SEI INVESTMENT 
By OAKS, Pa.,
Consolidated Overview
(In thousands, except For the Three Months For the Twelve Months
earnings per share) Ended December 31, Ended December 31,
2007 2006 % 2007 2006 %
Revenues $353,409 $315,514 12% $1,369,028 $1,175,749 16%
Net Income Before
Taxes 84,792 98,054 (14%) 409,540 358,756 14%
Net Income 53,632 63,624 (16%) 259,809 236,990 10%
Diluted Earnings Per
Share $.27 $.31 (13%) $1.28 $1.17 9%
"We continue to be satisfied with the progress we are making, even in the face of difficulties created by the capital and credit markets," said Alfred P. West, Jr., SEI Chairman and CEO.
"During the fourth-quarter, SEI realized increased contributions from all of our core businesses, saw continued success in the first installation of our Global Wealth Platform, and made good progress on our other key investments. In the long run, we remain firm in our belief that what we are doing will provide our clients with increased opportunities for success and allow us to grow our future revenues and profits more rapidly."
Summary of Fourth-Quarter and Year to Date Results by Business Segment
(In thousands) For the Three Month Period For the Twelve Month Period
Ended December 31, Ended December 31,
2007 2006 % 2007 2006 %
Private Banks:
Revenues $111,814 $94,273 19% $413,922 $367,449 13%
Expenses 89,255 74,423 20% 330,923 279,089 19%
Operating Profit $22,559 $19,850 14% $82,999 $88,360 (6%)
Operating Margin 20% 21% 20% 24%
Investment Advisors:
Revenues 66,564 60,070 11% 259,288 225,716 15%
Expenses 33,392 29,162 15% 124,942 111,907 12%
Operating Profit 33,172 30,908 7% 134,346 113,809 18%
Operating Margin 50% 51% 52% 50%
Institutional
Investors:
Revenues 52,778 45,796 15% 199,593 164,962 21%
Expenses 32,031 28,563 12% 121,365 106,377 14%
Operating Profit 20,747 17,233 20% 78,228 58,585 34%
Operating Margin 39% 38% 39% 36%
Investment Managers:
Revenues 38,244 32,826 17% 143,375 118,964 21%
Expenses 26,752 23,641 13% 101,401 90,799 12%
Operating Profit 11,492 9,185 25% 41,974 28,165 49%
Operating Margin 30% 28% 29% 24%
Investments in New
Businesses:
Revenues 1,858 2,191 (15%) 7,205 7,537 (4%)
Expenses 5,073 6,048 (16%) 19,670 22,891 (14%)
Operating Loss (3,215) (3,857) 17% (12,465) (15,354) 19%
Operating Margin n/a n/a n/a n/a
LSV
Revenues 82,151 80,358 2% 345,645 291,121 19%
Expenses (1) 51,515 48,959 5% 213,926 178,727 20%
Operating profit 30,636 31,399 (2%) 131,719 112,394 17%
Operating Margin 37% 39% 38% 39%
Consolidated Segment
Totals:
Revenues $353,409 $315,514 12% $1,369,028 $1,175,749 16%
Expenses 238,018 210,796 13% 912,227 789,790 16%
Operating Profit $115,391 $104,718 10% $456,801 $385,959 18%
Operating Margin 33% 33% 33% 33%
(1) Includes $42,387 and $42,862 for the three month period ended December
31, 2007 and 2006, respectively, and $181,591 and $153,381 for the
twelve month period ended December 31, 2007 and 2006, respectively, of
minority interest to the other partners of LSV.
A reconciliation of the totals reported for the business segments to the
applicable line items in the Consolidated Statements of Income for the three
and twelve month periods ended
Three months ended Twelve months ended
December 31, December 31,
2007 2006 2007 2006
Total operating profit from
business segments $115,391 $104,718 $456,801 $385,959
Corporate overhead expenses (11,586) (10,221) (42,045) (38,842)
Minority interest reflected
in segments 43,859 44,051 186,500 158,615
LSV Employee Group Expenses (1) (1,821) (1,864) (7,281) (7,281)
Income from operations $145,843 $136,684 $593,975 $498,451
(1) Includes $1,806 for the three month period ending December 31, 2007
and 2006, and $7,222 for the twelve month period ending December 31,
2007 and 2006 of amortization expense related to intangible assets
owned by LSV Employees Group LLC. The amortization is offset through
Minority interest since SEI does not have any ownership in LSV
Employee Group LLC.
