ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Pennsylvania
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23-1707341
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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1 Freedom Valley Drive, Oaks, Pennsylvania
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19456-1100
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $.01 per share
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The NASDAQ Stock Market LLC
(The NASDAQ Global Select Market®)
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Large accelerated filer x
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Accelerated filer o
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Non-accelerated filer o
(Do not check if a smaller reporting company)
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Smaller reporting company o
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Common Stock, $.01 par value
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157,278,314
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1.
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The definitive proxy statement relating to the registrant’s 2018 Annual Meeting of Shareholders, to be filed within 120 days after the end of the fiscal year covered by this annual report, is incorporated by reference in Part III hereof.
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Page
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PART I
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Item 1.
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Business.
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Item 1A.
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Risk Factors.
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Item 1B.
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Unresolved Staff Comments.
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Item 2.
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Properties.
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Item 3.
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Legal Proceedings.
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Item 4.
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Mine Safety Disclosures.
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PART II
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
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Item 6.
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Selected Financial Data.
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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Item 7A.
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Quantitative and Qualitative Disclosures About Market Risk.
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Item 8.
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Financial Statements and Supplementary Data.
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Item 9.
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Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
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Item 9A.
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Controls and Procedures.
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Item 9B.
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Other Information.
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PART III
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Item 10.
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Directors, Executive Officers and Corporate Governance.
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Item 11.
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Executive Compensation.
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence.
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Item 14.
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Principal Accounting Fees and Services.
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PART IV
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Item 15.
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Exhibits, Financial Statement Schedules.
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•
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Investment processing outsourcing platforms for providers of institutional and private-client wealth management services, including banks, trust companies, independent wealth advisers and other financial services firms;
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•
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Investment management platforms for institutional investors, including retirement plan sponsors, not-for-profit organizations and affluent individual investors; and
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•
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Investment operations outsourcing platforms for investment management firms, banks and investment companies that sponsor and distribute mutual funds, hedge funds and alternative investments.
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•
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Achieve growth in revenue and earnings. We seek to grow organically by providing additional services to clients, adding new clients, introducing new products and adapting products for new markets. We may also make selective acquisitions to gain capabilities or platforms that enable future organic growth.
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•
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Forge long-term client relationships. We strive to achieve high levels of customer satisfaction and to forge close and long lasting client relationships. We believe these relationships enable us to market additional services and acquire knowledge and insights that fuel the product development process.
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•
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Invest in product development. We continually enhance products and services to keep pace with industry developments, regulatory requirements and the emerging needs of markets and clients. We believe ongoing investments in research and development give us a sustainable, competitive advantage in our markets.
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•
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Maintain financial strength. We adopt business models that generate recurring revenues and positive cash flows. Predictable cash flows serve as a source of funds for continuing operations, investments in new products, common stock repurchases and dividend payments.
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•
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Leverage investments across the business. We create scalable, enterprise-wide platforms designed to serve the needs of multiple markets, potentially offering operating efficiencies that can benefit corporate profitability.
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•
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Create value for shareholders. The objective of achieving long-term sustainable growth in revenues and earnings strongly influences the management of the business. This philosophy guides corporate management practices, strategic planning activities and employee compensation practices.
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2017
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2016
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2015
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Private Banks
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31
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%
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33
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%
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34
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%
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Investment Advisors
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24
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%
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23
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%
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23
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%
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Institutional Investors
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21
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%
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22
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%
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22
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%
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Investment Managers
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23
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%
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21
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%
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20
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%
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Investments in New Businesses
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1
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%
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1
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%
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1
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%
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100
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%
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100
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%
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100
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%
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(all dollar amounts in thousands)
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2017
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2016
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2015
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||||||
Research and development expenditures
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$
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155,252
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$
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134,323
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$
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102,923
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||||||
Capitalization of costs incurred in developing computer software
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$
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61,043
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$
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50,392
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$
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29,416
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||||||
Research and development expenditures as a percentage of revenues
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10.2
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%
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9.6
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%
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7.7
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%
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2017
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High
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Low
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Dividends
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||||||
First Quarter
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$
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52.60
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$
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47.88
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$
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—
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Second Quarter
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54.57
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49.45
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0.28
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Third Quarter
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61.71
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52.20
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—
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Fourth Quarter
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72.48
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60.78
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0.30
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2016
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High
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Low
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Dividends
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||||||
First Quarter
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$
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51.94
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$
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32.01
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$
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—
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Second Quarter
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51.75
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42.04
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0.26
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Third Quarter
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52.54
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42.12
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—
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Fourth Quarter
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50.60
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43.54
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0.28
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Period
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Total Number of Shares Purchased
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Average Price Paid per Share
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Total Number of
Shares Purchased as
Part of Publicly
Announced Program
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Approximate Dollar
Value of Shares that
May Yet Be
Purchased
Under the Program
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||||||
October 1 – 31, 2017
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50,000
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$
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64.18
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50,000
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$
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227,267,000
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November 1 – 30, 2017
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315,000
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66.52
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315,000
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206,313,000
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December 1 – 31, 2017
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500,000
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71.41
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500,000
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170,638,000
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Total
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865,000
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69.21
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865,000
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Year Ended December 31,
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2017
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2016
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2015
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2014
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2013
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||||||||||
Revenues
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$
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1,526,552
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$
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1,401,545
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$
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1,334,208
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$
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1,266,005
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$
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1,126,132
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Total expenses
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1,129,608
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1,025,851
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975,995
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913,221
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877,723
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|||||
Income from operations
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396,944
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375,694
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358,213
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352,784
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248,409
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|||||
Other income, net
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160,095
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132,791
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142,267
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136,878
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186,989
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|||||
Income before income taxes
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557,039
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508,485
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500,480
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489,662
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435,398
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|||||
Income taxes
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152,650
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174,668
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168,825
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170,949
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146,924
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|||||
Net income
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404,389
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333,817
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331,655
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318,713
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288,474
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|||||
Less: Net income attributable to the noncontrolling interest
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—
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—
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—
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—
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(350
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)
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|||||
Net income attributable to SEI Investments
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404,389
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333,817
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331,655
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318,713
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288,124
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|||||
Basic earnings per common share
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$
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2.56
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$
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2.07
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$
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2.00
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$
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1.89
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$
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1.68
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Shares used to compute basic earnings per common share
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158,177
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161,350
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165,725
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168,246
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171,561
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|||||
Diluted earnings per common share
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$
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2.49
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$
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2.03
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$
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1.96
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$
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1.85
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$
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1.64
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Shares used to compute diluted earnings per common share
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162,269
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164,431
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169,598
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172,565
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175,718
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|||||
Cash dividends declared per common share
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$
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0.58
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$
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0.54
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$
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0.50
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$
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0.46
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$
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0.42
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Financial Position as of December 31,
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||||||||||
Cash and cash equivalents
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$
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744,247
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$
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695,701
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$
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679,661
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$
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667,446
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$
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578,273
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Total assets
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1,853,369
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1,636,823
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1,588,628
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1,542,875
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1,439,169
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|||||
SEI Investments Shareholders’ equity
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1,476,839
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1,303,114
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1,289,720
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1,247,613
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|
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1,156,002
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Year Ended December 31,
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2017
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2016
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Percent
Change*
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2015
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Percent
Change
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||||||||
Revenues
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$
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1,526,552
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|
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$
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1,401,545
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9
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%
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$
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1,334,208
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5
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%
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Expenses
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1,129,608
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1,025,851
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10
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%
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975,995
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5
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%
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|||
Income from operations
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396,944
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|
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375,694
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6
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%
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358,213
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5
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%
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|||
Net gain (loss) from investments
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1,269
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|
112
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NM
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(456
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)
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NM
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|||
Interest income, net of interest expense
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6,276
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3,785
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66
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%
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2,875
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32
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%
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|||
Equity in earnings of unconsolidated affiliates
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152,550
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126,103
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21
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%
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137,057
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(8
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)%
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Gain on sale of subsidiary
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—
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2,791
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NM
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|
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2,791
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—
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%
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|||
Income before income taxes
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557,039
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|
|
508,485
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|
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10
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%
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500,480
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|
|
2
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%
|
|||
Income taxes
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152,650
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|
|
174,668
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|
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(13
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)%
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168,825
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|
|
3
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%
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|||
Net income
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404,389
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|
|
333,817
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21
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%
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331,655
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|
1
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%
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|||
Diluted earnings per common share
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$
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2.49
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|
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$
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2.03
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23
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%
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$
|
1.96
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4
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%
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•
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Revenue growth was primarily driven by higher Asset management, administration and distribution fees from market appreciation and positive cash flows from new and existing clients. Our average assets under management, excluding LSV, increased $24.2 billion, or 13 percent, to $214.1 billion during 2017 as compared to $189.9 billion during 2016. Our average assets under administration increased $57.7 billion, or 13 percent, to $497.6 billion during 2017 as compared to $439.9 billion during 2016.
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•
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Information processing and software servicing fees in our Private Banks segment increased $16.6 million in 2017 primarily due to increased assets from new and existing clients processed on the SEI Wealth Platform and increased non-recurring professional services fees.
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•
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Our proportionate share in the earnings of LSV was $152.6 million in 2017 as compared to $126.1 million in 2016, an increase of 21 percent. The increase was primarily due to increased assets under management from LSV's existing clients due to market appreciation and increased performance fees associated with their investment products.
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•
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We capitalized $51.4 million in 2017 for the SEI Wealth Platform as compared to $39.8 million in 2016. Amortization expense related to the Platform increased to $46.5 million during 2017 as compared to $45.0 million during 2016 due to continued development. We adjusted the remaining useful life of certain components and functionality of the Platform effective October 1, 2017 (See the caption "SEI Wealth Platform - Recent Developments" later in this discussion for more information).
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•
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As we continue the development of new elements of the Platform, our expenses related to maintenance, enhancements and support have increased. These costs are primarily recognized in personnel and consulting costs and are expensed as incurred. These increased costs primarily impacted the Private Banks and Investment Advisors business segments.
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•
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We also capitalized $9.7 million in 2017 as compared to $10.6 million in 2016 for new technological capabilities for the Investment Managers segment. This new offering includes components that leverage upon the current infrastructure and add significant enhancements designed to aggregate, transact and process data. We expect this new technology will be placed into service during the first quarter of 2018 with an estimated useful life of five to seven years.
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•
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We recognized a $3.4 million performance fee and a corresponding $1.7 million sub-advisory expense associated with an SEI-sponsored investment product during the fourth quarter 2017. These items resulted in a positive net impact of approximately $0.01 diluted earnings per share and were reflected in the Institutional Investors segment.
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•
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Our operating expenses, primarily personnel costs, in our Investment Advisors and Investment Managers segments increased. These expenses primarily consist of operational, technology and marketing costs and are mainly related to servicing existing clients and acquiring new clients. These operating expenses are included in Compensation, benefits and other personnel costs on the accompanying Consolidated Statements of Operations.
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•
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Stock-based compensation expense increased by $20.3 million during 2017 as compared to 2016 due to a change in our estimate of the timing of when stock option vesting targets will be achieved and stock options awards granted in late 2016 (See the caption "Stock-Based Compensation" later in this discussion for more information).
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•
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The direct costs associated with our investment management programs increased in our Private Banks, Investment Advisors and Institutional Investors segments. These costs primarily relate to fees charged by investment advisory firms for day-to-day portfolio management of SEI-sponsored investment products. These costs are included in Sub-advisory, distribution and other asset management costs on the accompanying Consolidated Statements of Operations.
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•
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Our effective tax rate during 2017 was 27.4 percent as compared to 34.3 percent during 2016. Our effective tax rate for 2017 reflects the estimated impact of the Tax Cuts and Jobs Act (Tax Act) and includes a tax benefit resulting from the re-measurement of our estimated net deferred tax liability as of December 31, 2017, partially offset by a one-time transition tax relating to the estimated tax impact of the deemed repatriation and withholding tax of our previously undistributed foreign earnings. Our 2017 tax rate was also positively impacted by the adoption of a new accounting standard which requires all excess tax benefits recognized on stock-based compensation expense to be recorded as an income tax benefit in the income statement (See the caption "Income Taxes" later in this discussion for more information).
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•
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On July 3, 2017, we acquired Archway Technology Partners, LLC (Archway), a provider of operating technologies and services to the family office industry, for $81.6 million in cash consideration. We borrowed $40.0 million under our credit facility to fund this acquisition and made principal payments of $10.0 million each in October 2017 and January 2018. The results of operations of Archway are included in our Investment Managers business segment (See Notes 7 and 16 to the Notes to Consolidated Financial Statements).
