UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________

FORM 10-Q


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

For the quarterly period ended ~~June~~September 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from_________to ________

Commission File Number: 0-10200

________________________________________

SEI INVESTMENTS COMPANY

(Exact Name of Registrant as Specified in its Charter)

________________________________________


Pennsylvania						23-1707341
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

1 Freedom Valley Drive, Oaks, Pennsylvania 19456-1100

(Address of Principal Executive Offices) (Zip Code)

(610) 676-1000

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $0.01 per share

SEIC

The NASDAQ Stock Market LLC

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No x

The number of shares outstanding of the registrant’s common stock, as of the close of business on ~~July 15,~~October 20, 2022:


Common Stock, $0.01 par value						~~135,489,033~~134,828,481

SEI INVESTMENTS COMPANY

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Page

Item 1.

Financial Statements.

Consolidated Balance Sheets (Unaudited) -- ~~June~~September 30, 2022 and December 31, 2021

Consolidated Statements of Operations (Unaudited) -- For the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2022 and 2021

Consolidated Statements of Comprehensive Income (Unaudited) -- For the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2022 and 2021

Consolidated Statements of Changes in Equity (Unaudited) -- For the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2022 and 2021

Consolidated Condensed Statements of Cash Flows (Unaudited) -- For the ~~Six~~Nine Months Ended ~~June~~September 30, 2022 and 2021

Notes to Consolidated Financial Statements

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations.

2928

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

Item 4.

Controls and Procedures.

PART II - OTHER INFORMATION

Item 1.

Legal Proceedings.

4645

Item 1A.

Risk Factors.

4645

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

4645

Item 6.

Exhibits.

4645

Signatures

4746

PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements.

SEI Investments Company

Consolidated Balance Sheets

(unaudited)

(In thousands, except par value)


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Assets	Assets					Assets
Current Assets:	Current Assets:					Current Assets:
Cash and cash equivalents	Cash and cash equivalents	$	771,673	$	831,407	Cash and cash equivalents	$	791,437	$	831,407
Restricted cash	Restricted cash	351		351		Restricted cash	351		351
Receivables from investment products	Receivables from investment products	54,911		59,036		Receivables from investment products	91,223		59,036
Receivables, net of allowance for doubtful accounts of $1,952 and $1,602		466,902		441,609
Receivables, net of allowance for doubtful accounts of $2,336 and $1,602						Receivables, net of allowance for doubtful accounts of $2,336 and $1,602	482,692		441,609
Securities owned	Securities owned	31,171		28,267		Securities owned	31,586		28,267
Other current assets	Other current assets	50,523		43,559		Other current assets	54,931		43,559
Total Current Assets	Total Current Assets	1,375,531		1,404,229		Total Current Assets	1,452,220		1,404,229
Property and Equipment, net of accumulated depreciation of $424,048 and $409,248		178,946		178,869
Property and Equipment, net of accumulated depreciation of $431,473 and $409,248						Property and Equipment, net of accumulated depreciation of $431,473 and $409,248	182,522		178,869
Operating Lease Right-of-Use Assets	Operating Lease Right-of-Use Assets	27,629		33,614		Operating Lease Right-of-Use Assets	24,187		33,614
Capitalized Software, net of accumulated amortization of $572,065 and $545,307		230,497		243,446
Capitalized Software, net of accumulated amortization of $579,352 and $545,307						Capitalized Software, net of accumulated amortization of $579,352 and $545,307	234,228		243,446
Available for Sale and Equity Securities	Available for Sale and Equity Securities	121,682		129,541		Available for Sale and Equity Securities	109,375		129,541
Investments in Affiliated Funds, at fair value	Investments in Affiliated Funds, at fair value	6,000		6,916		Investments in Affiliated Funds, at fair value	5,620		6,916
Investment in Unconsolidated Affiliate	Investment in Unconsolidated Affiliate	46,865		107,918		Investment in Unconsolidated Affiliate	39,012		107,918
Goodwill	Goodwill	117,405		117,232		Goodwill	117,509		117,232
Intangible Assets, net of accumulated amortization of $24,163 and $17,716		61,669		68,782
Intangible Assets, net of accumulated amortization of $27,133 and $17,716						Intangible Assets, net of accumulated amortization of $27,133 and $17,716	58,201		68,782
Deferred Contract Costs	Deferred Contract Costs	35,353		36,236		Deferred Contract Costs	37,790		36,236
Deferred Income Taxes	Deferred Income Taxes	2,459		2,983		Deferred Income Taxes	2,253		2,983
Other Assets, net	Other Assets, net	30,893		24,936		Other Assets, net	32,514		24,936
Total Assets	Total Assets	$	2,234,929	$	2,354,702	Total Assets	$	2,295,431	$	2,354,702

The accompanying notes are an integral part of these consolidated financial statements.

SEI Investments Company

Consolidated Balance Sheets

(unaudited)

(In thousands, except par value)


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Liabilities and Equity	Liabilities and Equity					Liabilities and Equity
Current Liabilities:	Current Liabilities:					Current Liabilities:
Accounts payable	Accounts payable	$	10,305	$	10,312	Accounts payable	$	8,209	$	10,312
Accrued liabilities	Accrued liabilities	218,752		324,382		Accrued liabilities	294,987		324,382
Current portion of long-term operating lease liabilities	Current portion of long-term operating lease liabilities	10,993		11,328		Current portion of long-term operating lease liabilities	11,202		11,328
Deferred revenue	Deferred revenue	13,510		9,721		Deferred revenue	13,025		9,721
Total Current Liabilities	Total Current Liabilities	253,560		355,743		Total Current Liabilities	327,423		355,743
Borrowings Under Revolving Credit Facility	Borrowings Under Revolving Credit Facility	—		40,000		Borrowings Under Revolving Credit Facility	—		40,000
Long-term Income Taxes Payable	Long-term Income Taxes Payable	803		803		Long-term Income Taxes Payable	803		803
Deferred Income Taxes	Deferred Income Taxes	22,833		48,876		Deferred Income Taxes	3,545		48,876
Long-term Operating Lease Liabilities	Long-term Operating Lease Liabilities	21,675		27,639		Long-term Operating Lease Liabilities	18,361		27,639
Other Long-term Liabilities	Other Long-term Liabilities	13,970		20,878		Other Long-term Liabilities	14,986		20,878
Total Liabilities	Total Liabilities	312,841		493,939		Total Liabilities	365,118		493,939
Commitments and Contingencies	Commitments and Contingencies	0		0		Commitments and Contingencies
Shareholders' Equity:	Shareholders' Equity:					Shareholders' Equity:
Common stock, $0.01 par value, 750,000 shares authorized; 135,480 and 138,449 shares issued and outstanding		1,355		1,384
Common stock, $0.01 par value, 750,000 shares authorized; 134,816 and 138,449 shares issued and outstanding						Common stock, $0.01 par value, 750,000 shares authorized; 134,816 and 138,449 shares issued and outstanding	1,348		1,384
Capital in excess of par value	Capital in excess of par value	1,272,971		1,246,608		Capital in excess of par value	1,285,224		1,246,608
Retained earnings	Retained earnings	693,525		632,614		Retained earnings	711,330		632,614
Accumulated other comprehensive loss, net	Accumulated other comprehensive loss, net	(45,763)		(19,843)		Accumulated other comprehensive loss, net	(67,589)		(19,843)
Total Shareholders' Equity	Total Shareholders' Equity	1,922,088		1,860,763		Total Shareholders' Equity	1,930,313		1,860,763
Total Liabilities and Shareholders' Equity	Total Liabilities and Shareholders' Equity	$	2,234,929	$	2,354,702	Total Liabilities and Shareholders' Equity	$	2,295,431	$	2,354,702

The accompanying notes are an integral part of these consolidated financial statements.

SEI Investments Company

Consolidated Statements of Operations

(unaudited)

(In thousands, except per share data)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
Revenues:	Revenues:									Revenues:
Asset management, administration and distribution fees	Asset management, administration and distribution fees	$	382,594	$	382,509	$	776,691	$	750,155	Asset management, administration and distribution fees	$	372,133	$	393,296	$	1,148,824	$	1,143,451
Information processing and software servicing fees	Information processing and software servicing fees	99,076		93,142		286,422		181,182		Information processing and software servicing fees	99,201		92,026		385,623		273,208
Total revenues	Total revenues	481,670		475,651		1,063,113		931,337		Total revenues	471,334		485,322		1,534,447		1,416,659
Expenses:	Expenses:									Expenses:
Subadvisory, distribution and other asset management costs	Subadvisory, distribution and other asset management costs	50,023		55,827		103,151		105,991		Subadvisory, distribution and other asset management costs	47,334		55,619		150,485		161,610
Software royalties and other information processing costs	Software royalties and other information processing costs	7,407		7,471		14,954		13,213		Software royalties and other information processing costs	6,909		7,348		21,863		20,561
Compensation, benefits and other personnel	Compensation, benefits and other personnel	157,921		141,779		318,405		279,000		Compensation, benefits and other personnel	227,127		150,188		545,532		429,188
Stock-based compensation	Stock-based compensation	10,007		10,103		20,573		19,855		Stock-based compensation	10,766		11,318		31,339		31,173
Consulting, outsourcing and professional fees	Consulting, outsourcing and professional fees	63,271		55,449		125,762		109,789		Consulting, outsourcing and professional fees	58,558		55,868		184,320		165,657
Data processing and computer related	Data processing and computer related	32,254		27,375		62,070		53,096		Data processing and computer related	30,950		26,650		93,020		79,746
Facilities, supplies and other costs	Facilities, supplies and other costs	20,133		18,479		37,760		35,727		Facilities, supplies and other costs	19,704		14,124		57,464		49,851
Amortization	Amortization	16,508		14,723		33,395		29,075		Amortization	10,382		14,674		43,777		43,749
Depreciation	Depreciation	8,286		8,424		16,384		16,733		Depreciation	8,558		8,408		24,942		25,141
Total expenses	Total expenses	365,810		339,630		732,454		662,479		Total expenses	420,288		344,197		1,152,742		1,006,676
Income from operations	Income from operations	115,860		136,021		330,659		268,858		Income from operations	51,046		141,125		381,705		409,983
Net (loss) gain from investments	Net (loss) gain from investments	(2,620)		377		(3,109)		709		Net (loss) gain from investments	(1,406)		(575)		(4,515)		134
Interest and dividend income	Interest and dividend income	1,853		878		2,701		1,823		Interest and dividend income	3,962		892		6,663		2,715
Interest expense	Interest expense	(211)		(130)		(461)		(253)		Interest expense	(143)		(101)		(604)		(354)
Equity in earnings of unconsolidated affiliate	Equity in earnings of unconsolidated affiliate	29,813		35,065		62,272		68,415		Equity in earnings of unconsolidated affiliate	26,654		35,005		88,926		103,420
Income before income taxes	Income before income taxes	144,695		172,211		392,062		339,552		Income before income taxes	80,113		176,346		472,175		515,898
Income taxes	Income taxes	33,419		38,433		90,478		76,304		Income taxes	18,454		38,301		108,932		114,605
Net income	Net income	$	111,276	$	133,778	$	301,584	$	263,248	Net income	$	61,659	$	138,045	$	363,243	$	401,293
Basic earnings per common share	Basic earnings per common share	$	0.82	$	0.94	$	2.20	$	1.85	Basic earnings per common share	$	0.46	$	0.98	$	2.66	$	2.83
Shares used to compute basic earnings per share	Shares used to compute basic earnings per share	136,435		142,074		137,185		142,638		Shares used to compute basic earnings per share	135,203		140,507		136,524		141,928
Diluted earnings per common share	Diluted earnings per common share	$	0.81	$	0.93	$	2.17	$	1.82	Diluted earnings per common share	$	0.45	$	0.97	$	2.63	$	2.79
Shares used to compute diluted earnings per share	Shares used to compute diluted earnings per share	137,817		144,212		138,764		144,759		Shares used to compute diluted earnings per share	136,345		142,426		137,958		143,981
Dividends declared per common share	Dividends declared per common share	$	0.40	$	0.37	$	0.40	$	0.37	Dividends declared per common share	$	—	$	—	$	0.40	$	0.37

The accompanying notes are an integral part of these consolidated financial statements.

SEI Investments Company

Consolidated Statements of Comprehensive Income

(unaudited)

(In thousands)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
Net income	Net income	$	111,276	$	133,778	$	301,584	$	263,248	Net income	$	61,659	$	138,045	$	363,243	$	401,293
Other comprehensive (loss) income, net of tax:
Other comprehensive loss, net of tax:										Other comprehensive loss, net of tax:
Foreign currency translation adjustments	Foreign currency translation adjustments	(14,623)		994		(19,181)		2,679		Foreign currency translation adjustments	(17,909)		(5,546)		(37,090)		(2,867)
Unrealized loss on investments:	Unrealized loss on investments:									Unrealized loss on investments:
Unrealized losses during the period, net of income taxes of $923, $85, $2,109 and $245		(3,088)		(292)		(7,057)		(835)
Reclassification adjustment for losses realized in net income, net of income taxes of $(39), $(49), $(96) and $(123)		129		179		318		432
Total other comprehensive (loss) income, net of tax		(17,582)		881		(25,920)		2,276
Unrealized losses during the period, net of income taxes of $1,194, $208, $3,303 and $453										Unrealized losses during the period, net of income taxes of $1,194, $208, $3,303 and $453	(4,000)		(713)		(11,057)		(1,548)
Reclassification adjustment for losses realized in net income, net of income taxes of $(24), $(67), $(120) and $(190)										Reclassification adjustment for losses realized in net income, net of income taxes of $(24), $(67), $(120) and $(190)	83		238		401		670
Total other comprehensive loss, net of tax										Total other comprehensive loss, net of tax	(21,826)		(6,021)		(47,746)		(3,745)
Comprehensive income	Comprehensive income	$	93,694	$	134,659	$	275,664	$	265,524	Comprehensive income	$	39,833	$	132,024	$	315,497	$	397,548

The accompanying notes are an integral part of these consolidated financial statements.

