | ||||||
Out-of-pocket reimbursements | 5.5 | 6.3 | (0.8 | ) | (12.7 | )% | |||||||||
Total revenues | 318.7 | 320.6 | (1.9 | ) | (0.6 | )% | |||||||||
Costs and expenses | 256.0 | 258.1 | (2.1 | ) | (0.8 | )% | |||||||||
Depreciation and amortization | 8.1 | 12.0 | (3.9 | ) | (32.5 | )% | |||||||||
Operating income | $ | 54.6 | $ | 50.5 | $ | 4.1 | 8.1 | % | |||||||
Operating margin | 17.4 | % | 16.1 | % |
September 30, | ||||||
2017 | 2016 | |||||
DST Health Solutions covered lives | 21.6 | 23.9 |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
DST Pharmacy Solutions pharmacy paid claims | 124.2 | 125.7 | 370.8 | 379.3 |
Nine Months Ended | |||||||
September 30, | |||||||
2017 | 2016 | ||||||
Domestic Financial Services | $ | 53.5 | $ | 36.8 | |||
International Financial Services | 2.9 | 2.4 | |||||
Healthcare Services | 5.3 | 3.5 | |||||
$ | 61.7 | $ | 42.7 |
• | super-majority stockholder approval required for certain actions; |
• | specific procedures for stockholders to nominate new directors; |
• | the Board’s authority to issue and set the terms of preferred stock; |
• | various rights of joint venture co-owners and contractual counterparties, including rights of lenders and certain customers and executives in the event of a change in control; |
• | public reporting of ownership and of changes in ownership by stockholders with at least a 5% interest in us; and |
• | legal restrictions on business combinations with certain stockholders. |
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total $ Amount of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs | |||||||||||||
July 1 — July 31 | 1,226,732 | (1) | $ | 61.27 | $ | 74,999,956 | $ | 225,000,044 | (2) | ||||||||
August 1 — August 31 | — | (1) | — | — | 225,000,044 | (2) | |||||||||||
September 1 — September 30 | — | (1) | — | — | 225,000,044 | (2) | |||||||||||
Total | 1,226,732 | $ | 61.27 | $ | 74,999,956 | $ | 225,000,044 | (2) |
(1) | During July 2017, we purchased, in accordance with the applicable equity compensation plan, 3,049 shares of our common stock for participant income tax withholding in conjunction with stock option exercises or from the vesting of restricted shares, as requested by the participants, or from shares surrendered in satisfaction of option exercise price. These purchases were not made under the publicly announced repurchase plans or programs, but were allowed by the rules of the Compensation Committee of the DST Board of Directors. |
(2) | On June 13, 2016, our Board of Directors authorized a $300.0 million share repurchase plan, which we announced on June 14, 2016. This plan allowed, but did not require, the repurchase of common stock in open market transactions and private transactions. The plan did not have an expiration date. As a result of additional share repurchases in the second quarter 2017, this plan was exhausted. On May 9, 2017, the Board of Directors authorized a new $300.0 million share repurchase plan, which we announced the same day. This plan allows, but does not require, the repurchase of common stock in open market transactions and private transactions. This plan does not have an expiration date. We may enter into one or more plans with our brokers or banks for pre-authorized purchases within defined limits pursuant to Rule 10b5-1 to effect all or a portion of such share repurchases. |
Incorporated by Reference | Filed/Furnished Herewith | |||||||||||
Exhibit no. | Exhibit Description | Form | SEC File No. | Exhibit | Filing Date | |||||||
(2) Plan of acquisition, reorganization, arrangement, liquidation or succession | ||||||||||||
2.1 | * | |||||||||||
2.2 | * | |||||||||||
(3) Articles of Incorporation and Bylaws | ||||||||||||
3.1 | 8-K | 001-14036 | 3.3 | 5/14/2015 | ||||||||
3.2 | 8-K | 001-14036 | 3.1 | 2/29/2016 | ||||||||
(10) Material Contracts | ||||||||||||
10.1 | * | |||||||||||
10.2 | * | |||||||||||
10.3 | * | |||||||||||
10.4 | * | |||||||||||
(31) and (32) Officer Certifications | ||||||||||||
31.1 | * | |||||||||||
31.2 | * | |||||||||||
32.0 | * | |||||||||||
(101) Formatted in XBRL (Extensible Business Reporting Language) | ||||||||||||
The following financial information from DST’s Quarterly Report on Form 10-Q for the period ended September 30, 2017, filed with the SEC on November 2, 2017, formatted in Extensible Business Reporting Language (“XBRL”): (i) the Condensed Consolidated Balance Sheet at September 30, 2017 and December 31, 2016, (ii) the Condensed Consolidated Statement of Income for the three and nine months ended September 30, 2017 and 2016, (iii) the Condensed Consolidated Statement of Comprehensive Income for the three and nine months ended September 30, 2017 and 2016, (iv) the Condensed Consolidated Statement of Changes in Stockholders’ Equity for the nine months ended September 30, 2017 and 2016, (v) the Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2017 and 2016, and (vi) Notes to Condensed Consolidated Financial Statements. |
DST Systems, Inc. | |
/s/ Gregg Wm. Givens | |
Gregg Wm. Givens | |
Senior Vice President, Chief Financial Officer and Treasurer | |
(Principal Financial Officer) |
(State Street GP) INTERNATIONAL FINANCIAL DATA SERVICES GP, INC. By: ___/s/ Robert Kaplan_____________ Name: Robert Kaplan Title: Executive Vice President | (DST GP) IFDS GP, INC. By: ___/s/ Kenneth V. Hager_____________ Name: Kenneth V. Hager Title: Director & Treasurer |
STATE STREET CORPORATION By: ___/s/ Michael Rogers___________ Name: Michael Rogers Title: Executive Vice President | DST SYSTEMS, INC. By: ___/s/ Stephen C. Hooley_____________ Name: Stephen C. Hooley Title: Chief Executive Officer & President |
(State Street GP) INTERNATIONAL FINANCIAL DATA SERVICES GP, INC. By: __/s/ Robert Kaplan_______ Name: Robert Kaplan Title: Executive Vice President | (DST GP) IFDS GP, INC. By: __/s/ Gregg Wm. Givens_______ Name: Gregg Wm. Givens Title: President |
STATE STREET CORPORATION By: ___/s/ Susan Dargan_______ Name: Susan Dargan Title: Executive Vice President | DST SYSTEMS, INC. By: ___/s/ Gregg Wm. Givens_______ Name: Gregg Wm. Givens Title: Senior Vice President, CFO And Treasurer |
Name: | ALPS Alternative Investment Services, LLC |
Address: | 333 West 11th Street, Kansas City, MO 64105 |
Jurisdiction of Organization: | Delaware |
UCC Filing Office: | Delaware Secretary of State |
SELLER: | FOUNTAIN CITY FINANCE, LLC By: /s/ Gregg. Wm. Givens Name: Gregg Wm. Givens Title: President and Treasurer |
PARENT: | DST SYSTEMS, INC. By: /s/ Gregg. Wm. Givens Name: Gregg Wm. Givens Title: Senior Vice President, Chief Financial Officer and Treasurer |
SERVICER: | DST SYSTEMS, INC. By: /s/ Gregg. Wm. Givens Name: Gregg Wm. Givens Title: Senior Vice President, Chief Financial Officer and Treasurer |
ORIGNATORS: | DST SYSTEMS, INC. DST OUTPUT, LLC DST OUTPUT CENTRAL, LLC DST OUTPUT EAST, LLC DST OUTPUT WEST, LLC DST TECHNOLOGIES, INC. DST MAILING SERVICES, INC. DST OUTPUT ELECTRONIC SOLUTIONS, INC. DST WORLDWIDE SERVICES, LLC DST RETIREMENT SOLUTIONS, LLC ARGUS HEALTH SYSTEMS, INC. DST HEALTH SOLUTIONS, LLC DST BROKERAGE SOLUTIONS, LLC NEWKIRK PRODUCTS, INC. LTM PUBLISHING, INC. MCKAY HOCHMAN CO., INC. THIRD PARTY EDUCATIONAL SYSTEMS, INC. LATERAL GROUP NA, LLC DST HEALTHCARE HOLDINGS, INC. ALPS ALTERNATIVE INVESTMENT SERVICES, LLC By: /s/ Gregg. Wm. Givens Name: Gregg Wm. Givens Title: Treasurer |
AGENT: | WELLS FARGO BANK, NATIONAL ASSOCIATION, as Agent By: /s/ William P. Rutkowski Name: William P. Rutkowski Title: Vice President |
BANK: | WELLS FARGO BANK, NATIONAL ASSOCIATION, By: /s/ William P. Rutkowski Name: William P. Rutkowski Title: Vice President |
SELLER: | FOUNTAIN CITY FINANCE, LLC By: /s/ Gregg. Wm. Givens Name: Gregg Wm. Givens Title: President and Treasurer |
PARENT: | DST SYSTEMS, INC. By: /s/ Gregg. Wm. Givens Name: Gregg Wm. Givens Title: Senior Vice President, Chief Financial Officer and Treasurer |
SERVICER: | DST SYSTEMS, INC. By: /s/ Gregg. Wm. Givens Name: Gregg Wm. Givens Title: Senior Vice President, Chief Financial Officer and Treasurer |
ORIGNATORS: | DST SYSTEMS, INC. DST OUTPUT, LLC DST OUTPUT CENTRAL, LLC DST OUTPUT EAST, LLC DST OUTPUT WEST, LLC DST TECHNOLOGIES, INC. DST MAILING SERVICES, INC. DST OUTPUT ELECTRONIC SOLUTIONS, INC. DST WORLDWIDE SERVICES, LLC DST RETIREMENT SOLUTIONS, LLC ARGUS HEALTH SYSTEMS, INC. DST HEALTH SOLUTIONS, LLC DST BROKERAGE SOLUTIONS, LLC NEWKIRK PRODUCTS, INC. LTM PUBLISHING, INC. MCKAY HOCHMAN CO., INC. THIRD PARTY EDUCATIONAL SYSTEMS, INC. LATERAL GROUP NA, LLC DST HEALTHCARE HOLDINGS, INC. ALPS ALTERNATIVE INVESTMENT SERVICES, LLC By: /s/ Gregg. Wm. Givens Name: Gregg Wm. Givens Title: Treasurer |
AGENT: | WELLS FARGO BANK, NATIONAL ASSOCIATION, as Agent By: /s/ William P. Rutkowski Name: William P. Rutkowski Title: Vice President |
BANK: | WELLS FARGO BANK, NATIONAL ASSOCIATION, By: /s/ William P. Rutkowski Name: William P. Rutkowski Title: Vice President |
Address: | 333 West 11th Street, 5th Floor |
Address: | 333 West 11th Street, 5th Floor |
Address: | 333 West 11th Street, 5th Floor |
Address: | 333 West 11th Street, 5th Floor |
Name: | DST Technologies, Inc. |
Address: | 333 West 11th Street, 5th Floor |
Name: | DST Mailing Services, Inc. |
Address: | 333 West 11th Street, 5th Floor |
Name: | DST Output Electronic Solutions, Inc. |
Address: | 333 West 11th Street, 5th Floor |
Name: | DST Worldwide Services, LLC |
Address: | 333 West 11th Street, 5th Floor |
Address: | 333 West 11th Street, 5th Floor Kansas |
Address: | 1300 Washington Street |
PURCHASER: | FOUNTAIN CITY FINANCE, LLC By: /s/ Gregg Wm. Givens Name: Gregg Wm. Givens Title: President and Treasurer |
SELLER: | DST SYSTEMS, INC. By: /s/ Gregg Wm. Givens Name: Gregg Wm. Givens Title: Senior Vice President, Chief Financial Officer and Treasurer |
SERVICER: | DST SYSTEMS, INC. By: /s/ Gregg Wm. Givens Name: Gregg Wm. Givens Title: Senior Vice President, Chief Financial Officer and Treasurer |
1. | I have reviewed this quarterly report on Form 10-Q of DST Systems, Inc. (the “registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: November 2, 2017 | ||
By: | /s/ Stephen C. Hooley | |
Stephen C. Hooley | ||
Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of DST Systems, Inc. (the “registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: November 2, 2017 | ||
By: | /s/ Gregg Wm. Givens | |
Gregg Wm. Givens | ||
Chief Financial Officer |
/s/ Stephen C. Hooley | |
Stephen C. Hooley | |
Chief Executive Officer | |
November 2, 2017 | |
/s/ Gregg Wm. Givens | |
Gregg Wm. Givens | |
Chief Financial Officer | |
November 2, 2017 |
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Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Oct. 31, 2017 |
|
Document and Entity Information | ||
Entity Registrant Name | DST SYSTEMS INC | |
Entity Central Index Key | 0000714603 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2017 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Common Stock, Shares Outstanding | 60,220,181 | |
Entity Filer Category | Large Accelerated Filer |
Condensed Consolidated Balance Sheet (Parenthetical) - $ / shares shares in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10.0 | 10.0 |
Preferred stock, shares issued | 0.0 | 0.0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 400.0 | 400.0 |
Common stock, shares issued | 64.4 | 82.0 |
Treasury stock, shares | 3.9 | 18.0 |
Condensed Consolidated Statement of Comprehensive Income - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|||
Statement of Comprehensive Income [Abstract] | ||||||
Net income attributable to DST Systems, Inc. | $ 48.5 | $ 273.3 | $ 370.3 | $ 384.4 | ||
Other comprehensive income (loss), net of tax and reclassifications to earnings, derived from: | ||||||
Available-for-sale securities | 0.3 | 21.7 | (93.6) | (0.7) | ||
Cash flow hedges | 0.0 | 0.0 | 0.2 | 0.2 | ||
Foreign currency translation adjustments | [1] | 16.0 | (1.1) | 69.1 | (24.3) | |
Other comprehensive income (loss) | 16.3 | 20.6 | (24.3) | (24.8) | ||
Comprehensive income | $ 64.8 | $ 293.9 | $ 346.0 | $ 359.6 | ||
|
Summary of Accounting Policies |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Accounting Policies | Summary of Accounting Policies The Condensed Consolidated Financial Statements of DST Systems, Inc. and consolidated subsidiaries (“we,” “our,” “us,” the “Company” or “DST”) included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the United States Securities and Exchange Commission. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures are adequate to enable a reasonable understanding of the information presented. These Condensed Consolidated Financial Statements should be read in conjunction with our audited financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. In March 2017, we acquired State Street Corporation’s (“State Street”) ownership in both Boston Financial Data Services, Inc. (“BFDS”) and International Financial Data Services Limited (“IFDS U.K.”), which resulted in control of the entities. As such, they were consolidated in our financial results from the date control was obtained. In addition, beginning in 2017, DST established a new reportable segment structure that separates the previously reported Financial Services segment into two new segments, Domestic Financial Services and International Financial Services, based upon the geographical location of the revenue-generating business. The activity within the previously reported Investments and Other segment has now been included in either the Domestic or International Financial Services segments based on the business supported. The Healthcare Services segment remains unchanged. The new segment presentation is reflective of how management is now operating the business and making resource allocations following the acquisitions of the remaining interests in IFDS U.K. and BFDS in the first quarter 2017, as well as the recent reductions in non-core investment assets resulting from monetizations and the use of State Street stock in the BFDS exchange transaction. The Company’s operating business units are now reported as three operating segments (Domestic Financial Services, International Financial Services and Healthcare Services). Certain amounts in the 2016 financial statements have been reclassified to conform to the 2017 presentation and prior periods have been revised to reflect the new reportable operating segments. In May 2017, our Board of Directors declared a two-for-one stock split of DST’s outstanding common stock effected in the form of a stock dividend, which was paid on June 8, 2017 to shareholders of record at the close of business on May 26, 2017. In connection with the stock split, 16.5 million treasury shares were used to settle a portion of the distribution. All share and per share data, excluding treasury shares, have been retroactively adjusted for all periods presented to reflect the stock split as if the stock split had occurred at the beginning of the earliest period presented. In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments (consisting only of normal recurring adjustments) necessary to fairly state the consolidated financial position and the results of operations, comprehensive income, changes in stockholders’ equity and cash flows for the periods presented. The results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of the results to be expected for the full year 2017. Recently Adopted Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued guidance which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification of related amounts within the statement of cash flows. The guidance was adopted by us on January 1, 2017 and resulted in approximately $0.6 million and $2.6 million of excess tax benefits being recognized in Income taxes in the Condensed Consolidated Statement of Income for the three and nine months ended September 30, 2017, respectively. We also elected to account for forfeitures as they occur rather than using an estimated forfeiture rate. The impact to our consolidated financial statements was not material. Accounting Pronouncements Pending Adoption In November 2016, the FASB issued guidance which requires the statement of cash flows to explain changes during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The guidance is effective January 1, 2018 and requires retrospective application. Early adoption is permitted. We are currently evaluating the standard and the impact it will have on our consolidated financial statements, but have determined that our Funds held on behalf of clients and Other assets that meet the definition of cash and cash equivalents but are restricted for use will be included when reconciling the beginning and end of period balances on the Condensed Consolidated Statement of Cash Flows. In October 2016, the FASB issued guidance which requires the recognition of income tax consequences for intra-entity transfers of assets other than inventory. The guidance is effective January 1, 2018 and requires modified retrospective application. Early adoption is permitted. We are currently evaluating the standard and the impact it will have on our consolidated financial statements and related disclosures, however we do not expect it to have a material impact on our consolidated financial statements. In February 2016, the FASB issued guidance which requires lessees to reflect most leases on their balance sheet as assets and obligations. The guidance is effective January 1, 2019 with early adoption permitted. The standard is to be applied under the modified retrospective method, with elective reliefs, which requires application of the new guidance for all periods presented. We are currently evaluating the standard and the impact it will have on our consolidated financial statements and related disclosures. In January 2016, the FASB issued guidance which updates the reporting model for certain financial instruments, including the requirement for equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. The guidance is effective January 1, 2018 and requires a cumulative-effective adjustment as of the beginning of the fiscal year of adoption. Early adoption is permitted as of the beginning of the fiscal year of adoption. We are currently evaluating the standard and the impact it will have on our consolidated financial statements and related disclosures, but generally believe our private equity funds accounted for under the cost method will be measured at fair value, resulting in increased volatility in our Condensed Consolidated Statement of Income. In May 2014, the FASB issued guidance which requires companies to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration it expects to be entitled in exchange for those goods or services. The new standard and subsequently issued amendments will become effective January 1, 2018. We plan to adopt the guidance using the modified retrospective transition approach. We are currently evaluating the impacts of the application of the new standard to our existing portfolio of customer contracts and will continue to review new contracts entered into prior to the adoption of the new standard. While we expect the adoption of the standard will change the timing of when revenue is recognized for certain revenue streams, we currently anticipate that the majority of our contracts with customers that include account- and/or transaction-based processing fees will be accounted for under the series deliverable guidance in the new standard which will likely result in minimal changes as compared to current revenue recognition. These revenues will continue to be recognized over time as a single stand-ready performance obligation. As such, we do not currently anticipate significant changes in current systems or processes. Although we currently do not believe there will be a material impact of adopting the new revenue standard on our consolidated financial statements, our assessment of the expected impact of adoption will continue throughout the remainder of 2017. |