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•
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We continued our stock repurchase program during 2017 and purchased approximately 4,403,000 shares at an average price of $56.36 per share for a total cost of $248.1 million.
|
•
|
Revenue growth was primarily driven by higher Asset management, administration and distribution fees from improved cash flows from new and existing clients and market appreciation. Our average assets under management,
|
•
|
We recognized a $12.3 million performance fee and a corresponding $6.1 million sub-advisory expense associated with an SEI-sponsored investment product during the fourth quarter 2016. These items resulted in a positive net impact of approximately $0.03 diluted earnings per share and were reflected in the Institutional Investors segment.
|
•
|
Information processing and software servicing fees in our Private Banks segment increased $9.3 million in 2016 primarily due to increased assets from new and existing clients processed on the SEI Wealth Platform and increased non-recurring professional services fees.
|
•
|
Our proportionate share in the earnings of LSV was $126.1 million in 2016 as compared to $138.4 million in 2015, a decrease of nine percent. The decrease was primarily due to lower performance fees and increased personnel expenses of LSV.
|
•
|
The direct costs associated with our investment management programs increased in our Private Banks, Investment Advisors and Institutional Investors segments. These costs primarily relate to fees charged by investment advisory firms for day-to-day portfolio management of SEI-sponsored investment products and include the $6.1 million sub-advisory expense associated with performance fees mentioned previously. These costs are included in Sub-advisory, distribution and other asset management costs on the accompanying Consolidated Statements of Operations.
|
•
|
We capitalized $50.4 million and $29.4 million in software development costs in 2016 and 2015, respectively. Of these amounts, $39.8 million in 2016 and $24.5 million in 2015 directly relate to the SEI Wealth Platform. Amortization expense related to capitalized software was $45.0 million during 2016 as compared to $42.4 million during 2015 due to continued enhancements to the Platform.
|
•
|
As we continue the development of new elements of the Platform, our expenses related to maintenance, enhancements and support have increased. These costs are primarily recognized in personnel and consulting costs and are expensed as incurred. These increased costs primarily impacted the Private Banks and Investment Advisors business segments. We expect these costs to continue to increase into 2017.
|
•
|
We progressed in the development phase of a new application for the Investment Managers segment and capitalized $10.6 million in software development costs in 2016. This new offering includes components that leverage upon the current infrastructure and add significant enhancements designed to aggregate, transact and process data.
|
•
|
Our operating expenses, primarily personnel costs, in our Investment Advisors and Investment Managers segments increased. These expenses primarily consist of operational and marketing costs and are mainly related to servicing existing clients and acquiring new clients. These operating expenses are included in Compensation, benefits and other personnel costs on the accompanying Consolidated Statements of Operations.
|
•
|
The strengthening of the U.S. dollar against the British pound during 2016 negatively impacted our revenues and operating income of our Private Banks and Institutional Investors segments. A prolonged period of a strengthening U.S. dollar against the British pound could have a further negative impact to our revenues and operating profits of these segments.
|
•
|
We recorded our final pre-tax gain of $2.8 million, or $0.01 diluted earnings per share, in 2016 from the sale of SEI Asset Korea (SEI AK) which was completed during the first quarter 2013. This gain was the result of the third in a series of three annual payments related to the contingent purchase price we received from the sale. The gain from the sale is included in Gain on sale of subsidiary on the accompanying Consolidated Statement of Operations (See Note 15 to the Consolidated Financial Statements for more information).
|
•
|
Our effective tax rate was 34.3 percent in 2016 as compared to 33.7 percent in 2015. Our tax rate in 2015 benefited from a favorable settlement of a tax petition filed with the State of Pennsylvania (See the caption "Income Taxes" later in this discussion for more information).
|
•
|
We continued our stock repurchase program during 2016 and purchased approximately 6,600,000 shares at an average price of $44.60 per share for a total cost of $294.4 million.
|
Ending Asset Balances
|
|
|
||||||||||||||||
(In millions)
|
|
As of December 31,
|
||||||||||||||||
|
|
|
|
|
|
Percent Change
|
|
|
|
Percent Change
|
||||||||
|
|
2017
|
|
2016
|
|
|
2015
|
|
||||||||||
Private Banks:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity and fixed-income programs
|
|
$
|
22,764
|
|
|
$
|
17,926
|
|
|
27
|
%
|
|
$
|
18,150
|
|
|
(1
|
)%
|
Collective trust fund programs
|
|
4
|
|
|
3
|
|
|
33
|
%
|
|
4
|
|
|
(25
|
)%
|
|||
Liquidity funds
|
|
3,864
|
|
|
4,230
|
|
|
(9
|
)%
|
|
5,835
|
|
|
(28
|
)%
|
|||
Total assets under management
|
|
$
|
26,632
|
|
|
$
|
22,159
|
|
|
20
|
%
|
|
$
|
23,989
|
|
|
(8
|
)%
|
Client proprietary assets under administration
|
|
22,980
|
|
|
19,255
|
|
|
19
|
%
|
|
17,532
|
|
|
10
|
%
|
|||
Total assets
|
|
$
|
49,612
|
|
|
$
|
41,414
|
|
|
20
|
%
|
|
$
|
41,521
|
|
|
—
|
%
|
Investment Advisors:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity and fixed-income programs
|
|
$
|
61,908
|
|
|
$
|
52,847
|
|
|
17
|
%
|
|
$
|
46,123
|
|
|
15
|
%
|
Collective trust fund programs
|
|
5
|
|
|
5
|
|
|
—
|
%
|
|
7
|
|
|
(29
|
)%
|
|||
Liquidity funds
|
|
2,414
|
|
|
2,741
|
|
|
(12
|
)%
|
|
4,924
|
|
|
(44
|
)%
|
|||
Total assets under management
|
|
$
|
64,327
|
|
|
$
|
55,593
|
|
|
16
|
%
|
|
$
|
51,054
|
|
|
9
|
%
|
Institutional Investors:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity and fixed-income programs
|
|
$
|
86,727
|
|
|
$
|
76,465
|
|
|
13
|
%
|
|
$
|
72,263
|
|
|
6
|
%
|
Collective trust fund programs
|
|
78
|
|
|
93
|
|
|
(16
|
)%
|
|
96
|
|
|
(3
|
)%
|
|||
Liquidity funds
|
|
2,937
|
|
|
2,903
|
|
|
1
|
%
|
|
2,883
|
|
|
1
|
%
|
|||
Total assets under management
|
|
$
|
89,742
|
|
|
$
|
79,461
|
|
|
13
|
%
|
|
$
|
75,242
|
|
|
6
|
%
|
Advised assets
|
|
4,802
|
|
|
—
|
|
|
NM
|
|
|
—
|
|
|
NM
|
|
|||
Total assets
|
|
$
|
94,544
|
|
|
$
|
79,461
|
|
|
19
|
%
|
|
$
|
75,242
|
|
|
6
|
%
|
Investment Managers:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity and fixed-income programs
|
|
$
|
96
|
|
|
$
|
81
|
|
|
19
|
%
|
|
$
|
66
|
|
|
23
|
%
|
Collective trust fund programs
|
|
49,340
|
|
|
36,991
|
|
|
33
|
%
|
|
32,117
|
|
|
15
|
%
|
|||
Liquidity funds
|
|
743
|
|
|
667
|
|
|
11
|
%
|
|
832
|
|
|
(20
|
)%
|
|||
Total assets under management
|
|
$
|
50,179
|
|
|
$
|
37,739
|
|
|
33
|
%
|
|
$
|
33,015
|
|
|
14
|
%
|
Client proprietary assets under administration
|
|
495,447
|
|
|
448,708
|
|
|
10
|
%
|
|
390,282
|
|
|
15
|
%
|
|||
Total assets
|
|
$
|
545,626
|
|
|
$
|
486,447
|
|
|
12
|
%
|
|
$
|
423,297
|
|
|
15
|
%
|
Investments in New Businesses:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity and fixed-income programs
|
|
$
|
1,104
|
|
|
$
|
884
|
|
|
25
|
%
|
|
$
|
764
|
|
|
16
|
%
|
Liquidity funds
|
|
53
|
|
|
61
|
|
|
(13
|
)%
|
|
47
|
|
|
30
|
%
|
|||
Total assets under management
|
|
$
|
1,157
|
|
|
$
|
945
|
|
|
22
|
%
|
|
$
|
811
|
|
|
17
|
%
|
Advised assets
|
|
49
|
|
|
—
|
|
|
NM
|
|
|
—
|
|
|
NM
|
|
|||
Total assets
|
|
$
|
1,206
|
|
|
$
|
945
|
|
|
28
|
%
|
|
$
|
811
|
|
|
17
|
%
|
LSV:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity and fixed-income programs
|
|
$
|
105,278
|
|
|
$
|
87,248
|
|
|
21
|
%
|
|
$
|
78,335
|
|
|
11
|
%
|
Total:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity and fixed-income programs
|
|
$
|
277,877
|
|
|
$
|
235,451
|
|
|
18
|
%
|
|
$
|
215,701
|
|
|
9
|
%
|
Collective trust fund programs
|
|
49,427
|
|
|
37,092
|
|
|
33
|
%
|
|
32,224
|
|
|
15
|
%
|
|||
Liquidity funds
|
|
10,011
|
|
|
10,602
|
|
|
(6
|
)%
|
|
14,521
|
|
|
(27
|
)%
|
|||
Total assets under management
|
|
$
|
337,315
|
|
|
$
|
283,145
|
|
|
19
|
%
|
|
$
|
262,446
|
|
|
8
|
%
|
Advised assets
|
|
4,851
|
|
|
—
|
|
|
NM
|
|
|
—
|
|
|
NM
|
|
|||
Client proprietary assets under administration
|
|
518,427
|
|
|
467,963
|
|
|
11
|
%
|
|
407,814
|
|
|
15
|
%
|
|||
Total assets under management, advisement and administration
|
|
$
|
860,593
|
|
|
$
|
751,108
|
|
|
15
|
%
|
|
$
|
670,260
|
|
|
12
|
%
|
Average Asset Balances
|
|
|
||||||||||||||||
(In millions)
|
|
For the Year Ended December 31,
|
||||||||||||||||
|
|
|
|
|
|
Percent Change
|
|
|
|
Percent Change
|
||||||||
|
|
2017
|
|
2016
|
|
|
2015
|
|
||||||||||
Private Banks:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity and fixed-income programs
|
|
$
|
20,139
|
|
|
$
|
18,186
|
|
|
11
|
%
|
|
$
|
19,106
|
|
|
(5
|
)%
|
Collective trust fund programs
|
|
4
|
|
|
3
|
|
|
33
|
%
|
|
7
|
|
|
(57
|
)%
|
|||
Liquidity funds
|
|
3,717
|
|
|
4,799
|
|
|
(23
|
)%
|
|
5,491
|
|
|
(13
|
)%
|
|||
Total assets under management
|
|
$
|
23,860
|
|
|
$
|
22,988
|
|
|
4
|
%
|
|
$
|
24,604
|
|
|
(7
|
)%
|
Client proprietary assets under administration
|
|
21,397
|
|
|
18,433
|
|
|
16
|
%
|
|
17,652
|
|
|
4
|
%
|
|||
Total assets
|
|
$
|
45,257
|
|
|
$
|
41,421
|
|
|
9
|
%
|
|
$
|
42,256
|
|
|
(2
|
)%
|
Investment Advisors:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity and fixed-income programs
|
|
$
|
57,475
|
|
|
$
|
49,537
|
|
|
16
|
%
|
|
$
|
45,968
|
|
|
8
|
%
|
Collective trust fund programs
|
|
5
|
|
|
6
|
|
|
(17
|
)%
|
|
9
|
|
|
(33
|
)%
|
|||
Liquidity funds
|
|
2,380
|
|
|
3,601
|
|
|
(34
|
)%
|
|
3,550
|
|
|
1
|
%
|
|||
Total assets under management
|
|
$
|
59,860
|
|
|
$
|
53,144
|
|
|
13
|
%
|
|
$
|
49,527
|
|
|
7
|
%
|
Institutional Investors:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity and fixed-income programs
|
|
$
|
81,956
|
|
|
$
|
75,347
|
|
|
9
|
%
|
|
$
|
73,804
|
|
|
2
|
%
|
Collective trust fund programs
|
|
84
|
|
|
94
|
|
|
(11
|
)%
|
|
95
|
|
|
(1
|
)%
|
|||
Liquidity funds
|
|
2,995
|
|
|
2,805
|
|
|
7
|
%
|
|
3,082
|
|
|
(9
|
)%
|
|||
Total assets under management
|
|
$
|
85,035
|
|
|
$
|
78,246
|
|
|
9
|
%
|
|
$
|
76,981
|
|
|
2
|
%
|
Advised assets
|
|
3,961
|
|
|
—
|
|
|
NM
|
|
|
—
|
|
|
NM
|
|
|||
Total assets
|
|
$
|
88,996
|
|
|
$
|
78,246
|
|
|
14
|
%
|
|
$
|
76,981
|
|
|
2
|
%
|
Investment Managers:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity and fixed-income programs
|
|
$
|
88
|
|
|
$
|
73
|
|
|
21
|
%
|
|
$
|
34
|
|
|
115
|
%
|
Collective trust fund programs
|
|
43,323
|
|
|
33,808
|
|
|
28
|
%
|
|
23,476
|
|
|
44
|
%
|
|||
Liquidity funds
|
|
898
|
|
|
805
|
|
|
12
|
%
|
|
1,004
|
|
|
(20
|
)%
|
|||
Total assets under management
|
|
$
|
44,309
|
|
|
$
|
34,686
|
|
|
28
|
%
|
|
$
|
24,514
|
|
|
41
|
%
|
Client proprietary assets under administration
|
|
476,207
|
|
|
421,446
|
|
|
13
|
%
|
|
378,970
|
|
|
11
|
%
|
|||
Total assets
|
|
$
|
520,516
|
|
|
$
|
456,132
|
|
|
14
|
%
|
|
$
|
403,484
|
|
|
13
|
%
|
Investments in New Businesses:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity and fixed-income programs
|
|
$
|
990
|
|
|
$
|
816
|
|
|
21
|
%
|
|
$
|
776
|
|
|
5
|
%
|
Liquidity funds
|
|
59
|
|
|
48
|
|
|
23
|
%
|
|
68
|
|
|
(29
|
)%
|
|||
Total assets under management
|
|
$
|
1,049
|
|
|
$
|
864
|
|
|
21
|
%
|
|
$
|
844
|
|
|
2
|
%
|
Advised assets
|
|
70
|
|
|
—
|
|
|
NM
|
|
|
—
|
|
|
NM
|
|
|||
Total assets
|
|
$
|
1,119
|
|
|
$
|
864
|
|
|
30
|
%
|
|
$
|
844
|
|
|
2
|
%
|
LSV:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity and fixed-income programs
|
|
$
|
96,705
|
|
|
$
|
80,620
|
|
|
20
|
%
|
|
$
|
82,785
|
|
|
(3
|
)%
|
Total:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity and fixed-income programs
|
|
$
|
257,353
|
|
|
$
|
224,579
|
|
|
15
|
%
|
|
$
|
222,473
|
|
|
1
|
%
|
Collective trust fund programs
|
|
43,416
|
|
|
33,911
|
|
|
28
|
%
|
|
23,587
|
|
|
44
|
%
|
|||
Liquidity funds
|
|
10,049
|
|
|
12,058
|
|
|
(17
|
)%
|
|
13,195
|
|
|
(9
|
)%
|
|||
Total assets under management
|
|
$
|
310,818
|
|
|
$
|
270,548
|
|
|
15
|
%
|
|
$
|
259,255
|
|
|
4
|
%
|
Advised assets
|
|
4,031
|
|
|
—
|
|
|
NM
|
|
|
—
|
|
|
NM
|
|
|||
Client proprietary assets under administration
|
|
497,604
|
|
|
439,879
|
|
|
13
|
%
|
|
396,622
|
|
|
11
|
%
|
|||
Total assets under management, advisement and administration
|
|
$
|
812,453
|
|
|
$
|
710,427
|
|
|
14
|
%
|
|
$
|
655,877
|
|
|
8
|
%
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
Percent
Change
|
|
2015
|
|
Percent
Change
|
||||||||
Private Banks:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
$
|
474,272
|
|
|
$
|
457,886
|
|
|
4
|
%
|
|
$
|
456,516
|
|
|
—
|
%
|
Expenses
|
|
455,119
|
|
|
421,188
|
|
|
8
|
%
|
|
410,975
|
|
|
2
|
%
|
|||
Operating profit
|
|
$
|
19,153
|
|
|
$
|
36,698
|
|
|
(48
|
)%
|
|
$
|
45,541
|
|
|
(19
|
)%
|
Gain on sale of subsidiary
|
|
—
|
|
|
2,791
|
|
|
NM
|
|
|
2,791
|
|
|
—
|
%
|
|||
Total profit
|
|
$
|
19,153
|
|
|
$
|