Fourth-Quarter Business Commentary:
-- All four core business segments (Private Banks, Investment Advisors,
Institutional Investors and Investment Managers) reported double-digit
percentage revenue gains versus fourth-quarter, 2006.
-- The Private Banks, Institutional Investors and Investment Managers
segments all reported double-digit percentage gains in operating profit
versus fourth-quarter, 2006 levels.
-- The Global Wealth Platform was placed into service during the third-
quarter, 2007. Fourth-quarter expenses reflect an increase of
approximately $3.4 million for amortization versus fourth-quarter, 2006
levels. The amortization is primarily recognized in the Private Banks
and Investment Advisors segments.
-- The company's percentage ownership in LSV remained at approximately 43
percent. In the fourth-quarter, 2007, the company recognized $30.6
million as its portion of the earnings from LSV versus $31.4 million in
the fourth-quarter, 2006.
-- Assets under management declined by $4.9 billion during fourth-quarter,
2007 to $196.8 billion, due to market depreciation.
-- In the fourth-quarter 2007, SEI purchased 706,000 shares of its common
stock for $21.2 million. Stock repurchases totaled 7.2 million shares
for approximately $205 million for the 2007 calendar year.
-- The fourth-quarter results include a $25.1 million non-cash charge
related to money market funds support agreements. Additional
information about the capital support agreements is contained in SEI's
third-quarter, 2007 Form 10-Q filed November 9, 2007.
Earnings Conference Call
A conference call to review earnings is scheduled for
About SEI
SEI (Nasdaq: SEIC) is a leading global provider of outsourced asset
management, investment processing and investment operations solutions. The
company's innovative solutions help corporations, financial institutions,
financial advisors, and affluent families create and manage wealth. As of
Many of our responses may be considered "forward looking statements" and include discussions about future operations, strategies and financial results. Forward-looking statements are based upon estimates and assumptions that involve risks and uncertainties, many of which are beyond our control or are subject to change. Although we believe our assumptions are reasonable, they could be inaccurate. Our actual future revenues and income could differ materially from our expected results. We have no obligation to publicly update or revise any forward-looking statements.
SEI INVESTMENTS COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Three Months Ended December 31,
2007 2006
Asset management, admin. and
distribution fees $278,086 $249,810
Information processing and
software servicing fees 62,170 53,693
Transaction-based and
trade execution fees 13,153 12,011
Total revenues 353,409 315,514
Commissions and fees 46,666 39,937
Compensation, benefits and
other personnel 88,857 84,128
Consulting, outsourcing and
professional fees 27,443 20,827
Data processing and computer related 10,785 10,319
Facilities, supplies and other costs 22,546 16,321
Depreciation and amortization 11,269 7,298
Total expenses 207,566 178,830
Income from operations 145,843 136,684
Minority interest (41,440) (41,104)
Net loss on investments (1) (23,880) (512)
Interest and dividend income 5,282 4,372
Interest expense (1,013) (1,386)
Income before taxes 84,792 98,054
Income taxes 31,160 34,430
Net income $53,632 $63,624
Diluted earnings per common share $.27 $.31
Shares used to calculate diluted
earnings per common share 200,297 204,660
Basic earnings per common share $.28 $.32
Shares used to calculate basic
earnings per common share 194,321 197,808
Dividends declared per common share .07 .06
(1) Includes $25,122 non-cash charge related to money market funds support
agreements.
SEI INVESTMENTS COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Twelve Months Ended December 31,
2007 2006
(Unaudited)
Asset management, admin. and
distribution fees $1,091,424 $918,142
Information processing and
software servicing fees 230,301 213,066
Transaction-based and
trade execution fees 47,303 44,541
Total revenues 1,369,028 1,175,749
Commissions and fees 176,523 147,835
Compensation, benefits and other
personnel 350,150 315,502
Consulting, outsourcing and
professional fees 94,642 77,753
Data processing and computer related 42,189 37,755
Facilities, supplies and other costs 74,413 69,306
Depreciation and amortization 37,136 29,147
Total expenses 775,053 677,298
Income from operations 593,975 498,451
Minority interest (175,879) (146,962)
Net loss on investments (1) (25,395) (2,378)
Interest and dividend income 18,596 13,521
Interest expense (4,709) (5,464)
Other income 2,952 1,588
Income before taxes 409,540 358,756
Income taxes 149,731 121,766
Net income $259,809 $236,990
Diluted earnings per common share $1.28 $1.17
Shares used to calculate diluted
earnings per common share 202,231 203,266
Basic earnings per common share $1.32 $1.20
Shares used to calculate basic
earnings per common share 196,120 197,364
Dividends declared per common share $.14 $.12
(1) Includes $25,122 non-cash charge related to money market funds support
agreements.