SEI Investments Company

Consolidated Statements of Changes in Equity

(unaudited)

(In thousands)


		Shares of Common Stock	Common Stock		Capital In Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss		Total Equity			Shares of Common Stock	Common Stock		Capital In Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss		Total Equity
		For the Three Months Ended June 30, 2022												For the Three Months Ended September 30, 2022
Balance, April 1, 2022		137,219	$	1,372	$	1,266,320	$	733,572	$	(28,181)	$	1,973,083
Balance, July 1, 2022													Balance, July 1, 2022	135,480	$	1,355	$	1,272,971	$	693,525	$	(45,763)	$	1,922,088
Net income	Net income	—	—		—		111,276		—		111,276		Net income	—	—		—		61,659		—		61,659
Other comprehensive loss	Other comprehensive loss	—	—		—		—		(17,582)		(17,582)		Other comprehensive loss	—	—		—		—		(21,826)		(21,826)
Purchase and retirement of common stock	Purchase and retirement of common stock	(1,970)	(20)		(12,328)		(96,945)		—		(109,293)		Purchase and retirement of common stock	(890)	(9)		(5,571)		(43,854)		—		(49,434)
Issuance of common stock under employee stock purchase plan	Issuance of common stock under employee stock purchase plan	22	1		1,089		—		—		1,090		Issuance of common stock under employee stock purchase plan	24	—		1,123		—		—		1,123
Issuance of common stock upon exercise of stock options	Issuance of common stock upon exercise of stock options	209	2		7,883		—		—		7,885		Issuance of common stock upon exercise of stock options	202	2		5,935		—		—		5,937
Stock-based compensation	Stock-based compensation	—	—		10,007		—		—		10,007		Stock-based compensation	—	—		10,766		—		—		10,766
Dividends declared ($0.40 per share)		—	—		—		(54,378)		—		(54,378)
Balance, June 30, 2022		135,480	$	1,355	$	1,272,971	$	693,525	$	(45,763)	$	1,922,088

Balance, September 30, 2022													Balance, September 30, 2022	134,816	$	1,348	$	1,285,224	$	711,330	$	(67,589)	$	1,930,313


		Shares of Common Stock	Common Stock		Capital In Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss		Total Equity			Shares of Common Stock	Common Stock		Capital In Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss		Total Equity
		For the Three Months Ended June 30, 2021												For the Three Months Ended September 30, 2021
Balance, April 1, 2021		142,701	$	1,427	$	1,208,433	$	634,651	$	(15,403)	$	1,829,108
Balance, July 1, 2021													Balance, July 1, 2021	141,027	$	1,410	$	1,219,487	$	599,231	$	(14,522)	$	1,805,606
Net income	Net income	—	—		—		133,778		—		133,778		Net income	—	—		—		138,045		—		138,045
Other comprehensive income		—	—		—		—		881		881
Other comprehensive loss													Other comprehensive loss	—	—		—		—		(6,021)		(6,021)
Purchase and retirement of common stock	Purchase and retirement of common stock	(2,086)	(21)		(12,389)		(116,809)		—		(129,219)		Purchase and retirement of common stock	(1,980)	(21)		(11,751)		(108,123)		—		(119,895)
Issuance of common stock under employee stock purchase plan	Issuance of common stock under employee stock purchase plan	18	—		966		—		—		966		Issuance of common stock under employee stock purchase plan	22	1		1,119		—		—		1,120
Issuance of common stock upon exercise of stock options	Issuance of common stock upon exercise of stock options	394	4		12,374		—		—		12,378		Issuance of common stock upon exercise of stock options	236	3		7,912		—		—		7,915
Stock-based compensation	Stock-based compensation	—	—		10,103		—		—		10,103		Stock-based compensation	—	—		11,318		—		—		11,318
Dividends declared ($0.37 per share)		—	—		—		(52,389)		—		(52,389)
Balance, June 30, 2021		141,027	$	1,410	$	1,219,487	$	599,231	$	(14,522)	$	1,805,606

Balance, September 30, 2021													Balance, September 30, 2021	139,305	$	1,393	$	1,228,085	$	629,153	$	(20,543)	$	1,838,088

The accompanying notes are an integral part of these consolidated financial statements.

SEI Investments Company

Consolidated Statements of Changes in Equity

(unaudited)

(In thousands)


		Shares of Common Stock	Common Stock		Capital In Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss		Total Equity			Shares of Common Stock	Common Stock		Capital In Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss		Total Equity
		For the Six Months Ended June 30, 2022												For the Nine Months Ended September 30, 2022
Balance, January 1, 2022	Balance, January 1, 2022	138,449	$	1,384	$	1,246,608	$	632,614	$	(19,843)	$	1,860,763	Balance, January 1, 2022	138,449	$	1,384	$	1,246,608	$	632,614	$	(19,843)	$	1,860,763
Net income	Net income	—	—		—		301,584		—		301,584		Net income	—	—		—		363,243		—		363,243
Other comprehensive loss	Other comprehensive loss	—	—		—		—		(25,920)		(25,920)		Other comprehensive loss	—	—		—		—		(47,746)		(47,746)
Purchase and retirement of common stock	Purchase and retirement of common stock	(3,683)	(37)		(23,051)		(186,295)		—		(209,383)		Purchase and retirement of common stock	(4,573)	(46)		(28,622)		(230,149)		—		(258,817)
Issuance of common stock under employee stock purchase plan	Issuance of common stock under employee stock purchase plan	45	1		2,257		—		—		2,258		Issuance of common stock under employee stock purchase plan	69	1		3,380		—		—		3,381
Issuance of common stock upon exercise of stock options	Issuance of common stock upon exercise of stock options	669	7		26,584		—		—		26,591		Issuance of common stock upon exercise of stock options	871	9		32,519		—		—		32,528
Stock-based compensation	Stock-based compensation	—	—		20,573		—		—		20,573		Stock-based compensation	—	—		31,339		—		—		31,339
Dividends declared ($0.40 per share)	Dividends declared ($0.40 per share)	—	—		—		(54,378)		—		(54,378)		Dividends declared ($0.40 per share)	—	—		—		(54,378)		—		(54,378)
Balance, June 30, 2022		135,480	$	1,355	$	1,272,971	$	693,525	$	(45,763)	$	1,922,088
Balance, September 30, 2022													Balance, September 30, 2022	134,816	$	1,348	$	1,285,224	$	711,330	$	(67,589)	$	1,930,313


		Shares of Common Stock	Common Stock		Capital In Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss		Total Equity			Shares of Common Stock	Common Stock		Capital In Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss		Total Equity
		For the Six Months Ended June 30, 2021												For the Nine Months Ended September 30, 2021
Balance, January 1, 2021	Balance, January 1, 2021	143,396	$	1,434	$	1,190,001	$	565,270	$	(16,798)	$	1,739,907	Balance, January 1, 2021	143,396	$	1,434	$	1,190,001	$	565,270	$	(16,798)	$	1,739,907
Net income	Net income	—	—		—		263,248		—		263,248		Net income	—	—		—		401,293		—		401,293
Other comprehensive income		—	—		—		—		2,276		2,276
Other comprehensive loss													Other comprehensive loss	—	—		—		—		(3,745)		(3,745)
Purchase and retirement of common stock	Purchase and retirement of common stock	(3,238)	(32)		(19,228)		(176,898)		—		(196,158)		Purchase and retirement of common stock	(5,218)	(53)		(30,979)		(285,021)		—		(316,053)
Issuance of common stock under employee stock purchase plan	Issuance of common stock under employee stock purchase plan	42	—		2,105		—		—		2,105		Issuance of common stock under employee stock purchase plan	64	1		3,224		—		—		3,225
Issuance of common stock upon exercise of stock options	Issuance of common stock upon exercise of stock options	827	8		26,754		—		—		26,762		Issuance of common stock upon exercise of stock options	1,063	11		34,666		—		—		34,677
Stock-based compensation	Stock-based compensation	—	—		19,855		—		—		19,855		Stock-based compensation	—	—		31,173		—		—		31,173
Dividends declared ($0.37 per share)	Dividends declared ($0.37 per share)	—	—		—		(52,389)		—		(52,389)		Dividends declared ($0.37 per share)	—	—		—		(52,389)		—		(52,389)
Balance, June 30, 2021		141,027	$	1,410	$	1,219,487	$	599,231	$	(14,522)	$	1,805,606
Balance, September 30, 2021													Balance, September 30, 2021	139,305	$	1,393	$	1,228,085	$	629,153	$	(20,543)	$	1,838,088

The accompanying notes are an integral part of these consolidated financial statements.

SEI Investments Company

Consolidated Condensed Statements of Cash Flows

(unaudited)

(In thousands)


		Six Months Ended June 30,					Nine Months Ended September 30,
		2022		2021			2022		2021
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	301,584	$	263,248	Net income	$	363,243	$	401,293
Adjustments to reconcile net income to net cash provided by operating activities (See Note 1)	Adjustments to reconcile net income to net cash provided by operating activities (See Note 1)	29,031		61,749		Adjustments to reconcile net income to net cash provided by operating activities (See Note 1)	65,276		82,588
Net cash provided by operating activities	Net cash provided by operating activities	330,615		324,997		Net cash provided by operating activities	428,519		483,881
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Additions to property and equipment	Additions to property and equipment	(19,821)		(15,469)		Additions to property and equipment	(32,319)		(22,520)
Additions to capitalized software	Additions to capitalized software	(13,809)		(12,271)		Additions to capitalized software	(24,827)		(19,486)
Purchases of marketable securities	Purchases of marketable securities	(96,642)		(81,541)		Purchases of marketable securities	(124,454)		(168,333)
Prepayments and maturities of marketable securities	Prepayments and maturities of marketable securities	90,553		64,194		Prepayments and maturities of marketable securities	124,040		133,895
Sales of marketable securities	Sales of marketable securities	106		—		Sales of marketable securities	179		327
Other investing activities	Other investing activities	(2,903)		(11,000)		Other investing activities	(2,961)		(11,425)
Net cash used in investing activities	Net cash used in investing activities	(42,516)		(56,087)		Net cash used in investing activities	(60,342)		(87,542)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Repayments under revolving credit facility	Repayments under revolving credit facility	(40,000)		—		Repayments under revolving credit facility	(40,000)		—
Payment of contingent consideration	Payment of contingent consideration	(868)		(3,965)		Payment of contingent consideration	(868)		(3,965)
Purchase and retirement of common stock	Purchase and retirement of common stock	(210,324)		(197,322)		Purchase and retirement of common stock	(266,549)		(315,811)
Proceeds from issuance of common stock	Proceeds from issuance of common stock	28,849		28,867		Proceeds from issuance of common stock	35,909		37,902
Payment of dividends	Payment of dividends	(109,830)		(105,516)		Payment of dividends	(109,830)		(105,516)
Net cash used in financing activities	Net cash used in financing activities	(332,173)		(277,936)		Net cash used in financing activities	(381,338)		(387,390)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	Effect of exchange rate changes on cash, cash equivalents and restricted cash	(15,660)		2,578		Effect of exchange rate changes on cash, cash equivalents and restricted cash	(26,809)		(2,442)
Net decrease in cash, cash equivalents and restricted cash		(59,734)		(6,448)
Net (decrease) increase in cash, cash equivalents and restricted cash						Net (decrease) increase in cash, cash equivalents and restricted cash	(39,970)		6,507
Cash, cash equivalents and restricted cash, beginning of period	Cash, cash equivalents and restricted cash, beginning of period	831,758		787,727		Cash, cash equivalents and restricted cash, beginning of period	831,758		787,727
Cash, cash equivalents and restricted cash, end of period	Cash, cash equivalents and restricted cash, end of period	$	772,024	$	781,279	Cash, cash equivalents and restricted cash, end of period	$	791,788	$	794,234

The accompanying notes are an integral part of these consolidated financial statements.

Notes to Consolidated Financial Statements

(all figures are in thousands except share and per share data)

Note 1. Summary of Significant Accounting Policies

Nature of Operations

SEI Investments Company (the Company), a Pennsylvania corporation, provides comprehensive platforms, services and infrastructure–encompassing technology, operational, and investment management services–to help wealth managers, financial advisors, investment managers, family offices, institutional and private investors create and manage wealth.

Investment processing platforms provide technologies and business process outsourcing services for wealth managers and investment advisors. These solutions include investment advisory, client relationship, and other technology-enabled capabilities for the front office; administrative and investment services for the middle office; and accounting and processing services for the back office. Revenues from investment processing platforms are recognized in Information processing and software servicing fees on the accompanying Consolidated Statements of Operations.

Investment operations platforms provide business process outsourcing services for investment managers and asset owners. These platforms support a broad range of traditional and alternative investments and provide technology-enabled information analytics and investor capabilities for the front office; administrative and investment services for the middle office; and fund administration and accounting services for the back office. Revenues from investment operations platforms are recognized in Asset management, administration and distribution fees on the accompanying Consolidated Statements of Operations.

Investment management platforms provide comprehensive solutions for managing personal and institutional wealth. These platforms include goals-based investment strategies; SEI-sponsored investment products, including mutual funds, collective investment products, alternative investment portfolios and separately managed accounts (SMA); and other market-specific advice, technology and operational components. These platforms are offered to wealth managers as part of a complete goals-based investment program for their end-investors. For institutional investors, the Company provides Outsourced Chief Investment Officer (OCIO) solutions that include investment management programs, as well as advisory and administrative services. Revenues from investment management platforms are recognized in Asset management, administration and distribution fees on the accompanying Consolidated Statements of Operations.

Basis of Presentation

The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America. Certain financial information and accompanying note disclosure normally included in the Company’s Annual Report on Form 10-K have been condensed or omitted. The interim financial information is unaudited but reflects all adjustments (consisting of only normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of financial position of the Company as of ~~June~~September 30, 2022, the results of operations for the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, and cash flows for the ~~six-months~~nine-months ended ~~June~~September 30, 2022 and 2021. These interim Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

There have been no significant changes in significant accounting policies during the ~~six~~nine months ended ~~June~~September 30, 2022 as compared to the significant accounting policies described in the Company's Annual Report on Form 10-K for the year ended December 31, 2021.

Variable Interest Entities

The Company or its affiliates have created numerous investment products for its clients in various types of legal entity structures. The Company serves as the Manager, Administrator and Distributor for these investment products and may also serve as the Trustee for some of the investment products. The Company receives asset management, distribution, administration and custodial fees for these services. Clients are the equity investors and participate in proportion to their ownership percentage in the net income or loss and net capital gains or losses of the products, and, on liquidation, will participate in proportion to their ownership percentage in the remaining net assets of the products after satisfaction of outstanding liabilities. The Company has concluded that it is not the primary beneficiary of the entities and, therefore, is not required to consolidate any of the pooled investment vehicles for which it receives asset management, distribution, administration and custodial fees under the VIE model.

The Company is a party to expense limitation agreements with certain SEI-sponsored money market funds subject to Rule 2a-7 of the Investment Company Act of 1940 which establish a maximum level of ordinary operating expenses incurred by the fund in any fiscal year including, but not limited to, fees of the administrator or its affiliates. Under the terms of these

agreements, the Company waived ~~$9,039~~$7,896 and ~~$11,256~~$11,629 in fees during the three months ended ~~June~~September 30, 2022 and 2021, respectively. During the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, the Company waived ~~$20,224~~$28,120 and ~~$21,489,~~$33,118, respectively, in fees.

Revenue Recognition

Revenue is recognized when the transfer of control of promised goods or services under the terms of a contract with customers are satisfied in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those promised goods or services. Certain portions of the Company’s revenues involve a third party in providing goods or services to its customers. In such circumstances, the Company must determine whether the nature of its promise to the customer is to provide the underlying goods or services (the Company is the principal in the transaction and reports the transaction gross) or to arrange for a third party to provide the underlying goods or services (the entity is the agent in the transaction and reports the transaction net). See Note 13 for related disclosures regarding revenue recognition.

Cash and Cash Equivalents

Cash and cash equivalents includes ~~$320,825~~$305,877 and $290,256 at ~~June~~September 30, 2022 and December 31, 2021, respectively, primarily invested in SEI-sponsored open-ended money market mutual funds.

Restricted Cash

Restricted cash includes $250 at ~~June~~September 30, 2022 and December 31, 2021 segregated for regulatory purposes related to trade-execution services conducted by SEI Investments (Europe) Limited. Restricted cash also includes $101 at ~~June~~September 30, 2022 and December 31, 2021 segregated in special reserve accounts for the benefit of customers of the Company’s broker-dealer subsidiary, SEI Investments Distribution Co. (SIDCO), in accordance with certain rules established by the Securities and Exchange Commission (SEC) for broker-dealers.

Capitalized Software

The Company capitalized ~~$13,809~~$24,827 and ~~$12,271~~$19,486 of software development costs during the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively. The Company's software development costs primarily relate to significant enhancements to the SEI Wealth PlatformSM (SWP). As of ~~June~~September 30, 2022, the net book value of SWP was ~~$224,736~~$225,725. The net book value includes ~~$28,744~~$8,660 of capitalized software development costs in-progress associated with future releases of SWP. Capitalized software development costs in-progress associated with future releases of SWP were $29,253 as of December 31, 2021. SWP has a weighted average remaining life of ~~10.3~~10.0 years. Amortization expense for SWP was ~~$23,859~~$29,696 and ~~$23,876~~$35,834 during the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively. The Company capitalized $5,284 of software development costs during the nine months ended September 30, 2022 related to a new platform for the Investment Managers segment. The platform is not yet ready for use.