39,489
|
|
|
NM
|
|
|
$
|
48,332
|
|
|
NM
|
|
Operating margin (a)
|
|
4
|
%
|
|
8
|
%
|
|
|
|
10
|
%
|
|
|
|||||
Investment Advisors:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
373,473
|
|
|
330,677
|
|
|
13
|
%
|
|
306,620
|
|
|
8
|
%
|
|||
Expenses
|
|
201,833
|
|
|
180,140
|
|
|
12
|
%
|
|
171,968
|
|
|
5
|
%
|
|||
Operating profit
|
|
$
|
171,640
|
|
|
$
|
150,537
|
|
|
14
|
%
|
|
$
|
134,652
|
|
|
12
|
%
|
Operating margin
|
|
46
|
%
|
|
46
|
%
|
|
|
|
44
|
%
|
|
|
|||||
Institutional Investors:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
322,457
|
|
|
312,584
|
|
|
3
|
%
|
|
297,568
|
|
|
5
|
%
|
|||
Expenses
|
|
161,640
|
|
|
153,117
|
|
|
6
|
%
|
|
145,851
|
|
|
5
|
%
|
|||
Operating profit
|
|
$
|
160,817
|
|
|
$
|
159,467
|
|
|
1
|
%
|
|
$
|
151,717
|
|
|
5
|
%
|
Operating margin
|
|
50
|
%
|
|
51
|
%
|
|
|
|
51
|
%
|
|
|
|||||
Investment Managers:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
349,444
|
|
|
294,390
|
|
|
19
|
%
|
|
267,963
|
|
|
10
|
%
|
|||
Expenses
|
|
226,504
|
|
|
191,127
|
|
|
19
|
%
|
|
172,094
|
|
|
11
|
%
|
|||
Operating profit
|
|
$
|
122,940
|
|
|
$
|
103,263
|
|
|
19
|
%
|
|
$
|
95,869
|
|
|
8
|
%
|
Operating margin
|
|
35
|
%
|
|
35
|
%
|
|
|
|
36
|
%
|
|
|
|||||
Investments in New Businesses:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
6,906
|
|
|
6,008
|
|
|
15
|
%
|
|
5,541
|
|
|
8
|
%
|
|||
Expenses
|
|
20,678
|
|
|
20,962
|
|
|
(1
|
)%
|
|
20,656
|
|
|
1
|
%
|
|||
Operating loss
|
|
$
|
(13,772
|
)
|
|
$
|
(14,954
|
)
|
|
NM
|
|
|
$
|
(15,115
|
)
|
|
NM
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
Percent
Change
|
|
2015
|
|
Percent
Change
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Investment processing and software servicing fees
|
|
$
|
315,021
|
|
|
$
|
298,382
|
|
|
6
|
%
|
|
$
|
289,056
|
|
|
3
|
%
|
Asset management, administration & distribution fees
|
|
138,564
|
|
|
133,740
|
|
|
4
|
%
|
|
138,606
|
|
|
(4
|
)%
|
|||
Transaction-based and trade execution fees
|
|
20,687
|
|
|
25,764
|
|
|
(20
|
)%
|
|
28,854
|
|
|
(11
|
)%
|
|||
Total revenues
|
|
$
|
474,272
|
|
|
$
|
457,886
|
|
|
4
|
%
|
|
$
|
456,516
|
|
|
—
|
%
|
•
|
Increased recurring investment processing fees from the growth in new and existing client assets processed on the SEI Wealth Platform;
|
•
|
Increased non-recurring professional services fees from existing clients as well as clients scheduled for implementation on the SEI Wealth Platform; and
|
•
|
Increased investment management fees from existing international clients due to higher average assets under management resulting from market appreciation and positive net cash flows; partially offset by
|
•
|
Decreased trade execution fees due to lower trading volumes;
|
•
|
The negative impact from foreign currency exchange rate fluctuations between the U.S. dollar and the British pound on our foreign operations;
|
•
|
Decreased investment management fees from liquidity products due to changes in product mix; and
|
•
|
Decreased investment processing fees from the loss of TRUST 3000® clients.
|
•
|
Increased recurring investment processing fees from the growth in new and existing client assets processed on the SEI Wealth Platform;
|
•
|
Increased non-recurring professional services fees from existing clients as well as clients scheduled for implementation on the SEI Wealth Platform; and
|
•
|
Non-recurring contract buyout fees of $1.6 million from an investment processing client; partially offset by
|
•
|
Decreased investment management fees from existing international clients due to negative cash flows associated with client losses and the deployment of a new product strategy for a global distribution client;
|
•
|
Lower recurring investment processing fees earned on our mutual fund trading solution due to price reductions; and
|
•
|
The negative impact from foreign currency exchange rate fluctuations between the U.S. dollar and the British pound.
|
•
|
Increased non-capitalized costs, mainly personnel and consulting costs, related to maintenance and support of the SEI Wealth Platform;
|
•
|
Increased stock-based compensation costs of approximately $6.1 million primarily due to the change in management's estimate of the timing of the achievement of stock option vesting targets;
|
•
|
The net negative impact from foreign currency exchange rate fluctuations between the U.S. dollar and the British pound on our foreign operations;
|
•
|
Increased personnel costs, mainly salary and sales compensation costs; and
|
•
|
Increased direct expenses associated with increased investment management fees from existing international clients; partially offset by
|
•
|
An increase in revenues; and
|
•
|
Decreased direct expenses associated with the decreased trade execution fees.
|
•
|
Increased non-capitalized costs, mainly personnel and consulting costs, related to maintenance and enhancements to the SEI Wealth Platform;
|
•
|
Increased amortization expense related to the SEI Wealth Platform; and
|
•
|
The net negative impact from foreign currency exchange rate fluctuations between the U.S. dollar and the British pound on our foreign operations; partially offset by
|
•
|
The write-off of approximately $3.6 million of previously capitalized software development costs and purchased software related to the SEI Wealth Platform in the third quarter 2015; and
|
•
|
Decreased direct expenses associated with decreased investment management fees from existing international clients.
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
Percent
Change
|
|
2015
|
|
Percent
Change
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Investment management fees-SEI fund programs
|
|
$
|
278,819
|
|
|
$
|
251,333
|
|
|
11
|
%
|
|
$
|
238,120
|
|
|
6
|
%
|
Separately managed account fees
|
|
78,902
|
|
|
64,280
|
|
|
23
|
%
|
|
54,987
|
|
|
17
|
%
|
|||
Other fees
|
|
15,752
|
|
|
15,064
|
|
|
5
|
%
|
|
13,513
|
|
|
11
|
%
|
|||
Total revenues (a)
|
|
$
|
373,473
|
|
|
$
|
330,677
|
|
|
13
|
%
|
|
$
|
306,620
|
|
|
8
|
%
|
•
|
Increased investment management fees and separately managed account program fees due to higher assets under management caused by market appreciation and positive net cash flows from new and existing advisors.
|
•
|
An increase in revenues; partially offset by
|
•
|
Increased direct expenses associated with increased assets in our investment management programs;
|
•
|
Increased personnel costs for marketing to and servicing new advisors;
|
•
|
Increased non-capitalized costs, mainly personnel and consulting costs, related to maintenance, support and client migrations to the SEI Wealth Platform; and
|
•
|
Increased stock-based compensation costs of approximately $3.0 million primarily due to the change in management's estimate of the timing of the achievement of stock option vesting targets.
|
•
|
An increase in revenues;
|
•
|
The write-off of approximately $2.4 million of previously capitalized software development costs related to the SEI Wealth Platform in the third quarter 2015; and
|
•
|
Decreased sales compensation expense; partially offset by
|
•
|
Increased direct expenses associated with increased assets in our investment management programs;
|
•
|
Increased personnel costs for marketing to and servicing new advisors;
|
•
|
Increased non-capitalized costs, mainly personnel and consulting costs, related to maintenance, enhancements and client migrations to the SEI Wealth Platform; and
|
•
|
Increased amortization expense related to the SEI Wealth Platform.
|
•
|
Increased investment management fees from existing clients due to higher assets under management caused by market appreciation;
|
•
|
Performance fees of $3.4 million and $12.3 million earned during the fourth quarter 2017 and 2016, respectively, from an SEI-sponsored investment product; and
|
•
|
Asset funding from new sales of our retirement and not-for-profit solutions; partially offset by
|
•
|
Client losses;
|
•
|
The negative impact from foreign currency exchange rate fluctuations between the U.S. dollar and the British pound; and
|
•
|
A decrease in the average basis points earned on client assets.
|
•
|
An increase in revenues; partially offset by
|
•
|
Sub-advisory fees of $1.7 million related to the previously mentioned performance fees;
|
•
|
Increased direct expenses associated with investment management fees;
|
•
|
Increased stock-based compensation costs of approximately $3.3 million primarily due to the change in management's estimate of the timing of the achievement of stock option vesting targets;
|
•
|
Increased personnel compensation costs; and
|
•
|
The net negative impact from foreign currency exchange rate fluctuations between the U.S. dollar and the British pound on our foreign operations.
|
•
|
An increase in revenues; and
|
•
|
Decreased personnel costs, mainly sales compensation expenses; partially offset by
|
•
|
Sub-advisory expense of $6.1 million related to the previously mentioned performance fees;
|
•
|
Increased direct expenses associated with investment management fees; and
|
•
|
The net negative impact from foreign currency exchange rate fluctuations between the U.S. dollar and the British pound on our foreign operations.
|
•
|
Higher valuations of existing client assets from improved capital markets:
|
•
|
Positive cash flows into alternative, traditional and separately managed account offerings from new and existing clients; and
|
•
|
Added revenues of $10.2 million from the acquisition of Archway during the third quarter 2017; partially offset by
|
•
|
Client losses and fund closures.
|
•
|
An increase in revenues; and
|
•
|
A net reduction of $3.8 million to the contingent purchase price during the fourth quarter 2017 related to the acquisition of Archway; partially offset by
|
•
|
Increased personnel expenses, technology and other operational costs to service new and existing clients;
|
•
|
Increased stock-based compensation costs of approximately $4.8 million primarily due to the change in management's estimate of the timing of the achievement of stock option vesting targets;
|
•
|
Increased incentive compensation costs;
|
•
|
Increased personnel and amortization expense related to the Archway acquisition; and
|
•
|
Increased non-capitalized investment spending, mainly consulting costs.
|
•
|
An increase in revenues; partially offset by
|
•
|
Increased personnel expenses, technology and other operational costs to service new and existing clients; and
|
•
|
Increased non-capitalized investment spending, mainly consulting costs.
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net gain (loss) from investments
|
|
$
|
1,269
|
|
|
$
|
112
|
|
|
$
|
(456
|
)
|
Interest and dividend income
|
|
7,057
|
|
|
4,316
|
|
|
3,358
|
|
|||
Interest expense
|
|
(781
|
)
|
|
(531
|
)
|
|
(483
|
)
|
|||
Equity in earnings of unconsolidated affiliates
|
|
152,550
|
|
|
126,103
|
|
|
137,057
|
|
|||
Gain on sale of subsidiary
|
|
—
|
|
|
2,791
|
|
|
2,791
|
|
|||
Total other income and expense items, net
|
|
$
|
160,095
|
|
|
$
|
132,791
|
|
|
$
|
142,267
|
|
|
|
2017
|
|
2016
|
|
Percent Change
|
|
2015
|
|
Percent Change
|
||||||||
Revenues
|
|
$
|
491,872
|
|
|
$
|
399,462
|
|
|
23
|
%
|
|
$
|
427,653
|
|
|
(7
|
)%
|
Net income
|
|
392,141
|
|
|
323,381
|
|
|
21
|
%
|
|
352,845
|
|
|
(8
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
SEI's proportionate share in the earnings of LSV
|
|
$
|
152,550
|
|
|
$
|
126,103
|
|
|
21
|
%
|
|
$
|
138,407
|
|
|
(9
|
)%
|
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
|||
Statutory rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State taxes, net of federal tax benefit
|
1.3
|
|
|
1.3
|
|
|
1.6
|
|
Foreign tax expense and tax rate differential
|
(1.1
|
)
|
|
(0.8
|
)
|
|
(1.2
|
)
|
Tax benefit from stock option exercises
|
(3.9
|
)
|
|
—
|
|
|
—
|
|
Enactment of the Tax Cuts and Jobs Act:
|
|
|
|
|
|
|||
Re-measurement of deferred tax liability
|
(4.9
|
)
|
|
—
|
|
|
—
|
|
One-time transition tax on repatriation of foreign earnings and withholding tax
|
2.6
|
|
|
—
|
|
|
—
|
|
Research and development tax credit
|
(0.9
|
)
|
|
(0.8
|
)
|
|
(0.6
|
)
|
Domestic Production Activities Deduction
|
(0.5
|
)
|
|
(0.6
|
)
|
|
(0.6
|
)
|
Settlement of state tax petition
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
Other, net
|
(0.2
|
)
|
|
0.2
|
|
|
0.3
|
|
|
27.4
|
%
|
|
34.3
|
%
|
|
33.7
|
%
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net cash provided by operating activities
|
|
$
|
459,898
|
|
|
$
|
434,220
|
|
|
$
|
407,516
|
|
Net cash used in investing activities
|
|
(172,302
|
)
|
|
(79,585
|
)
|
|
(78,015
|
)
|
|||
Net cash used in financing activities
|
|
(253,633
|
)
|
|
(328,672
|
)
|
|
(305,861
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
|
14,583
|
|
|
(9,923
|
)
|
|
(11,425
|
)
|
|||
Net increase in cash and cash equivalents
|
|
48,546
|
|
|
16,040
|
|
|
12,215
|
|
|||
Cash and cash equivalents, beginning of year
|
|
695,701
|
|
|
679,661
|
|
|
667,446
|
|
|||
Cash and cash equivalents, end of year
|
|
$
|
744,247
|
|
|
$
|
695,701
|
|
|
$
|
679,661
|
|
•
|
Cash paid for acquisition, net of cash acquired. We completed the acquisition of Archway in July 2017. The purchase price paid included $81.6 million in cash consideration; however, we acquired $1.4 million in cash during the transaction for a net cash payment of $80.2 million (See Note 16 to the Consolidated Financial Statements).