SEI INVESTMENTS COMPANY
CONDENSED BALANCE SHEETS
(In thousands)
(Unaudited)
December 31, December 31,
2007 2006
Assets
Cash and short-term investments $360,921 $286,948
Restricted cash 10,250 10,250
Receivables 275,109 244,599
Securities owned 16,777 16,431
Other current assets 31,877 28,245
Total current assets 694,934 586,473
Property and equipment, net 143,516 130,732
Investments available for sale 77,169 71,690
Capitalized software, net 231,684 180,014
Goodwill 22,842 22,842
Intangible assets 60,177 67,836
Other assets, net 22,043 20,118
Total assets $1,252,365 $1,079,705
Liabilities
Current liabilities (1) $230,367 $196,127
Long-term debt 43,971 67,538
Deferred income taxes 73,600 76,148
Long term liabilities 11,895 --
Minority interest 136,149 109,380
Shareholders' Equity 756,383 630,512
Total liabilities and
shareholders' equity $1,252,365 $1,079,705
(1) Includes $25,122 accrual related to money market funds support
agreements.
SEI INVESTMENTS COMPANY
ASSET BALANCES
(In millions)
(Unaudited)
Dec. 31, Mar. 31, Jun. 30, Sep. 30, Dec. 31,
2006 2007 2007 2007 2007
Private Banks:
Equity/Fixed Income
prgms. $16,806 $18,196 $20,666 $21,816 $21,160
Collective Trust Fund
prgm. 1,251 1,148 1,078 1,056 1,007
Liquidity funds 8,513 8,241 8,224 8,836 8,886
Total assets under
mgmt. $26,570 $27,585 $29,968 $31,708 $31,053
Client assets under
admin. 14,738 14,864 15,019 15,655 14,235
Total assets $41,308 $42,449 $44,987 $47,363 $45,288
Investment Advisors:
Equity/Fixed Income
prgms. $34,096 $35,225 $36,923 $37,751 $36,378
Collective Trust Fund
prgm. 2,480 2,491 2,334 2,325 2,295
Liquidity funds 1,421 1,404 1,400 1,619 2,079
Total assets under
mgmt. $37,997 $39,120 $40,657 $41,695 $40,752
Institutional Investors:
Equity/Fixed Income
prgms. $37,720 $39,504 $40,771 $43,504 $44,833
Collective Trust Fund
prgm. 1,081 1,078 895 907 897
Liquidity funds 3,371 5,072 4,128 4,342 3,629
Total assets under
mgmt. $42,172 $45,654 $45,794 $48,753 $49,359
Investment Managers:
Equity/Fixed Income
prgms. $30 $29 $32 $24 $24
Collective Trust Fund
prgm. 8,675 8,300 7,990 6,814 6,651
Liquidity funds 215 178 271 360 325
Total assets under
mgmt. $8,920 $8,507 $8,293 $7,198 $7,000
Client assets under
admin. 170,344 180,745 192,931 205,251 215,124
Total assets $179,264 $189,252 $201,224 $212,449 $222,124
Investments in New
Businesses:
Equity/Fixed Income
prgms. $805 $843 $887 $907 $929
Liquidity funds 53 43 43 40 74
Total assets under
mgmt. $858 $886 $930 $947 $1,003
LSV Asset Management
Equity/Fixed Income
prgms. $64,970 $68,225 $73,100 $71,349 $67,599
Consolidated:
Equity/Fixed Income
prgms (A) $154,427 $162,022 $172,379 $175,351 $170,923
Collective Trust Fund
prgm. 13,487 13,017 12,297 11,102 10,850
Liquidity funds 13,573 14,938 14,066 15,197 14,993
Total assets under
mgmt. $181,487 $189,977 $198,742 $201,650 $196,766
Client assets under
admin. (B) 185,082 195,609 207,950 220,906 229,359
Total assets $366,569 $385,586 $406,692 $422,556 $426,125
(A) Equity/Fixed Income programs include $3,717 of assets invested in
SEI's Asset Allocation Funds at December 31, 2007.
(B) In addition to the numbers presented, SEI also administers an
additional $6,326 in Funds of Funds assets (as of December 31, 2007)
on which SEI does not earn an administration fee.
SOURCE SEI Investments Company