Significant Business Transactions |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Business Acquisitions | Significant Business Transactions Acquisition of the remaining interests in BFDS On March 27, 2017, we entered into a series of definitive agreements to acquire State Street’s equity interest in our BFDS joint venture, which provides shareholder recordkeeping, intermediary and investor services, and regulatory compliance solutions to financial services clients in the United States. We also acquired an investment in a privately-held company and the equity interest in IFDS Realty, LLC, which holds the real estate assets used in BFDS’ operations, through a distribution from International Financial Data Services L.P. (“IFDS L.P.”), our 50/50 joint venture with State Street. The BFDS transaction, which closed on March 30, 2017, was structured as a non–taxable exchange under Section 355 of the Internal Revenue Code. At closing, DST delivered to State Street approximately 2.0 million shares of State Street common stock with a closing date fair value of $163.4 million (with a cost basis for tax purposes of approximately $1.1 million) in exchange for State Street’s equity interest in BFDS. The number of shares delivered at closing was calculated using the negotiated fair value of $157.6 million and the closing price of State Street’s stock at signing. BFDS is included within the Domestic Financial Services segment. The acquisition of State Street’s 50% equity interest in BFDS was accounted for as a step-acquisition. Accordingly, we remeasured our previously held non-controlling equity interest in BFDS to the estimated fair value of $151.1 million, resulting in a gain of $56.0 million recorded at the acquisition date, within Other income, net in the Condensed Consolidated Statement of Income. The factors described above, combined with the synergies expected from combining our operations with the acquired entity and the resulting enhanced clarity in the service offerings available to our clients, are the basis for the acquisition price paid resulting in $68.7 million of goodwill recorded, none of which is expected to be deductible for tax purposes. The transaction was accounted for using the acquisition method of accounting, and as such, assets acquired, liabilities assumed, and consideration transferred were recorded at their estimated fair values on the acquisition date. Subsequent to the acquisition date, our initial purchase price allocation and estimate of fair value for certain intangible assets and related income tax effects have been adjusted based on facts and circumstances existing at the acquisition date. Future adjustments to the purchase price allocation could be significant as valuations for certain tangible assets, intangible assets and contingent liabilities are finalized and the associated income tax impacts are determined. The following table summarizes the aggregate acquisition-date fair value of the consideration transferred for the acquisition of BFDS and the amounts recognized as of the acquisition date for the assets acquired and liabilities assumed (in millions):
_____________________________________________________ (1) Equals the estimated fair value of DST’s previously-held equity interest in BFDS valued at $151.1 million, which represents an approximate 7.5% discount to the acquisition price for State Street’s equity interests in BFDS prior to the acquisition date. The difference between the fair value of State Street common stock transferred of $163.4 million and the $151.1 million represents an estimate of a control premium, which has not been included in the valuation of DST’s previous non-controlling interest. (2) As a result of the acquisition of the remaining interests in BFDS, we acquired certain investments associated with active deferred compensation plans for senior management and certain highly compensated employees. Approximately $3.7 million of the underlying investments were in DST common stock. As a result, the common stock was considered effectively repurchased at the acquisition date and reclassified to Treasury stock in the Condensed Consolidated Balance Sheet. (3) Includes $2.0 million of acquired software with a weighted-average useful life of 5 years. The following table summarizes the intangible assets acquired and estimated weighted-average useful lives as of the acquisition date (in millions):
The operating results of BFDS were combined with our operating results subsequent to the acquisition date. Approximately $67.5 million and $132.9 million of total revenues, net of intercompany eliminations, and $12.3 million and $14.2 million of pretax income of the acquired business is included in the Condensed Consolidated Statement of Income for the three and nine months ended September 30, 2017, respectively. Acquisition of the remaining interests in IFDS U.K. On March 27, 2017, we acquired State Street’s ownership of our IFDS U.K. joint venture, an investor and policy holder administrative services and technology provider to the collective funds, insurance, and retirement industries, for $141.0 million. Additionally, we acquired from our IFDS L.P. joint venture both the equity interest in IFDS Realty U.K. LLC (“IFDS Realty U.K.”), which holds certain real estate utilized by the U.K. business, and the equity interest in IFDS Percana Group Ltd. (“IFDS Percana”) for total cash consideration of $68.0 million. As a result of DST’s 50% ownership in IFDS L.P., approximately half of the cash consideration DST paid to IFDS L.P. was distributed to DST in the form of a distribution, resulting in net cash paid for the acquisition, after cash distributions of approximately $175.0 million. The acquisition was funded through cash on hand and our existing debt facilities. In addition, concurrent with the acquisition of the remaining interests in IFDS U.K., we also purchased State Street’s notes receivable from IFDS U.K. for cash consideration of $25.9 million, which approximated the fair value of the note at the acquisition date. We will continue to service offshore and cross-border markets in Canada, Ireland and Luxembourg through IFDS L.P., our 50/50 joint venture with State Street. IFDS U.K., IFDS Realty U.K. and IFDS Percana are included within the International Financial Services segment. The acquisition of State Street’s 50% equity interest in IFDS U.K. was accounted for as a step-acquisition. Accordingly, we remeasured our previously held non-controlling equity interest in IFDS U.K. to the estimated fair value of $136.8 million, resulting in a loss of $12.2 million at the acquisition date, which is included in Other income, net in the Condensed Consolidated Statement of Income. The factors described above, combined with the benefits expected from the opportunities for enhanced efficiencies in our delivery model, are the basis for the acquisition price paid resulting in $195.9 million of goodwill recorded, of which $18.9 million is expected to be deductible for tax purposes. The transaction was accounted for using the acquisition method of accounting, and as such, assets acquired, liabilities assumed, and consideration transferred were recorded at their estimated fair values on the acquisition date. Subsequent to the acquisition date, our initial purchase price allocation and estimate of fair value for certain intangible assets and related income tax effects were adjusted based on facts and circumstances existing at the acquisition date. Future adjustments to the purchase price allocation could be significant as valuations for certain tangible assets, intangible assets and contingent liabilities are finalized and the associated income tax impacts are determined. The following table summarizes the aggregate acquisition-date fair value of the consideration transferred for the acquisition of the remaining interests in IFDS U.K. and the amounts recognized as of the acquisition date for the assets acquired and liabilities assumed (in millions):
_____________________________________________________ (1) Cash paid is comprised of cash payments to acquire State Street’s equity interest in IFDS U.K. and a note receivable from IFDS U.K., as well as IFDS L.P.’s equity interests in IFDS Percana and IFDS Realty U.K. (2) Equals the estimated fair value of DST’s previously-held equity interest in IFDS U.K. valued at $136.8 million, which represents an approximate 3.0% discount to the acquisition price for State Street’s equity interests in IFDS U.K. prior to the acquisition date. The difference between the $141.0 million of cash paid to acquire State Street’s equity interests in IFDS U.K. and the $136.8 million represents an estimate of a control premium, which has not been included in the valuation of DST’s previous non-controlling interest. (3) Includes $21.9 million of acquired software with a weighted-average useful life of 6 years. The following table summarizes the intangible assets acquired and estimated weighted-average useful lives as of the acquisition date (in millions):
The operating results of IFDS U.K. were combined with our operating results subsequent to the acquisition date. Approximately $112.7 million and $313.8 million of total revenues, net of intercompany eliminations, and $4.9 million and $65.6 million of pretax income of the acquired business is included in the Condensed Consolidated Statement of Income for the three and nine months ended September 30, 2017, respectively. The following table summarizes the unaudited pro forma results of operations for the three and nine months ended September 30, 2017 and 2016 as if the BFDS and IFDS U.K. acquisitions had occurred on January 1, 2016 (in millions, except per share amounts):
The pro forma financial information adjusts the actual combined results for items that are recurring in nature and directly attributable to the acquisitions of the remaining interests in BFDS and IFDS U.K., including intangible asset amortization and fair value adjustments for property, plant and equipment, deferred revenue and other transaction related items. The nine months ended September 30, 2017 pro forma information was reduced by the net gains resulting from the transaction of $188.6 million. The unaudited pro forma amounts have been prepared based on estimates and assumptions, which we believe are reasonable, and are not indicative of what actual consolidated results of operations might have been if the acquisitions had been effective at the beginning of 2016, nor is it reflective of our expected actual results of operations for any future period. We incurred approximately $5.1 million of pretax costs from 2015 through the third quarter 2017 in connection with our acquisitions of the remaining interests in BFDS and IFDS U.K., which are included in Costs and expenses in our Condensed Consolidated Statement of Income. Significant contractual matters In April 2017, we signed an amendment to an existing servicing agreement, which extends in excess of ten years, with a wealth management platform client. As part of this amendment, we made an up-front payment of £30.0 million to the client during the second quarter 2017. We also agreed to pay them an additional £30.0 million during the fourth quarter of 2017. These payments are expected to be recovered over the term of the revised contractual arrangement. Additionally, on June 30, 2017, a formal termination agreement was reached with a wealth management platform client for whom we were completing multi-year development and implementation efforts. As a result of this agreement, during the nine months ended September 30, 2017, DST recognized previously deferred revenue and termination payments received totaling $93.2 million as incremental operating revenue. DST also incurred bad debt expense of $34.5 million for previously invoiced services for which payment will now not be collected and $5.2 million of other termination-related charges. |
Discontinued Operations |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations | Discontinued Operations On July 1, 2016, pursuant to the Purchase Agreement dated June 14, 2016, we completed the sale of our North American Customer Communications business for cash consideration of $410.7 million after giving effect to a $0.7 million adjustment agreed upon in December 2016 to settle working capital and other matters under the terms of the agreement. We recorded a pretax gain of $341.5 million on the sale during 2016. Additionally, on May 4, 2017, we completed the sale of our United Kingdom Customer Communications business for cash consideration of approximately $43.6 million, after giving effect to a $0.3 million adjustment agreed upon in October 2017 to settle working capital and other matters under the terms of the agreement. We recorded a pretax gain of $2.6 million on the sale. We have classified the results of the two businesses sold as well as the gain realized upon sale as discontinued operations in our Condensed Consolidated Statement of Income and Statement of Cash Flows for all periods presented. Additionally, the related assets and liabilities associated with our United Kingdom Customer Communications discontinued operations were classified as held for sale in our Condensed Consolidated Balance Sheet at December 31, 2016. Pursuant to the terms of the North American transaction, we will continue to provide certain information technology and operations processing activities to the North American Customer Communications business for an estimated period of up to 18 months from the transaction date. Additionally, we will continue to incur costs for certain print-related services provided by the disposed business for an estimated period of 3 to 5 years following the transaction. The information technology and operations processing activities we performed after the sale of the business resulted in approximately $10.7 million and $23.2 million of continuing cash inflows from the business sold and the costs incurred for certain print-related services provided by the business sold resulted in continuing cash outflows of approximately $15.1 million and $38.8 million for the three and nine months ended September 30, 2017. The revenues previously eliminated in consolidation that have continued post-transaction were approximately $6.5 million and $21.0 million for the three and nine months ended September 30, 2017, respectively, as compared to $5.7 million and $13.8 million for the three and nine months ended September 30, 2016, respectively. The expenses previously eliminated in consolidation that have continued post-transaction were approximately $10.6 million and $39.3 million for the three and nine months ended September 30, 2017, respectively, as compared to $12.9 million and $21.4 million for the three and nine months ended September 30, 2016, respectively. The revenues and expenses associated with these continued activities have been classified within continuing operations for all periods presented. The offsetting costs and revenues previously recorded within Customer Communications and eliminated in consolidation have been reclassified to discontinued operations for all periods presented. As of September 30, 2017, all assets and liabilities previously classified as held for sale in our Condensed Consolidated Balance Sheet had been sold. The following table summarizes the assets and liabilities classified as held for sale in our Condensed Consolidated Balance Sheet (in millions):