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Purchases
|
|
$
|
(69,525
|
)
|
|
$
|
(73,193
|
)
|
|
$
|
(52,538
|
)
|
Sales and maturities
|
|
65,830
|
|
|
69,293
|
|
|
46,312
|
|
|||
Net investing activities from marketable securities
|
|
$
|
(3,695
|
)
|
|
$
|
(3,900
|
)
|
|
$
|
(6,226
|
)
|
•
|
The capitalization of costs incurred in developing computer software. We capitalized $61.0 million, $50.4 million and $29.4 million of software development costs in 2017, 2016 and 2015, respectively. Amounts capitalized primarily include costs for significant enhancements and upgrades for the expanded functionality of the SEI Wealth Platform. Our capitalized software amounts also include $9.7 million, $10.6 million and $4.9 million in 2017, 2016 and 2015, respectively, for new technological capabilities for the Investment Managers segment. We expect this new technology to be placed into service during the first quarter of 2018 with an estimated useful life of five to seven years.
|
•
|
Capital expenditures. Our capital expenditures in 2017, 2016 and 2015 primarily include purchased software and equipment for our data center operations. Our expenditures in 2016 also include software and equipment for a new U.S. disaster recovery site. Our expenditures in 2015 include $13.8 million to relocate our London operations to a new facility. In 2018, we intend to expand our corporate headquarters. Cash outlays during 2018 for the expansion are estimated to range from approximately $12.0 million to $15.0 million. This phase of the expansion is currently estimated to be completed in late 2019.
|
•
|
Receipt of contingent payment from sale of SEI AK. The sale of SEI AK was completed during the first quarter of 2013. We received cash of $2.8 million during 2016 and 2015 resulting from annual payments related to the contingent purchase price from the sale. The cash received in 2016 was the final payment in the series of annual payments. Additional information pertaining to the sale is presented in Note 15 to the Consolidated Financial Statements.
|
•
|
Borrowings and principal repayments on revolving credit facility. In July 2017, we borrowed $40.0 million for the funding of the acquisition of Archway. We made principal payments of $10.0 million each during October 2017 and January 2018 and intend to repay the entire outstanding balance during 2018 (See Note 7 to the Consolidated Financial Statements).
|
•
|
The repurchase of our common stock. Our Board of Directors has authorized the repurchase of our common stock through multiple authorizations. Currently, there is no expiration date for our common stock repurchase program. The following table lists information regarding repurchases of our common stock during 2017, 2016 and 2015:
|
Year
|
|
Total Number of
Shares Repurchased
|
|
Average Price
Paid per Share
|
|
Total Cost
|
|||||
2017
|
|
4,403,000
|
|
|
$
|
56.36
|
|
|
$
|
248,114
|
|
2016
|
|
6,600,000
|
|
|
44.60
|
|
|
294,374
|
|
||
2015
|
|
5,951,000
|
|
|
48.66
|
|
|
289,587
|
|
•
|
Proceeds from the issuance of our common stock. We received $53.6 million, $48.3 million and $65.5 million in proceeds from the issuance of our common stock during 2017, 2016 and 2015, respectively. The proceeds we receive from the issuance of our common stock is directly attributable to the levels of stock option exercise activity.
|
•
|
Dividend payments. Our cash dividends paid during 2017, 2016 and 2015 were as follows:
|
Year
|
|
Cash Dividends Paid
|
|
Cash Dividends
Paid per Share
|
||||
2017
|
|
$
|
88,862
|
|
|
$
|
0.56
|
|
2016
|
|
84,686
|
|
|
0.52
|
|
||
2015
|
|
80,030
|
|
|
0.48
|
|
|
|
Total
|
|
2018
|
|
2019
|
|
2020 to 2021
|
|
2022 and thereafter
|
||||||||||
Line of credit (a)
|
|
$
|
34,266
|
|
|
$
|
1,231
|
|
|
$
|
1,231
|
|
|
$
|
31,804
|
|
|
$
|
—
|
|
Operating leases and maintenance agreements (b)
|
|
63,139
|
|
|
10,046
|
|
|
9,427
|
|
|
14,495
|
|
|
29,171
|
|
|||||
Other commitments (c)
|
|
14,819
|
|
|
4,190
|
|
|
904
|
|
|
1,808
|
|
|
7,917
|
|
|||||
Total
|
|
$
|
112,224
|
|
|
$
|
15,467
|
|
|
$
|
11,562
|
|
|
$
|
48,107
|
|
|
$
|
37,088
|
|
(a)
|
Amounts include estimated interest charges, commitment fees and the outstanding balance of our credit facility. Our credit facility is scheduled to expire in 2021. See Note 7 to the Consolidated Financial Statements.
|
(b)
|
See Note 11 to the Consolidated Financial Statements.
|
(c)
|
Amounts include the portion of uncertain tax liabilities classified as a current liability and the estimated tax impact of the deemed repatriation of our previously undistributed foreign earnings associated with the Tax Act. The actual cash payment associated with these commitments may differ. See Note 12 to the Consolidated Financial Statements.
|
|
|
Index to Financial Statements:
|
Page
|
|
|
Reports of Independent Registered Public Accounting Firm
|
|
Consolidated Balance Sheets — December 31, 2017 and 2016
|
|
Consolidated Statements of Operations — For the years ended December 31, 2017, 2016 and 2015
|
|
Consolidated Statements of Comprehensive Income — For the years ended December 31, 2017, 2016 and 2015
|
|
Consolidated Statements of Changes in Equity — For the years ended December 31, 2017, 2016 and 2015
|
|
Consolidated Statements of Cash Flows — For the years ended December 31, 2017, 2016 and 2015
|
|
Notes to Consolidated Financial Statements
|
|
Schedule II - Valuation and Qualifying Accounts and Reserves — For the years ended December 31, 2017, 2016 and 2015
|
|
|
December 31,
|
|
2017
|
|
2016
|
||||
Assets
|
|
Current Assets:
|
|
|
|
|
||||
|
|
Cash and cash equivalents
|
|
$
|
744,247
|
|
|
$
|
695,701
|
|
|
|
Restricted cash
|
|
3,505
|
|
|
3,500
|
|
||
|
|
Receivables from investment products
|
|
56,666
|
|
|
61,761
|
|
||
|
|
Receivables, net of allowance for doubtful accounts of $695 and $523
|
|
282,706
|
|
|
227,957
|
|
||
|
|
Securities owned
|
|
21,526
|
|
|
21,339
|
|
||
|
|
Other current assets
|
|
31,158
|
|
|
27,575
|
|
||
|
|
Total Current Assets
|
|
1,139,808
|
|
|
1,037,833
|
|
||
|
|
Property and Equipment, net of accumulated depreciation of $309,955 and $285,322
|
|
146,428
|
|
|
146,190
|
|
||
|
|
Capitalized Software, net of accumulated amortization of $350,045 and $303,540
|
|
310,405
|
|
|
295,867
|
|
||
|
|
Investments Available for Sale
|
|
87,983
|
|
|
84,033
|
|
||
|
|
Investments in Affiliated Funds, at fair value
|
|
6,034
|
|
|
4,858
|
|
||
|
|
Investment in Unconsolidated Affiliates
|
|
59,492
|
|
|
50,459
|
|
||
|
|
Goodwill
|
|
52,990
|
|
|
—
|
|
||
|
|
Intangible Assets, net of accumulated amortization of $1,552
|
|
28,578
|
|
|
—
|
|
||
|
|
Deferred Income Taxes
|
|
2,767
|
|
|
2,127
|
|
||
|
|
Other Assets, net
|
|
18,884
|
|
|
15,456
|
|
||
|
|
Total Assets
|
|
$
|
1,853,369
|
|
|
$
|
1,636,823
|
|
|
|
December 31,
|
|
2017
|
|
2016
|
||||
Liabilities
and Equity
|
|
Current Liabilities:
|
|
|
|
|
||||
|
|
Accounts payable
|
|
$
|
5,268
|
|
|
$
|
5,966
|
|
|
|
Accrued liabilities
|
|
265,058
|
|
|
240,525
|
|
||
|
|
Deferred revenue
|
|
4,723
|
|
|
2,880
|
|
||
|
|
Total Current Liabilities
|
|
275,049
|
|
|
249,371
|
|
||
|
|
Borrowings Under Revolving Credit Facility
|
|
30,000
|
|
|
—
|
|
||
|
|
Long-term Income Taxes Payable
|
|
10,629
|
|
|
—
|
|
||
|
|
Deferred Income Taxes
|
|
48,472
|
|
|
69,693
|
|
||
|
|
Other Long-term Liabilities
|
|
12,380
|
|
|
14,645
|
|
||
|
|
Total Liabilities
|
|
376,530
|
|
|
333,709
|
|
||
|
|
Commitments and Contingencies
|
|
|
|
|
||||
|
|
Shareholders' Equity:
|
|
|
|
|
||||
|
|
Series Preferred stock, $.05 par value, 50 shares authorized; no shares issued and outstanding
|
|
—
|
|
|
—
|
|
||
|
|
Common stock, $.01 par value, 750,000 shares authorized; 157,069 and 159,031 shares issued and outstanding
|
|
1,571
|
|
|
1,590
|
|
||
|
|
Capital in excess of par value
|
|
1,027,709
|
|
|
955,461
|
|
||
|
|
Retained earnings
|
|
467,467
|
|
|
384,018
|
|
||
|
|
Accumulated other comprehensive loss, net
|
|
(19,908
|
)
|
|
(37,955
|
)
|
||
|
|
Total Shareholders' Equity
|
|
1,476,839
|
|
|
1,303,114
|
|
||
|
|
Total Liabilities and Equity
|
|
$
|
1,853,369
|
|
|
$
|
1,636,823
|
|
|
|
|
Consolidated Statements of Operations
|
|
SEI Investments Company
|
(In thousands, except per-share data)
|
|
and Subsidiaries
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues:
|
|
|
|
|
|
|
||||||
Asset management, administration and distribution fees
|
|
$
|
1,180,789
|
|
|
$
|
1,072,176
|
|
|
$
|
1,010,511
|
|
Information processing and software servicing fees
|
|
321,741
|
|
|
300,346
|
|
|
290,893
|
|
|||
Transaction-based and trade execution fees
|
|
24,022
|
|
|
29,023
|
|
|
32,804
|
|
|||
Total revenues
|
|
1,526,552
|
|
|
1,401,545
|
|
|
1,334,208
|
|
|||
Expenses:
|
|
|
|
|
|
|
||||||
Subadvisory, distribution and other asset management costs
|
|
179,181
|
|
|
170,961
|
|
|
160,062
|
|
|||
Software royalties and other information processing costs
|
|
31,275
|
|
|
30,323
|
|
|
31,497
|
|
|||
Brokerage commissions
|
|
17,845
|
|
|
22,152
|
|
|
24,388
|
|
|||
Compensation, benefits and other personnel
|
|
458,737
|
|
|
414,622
|
|
|
395,774
|
|
|||
Stock-based compensation
|
|
36,366
|
|
|
16,017
|
|
|
17,312
|
|
|||
Consulting, outsourcing and professional fees
|
|
186,357
|
|
|
166,769
|
|
|
146,436
|
|
|||
Data processing and computer related
|
|
71,909
|
|
|
64,930
|
|
|
58,884
|
|
|||
Facilities, supplies and other costs
|
|
72,352
|
|
|
68,245
|
|
|
74,968
|
|
|||
Amortization
|
|
48,275
|
|
|
45,392
|
|
|
42,630
|
|
|||
Depreciation
|
|
27,311
|
|
|
26,440
|
|
|
24,044
|
|
|||
Total expenses
|
|
1,129,608
|
|
|
1,025,851
|
|
|
975,995
|
|
|||
Income from operations
|
|
396,944
|
|
|
375,694
|
|
|
358,213
|
|
|||
Net gain (loss) from investments
|
|
1,269
|
|
|
112
|
|
|
(456
|
)
|
|||
Interest and dividend income
|
|
7,057
|
|
|
4,316
|
|
|
3,358
|
|
|||
Interest expense
|
|
(781
|
)
|
|
(531
|
)
|
|
(483
|
)
|
|||
Equity in earnings of unconsolidated affiliates
|
|
152,550
|
|
|
126,103
|
|
|
137,057
|
|
|||
Gain on sale of subsidiary
|
|
—
|
|
|
2,791
|
|
|
2,791
|
|
|||
Income before income taxes
|
|
557,039
|
|
|