Earnings per Share

The calculations of basic and diluted earnings per share for the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021 are:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
Net income	Net income	$	111,276	$	133,778	$	301,584	$	263,248	Net income	$	61,659	$	138,045	$	363,243	$	401,293
Shares used to compute basic earnings per common share	Shares used to compute basic earnings per common share	136,435,000		142,074,000		137,185,000		142,638,000		Shares used to compute basic earnings per common share	135,203,000		140,507,000		136,524,000		141,928,000
Dilutive effect of stock options	Dilutive effect of stock options	1,382,000		2,138,000		1,579,000		2,121,000		Dilutive effect of stock options	1,142,000		1,919,000		1,434,000		2,053,000
Shares used to compute diluted earnings per common share	Shares used to compute diluted earnings per common share	137,817,000		144,212,000		138,764,000		144,759,000		Shares used to compute diluted earnings per common share	136,345,000		142,426,000		137,958,000		143,981,000
Basic earnings per common share	Basic earnings per common share	$	0.82	$	0.94	$	2.20	$	1.85	Basic earnings per common share	$	0.46	$	0.98	$	2.66	$	2.83
Diluted earnings per common share	Diluted earnings per common share	$	0.81	$	0.93	$	2.17	$	1.82	Diluted earnings per common share	$	0.45	$	0.97	$	2.63	$	2.79

During the three months ended ~~June~~September 30, 2022 and 2021, employee stock options to purchase ~~12,064,000~~11,862,000 and ~~11,530,000~~11,347,000 shares of common stock with an average exercise price of ~~$60.27~~$60.26 and ~~$57.77,~~$57.80, respectively, were outstanding but not included in the computation of diluted earnings per common share. During the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, employee stock options to purchase ~~12,141,000~~12,048,000 and ~~11,623,000~~11,531,000 shares of common stock with an average exercise price of ~~$60.28~~$60.27 and ~~$57.77,~~$57.78, respectively, were outstanding but not included in the computation of diluted earnings per common share. These options for the three and ~~six~~nine month periods were not included in the computation of diluted earnings per common share because either the performance conditions have not been satisfied or would not have been satisfied if the reporting date was the end of the contingency period or the options' exercise price was greater than

the average market price of the Company’s common stock and the effect on diluted earnings per common share would have been anti-dilutive.

Statements of Cash Flows

For purposes of the Consolidated Statements of Cash Flows, the Company considers investment instruments purchased with an original maturity of three months or less to be cash equivalents.

The following table provides the details of the adjustments to reconcile net income to net cash provided by operating activities for the ~~six~~nine months ended ~~June~~September 30:


		2022		2021			2022		2021
Net income	Net income	$	301,584	$	263,248	Net income	$	363,243	$	401,293
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	Depreciation	16,384		16,733		Depreciation	24,942		25,141
Amortization	Amortization	33,395		29,075		Amortization	43,777		43,749
Equity in earnings of unconsolidated affiliate	Equity in earnings of unconsolidated affiliate	(62,272)		(68,415)		Equity in earnings of unconsolidated affiliate	(88,926)		(103,420)
Distributions received from unconsolidated affiliate	Distributions received from unconsolidated affiliate	69,824		68,064		Distributions received from unconsolidated affiliate	103,504		110,559
Stock-based compensation	Stock-based compensation	20,573		19,855		Stock-based compensation	31,339		31,173
Provision for losses on receivables	Provision for losses on receivables	350		2,088		Provision for losses on receivables	734		1,569
Deferred income tax expense	Deferred income tax expense	(23,506)		(6,869)		Deferred income tax expense	(41,419)		(6,639)
Net loss (gain) from investments	Net loss (gain) from investments	3,109		(709)		Net loss (gain) from investments	4,515		(134)

Change in other long-term liabilities	Change in other long-term liabilities	1,998		987		Change in other long-term liabilities	3,014		2,103
Change in other assets	Change in other assets	(3,111)		(976)		Change in other assets	(4,820)		314
Contract costs capitalized, net of amortization	Contract costs capitalized, net of amortization	883		429		Contract costs capitalized, net of amortization	(1,554)		(482)
Other	Other	(1,521)		929		Other	(6,934)		921
Change in current assets and liabilities	Change in current assets and liabilities					Change in current assets and liabilities
(Increase) decrease in	(Increase) decrease in					(Increase) decrease in
Receivables from investment products	Receivables from investment products	4,125		(906)		Receivables from investment products	(32,187)		(4,537)
Receivables	Receivables	(25,523)		(26,437)		Receivables	(41,697)		(58,537)
Other current assets	Other current assets	(7,014)		538		Other current assets	(11,422)		(3,919)
Advances due from unconsolidated affiliate	Advances due from unconsolidated affiliate	53,500		51,364		Advances due from unconsolidated affiliate	54,328		51,422
(Decrease) increase in	(Decrease) increase in					(Decrease) increase in
Accounts payable	Accounts payable	(7)		1,525		Accounts payable	(2,103)		3,006
Accrued liabilities	Accrued liabilities	(55,734)		(25,721)		Accrued liabilities	27,092		(9,851)
Deferred revenue	Deferred revenue	3,578		195		Deferred revenue	3,093		150
Total adjustments	Total adjustments	29,031		61,749		Total adjustments	65,276		82,588
Net cash provided by operating activities	Net cash provided by operating activities	$	330,615	$	324,997	Net cash provided by operating activities	$	428,519	$	483,881

Note 2. Investment in Unconsolidated Affiliate

LSV Asset Management

The Company has an investment in LSV Asset Management (LSV), a registered investment advisor that provides investment advisory services primarily to institutions, including pension plans and investment companies. LSV is currently an investment sub-advisor for a limited number of SEI-sponsored investment products. The Company's partnership interest in LSV as of ~~June~~September 30, 2022 was 38.6%. The Company accounts for its interest in LSV using the equity method because of its less than 50% ownership. The Company’s interest in the net assets of LSV is reflected in Investment in unconsolidated affiliate on the accompanying Consolidated Balance Sheets and its interest in the earnings of LSV is reflected in Equity in earnings of unconsolidated affiliate on the accompanying Consolidated Statements of Operations.

At ~~June~~September 30, 2022, the Company’s total investment in LSV was ~~$46,865.~~$39,012. The Company receives partnership distributions from LSV on a quarterly basis. The Company received partnership distributions from LSV of ~~$69,824~~$103,504 and ~~$68,064~~$110,559 in the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively. As such, the Company considers these

distribution payments as returns on investment rather than returns of the Company's original investment in LSV and has therefore classified the associated cash inflows as an operating activity on the Consolidated Statements of Cash Flows.

The Company’s proportionate share in the earnings of LSV was ~~$29,813~~$26,654 and ~~$35,065~~$35,005 during the three months ended ~~June~~September 30, 2022 and 2021, respectively. During the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, the Company's proportionate share in the earnings of LSV was ~~$62,272~~$88,926 and ~~$68,415,~~$103,420, respectively.

These tables contain condensed financial information of LSV:


Condensed Statement of Operations	Condensed Statement of Operations	Three Months Ended June 30,				Six Months Ended June 30,				Condensed Statement of Operations	Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
Revenues	Revenues	$	99,814	$	116,392	$	208,264	$	227,229	Revenues	$	91,588	$	115,728	$	299,852	$	342,957
Net income	Net income	77,193		90,520		160,984		176,440		Net income	69,013		90,365		229,997		266,805


Condensed Balance Sheets	Condensed Balance Sheets	June 30, 2022		December 31, 2021		Condensed Balance Sheets	September 30, 2022		December 31, 2021
Current assets	Current assets	$	118,021	$	171,058	Current assets	$	110,421	$	171,058
Non-current assets	Non-current assets	5,329		4,792		Non-current assets	5,113		4,792
Total assets	Total assets	$	123,350	$	175,850	Total assets	$	115,534	$	175,850

Current liabilities	Current liabilities	$	53,683	$	82,858	Current liabilities	$	64,263	$	82,858
Non-current liabilities	Non-current liabilities	3,465		3,863		Non-current liabilities	3,260		3,863
Partners’ capital	Partners’ capital	66,202		89,129		Partners’ capital	48,011		89,129
Total liabilities and partners’ capital	Total liabilities and partners’ capital	$	123,350	$	175,850	Total liabilities and partners’ capital	$	115,534	$	175,850

On April 1, 2022, LSV provided an interest in the partnership to select key employees which reduced the ownership percentage of each existing partner on a pro-rata basis. As a result, the Company's total partnership interest in LSV was reduced slightly to approximately 38.6% from approximately 38.7%.

Note 3. Composition of Certain Financial Statement Captions

Receivables

Receivables on the accompanying Consolidated Balance Sheets consist of:


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Trade receivables	Trade receivables	$	107,853	$	111,209	Trade receivables	$	121,181	$	111,209
Fees earned, not billed	Fees earned, not billed	337,445		315,255		Fees earned, not billed	332,457		315,255
Other receivables	Other receivables	23,556		16,747		Other receivables	31,390		16,747
		468,854		443,211			485,028		443,211
Less: Allowance for doubtful accounts	Less: Allowance for doubtful accounts	(1,952)		(1,602)		Less: Allowance for doubtful accounts	(2,336)		(1,602)
		$	466,902	$	441,609		$	482,692	$	441,609

Fees earned, not billed represents receivables from contracts with customers earned but unbilled and results from timing differences between services provided and contractual billing schedules. These billing schedules generally provide for fees to be billed on a quarterly basis. In addition, certain fees earned from investment operations services are calculated based on assets under administration that have an extended valuation process. Billings to these clients occur once the asset valuation processes are completed.

Receivables from investment products on the accompanying Consolidated Balance Sheets primarily represent fees receivable for distribution, investment advisory, and administration services to various regulated investment companies and other investment products sponsored by SEI.

Property and Equipment

Property and Equipment on the accompanying Consolidated Balance Sheets consists of:


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Buildings	Buildings	$	209,907	$	209,766	Buildings	$	210,108	$	209,766
Equipment	Equipment	167,591		153,158		Equipment	175,059		153,158
Land	Land	26,411		24,651		Land	26,439		24,651
Purchased software	Purchased software	156,569		156,387		Purchased software	160,437		156,387
Furniture and fixtures	Furniture and fixtures	21,323		21,254		Furniture and fixtures	21,402		21,254
Leasehold improvements	Leasehold improvements	20,617		21,946		Leasehold improvements	19,590		21,946
Construction in progress	Construction in progress	576		955		Construction in progress	960		955
		602,994		588,117			613,995		588,117
Less: Accumulated depreciation	Less: Accumulated depreciation	(424,048)		(409,248)		Less: Accumulated depreciation	(431,473)		(409,248)
Property and Equipment, net	Property and Equipment, net	$	178,946	$	178,869	Property and Equipment, net	$	182,522	$	178,869

The Company recognized ~~$16,384~~$24,942 and ~~$16,733~~$25,141 in depreciation expense related to property and equipment for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively.

Deferred Contract Costs

Deferred contract costs, which primarily consist of deferred sales commissions, were ~~$35,353~~$37,790 and $36,236 as of ~~June~~September 30, 2022 and December 31, 2021, respectively. The Company deferred expenses related to contract costs of ~~$1,543~~$4,648 and ~~$1,674~~$2,932 during the three months ended ~~June~~September 30, 2022 and 2021, respectively. During the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, the Company deferred expenses related to contract costs of ~~$5,062~~$9,710 and ~~$4,046,~~$6,978, respectively. Amortization expense related to deferred contract costs were ~~$5,945~~$8,156 and ~~$4,475~~$6,496 during the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively. Amortization expense during the ~~six~~nine months ended ~~June~~September 30, 2022 includes $1,784 in expense accelerated as a result of the termination of a contractual agreement with a significant client (See Note 13). Amortization expense related to deferred contract costs is included in Compensation, benefits and other personnel on the accompanying Consolidated Statements of Operations. There ~~was~~were no material impairment ~~loss~~losses in relation to deferred contract costs during the ~~six~~nine months ended ~~June~~September 30, 2022.

Accrued Liabilities

Accrued liabilities on the accompanying Consolidated Balance Sheets consist of:


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Accrued employee compensation	Accrued employee compensation	$	52,418	$	107,933	Accrued employee compensation	$	82,946	$	107,933
Accrued employee benefits and other personnel	Accrued employee benefits and other personnel	9,749		13,951		Accrued employee benefits and other personnel	7,142		13,951
Accrued voluntary separation program						Accrued voluntary separation program	58,424		—
Accrued consulting, outsourcing and professional fees	Accrued consulting, outsourcing and professional fees	47,067		36,411		Accrued consulting, outsourcing and professional fees	41,919		36,411
Accrued sub-advisory, distribution and other asset management fees	Accrued sub-advisory, distribution and other asset management fees	58,400		58,661		Accrued sub-advisory, distribution and other asset management fees	57,988		58,661

Accrued dividend payable	Accrued dividend payable	—		55,452		Accrued dividend payable	—		55,452

Other accrued liabilities	Other accrued liabilities	51,118		51,974		Other accrued liabilities	46,568		51,974
Total accrued liabilities	Total accrued liabilities	$	218,752	$	324,382	Total accrued liabilities	$	294,987	$	324,382

Note 4. Fair Value Measurements

The fair value of the Company’s financial assets and liabilities, except for the Company's investment funds sponsored by LSV, is determined in accordance with the fair value hierarchy. The fair value of the Company’s Level 1 financial assets consist mainly of investments in open-ended mutual funds that are quoted daily. Level 2 financial assets consist of GNMA mortgage-backed securities held by the Company's wholly-owned limited purpose federal thrift subsidiary, SEI Private Trust Company (SPTC), Federal Home Loan Bank (FHLB) and other U.S. government agency short-term notes held by SIDCO. The financial assets held by SIDCO were purchased as part of a cash management program requiring only short term, top-tier investment grade government and corporate securities. The financial assets held by SPTC are debt securities issued by GNMA and are backed by the full faith and credit of the U.S. government. These securities were

purchased for the sole purpose of satisfying applicable regulatory requirements and have maturity dates which range from 2023 to 2041.

The fair value of the Company's investment funds sponsored by LSV is measured using the net asset value per share (NAV) as a practical expedient. The NAVs of the funds are calculated by the funds' independent custodian and are derived from the fair values of the underlying investments as of the reporting date. The funds allow for investor redemptions at the end of each calendar month. This investment has not been classified in the fair value hierarchy but is presented in the tables below to permit reconciliation to the amounts presented on the accompanying Consolidated Balance Sheets.

The valuation of the Company's Level 2 financial assets held by SIDCO and SPTC are based upon securities pricing policies and procedures utilized by third-party pricing vendors.

The pricing policies and procedures applied for our Level 1 and Level 2 financial assets during the ~~six~~nine months ended ~~June~~September 30, 2022 were consistent with those as described in the Company's Annual Report on Form 10-K at December 31, 2021. The Company had no Level 3 financial assets at ~~June~~September 30, 2022 or December 31, 2021 that were required to be measured at fair value on a recurring basis. Level 3 financial liabilities at ~~June~~September 30, 2022 and December 31, 2021 consist entirely of the estimated contingent consideration resulting from an acquisition (See Note 12). The fair value of the contingent consideration was determined using a Monte-Carlo simulation model. Key assumptions for the Monte-Carlo simulation model include expected revenues, expected volatility, risk-free rate and other factors. There were no transfers of financial assets between levels within the fair value hierarchy during the ~~six~~nine months ended ~~June~~September 30, 2022.

