DST Systems, Inc. Investor Presentation February 2015

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1 DST Systems, Inc. Investor Presentation February 2015

2 Safe Harbor Our presentation may include forward looking statements regarding DST or any of its businesses. Such statements are based on our views as of today, and actual results could differ materially. A number of factors could affect future results, including those risk factors set forth in our latest Form 10 Q report filed with the SEC. All such factors should be considered in evaluating any forward looking statements. If we permit your printing, copying or transmitting of content in this presentation, it is under a non exclusive, non transferable, limited license, and you must include or refer to the copyright notice contained in this document. You may not create derivative works of this presentation or its content without our prior written permission. Copyright 2015 by DST Systems, Inc. All rights reserved. Our trademarks and service marks and those of third parties used in this presentation are the property of their respective owners. 2

3 Company Profile Leading provider of technology, strategic advisory and business processing solutions. Deep penetration in key verticals Financial Services Mutual funds Brokerage Retirement Healthcare Services Medical claims processing Pharmacy claims processing Care management Global leader in Customer Communications NYSE: DST Based in Kansas City, MO Operates with ~13,000 employees 2014 Operating Revenue = $2,042.0 million (Excludes out of pocket reimbursements) 3

4 4 Long History of Value Creation

5 Favorable Industry Trends (1) (2) 5 (1) Source: U.S. life expectancy ; United States Centers for Disease Control and Prevention. (2) Source: Open Security Foundation and Ponemon Institute.

6 Investment Highlights Leadership position in industries served Deep, longstanding customer relationships Robust, scalable technology platform and infrastructure Deep regulatory compliance expertise Attractive business model with significant recurring and diversified revenues Experienced management team with proven track record 6

7 Leadership Position in Industries Served Financial Services Healthcare Services ASSET MANAGERS TA M accounts Fast/iFast 23.8 M accounts Vision 160,000 advisors ALPS AUA $176.9 B ALPS AUM $15.3 B BROKERAGE Subaccounting 28.6 M accounts RETIREMENT TRAC 7.2 M participants HEALTHCARE Healthcare Covered Lives Pharmacy Claims Paid in M M Business Process Management 212,500 users Customer Communications: 10.8 billion images produced, 2.7 billion items mailed during 2014 Business Process Outsourcing Cost effective processing and infrastructure support Global IT Outsourcing Technology development, support, testing, processing and consulting 7 Infrastructure Leverage Data Centers Communication Networks Business Continuity Disaster Recovery

8 Key Focus Areas for Growth Applied Analytics Asset Management Brokerage Solutions Distribution Solutions Retirement Solutions Wealth Management Solutions 8 Healthcare Technologies and Care Management Solutions

9 Our Service Model Software SAAS BPO Consulting A la Carte Offering SAAS and BPO Drive Majority of Business Trend: Customers Move Up the Spectrum Great Growth Opportunity 9

10 Attractive Business Model Significant Recurring Sources of Revenue Long Term Contracts Deeply Embedded in Client Work Flow Significant Switching Costs Recurring Revenue 10

11 Experienced Management Team with Proven Track Record Highly experienced team with more than 200 years of cumulative industry experience New leadership team with deep industry expertise Steve Hooley Chief Executive Officer and President Gregg Givens Chief Financial Officer Beth Sweetman Head of Human Capital Steve Towle Head of Financial Services Named DST s Chief Executive Officer in 2012 Served as President and Chief Executive Officer of Boston Financial Data Services, Inc Joined BFDS in 2004 and DST in 2009 Named DST CFO in Jan Served as senior manager at Price Waterhouse for 14 years Joined DST in 1996 and has been significantly involved with DST s M&A activities, financing transactions, and joint venture operations Appointed Senior Vice President and Chief Human Resources Officer in In June 2013, assumed responsibility for leading the entire DST Human Resources organization, both domestically and internationally. Served as President and CEO of DST s Customer Communications business from Former President and COO of Boston Financial Data Services, Inc., a DST joint venture Joined BFDS in 1997 and DST in 2004 Ned Burke Head of ALPS Simon Hudson Lund Head of Non US Business Jonathan Boehm Head of Healthcare Business Mike Abbaei Head of Customer Communications 11 Joined ALPS in 1991 as National Sales Manager and became President in 2000 Joined DST in February 2013 as Chief Executive Officer of DST International Holdings Previously led Transfer Agency Operations for IFDS, a DST joint venture; joined IFDS in 2003 President and CEO of DST Healthcare as well as President and CEO of Argus Health Systems Joined DST in 1984 Joined DST in 2011 as President of Brokerage Solutions Former Executive VP and CIO of Legg Mason