508,485
|
|
|
500,480
|
|
|||
Income taxes
|
|
152,650
|
|
|
174,668
|
|
|
168,825
|
|
|||
Net income
|
|
$
|
404,389
|
|
|
$
|
333,817
|
|
|
$
|
331,655
|
|
|
|
|
|
|
|
|
||||||
Basic earnings per common share
|
|
$
|
2.56
|
|
|
$
|
2.07
|
|
|
$
|
2.00
|
|
Shares used to compute basic earnings per share
|
|
158,177
|
|
|
161,350
|
|
|
165,725
|
|
|||
Diluted earnings per common share
|
|
$
|
2.49
|
|
|
$
|
2.03
|
|
|
$
|
1.96
|
|
Shares used to compute diluted earnings per share
|
|
162,269
|
|
|
164,431
|
|
|
169,598
|
|
|||
Dividends declared per common share
|
|
$
|
0.58
|
|
|
$
|
0.54
|
|
|
$
|
0.50
|
|
|
|
|
Consolidated Statements of Comprehensive Income
|
|
SEI Investments Company
|
(In thousands)
|
|
and Subsidiaries
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net income
|
|
$
|
404,389
|
|
|
$
|
333,817
|
|
|
$
|
331,655
|
|
Other comprehensive gain (loss), net of tax:
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
|
17,597
|
|
|
(12,131
|
)
|
|
(14,900
|
)
|
|||
Unrealized holding gain (loss) on investments:
|
|
|
|
|
|
|
||||||
Unrealized holding gains (losses) during the period, net of income taxes of $1, $457 and $822
|
|
190
|
|
|
(918
|
)
|
|
(1,659
|
)
|
|||
Less: reclassification adjustment for losses realized in net income, net of income taxes of $(99), $(201) and $(76)
|
|
260
|
|
|
384
|
|
|
164
|
|
|||
Total other comprehensive gain (loss), net of taxes
|
|
18,047
|
|
|
(12,665
|
)
|
|
(16,395
|
)
|
|||
Comprehensive income
|
|
$
|
422,436
|
|
|
$
|
321,152
|
|
|
$
|
315,260
|
|
|
|
|
Consolidated Statements of Changes in Equity
|
|
SEI Investments Company
|
(In thousands, except per-share data)
|
|
and Subsidiaries
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||||
Shares of Common Stock
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
159,031
|
|
|
163,733
|
|
|
166,688
|
|
|||
Purchase and retirement of common stock
|
|
(4,403
|
)
|
|
(6,600
|
)
|
|
(5,951
|
)
|
|||
Issuance of common stock under the employee stock purchase plan
|
|
71
|
|
|
88
|
|
|
69
|
|
|||
Issuance of common stock upon exercise of stock options
|
|
2,370
|
|
|
1,810
|
|
|
2,927
|
|
|||
Ending balance
|
|
157,069
|
|
|
159,031
|
|
|
163,733
|
|
|||
|
|
|
|
|
|
|
||||||
Common Stock
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
$
|
1,590
|
|
|
$
|
1,637
|
|
|
$
|
1,667
|
|
Purchase and retirement of common stock
|
|
(44
|
)
|
|
(66
|
)
|
|
(60
|
)
|
|||
Issuance of common stock under the employee stock purchase plan
|
|
1
|
|
|
1
|
|
|
1
|
|
|||
Issuance of common stock upon exercise of stock options
|
|
24
|
|
|
18
|
|
|
29
|
|
|||
Ending balance
|
|
$
|
1,571
|
|
|
$
|
1,590
|
|
|
$
|
1,637
|
|
|
|
|
|
|
|
|
||||||
Capital In Excess of Par Value
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
$
|
955,461
|
|
|
$
|
910,513
|
|
|
$
|
834,615
|
|
Cumulative effect upon adoption of ASU 2016-09
|
|
2,582
|
|
|
—
|
|
|
—
|
|
|||
Purchase and retirement of common stock
|
|
(20,243
|
)
|
|
(28,306
|
)
|
|
(22,984
|
)
|
|||
Issuance of common stock under the employee stock purchase plan
|
|
3,280
|
|
|
3,357
|
|
|
2,798
|
|
|||
Issuance of common stock upon exercise of stock options
|
|
50,263
|
|
|
44,896
|
|
|
62,716
|
|
|||
Stock-based compensation
|
|
36,366
|
|
|
16,017
|
|
|
17,312
|
|
|||
Tax benefit on stock options exercised
|
|
—
|
|
|
8,984
|
|
|
16,056
|
|
|||
Ending balance
|
|
$
|
1,027,709
|
|
|
$
|
955,461
|
|
|
$
|
910,513
|
|
|
|
|
|
|
|
|
||||||
Retained Earnings
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
$
|
384,018
|
|
|
$
|
402,860
|
|
|
$
|
420,226
|
|
Cumulative effect upon adoption of ASU 2016-09
|
|
(1,669
|
)
|
|
—
|
|
|
—
|
|
|||
Net income
|
|
404,389
|
|
|
333,817
|
|
|
331,655
|
|
|||
Purchase and retirement of common stock
|
|
(227,827
|
)
|
|
(266,002
|
)
|
|
(266,543
|
)
|
|||
Dividends declared ($0.58, $0.54 and $0.50 per share)
|
|
(91,444
|
)
|
|
(86,657
|
)
|
|
(82,478
|
)
|
|||
Ending balance
|
|
$
|
467,467
|
|
|
$
|
384,018
|
|
|
$
|
402,860
|
|
|
|
|
|
|
|
|
||||||
Accumulated Other Comprehensive Loss
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
$
|
(37,955
|
)
|
|
$
|
(25,290
|
)
|
|
$
|
(8,895
|
)
|
Other comprehensive gain (loss)
|
|
18,047
|
|
|
(12,665
|
)
|
|
(16,395
|
)
|
|||
Ending balance
|
|
$
|
(19,908
|
)
|
|
$
|
(37,955
|
)
|
|
$
|
(25,290
|
)
|
|
|
|
|
|
|
|
||||||
Total Equity
|
|
$
|
1,476,839
|
|
|
$
|
1,303,114
|
|
|
$
|
1,289,720
|
|
|
|
|
Consolidated Statements of Cash Flows
|
|
SEI Investments Company
|
(In thousands)
|
|
and Subsidiaries
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
404,389
|
|
|
$
|
333,817
|
|
|
$
|
331,655
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Depreciation
|
|
27,311
|
|
|
26,440
|
|
|
24,044
|
|
|||
Amortization
|
|
48,275
|
|
|
45,392
|
|
|
42,630
|
|
|||
Equity in earnings of unconsolidated affiliates
|
|
(152,550
|
)
|
|
(126,103
|
)
|
|
(137,057
|
)
|
|||
Distributions received from unconsolidated affiliate
|
|
143,517
|
|
|
125,224
|
|
|
141,767
|
|
|||
Stock-based compensation
|
|
36,366
|
|
|
16,017
|
|
|
17,312
|
|
|||
Provision for losses on receivables
|
|
172
|
|
|
(126
|
)
|
|
(135
|
)
|
|||
Deferred income tax expense
|
|
(21,046
|
)
|
|
4,794
|
|
|
(1,394
|
)
|
|||
Gain from sale of SEI AK
|
|
—
|
|
|
(2,791
|
)
|
|
(2,791
|
)
|
|||
Net (gain) loss from investments
|
|
(1,269
|
)
|
|
(112
|
)
|
|
456
|
|
|||
Tax benefit on stock options exercised
|
|
—
|
|
|
8,984
|
|
|
16,056
|
|
|||
Change in long-term taxes payable
|
|
10,629
|
|
|
—
|
|
|
—
|
|
|||
Change in other long-term liabilities
|
|
(2,265
|
)
|
|
3,248
|
|
|
1,070
|
|
|||
Change in other assets
|
|
(1,489
|
)
|
|
(1,917
|
)
|
|
783
|
|
|||
Write off of capitalized and purchased software
|
|
—
|
|
|
—
|
|
|
6,055
|
|
|||
Other
|
|
(2,191
|
)
|
|
390
|
|
|
(2,440
|
)
|
|||
Change in current assets and liabilities:
|
|
|
|
|
|
|
||||||
Decrease (increase) in:
|
|
|
|
|
|
|
||||||
Receivables from investment products
|
|
5,095
|
|
|
(13,663
|
)
|
|
295
|
|
|||
Receivables
|
|
(52,726
|
)
|
|
(4,807
|
)
|
|
(28,469
|
)
|
|||
Other current assets
|
|
(3,583
|
)
|
|
(1,368
|
)
|
|
(8,014
|
)
|
|||
Increase (decrease) in:
|
|
|
|
|
|
|
||||||
Accounts payable
|
|
(909
|
)
|
|
1,455
|
|
|
(5,441
|
)
|
|||
Accrued liabilities
|
|
20,992
|
|
|
18,851
|
|
|
10,498
|
|
|||
Deferred revenue
|
|
1,180
|
|
|
495
|
|
|
636
|
|
|||
Total adjustments
|
|
55,509
|
|
|
100,403
|
|
|
75,861
|
|
|||
Net cash provided by operating activities
|
|
$
|
459,898
|
|
|
$
|
434,220
|
|
|
$
|
407,516
|
|
|
|
|
Consolidated Statements of Cash Flows
|
|
SEI Investments Company
|
(In thousands)
|
|
and Subsidiaries
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Decrease in restricted cash
|
|
—
|
|
|
2,000
|
|
|
301
|
|
|||
Additions to property and equipment
|
|
(25,525
|
)
|
|
(31,397
|
)
|
|
(44,465
|
)
|
|||
Additions to capitalized software
|
|
(61,043
|
)
|
|
(50,392
|
)
|
|
(29,416
|
)
|
|||
Purchases of marketable securities
|
|
(69,525
|
)
|
|
(73,193
|
)
|
|
(52,538
|
)
|
|||
Prepayments and maturities of marketable securities
|
|
65,830
|
|
|
54,141
|
|
|
38,551
|
|
|||
Sales of marketable securities
|
|
—
|
|
|
15,152
|
|
|
7,761
|
|
|||
Cash paid for acquisition, net of cash acquired
|
|
(80,234
|
)
|
|
—
|
|
|
—
|
|
|||
Receipt of contingent payment from sale of SEI AK
|
|
—
|
|
|
2,791
|
|
|
2,791
|
|
|||
Other investing activities
|
|
(1,805
|
)
|
|
1,313
|
|
|
(1,000
|
)
|
|||
Net cash used in investing activities
|
|
(172,302
|
)
|
|
(79,585
|
)
|
|
(78,015
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Borrowings under revolving credit facility
|
|
40,000
|
|
|
—
|
|
|
—
|
|
|||
Repayments under revolving credit facility
|
|
(10,000
|
)
|
|
—
|
|
|
—
|
|
|||
Purchase and retirement of common stock
|
|
(248,339
|
)
|
|
(292,258
|
)
|
|
(291,374
|
)
|
|||
Proceeds from issuance of common stock
|
|
53,568
|
|
|
48,272
|
|
|
65,543
|
|
|||
Payment of dividends
|
|
(88,862
|
)
|
|
(84,686
|
)
|
|
(80,030
|
)
|
|||
Net cash used in financing activities
|
|
(253,633
|
)
|
|
(328,672
|
)
|
|
(305,861
|
)
|
|||
|
|
|
|
|
|
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
|
14,583
|
|
|
(9,923
|
)
|
|
(11,425
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net increase in cash and cash equivalents
|
|
48,546
|
|
|
16,040
|
|
|
12,215
|
|
|||
|
|
|
|
|
|
|
||||||
Cash and cash equivalents, beginning of year
|
|
695,701
|
|
|
679,661
|
|
|
667,446
|
|
|||
|
|
|
|
|
|
|
||||||
Cash and cash equivalents, end of year
|
|
$
|
744,247
|
|
|
$
|
695,701
|
|
|
$
|
679,661
|
|
|
|
|
|
|
|
|
||||||
Interest paid
|
|
$
|
699
|
|
|
$
|
531
|
|
|
$
|
460
|
|
Income taxes paid
|
|
$
|
165,049
|
|
|
$
|
157,255
|
|
|
$
|
159,605
|
|
|
|
|
|
|
|
|
||||||
Non-cash financing activities
|
|
|
|
|
|
|
||||||
Dividends declared but not paid
|
|
$
|
47,179
|
|
|
$
|
44,596
|
|
|
$
|
42,625
|
|
|
|
|
Notes to Consolidated Financial Statements
|
|
SEI Investments Company
|
(all figures are in thousands except share and per-share data)
|
|
and Subsidiaries
|
2018
|
$
|
43,717
|
|
2019
|
43,717
|
|
|
2020
|
43,717
|
|
|
2021
|
43,439
|
|
|
2022
|
29,556
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net income
|
|
$
|
404,389
|
|
|
$
|
333,817
|
|
|
$
|
331,655
|
|
Shares used to compute basic earnings per common share
|
|
158,177,000
|
|
|
161,350,000
|
|
|
165,725,000
|
|
|||
Dilutive effect of stock options
|
|
4,092,000
|
|
|
3,081,000
|
|
|
3,873,000
|
|
|||
Shares used to compute diluted earnings per common share
|
|
162,269,000
|
|
|
164,431,000
|
|
|
169,598,000
|
|
|||
Basic earnings per common share
|
|
$
|
2.56
|
|
|
$
|
2.07
|
|
|
$
|
2.00
|
|
Diluted earnings per common share
|
|
$
|
2.49
|
|
|
$
|
2.03
|
|
|
$
|
1.96
|
|
Condensed Statement of Operations
Year ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues
|
|
$
|
491,872
|
|
|
$
|
399,462
|
|
|
$
|
427,653
|
|
Net income
|
|
$
|
392,141
|
|
|
$
|
323,381
|
|
|
$
|
352,845
|
|
Condensed Balance Sheets
December 31,
|
|
2017
|
|
2016
|
||||
Current assets
|
|
$
|
155,239
|
|
|
$
|
125,872
|
|
Non-current assets
|
|
1,407
|
|
|
1,927
|
|
||
Total assets