The fair value of certain financial assets of the Company was determined using the following inputs:


				Fair Value Measurements at the End of the Reporting Period Using							Fair Value Measurements at the End of the Reporting Period Using
Assets	Assets	June 30, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Assets	September 30, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
Equity securities	Equity securities	$	10,812	$	10,812	$	—	Equity securities	$	10,139	$	10,139	$	—
Available-for-sale debt securities	Available-for-sale debt securities	110,870		—		110,870		Available-for-sale debt securities	99,236		—		99,236
Fixed-income securities owned	Fixed-income securities owned	31,171		—		31,171		Fixed-income securities owned	31,586		—		31,586
Investment funds sponsored by LSV (1)	Investment funds sponsored by LSV (1)	6,000						Investment funds sponsored by LSV (1)	5,620
		$	158,853	$	10,812	$	142,041		$	146,581	$	10,139	$	130,822


			Fair Value Measurements at the End of the Reporting Period Using
Assets	December 31, 2021		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
Equity securities	$	12,406	$	12,406	$	—
Available-for-sale debt securities	117,135		—		117,135
Fixed-income securities owned	28,267		—		28,267
Investment funds sponsored by LSV (1)	6,916
	$	164,724	$	12,406	$	145,402

(1) The fair value amounts presented in the tables above are intended to permit reconciliation of the fair value hierarchy to the amounts presented on the accompanying Consolidated Balance Sheets (See Note 5).

Note 5. Marketable Securities

Marketable securities include investments in money market funds and commercial paper classified as cash equivalents, available-for-sale debt securities, investments in SEI-sponsored and non-SEI-sponsored mutual funds, equities, investments in funds sponsored by LSV and securities owned by SIDCO.

Cash Equivalents

Investments in money market funds and commercial paper classified as cash equivalents had a fair value of ~~$458,521~~$474,736 and $422,838 at ~~June~~September 30, 2022 and December 31, 2021, respectively. There were no material unrealized or realized gains or losses from these investments during the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021. Investments in money market funds and commercial paper are Level 1 assets.

Available for Sale and Equity Securities

Available For Sale and Equity Securities on the accompanying Consolidated Balance Sheets consist of:


		At June 30, 2022									At September 30, 2022
		Cost Amount		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value			Cost Amount		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value
Available-for-sale debt securities	Available-for-sale debt securities	$	119,702	$	—	$	(8,832)	$	110,870	Available-for-sale debt securities	$	113,155	$	—	$	(13,919)	$	99,236
SEI-sponsored mutual funds	SEI-sponsored mutual funds	6,271		—		(249)		6,022		SEI-sponsored mutual funds	6,197		—		(745)		5,452
Equities and other mutual funds	Equities and other mutual funds	4,870		—		(80)		4,790		Equities and other mutual funds	5,030		—		(343)		4,687
		$	130,843	$	—	$	(9,161)	$	121,682		$	124,382	$	—	$	(15,007)	$	109,375


	At December 31, 2021
	Cost Amount		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value
Available-for-sale debt securities	$	117,215	$	—	$	(80)	$	117,135
SEI-sponsored mutual funds	6,748		463		—		7,211
Equities and other mutual funds	4,935		260		—		5,195
	$	128,898	$	723	$	(80)	$	129,541

Net unrealized losses at ~~June~~September 30, 2022 of available-for-sale debt securities were ~~$6,801~~$10,718 (net of income tax benefit of ~~$2,031)~~$3,201). Net unrealized losses at December 31, 2021 of available-for-sale debt securities were $62 (net of income tax benefit of $18). These unrealized losses are associated with the Company’s investments in mortgage-backed securities issued by GNMA and were caused by interest rate increases (See Note 4). The contractual cash flows of these securities are guaranteed by an agency of the U.S. government. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost bases of the Company's investments. The Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases. These net unrealized losses are reported as a separate component of Accumulated other comprehensive loss on the accompanying Consolidated Balance Sheets.

There were gross realized losses of ~~$414~~$521 and ~~$556~~$861 from available-for-sale debt securities during the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively. There were no gross realized gains from available-for-sale debt securities during the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021. Realized losses from available-for-sale debt securities, including amounts reclassified from accumulated comprehensive loss, are reflected in Net (loss) gain from investments on the accompanying Consolidated Statements of Operations.

There were gross realized gains of $7$226 and gross realized losses of ~~$658~~$714 from mutual funds and equities during the ~~six~~nine months ended ~~June~~September 30, 2022. There were gross realized gains of ~~$613~~$714 and gross realized losses of ~~$59~~$65 from mutual funds and equities during the ~~six~~nine months ended ~~June~~September 30, 2021. Gains and losses from mutual funds and equities are reflected in Net (loss) gain from investments on the accompanying Consolidated Statements of Operations.

Investments in Affiliated Funds

The Company has an investment in funds sponsored by LSV. The Company records this investment on the accompanying Consolidated Balance Sheets at fair value. Unrealized gains and losses from the change in fair value of these funds are recognized in Net (loss) gain from investments on the accompanying Consolidated Statements of Operations.

The funds had a fair value of ~~$6,000~~$5,620 and $6,916 at ~~June~~September 30, 2022 and December 31, 2021, respectively. The Company recognized unrealized losses of ~~$1,270~~$380 and ~~unrealized gains of $309~~$39 during the three months ended ~~June~~September 30, 2022 and 2021, respectively, from the change in fair value of the funds. The Company recognized unrealized losses of ~~$916~~$1,296 and unrealized gains of ~~$766~~$727 during the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively, from the change in fair value of the funds.

Securities Owned

The Company’s broker-dealer subsidiary, SIDCO, has investments in U.S. government agency securities with maturity dates less than one year. These investments are reflected as Securities owned on the accompanying Consolidated Balance Sheets. Due to specialized accounting practices applicable to investments by broker-dealers, the securities are reported at fair value and changes in fair value are recorded in current period earnings. The securities had a fair value of ~~$31,171~~$31,586 and $28,267 at ~~June~~September 30, 2022 and December 31, 2021, respectively. There were no material net gains or losses related to the securities during the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021.

Note 6. Line of Credit

The Company has a five-year $325,000 Credit Agreement (the Credit Facility) with Wells Fargo Bank, N.A., and a syndicate of other lenders. The Credit Facility is scheduled to expire in April 2026, at which time any aggregate principal amount of loans outstanding becomes payable in full. Any borrowings made under the Credit Facility will accrue interest at rates that, at the Company's option, are based on a base rate (the Base Rate) plus a premium that can range from 0.25% to 1.00% or the London InterBank Offered Rate (LIBOR) plus a premium that can range from 1.25% to 2.00% depending on the Company’s Leverage Ratio (a ratio of consolidated indebtedness to consolidated EBITDA for the 4four preceding fiscal quarters, all as defined in the related agreement). The Base Rate is defined as the highest of a) the Federal Funds Rate, as published by the Federal Reserve Bank of New York, plus 0.50%, b) the prime commercial lending rate of Wells Fargo, c) the applicable LIBOR plus 1.00%, or d) 0%. The Credit Facility includes fallback language clearly defining an alternative reference rate which provides for specified replacement rates upon a LIBOR cessation event. At the time of a LIBOR cessation event, the replacement rate, the Secured Overnight Financing Rate (SOFR), self-executes without the need for negotiations or a formal amendment process.

The Company also pays quarterly commitment fees based on the unused portion of the Credit Facility. The quarterly fees for the Credit Facility can range from 0.15% of the amount of the unused portion to 0.30%, depending on the Company’s Leverage Ratio. Certain wholly-owned subsidiaries of the Company have guaranteed the obligations of the Company under the agreement. The aggregate amount of the Credit Facility may be increased by an additional $100,000 under certain conditions set forth in the agreement. The Company may issue up to $15,000 in letters of credit under the terms of the Credit Facility. The Company pays a periodic commission fee of 1.25% plus an issuance fee of ~~0.200%~~0.20% of the aggregate face amount of the outstanding letters of credit issued under the Credit Facility.

The Credit Facility contains covenants with restrictions on the ability of the Company to do transactions with affiliates other than wholly-owned subsidiaries or to incur liens or certain types of indebtedness as defined in the agreement. In the event of a default under the Credit Facility, the Company would also be restricted from paying dividends on, or repurchasing, its common stock without the approval of the lenders. Upon the occurrence of certain financial or economic events, significant corporate events, or certain other events of default constituting an event of default under the Credit Facility, all loans outstanding may be declared immediately due and payable and all commitments under the agreement may be terminated.

In November 2021, the Company borrowed $40,000 under the Credit Facility for the funding of an acquisition (See Note 12). During the ~~six~~nine months ended ~~June~~September 30, 2022, the Company made principal payments of $40,000 to fully repay the outstanding balance of the Credit Facility.

As of ~~July 15,~~October 20, 2022, the Company had outstanding letters of credit of $6,003 under the Credit Facility. These letters of credit were issued primarily for the expansion of the Company's headquarters and are scheduled to expire during 2022. The amount of the Credit Facility that is available for general corporate purposes as of ~~July 15,~~October 20, 2022 was $318,997.

The Company was in compliance with all covenants of the Credit Facility during the ~~six~~nine months ended ~~June~~September 30, 2022.

Note 7. Shareholders’ Equity

Stock-Based Compensation

The Company has only non-qualified stock options and restricted stock units outstanding under its equity compensation plans. All outstanding stock options have performance-based vesting provisions specific to each option grant that tie the vesting of the applicable stock options to the Company’s financial performance. The Company’s stock options vest at a rate of 50% when a specified financial vesting target is achieved, and the remaining 50% when a second, higher specified financial vesting target is achieved. Options vest as a result of achievement of the financial vesting targets. Options granted in December 2017 and thereafter include a service condition which requires a minimum two or four year waiting period from the grant date along with the attainment of the applicable financial vesting target. The targets are measured

annually on December 31. The amount of stock-based compensation expense recognized in the period is based upon management’s estimate of when the financial vesting targets may be achieved. Any change in management’s estimate could result in the remaining amount of stock-based compensation expense to be accelerated, spread out over a longer period, or reversed. This may cause volatility in the recognition of stock-based compensation expense in future periods and could materially affect the Company’s earnings. The Company's restricted stock units outstanding vest ratably over four years ~~commencing March 31, 2022.~~

from the date the award is granted.

The Company recognized stock-based compensation expense in its Consolidated Financial Statements in the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively, as follows:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
Stock-based compensation expense	Stock-based compensation expense	$	10,007	$	10,103	$	20,573	$	19,855	Stock-based compensation expense	$	10,766	$	11,318	$	31,339	$	31,173
Less: Deferred tax benefit	Less: Deferred tax benefit	(1,839)		(1,904)		(3,934)		(3,758)		Less: Deferred tax benefit	(1,917)		(1,857)		(5,851)		(5,615)
Stock-based compensation expense, net of tax	Stock-based compensation expense, net of tax	$	8,168	$	8,199	$	16,639	$	16,097	Stock-based compensation expense, net of tax	$	8,849	$	9,461	$	25,488	$	25,558

The Company revised its estimate of when some vesting targets are expected to be achieved. This change in management's estimate resulted in a decrease of ~~$663~~$2,779 in stock-based compensation expense during the ~~six~~nine months ended ~~June~~September 30, 2022.

As of ~~June~~September 30, 2022, there was approximately ~~$82,733~~$72,913 of unrecognized compensation cost remaining related to unvested employee stock options and restricted stock units that management expects will vest and is being amortized.

The Company issues new common shares associated with the exercise of stock options. The total intrinsic value of options exercised during the ~~six~~nine months ended ~~June~~September 30, 2022 was ~~$12,806.~~$18,147. The total options exercisable as of ~~June~~September 30, 2022 had an intrinsic value of ~~$61,515.~~$33,688. The total intrinsic value for options exercisable is calculated as the difference between the market value of the Company’s common stock as of ~~June~~September 30, 2022 and the weighted average exercise price of the options. The market value of the Company’s common stock as of ~~June~~September 30, 2022 was ~~$54.02~~$49.05 as reported by the Nasdaq Stock Market, LLC. The weighted average exercise price of the options exercisable as of ~~June~~September 30, 2022 was ~~$49.40.~~$49.90. Total options that were outstanding as of ~~June~~September 30, 2022 were ~~18,072,000~~17,645,000. Total options that were exercisable as of ~~June~~September 30, 2022 were ~~7,911,000~~7,705,000.

The Company initiated a voluntary separation program to long-tenured employees which was finalized in ~~June~~July 2022. Certain allowances provided to the participating employees in the program ~~are expected to result~~resulted in modifications to the Company's equity compensation plans related to the vesting of stock options during the remainder of 2022 and the period in which the employee may exercise vested stock options after the termination of employment (See Note 14). The Company incurred additional stock-based compensation expense of $2,307 as a result of these modifications. The Company accounts for stock option forfeitures as they occur. During the three months ended September 30, 2022, the Company reversed previously recognized stock-option expense of $784 as a result of the cancellation of certain stock option awards to employees participating in the voluntary separation program.

Common Stock Buyback

The Company’s Board of Directors, under multiple authorizations, has authorized the repurchase of common stock on the open market or through private transactions. The Company purchased ~~3,683,000~~4,573,000 shares at a total cost of ~~$209,383~~$258,817 during the ~~six~~nine months ended ~~June~~September 30, 2022, which reduced the total shares outstanding of common stock. The cost of stock purchases during the period includes the cost of certain transactions that settled in the following quarter. On June 1, 2022, the Company's Board of Directors approved an increase in the stock repurchase program by an additional $200,000. As of ~~June~~September 30, 2022, the Company had approximately ~~$221,910~~$172,477 of authorization remaining for the purchase of common stock under the program.

The Company immediately retires its common stock when purchased. Upon retirement, the Company reduces Capital in excess of par value for the average capital per share outstanding and the remainder is charged against Retained earnings. If the Company reduces its Retained earnings to zero, any subsequent purchases of common stock will be charged entirely to Capital in excess of par value.

Cash Dividend

On June 1, 2022, the Board of Directors declared a cash dividend of $0.40 per share on the Company's common stock, which was paid on June 22, 2022, to shareholders of record on June 13, 2022. Cash dividends declared during the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021 were $54,378 and $52,389, respectively.

Note 8. Accumulated Other Comprehensive Loss

The components of Accumulated other comprehensive loss, net of tax, are as follows:


		Foreign Currency Translation Adjustments		Unrealized Gains (Losses) on Investments		Accumulated Other Comprehensive Loss			Foreign Currency Translation Adjustments		Unrealized Gains (Losses) on Investments		Accumulated Other Comprehensive Loss
Balance, January 1, 2022	Balance, January 1, 2022	$	(19,781)	$	(62)	$	(19,843)	Balance, January 1, 2022	$	(19,781)	$	(62)	$	(19,843)

Other comprehensive loss before reclassifications	Other comprehensive loss before reclassifications	(19,181)		(7,057)		(26,238)		Other comprehensive loss before reclassifications	(37,090)		(11,057)		(48,147)
Amounts reclassified from accumulated other comprehensive loss	Amounts reclassified from accumulated other comprehensive loss	—		318		318		Amounts reclassified from accumulated other comprehensive loss	—		401		401
Net current-period other comprehensive loss	Net current-period other comprehensive loss	(19,181)		(6,739)		(25,920)		Net current-period other comprehensive loss	(37,090)		(10,656)		(47,746)

Balance, June 30, 2022		$	(38,962)	$	(6,801)	$	(45,763)
Balance, September 30, 2022								Balance, September 30, 2022	$	(56,871)	$	(10,718)	$	(67,589)

Note 9. Business Segment Information

The Company’s reportable business segments are:

Private Banks – Provides outsourced investment processing and investment management platforms to banks and trust institutions, independent wealth advisers and financial advisors worldwide;

Investment Advisors – Provides investment management and investment processing platforms to affluent investors through a network of independent registered investment advisors, financial planners and other investment professionals in the United States;

Institutional Investors – Provides OCIO solutions, including investment management and administrative outsourcing platforms to retirement plan sponsors, healthcare systems, higher education and other not-for-profit organizations worldwide;

Investment Managers – Provides investment operations outsourcing platforms to fund companies, banking institutions, traditional and non-traditional investment managers worldwide and family offices in the United States; and

Investments in New Businesses – Focuses on providing investment management solutions to ultra-high-net-worth families residing in the United States; developing network and data protection services; modularizing larger technology platforms into stand-alone components; entering new markets; and conducting other research and development activities.

