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x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2003

For the transition period from ____________ to ____________

Commission File Number 1-14036

DST SYSTEMS, INC.
(Exact name of registrant as specified in its charter)

(816) 435-1000
(Registrant's telephone number, including area code)

No Changes
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the Company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X]     No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes [X]      No [ ]

Number of shares outstanding of the Company's common stock as of October 31, 2003:
Common Stock $0.01 par value – 115,736,459

The brand, service or product names or marks referred to in this Report are trademarks or services marks, registered or otherwise, of DST Systems, Inc. or its subsidiaries and affiliates or of vendors to the Company.

The Condensed Consolidated Financial Statements of DST Systems, Inc. ("DST" or the "Company") 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 have been condensed or omitted pursuant to such rules and regulations, although the Company believes 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 the audited financial statements and the notes thereto for the year ended December 31, 2002.

The results of operations for the three and nine months ended September 30, 2003 are not necessarily indicative of the results to be expected for the full year 2003.

DST Systems, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

The Condensed Consolidated Financial Statements of DST Systems, Inc. ("DST" or the "Company") 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 have been condensed or omitted pursuant to such rules and regulations, although the Company believes 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 the audited financial statements and the notes thereto for the year ended December 31, 2002.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal interim closing procedures) necessary to present fairly the financial position of the Company and its subsidiaries at September 30, 2003 and December 31, 2002, and the results of operations for the three and nine months ended September 30, 2003 and 2002 and cash flows for the nine months ended September 30, 2003 and 2002.

Certain amounts in the prior year's consolidated financial statements have been reclassified to conform to the current year presentation.

The results of operations for the three and nine months ended September 30, 2003 are not necessarily indicative of the results to be expected for the full year 2003.

On August 25, 2003, the Company announced it had entered into a definitive agreement with Janus under which DST will acquire from Janus 32.3 million shares of DST common stock (27.9% of the outstanding shares) in exchange for all of the stock of a DST subsidiary, DST Output Marketing Services, Inc. ("OMS"), which is part of DST's Output Solutions segment. At the time of the exchange, OMS will hold an operating commercial printing and graphics design business and additional cash to equalize the value of the operating business and shares being exchanged. Janus and DST have agreed that the exchange value of the DST shares at closing will be determined based on the average price of DST common stock during the twenty trading day period prior to the close of the transaction, but at not less than $30.00 per share nor more than $34.50 per share. On this basis, and including the value of its other assets, OMS would have an approximate aggregate value of between $969 million to $1.114 billion, and its assets at closing would include cash of approximately $854 million to approximately $999 million. OMS's revenues for the year ended December 31, 2002 and the nine months ended September 30, 2003 were $105.7 million and $65.7 million, respectively. OMS has approximately 420 employees.

If any condition to closing is not satisfied or waived by the parties, DST will not be able to complete the exchange. The Company is unable to predict the ultimate effect of the inability to complete the exchange on the Company. The Company has issued convertible debentures in order to partially finance the exchange and will incur continuing significant costs from such issuance until the retirement of the debentures. In addition, the Company would not be able to achieve the business objectives of the exchange which could have a harmful effect on DST's business. It is possible that there may be a decline in the market price of the Company's common stock if the exchange is not completed.

On March 30, 2001, DST completed the acquisition of a 75% interest in EquiServe by purchasing interests held by FleetBoston Financial ("FleetBoston") and Bank One Corporation ("Bank One"). On July 31, 2001, DST completed the acquisition of the remaining 25%, which was owned by Boston Financial Data Services, on essentially the same terms provided to FleetBoston and Bank One.

A restructuring provision of $15.9 million was recorded for employee severances and supplier contract termination costs related to the acquisition. The Company utilized $0.2 million and $2.3 million for the three and nine months ended September 30, 2003, respectively, related to the restructuring provision for employee severances. The restructuring provision for employee severance costs, which affected employees across nearly all classifications and locations, was $12.5 million relating to approximately 610 employees, of which 638 employees have been separated from the Company as of September 30, 2003. The remaining employee severances of approximately $0.9 million are expected to be paid in 2003. The restructuring provision will be utilized as such severance payments are made. Contract termination costs of approximately $3.4 million were paid in 2001 that related to facilities that were closed.

The Output Solutions segment is consolidating its operations into three primary facilities and is closing certain other smaller facilities, which the Company believes will result in operational efficiencies. Lease termination costs of $1.0 million, which were accrued during 2002, are to be paid out over the remaining lease terms from 2003 to 2004. Approximately 393 employees have been separated from the Company as of September 30, 2003 and approximately a remaining 64 employees are expected to be separated in 2003. The remaining employee severances to be paid out, which were accrued during 2002, total approximately $1.7 million. The restructuring provision will be utilized as such severance payments are made. The segment recorded costs associated with facility and other consolidations of $0.9 million and $2.4 million, respectively, for the three and nine months ended September 30, 2003, consisting of facility closure and relocation costs of $1.5 million, asset impairments of $0.5 million and othe r costs of $0.4 million for the nine months ended September 30, 2003. Estimated additional charges of $1 million related to facility consolidations in 2003 will be expensed when incurred.

Investments are as follows (in millions):

Certain information related to the Company's available-for-sale securities is as follows (in millions):

The Company recognized investment impairments of $0.3 million and $6.1 million for the three and nine months ended September 30, 2003, respectively, and $3.3 million and $3.5 million for the three and nine months ended September 30, 2002, respectively. A decline in a security's net realizable value that is other than temporary is treated as a realized loss in the statement of income and the cost basis of the security is reduced to its estimated fair value.

The following table summarizes equity in earnings (losses) of unconsolidated affiliates (in millions):

The following table summarizes intangible assets (in millions):