|
|
$
|
156,646
|
|
|
$
|
127,799
|
|
|
|
|
|
|
||||
Current liabilities
|
|
$
|
46,486
|
|
|
$
|
39,303
|
|
Partners’ capital
|
|
110,160
|
|
|
88,496
|
|
||
Total liabilities and partners’ capital
|
|
$
|
156,646
|
|
|
$
|
127,799
|
|
|
|
2017
|
|
2016
|
||||
Trade receivables
|
|
$
|
76,760
|
|
|
$
|
48,683
|
|
Fees earned, not billed
|
|
194,331
|
|
|
168,971
|
|
||
Other receivables
|
|
12,310
|
|
|
10,826
|
|
||
|
|
283,401
|
|
|
228,480
|
|
||
Less: Allowance for doubtful accounts
|
|
(695
|
)
|
|
(523
|
)
|
||
Receivables, net
|
|
$
|
282,706
|
|
|
$
|
227,957
|
|
|
|
2017
|
|
2016
|
||||
Buildings
|
|
$
|
153,961
|
|
|
$
|
152,171
|
|
Equipment
|
|
115,546
|
|
|
106,759
|
|
||
Land
|
|
10,030
|
|
|
10,030
|
|
||
Purchased software
|
|
134,610
|
|
|
128,008
|
|
||
Furniture and fixtures
|
|
18,114
|
|
|
17,292
|
|
||
Leasehold improvements
|
|
18,017
|
|
|
15,175
|
|
||
Construction in progress
|
|
6,105
|
|
|
2,077
|
|
||
|
|
456,383
|
|
|
431,512
|
|
||
Less: Accumulated depreciation
|
|
(309,955
|
)
|
|
(285,322
|
)
|
||
Property and Equipment, net
|
|
$
|
146,428
|
|
|
$
|
146,190
|
|
|
|
2017
|
|
2016
|
||||
Accrued employee compensation
|
|
$
|
88,960
|
|
|
$
|
79,735
|
|
Accrued consulting, outsourcing and professional fees
|
|
29,658
|
|
|
24,428
|
|
||
Accrued sub-advisory, distribution and other asset management fees
|
|
42,365
|
|
|
41,666
|
|
||
Accrued dividend payable
|
|
47,179
|
|
|
44,596
|
|
||
Other accrued liabilities
|
|
56,896
|
|
|
50,100
|
|
||
Accrued liabilities
|
|
$
|
265,058
|
|
|
$
|
240,525
|
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||
|
|
December 31, 2017
|
|
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|||||
Assets
|
|
|
|
|
|
|
||||||
Equity available-for-sale securities
|
|
$
|
11,250
|
|
|
$
|
11,250
|
|
|
$
|
—
|
|
Fixed-income available-for-sale securities
|
|
76,733
|
|
|
—
|
|
|
76,733
|
|
|||
Fixed-income securities owned
|
|
21,526
|
|
|
—
|
|
|
21,526
|
|
|||
Investment funds sponsored by LSV (1)
|
|
6,034
|
|
|
|
|
|
|||||
|
|
$
|
115,543
|
|
|
$
|
11,250
|
|
|
$
|
98,259
|
|
|
|
|
|
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)
|
|||||
Assets
|
|
|
|
|
|
|
||||||
Equity available-for-sale securities
|
|
$
|
9,581
|
|
|
$
|
9,581
|
|
|
$
|
—
|
|
Fixed-income available-for-sale securities
|
|
74,452
|
|
|
—
|
|
|
74,452
|
|
|||
Fixed-income securities owned
|
|
21,339
|
|
|
—
|
|
|
21,339
|
|
|||
Investment funds sponsored by LSV (1)
|
|
4,858
|
|
|
|
|
|
|||||
|
|
$
|
110,230
|
|
|
$
|
9,581
|
|
|
$
|
95,791
|
|
|
|
At December 31, 2017
|
||||||||||||||
|
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
(Losses)
|
|
Fair
Value
|
||||||||
SEI-sponsored mutual funds
|
|
$
|
7,369
|
|
|
$
|
110
|
|
|
$
|
(143
|
)
|
|
$
|
7,336
|
|
Equities and other mutual funds
|
|
3,456
|
|
|
458
|
|
|
—
|
|
|
3,914
|
|
||||
Debt securities
|
|
77,745
|
|
|
—
|
|
|
(1,012
|
)
|
|
76,733
|
|
||||
|
|
$
|
88,570
|
|
|
$
|
568
|
|
|
$
|
(1,155
|
)
|
|
$
|
87,983
|
|
|
|
At December 31, 2016
|
||||||||||||||
|
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
(Losses)
|
|
Fair
Value
|
||||||||
SEI-sponsored mutual funds
|
|
$
|
7,357
|
|
|
$
|
24
|
|
|
$
|
(996
|
)
|
|
$
|
6,385
|
|
Equities and other mutual funds
|
|
2,968
|
|
|
228
|
|
|
—
|
|
|
3,196
|
|
||||
Debt securities
|
|
74,843
|
|
|
—
|
|
|
(391
|
)
|
|
74,452
|
|
||||
|
|
$
|
85,168
|
|
|
$
|
252
|
|
|
$
|
(1,387
|
)
|
|
$
|
84,033
|
|
|
|
2017
|
|
2016
|
|
2015
|
|||
Expected term (in years)
|
|
6.00
|
|
|
6.00
|
|
|
5.58
|
|
Expected volatility
|
|
22.58
|
%
|
|
25.44
|
%
|
|
23.86
|
%
|
Expected dividend yield
|
|
0.82
|
%
|
|
1.10
|
%
|
|
1.00
|
%
|
Risk-free interest rate
|
|
2.29
|
%
|
|
2.18
|
%
|
|
1.90
|
%
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Stock-based compensation expense
|
|
$
|
36,366
|
|
|
$
|
16,017
|
|
|
$
|
17,312
|
|
Less: Deferred tax benefit
|
|
(7,891
|
)
|
|
(5,612
|
)
|
|
(6,107
|
)
|
|||
Stock-based compensation expense, net of tax
|
|
$
|
28,475
|
|
|
$
|
10,405
|
|
|
$
|
11,205
|
|
|
|
Number of
Shares
|
|
Weighted
Avg. Price
|
|||
Balance as of December 31, 2014
|
|
20,461,000
|
|
|
$
|
25.26
|
|
Granted
|
|
2,005,000
|
|
|
53.34
|
|
|
Exercised
|
|
(2,927,000
|
)
|
|
21.44
|
|
|
Expired or canceled
|
|
(302,000
|
)
|
|
28.97
|
|
|
Balance as of December 31, 2015
|
|
19,237,000
|
|
|
$
|
28.71
|
|
Granted
|
|
2,310,000
|
|
|
49.57
|
|
|
Exercised
|
|
(1,809,000
|
)
|
|
24.82
|
|
|
Expired or canceled
|
|
(1,669,000
|
)
|
|
30.86
|
|
|
Balance as of December 31, 2016
|
|
18,069,000
|
|
|
$
|
31.57
|
|
Granted
|
|
2,057,000
|
|
|
69.87
|
|
|
Exercised
|
|
(2,370,000
|
)
|
|
21.22
|
|
|
Expired or canceled
|
|
(1,044,000
|
)
|
|
33.42
|
|
|
Balance as of December 31, 2017
|
|
16,712,000
|
|
|
$
|
37.63
|
|
|
|
|
|
|
|||
Exercisable as of December 31, 2017
|
|
10,624,000
|
|
|
$
|
28.99
|
|
Available for future grant as of December 31, 2017
|
|
24,108,000
|
|
|
|
|
|
|
Options Outstanding at December 31, 2017
|
|
Options Exercisable at December 31, 2017
|
||||||||||||||||
Range of Exercise Prices (Per Share)
|
Number of Shares
|
|
Weighted Average
Exercise Price
(Per Share)
|
|
Weighted Average
Remaining
Contractual
Life (Years)
|
|
Number of Shares
|
|
Weighted Average
Exercise Price
(Per Share)
|
|
Weighted Average
Remaining
Contractual
Life (Years)
|
||||||||||
$
|
14.62
|
|
-
|
15.77
|
2,178,000
|
|
|
$
|
15.45
|
|
|
3.16
|
|
2,178,000
|
|
|
$
|
15.45
|
|
|
3.16
|
17.65
|
|
-
|
21.05
|
1,174,000
|
|
|
17.67
|
|
|
2.01
|
|
1,174,000
|
|
|
17.67
|
|
|
2.01
|
|||
22.45
|
|
-
|
23.86
|
3,432,000
|
|
|
23.19
|
|
|
3.95
|
|
3,422,000
|
|
|
23.19
|
|
|
3.96
|
|||
27.03
|
|
-
|
39.15
|
1,815,000
|
|
|
33.65
|
|
|
6.09
|
|
747,000
|
|
|
33.58
|
|
|
6.09
|
|||
40.64
|
|
-
|
53.16
|
4,190,000
|
|
|
45.49
|
|
|
8.54
|
|
2,095,000
|
|
|
45.49
|
|
|
8.08
|
|||
53.34
|
|
-
|
71.12
|
3,923,000
|
|
|
62.01
|
|
|
9.05
|
|
1,008,000
|
|
|
53.39
|
|
|
8.14
|
|||
|
|
|
16,712,000
|
|
|
|
|
|
|
10,624,000
|
|
|
|
|
|
Year
|
|
Total Number of
Shares Repurchased
|
|
Total Cost
|
|||
2017
|
|
4,403,000
|
|
|
$
|
248,114
|
|
2016
|
|
6,600,000
|
|
|
294,374
|
|
|
2015
|
|
5,951,000
|
|
|
289,587
|
|
|
|
Foreign
Currency
Translation
Adjustments
|
|
Unrealized
Holding
Gains (Losses)
on Investments
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
||||||
Balance, January 1, 2015
|
|
$
|
(10,088
|
)
|
|
$
|
1,193
|
|
|
$
|
(8,895
|
)
|
|
|
|
|
|
|
|
||||||
Other comprehensive loss before reclassifications
|
|
(14,900
|
)
|
|
(1,659
|
)
|
|
(16,559
|
)
|
|||
Amounts reclassified from accumulated other comprehensive loss
|
|
—
|
|
|
164
|
|
|
164
|
|
|||
Net current-period other comprehensive loss
|
|
(14,900
|
)
|
|
(1,495
|
)
|
|
(16,395
|
)
|
|||
|
|
|
|
|
|
|
||||||
Balance, December 31, 2015
|
|
$
|
(24,988
|
)
|
|
$
|
(302
|
)
|
|
$
|
(25,290
|
)
|
|
|
|
|
|
|
|
||||||
Other comprehensive loss before reclassifications
|
|
(12,131
|
)
|
|
(918
|
)
|
|
(13,049
|
)
|
|||
Amounts reclassified from accumulated other comprehensive loss
|
|
—
|
|
|
384
|
|
|
384
|
|
|||
Net current-period other comprehensive loss
|
|
(12,131
|
)
|
|
(534
|
)
|
|
(12,665
|
)
|
|||
|
|
|
|
|
|
|
||||||
Balance, December 31, 2016
|
|
$
|
(37,119
|
)
|
|
$
|
(836
|
)
|
|
$
|
(37,955
|
)
|
|
|
|
|
|
|
|
||||||
Other comprehensive gain before reclassifications
|
|
17,597
|
|
|
190
|
|
|
17,787
|
|
|||
Amounts reclassified from accumulated other comprehensive loss
|
|
—
|
|
|
260
|
|
|
260
|
|
|||
Net current-period other comprehensive gain
|
|
17,597
|
|
|
450
|
|
|
18,047
|
|
|||
|
|
|
|
|
|
|
||||||
Balance, December 31, 2017
|
|
$
|
(19,522
|
)
|
|
$
|
(386
|
)
|
|
$
|
(19,908
|
)
|
2018
|
$
|
10,046
|
|
2019
|
9,427
|
|
|
2020
|
7,413
|
|
|
2021
|
7,082
|
|
|
2022 and thereafter
|
29,171
|
|
|
|
$
|
63,139
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||||
Current
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
154,776
|
|
|
$
|
158,411
|
|
|
$
|
159,774
|
|
State
|
|
11,645
|
|
|
10,500
|
|
|
7,756
|
|
|||
Foreign
|
|
8,002
|
|
|
5,137
|
|
|
5,224
|
|
|||
|
|
174,423
|
|
|
174,048
|
|
|
172,754
|
|
|||
Deferred
|
|
|
|
|
|
|
||||||
Federal
|
|
(26,350
|
)
|
|
788
|
|
|
(5,343
|
)
|
|||
State
|
|
1,378
|
|
|
(168
|
)
|
|
1,414
|
|
|||
Foreign
|
|
3,199
|
|
|
—
|
|
|
—
|
|
|||
|
|
(21,773
|
)
|
|
620
|
|
|
(3,929
|
)
|
|||
Total income taxes
|
|
$
|
152,650
|
|
|
$
|
174,668
|
|
|
$
|
168,825
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||||
Domestic
|
|
$
|
523,044
|
|
|
$
|
481,760
|
|
|
$
|
472,384
|
|
Foreign
|
|
33,995
|
|
|
26,725
|
|
|
28,096
|
|
|||
|
|
$
|
557,039
|
|
|
$
|
508,485
|
|
|
$
|
500,480
|
|
Year Ended December 31,
|
2017
|
|
2016
|
|
2015
|
|||
Statutory rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State taxes, net of federal tax benefit
|
1.3
|
|
|
1.3
|
|
|
1.6
|
|
Foreign tax expense and tax rate differential
|
(1.1
|
)
|
|
(0.8
|
)
|
|
(1.2
|
)
|
Tax benefit from stock option exercises
|
(3.9
|
)
|
|
—
|
|
|
—
|
|
Enactment of the Tax Cuts and Jobs Act:
|
|
|
|
|
|
|||
Re-measurement of deferred tax liability
|
(4.9
|
)
|
|
—
|
|
|
—
|
|
One-time transition tax on repatriation of foreign earnings and withholding tax
|
2.6
|
|
|
—
|
|
|
—
|
|
Research and development tax credit
|
(0.9
|
)
|
|
(0.8
|
)
|
|
(0.6
|
)
|
Domestic Production Activities Deduction
|
(0.5
|
)
|
|
(0.6
|
)
|
|
(0.6
|
)
|
Settlement of state tax petition
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
Other, net
|
(0.2
|
)
|
|
0.2
|
|
|
0.3
|
|
|
27.4
|
%
|
|
34.3
|
%
|
|
33.7
|
%
|
|
|
2017
|
|
2016
|
||||
Deferred Tax Assets:
|
|
|
|
|
||||
Stock-based compensation expense
|
|
$
|
24,725
|
|
|
$
|
33,459
|
|
Foreign and state net operating loss carryforward
|
|
71,236
|
|
|
20,049
|
|
||
Basis differences in investments
|
|
4,191
|
|
|
6,165
|
|
||
Federal benefit of state tax deduction for uncertain tax positions
|
|
1,918
|
|
|
3,647
|
|
||
Revenue and expense recognized in different periods for financial reporting and income tax purposes
|
|
2,631
|
|
|
5,022
|
|
||
Other assets
|
|
273
|
|
|
813
|
|
||
Total deferred income tax assets
|
|
104,974
|
|
|
69,155
|
|
||