The following table summarizes the comparative financial results of discontinued operations which are presented as Income from discontinued operations, net of tax on our Condensed Consolidated Statement of Income (in millions):
In April 2016, we completed the sale of our United Kingdom Customer Communications’ Bristol production facilities for pretax proceeds totaling approximately $16.0 million. Concurrent with this sale, we leased back approximately two-thirds of the facilities under a 12-year lease. The rent payments and associated rent expense of the Bristol production facilities were approximately $0.7 million per year over the 12-year lease term. This lease obligation was included in the sale of the United Kingdom Customer Communications business on May 4, 2017. |
Investments |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Investments Investments are as follows (in millions):
Certain information related to our available-for-sale securities is as follows (in millions):
At September 30, 2017 and December 31, 2016, the carrying value of our available-for-sale investments was $11.9 million and $180.5 million, respectively. The majority of the $62.2 million of deferred tax liabilities associated with the available-for-sale investments at December 31, 2016 were reversed during the nine months ended September 30, 2017 as a result of the non-taxable exchange of the State Street shares for State Street’s ownership interest in BFDS. During the nine months ended September 30, 2017 and 2016, we received $0.9 million and $61.2 million, respectively, from the sale of available-for-sale securities. Gross realized gains of $0.1 million were recorded during the three months ended September 30, 2017 as compared to $0.2 million of gross realized gains and $0.1 million of losses recorded during the three months ended September 30, 2016, from the sale or exchange of available-for-sale securities. Gross realized gains of $170.1 million and $6.0 million and gross realized losses of $14.3 million and $3.8 million were recorded during the nine months ended September 30, 2017 and 2016, respectively, from the sale or exchange of available-for-sale securities. The gross realized gains and losses are included within Other income, net in the Condensed Consolidated Statement of Income. We consolidate the investments of open-end funds in which we own a controlling interest as a result of our seed capital investments. At December 31, 2016, we had a controlling interest in seed capital investments of $53.6 million which was comprised primarily of equity securities as well as $8.4 million of cash collateral deposited with a broker for securities sold short. In March 2017, we reduced our ownership interest in a substantial portion of our seed capital investments, resulting in the deconsolidation of the respective fund. We held non-controlling interests in certain seed capital investments of $11.7 million and $7.4 million at September 30, 2017 and December 31, 2016, respectively. We are a limited partner in various private equity funds which are primarily accounted for using the cost method. Our involvement in financing the operations of the private equity fund investments is generally limited to our investments in the entities. At September 30, 2017 and December 31, 2016, our carrying value of these private equity fund investments was approximately $93.5 million and $111.2 million, respectively. At September 30, 2017, we had future capital commitments related to these private equity fund investments of approximately $3.2 million. Additionally, we have other investments with a carrying value of $48.4 million and $16.8 million at September 30, 2017 and December 31, 2016, respectively. We record lower of cost or market valuation adjustments on cost method and other investments when impairment conditions, such as adverse market conditions or poor performance of the underlying investment, are present. We had no impairments on cost method and other investments during the three months ended September 30, 2017 and $4.5 million of impairments on cost method and other investments during the nine months ended September 30, 2017. We had no impairments on cost method and other investments during the three and nine months ended September 30, 2016. Our investments in private equity funds meet the definition of a variable interest entity (“VIE”); however, the private equity fund investments were not consolidated as we do not have the power to direct the entities’ most significant economic activities. The maximum risk of loss related to our private equity fund investments is limited to the carrying value of our investments in the entities plus any future capital commitments. At September 30, 2017 and December 31, 2016, our maximum risk of loss associated with these VIE’s, which is comprised of our investment and required future capital commitments, was $96.7 million and $115.0 million, respectively. |
Unconsolidated Affiliates |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unconsolidated Affiliates | Unconsolidated Affiliates Investments in unconsolidated affiliates are as follows (in millions):
_____________________________________________________ (1) DST’s ownership percentage in IFDS U.K. and BFDS was 50% prior to the respective acquisitions in March 2017, at which time the businesses became wholly-owned subsidiaries. Equity in earnings of unconsolidated affiliates are as follows (in millions):
In connection with the acquisitions of the remaining interests in BFDS and IFDS U.K., as well as the receipt of IFDS L.P.’s distributions of real estate and its investment in IFDS Percana during March 2017, the corresponding investments in unconsolidated affiliates balances were reduced. Additionally, in connection with the acquisitions, DST also effectively settled IFDS U.K.’s note payables to State Street by acquiring State Street’s outstanding note receivables due from IFDS U.K., which is considered part of the total cash paid to acquire State Street’s equity interests in IFDS U.K. See Note 2, Significant Business Transactions, for further details. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Authoritative accounting guidance on fair value measurements establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. As of September 30, 2017 and December 31, 2016, we held certain investment assets and certain liabilities that are required to be measured at fair value on a recurring basis. These investments include our money market funds, available-for-sale equity securities, trading securities, seed capital investments and securities sold short whereby fair value is determined using quoted prices in active markets. Accordingly, the fair value measurements of these investments have been classified as Level 1 in the tables below. Fair value for deferred compensation liabilities that are credited with deemed gains or losses of the underlying hypothetical investments, primarily equity securities, have been classified as Level 1 in the tables below. In addition, we may have interest rate and foreign currency derivative instruments that are required to be reported at fair value. Fair value for the derivative instruments was determined using inputs from quoted prices for similar assets and liabilities in active markets that are directly or indirectly observable. Accordingly, our derivative instruments have been classified as Level 2 in the tables below. The following tables present assets and liabilities measured at fair value on a recurring basis (in millions):
_____________________________________________________ (1) Included in Cash and cash equivalents, Funds held on behalf of clients, and Other current assets on the Condensed Consolidated Balance Sheet. (2) Included in Investments on the Condensed Consolidated Balance Sheet. (3) Included in Other liabilities on the Condensed Consolidated Balance Sheet. At September 30, 2017 and December 31, 2016, we held approximately $7.6 million and $11.5 million, respectively, of investments in pooled funds, which are measured using net asset value as a practical expedient for fair value and therefore excluded from the tables above. The investments in pooled funds are included within the $141.9 million and $128.0 million of cost method and other investments at September 30, 2017 and December 31, 2016, respectively, disclosed within Note 4, Investments. |
Intangible Assets and Goodwill |
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Intangible Assets and Goodwill | Intangible Assets and Goodwill Intangible assets The following table summarizes intangible assets (in millions):
Amortization expense of intangible assets for the three and nine months ended September 30, 2017 was approximately $8.1 million and $20.2 million, respectively, as compared to $4.3 million and $12.3 million for the three and nine months ended September 30, 2016, respectively. The following table summarizes the estimated annual amortization for intangible assets recorded as of September 30, 2017 (in millions):
Goodwill The following table summarizes the changes in the carrying amount of goodwill for the nine months ended September 30, 2017, by segment (in millions):
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Debt | Debt We are obligated under notes and other indebtedness as follows (in millions):
Accounts receivable securitization program We securitize certain of our domestic accounts receivable through an accounts receivable securitization program with a third-party bank. The maximum amount that can be outstanding under this program is $150.0 million. The facility will expire by its terms in May 2018, unless renewed. The outstanding amount under the program was $65.6 million and $103.2 million at September 30, 2017 and December 31, 2016, respectively. During the nine months ended September 30, 2017 and 2016, total proceeds from the accounts receivable securitization program were approximately $443.1 million and $746.8 million, respectively, and total repayments were approximately $480.7 million and $658.2 million, respectively, which comprise the net cash flows presented within the financing section of the Condensed Consolidated Statement of Cash Flows. Revolving credit facilities Our syndicated credit facility provides for revolving unsecured credit in an aggregate principal amount of up to $850.0 million. The outstanding amount under this syndicated credit facility was $325.0 million and $75.0 million at September 30, 2017 and December 31, 2016, respectively. We also have another unsecured revolving line of credit to support our operations that provides total borrowings of up to $10.0 million. There were no borrowings outstanding under this line of credit at September 30, 2017 or December 31, 2016. During the nine months ended September 30, 2017 and 2016, total proceeds from our revolving credit facilities were approximately $1,117.3 million and $768.7 million, respectively, and total repayments were approximately $867.3 million and $984.8 million, respectively, which comprise the net cash flows presented within the financing section of the Condensed Consolidated Statement of Cash Flows. Other indebtedness In connection with the acquisition of the remaining interests in IFDS U.K. during 2017, we assumed a mortgage with a principal amount of £23.0 million which matures in October 2020 (“U.K. mortgage”). The outstanding amount under the mortgage was $29.5 million at September 30, 2017 with a fixed rate of 3.9%. Principal payments of £1.0 million and accrued interest are payable semi-annually in April and October of each year, with the outstanding balance due at maturity. Fair value Based upon the borrowing rates currently available to us for indebtedness with similar terms and average maturities, the carrying value of long-term debt, with the exception of the privately placed senior notes (collectively, the “Senior Notes”), and the U.K mortgage, is considered to approximate fair value. The estimated fair values of the Senior Notes and U.K. mortgage were derived principally from quoted prices for similar financial instruments (Level 2 in the fair value hierarchy). As of September 30, 2017 and December 31, 2016, the carrying values and estimated fair values of the fixed rate debt were as follows (in millions):
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Income Taxes |
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Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We record income tax expense during interim periods based on our best estimate of the full year’s tax rate as adjusted for discrete items, if any, that are taken into account in the relevant interim period. Each quarter, we update our estimate of the annual effective tax rate and any change in the estimated rate is recorded on a cumulative basis. Our tax rate on income from continuing operations was 21.0% and 15.3% for the three and nine months ended September 30, 2017, respectively, compared to 38.3% and 37.3% for the three and nine months ended September 30, 2016, respectively. The Company’s tax rate for the three and nine months ended September 30, 2017 was lower than the statutory federal income tax rate of 35% primarily due to the non-taxable nature of the BFDS exchange transaction, the adoption of new tax guidance issued for tax benefits on employee share-based transactions, benefits realized from the settlement of uncertain tax positions, and a change in the proportional mix of domestic and international income. The Company’s tax rate for the three and nine months ended September 30, 2016 was higher than the statutory federal income tax rate of 35% primarily due to state income taxes and transaction related taxes, partially offset by dividends received deductions and a change in the proportional mix of domestic and international income. Our estimated annual effective full year 2017 tax rate will vary from the statutory federal rate primarily as a result of variances among the estimates and actual amounts of full year sources of taxable income (e.g., domestic consolidated, joint venture and/or international), the realization of tax credits (e.g., research and experimentation, foreign tax and state incentive), adjustments which may arise from the resolution of tax matters under review and our assessment of our liability for uncertain tax positions. |
Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Equity Earnings per share The computation of basic and diluted earnings per share is as follows (in millions, except per share amounts):
We had approximately 60.5 million and 65.3 million common shares outstanding at September 30, 2017 and 2016, respectively. No shares from options to purchase common stock were excluded from the diluted earnings per share calculation because they were anti-dilutive for the three and nine months ended September 30, 2017 and 2016. Share-based compensation We have share-based compensation plans covering our employees and non-employee directors. During the nine months ended September 30, 2017, we granted approximately 0.6 million restricted stock units (“RSU’s”), of which approximately 0.3 million are performance stock units. Additionally, during the nine months ended September 30, 2017, we had 0.4 million RSU’s vest as the result of the completion of the service requirements or achievement of the service and performance features of the awards, as applicable. At September 30, 2017, we had 1.3 million unvested RSU’s and 0.6 million stock options outstanding. We recognized share based compensation expense of $18.0 million and $31.8 million during the three and nine months ended September 30, 2017, respectively, as compared to $1.4 million and $16.7 million during the three and nine months ended September 30, 2016. These amounts are inclusive of discontinued operations. At September 30, 2017, we had $64.6 million of unrecognized compensation expense related to our share based compensation arrangements. We estimate that compensation expense recognition attributable to currently outstanding stock option and RSU grants will be approximately $8.7 million for the remainder of 2017, $13.9 million for 2018, $5.0 million for 2019 and $0.8 million for 2020. Future expense recognition is not projected on approximately $36.2 million of unrecognized compensation expense as the related awards are not currently expected to achieve their required performance features and therefore not expected to vest. Other comprehensive income (loss) Accumulated other comprehensive income (loss) balances consist of the following (in millions), net of tax:
Additions to and reclassifications out of accumulated other comprehensive income attributable to the Company are as follows (in millions):
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(3) Cumulative translation adjustments are inclusive of amounts derived from assets and liabilities held for sale.