The information in the following tables is derived from internal financial reporting used for corporate management purposes. There are no inter-segment revenues for the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021. Assets are not allocated to segments for internal reporting purposes. The accounting policies of the reportable business segments are the same as those described in Note 1 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

The following tables highlight certain financial information about each of the business segments for the three months ended ~~June~~September 30, 2022 and 2021:


		Private Banks		Investment Advisors		Institutional Investors		Investment Managers		Investments In New Businesses		Total			Private Banks		Investment Advisors		Institutional Investors		Investment Managers		Investments In New Businesses		Total
		For the Three Months Ended June 30, 2022													For the Three Months Ended September 30, 2022
Revenues	Revenues	$	124,184	$	113,194	$	83,483	$	155,926	$	4,883	$	481,670	Revenues	$	122,660	$	109,565	$	78,260	$	156,015	$	4,834	$	471,334
Expenses	Expenses	121,060		63,375		43,925		100,807		12,844		342,011		Expenses	116,661		61,150		42,149		100,876		9,915		330,751
Operating profit (loss)	Operating profit (loss)	$	3,124	$	49,819	$	39,558	$	55,119	$	(7,961)	$	139,659	Operating profit (loss)	$	5,999	$	48,415	$	36,111	$	55,139	$	(5,081)	$	140,583


		Private Banks		Investment Advisors		Institutional Investors		Investment Managers		Investments In New Businesses		Total			Private Banks		Investment Advisors		Institutional Investors		Investment Managers		Investments In New Businesses		Total
		For the Three Months Ended June 30, 2021													For the Three Months Ended September 30, 2021
Revenues	Revenues	$	123,676	$	119,396	$	85,699	$	142,808	$	4,072	$	475,651	Revenues	$	123,018	$	124,768	$	85,759	$	147,412	$	4,365	$	485,322
Expenses	Expenses	117,654		59,133		41,895		84,995		13,631		317,308		Expenses	116,679		62,107		41,643		89,594		12,820		322,843
Operating profit (loss)	Operating profit (loss)	$	6,022	$	60,263	$	43,804	$	57,813	$	(9,559)	$	158,343	Operating profit (loss)	$	6,339	$	62,661	$	44,116	$	57,818	$	(8,455)	$	162,479

A reconciliation of the total operating profit reported for the business segments to income from operations in the Consolidated Statements of Operations for the three months ended ~~June~~September 30, 2022 and 2021 is as follows:


		2022		2021			2022		2021
Total operating profit from segments	Total operating profit from segments	$	139,659	$	158,343	Total operating profit from segments	$	140,583	$	162,479
Corporate overhead expenses(1)	Corporate overhead expenses(1)	(23,799)		(22,322)		Corporate overhead expenses(1)	(89,537)		(21,354)
Income from operations	Income from operations	$	115,860	$	136,021	Income from operations	$	51,046	$	141,125

(1) Corporate overhead expenses include the total costs for the Voluntary Separation Program (See Note 14).

The following tables provide additional information for the three months ended ~~June~~September 30, 2022 and 2021 pertaining to the business segments:


		Capital Expenditures (1)				Depreciation					Capital Expenditures (2)				Depreciation
		2022		2021		2022		2021			2022		2021		2022		2021
Private Banks	Private Banks	$	8,541	$	8,594	$	5,554	$	4,178	Private Banks	$	8,404	$	6,173	$	5,050	$	4,980
Investment Advisors	Investment Advisors	3,423		3,580		469		1,417		Investment Advisors	3,476		2,896		513		499
Institutional Investors	Institutional Investors	1,028		884		285		353		Institutional Investors	1,080		720		283		271
Investment Managers	Investment Managers	4,113		3,373		1,755		2,027		Investment Managers	9,843		3,722		2,498		2,428
Investments in New Businesses	Investments in New Businesses	208		313		44		100		Investments in New Businesses	227		336		36		60
Total from business segments	Total from business segments	$	17,313	$	16,744	$	8,107	$	8,075	Total from business segments	$	23,030	$	13,847	$	8,380	$	8,238
Corporate overhead	Corporate overhead	445		418		179		349		Corporate overhead	486		419		178		170
		$	17,758	$	17,162	$	8,286	$	8,424		$	23,516	$	14,266	$	8,558	$	8,408

~~(1)~~(2) Capital expenditures include additions to property and equipment and capitalized software.


		Amortization					Amortization
		2022		2021			2022		2021
Private Banks	Private Banks	$	8,261	$	8,633	Private Banks	$	4,515	$	8,526
Investment Advisors	Investment Advisors	3,158		2,909		Investment Advisors	1,736		3,014
Institutional Investors	Institutional Investors	2,257		427		Institutional Investors	1,808		427
Investment Managers	Investment Managers	2,577		2,444		Investment Managers	2,121		2,451
Investments in New Businesses	Investments in New Businesses	185		185		Investments in New Businesses	145		185
Total from business segments	Total from business segments	$	16,438	$	14,598	Total from business segments	$	10,325	$	14,603
Corporate overhead	Corporate overhead	70		125		Corporate overhead	57		71
		$	16,508	$	14,723		$	10,382	$	14,674

The following tables highlight certain financial information about each of business segment for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021:


		Private Banks		Investment Advisors		Institutional Investors		Investment Managers		Investments In New Businesses		Total			Private Banks		Investment Advisors		Institutional Investors		Investment Managers		Investments In New Businesses		Total
		For the Six Months Ended June 30, 2022													For the Nine Months Ended September 30, 2022
Revenues	Revenues	$	337,732	$	232,424	$	170,322	$	312,827	$	9,808	$	1,063,113	Revenues	$	460,392	$	341,989	$	248,582	$	468,842	$	14,642	$	1,534,447
Expenses	Expenses	243,015		127,895		89,283		199,644		24,794		684,631		Expenses	359,676		189,045		131,432		300,520		34,709		1,015,382
Operating profit (loss)	Operating profit (loss)	$	94,717	$	104,529	$	81,039	$	113,183	$	(14,986)	$	378,482	Operating profit (loss)	$	100,716	$	152,944	$	117,150	$	168,322	$	(20,067)	$	519,065


		Private Banks		Investment Advisors		Institutional Investors		Investment Managers		Investments In New Businesses		Total			Private Banks		Investment Advisors		Institutional Investors		Investment Managers		Investments In New Businesses		Total
		For the Six Months Ended June 30, 2021													For the Nine Months Ended September 30, 2021
Revenues	Revenues	$	241,284	$	232,690	$	170,198	$	279,227	$	7,938	$	931,337	Revenues	$	364,302	$	357,458	$	255,957	$	426,639	$	12,303	$	1,416,659
Expenses	Expenses	228,378		114,160		81,053		168,015		27,035		618,641		Expenses	345,057		176,267		122,696		257,609		39,855		941,484
Operating profit (loss)	Operating profit (loss)	$	12,906	$	118,530	$	89,145	$	111,212	$	(19,097)	$	312,696	Operating profit (loss)	$	19,245	$	181,191	$	133,261	$	169,030	$	(27,552)	$	475,175

A reconciliation of the total operating profit reported for the business segments to income from operations in the Consolidated Statements of Operations for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021:


		2022		2021			2022		2021
Total operating profit from segments	Total operating profit from segments	$	378,482	$	312,696	Total operating profit from segments	$	519,065	$	475,175
Corporate overhead expenses(1)	Corporate overhead expenses(1)	(47,823)		(43,838)		Corporate overhead expenses(1)	(137,360)		(65,192)
Income from operations	Income from operations	$	330,659	$	268,858	Income from operations	$	381,705	$	409,983

(1) Corporate overhead expenses include the total costs for the Voluntary Separation Program (See Note 14).

The following tables provide additional information for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021:


		Capital Expenditures (1)				Depreciation					Capital Expenditures (2)				Depreciation
		2022		2021		2022		2021			2022		2021		2022		2021
Private Banks	Private Banks	$	15,763	$	14,423	$	10,660	$	8,310	Private Banks	$	24,167	$	20,596	$	15,710	$	13,290
Investment Advisors	Investment Advisors	6,450		5,888		925		2,706		Investment Advisors	9,926		8,784		1,438		3,205
Institutional Investors	Institutional Investors	1,977		1,395		574		711		Institutional Investors	3,057		2,115		857		982
Investment Managers	Investment Managers	8,137		5,004		3,775		4,080		Investment Managers	17,980		8,726		6,273		6,508
Investments in New Businesses	Investments in New Businesses	413		452		88		246		Investments in New Businesses	640		788		124		306
Total from business segments	Total from business segments	$	32,740	$	27,162	$	16,022	$	16,053	Total from business segments	$	55,770	$	41,009	$	24,402	$	24,291
Corporate Overhead	Corporate Overhead	890		578		362		680		Corporate Overhead	1,376		997		540		850
		$	33,630	$	27,740	$	16,384	$	16,733		$	57,146	$	42,006	$	24,942	$	25,141

~~(1)~~(2) Capital expenditures include additions to property and equipment and capitalized software.


		Amortization					Amortization
		2022		2021			2022		2021
Private Banks	Private Banks	$	16,800	$	17,209	Private Banks	$	21,315	$	25,735
Investment Advisors	Investment Advisors	6,391		5,536		Investment Advisors	8,127		8,550
Institutional Investors	Institutional Investors	4,540		853		Institutional Investors	6,348		1,280
Investment Managers	Investment Managers	5,153		4,924		Investment Managers	7,274		7,375
Investments in New Businesses	Investments in New Businesses	370		370		Investments in New Businesses	515		555
Total from business segments	Total from business segments	$	33,254	$	28,892	Total from business segments	$	43,579	$	43,495
Corporate Overhead	Corporate Overhead	141		183		Corporate Overhead	198		254
		$	33,395	$	29,075		$	43,777	$	43,749

Note 10. Income Taxes

The gross liability for unrecognized tax benefits at ~~June~~September 30, 2022 and December 31, 2021 was ~~$16,861~~$17,718 and $14,887, respectively, exclusive of interest and penalties, of which ~~$16,358~~$16,973 and $14,382 would affect the effective tax rate if the Company were to recognize the tax benefit.

The Company classifies interest and penalties on unrecognized tax benefits as income tax expense. As of ~~June~~September 30, 2022 and December 31, 2021, the combined amount of accrued interest and penalties related to tax positions taken on tax returns was ~~$1,642~~$1,458 and $1,338, respectively.


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Gross liability for unrecognized tax benefits, exclusive of interest and penalties	Gross liability for unrecognized tax benefits, exclusive of interest and penalties	$	16,861	$	14,887	Gross liability for unrecognized tax benefits, exclusive of interest and penalties	$	17,718	$	14,887
Interest and penalties on unrecognized benefits	Interest and penalties on unrecognized benefits	1,642		1,338		Interest and penalties on unrecognized benefits	1,458		1,338
Total gross uncertain tax positions	Total gross uncertain tax positions	$	18,503	$	16,225	Total gross uncertain tax positions	$	19,176	$	16,225
Amount included in Current liabilities	Amount included in Current liabilities	$	4,533	$	4,253	Amount included in Current liabilities	$	4,190	$	4,253
Amount included in Other long-term liabilities	Amount included in Other long-term liabilities	13,970		11,972		Amount included in Other long-term liabilities	14,986		11,972
		$	18,503	$	16,225		$	19,176	$	16,225

The effective income tax rate for the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021 differs from the federal income tax statutory rate due to the following:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
Statutory rate	Statutory rate	21.0	%	21.0	%	21.0	%	21.0	%	Statutory rate	21.0	%	21.0	%	21.0	%	21.0	%
State taxes, net of federal tax benefit	State taxes, net of federal tax benefit	2.8		3.2		2.8		3.2		State taxes, net of federal tax benefit	3.4		2.5		2.9		3.0
Foreign tax expense and tax rate differential	Foreign tax expense and tax rate differential	(0.1)		(0.1)		(0.1)		(0.1)		Foreign tax expense and tax rate differential	(0.2)		(0.1)		(0.1)		(0.1)
Tax benefit from stock option exercises	Tax benefit from stock option exercises	(0.3)		(1.2)		(0.3)		(1.2)		Tax benefit from stock option exercises	(1.1)		(0.6)		(0.5)		(1.0)

State settlements										State settlements	—		(0.3)		—		(0.2)
Provision-to-return adjustment										Provision-to-return adjustment	—		(0.5)		—		(0.2)
Other, net	Other, net	(0.3)		(0.6)		(0.3)		(0.4)		Other, net	(0.1)		(0.3)		(0.2)		(0.3)
		23.1	%	22.3	%	23.1	%	22.5	%		23.0	%	21.7	%	23.1	%	22.2	%

The increase in the Company's effective tax rate for the three ~~and six~~ months ended ~~June~~September 30, 2022 was primarily due to an increase in the state effective tax rate and one-time state settlements which reduced the effective rate in 2021. Provision-to-return adjustments and statutory limitations which lowered the 2021 effective rate are expected to be realized in the fourth quarter of 2022. The increase was partially offset by increased tax benefits related to the stock option exercises as a percentage of net income in the third quarter of 2022 compared to the third quarter of 2021.

The increase in the Company's effective tax rate for the nine months ended September 30, 2022 was primarily due to decreased tax benefits related to the lower volume of stock option exercises in 2022 compared to the prior year ~~period. The increase was offset by a decrease~~period as well as the timing of one-time state settlements which reduced the effective rate in ~~state tax expense.~~2021. Provision-to-return adjustments and statutory limitations which lowered the 2021 effective rate for the nine month period are expected to be realized in the fourth quarter of 2022.

The Company files income tax returns in the United States on a consolidated basis and in many U.S. state and foreign jurisdictions. The Company is subject to examination of income tax returns by the Internal Revenue Service (IRS) and other domestic and foreign tax authorities. The Company is no longer subject to U.S. federal income tax examination for years before 2018 and is no longer subject to state, local or foreign income tax examinations by authorities for years before 2015.

The Company estimates it will recognize ~~$4,533~~$4,190 of gross unrecognized tax benefits. This amount is expected to be paid within one year or to be removed at the expiration of the statute of limitations and resolution of income tax audits and is netted against the current payable account. These unrecognized tax benefits are related to tax positions taken on certain federal, state, and foreign tax returns. However, the timing of the resolution of income tax examinations is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ materially from the amounts accrued for each year. While it is reasonably possible that some issues under examination could be resolved in the next twelve months, based upon the current facts and circumstances, the Company cannot reasonably

estimate the timing of such resolution or the total range of potential changes as it relates to the current unrecognized tax benefits that are recorded as part of the Company’s financial statements.

On July 8, 2022, House Bill 1342 was signed into law in the Commonwealth of Pennsylvania, making significant changes to the corporate income tax rate. The bill reduces the corporate income tax rate from 9.99% to 4.99% with reductions occurring in phases beginning each tax year from January 1, 2023 through January 1, 2031. U.S. GAAP requires companies to recognize the effect of tax law changes in the period of enactment. ~~Management~~The Company is ~~still~~currently evaluating the ~~impact~~enactment of this ~~rate change~~law but does not expect itthe impact on its consolidated financial statements and related disclosures to be material.

On August 16, 2022, President Biden signed into law H.R. 5376, commonly referred to as the Inflation Reduction Act of 2022 (IRA). IRA introduces a new 15% corporate alternative minimum tax as well as a 1% excise tax on repurchases of stock by certain publicly traded corporations. Both of these provisions begin for tax years beginning after December 31, 2022. The Company is currently evaluating the enactment of IRA but does not expect the impact on its consolidated financial statements and related disclosures to be material.