Less: valuation allowance
|
|
(68,469
|
)
|
|
(17,922
|
)
|
||
Net deferred income tax assets
|
|
$
|
36,505
|
|
|
$
|
51,233
|
|
|
|
|
|
|
||||
Deferred Tax Liabilities:
|
|
|
|
|
||||
Capitalized software currently deductible for tax purposes, net of amortization
|
|
$
|
(70,575
|
)
|
|
$
|
(107,897
|
)
|
Difference in financial reporting and income tax depreciation methods
|
|
(3,182
|
)
|
|
(5,190
|
)
|
||
Difference between book and tax basis of other assets
|
|
(3,549
|
)
|
|
(4,597
|
)
|
||
Goodwill and other intangibles
|
|
(1,001
|
)
|
|
—
|
|
||
Foreign Dividend Withholding Tax
|
|
(3,199
|
)
|
|
—
|
|
||
Other liabilities
|
|
(704
|
)
|
|
(1,115
|
)
|
||
Total deferred income tax liabilities
|
|
$
|
(82,210
|
)
|
|
$
|
(118,799
|
)
|
Net deferred income tax liabilities
|
|
$
|
(45,705
|
)
|
|
$
|
(67,566
|
)
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Balance as of January 1
|
|
$
|
17,287
|
|
|
$
|
14,517
|
|
|
$
|
14,018
|
|
Tax positions related to current year:
|
|
|
|
|
|
|
||||||
Gross additions
|
|
3,180
|
|
|
3,756
|
|
|
1,954
|
|
|||
Tax positions related to prior years:
|
|
|
|
|
|
|
||||||
Gross additions
|
|
211
|
|
|
1,762
|
|
|
297
|
|
|||
Settlements
|
|
(352
|
)
|
|
(378
|
)
|
|
—
|
|
|||
Lapses on statute of limitations
|
|
(5,846
|
)
|
|
(2,370
|
)
|
|
(1,752
|
)
|
|||
Balance as of December 31
|
|
$
|
14,480
|
|
|
$
|
17,287
|
|
|
$
|
14,517
|
|
|
|
Private
Banks
|
|
Investment
Advisors
|
|
Institutional
Investors
|
|
Investment
Managers
|
|
Investments
In New
Businesses
|
|
Total
|
||||||||||||
|
|
For the Year Ended December 31, 2017
|
||||||||||||||||||||||
Revenues
|
|
$
|
474,272
|
|
|
$
|
373,473
|
|
|
$
|
322,457
|
|
|
$
|
349,444
|
|
|
$
|
6,906
|
|
|
$
|
1,526,552
|
|
Expenses
|
|
455,119
|
|
|
201,833
|
|
|
161,640
|
|
|
226,504
|
|
|
20,678
|
|
|
1,065,774
|
|
||||||
Operating profit (loss)
|
|
$
|
19,153
|
|
|
$
|
171,640
|
|
|
$
|
160,817
|
|
|
$
|
122,940
|
|
|
$
|
(13,772
|
)
|
|
$
|
460,778
|
|
|
|
Private
Banks
|
|
Investment
Advisors
|
|
Institutional
Investors
|
|
Investment
Managers
|
|
Investments
In New
Businesses
|
|
Total
|
||||||||||||
|
|
For the Year Ended December 31, 2016
|
||||||||||||||||||||||
Revenues
|
|
$
|
457,886
|
|
|
$
|
330,677
|
|
|
$
|
312,584
|
|
|
$
|
294,390
|
|
|
$
|
6,008
|
|
|
$
|
1,401,545
|
|
Expenses
|
|
421,188
|
|
|
180,140
|
|
|
153,117
|
|
|
191,127
|
|
|
20,962
|
|
|
966,534
|
|
||||||
Operating profit (loss)
|
|
$
|
36,698
|
|
|
$
|
150,537
|
|
|
$
|
159,467
|
|
|
$
|
103,263
|
|
|
$
|
(14,954
|
)
|
|
$
|
435,011
|
|
Gain on sale of subsidiary
|
|
2,791
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,791
|
|
||||||
Total profit (loss)
|
|
$
|
39,489
|
|
|
$
|
150,537
|
|
|
$
|
159,467
|
|
|
$
|
103,263
|
|
|
$
|
(14,954
|
)
|
|
$
|
437,802
|
|
|
|
Private
Banks
|
|
Investment
Advisors
|
|
Institutional
Investors
|
|
Investment
Managers
|
|
Investments
In New
Businesses
|
|
Total
|
||||||||||||
|
|
For the Year Ended December 31, 2015
|
||||||||||||||||||||||
Revenues
|
|
$
|
456,516
|
|
|
$
|
306,620
|
|
|
$
|
297,568
|
|
|
$
|
267,963
|
|
|
$
|
5,541
|
|
|
$
|
1,334,208
|
|
Expenses
|
|
410,975
|
|
|
171,968
|
|
|
145,851
|
|
|
172,094
|
|
|
20,656
|
|
|
921,544
|
|
||||||
Operating profit (loss)
|
|
$
|
45,541
|
|
|
$
|
134,652
|
|
|
$
|
151,717
|
|
|
$
|
95,869
|
|
|
$
|
(15,115
|
)
|
|
$
|
412,664
|
|
Gain on sale of subsidiary
|
|
2,791
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,791
|
|
||||||
Total profit (loss)
|
|
$
|
48,332
|
|
|
$
|
134,652
|
|
|
$
|
151,717
|
|
|
$
|
95,869
|
|
|
$
|
(15,115
|
)
|
|
$
|
415,455
|
|
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||||
Total operating profit from segments above
|
|
$
|
460,778
|
|
|
$
|
435,011
|
|
|
$
|
412,664
|
|
Corporate overhead expenses
|
|
(63,834
|
)
|
|
(59,317
|
)
|
|
(54,451
|
)
|
|||
Income from operations
|
|
$
|
396,944
|
|
|
$
|
375,694
|
|
|
$
|
358,213
|
|
|
|
Capital Expenditures (1)
|
|
Depreciation
|
||||||||||||||||||||
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
Private Banks
|
|
$
|
47,526
|
|
|
$
|
45,940
|
|
|
$
|
41,972
|
|
|
$
|
16,479
|
|
|
$
|
13,222
|
|
|
$
|
12,348
|
|
Investment Advisors
|
|
17,450
|
|
|
17,610
|
|
|
13,206
|
|
|
3,364
|
|
|
3,880
|
|
|
3,410
|
|
||||||
Institutional Investors
|
|
4,020
|
|
|
4,319
|
|
|
5,301
|
|
|
1,121
|
|
|
1,367
|
|
|
1,200
|
|
||||||
Investment Managers
|
|
15,863
|
|
|
11,209
|
|
|
10,119
|
|
|
4,698
|
|
|
4,877
|
|
|
4,040
|
|
||||||
Investments in New Businesses
|
|
546
|
|
|
726
|
|
|
736
|
|
|
826
|
|
|
2,197
|
|
|
2,278
|
|
||||||
Total from business segments
|
|
$
|
85,405
|
|
|
$
|
79,804
|
|
|
$
|
71,334
|
|
|
$
|
26,488
|
|
|
$
|
25,543
|
|
|
$
|
23,276
|
|
Corporate Overhead
|
|
1,163
|
|
|
1,985
|
|
|
2,547
|
|
|
823
|
|
|
897
|
|
|
768
|
|
||||||
|
|
$
|
86,568
|
|
|
$
|
81,789
|
|
|
$
|
73,881
|
|
|
$
|
27,311
|
|
|
$
|
26,440
|
|
|
$
|
24,044
|
|
|
|
Amortization
|
||||||||||
Year Ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||||
Private Banks
|
|
$
|
32,696
|
|
|
$
|
31,675
|
|
|
$
|
29,819
|
|
Investment Advisors
|
|
10,930
|
|
|
10,458
|
|
|
9,880
|
|
|||
Institutional Investors
|
|
1,599
|
|
|
1,674
|
|
|
1,558
|
|
|||
Investment Managers
|
|
2,593
|
|
|
1,092
|
|
|
1,029
|
|
|||
Investments in New Businesses
|
|
239
|
|
|
146
|
|
|
116
|
|
|||
Total from business segments
|
|
$
|
48,057
|
|
|
$
|
45,045
|
|
|
$
|
42,402
|
|
Corporate Overhead
|
|
218
|
|
|
347
|
|
|
228
|
|
|||
|
|
$
|
48,275
|
|
|
$
|
45,392
|
|
|
$
|
42,630
|
|
|
|
Total Assets
|
||||||
|
|
2017
|
|
2016
|
||||
Private Banks
|
|
$
|
523,214
|
|
|
$
|
471,435
|
|
Investment Advisors
|
|
139,697
|
|
|
160,717
|
|
||
Institutional Investors
|
|
117,286
|
|
|
109,879
|
|
||
Investment Managers
|
|
278,540
|
|
|
158,621
|
|
||
Investments in New Businesses
|
|
19,269
|
|
|
4,910
|
|
||
Total from business segments
|
|
$
|
1,078,006
|
|
|
$
|
905,562
|
|
Corporate Overhead (2)
|
|
775,363
|
|
|
731,261
|
|
||
|
|
$
|
1,853,369
|
|
|
$
|
1,636,823
|
|
For the Year Ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
||||||
United States
|
|
$
|
1,298,381
|
|
|
$
|
1,191,640
|
|
|
$
|
1,123,165
|
|
International operations
|
|
228,171
|
|
|
209,905
|
|
|
211,043
|
|
|||
|
|
$
|
1,526,552
|
|
|
$
|
1,401,545
|
|
|
$
|
1,334,208
|
|
|
|
2017
|
|
2016
|
||||
United States
|
|
$
|
1,471,260
|
|
|
$
|
1,317,235
|
|
International operations
|
|
382,109
|
|
|
319,588
|
|
||
|
|
$
|
1,853,369
|
|
|
$
|
1,636,823
|
|
|
|
Estimated Fair Value
|
|
Estimated Useful Life
|
||
Current assets, net of current liabilities
|
|
$
|
2,539
|
|
|
|
Property and equipment
|
|
776
|
|
|
|
|
Goodwill
|
|
52,990
|
|
|
|
|
Identifiable intangible assets
|
|
|
|
|
||
Acquired technology
|
|
13,510
|
|
|
10 years
|
|
Client relationships
|
|
10,760
|
|
|
15 years
|
|
Non-competition agreements
|
|
3,470
|
|
|
5 years
|
|
Trade names
|
|
2,390
|
|
|
7 years
|
|
Contingent consideration
|
|
(4,800
|
)
|
|
|
|
Total purchase price allocation
|
|
$
|
81,635
|
|
|
|
|
|
For the Three Months Ended
|
||||||||||||||
2017
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31(1)
|
||||||||
Revenues
|
|
$
|
359,984
|
|
|
$
|
372,331
|
|
|
$
|
386,018
|
|
|
$
|
408,219
|
|
Income before income taxes
|
|
$
|
128,660
|
|
|
$
|
135,158
|
|
|
$
|
140,769
|
|
|
$
|
152,452
|
|
Net income
|
|
$
|
88,737
|
|
|
$
|
91,769
|
|
|
$
|
101,739
|
|
|
$
|
122,144
|
|
Basic earnings per share
|
|
$
|
0.56
|
|
|
$
|
0.58
|
|
|
$
|
0.64
|
|
|
$
|
0.78
|
|
Diluted earnings per share (2)
|
|
$
|
0.55
|
|
|
$
|
0.57
|
|
|
$
|
0.63
|
|
|
$
|
0.75
|
|
|
|
|
|
|
|
|
|
|
||||||||
Effective income tax rate
|
|
31.0
|
%
|
|
32.1
|
%
|
|
27.7
|
%
|
|
19.9
|
%
|
|
|
For the Three Months Ended
|
||||||||||||||
2016
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31(3)
|
||||||||
Revenues
|
|
$
|
334,263
|
|
|
$
|
343,831
|
|
|
$
|
354,641
|
|
|
$
|
368,810
|
|
Income before income taxes
|
|
$
|
119,638
|
|
|
$
|
124,904
|
|
|
$
|
130,890
|
|
|
$
|
133,053
|
|
Net income
|
|
$
|
77,497
|
|
|
$
|
81,005
|
|
|
$
|
86,704
|
|
|
$
|
88,611
|
|
Basic earnings per share
|
|
$
|
0.48
|
|
|
$
|
0.50
|
|
|
$
|
0.54
|
|
|
$
|
0.55
|
|
Diluted earnings per share (2)
|
|
$
|
0.47
|
|
|
$
|
0.49
|
|
|
$
|
0.53
|
|
|
$
|
0.55
|
|
|
|
|
|
|
|
|
|
|
||||||||
Effective income tax rate
|
|
35.2
|
%
|
|
35.2
|
%
|
|
33.8
|
%
|
|
33.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Schedule II - Valuation and Qualifying Accounts and Reserves
|
|
|
|
SEI Investments Company
|
||||||
(In thousands)
|
|
|
|
|
|
|
|
and Subsidiaries
|
Year Ended December 31,
|
|
|
Additions
|
|
|
|
|
|||||||||||||
Description
|
|
Balance at
Beginning
of Year
|
|
Charged to
Costs and
Expenses
|
|
Charged
to Other
Accounts
|
|
(Deductions)
|
|
Balance
at End
of Year
|
||||||||||
Allowance for doubtful accounts:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2017
|
|
$
|
523
|
|
|
$
|
172
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
695
|
|
2016
|
|
649
|
|
|
—
|
|
|
—
|
|
|
(126
|
)
|
|
523
|
|
|||||
2015
|
|
784
|
|
|
—
|
|
|
—
|
|
|
(135
|
)
|
|
649
|
|
|||||
Deferred income tax valuation allowance:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2017 (1)
|
|
$
|
17,922
|
|
|
$
|
—
|
|
|
$
|
50,547
|
|
|
$
|
—
|
|
|
$
|
68,469
|
|
2016
|
|
14,548
|
|
|
—
|
|
|
3,374
|
|
|
—
|
|
|
17,922
|
|
|||||
2015
|
|
16,509
|
|
|
(1,142
|
)
|
|
(819
|
)
|
|
—
|
|
|
14,548
|
|
|
|
Number of
securities to be
issued upon
exercise of
outstanding options,
warrants and rights
(a)
|
|
Weighted –average
exercise price of
outstanding options,
warrants and rights
(b)
|
|
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))
(c)
|
||||
Equity compensation plans approved by security holders
|
|
16,712,177
|
|
|
$
|
37.63
|
|
|
24,107,806
|
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
16,712,177
|
|
|
$
|
37.63
|
|
|
24,107,806
|
|
|
|
|
|
|
|
|
|
|
SEI INVESTMENTS COMPANY
|
||
|
|
|
|
||
Date:
|
February 22, 2018
|
|
By:
|
|
/s/ Dennis J. McGonigle
|
|
|
|
|
|
Dennis J. McGonigle
|
|
|
|
|
|
Chief Financial Officer
|
Date:
|
February 22, 2018
|
|
By:
|
|
/s/ Alfred P. West, Jr.