One of our unconsolidated affiliates had an interest rate swap liability with a fair market value of $30.1 million and $33.1 million at September 30, 2017 and December 31, 2016, respectively. The unconsolidated affiliate used inputs from quoted prices for similar assets and liabilities in active markets that are directly or indirectly observable relating to the measurement of the interest rate swap. Our 50% proportionate share of this interest rate swap liability was $15.1 million and $16.5 million at September 30, 2017 and December 31, 2016, respectively. We record our proportionate share of this liability in an amount not to exceed the carrying value of our investment in this unconsolidated affiliate. Because the carrying value of this unconsolidated affiliate investment balance was zero at both September 30, 2017 and December 31, 2016, no change in the interest rate swap liability was recorded in the Condensed Consolidated Financial Statements. Stock repurchases During the nine months ended September 30, 2017, we repurchased approximately 3.8 million shares of DST common stock, on a post-split basis, for $225.0 million. On May 9, 2017, our Board of Directors authorized a new $300.0 million share repurchase plan. During October 2017, we spent $22.5 million to repurchase approximately 0.4 million shares, resulting in approximately $202.5 million remaining under the new share repurchase plan. Shares received in exchange for satisfaction of the option exercise price and for tax withholding obligations arising from the exercise of options to purchase the Company’s stock or from the vesting of restricted stock under our share-based compensation plans are included in common stock repurchased in the Condensed Consolidated Statement of Cash Flows. The amount of such share receipts and withholdings for option exercises and restricted stock vesting was $10.4 million and $15.7 million during the nine months ended September 30, 2017 and 2016, respectively. In addition, in connection with the non-cash acquisition of the remaining interest in BFDS, DST acquired $3.7 million of DST common stock that was held by BFDS. Dividends Total dividends for the nine months ended September 30, 2017 and 2016 were $34.0 million and $33.8 million, respectively. Cash dividends of $33.0 million and $32.8 million were paid during the nine months ended September 30, 2017 and 2016. The remaining amount of dividends represents dividend equivalent shares of RSU’s in lieu of cash dividends. On May 9, 2017, our Board of Directors approved a two-for-one split of DST’s common stock. The stock split was effected in the form of a stock dividend paid on June 8, 2017 to shareholders of record at the close of business on May 26, 2017. In connection with the stock split, 16.5 million treasury shares were used to settle a portion of the distribution. The distribution of treasury shares during the nine months ended September 30, 2017 reduced Additional paid-in capital by $40.5 million, Retained earnings by $1,297.2 million and Treasury stock by $1,337.9 million. On October 27, 2017, our Board of Directors declared a quarterly cash dividend of $0.18 per share on our common stock, payable on December 8, 2017 to shareholders of record at the close of business on November 22, 2017. |
Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Agreements We have letters of credit and bank guarantees of $6.0 million and $5.9 million outstanding at September 30, 2017 and December 31, 2016, respectively. Letters of credit are secured by our debt facilities. We have entered into agreements with certain officers whereby upon defined circumstances constituting a change in control of the Company, certain benefit entitlements are automatically funded and such officers are entitled to specific cash payments upon termination of employment. Additionally, we have adopted the DST Systems, Inc. Executive Severance Plan, which provides certain benefits to participants in the event of a qualifying termination under the plan. In the normal course of business, to facilitate transactions of services and products and other business assets, and in certain strategic transactions, we have agreed to indemnify certain parties with respect to certain matters. We have agreed to hold certain parties harmless against losses arising from a breach of representations or covenants, data and confidentiality obligations, intellectual property infringement or other claims made by third parties. These agreements may limit the time period in which an indemnification claim can be made and the amount of the claim. At September 30, 2017 and December 31, 2016, except for certain immaterial items, there were no liabilities for guarantees or indemnifications as it is not reasonably possible to estimate either the maximum potential payments or range of payments under these indemnification agreements or to determine the timing of any such payments due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, payments made under these agreements have not had a material impact on our financial statements. Legal Proceedings A putative class action suit was filed against the Company, the Compensation Committee of our Board of Directors, the Advisory Committee of our 401(k) Profit Sharing Plan (the “Plan”) and certain of our present and/or former officers and directors, alleging breach of fiduciary duties and other violations of the Employee Retirement Income Security Act. The suit, DuCharme v. DST Systems, et al. was filed in U.S. District Court for the Western District of Missouri on January 13, 2017 and dismissed on June 23, 2017. On September 7, 2017, a different plaintiff filed a new complaint in the same court, captioned Ostrander v. DST Systems, Inc., et al. making substantially similar allegations as those asserted in the DuCharme complaint. A related suit, Cooper v. Ruane Cunniff & Goldfarb Inc., et. al., was filed in federal court in the Southern District of New York on March 14, 2016, and the DST-related parties were dismissed without prejudice. On September 1, 2017, a new complaint was filed purportedly on behalf of the Plan in the Southern District of New York, captioned Ferguson, et al. v. Ruane, Cunniff & Goldfarb Inc., et al., naming as defendants the Company, the Compensation Committee of our Board of Directors, the Advisory Committee of the Plan and certain of our present and/or former officers and directors. The complaint’s allegations are substantially similar to the allegations asserted in the Cooper case. We intend to defend these cases vigorously, and, because the suits are still in their preliminary stages, have not yet determined what effect these lawsuits will have, if any, on our financial position or results of operations. We are involved in various other legal proceedings arising in the normal course of our businesses. At this time, we do not believe any material losses under these claims to be probable or estimable. While the ultimate outcome of these other legal proceedings cannot be predicted with certainty, it is the opinion of management, after consultation with legal counsel, that the final outcome in such proceedings, in the aggregate, would not have a material adverse effect on our financial statements. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information Our operating business units offer sophisticated information processing and software services and products. As discussed in Note 1, Summary of Accounting Policies, we established a new reportable segment structure during first quarter 2017. We now present our businesses as three reportable operating segments, Domestic Financial Services, International Financial Services and Healthcare Services. Prior periods have been revised to reflect the new reportable operating segments. Information concerning total assets by reporting segment is as follows (in millions):
We evaluate the performance of our operating segments based on income before interest expense, income taxes and non-controlling interest. Intersegment revenues are reflected at rates determined by us and may not be reflective of market rates. Summarized financial information concerning our segments is shown in the following tables (in millions):
Earnings from continuing operations before interest, income taxes and non-controlling interest in the segment reporting information above less interest expense of $6.9 million and $5.4 million for the three months ended September 30, 2017 and 2016, respectively, is equal to our income from continuing operations before income taxes and non-controlling interest on a consolidated basis for the corresponding periods.
Earnings from continuing operations before interest, income taxes and non-controlling interest in the segment reporting information above less interest expense of $19.7 million and $18.0 million for the nine months ended September 30, 2017 and 2016, respectively, is equal to our income from continuing operations before income taxes and non-controlling interest on a consolidated basis for the corresponding periods.
Earnings from continuing operations before interest, income taxes and non-controlling interest in the segment reporting information above less interest expense of $23.5 million and $23.8 million for the years ended December 31, 2016 and 2015, respectively, is equal to our income from continuing operations before income taxes and non-controlling interest on a consolidated basis for the corresponding periods. |
Restructuring Charges |
9 Months Ended |
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Sep. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges | Restructuring Charges As a result of integration activities following the acquisition of the remaining interests in BFDS, we initiated a plan to reduce our workforce to enhance operational efficiency within the Domestic Financial Services segment. During the nine months ended September 30, 2017, we incurred pretax restructuring charges related to employee termination and other costs of $9.2 million primarily related to this restructuring event. As of September 30, 2017, we had a liability of $2.3 million associated with these restructuring activities. |
Summary of Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
New accounting pronouncements | Recently Adopted Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued guidance which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification of related amounts within the statement of cash flows. The guidance was adopted by us on January 1, 2017 and resulted in approximately $0.6 million and $2.6 million of excess tax benefits being recognized in Income taxes in the Condensed Consolidated Statement of Income for the three and nine months ended September 30, 2017, respectively. We also elected to account for forfeitures as they occur rather than using an estimated forfeiture rate. The impact to our consolidated financial statements was not material. Accounting Pronouncements Pending Adoption In November 2016, the FASB issued guidance which requires the statement of cash flows to explain changes during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The guidance is effective January 1, 2018 and requires retrospective application. Early adoption is permitted. We are currently evaluating the standard and the impact it will have on our consolidated financial statements, but have determined that our Funds held on behalf of clients and Other assets that meet the definition of cash and cash equivalents but are restricted for use will be included when reconciling the beginning and end of period balances on the Condensed Consolidated Statement of Cash Flows. In October 2016, the FASB issued guidance which requires the recognition of income tax consequences for intra-entity transfers of assets other than inventory. The guidance is effective January 1, 2018 and requires modified retrospective application. Early adoption is permitted. We are currently evaluating the standard and the impact it will have on our consolidated financial statements and related disclosures, however we do not expect it to have a material impact on our consolidated financial statements. In February 2016, the FASB issued guidance which requires lessees to reflect most leases on their balance sheet as assets and obligations. The guidance is effective January 1, 2019 with early adoption permitted. The standard is to be applied under the modified retrospective method, with elective reliefs, which requires application of the new guidance for all periods presented. We are currently evaluating the standard and the impact it will have on our consolidated financial statements and related disclosures. In January 2016, the FASB issued guidance which updates the reporting model for certain financial instruments, including the requirement for equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. The guidance is effective January 1, 2018 and requires a cumulative-effective adjustment as of the beginning of the fiscal year of adoption. Early adoption is permitted as of the beginning of the fiscal year of adoption. We are currently evaluating the standard and the impact it will have on our consolidated financial statements and related disclosures, but generally believe our private equity funds accounted for under the cost method will be measured at fair value, resulting in increased volatility in our Condensed Consolidated Statement of Income. In May 2014, the FASB issued guidance which requires companies to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration it expects to be entitled in exchange for those goods or services. The new standard and subsequently issued amendments will become effective January 1, 2018. We plan to adopt the guidance using the modified retrospective transition approach. We are currently evaluating the impacts of the application of the new standard to our existing portfolio of customer contracts and will continue to review new contracts entered into prior to the adoption of the new standard. While we expect the adoption of the standard will change the timing of when revenue is recognized for certain revenue streams, we currently anticipate that the majority of our contracts with customers that include account- and/or transaction-based processing fees will be accounted for under the series deliverable guidance in the new standard which will likely result in minimal changes as compared to current revenue recognition. These revenues will continue to be recognized over time as a single stand-ready performance obligation. As such, we do not currently anticipate significant changes in current systems or processes. Although we currently do not believe there will be a material impact of adopting the new revenue standard on our consolidated financial statements, our assessment of the expected impact of adoption will continue throughout the remainder of 2017. |