Note 11. Commitments and Contingencies

In the ordinary course of business, the Company from time to time enters into contracts containing indemnification obligations of the Company. These obligations may require the Company to make payments to another party upon the occurrence of certain events including the failure by the Company to meet its performance obligations under the contract. These contractual indemnification provisions are often standard contractual terms of the nature customarily found in the type of contracts entered into by the Company. In many cases, there are no stated or notional amounts included in the indemnification provisions. There are no amounts reflected on the Consolidated Balance Sheets as of ~~June~~September 30, 2022 and December 31, 2021 related to these indemnifications.

Stanford Trust Company Litigation

There has been no material change to the status of the litigations related to the Stanford Trust Company matters or the Company’s expectations with respect to such matters as previously reported in the Company’s quarterly report on Form 10-Q as filed with the Commission on April 25, 2022.

SS&C Advent ~~Litigation~~Matter

On February 28, 2020, SEI Global Services, Inc. (SGSI), a wholly-owned subsidiary of the Company, filed a complaint under seal in the United States District Court for the Eastern District of Pennsylvania against SS&C Advent (Advent) and SS&C Technologies Holdings, Inc. (SS&C) alleging that SS&C and Advent breached the terms of the contract between the parties and asking the Court to hold SS&C and Advent to their bargained-for obligations (the Advent Matter). In addition to Breach of Contract, the complaint also ~~includes~~included counts for Declaratory Judgment, Tortious Interference with Existing and Prospective Contractual Relations, Violation of the New York General Business Law Section 349, Violations of Section 2 of the Sherman Antitrust Act, Promissory Estoppel and Breach of the Covenant of Good Faith and Fair Dealing. SGSI ~~seeks~~sought various forms of relief, including declaratory judgment, specific performance under the contract, and monetary damages, including punitive damages, treble damages and attorney’s fees.

~~Following various procedural actions, including an amendment of SGSI’s complaint to include additional breach of contract claims, Advent filed a motion to dismiss SGSI’s complaint.~~

On October 23, 2020, the ~~United States District Court for the Eastern District of Pennsylvania~~federal court dismissed SEI’s federal antitrust claims ~~and~~but declined to rule on the state law ~~claims on the basis that in the absence of the anti-trust claim, the court had no jurisdiction over the state law~~ claims. SGSI ~~has~~ appealed the dismissal of the federal anti-trust claims to the Third Circuit Court of Appeals. On June 30, 2022, the Third Circuit Court of Appeals issued an order denying SGSI’s appeal of the District Court’s ruling.

~~Since~~Beginning in October 23, 2020, Advent and SGSI ~~have been litigating~~litigated the remaining breach of contract, breach of the implied duty of good faith and fair dealing, and tortious interference with contract claims in New York State Court. ~~Additionally, SGSI made motions for injunctive relief~~New York State Court rulings during the litigation of the Advent Matter affirmed the validity and enforceability of SGSI’s perpetual license to ~~insure that~~Advent’s Geneva software.

On September 26, 2022, the parties entered into a confidential settlement agreement of the outstanding issues being litigated in the Advent ~~provided SGSI with access to the Geneva, Moxy and APX software modules as SGSI believes is required pursuant to the terms of a valid contract.~~ Matter.

On ~~January 13, 2021,~~October 3, 2022, Judge Borrok of the ~~Supreme Court of the State of~~ New York ~~granted SGSI’s motion for injunctive relief and~~State Court issued an Order in which he characterized the basis for Advent’s claim for breach of contract as appearing to be “pre-textual” and found that SGSI’s claims for breach of contract would likely succeed on the merits. Judge Borrok granted SGSI’s motion for injunctive relief, on a preliminary basis, and precluded SS&C Advent from:

•~~Dishonoring their contractual obligations and commitments under the SLSA, including, denying SEI’s licenses, rights, and privileges under the SLSA;~~

• Failing to provide new license keys for the license keys due to Geneva, Moxy, and APX, and other software products licensed by SEI pursuant to the SLSA (such new license keys to be provided no later than January 15, 2021 at 10 A.M.);

~~• Denying to SEI any and all access to the Geneva, Moxy, and APX software and related modules as are reasonably necessary to provide access to such software to SEI’s clients; and~~

~~• Denying to SEI any and all support, maintenance and technical support services for Geneva, Moxy, and APX.~~

Pursuant to the Court's injunction order, SS&C Advent provided SEI with the necessary access to the Geneva, Moxy and APX software modules on January 14, 2021. These were tested, verified and are now running in the SEI production environment.

On January 15, 2021, SS&C Advent appealed Judge Borrok’s order granting SEI’s motion for preliminary injunctive relief to the Appellate Division of the Supreme Court of the State of New York, First Department. The Appellate Division unanimously affirmed the injunction order on June 15, 2021.

~~On March 1, 2021, SS&C Advent moved to dismiss SGSI’s breach of contract and tortious interference with contract counter claims. These counter-claims were:~~

1.~~breach of contract;~~

2.~~declaratory judgment;~~

3.~~tortious interference with existing and prospective contractual relations;~~

4.~~deceptive trade practices in violation of New York Statutes;~~

5.~~breach of the covenant of good faith and fair dealing; and~~

6.~~promissory estoppel.~~

The parties agreed to toll the litigation while endeavoring to resolve their dispute through a settlement mediation process moderated by Judge Borrok. The parties were unable to reach an agreement as to a settlement of the litigation and reengaged in the litigation process.

On October 5, 2021, Judge Borrok issued an order partially denying and partially granting SS&C Advent’s motion to dismiss SGSI’s breach of contract and tortious interference with contract counter claims.

~~Judge Borrok dismissed the third claim with respect to prospective contractual relationships only, as well as the fourth claim and the sixth claim. The remaining claims directed to proceed were:~~

1.~~breach of contract;~~

2.~~declaratory judgment;~~

3.~~tortious interference with existing a contractual relations; and~~

4.~~breach of the covenant of good faith and fair dealing.~~

On December 1, 2021, SGSI filed a motion for partial summary judgment in the New York state court action. This motion applies to Count I of SS&C Advent’s complaint (SS&C Advent’s request for a declaratory judgment that its termination of the SGSI license agreements was proper); and Counts I and II of SGSI’s counterclaims (SGSI’s request for a declaratory judgment that SS&C Advent’s termination of the contract was improper because the licenses are perpetual unless SGSI chooses to not renew them or breaches the terms). SS&C Advent filed a cross-motion for summary judgment for a declaration that it was entitled to not renew SGSI's contracts. It also argued that if SGSI prevailed on its breach of contract claims, then its breach of implied duty of good faith and fair dealing claim must be dismissed in turn.

~~On December 31, 2021, SGSI received the license key for another year of access to the product. This ensures SGSI access to Advent and Moxy through January 31, 2023.~~

On April 15, 2022, Judge Borrok held a hearing on SGSI’s motion for partial summary judgement and issued an order on the same day granting SGSI's motion in its entirety and denying SS&C Advent's cross motion. Specifically, the Court:

1.~~Rejected SS&C Advent's argument that the license is not perpetual;~~

2.~~Determined that SS&C Advent's purported termination was "pretextual" and breached the parties' contract;~~

3.~~Determined that SS&C Advent's attempt to not renew breached the parties' contracts because "Advent did not have the right not to renew," after~~ dismissing ~~SS&C Advent's argument that it shared the same nonrenewal rights as SGSI as a "false narrative;" and~~

4.~~Rejected SS&C Advent's second attempt to dismiss SGSI's breach of implied duty of good faith and fair dealing claim.~~

SEI continues to believe that it will not have to change providers under the current terms of its contract with SS&C Advent and that the process of litigating its rights under this contract may be a multi-year process.

~~SEI believes SGSI has a strong basis for proving the actions it alleges in~~ the Advent Matter ~~and looks forward to~~in connection with the opportunity to pursue its remaining tort and breach of implied covenant and good faith and fair dealing claims continue to assert all of its rights in tort and under the contract and prove the damages that it has suffered as a consequence of the behavior by SS&C Advent that SGSI alleges. SEI expects the financial impact of litigating the Advent Matter to be immaterial.settlement agreement.

Other Matters

The Company and certain of its subsidiaries are party to various other examinations, investigations, actions and claims arising in the normal course of business that the Company does not believe are material. The Company believes that the ultimate resolution of these matters will not have a material adverse effect on the Company's financial position or the manner in which the Company conducts its business. Currently, the Company does not believe the amount of losses associated with these matters can be estimated. While the Company does not believe that the amount of such losses will,

when liquidated or estimable, be material to its financial position, the assumptions may be incorrect and any such loss could have a material adverse effect on the Company's results of operations or the manner in which the Company conducts its business in the period(s) during which the underlying matters are resolved.

Note 12. Goodwill and Intangible Assets

The changes in the carrying amount of the Company's goodwill by segment are as follows:


		Institutional Investors				Investment Managers		Investments in New Businesses				Total					Institutional Investors				Investment Managers		Investments in New Businesses		Total

Balance, December 31, 2021	Balance, December 31, 2021			$	48,911					$	56,822				$	11,499			$	117,232		Balance, December 31, 2021	$	48,911	$	56,822	$	11,499	$	117,232
Measurement period adjustments	Measurement period adjustments	(11)				211		—				200		Measurement period adjustments			103				216		—		319
Foreign currency translation adjustments	Foreign currency translation adjustments	—				(27)		—				(27)		Foreign currency translation adjustments			—				(42)		—		(42)
Balance, June 30, 2022		$	48,900			$	57,006	$	11,499			$	117,405
Balance, September 30, 2022														Balance, September 30, 2022			$	49,014			$	56,996	$	11,499	$	117,509

In October 2021, the Company acquired all ownership interests of Finomial Corporation (Finomial). The excess purchase price over the estimated value of the net tangible and identifiable intangible assets was allocated to goodwill. The total amount of goodwill from this transaction amounted to $4,036 and is included in the accompanying Consolidated Balance Sheets.

In November 2021, the Company acquired all ownership interests of Novus Partners (Novus). The excess purchase price over the estimated value of the net tangible and identifiable intangible assets was allocated to goodwill. The total amount of goodwill from this transaction amounted to $48,911 and is included in the accompanying Consolidated Balance Sheets.

In addition to the intangible assets acquired through the acquisitions of Finomial and Novus, during 2021, the Company also acquired intangible assets through the purchase of a technology platform providing digital collaboration tools for financial advisors and the purchase of the Atlas Master Trust, a defined contribution master trust in the United Kingdom.

In April 2018, the Company acquired all ownership interests of Huntington Steele, LLC (Huntington Steele). The total purchase price was allocated to Huntington Steele’s net tangible and intangible assets based upon their estimated fair values at the date of purchase. The excess purchase price over the value of the identifiable intangible assets was recorded as goodwill. The total amount of goodwill from this transaction amounted to $11,499 and is included on the accompanying Consolidated Balance Sheets. The total purchase price for Huntington Steele included a contingent purchase price payable to the sellers upon the attainment of specified financial measures determined at various intervals occurring between 2019 and 2023. The Company made payments of $868 and $3,965 during the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively, to the sellers. As of ~~June~~September 30, 2022, the remaining amount of the contingent consideration of ~~$9,166~~$9,271 is included in Accrued liabilities on the accompanying Balance Sheet.

The Company recognized ~~$6,496~~$9,534 and ~~$2,117~~$3,312 of amortization expense related to the intangible assets acquired ~~through acquisitions~~ during the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively.

Note 13. Revenues from Contracts with Customers

The Company’s principal sources of revenues are: (1) asset management, administration and distribution fees primarily earned based upon a contractual percentage of net assets under management or administration; and (2) information processing and software servicing fees that are either recurring and primarily earned based upon the number of trust accounts being serviced or a percentage of the market value of the clients' assets processed on the Company's platforms, or non-recurring and based upon project-oriented contractual agreements related to client implementations.

Disaggregation of Revenue

The following tables provide additional information pertaining to our revenues disaggregated by major product line and primary geographic market based on the location of the use of the products or services for each of the business segments for the three months ended ~~June~~September 30, 2022 and 2021:


	Private Banks		Investment Advisors		Institutional Investors		Investment Managers		Investments In New Businesses		Total
Major Product Lines:	For the Three Months Ended September 30, 2022
Investment management fees from pooled investment products	$	30,002	$	63,688	$	12,928	$	81	$	367	$	107,066
Investment management fees from investment management agreements	633		39,915		60,887		—		3,992		105,427
Investment operations fees	336		—		—		144,181		—		144,517
Investment processing fees - PaaS	57,818		—		—		—		—		57,818
Investment processing fees - SaaS	29,855		—		2,650		3,963		—		36,468
Professional services fees	3,195		—		—		798		—		3,993
Account fees and other	821		5,962		1,795		6,992		475		16,045
Total revenues	$	122,660	$	109,565	$	78,260	$	156,015	$	4,834	$	471,334

Primary Geographic Markets:
United States	$	81,628	$	109,565	$	65,571	$	141,928	$	4,834	$	403,526
United Kingdom	27,186		—		9,729		—		—		36,915
Canada	10,495		—		1,357		—		—		11,852
Ireland	3,351		—		1,570		9,580		—		14,501
Luxembourg	—		—		—		4,507		—		4,507
Other	—		—		33		—		—		33
Total revenues	$	122,660	$	109,565	$	78,260	$	156,015	$	4,834	$	471,334

Private
Banks
Investment
Advisors Institutional
Investors Investment
Managers Investments
In New
Businesses Total
Major Product Lines: For the Three Months Ended June 30, 2022
Investment management fees from pooled investment products $ 31,993 $ 67,490 $ 15,700 $ 123 $ 402 $ 115,708
Investment management fees from investment management agreements 616 40,398 63,212 — 4,073 108,299
Investment operations fees 344 — — 144,742 — 145,086
Investment processing fees - PaaS 56,378 — — — — 56,378
Investment processing fees - SaaS 29,845 — 3,021 3,911 — 36,777
Professional services fees 4,096 — — 635 — 4,731
Account fees and other 912 5,306 1,550 6,515 408 14,691
Total revenues $ 124,184 $ 113,194 $ 83,483 $ 155,926 $ 4,883 $ 481,670
Primary Geographic Markets:
United States $ 96,115 $ 113,194 $ 68,702 $ 142,350 $ 4,883 $ 425,244
United Kingdom 13,036 — 11,283 — — 24,319
Canada 11,023 — 1,424 — — 12,447
Ireland 4,010 — 1,963 9,416 — 15,389
Luxembourg — — — 4,160 — 4,160
Other — — 111 — — 111
Total revenues $ 124,184 $ 113,194 $ 83,483 $ 155,926 $ 4,883 $ 481,670


		Private Banks		Investment Advisors		Institutional Investors		Investment Managers		Investments In New Businesses		Total			Private Banks		Investment Advisors		Institutional Investors		Investment Managers		Investments In New Businesses		Total
Major Product Lines:	Major Product Lines:	For the Three Months Ended June 30, 2021												Major Product Lines:	For the Three Months Ended September 30, 2021
Investment management fees from pooled investment products	Investment management fees from pooled investment products	$	33,708	$	75,039	$	13,638	$	14	$	326	$	122,725	Investment management fees from pooled investment products	$	34,212	$	77,123	$	13,639	$	32	$	338	$	125,344
Investment management fees from investment management agreements	Investment management fees from investment management agreements	603		38,345		71,342		—		3,561		113,851		Investment management fees from investment management agreements	605		41,688		71,964		—		3,864		118,121
Investment operations fees	Investment operations fees	402		—		—		132,262		—		132,664		Investment operations fees	363		—		—		136,978		—		137,341
Investment processing fees - PaaS	Investment processing fees - PaaS	55,746		—		—		—		—		55,746		Investment processing fees - PaaS	54,191		—		—		—		—		54,191
Investment processing fees - SaaS	Investment processing fees - SaaS	28,442		—		—		3,855		—		32,297		Investment processing fees - SaaS	28,579		—		—		3,848		—		32,427
Professional services fees	Professional services fees	3,928		—		—		867		—		4,795		Professional services fees	4,174		—		—		871		—		5,045
Account fees and other	Account fees and other	847		6,012		719		5,810		185		13,573		Account fees and other	894		5,957		156		5,683		163		12,853
Total revenues	Total revenues	$	123,676	$	119,396	$	85,699	$	142,808	$	4,072	$	475,651	Total revenues	$	123,018	$	124,768	$	85,759	$	147,412	$	4,365	$	485,322