|
|
|
|
|
|
Alfred P. West, Jr.
|
|
|
|
|
|
Chairman of the Board, Chief Executive Officer, and
|
|
|
|
|
|
Director
|
|
|
|
|
||
Date:
|
February 22, 2018
|
|
By:
|
|
/s/ Carmen V. Romeo
|
|
|
|
|
|
Carmen V. Romeo
|
|
|
|
|
|
Director
|
|
|
|
|
||
Date:
|
February 22, 2018
|
|
By:
|
|
/s/ William M. Doran
|
|
|
|
|
|
William M. Doran
|
|
|
|
|
|
Director
|
|
|
|
|
||
Date:
|
February 22, 2018
|
|
By:
|
|
/s/ Kathryn M. McCarthy
|
|
|
|
|
|
Kathryn M. McCarthy
|
|
|
|
|
|
Director
|
|
|
|
|
||
Date:
|
February 22, 2018
|
|
By:
|
|
/s/ Sarah W. Blumenstein
|
|
|
|
|
|
Sarah W. Blumenstein
|
|
|
|
|
|
Director
|
|
|
|
|
|
|
Date:
|
February 22, 2018
|
|
By:
|
|
/s/ Carl A. Guarino
|
|
|
|
|
|
Carl A. Guarino
|
|
|
|
|
|
Director
|
3.1
|
|
(P)
|
|
Articles of Incorporation of the Registrant as amended on January 21, 1983. (Incorporated by reference to exhibit 3.1 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1982.)
|
3.1.2
|
|
(P)
|
|
Amendment to Articles of Incorporation of the Registrant, dated May 21, 1992. (Incorporated by reference to exhibit 3.1.2 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1992.)
|
3.1.3
|
|
(P)
|
|
Amendment to Articles of Incorporation of the Registrant, dated May 26, 1994. (Incorporated by reference to exhibit 3.1.3 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1994.)
|
3.1.4
|
|
(P)
|
|
Amendment to Articles of Incorporation of the Registrant, dated November 21, 1996. (Incorporated by reference to exhibit 3.1.4 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 1996.)
|
3.1.5
|
|
|
|
|
3.2
|
|
|
|
|
3.2.1
|
|
|
|
|
4.1
|
|
|
|
|
4.2
|
|
|
|
|
|
|
|
||
|
|
|
Note: Exhibits 10.4 through 10.11 constitute the management contracts and executive compensatory plans or arrangements in which certain of the directors and executive officers of the Registrant participate.
|
|
|
|
|
||
10.4
|
|
|
|
|
10.4.1
|
|
|
|
|
10.5
|
|
|
|
|
10.6
|
|
|
|
|
10.9
|
|
|
|
|
10.10
|
|
|
|
|
10.11
|
|
|
|
|
10.22
|
|
|
|
|
10.22.1
|
|
|
|
10.22.2
|
|
|
|
|
10.24
|
|
|
|
|
10.25
|
|
|
|
|
10.26
|
|
|
|
|
14
|
|
|
|
|
21
|
|
*
|
|
|
23.1
|
|
*
|
|
|
23.2
|
|
*
|
|
|
31.1
|
|
*
|
|
|
31.2
|
|
*
|
|
|
32
|
|
*
|
|
|
99.1
|
|
|
|
|
99.2
|
|
|
|
|
99.3
|
|
|
|
|
99.4
|
|
|
|
|
99.5
|
|
|
|
|
99.6
|
|
|
|
|
99.7
|
|
|
|
|
99.8
|
|
*
|
|
|
101.INS
|
|
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
101.SCH
|
|
*
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.LAB
|
|
*
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
101.DEF
|
|
*
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
*
|
Filed herewith as an exhibit to this Annual Report on Form 10-K.
|
(P)
|
Paper exhibit.
|
SUBSIDIARIES OF THE REGISTRANT
|
||
|
|
|
NAME
|
|
JURISDICTION OF ORGANIZATION OR INCORPORATION
|
|
|
|
SEI Investments Distribution Co.
|
|
Pennsylvania
|
SEI Investments Management Corporation
|
|
Delaware
|
SEI Investments Developments, Inc.
|
|
Delaware
|
SEI Investments Global Funds Services
|
|
Delaware
|
SEI Custodial Operations Company, LLC
|
|
Delaware
|
SEI Trust Company
|
|
Pennsylvania
|
SEI Funds, Inc.
|
|
Delaware
|
SEI Investments, Inc.
|
|
Delaware
|
SEI Global Investments Corporation
|
|
Delaware
|
SEI Investments Canada Company
|
|
Canada (Federal)
|
SEI Advanced Capital Management, Inc.
|
|
Delaware
|
SEI Global Capital Investments, Inc.
|
|
Delaware
|
SEI Investments Global (Cayman), Ltd.
|
|
Cayman Islands, B. W. I.
|
SEI Investments Global, Limited
|
|
Ireland
|
SEI Investments Global Fund Services, Ltd.
|
|
Ireland
|
SEI Global Holdings (Cayman) Inc.
|
|
Cayman Islands, B. W. I.
|
SEI Investments (South Africa) Limited
|
|
South Africa
|
SEI Primus Holding Corporation
|
|
Delaware
|
SEI Investments Depositary & Custodial Services (Ireland) Limited
|
|
Ireland
|
SEI Private Trust Company
|
|
Pennsylvania
|
SEI Ventures, Inc.
|
|
Delaware
|
SEI Investments (Europe) Limited
|
|
United Kingdom
|
SEI SIMC Holdings, LLC
|
|
Delaware
|
SIMC Subsidiary, LLC
|
|
Delaware
|
SEI Global Nominee Ltd.
|
|
United Kingdom
|
SEI Insurance Group, Inc.
|
|
Pennsylvania
|
SEI Global Services, Inc.
|
|
Delaware
|
SEI Investments (Asia), Limited
|
|
Hong Kong
|
SEI European Services Limited
|
|
United Kingdom
|
SEI Trustees Limited
|
|
United Kingdom
|
SEI Investment Strategies, LLC
|
|
Delaware
|
LSV Asset Management
|
|
Delaware
|
SEI Institutional Transfer Agent, Inc.
|
|
Delaware
|
SEI Investments - Guernsey Limited
|
|
Guernsey
|
Keystone Capital Holdings, LLC
|
|
Indiana
|
Archway Technology Partners, LLC
|
|
Indiana
|
Archway Finance & Operations, Inc.
|
|
Indiana
|
SEI Technology Services India Private Limited
|
|
India
|
/s/ Alfred P. West, Jr.
|
Alfred P. West, Jr.
|
Chairman and Chief Executive Officer
|
/s/ Dennis J. McGonigle
|
Dennis J. McGonigle
|
Chief Financial Officer
|
Date:
|
February 22, 2018
|
|
Date:
|
February 22, 2018
|
|
|
|
|
|
/s/ Alfred P. West, Jr.
|
|
/s/ Dennis J. McGonigle
|
||
Alfred P. West, Jr.
|
|
Dennis J. McGonigle
|
||
Chairman and Chief Executive Officer
|
|
Chief Financial Officer
|
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
25,333
|
|
|
$
|
19,863
|
|
Management fee receivables, net of allowance for
|
|
|
|
||||
doubtful accounts of $0 and $6
|
128,255
|
|
|
104,648
|
|
||
Prepaid expenses and other current assets
|
1,651
|
|
|
1,361
|
|
||
Total current assets
|
155,239
|
|
|
125,872
|
|
||
Fixed assets, net of accumulated depreciation and
|
|
|
|
||||
amortization of $5,942 and $5,145
|
1,407
|
|
|
1,927
|
|
||
Total assets
|
$
|
156,646
|
|
|
$
|
127,799
|
|
Liabilities and Partners' Capital
|
|
|
|
||||
Accrued compensation
|
$
|
42,212
|
|
|
$
|
36,104
|
|
Accrued other
|
2,439
|
|
|
1,608
|
|
||
Total accrued liabilities
|
44,651
|
|
|
37,712
|
|
||
Due to SEI Funds, Inc.
|
1,835
|
|
|
1,591
|
|
||
Total current liabilities
|
46,486
|
|
|
39,303
|
|
||
Commitments and contingencies
|
|
|
|
||||
Partners' capital
|
110,160
|
|
|
88,496
|
|
||
Total liabilities and partners' capital
|
$
|
156,646
|
|
|
$
|
127,799
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue
|
|
|
|
|
|
||||||
Management fees
|
$
|
491,872
|
|
|
$
|
399,462
|
|
|
$
|
427,653
|
|
Interest income
|
107
|
|
|
93
|
|
|
111
|
|
|||
Total revenue
|
491,979
|
|
|
399,555
|
|
|
427,764
|
|
|||
Expenses
|
|
|
|
|
|
||||||
Compensation, benefits and other personnel
|
77,384
|
|
|
60,747
|
|
|
54,049
|
|
|||
Stock based compensation
|
4,746
|
|
|
(1,181
|
)
|
|
3,646
|
|
|||
Consulting and professional fees
|
2,671
|
|
|
2,500
|
|
|
3,051
|
|
|||
Data processing and computer related
|
10,430
|
|
|
9,631
|
|
|
8,889
|
|
|||
Facilities, supplies and other costs
|
3,810
|
|
|
3,684
|
|
|
4,655
|
|
|||
Depreciation and amortization
|
797
|
|
|
793
|
|
|
629
|
|
|||
Total expenses
|
99,838
|
|
|
76,174
|
|
|
74,919
|
|
|||
Net income
|
$
|
392,141
|
|
|
$
|
323,381
|
|
|
$
|
352,845
|
|
|
Partnership
Capital
|
||
Balance, December 31, 2014
|
$
|
100,718
|
|
Net income
|
352,845
|
|
|
Partnership distributions
|
(364,839
|
)
|
|
Balance, December 31, 2015
|
88,724
|
|
|
Net income
|
323,381
|
|
|
Partnership distributions
|
(323,609
|
)
|
|
Balance, December 31, 2016
|
88,496
|
|
|
Net income
|
392,141
|
|
|
Partnership distributions
|
(370,477
|
)
|
|
Balance, December 31, 2017
|
$
|
110,160
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
392,141
|
|
|
$
|
323,381
|
|
|
$
|
352,845
|
|
Adjustments to reconcile net income to cash provided
|
|
|
|
|
|
||||||
by operating activities
|
|
|
|
|
|
||||||
Depreciation and amortization
|
797
|
|
|
793
|
|
|
629
|
|
|||
Increase (decrease) in allowance for doubtful accounts
|
(6
|
)
|
|
(5
|
)
|
|
5
|
|
|||
Change in assets and liabilities
|
|
|
|
|
|
||||||
Decrease (increase)
|
|
|
|
|
|
||||||
Management fee receivables
|
(23,601
|
)
|
|
(13,873
|
)
|
|
11,346
|
|
|||
Prepaid expenses and other current assets
|
(290
|
)
|
|
611
|
|
|
68
|
|
|||
Increase (decrease)
|
|
|
|
|
|
||||||
Accrued compensation
|
6,108
|
|
|
(1,617
|
)
|
|
4,941
|
|
|||
Accrued other
|
831
|
|
|
(256
|
)
|
|
358
|
|
|||
Due to SEI Funds, Inc.
|
244
|
|
|
300
|
|
|
369
|
|
|||
Net cash provided by operating activities
|
376,224
|
|
|
309,334
|
|
|
370,561
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Purchases of fixed assets
|
(277
|
)
|
|
(345
|
)
|
|
(735
|
)
|
|||
Net cash used in investing activities
|
(277
|
)
|
|
(345
|
)
|
|
(735
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Partnership distributions
|
(370,477
|
)
|
|
(323,609
|
)
|
|
(364,839
|
)
|
|||
Net cash used in financing activities
|
(370,477
|
)
|
|
(323,609
|
)
|
|
(364,839
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
5,470
|
|
|
(14,620
|
)
|
|
4,987
|
|
|||
Cash and cash equivalents
|
|
|
|
|
|
||||||
Beginning of year
|
19,863
|
|
|
34,483
|
|
|
29,496
|
|
|||
End of year
|
$
|
25,333
|
|
|
$
|
19,863
|
|
|
$
|
34,483
|
|
1.
|
Background
|
2.
|
Summary of Significant Accounting Policies
|
|
2017
|
|
2016
|
||||
Management fee receivables
|
$
|
3,176
|
|
|
$
|
4,611
|
|
Unbilled management fee receivables
|
125,079
|
|
|
100,043
|
|
||
|
128,255
|
|
|
104,654
|
|
||
Less: Allowance for doubtful accounts
|
—
|
|
|
(6
|
)
|
||
Total management fee receivables
|
$
|
128,255
|
|
|
$
|
104,648
|
|
|
|
|
|
|
Estimated Useful Lives
|
||||
|
2017
|
|
2016
|
|
|||||
|
|
|
|
|
|
||||
Equipment
|
$
|
2,946
|
|
|
$
|
2,779
|
|
|
3 to 5 years
|
Leasehold improvements
|
3,399
|
|
|
3,289
|
|
|
Lease Term
|
||
Furniture and fixtures
|
1,004
|
|
|
1,004
|
|
|
5 years
|
||
|
7,349
|
|
|
7,072
|
|
|
|
||
Less: Accumulated depreciation and amortization
|
(5,942
|
)
|
|
(5,145
|
)
|
|
|
||
|
$
|
1,407
|
|
|
$
|
1,927
|
|
|
|
3.
|
Commitments and Contingencies
|
2018
|
$
|
1,101
|
|
2019
|
1,121
|
|
|
2020
|
281
|
|
|
|
$
|
2,503
|
|
4.
|
Income Taxes
|
5.
|
Related Party Transactions
|
6.
|
Accrued stock-based compensation
|