Significant Business Transactions (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the aggregate acquisition-date fair value of the consideration transferred for the acquisition of the remaining interests in IFDS U.K. and the amounts recognized as of the acquisition date for the assets acquired and liabilities assumed (in millions):
_____________________________________________________ (1) Cash paid is comprised of cash payments to acquire State Street’s equity interest in IFDS U.K. and a note receivable from IFDS U.K., as well as IFDS L.P.’s equity interests in IFDS Percana and IFDS Realty U.K. (2) Equals the estimated fair value of DST’s previously-held equity interest in IFDS U.K. valued at $136.8 million, which represents an approximate 3.0% discount to the acquisition price for State Street’s equity interests in IFDS U.K. prior to the acquisition date. The difference between the $141.0 million of cash paid to acquire State Street’s equity interests in IFDS U.K. and the $136.8 million represents an estimate of a control premium, which has not been included in the valuation of DST’s previous non-controlling interest. (3) Includes $21.9 million of acquired software with a weighted-average useful life of 6 years. The following table summarizes the aggregate acquisition-date fair value of the consideration transferred for the acquisition of BFDS and the amounts recognized as of the acquisition date for the assets acquired and liabilities assumed (in millions):
_____________________________________________________ (1) Equals the estimated fair value of DST’s previously-held equity interest in BFDS valued at $151.1 million, which represents an approximate 7.5% discount to the acquisition price for State Street’s equity interests in BFDS prior to the acquisition date. The difference between the fair value of State Street common stock transferred of $163.4 million and the $151.1 million represents an estimate of a control premium, which has not been included in the valuation of DST’s previous non-controlling interest. (2) As a result of the acquisition of the remaining interests in BFDS, we acquired certain investments associated with active deferred compensation plans for senior management and certain highly compensated employees. Approximately $3.7 million of the underlying investments were in DST common stock. As a result, the common stock was considered effectively repurchased at the acquisition date and reclassified to Treasury stock in the Condensed Consolidated Balance Sheet. (3) Includes $2.0 million of acquired software with a weighted-average useful life of 5 years. |
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Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The following table summarizes the intangible assets acquired and estimated weighted-average useful lives as of the acquisition date (in millions):
The following table summarizes the intangible assets acquired and estimated weighted-average useful lives as of the acquisition date (in millions):
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Business Acquisition, Pro Forma Information | The following table summarizes the unaudited pro forma results of operations for the three and nine months ended September 30, 2017 and 2016 as if the BFDS and IFDS U.K. acquisitions had occurred on January 1, 2016 (in millions, except per share amounts):
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Discontinued Operations (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations | The following table summarizes the assets and liabilities classified as held for sale in our Condensed Consolidated Balance Sheet (in millions):
The following table summarizes the comparative financial results of discontinued operations which are presented as Income from discontinued operations, net of tax on our Condensed Consolidated Statement of Income (in millions):
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Investments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of investments | Investments are as follows (in millions):
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Schedule of reconciliation of available-for-sale securities from book cost basis to market value | Certain information related to our available-for-sale securities is as follows (in millions):
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Unconsolidated Affiliates (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of unconsolidated affiliates | Investments in unconsolidated affiliates are as follows (in millions):
_____________________________________________________ (1) DST’s ownership percentage in IFDS U.K. and BFDS was 50% prior to the respective acquisitions in March 2017, at which time the businesses became wholly-owned subsidiaries. Equity in earnings of unconsolidated affiliates are as follows (in millions):
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Fair Value Measurements (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets and liabilities measured at fair value on a recurring basis | The following tables present assets and liabilities measured at fair value on a recurring basis (in millions):
_____________________________________________________ (1) Included in Cash and cash equivalents, Funds held on behalf of clients, and Other current assets on the Condensed Consolidated Balance Sheet. (2) Included in Investments on the Condensed Consolidated Balance Sheet. (3) Included in Other liabilities on the Condensed Consolidated Balance Sheet. |
Intangible Assets and Goodwill (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of intangible assets | The following table summarizes intangible assets (in millions):
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Schedule of estimated annual amortization for intangible assets | The following table summarizes the estimated annual amortization for intangible assets recorded as of September 30, 2017 (in millions):
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Schedule of changes in the carrying amount of goodwill | The following table summarizes the changes in the carrying amount of goodwill for the nine months ended September 30, 2017, by segment (in millions):
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Debt (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of the Company's obligations and other indebtedness | We are obligated under notes and other indebtedness as follows (in millions):
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Schedule of Carrying and Fair Value of the Senior Notes | As of September 30, 2017 and December 31, 2016, the carrying values and estimated fair values of the fixed rate debt were as follows (in millions):
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Equity (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of basic and diluted earnings per share | The computation of basic and diluted earnings per share is as follows (in millions, except per share amounts):
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Schedule of accumulated other comprehensive income | Accumulated other comprehensive income (loss) balances consist of the following (in millions), net of tax:
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Additions to and reclassification out of accumulated other comprehensive income | Additions to and reclassifications out of accumulated other comprehensive income attributable to the Company are as follows (in millions):
_______________________________________________________________
(3) Cumulative translation adjustments are inclusive of amounts derived from assets and liabilities held for sale.
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Segment Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of total assets by reporting segment | Information concerning total assets by reporting segment is as follows (in millions):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of financial information concerning segments | Summarized financial information concerning our segments is shown in the following tables (in millions):
Earnings from continuing operations before interest, income taxes and non-controlling interest in the segment reporting information above less interest expense of $6.9 million and $5.4 million for the three months ended September 30, 2017 and 2016, respectively, is equal to our income from continuing operations before income taxes and non-controlling interest on a consolidated basis for the corresponding periods.
Earnings from continuing operations before interest, income taxes and non-controlling interest in the segment reporting information above less interest expense of $19.7 million and $18.0 million for the nine months ended September 30, 2017 and 2016, respectively, is equal to our income from continuing operations before income taxes and non-controlling interest on a consolidated basis for the corresponding periods.
Earnings from continuing operations before interest, income taxes and non-controlling interest in the segment reporting information above less interest expense of $23.5 million and $23.8 million for the years ended December 31, 2016 and 2015, respectively, is equal to our income from continuing operations before income taxes and non-controlling interest on a consolidated basis for the corresponding periods. |
Summary of Accounting Policies (Details) shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2017
USD ($)
segment
shares
|
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of new operating segments | segment | 2 | |
Number of operating segments | 3 | |
Treasury shares, stock split | shares | 16.5 | |
Excess tax benefits, share-based compensation | $ | $ 0.6 | $ 2.6 |
Significant Business Transactions - Acquisitions of BFDS (Details) - USD ($) shares in Millions, $ in Millions |
Mar. 30, 2017 |
Sep. 30, 2017 |
Mar. 29, 2017 |
Mar. 27, 2017 |
Dec. 31, 2016 |
||
---|---|---|---|---|---|---|---|
Business Acquisition [Line Items] | |||||||
Ownership percentage | 50.00% | 50.00% | |||||
Goodwill | $ 796.5 | $ 516.4 | |||||
Boston Financial Data Services, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Ownership percentage | 50.00% | ||||||
Equity issued (in shares) | 2.0 | ||||||
Fair value of common stock used to acquire the remaining equity interests in BFDS, certain investments and real estate | $ 163.4 | ||||||
Cost basis for tax purposes | 1.1 | ||||||
Negotiated fair value | 157.6 | ||||||
Estimated fair value of DST’s previously-held equity interests | [1] | 151.1 | |||||
Remeasurement gain | 56.0 | ||||||
Goodwill | 68.7 | ||||||
Goodwill expected tax deductible amount | $ 0.0 | ||||||
International Financial Data Services L.P. | |||||||
Business Acquisition [Line Items] | |||||||
Ownership percentage | 50.00% | 50.00% | 50.00% | ||||
|
Significant Business Transactions - Acquisitions of BFDS, Schedule of Aggregate Acquisition-date Fair Value of Consideration Transferred (Details) - USD ($) $ in Millions |
9 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 30, 2017 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
||||||||
Recognized amounts of identifiable assets acquired and liabilities assumed | |||||||||||
Goodwill | $ 796.5 | $ 516.4 | |||||||||
Treasury stock acquired | $ 239.0 | $ 240.7 | |||||||||
Boston Financial Data Services, Inc. | |||||||||||
Consideration | |||||||||||
Fair value of common stock used to acquire the remaining equity interests in BFDS, certain investments and real estate | $ 163.4 | ||||||||||
Estimated fair value of DST’s previously-held equity interests | [1] | 151.1 | |||||||||
Effective settlement of pre-existing relationships | (5.9) | ||||||||||
Total consideration transferred | 308.6 | ||||||||||
Recognized amounts of identifiable assets acquired and liabilities assumed | |||||||||||
Cash and cash equivalents | 96.8 | ||||||||||
Accounts receivable | 81.6 | ||||||||||
Other current assets | 3.6 | ||||||||||
Investments | [2] | 35.8 | |||||||||
Properties | [3] | 22.6 | |||||||||
Intangible assets | 57.2 | ||||||||||
Goodwill | 68.7 | ||||||||||
Deferred income taxes | 2.4 | ||||||||||
Other assets | 3.2 | ||||||||||
Total assets | 371.9 | ||||||||||
Accounts payable | 5.2 | ||||||||||