Primary Geographic Markets:	Primary Geographic Markets:													Primary Geographic Markets:
United States	United States	$	78,848	$	119,396	$	67,792	$	132,648	$	4,072	$	402,756	United States	$	77,260	$	124,768	$	68,810	$	136,934	$	4,365	$	412,137
United Kingdom	United Kingdom	28,082		—		14,035		—		—		42,117		United Kingdom	28,767		—		13,327		—		—		42,094
Canada	Canada	12,152		—		1,198		—		—		13,350		Canada	12,343		—		926		—		—		13,269
Ireland	Ireland	4,594		—		2,546		10,160		—		17,300		Ireland	4,648		—		2,570		10,478		—		17,696
Other	Other	—		—		128		—		—		128		Other	—		—		126		—		—		126
Total revenues	Total revenues	$	123,676	$	119,396	$	85,699	$	142,808	$	4,072	$	475,651	Total revenues	$	123,018	$	124,768	$	85,759	$	147,412	$	4,365	$	485,322

The following tables provide additional information pertaining to our revenues disaggregated by major product line and primary geographic market based on the location of the use of the products or services for each of the Company’s business segments for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021:


	Private Banks		Investment Advisors		Institutional Investors		Investment Managers		Investments In New Businesses		Total
Major Product Lines:	For the Nine Months Ended September 30, 2022
Investment management fees from pooled investment products	$	95,113	$	203,171	$	42,494	$	288	$	1,136	$	342,202
Investment management fees from investment management agreements	1,504		122,321		192,559		—		12,191		328,575
Investment operations fees	1,040		—		—		434,302		—		435,342
Investment processing fees - PaaS	170,651		—		—		—		—		170,651
Investment processing fees - SaaS	89,259		—		8,781		11,532		—		109,572
Professional services fees (1)	100,020		—		—		1,822		—		101,842
Account fees and other	2,805		16,497		4,748		20,898		1,315		46,263
Total revenues	$	460,392	$	341,989	$	248,582	$	468,842	$	14,642	$	1,534,447

Primary Geographic Markets:
United States	$	244,472	$	341,989	$	204,836	$	428,303	$	14,642	$	1,234,242
United Kingdom	171,042		—		33,761		—		—		204,803
Canada	33,318		—		4,023		—		—		37,341
Ireland	11,560		—		5,700		28,818		—		46,078
Luxembourg	—		—		—		11,721		—		11,721
Other	—		—		262		—		—		262
Total revenues	$	460,392	$	341,989	$	248,582	$	468,842	$	14,642	$	1,534,447

Private
Banks Investment
Advisors Institutional
Investors Investment
Managers Investments
In New
Businesses Total
Major Product Lines: For the Six Months Ended June 30, 2022
Investment management fees from pooled investment products $ 65,111 $ 139,483 $ 29,566 $ 207 $ 769 $ 235,136
Investment management fees from investment management agreements 871 82,406 131,672 — 8,199 223,148
Investment operations fees 704 — — 290,121 — 290,825
Investment processing fees - PaaS 112,833 — — — — 112,833
Investment processing fees - SaaS 59,404 — 6,131 7,569 — 73,104
Professional services fees (1) 96,825 — — 1,024 — 97,849
Account fees and other 1,984 10,535 2,953 13,906 840 30,218
Total revenues $ 337,732 $ 232,424 $ 170,322 $ 312,827 $ 9,808 $ 1,063,113
Primary Geographic Markets:
United States $ 177,001 $ 232,424 $ 139,265 $ 286,375 $ 9,808 $ 844,873
United Kingdom 129,699 — 24,032 — — 153,731
Canada 22,823 — 2,666 — — 25,489
Ireland 8,209 — 4,130 19,238 — 31,577
Luxembourg — — — 7,214 — 7,214
Other — — 229 — — 229
Total revenues $ 337,732 $ 232,424 $ 170,322 $ 312,827 $ 9,808 $ 1,063,113

(1) Professional services fees of the Private Banks segment includes one-time early termination fees of $88,000 related to a contractual agreement with a significant client of the Company. In accordance with Accounting Standards Codification 606, the entire amount of the fees received were recorded during the three months ended March 31, 2022 as there were no future performance obligations of the Company related to the agreement upon termination.


		Private Banks		Investment Advisors		Institutional Investors		Investment Managers		Investments In New Businesses		Total			Private Banks		Investment Advisors		Institutional Investors		Investment Managers		Investments In New Businesses		Total
Major Product Lines:	Major Product Lines:	For the Six Months Ended June 30, 2021												Major Product Lines:	For the Nine Months Ended September 30, 2021
Investment management fees from pooled investment products	Investment management fees from pooled investment products	$	66,272	$	147,693	$	27,726	$	73	$	655	$	242,419	Investment management fees from pooled investment products	$	100,484	$	224,816	$	41,365	$	105	$	993	$	367,763
Investment management fees from investment management agreements	Investment management fees from investment management agreements	1,076		73,059		141,285		—		6,947		222,367		Investment management fees from investment management agreements	1,681		114,747		213,249		—		10,811		340,488
Investment operations fees	Investment operations fees	771		—		—		257,423		—		258,194		Investment operations fees	1,134		—		—		394,401		—		395,535
Investment processing fees - PaaS	Investment processing fees - PaaS	106,622		—		—		—		—		106,622		Investment processing fees - PaaS	160,813		—		—		—		—		160,813
Investment processing fees - SaaS	Investment processing fees - SaaS	56,252		—		—		7,561		—		63,813		Investment processing fees - SaaS	84,831		—		—		11,409		—		96,240
Professional services fees	Professional services fees	8,335		—		—		2,014		—		10,349		Professional services fees	12,509		—		—		2,885		—		15,394
Account fees and other	Account fees and other	1,956		11,938		1,187		12,156		336		27,573		Account fees and other	2,850		17,895		1,343		17,839		499		40,426
Total revenues	Total revenues	$	241,284	$	232,690	$	170,198	$	279,227	$	7,938	$	931,337	Total revenues	$	364,302	$	357,458	$	255,957	$	426,639	$	12,303	$	1,416,659

Primary Geographic Markets:	Primary Geographic Markets:													Primary Geographic Markets:
United States	United States	$	153,943	$	232,690	$	134,512	$	259,664	$	7,938	$	788,747	United States	$	231,203	$	357,458	$	203,322	$	396,598	$	12,303	$	1,200,884
United Kingdom	United Kingdom	54,747		—		27,764		—		—		82,511		United Kingdom	83,514		—		41,091		—		—		124,605
Canada	Canada	23,634		—		2,500		—		—		26,134		Canada	35,977		—		3,426		—		—		39,403
Ireland	Ireland	8,960		—		5,165		19,563		—		33,688		Ireland	13,608		—		7,735		30,041		—		51,384
Other	Other	—		—		257		—		—		257		Other	—		—		383		—		—		383
Total revenues	Total revenues	$	241,284	$	232,690	$	170,198	$	279,227	$	7,938	$	931,337	Total revenues	$	364,302	$	357,458	$	255,957	$	426,639	$	12,303	$	1,416,659

Investment management fees from pooled investment products - Revenues associated with clients' assets invested in Company-sponsored pooled investment products. Contractual fees are stated as a percentage of the market value of assets under management and collected on a monthly basis. Revenues are recognized in Asset management, administration and distribution fees on the accompanying Consolidated Statements of Operations.

Investment management fees from investment management agreements - Revenues based on assets of clients of the Institutional Investors segment primarily invested in Company-sponsored products. Each client is charged an investment management fee that is stated as a percentage of the market value of all assets under management. The client is billed directly on a quarterly basis. Revenues are recognized in Asset management, administration and distribution fees on the accompanying Consolidated Statements of Operations.

Revenues associated with the separately managed account program offered through registered investment advisors located throughout the United States. The contractual fee is stated as a percentage of the market value of all assets invested in the separately managed account and collected on a quarterly basis. Revenues are recognized in Asset management, administration and distribution fees on the accompanying Consolidated Statements of Operations.

Investment operations fees - Revenues earned from accounting and administrative services, distribution support services and regulatory and compliance services to investment management firms and family offices. The Company contracts directly with the investment management firm or family office. The contractual fees are stated as a percentage of net assets under administration and billed when asset valuations are finalized. Revenues are recognized in Asset management, administration and distribution fees on the accompanying Consolidated Statements of Operations.

Investment processing fees - Platform as a Service - Revenues associated with clients that outsource their entire investment operation and back-office processing functions. Through the use of the Company's proprietary platforms, the Company assumes all back-office investment processing services including investment processing, custody and safekeeping of assets, income collections, securities settlement and other related trust activities. The contractual fee is based on a monthly fee plus additional fees determined on a per-account or per-transaction basis. Contractual fees can also be stated as a percentage of the value of assets processed on the Company's platforms each month as long as the

fee is in excess of a monthly contractual minimum. The client is billed directly on a monthly basis. Revenues are recognized in Information processing and software servicing fees on the accompanying Consolidated Statements of Operations.

Investment processing fees - Software as a Service - Revenues associated with clients of the Private Banks segment that outsource investment processing technology software and computer processing by accessing the Company's proprietary software and data center remotely but retain responsibility for all investment operations, client administration and other back-office trust operations. The contractual fee is based on a monthly fee plus additional fees determined on a per-account or per-transaction basis. The client is billed directly on a monthly basis.

Revenues associated with portfolio intelligence and workflow solutions offered to clients of the Institutional Investors segment and revenues associated with technology and outsourced services that support the accounting, investment management, and reporting functions for family offices and their service providers offered to clients of the Investment Managers segment. The contractual fee is primarily based on an annual fixed fee for software licenses and data management services. The client is billed in advance with various billing terms. Revenue recorded in advance of the performance of services is deferred and recognized when earned. Revenues are recognized in Information processing and software servicing fees on the accompanying Consolidated Statements of Operations.

Professional services fees - Revenues associated with the business services migration for investment processing clients of the Private Banks segment and investment operations clients of the Investment Managers segment. In addition, Professional services include other services such as business transformation consulting. Typically, fees are stated as a contractual fixed fee. The client is billed directly and fees are collected according to the terms of the agreement.

Account fees and other - Revenues associated with custody account servicing, account terminations, reimbursements received for out-of-pocket expenses, and other fees for the provision of ancillary services.

Note 14. Voluntary Separation Program

The Company initiated a Voluntary Separation Program (VSP) to long-tenured employees which was finalized in ~~June~~July 2022. ~~The VSP is a program designed to enhance talent attraction and development to drive future growth.~~ The VSP was offered to long-tenured employees as part of its commitment to professional development and expanded responsibilities for current and new employees by increasing advancement opportunities.

The VSP was made available to employees in the United States who met the long-term tenure requirements and includes a severance package and the continuation of certain benefits based upon years of service. The severance package also includes allowances related to the vesting of certain stock option awards during the remainder of 2022 and the period in which the employee may exercise vested stock options after the termination of employment. These allowances ~~will be~~are considered modifications to the Company's equity compensation plans.

~~Separation agreements with employees who are accepted to participate in the VSP are expected to be completed in July 2022.~~ The ~~vast~~ majority of the accepted employees are ~~anticipated~~scheduled to finish their employment during the first quarter 2023. All employees accepted into the program are scheduled to finish their employment before the end of ~~2022.~~2023. The expected departure dates for participating employees may be adjusted based on management’s determination of how best to ensure a smooth and successful transition of responsibilities. ~~The~~In accordance with accounting guidance, the Company ~~expects~~is required to recognize all costs related to termination salary and benefits under the VSP in the period in which the participating employees are irrevocably accepted into the program and the amount is reasonably estimated. As a ~~one-time increase between $54,000 and $58,000~~result, the Company recognized $56,996 in net personnel costs associated with the VSP during the ~~third quarter~~three months ended September 30, 2022. These personnel costs include stock-based compensation expense from modifications to the Company's equity compensation plans related to the vesting of stock options awarded to employees participating in the VSP net of options forfeited (See Note 7).

2827

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

(In thousands, except asset balances and per share data)

This discussion reviews and analyzes the consolidated financial condition, the consolidated results of operations and other key factors that may affect future performance. This discussion should be read in conjunction with the Consolidated Financial Statements, the Notes to the Consolidated Financial Statements and the Annual Report on Form 10-K for the year ended December 31, 2021.

Overview

Consolidated Summary

SEI is a leading global provider of technology-driven wealth and investment management solutions. We deliver comprehensive platforms, services and infrastructure–encompassing technology, operational, and investment management services–to help wealth managers, financial advisors, investment managers, family offices, institutional and private investors create and manage wealth. Investment processing fees are earned as either monthly fees for contracted services or as a percentage of the market value of our clients' assets processed on our platforms. Investment operations and investment management fees are earned as a percentage of assets under management, administration or advised assets. As of ~~June~~September 30, 2022, through our subsidiaries and partnerships in which we have a significant interest, we manage, advise or administer ~~$1.3~~$1.2 trillion in hedge, private equity, mutual fund and pooled or separately managed assets, including ~~$403.6~~$378.2 billion in assets under management and ~~$889.0~~$785.4 billion in client assets under administration. Our affiliate, LSV Asset Management (LSV), manages ~~$81.9~~$75.4 billion of assets which are included as assets under management.

Condensed Consolidated Statements of Operations for the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021 were:


		Three Months Ended June 30,				Percent Change*		Six Months Ended June 30,									Percent Change*		Three Months Ended September 30,								Percent Change*		Nine Months Ended September 30,				Percent Change*
		2022		2021			2022			2021						2022				2021					2022				2021
Revenues	Revenues	$	481,670	$	475,651		1%			$	1,063,113			$	931,337				14%		Revenues	$	471,334			$		485,322	(3)%		$	1,534,447	$	1,416,659	8%
Expenses	Expenses	365,810		339,630		8%		732,454				662,479					11%	Expenses	420,288				344,197				22%		1,152,742		1,006,676		15%
Income from operations	Income from operations	115,860		136,021		(15)%		330,659				268,858					23%	Income from operations	51,046				141,125				(64)%		381,705		409,983		(7)%
Net (loss) gain from investments	Net (loss) gain from investments	(2,620)		377		NM		(3,109)				709					NM	Net (loss) gain from investments	(1,406)				(575)				NM		(4,515)		134		NM
Interest income, net of interest expense	Interest income, net of interest expense	1,642		748		120%		2,240				1,570					43%	Interest income, net of interest expense	3,819				791				383%		6,059		2,361		157%
Equity in earnings from unconsolidated affiliate	Equity in earnings from unconsolidated affiliate	29,813		35,065		(15)%		62,272				68,415					(9)%	Equity in earnings from unconsolidated affiliate	26,654				35,005				(24)%		88,926		103,420		(14)%
Income before income taxes	Income before income taxes	144,695		172,211		(16)%		392,062				339,552					15%	Income before income taxes	80,113				176,346				(55)%		472,175		515,898		(8)%
Income taxes	Income taxes	33,419		38,433		(13)%		90,478				76,304					19%	Income taxes	18,454				38,301				(52)%		108,932		114,605		(5)%
Net income	Net income	111,276		133,778		(17)%		301,584				263,248					15%	Net income	61,659				138,045				(55)%		363,243		401,293		(9)%
Diluted earnings per common share	Diluted earnings per common share	$	0.81	$	0.93	(13)%		$	2.17			$	1.82				19%	Diluted earnings per common share	$	0.45			$	0.97			(54)%		$	2.63	$	2.79	(6)%

* Variances noted "NM" indicate the percent change is not meaningful.