12 Growth Strategies Strengthen and Expand Existing Customer Relationships Selectively Pursue Strategic Acquisitions Develop New and Innovative Products and Services 12 Leverage Proprietary Insights

13 13 DST Financial Discussion

14 Financial Highlights Significant recurring revenues Strong cash flows Solid balance sheet Robust revolving debt capacity Monetization of non core assets Focus on returning capital to shareholders 14

15 Historical Financial Performance Non GAAP Operating Revenues Non GAAP Net Income and EPS (1) 15. Note: Please refer to Non GAAP reconciliation slides for adjustment details. (1) Non GAAP net income after non controlling interest.

16 Financial Highlights Key Financial Highlights (on a non GAAP basis) Consolidated operating revenues (excluding out of pocket reimbursements) increased $87.4 million or 4.5% compared to 2013 Consolidated income from operations increased $12.3 million or 3.9% vs Diluted EPS increased $0.98 or 21.4% from 2013 Weighted average diluted shares outstanding for 2014 decreased by 3.6 million shares or 8.2% from 2013 to 40.5 million Year ended December 31, Non-GAAP Financial Results Operating Revenues $2,042.0 $1,954.6 Y o Y Growth 4.5% Operating Income $328.2 $315.9 Y o Y Growth 3.9% Diluted EPS $5.55 $4.57 Y o Y Growth 21.4% Segment Details Financial Services Operating Revenues $1,054.2 $998.3 Y o Y Growth 5.6% Operating Margin 19.8% 20.9% Healthcare Services Operating Revenues $382.2 $333.3 Y o Y Growth 14.7% Operating Margin 14.9% 15.7% Customer Communications Operating Revenues $650.5 $660.5 Y o Y Decline (1.5%) Operating Margin 8.8% 7.6% 16 Note: Please refer to Non GAAP reconciliation slides for adjustment details.

17 Condensed Balance Sheet (in millions) December 31, Current Assets operating $ $ $ $ Client funds Investments Available for sale securities Investments Cost method and other investments Unconsolidated affiliates (BFDS, IFDS, Real Estate) Properties, net Other non current assets Total assets $ 2,942.9 $ 3,090.5 $ 3,392.5 $ 3,428.6 Debt $ $ $ 1,011.6 $ 1,380.3 Current liabilities operating Client funds obligations Other non current liabilities Total stockholders' equity 1, , , Total liabilities and stockholders' equity $ 2,942.9 $ 3,090.5 $ 3,392.5 $ 3,428.6 Common shares outstanding

18 Monetization of Non Core Assets 2013 Q2 2013Q Q Q Q Q Q Q Total: $494.6 million Total: $109.4 million Total: $118.5 million Total: $100 million Total: $103.6 million Total: $431.5 million $259.5 million from the sales of marketable securities ($148.8 million from the sale of shares of State Street Corporation) $125 million cash dividend from BFDS $50.2 million from the sales of marketable securities ($44.6 million from the sale of shares of State Street Corporation) $59.2 million from the sales of marketable securities ($54.4 million from the sale of shares of State Street Corporation) $93.1 million from the sales of marketable securities ($91.3 million from the sale of shares of State Street Corporation) $202.5 million from the sales of marketable securities ($190.3 million from the sale of shares of State Street Corporation) $100 million of distributions from private equity funds and other investments $59.1 million of distributions from private equity fund and other investments $117.9 million of distributions from private equity fund and sales of other investments $8.7 million of distributions from private equity fund and sales of other investments $10.5 million of distributions from private equity fund and sales of other investments $196.2 million of distributions from private equity fund and sales of other investments $10.1 million from the sale of real estate assets $0.6 million from the sale of real estate assets $32.1 million from the sale of real estate assets $32.7 million from the sale of real estate assets 18 (1) All values shown represent pre tax proceeds.

Deleveraging Improving balance sheet supports strategic initiatives (Millions) Reduction in Total Debt (1) Debt Reduced $827 Million Highlights As of December 31, 2014, the Company s

during 2012 and 2013 New revolver capacity increased to $850 million sufficient to pursue potential M&A initiatives, $44.