Accrued compensation and benefits | 15.4 | ||||||||||
Deferred revenue | 2.1 | ||||||||||
Other current liabilities | 7.6 | ||||||||||
Other liabilities | 33.0 | ||||||||||
Total liabilities | 63.3 | ||||||||||
Net assets acquired | $ 308.6 | ||||||||||
Acquisition price discount (as a percent) | 7.50% | ||||||||||
Treasury stock acquired | $ 3.7 | ||||||||||
Boston Financial Data Services, Inc. | Acquired software | |||||||||||
Recognized amounts of identifiable assets acquired and liabilities assumed | |||||||||||
Properties | $ 2.0 | ||||||||||
Weighted average useful life | 5 years | ||||||||||
|
Significant Business Transactions - Acquisition of IFDS U.K., Schedule of Aggregate Acquisition-date Fair Value of Consideration Transferred (Details) - USD ($) $ in Millions |
1 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 27, 2017 |
Mar. 31, 2017 |
Sep. 30, 2017 |
Dec. 31, 2016 |
||||||||
Recognized amounts of identifiable assets acquired and liabilities assumed | |||||||||||
Goodwill | $ 796.5 | $ 516.4 | |||||||||
International Financial Data Services U.K. | |||||||||||
Consideration | |||||||||||
Cash paid to acquire the remaining equity interests in IFDS U.K. and other related interests (1) | $ 141.0 | ||||||||||
Estimated fair value of previously-held equity interests | 136.8 | ||||||||||
Recognized amounts of identifiable assets acquired and liabilities assumed | |||||||||||
Cash and cash equivalents | 99.2 | ||||||||||
Accounts receivable | 101.7 | ||||||||||
Other current assets | 14.4 | ||||||||||
Properties | [1] | 95.6 | |||||||||
Intangible assets | 104.0 | ||||||||||
Goodwill | 195.9 | ||||||||||
Deferred income taxes | 11.5 | ||||||||||
Other assets | 2.1 | ||||||||||
Total assets | 624.4 | ||||||||||
Current portion of long-term debt | 2.8 | ||||||||||
Accounts payable | 29.1 | ||||||||||
Accrued compensation and benefits | 23.6 | ||||||||||
Deferred revenue | 31.1 | ||||||||||
Other current liabilities | 61.7 | ||||||||||
Long-term debt | 26.3 | ||||||||||
Other liabilities | 23.6 | ||||||||||
Total liabilities | 198.2 | ||||||||||
Net assets acquired | $ 426.2 | ||||||||||
Acquisition price discount (as a percent) | 3.00% | ||||||||||
IFDS U.K. IFDS, Percana and IFDS Realty U.K. | |||||||||||
Consideration | |||||||||||
Cash paid to acquire the remaining equity interests in IFDS U.K. and other related interests (1) | [2] | $ 234.9 | |||||||||
Estimated fair value of previously-held equity interests | [3] | 136.8 | |||||||||
Effective settlement of pre-existing relationships | 54.5 | ||||||||||
Total consideration transferred | 426.2 | ||||||||||
Acquired software | International Financial Data Services U.K. | |||||||||||
Recognized amounts of identifiable assets acquired and liabilities assumed | |||||||||||
Properties | $ 21.9 | ||||||||||
Weighted average useful life | 6 years | ||||||||||
|
Significant Business Transactions - Summary of Intangible Assets Acquired and Estimated Useful Lives (Details) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | 9 Months Ended |
---|---|---|---|
Mar. 31, 2017 |
Sep. 30, 2017 |
Sep. 30, 2017 |
|
Boston Financial Data Services, Inc. | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Total revenues | $ 67.5 | $ 132.9 | |
Pretax income | 12.3 | 14.2 | |
Boston Financial Data Services, Inc. | Customer relationships | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Fair value | $ 57.2 | ||
Weighted average useful life | 13 years | ||
International Financial Data Services U.K. | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Total revenues | 112.7 | 313.8 | |
Pretax income | $ 4.9 | $ 65.6 | |
International Financial Data Services U.K. | Customer relationships | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Fair value | $ 104.0 | ||
Weighted average useful life | 10 years |
Significant Business Transactions - Summary of Unaudited Pro Forma Results (Details) - BFDS and IFDS U.K. - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Business Acquisition [Line Items] | ||||
Total revenues | $ 562.6 | $ 564.6 | $ 1,772.4 | $ 1,707.8 |
Net income attributable to DST Systems, Inc. | $ 48.5 | $ 263.2 | $ 191.8 | $ 350.8 |
Diluted earnings per share | $ 0.79 | $ 3.98 | $ 3.06 | $ 5.21 |
Significant Business Transactions - Pro Forma Additional Information (Details) £ in Millions, $ in Millions |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|---|
Apr. 30, 2017
GBP (£)
|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2016
USD ($)
|
|
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||||
Net income | $ 48.5 | $ 273.3 | $ 370.3 | $ 384.4 | |
Termination Costs | 5.2 | ||||
BFDS and IFDS U.K. | |||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||||
Transaction costs | $ 5.1 | 5.1 | |||
International Financial Data Services U.K. | |||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||||
Service agreement payment | £ | £ 30.0 | ||||
Additional project milestone payment | £ | £ 30.0 | ||||
Deferred Revenue and Termination Payments | 93.2 | ||||
Bad Debt Expense | 34.5 | ||||
Net Gains On Transaction And Related Tax Impact [Member] | BFDS and IFDS U.K. | |||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||||
Net income | $ 188.6 |
Discontinued Operations - Disposal Group Balance Sheet (Details) $ in Millions |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|---|
Jun. 14, 2016
USD ($)
|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2017
USD ($)
business
|
Sep. 30, 2016
USD ($)
|
Dec. 31, 2016
USD ($)
|
Oct. 31, 2017
USD ($)
|
May 04, 2017
USD ($)
|
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Number of businesses sold | business | 2 | |||||||
Intersegment revenues, discontinued operation after disposal | $ 6.5 | $ 5.7 | $ 21.0 | $ 13.8 | ||||
Intersegment expenses, discontinued operation after disposal | 10.6 | 12.9 | 39.3 | 21.4 | ||||
Assets | ||||||||
Cash and cash equivalents | 0.0 | 3.1 | 0.0 | 3.1 | ||||
Discontinued Operations, Held-for-sale | Customer Communications | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Pretax gain on business disposition | (0.3) | $ 340.1 | 2.6 | $ 340.1 | ||||
Assets | ||||||||
Cash and cash equivalents | $ 4.0 | |||||||
Accounts receivable | 38.9 | |||||||
Unconsolidated affiliates | 0.2 | |||||||
Properties, net | 9.9 | |||||||
Intangible assets, net | 11.2 | |||||||
Other assets | 8.4 | |||||||
Total assets held for sale | 0.0 | 0.0 | 72.6 | |||||
Liabilities | ||||||||
Current portion of debt | 0.4 | |||||||
Accounts payable | 13.2 | |||||||
Accrued compensation and benefits | 3.8 | |||||||
Deferred revenues and gains | 0.8 | |||||||
Long-term debt | 1.7 | |||||||
Income taxes payable | 1.0 | |||||||
Other liabilities | 9.2 | |||||||
Total liabilities held for sale | 30.1 | |||||||
North America | Customer Communications | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Cash consideration | $ 410.7 | |||||||
Consideration adjustment | 0.7 | |||||||
Pretax gain on business disposition | $ 341.5 | |||||||
United Kingdom | Customer Communications | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Cash consideration | $ 43.6 | |||||||
Pretax gain on business disposition | 2.6 | |||||||
Minimum | North America | Customer Communications | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Period of costs incurred after disposal | 3 years | |||||||
Maximum | North America | Customer Communications | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Period of continuing involvement after disposal | 18 years | |||||||
Period of costs incurred after disposal | 5 years | |||||||
Information Technology and Operations Processing | Customer Communications | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Amount of continuing cash inflow (outflow) after disposal | 10.7 | 23.2 | ||||||
Print Services | Customer Communications | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Amount of continuing cash inflow (outflow) after disposal | $ (15.1) | $ (38.8) | ||||||
Subsequent Event [Member] | United Kingdom | Customer Communications | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Consideration adjustment | $ 0.3 |
Discontinued Operations - Disposal Group Income Statement (Details) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|---|
Apr. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Income (loss) from discontinued operations, net of tax | $ (0.3) | $ 222.8 | $ 4.5 | $ 260.0 | |
Discontinued Operations, Held-for-sale | Customer Communications | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Operating revenues | 0.0 | 38.2 | 53.4 | 349.7 | |
Out-of-pocket reimbursements | 0.0 | 9.9 | 12.8 | 399.3 | |
Total revenues | 0.0 | 48.1 | 66.2 | 749.0 | |
Costs and expenses | 0.0 | 53.7 | 63.8 | 703.5 | |
Depreciation and amortization | 0.0 | 0.0 | 0.0 | 11.9 | |
Operating income (loss) | 0.0 | (5.6) | 2.4 | 33.6 | |
Equity in earnings of unconsolidated affiliates | 0.0 | 0.1 | 0.2 | 0.3 | |
Net gain (loss) on business disposition | (0.3) | 340.1 | 2.6 | 340.1 | |
Income (loss) before income taxes | (0.3) | 334.6 | 5.2 | 374.0 | |
Income taxes | 0.0 | 111.8 | 0.7 | 114.0 | |
Income (loss) from discontinued operations, net of tax | $ (0.3) | $ 222.8 | 4.5 | $ 260.0 | |
United Kingdom | Customer Communications | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Net gain (loss) on business disposition | $ 2.6 | ||||
Customer Communications | United Kingdom | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Sale Leaseback Transaction, Net Proceeds, Investing Activities | $ 16.0 | ||||
Sale Leaseback Transaction, Operating Lease Term | 12 years | ||||
Sale Leaseback Transaction, Portion of Building Leased, Percent | 66.67% | ||||
Sale Leaseback Transaction, Annual Rental Payments | $ 0.7 |
Investments (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
|
Investments [Line Items] | |||||
Carrying Value | $ 199.6 | $ 199.6 | $ 377.4 | ||
Available-for-sale securities | |||||
Book cost basis | 9.2 | 9.2 | 28.4 | ||
Gross unrealized gains | 2.7 | 2.7 | 152.1 | ||
Market value | 11.9 | 11.9 | 180.5 | ||
Proceeds from sale of investments | 0.9 | $ 61.2 | |||
Gross realized gains | 0.1 | $ 0.2 | 170.1 | 6.0 | |
Gross realized losses | 0.1 | 14.3 | 3.8 | ||
Seed capital investments cash collateral | 8.4 | ||||
Lower of cost or market valuation adjustments on cost method investments | 0.0 | $ 0.0 | 4.5 | $ 0.0 | |
Variable Interest Entity, Maximum Loss Exposure, Amount | 96.7 | 96.7 | 115.0 | ||
Cost method, private equity and other investments | |||||
Investments [Line Items] | |||||
Carrying Value | 48.4 | 48.4 | 16.8 | ||
Available-for-sale securities | |||||
Investments [Line Items] | |||||
Carrying Value | 11.9 | 11.9 | 180.5 | ||
Available-for-sale securities | |||||
Deferred Tax Liabilities | 62.2 | ||||
Available-for-sale securities | State Street Corporation | |||||
Investments [Line Items] | |||||
Carrying Value | 0.0 | 0.0 | 169.6 | ||
Available-for-sale securities | Other available-for-sale securities | |||||
Investments [Line Items] | |||||
Carrying Value | 11.9 | 11.9 | 10.9 | ||
Other investments | |||||
Investments [Line Items] | |||||
Carrying Value | 187.7 | 187.7 | 196.9 | ||
Other investments | Trading securities | |||||
Investments [Line Items] | |||||
Carrying Value | 34.1 | 34.1 | 7.9 | ||
Other investments | Seed Capital Investments | |||||
Investments [Line Items] | |||||
Carrying Value | 11.7 | 11.7 | 61.0 | ||
Other investments | Seed Capital Investments 1 | |||||
Investments [Line Items] | |||||
Carrying Value | 7.4 | ||||
Other investments | Seed Capital Investments 2 | |||||
Investments [Line Items] | |||||
Carrying Value | 53.6 | ||||
Other investments | Cost method, private equity and other investments | |||||
Investments [Line Items] | |||||
Carrying Value | 141.9 | 141.9 | 128.0 | ||
Private Equity Funds | |||||
Investments [Line Items] | |||||
Carrying Value | 93.5 | 93.5 | $ 111.2 | ||
Available-for-sale securities | |||||
Future capital commitments related to private equity fund investments | $ 3.2 | $ 3.2 |
Unconsolidated Affiliates (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Mar. 31, 2017 |
Mar. 30, 2017 |
Mar. 27, 2017 |
|||||
Unconsolidated affiliates [Line Items] | |||||||||||||
Ownership percentage | 50.00% | 50.00% | 50.00% | ||||||||||
Carrying value | $ 80.7 | $ 80.7 | $ 331.2 | ||||||||||
Equity in earnings of unconsolidated affiliates | $ 4.2 | $ 7.0 | $ 27.3 | $ 23.9 | 27.2 | $ 45.4 | |||||||
International Financial Data Services U.K. | |||||||||||||
Unconsolidated affiliates [Line Items] | |||||||||||||
Ownership percentage | 0.00% | [1] | 0.00% | [1] | 50.00% | ||||||||
Carrying value | $ 0.0 | $ 0.0 | 133.3 | ||||||||||
Equity in earnings of unconsolidated affiliates | $ 0.0 | 3.4 | $ 0.9 | 8.2 | |||||||||
International Financial Data Services L.P. | |||||||||||||
Unconsolidated affiliates [Line Items] | |||||||||||||
Ownership percentage | 50.00% | 50.00% | 50.00% | 50.00% | |||||||||
Carrying value | $ 43.1 | $ 43.1 | 73.2 | ||||||||||
Equity in earnings of unconsolidated affiliates | $ 2.4 | 0.9 | $ 15.8 | 3.9 | |||||||||
Boston Financial Data Services, Inc. | |||||||||||||
Unconsolidated affiliates [Line Items] | |||||||||||||
Ownership percentage | 0.00% | [1] | 0.00% | [1] | 50.00% | ||||||||
Carrying value | $ 0.0 | $ 0.0 | 91.2 | ||||||||||
Equity in earnings of unconsolidated affiliates | 0.0 | 1.2 | 3.6 | 5.5 | |||||||||
Unconsolidated real estate and other affiliates | |||||||||||||
Unconsolidated affiliates [Line Items] | |||||||||||||
Carrying value | 37.6 | 37.6 | $ 33.5 | ||||||||||
Equity in earnings of unconsolidated affiliates | $ 1.8 | $ 1.5 | $ 7.0 | $ 6.3 | |||||||||
|
Fair Value Measurements (Details) - USD ($) $ in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
|||||||
---|---|---|---|---|---|---|---|---|---|
Fair value measurements [Line Items] | |||||||||
Investments | $ 199.6 | $ 377.4 | |||||||
Cost-method and other investments | |||||||||
Fair value measurements [Line Items] | |||||||||
Investments | 48.4 | 16.8 | |||||||
Other investments | |||||||||
Fair value measurements [Line Items] | |||||||||
Investments | 187.7 | 196.9 | |||||||
Other investments | Cost-method and other investments | |||||||||
Fair value measurements [Line Items] | |||||||||
Investments | 141.9 | 128.0 | |||||||
Pooled funds | |||||||||
Fair value measurements [Line Items] | |||||||||
Investments in pooled funds | 7.6 | 11.5 | |||||||
Fair value measured on a recurring basis | |||||||||
Fair value measurements [Line Items] | |||||||||
Deferred compensation liabilities | [1] | (34.1) | (7.9) | ||||||
Derivative Liability | [1] | (0.4) | (0.4) | ||||||
Fair Value, Net Asset (Liability) | 283.4 | 669.9 | |||||||
Fair value measured on a recurring basis | Money market funds | |||||||||
Fair value measurements [Line Items] | |||||||||
Investments | [2] | 260.2 | 437.0 | ||||||
Fair value measured on a recurring basis | Equity securities | |||||||||
Fair value measurements [Line Items] | |||||||||
Investments | [3] | 46.0 | 188.4 | ||||||
Fair value measured on a recurring basis | Seed Capital Investments | |||||||||
Fair value measurements [Line Items] | |||||||||
Investments | [3] | 11.7 | 61.0 | ||||||
Fair value measured on a recurring basis | Securities sold short | |||||||||
Fair value measurements [Line Items] | |||||||||
Investments | [1] | (8.2) | |||||||
Quoted prices in Active Markets for Identical Assets (Level 1) | Fair value measured on a recurring basis | |||||||||
Fair value measurements [Line Items] | |||||||||
Deferred compensation liabilities | [1] | (34.1) | (7.9) | ||||||
Derivative Liability | [1] | 0.0 | 0.0 | ||||||
Fair Value, Net Asset (Liability) | 283.8 | 670.3 | |||||||
Quoted prices in Active Markets for Identical Assets (Level 1) | Fair value measured on a recurring basis | Money market funds | |||||||||
Fair value measurements [Line Items] | |||||||||
Investments | [2] | 260.2 | 437.0 | ||||||
Quoted prices in Active Markets for Identical Assets (Level 1) | Fair value measured on a recurring basis | Equity securities | |||||||||
Fair value measurements [Line Items] | |||||||||
Investments | [3] | 46.0 | 188.4 | ||||||
Quoted prices in Active Markets for Identical Assets (Level 1) | Fair value measured on a recurring basis | Seed Capital Investments | |||||||||
Fair value measurements [Line Items] | |||||||||
Investments | [3] | 11.7 | 61.0 | ||||||
Quoted prices in Active Markets for Identical Assets (Level 1) | Fair value measured on a recurring basis | Securities sold short | |||||||||
Fair value measurements [Line Items] | |||||||||
Investments | [1] | (8.2) | |||||||
Significant Other Observable Inputs (Level 2) | Fair value measured on a recurring basis | |||||||||
Fair value measurements [Line Items] | |||||||||
Deferred compensation liabilities | [1] | 0.0 | 0.0 | ||||||
Derivative Liability | [1] | (0.4) | (0.4) | ||||||
Fair Value, Net Asset (Liability) | (0.4) | (0.4) | |||||||
Significant Other Observable Inputs (Level 2) | Fair value measured on a recurring basis | Money market funds | |||||||||
Fair value measurements [Line Items] | |||||||||
Investments | [2] | 0.0 | 0.0 | ||||||
Significant Other Observable Inputs (Level 2) | Fair value measured on a recurring basis | Equity securities | |||||||||
Fair value measurements [Line Items] | |||||||||
Investments | [3] | 0.0 | 0.0 | ||||||
Significant Other Observable Inputs (Level 2) | Fair value measured on a recurring basis | Seed Capital Investments | |||||||||
Fair value measurements [Line Items] | |||||||||
Investments | [3] | 0.0 | 0.0 | ||||||
Significant Other Observable Inputs (Level 2) | Fair value measured on a recurring basis | Securities sold short | |||||||||
Fair value measurements [Line Items] | |||||||||
Investments | [1] | 0.0 | |||||||
Significant Unobservable Inputs (Level 3) | Fair value measured on a recurring basis | |||||||||
Fair value measurements [Line Items] | |||||||||
Deferred compensation liabilities | [1] | 0.0 | 0.0 | ||||||
Derivative Liability | [1] | 0.0 | 0.0 | ||||||
Fair Value, Net Asset (Liability) | 0.0 | 0.0 | |||||||
Significant Unobservable Inputs (Level 3) | Fair value measured on a recurring basis | Money market funds | |||||||||
Fair value measurements [Line Items] | |||||||||
Investments | [2] | 0.0 | 0.0 | ||||||
Significant Unobservable Inputs (Level 3) | Fair value measured on a recurring basis | Equity securities | |||||||||
Fair value measurements [Line Items] | |||||||||
Investments | [3] | 0.0 | 0.0 | ||||||
Significant Unobservable Inputs (Level 3) | Fair value measured on a recurring basis | Seed Capital Investments | |||||||||
Fair value measurements [Line Items] | |||||||||
Investments | [3] | $ 0.0 | 0.0 | ||||||
Significant Unobservable Inputs (Level 3) | Fair value measured on a recurring basis | Securities sold short | |||||||||
Fair value measurements [Line Items] | |||||||||
Investments | [1] | $ 0.0 | |||||||
|
Intangible Assets and Goodwill - Intangible Assets (Details) - USD ($) $ in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Amortizable intangible assets [Line Items] | ||
Carrying Amount | $ 400.7 | $ 232.1 |
Accumulated Amortization | 110.4 | 89.5 |
Customer relationships | ||
Amortizable intangible assets [Line Items] | ||
Carrying Amount | 372.4 | 203.6 |
Accumulated Amortization | 89.9 | 71.0 |
Other | ||
Amortizable intangible assets [Line Items] | ||
Carrying Amount | 28.3 | 28.5 |
Accumulated Amortization | $ 20.5 | $ 18.5 |
Intangible Assets and Goodwill - Annual Amortization for Intangible Assets (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 8.1 | $ 4.3 | $ 20.2 | $ 12.3 |
Annual amortization for intangible assets [Abstract] | ||||
Remainder of 2017 | 8.1 | 8.1 | ||
2018 | 32.2 | 32.2 | ||
2019 | 31.1 | 31.1 | ||
2020 | 28.7 | 28.7 | ||
2021 | 28.3 | 28.3 | ||
Thereafter | 161.9 | 161.9 | ||
Total | $ 290.3 | $ 290.3 |
Intangible Assets and Goodwill - Goodwill (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
| |
Changes in carrying amount of goodwill | |
Balance at the beginning of the period | $ 516.4 |
Acquisitions | 264.6 |
Disposals | 0.0 |
Other | 15.5 |
Balance at the end of the period | 796.5 |
Domestic Financial Services | |
Changes in carrying amount of goodwill | |
Balance at the beginning of the period | 345.8 |
Acquisitions | 68.7 |
Disposals | 0.0 |
Other | 1.0 |
Balance at the end of the period | 415.5 |
International Financial Services | |
Changes in carrying amount of goodwill | |
Balance at the beginning of the period | 15.6 |
Acquisitions | 195.9 |
Disposals | 0.0 |
Other | 14.5 |
Balance at the end of the period | 226.0 |
Healthcare Services | |
Changes in carrying amount of goodwill | |
Balance at the beginning of the period | 155.0 |
Acquisitions | 0.0 |
Disposals | 0.0 |
Other | 0.0 |
Balance at the end of the period | $ 155.0 |
Debt - Schedule of Debt (Details) - USD ($) $ in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Notes and other indebtedness [Line Items] | ||
Amount outstanding | $ 644.8 | $ 508.2 |
Less current portion of debt | 133.6 | 208.5 |
Long-term debt | 511.2 | 299.7 |
Accounts receivable securitization program | ||
Notes and other indebtedness [Line Items] | ||
Amount outstanding | 65.6 | 103.2 |
Revolving credit facilities | ||
Notes and other indebtedness [Line Items] | ||
Amount outstanding | 325.0 | 75.0 |
Senior notes | ||
Notes and other indebtedness [Line Items] | ||
Amount outstanding | 225.0 | 330.0 |
Other indebtedness | ||
Notes and other indebtedness [Line Items] | ||
Amount outstanding | $ 29.2 | $ 0.0 |
Debt - Narrative (Details) £ in Millions, $ in Millions |
9 Months Ended | ||||
---|---|---|---|---|---|
Sep. 30, 2017
GBP (£)
|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
|
Entity's debt and other obligations [Line Items] | |||||
Amount outstanding | $ 644.8 | $ 508.2 | |||
Proceeds from Lines of Credit | $ 1,117.3 | $ 768.7 | |||
Repayments of Lines of Credit | 867.3 | 984.8 | |||
Accounts receivable securitization program | |||||
Entity's debt and other obligations [Line Items] | |||||
Maximum borrowing capacity | 150.0 | ||||
Amount outstanding | 65.6 | 103.2 | |||
Proceeds from the accounts receivable securitization program | 443.1 | 746.8 | |||
Payments in respect of accounts receivable securitization program | $ 480.7 | $ 658.2 | |||
Revolving credit facilities | |||||
Entity's debt and other obligations [Line Items] | |||||
Maximum borrowing capacity | 850.0 | ||||
Amount outstanding | 325.0 | 75.0 | |||
New Line of Credit Facilities | |||||
Entity's debt and other obligations [Line Items] | |||||
Maximum borrowing capacity | 10.0 | ||||
Amount outstanding | 0.0 | $ 0.0 | |||
U.K. Mortgage | |||||
Entity's debt and other obligations [Line Items] | |||||
Amount outstanding | $ 29.5 | ||||
Mortgage principal amount | £ | £ 23.0 | ||||
Fixed interest rate | 3.90% | 3.90% | |||
Periodic principal payment | £ | £ 1.0 |
Debt - Fixed Rate Debt (Details) - USD ($) $ in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Carrying Value | ||
Notes and other indebtedness [Line Items] | ||
Amount outstanding | $ 254.5 | $ 330.0 |
Estimated Fair Value | ||
Notes and other indebtedness [Line Items] | ||
Amount outstanding | 264.8 | 346.3 |
Senior notes - Series B | Carrying Value | ||
Notes and other indebtedness [Line Items] | ||
Amount outstanding | 0.0 | 105.0 |
Senior notes - Series B | Estimated Fair Value | ||
Notes and other indebtedness [Line Items] | ||
Amount outstanding | 0.0 | 106.7 |
Senior notes - Series C | Carrying Value | ||
Notes and other indebtedness [Line Items] | ||
Amount outstanding | 65.0 | 65.0 |
Senior notes - Series C | Estimated Fair Value | ||
Notes and other indebtedness [Line Items] | ||
Amount outstanding | 66.0 | 67.5 |
Senior notes - Series D | Carrying Value | ||
Notes and other indebtedness [Line Items] | ||
Amount outstanding | 160.0 | 160.0 |
Senior notes - Series D | Estimated Fair Value | ||
Notes and other indebtedness [Line Items] | ||
Amount outstanding | 169.0 | 172.1 |
U.K. Mortgage | Carrying Value | ||
Notes and other indebtedness [Line Items] | ||
Amount outstanding | 29.5 | 0.0 |
U.K. Mortgage | Estimated Fair Value | ||
Notes and other indebtedness [Line Items] | ||
Amount outstanding | $ 29.8 | $ 0.0 |
Income Taxes (Details) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate (as a percent) | 21.00% | 38.30% | 15.30% | 37.30% |
Statutory federal income tax rate (as a percent) | 35.00% | 35.00% | 35.00% | 35.00% |
Equity - EPS (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Equity [Abstract] | ||||
Income from continuing operations attributable to DST Systems, Inc. | $ 48.8 | $ 50.5 | $ 365.8 | $ 124.4 |
Income (loss) from discontinued operations, net of tax | (0.3) | 222.8 | 4.5 | 260.0 |
Net income attributable to DST Systems, Inc. | $ 48.5 | $ 273.3 | $ 370.3 | $ 384.4 |
Weighted average common shares outstanding | 60.7 | 65.4 | 61.9 | 66.5 |
Incremental shares from restricted stock units and stock options | 0.9 | 0.7 | 0.8 | 0.8 |
Weighted average diluted shares outstanding | 61.6 | 66.1 | 62.7 | 67.3 |
Basic earnings per share | ||||
Continuing operations attributable to DST Systems, Inc., per basic share | $ 0.81 | $ 0.77 | $ 5.91 | $ 1.88 |
Discontinued operations, per basic share | (0.01) | 3.41 | 0.07 | 3.90 |
Basic earnings per share | 0.80 | 4.18 | 5.98 | 5.78 |
Diluted earnings per share | ||||
Continuing operations attributable to DST Systems, Inc., per diluted share | 0.79 | 0.76 | 5.84 | 1.85 |
Discontinued operation, per diluted share | 0.00 | 3.37 | 0.07 | 3.87 |
Diluted earnings per share | $ 0.79 | $ 4.13 | $ 5.91 | $ 5.72 |
Shares outstanding | 60.5 | 65.3 | 60.5 | 65.3 |
Anti-dilutive securities excluded from diluted earnings per share (in shares) | 0.0 | 0.0 | 0.0 | 0.0 |
Equity - Share Based Compensation (Details) - USD ($) shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Share-Based Compensation [Line Items] | ||||
Share based compensation recognized | $ 18.0 | $ 1.4 | $ 31.8 | $ 16.7 |
Unrecognized stock-based compensation expense | 64.6 | 64.6 | ||
Future Allocated Share-based Compensation, Expense Remainder of Fiscal Year | 8.7 | 8.7 | ||
Future Allocated Share-based Compensation Expense Year Two | 13.9 | 13.9 | ||
Future Allocated Share-based Compensation Expense Year Three | 5.0 | 5.0 | ||
Future Allocated Share-based Compensation Expense Year Four | 0.8 | 0.8 | ||
Unrecognized compensation expense not expected to vest | $ 36.2 | $ 36.2 | ||
Restricted stock units | ||||
Share-Based Compensation [Line Items] | ||||
Units granted during period (in shares) | 0.6 | |||
Units vested in period (in shares) | 0.4 | |||
Outstanding at the end of the period (in shares) | 1.3 | 1.3 | ||
Performance stock units | ||||
Share-Based Compensation [Line Items] | ||||
Units granted during period (in shares) | 0.3 | |||
Stock options | ||||
Share-Based Compensation [Line Items] | ||||
Stock options outstanding at the end of the period (in shares) | 0.6 | 0.6 |
Equity - AOCI (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Accumulated other comprehensive income [Line Items] | ||||