19 Deleveraging Improving balance sheet supports strategic initiatives (Millions) Reduction in Total Debt (1) Debt Reduced $827 Million Highlights As of December 31, 2014, the Company s outstanding debt is comprised of $389 million of fixed rate debt and $164 million of variable rate debt The Company has reduced debt by $827 million since 2011, paying down over $300 million during 2012 and 2013 New revolver capacity increased to $850 million sufficient to pursue potential M&A initiatives, $44.3 million outstanding as of December 31, (1) Reflects fiscal year end balances as of December 31. Current balance sheet affords the Company significant flexibility to meet its goals of making strategic investments in its business and returning capital to shareholders

20 Return of Capital to Shareholders Q Q Q Q Total: $304.4 million Total: $12.6 million Total: $211.9 million Total: $103.9 million Total: $119.2 million Total: $447.6million DST spent $252.6 million to repurchase 3.4 million shares of Common Stock DST spent $200 million to repurchase 2.4 million shares directly from the Argyros group DST spent $92.1 million to repurchase 1.0 million shares of Common Stock DST spent million to repurchase 1.2 million shares of Common Stock DST spent $200 million to repurchase 2.2 million shares of Common Stock DST spent $200 million to repurchase 2.4 million shares directly from the Argyros group DST paid $51.8 million in dividends ($1.20 per share) DST paid $12.6 million in dividends ($0.30 per share) DST paid $11.9 million in dividends ($0.30 per share) DST paid $11.8 million in dividends ($0.30 per share) DST paid $11.3 million in dividends ($0.30 per share) DST paid $47.6 million in dividends ($0.90 per share) Since 2010, DST has returned $1.2 billion of capital to shareholders 20

21 Key Takeaways Leadership position in industries served Deep, longstanding customer relationships Robust, scalable technology platform and infrastructure Deep regulatory compliance expertise Attractive business model with significant recurring and diversified revenues Experienced management team with proven track record 21

22 Appendix Use of Non GAAP Financial Information In addition to reporting operating revenue, operating income, pretax income, net income, net income attributable to DST Systems, Inc. ( DST Earnings ) and earnings per share on a GAAP basis, DST has also made certain non GAAP adjustments which are reconciled to the corresponding GAAP measures below. In making these non GAAP adjustments, the Company takes into account the impact of items that are not necessarily ongoing in nature, that do not have a high level of predictability associated with them or that are non operational in nature. Generally, these items include net gains on dispositions of business units, net gains (losses) associated with securities and other investments, restructuring and impairment costs and other similar items. Management believes the exclusion of these items provides a useful basis for evaluating underlying business unit performance, but should not be considered in isolation and is not in accordance with, or a substitute for, evaluating business unit performance utilizing GAAP financial information. Management uses non GAAP measures in its budgeting and forecasting processes and to further analyze its financial trends and operational run rate, as well as making financial comparisons to prior periods presented on a similar basis. The Company believes that providing such adjusted results allows investors and other users of DST's financial statements to better understand DST's comparative operating performance for the periods presented. DST's management uses each of these non GAAP financial measures in its own evaluation of the Company's performance, particularly when comparing performance to past periods. DST's non GAAP measures may differ from similar measures by other companies, even if similar terms are used to identify such measures. Although DST's management believes non GAAP measures are useful in evaluating the performance of its business, DST acknowledges that items excluded from such measures may have a material impact on the Company's operating revenue, operating income, pretax income, net income, DST earnings and earnings per share calculated in accordance with GAAP. Therefore, management typically uses Non GAAP measures in conjunction with GAAP results. These factors should be considered when evaluating DST's results. 22 The tables on the following pages reconcile the GAAP financial results to the corresponding non GAAP financial results. Additional descriptions of the non GAAP adjustments can be found in DST s Form 10 Q and Form 10 K filings.

23 Appendix Reconciliation of GAAP Results to Non GAAP Results 2014 For the Year Ended December 31, 2014 (in millions, except per share amounts) Operating Operating Pretax Net DST Diluted Revenue Income Income Income Earnings* EPS Reported GAAP income $ 2,042.0 $ $ $ $ $ Adjusted to remove: Restructuring charges Advisory costs and other transaction costs Loss accrual reversal (4.0) (4.0) (4.7) (4.7) (0.12) Charitable contribution Gain on contract to repurchase common stock (18.1) (18.1) (18.1) (0.45) Net gain on sale of business (100.5) (107.2) (107.2) (2.64) Net gain on securities and other investments (343.5) (212.7) (212.7) (5.26) Net gain from unconsolidated affiliated (5.7) (3.6) (3.6) (0.09) Income tax items (36.9) (36.9) (0.91) Adjusted Non GAAP income $ 2,042.0 $ $ $ $ $ 5.55 * DST Earnings has been defined as "net income attributable to DST Systems, Inc." (after non controlling interest). 23