Balance at beginning of period | $ 16.6 | |||
Net current period other comprehensive income (loss) | $ 16.3 | $ 20.6 | (24.3) | $ (24.8) |
Other Comprehensive Income (Loss), Net of Tax | 16.3 | $ 20.6 | (24.3) | $ (24.8) |
Balance at end of the period | (7.7) | (7.7) | ||
Unrealized Gain on Available-for-Sale Securities | ||||
Accumulated other comprehensive income [Line Items] | ||||
Balance at beginning of period | 94.1 | |||
Other Comprehensive Income (Loss), Net of Tax | (93.6) | |||
Balance at end of the period | 0.5 | 0.5 | ||
Unrealized Loss on Cash Flow Hedges | ||||
Accumulated other comprehensive income [Line Items] | ||||
Balance at beginning of period | (0.1) | |||
Other Comprehensive Income (Loss), Net of Tax | 0.2 | |||
Balance at end of the period | 0.1 | 0.1 | ||
Foreign Currency Translation Adjustments | ||||
Accumulated other comprehensive income [Line Items] | ||||
Balance at beginning of period | (77.4) | |||
Other Comprehensive Income (Loss), Net of Tax | 69.1 | |||
Balance at end of the period | $ (8.3) | $ (8.3) |
Equity - Reclassification out of AOCI (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
||||||||||||
Additions to and reclassifications out of Accumulated other comprehensive income [Line Items] | |||||||||||||||
Unrealized gains (losses) on available-for-sale securities, Pretax | $ 0.7 | $ 35.0 | $ 6.4 | $ 0.8 | |||||||||||
Reclassification of (gains) losses into net earnings on available-for-sale securities, Pretax | [1] | (0.1) | (0.1) | (155.8) | (2.0) | ||||||||||
Net change in available-for-sale securities, Pretax | 0.6 | 34.9 | (149.4) | (1.2) | |||||||||||
Unrealized gains (losses) on available-for-sale securities, Net of Tax | 0.3 | 21.7 | 4.0 | 0.5 | |||||||||||
Reclassification of (gains) losses into net earnings on available-for-sale securities, Net of Tax | [1] | 0.0 | 0.0 | (97.6) | (1.2) | ||||||||||
Net change in available-for-sale securities, Net of Tax | 0.3 | 21.7 | (93.6) | (0.7) | |||||||||||
Unrealized gains (losses) on cash flow hedges, Pretax | (0.2) | (0.1) | 0.0 | 0.4 | |||||||||||
Net change in cash flow hedges, Pretax | 0.0 | 0.1 | 0.3 | 0.4 | |||||||||||
Reclassification of (gains) losses into net earnings on foreign currency cash flow hedges, Net of Tax | (0.1) | (0.1) | 0.0 | 0.2 | |||||||||||
Net change in cash flow hedges, Net of Tax | 0.0 | 0.0 | 0.2 | 0.2 | |||||||||||
Reclassification into net earnings upon step-acquisition of foreign entities, Pretax | [2],[3] | 41.0 | 0.0 | ||||||||||||
Current period translation adjustments, Pretax | [2] | 16.1 | (1.1) | 31.5 | (24.3) | ||||||||||
Net Cumulative translation adjustments, Pretax | [2] | 16.1 | (1.1) | 69.2 | (24.3) | ||||||||||
Reclassification into net earnings upon step-acquisition of foreign entities, Net of Tax | [2],[3] | 41.0 | 0.0 | ||||||||||||
Current period translation adjustments, Net of Tax | [2] | 16.0 | (1.1) | 31.4 | (24.3) | ||||||||||
Net Cumulative translation adjustments, Net of Tax | [2] | 16.0 | (1.1) | 69.1 | (24.3) | ||||||||||
Total other comprehensive income (loss), Pretax | 16.7 | 33.9 | (79.9) | (25.1) | |||||||||||
Total other comprehensive income (loss), Net of Tax | 16.3 | 20.6 | (24.3) | (24.8) | |||||||||||
Foreign Currency Contracts | |||||||||||||||
Additions to and reclassifications out of Accumulated other comprehensive income [Line Items] | |||||||||||||||
Reclassification of (gains) losses into net earnings on foreign currency cash flow hedges, Pretax | [4] | 0.2 | 0.2 | 0.3 | 0.0 | ||||||||||
Reclassification of (gains) losses into net earnings on foreign currency cash flow hedges, Net of Tax | [4] | $ 0.1 | $ 0.1 | 0.2 | 0.0 | ||||||||||
Available-for-Sale Securities | |||||||||||||||
Additions to and reclassifications out of Accumulated other comprehensive income [Line Items] | |||||||||||||||
Total other comprehensive income (loss), Net of Tax | (93.6) | ||||||||||||||
Cash Flow Hedges | |||||||||||||||
Additions to and reclassifications out of Accumulated other comprehensive income [Line Items] | |||||||||||||||
Total other comprehensive income (loss), Net of Tax | 0.2 | ||||||||||||||
Cumulative Translation Adjustments | |||||||||||||||
Additions to and reclassifications out of Accumulated other comprehensive income [Line Items] | |||||||||||||||
Total other comprehensive income (loss), Net of Tax | 69.1 | ||||||||||||||
Discontinued Operations, Held-for-sale | |||||||||||||||
Additions to and reclassifications out of Accumulated other comprehensive income [Line Items] | |||||||||||||||
Reclassification into net earnings upon step-acquisition of foreign entities, Pretax | [2],[5] | (3.3) | 0.0 | ||||||||||||
Reclassification into net earnings upon step-acquisition of foreign entities, Net of Tax | [2],[5] | $ (3.3) | $ 0.0 | ||||||||||||
|
Equity - Unconsolidated Affiliates (Details) $ in Millions |
Sep. 30, 2017
USD ($)
affiliate
|
Dec. 31, 2016
USD ($)
affiliate
|
---|---|---|
Equity [Abstract] | ||
Number of unconsolidated affiliates with an interest rate swap | affiliate | 1 | 1 |
Unconsolidated affiliate's interest rate swap liability, fair value | $ 30.1 | $ 33.1 |
Equity method investments ownership percentage | 50.00% | 50.00% |
Proportionate share in unconsolidated affiliate's interest rate swap liability | $ 15.1 | $ 16.5 |
Equity - Stock repurchases and dividends (Details) $ / shares in Units, shares in Millions, $ in Millions |
9 Months Ended | |||||
---|---|---|---|---|---|---|
Oct. 27, 2017
$ / shares
|
May 09, 2017
USD ($)
|
Mar. 30, 2017
USD ($)
|
Sep. 30, 2017
USD ($)
shares
|
Sep. 30, 2016
USD ($)
|
Oct. 31, 2017
USD ($)
|
|
Stock repurchases and dividends [Line Items] | ||||||
Stock Repurchased During Period, Shares | shares | 3.8 | |||||
Stock Repurchased During Period, Value | $ 225.0 | |||||
Stock Repurchase Program, Authorized Amount | $ 300.0 | |||||
Share receipts and withholding amount from option exercise and restricted stock vesting | 10.4 | $ 15.7 | ||||
Dividends, common stock | 34.0 | 33.8 | ||||
Cash dividends paid | $ 33.0 | 32.8 | ||||
Treasury shares, stock split | shares | 16.5 | |||||
Distribution of treasury stock for stock split | $ 0.0 | |||||
Subsequent Event [Member] | ||||||
Stock repurchases and dividends [Line Items] | ||||||
Stock Repurchased, Remaining Authorized Repurchase Amount | $ 202.5 | |||||
Cash dividends declared (in dollars per share) | $ / shares | $ 0.18 | |||||
Boston Financial Data Services, Inc. | ||||||
Stock repurchases and dividends [Line Items] | ||||||
Stock Repurchased During Period, Value | $ 3.7 | |||||
Treasury Stock | ||||||
Stock repurchases and dividends [Line Items] | ||||||
Distribution of treasury stock for stock split | 1,337.9 | |||||
Common Stock | ||||||
Stock repurchases and dividends [Line Items] | ||||||
Stock split, conversion ratio | 2 | |||||
Distribution of treasury stock for stock split | (0.2) | |||||
Additional Paid-in Capital | ||||||
Stock repurchases and dividends [Line Items] | ||||||
Cash dividends paid | 1.0 | 1.0 | ||||
Distribution of treasury stock for stock split | (40.5) | |||||
Retained Earnings | ||||||
Stock repurchases and dividends [Line Items] | ||||||
Cash dividends paid | 34.0 | $ 33.8 | ||||
Distribution of treasury stock for stock split | $ (1,297.2) |
Commitments and Contingencies (Details) - USD ($) $ in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Letters of credit outstanding | $ 6.0 | $ 5.9 |
Segment Information (Details) $ in Millions |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2016
USD ($)
|
Dec. 31, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
|
|
Segment Reporting [Abstract] | ||||||
Number of operating segments | 3 | |||||
Summary of financial information of segments [Line Items] | ||||||
Total assets | $ 3,002.2 | $ 3,002.2 | $ 2,771.8 | |||
Operating revenues | 524.8 | $ 365.5 | 1,534.0 | $ 1,100.7 | ||
Out-of-pocket reimbursements | 37.8 | 21.2 | 90.3 | 57.2 | 82.3 | $ 69.0 |
Total revenues | 562.6 | 386.7 | 1,624.3 | 1,157.9 | 1,556.7 | 1,474.0 |
Costs and expenses | 472.1 | 289.6 | 1,323.7 | 916.9 | 1,213.4 | 1,150.2 |
Depreciation and amortization | 34.7 | 22.8 | 92.7 | 69.1 | 96.0 | 91.1 |
Operating income | 55.8 | 74.3 | 207.9 | 171.9 | 247.3 | 232.7 |
Other income (loss), net | 8.7 | 6.7 | 217.2 | 20.0 | 22.7 | 204.5 |
Gain on sale of business | 5.5 | |||||
Equity in earnings of unconsolidated affiliates | 4.2 | 7.0 | 27.3 | 23.9 | 27.2 | 45.4 |
Earnings from continuing operations before interest, income taxes and non-controlling interest | 68.7 | 88.0 | 452.4 | 215.8 | 302.7 | 482.6 |
Interest expense | (6.9) | (5.4) | (19.7) | (18.0) | (23.5) | (23.8) |
Operating Segments | ||||||
Summary of financial information of segments [Line Items] | ||||||
Operating revenues | 524.8 | 365.5 | 1,534.0 | 1,100.7 | 1,474.4 | 1,405.0 |
Operating Segments | Domestic Financial Services | ||||||
Summary of financial information of segments [Line Items] | ||||||
Total assets | 2,332.4 | 2,332.4 | 2,234.9 | |||
Operating revenues | 291.4 | 232.6 | 827.9 | 704.3 | 937.7 | 936.8 |
Out-of-pocket reimbursements | 28.8 | 19.2 | 77.6 | 50.5 | 73.0 | 60.7 |
Total revenues | 334.1 | 266.6 | 948.9 | 798.1 | 1,068.8 | 1,043.8 |
Costs and expenses | 275.9 | 194.9 | 783.6 | 629.9 | 829.0 | 792.3 |
Depreciation and amortization | 22.6 | 18.0 | 63.3 | 54.9 | 77.3 | 67.7 |
Operating income | 35.6 | 53.7 | 102.0 | 113.3 | 162.5 | 183.8 |
Other income (loss), net | 8.8 | 4.1 | 229.2 | 11.9 | 13.9 | 207.2 |
Gain on sale of business | 0.0 | |||||
Equity in earnings of unconsolidated affiliates | 1.7 | 2.5 | 10.1 | 11.4 | 14.3 | 23.8 |
Earnings from continuing operations before interest, income taxes and non-controlling interest | 46.1 | 60.3 | 341.3 | 136.6 | 190.7 | 414.8 |
Operating Segments | International Financial Services | ||||||
Summary of financial information of segments [Line Items] | ||||||
Total assets | 749.5 | 749.5 | 430.0 | |||
Operating revenues | 129.2 | 26.8 | 392.9 | 82.1 | 110.5 | 91.8 |
Out-of-pocket reimbursements | 7.1 | 0.2 | 7.4 | 0.8 | 1.2 | 1.7 |
Total revenues | 136.5 | 27.1 | 400.7 | 83.2 | 112.1 | 95.1 |
Costs and expenses | 125.0 | 23.6 | 328.1 | 72.9 | 98.2 | 86.1 |
Depreciation and amortization | 9.7 | 1.0 | 21.3 | 2.2 | 3.1 | 4.8 |
Operating income | 1.8 | 2.5 | 51.3 | 8.1 | 10.8 | 4.2 |
Other income (loss), net | (0.3) | 2.5 | (12.2) | 8.0 | 8.7 | (2.6) |
Gain on sale of business | 5.5 | |||||
Equity in earnings of unconsolidated affiliates | 2.4 | 4.4 | 16.8 | 12.3 | 12.4 | 21.3 |
Earnings from continuing operations before interest, income taxes and non-controlling interest | 3.9 | 9.4 | 55.9 | 28.4 | 37.4 | 22.9 |
Operating Segments | Healthcare Services | ||||||
Summary of financial information of segments [Line Items] | ||||||
Total assets | 500.2 | 500.2 | 552.2 | |||
Operating revenues | 104.2 | 106.1 | 313.2 | 314.3 | 426.2 | 376.4 |
Out-of-pocket reimbursements | 1.9 | 1.8 | 5.5 | 6.3 | 8.5 | 8.2 |
Total revenues | 106.1 | 107.9 | 318.7 | 320.6 | 434.7 | 384.6 |
Costs and expenses | 85.3 | 86.0 | 256.0 | 258.1 | 345.1 | 321.3 |
Depreciation and amortization | 2.4 | 3.8 | 8.1 | 12.0 | 15.6 | 18.6 |
Operating income | 18.4 | 18.1 | 54.6 | 50.5 | 74.0 | 44.7 |
Other income (loss), net | 0.2 | 0.1 | 0.2 | 0.1 | 0.1 | (0.1) |
Gain on sale of business | 0.0 | |||||
Equity in earnings of unconsolidated affiliates | 0.1 | 0.1 | 0.4 | 0.2 | 0.5 | 0.3 |
Earnings from continuing operations before interest, income taxes and non-controlling interest | 18.7 | 18.3 | 55.2 | 50.8 | 74.6 | 44.9 |
Elimination Adjustments | ||||||
Summary of financial information of segments [Line Items] | ||||||
Total assets | (579.9) | (579.9) | (517.9) | |||
Operating revenues | (14.1) | (14.9) | (43.8) | (43.6) | (58.5) | (47.9) |
Out-of-pocket reimbursements | 0.0 | 0.0 | (0.2) | (0.4) | (0.4) | (1.6) |
Total revenues | (14.1) | (14.9) | (44.0) | (44.0) | (58.9) | (49.5) |
Costs and expenses | (14.1) | (14.9) | (44.0) | (44.0) | (58.9) | (49.5) |
Depreciation and amortization | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
Operating income | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
Other income (loss), net | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
Gain on sale of business | 0.0 | |||||
Equity in earnings of unconsolidated affiliates | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
Earnings from continuing operations before interest, income taxes and non-controlling interest | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
Elimination Adjustments | Domestic Financial Services | ||||||
Summary of financial information of segments [Line Items] | ||||||
Operating revenues | 13.9 | 14.8 | 43.4 | 43.3 | 58.1 | 46.3 |
Elimination Adjustments | International Financial Services | ||||||
Summary of financial information of segments [Line Items] | ||||||
Operating revenues | 0.2 | 0.1 | 0.4 | 0.3 | 0.4 | 1.6 |
Elimination Adjustments | Healthcare Services | ||||||
Summary of financial information of segments [Line Items] | ||||||
Operating revenues | 0.0 | $ 0.0 | 0.0 | $ 0.0 | 0.0 | $ 0.0 |
Discontinued Operations, Held-for-sale | Customer Communications | ||||||
Summary of financial information of segments [Line Items] | ||||||
Assets held for sale | $ 0.0 | $ 0.0 | $ 72.6 |
Restructuring Charges (Details) - Domestic Financial Services $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
| |
Restructuring Cost and Reserve [Line Items] | |
Restructuring and Related Cost, Incurred Cost | $ 9.2 |
Restructuring Reserve | $ 2.3 |
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