24 Appendix Reconciliation of GAAP Results to Non GAAP Results 2013 For the Year Ended December 31, 2013 (in millions, except per share amounts) Operating Operating Pretax Net DST Diluted Revenue Income Income Income Earnings* EPS Reported GAAP income $ 1,960.6 $ $ $ $ $ 8.00 Adjusted to remove: Employee termination expenses Contract termination payment Financial Services (6.0) (6.0) (6.0) (3.7) (3.7) (0.08) Loss accrual Net loss on real estate assets Settlement of leased facility obligation (2.5) (2.5) (2.5) (2.5) (0.06) Net gain on securities and other investments (222.8) (138.1) (138.1) (3.14) Net gain from unconsolidated affiliates (7.4) (4.6) (4.6) (0.10) Income tax items (11.0) (11.0) (0.24) Adjusted Non GAAP income $ 1,954.6 $ $ $ $ $ 4.57 * DST Earnings has been defined as "net income attributable to DST Systems, Inc." (after non controlling interest). 24

25 Appendix Reconciliation of GAAP Results to Non GAAP Results 2012 For the Year Ended December 31, 2012 (in millions, except per share amounts) Operating Operating Pretax Net DST Diluted Revenue Income Income Income Earnings* EPS Reported GAAP income $ 1,892.4 $ $ $ $ $ 7.08 Adjusted to remove: Business advisory expenses Financial Services Employee termination expenses Loss accrual Leased facility abandonment costs Impairment of goodwill Net loss on real estate assets Asset impairment, employee termination and other expenses from insurance processing business Charitable contribution of securities (2.9) (2.9) (0.06) Net gain on securities and other investments (333.2) (208.0) (208.0) (4.54) Net gain from unconsolidated affiliates (11.1) (9.2) (9.2) (0.20) Income tax items (18.3) (18.3) (0.40) Adjusted Non GAAP income $ 1,892.4 $ $ $ $ $ * DST Earnings has been defined as "net income attributable to DST Systems, Inc." (after non controlling interest).

26 Appendix Reconciliation of GAAP Results to Non GAAP Results 2011 For the Year Ended December 31, 2011 (in millions, except per share amounts) Operating Operating Pretax Net DST Diluted Revenue Income Income Income Earnings* EPS Reported GAAP results $ 1,744.0 $ $ $ $ $ 3.95 Adjusted to remove: Contract termination payment, net (3.5) (2.0) (2.0) (1.2) (1.2) (0.03) Employee termination expenses Business development expenses Business advisory expenses Restructuring cost to amend sales agreements Loss accrual Net gain on securities and other investments (17.2) (10.5) (10.5) (0.23) Net loss on repurchase of convertible debentures Employee termination expenses at unconsolidated affiliate Impairment of unconsolidated affiliate Adjusted Non GAAP results $ 1,740.5 $ $ $ $ $ 4.09 * DST Earnings has been defined as "net income attributable to DST Systems, Inc." (after non controlling interest). 26

27 Appendix Reconciliation of GAAP Results to Non GAAP Results 2010 For the Year Ended December 31, 2010 (in millions, except per share amounts) Operating Operating Pretax Net DST Diluted Revenue Income Income Income Earnings* EPS Reported GAAP income $ 1,713.6 $ $ $ $ $ 6.73 Adjusted to remove: Contract termination payment, net (73.4) (67.2) (67.2) (41.0) (41.0) (0.87) Employee termination expenses Net gain on the disposition of securities and other investments 10.2 (60.6) (40.9) (40.9) (0.87) Dividend from a private equity investment (54.7) (42.1) (42.1) (0.89) Net loss on repurchase of convertible debentures Income tax items (2.3) (1.6) (0.03) Adjusted Non GAAP income $ 1,640.2 $ $ $ $ $ 4.43 * DST Earnings has been defined as "net income attributable to DST Systems, Inc." (after non controlling interest). 27

DST Systems, Inc. July 2015

DST Systems, Inc. July 2015 Safe Harbor Our presentation may include forward-looking statements regarding DST or any of its businesses. Such statements are based on our views as of today, and actual results