The following items had a significant impact on our financial results for the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021:

•Revenue growth in the first nine months of 2022 was primarily driven by higher Information processing and software servicing fees from early termination fees of $88.0 million recorded during the first quarter 2022 and new client conversions.

•Revenue from Asset management, administration and distribution fees increased slightly in the first nine months of 2022 from higher average assets under administration from market appreciation during 2021 and positive cash flows from new and existing clients despite the significant decline in market conditions in ~~2022.~~2022, most notably in the third quarter. Average assets under administration decreased $69.1 billion, or 8%, to $786.6 billion in the third quarter of 2022 as compared to $855.7 billion during the third quarter of 2021. Average assets under administration increased ~~$55.5~~$14.0 billion, or 7%2%, to ~~$895.4~~$859.2 billion in the first ~~six~~nine months of 2022 as compared to ~~$839.9~~$845.2 billion during the first ~~six~~nine months of 2021.

•Revenue from Asset management, administration and distribution fees ~~were~~was negatively impacted byfrom the loss of a ~~shift~~significant client of ~~our average assets under management into lower fee products.~~the Investment Advisors segment. Average assets under management, excluding LSV, increased ~~$21.0~~$21.1 billion, or 7%, to ~~$307.9~~$312.4 billion in the first ~~six~~nine months of 2022 as compared to ~~$286.9~~$291.3 billion during the first ~~six~~nine months of 2021.

•

A significant investment processing client of the Private Banks segment terminated an agreement for convenience during the first quarter 2022. As a result, we recorded one-time early termination fees of $88.0 million. The early termination fee is included in Information processing and software servicing fees on the accompanying Consolidated Statements of Operations.

•Revenues from our acquisitions of SEI Novus and Atlas Master Trust were ~~$6.1~~$8.7 million and ~~$2.5~~$3.7 million, respectively, during the first ~~six~~nine months of 2022. SEI Novus and Atlas Master Trust were acquired during the fourth quarter of 2021 and are reported in the Institutional Investors segment (See Note 12 to the Consolidated Financial Statements).

•Earnings from LSV decreased to ~~$62.3~~$88.9 million in the first ~~six~~nine months of 2022 as compared to ~~$68.4~~$103.4 million in the first ~~six~~nine months of 2021 due to negative cash flows from existing clients, market depreciation and client losses.

•Operating expenses also increased ~~primarily~~ from higher personnel and consulting costs due to business growth and competitive labor markets. ~~The~~Operational expenses also increased due to personnel costs and investments in compliance infrastructure to meet new regulatory requirements.The increase was partially offset by lower direct costs related to asset management ~~revenues.~~revenues and lower amortization expense.

•We initiated a Voluntary Separation Program (VSP) to long-tenured employees as part of our commitment to professional development and expanded responsibilities for current and new employees by increasing advancement opportunities. We recognized one-time costs of $57.0 million during the third quarter 2022 from the program. These costs are primarily included in Compensation, benefits and other personnel costs on the accompanying Consolidated Statements of Operations (See Note 14 to the Consolidated Financial Statements).

•The Institutional Investors segment includes personnel, professional fees, amortization and other costs related to SEI Novus and Atlas Master Trust. These expenses are primarily included in Compensation, benefits and other personnel costs, Consulting, outsourcing and professional fees, and Amortization on the accompanying Consolidated Statements of Operations.

•We capitalized ~~$12.7~~$19.5 million in the first ~~six~~nine months of 2022 for the SEI Wealth Platform as compared to ~~$12.2~~$19.4 million in the first ~~six~~nine months of 2021. Amortization expense related to SWP was ~~$23.9~~$29.7 million during the first ~~six~~nine months of 2022 ~~and~~as compared to $35.8 million during the first nine months of 2021. The decline in amortization expense was due to the amortization period of the initial development costs related to SWP which ended during the second quarter 2022 (See the caption "Capitalized software development costs" later in this discussion for more information).

•We continued the stock repurchase program during 2022 and purchased ~~3.7~~4.6 million shares for ~~$209.4~~$258.8 million in the ~~six~~nine month period.

~~Introduction of Voluntary Separation Program~~

In June 2022, we initiated an enhanced voluntary separation program to long-tenured employees as part of our commitment to professional development and expanded responsibilities for current and new employees by increasing advancement opportunities. The program was offered to employees in the United States who met the long-term tenure requirements and includes a severance package and the continuation of certain benefits. We expect a one-time increase between $54.0 million and $58.0 million in personnel costs associated with the program during the third quarter 2022 (See Note 14 to the Consolidated Financial Statements).

3029

Ending Asset Balances

(In millions)


		As of June 30,				Percent Change		As of September 30,				Percent Change
		2022		2021				2022		2021
Private Banks:	Private Banks:						Private Banks:
Equity and fixed-income programs	Equity and fixed-income programs	$	22,277	$	26,264	(15)%	Equity and fixed-income programs	$	20,131	$	25,618	(21)%
Collective trust fund programs	Collective trust fund programs	7		7		—%	Collective trust fund programs	7		6		17%
Liquidity funds	Liquidity funds	3,666		3,654		—%	Liquidity funds	3,778		3,988		(5)%
Total assets under management	Total assets under management	$	25,950	$	29,925	(13)%	Total assets under management	$	23,916	$	29,612	(19)%
Client assets under administration	Client assets under administration	3,923		4,412		(11)%	Client assets under administration	4,161		4,675		(11)%
Total assets	Total assets	$	29,873	$	34,337	(13)%	Total assets	$	28,077	$	34,287	(18)%
Investment Advisors:	Investment Advisors:						Investment Advisors:
Equity and fixed-income programs	Equity and fixed-income programs	$	65,783	$	78,053	(16)%	Equity and fixed-income programs	$	62,579	$	78,560	(20)%
Liquidity funds	Liquidity funds	8,292		3,550		134%	Liquidity funds	5,200		3,477		50%
Total Platform assets under management	Total Platform assets under management	$	74,075	$	81,603	(9)%	Total Platform assets under management	$	67,779	$	82,037	(17)%
Platform-only assets ~~(E)~~	Platform-only assets ~~(E)~~	12,642		13,566		(7)%	Platform-only assets ~~(E)~~	12,609		13,728		(8)%
Total Platform assets ~~(E)~~	Total Platform assets ~~(E)~~	$	86,717	$	95,169	(9)%	Total Platform assets ~~(E)~~	$	80,388	$	95,765	(16)%
Institutional Investors:	Institutional Investors:						Institutional Investors:
Equity and fixed-income programs	Equity and fixed-income programs	$	75,506	$	93,010	(19)%	Equity and fixed-income programs	$	69,621	$	89,441	(22)%
Collective trust fund programs	Collective trust fund programs	5		5		—%	Collective trust fund programs	6		5		20%
Liquidity funds	Liquidity funds	1,654		2,516		(34)%	Liquidity funds	1,640		2,599		(37)%
Total assets under management	Total assets under management	$	77,165	$	95,531	(19)%	Total assets under management	$	71,267	$	92,045	(23)%
Client assets under advisement	Client assets under advisement	4,218		4,566		(8)%	Client assets under advisement	4,204		4,698		(11)%
Total assets	Total assets	$	81,383	$	100,097	(19)%	Total assets	$	75,471	$	96,743	(22)%
Investment Managers:	Investment Managers:						Investment Managers:
Collective trust fund programs		$	142,035	$	87,012	63%
Collective trust fund programs (A)							Collective trust fund programs (A)	$	137,538	$	87,488	57%
Liquidity funds	Liquidity funds	271		473		(43)%	Liquidity funds	248		568		(56)%
Total assets under management	Total assets under management	$	142,306	$	87,485	63%	Total assets under management	$	137,786	$	88,056	56%
Client assets under administration ~~(A)~~	Client assets under administration ~~(A)~~	885,096		875,942		1%	Client assets under administration ~~(A)~~	781,246		861,605		(9)%
Total assets	Total assets	$	1,027,402	$	963,427	7%	Total assets	$	919,032	$	949,661	(3)%
Investments in New Businesses:	Investments in New Businesses:						Investments in New Businesses:
Equity and fixed-income programs	Equity and fixed-income programs	$	1,903	$	1,924	(1)%	Equity and fixed-income programs	$	1,813	$	1,964	(8)%
Liquidity funds	Liquidity funds	242		191		27%	Liquidity funds	221		202		9%
Total assets under management	Total assets under management	$	2,145	$	2,115	1%	Total assets under management	$	2,034	$	2,166	(6)%
Client assets under advisement	Client assets under advisement	1,076		1,422		(24)%	Client assets under advisement	1,026		1,378		(26)%
Total assets	Total assets	$	3,221	$	3,537	(9)%	Total assets	$	3,060	$	3,544	(14)%
LSV:	LSV:						LSV:
Equity and fixed-income programs (B)	Equity and fixed-income programs (B)	$	81,940	$	102,404	(20)%	Equity and fixed-income programs (B)	$	75,380	$	97,604	(23)%


Total:
Equity and fixed-income programs (C)	$	229,524	$	293,187	(22)%
Collective trust fund programs	137,551		87,499		57%
Liquidity funds	11,087		10,834		2%
Total assets under management	$	378,162	$	391,520	(3)%
Client assets under advisement	5,230		6,076		(14)%
Client assets under administration (D)	785,407		866,280		(9)%
Platform-only assets	12,609		13,728		(8)%
Total assets	$	1,181,408	$	1,277,604	(8)%

(A)Collective trust fund program assets are included in assets under management since SEI is the trustee. Fees earned on this product are less than fees earned on customized asset management programs.

(B) Equity and fixed-income programs include $1.7 billion of assets managed by LSV in which fees are based solely on performance and are not calculated as an asset-based fee (as of September 30, 2022).

(C) Equity and fixed-income programs include $6.2 billion of assets invested in various asset allocation funds (as of September 30, 2022).

(D) In addition to the assets presented, SEI also administers an additional $12.5 billion in Funds of Funds assets on which SEI does not earn an administration fee (as of September 30, 2022).

Total:
Equity and fixed-income programs (C) $ 247,409 $ 301,655 (18)%
Collective trust fund programs 142,047 87,024 63%
Liquidity funds 14,125 10,384 36%
Total assets under management $ 403,581 $ 399,063 1%
Client assets under advisement 5,294 5,988 (12)%
Client assets under administration (D) 889,019 880,354 1%
Platform-only assets 12,642 13,566 (7)%
Total assets $ 1,310,536 $ 1,298,971 1%
Average Asset Balances

~~(A)Client assets under administration in the Investment Managers segment include $80.7 billion of assets that are at fee levels below our normal full service assets (as of June 30, 2022).~~(In millions)

~~(B) Equity and fixed-income programs include assets managed by LSV in which fees are based on performance only. The ending value of these assets as of June 30, 2022 was $1.9 billion.~~

~~(C) Equity and fixed-income programs include $6.4 billion of assets invested in various asset allocation funds at June 30, 2022.~~

~~(D) In addition to the numbers presented, SEI also administers an additional $12.9 billion in Funds of Funds assets (as of June 30, 2022) on which SEI does not earn an administration fee.~~

~~(E) Platform assets under management and Platform-only assets combined are total Platform assets in the Investment Advisors segment.~~


	Three Months Ended September 30,				Percent Change	Nine Months Ended September 30,				Percent Change
	2022		2021			2022		2021
Private Banks:
Equity and fixed-income programs	$	22,115	$	26,232	(16)%	$	23,822	$	25,809	(8)%
Collective trust fund programs	7		6		17%	7		6		17%
Liquidity funds	3,742		3,916		(4)%	3,980		3,875		3%
Total assets under management	$	25,864	$	30,154	(14)%	$	27,809	$	29,690	(6)%
Client assets under administration	4,026		4,476		(10)%	4,230		4,399		(4)%
Total assets	$	29,890	$	34,630	(14)%	$	32,039	$	34,089	(6)%
Investment Advisors:
Equity and fixed-income programs	$	67,464	$	79,602	(15)%	$	71,825	$	76,560	(6)%
Liquidity funds	5,380		3,403		58%	5,867		3,464		69%
Total Platform assets under management	$	72,844	$	83,005	(12)%	$	77,692	$	80,024	(3)%
Platform-only assets	13,271		13,863		(4)%	13,464		13,120		3%
Total Platform assets	$	86,115	$	96,868	(11)%	$	91,156	$	93,144	(2)%
Institutional Investors:
Equity and fixed-income programs	$	74,859	$	91,965	(19)%	$	81,693	$	92,257	(11)%
Collective trust fund programs	6		5		20%	5		56		(91)%
Liquidity funds	1,717		2,742		(37)%	2,012		2,681		(25)%
Total assets under management	$	76,582	$	94,712	(19)%	$	83,710	$	94,994	(12)%
Client assets under advisement	4,194		4,658		(10)%	4,357		4,440		(2)%
Total assets	$	80,776	$	99,370	(19)%	$	88,067	$	99,434	(11)%
Investment Managers:
Collective trust fund programs (A)	$	143,817	$	89,441	61%	$	120,628	$	84,010	44%
Liquidity funds	250		532		(53)%	322		497		(35)%
Total assets under management	$	144,067	$	89,973	60%	$	120,950	$	84,507	43%
Client assets under administration	782,559		851,183		(8)%	854,925		840,774		2%
Total assets	$	926,626	$	941,156	(2)%	$	975,875	$	925,281	5%
Investments in New Businesses:
Equity and fixed-income programs	$	1,939	$	1,958	(1)%	$	1,993	$	1,857	7%
Liquidity funds	231		205		13%	260		203		28%
Total assets under management	$	2,170	$	2,163	—%	$	2,253	$	2,060	9%
Client assets under advisement	1,126		1,423		(21)%	1,229		1,385		(11)%
Total assets	$	3,296	$	3,586	(8)%	$	3,482	$	3,445	1%
LSV:
Equity and fixed-income programs (B)	$	81,241	$	99,924	(19)%	$	88,503	$	100,328	(12)%

~~Average Asset Balances~~

~~(In millions)~~

Three Months Ended June 30, Percent Change Six Months Ended June 30, Percent Change
2022 2021 2022 2021
Private Banks:
Equity and fixed-income programs $ 23,713 $ 26,056 (9)% $ 24,675 $ 25,598 (4)%
Collective trust fund programs 7 7 —% 7 7 —%
Liquidity funds 3,795 3,833 (1)% 4,099 3,855 6%
Total assets under management $ 27,515 $ 29,896 (8)% $ 28,781 $ 29,460 (2)%
Client assets under administration 4,163 4,405 (5)% 4,332 4,361 (1)%
Total assets $ 31,678 $ 34,301 (8)% $ 33,113 $ 33,821 (2)%
Investment Advisors:
Equity and fixed-income programs $ 70,436 $ 76,840 (8)% $ 74,006 $ 75,040 (1)%
Liquidity funds 7,070 3,370 110% 6,111 3,495 75%
Total Platform assets under management $ 77,506 $ 80,210 (3)% $ 80,117 $ 78,535 2%
Platform-only assets (E) 13,142 13,292 (1)% 13,560 12,749 6%
Total Platform assets (E) $ 90,648 $ 93,502 (3)% $ 93,677 $ 91,284 3%
Institutional Investors:
Equity and fixed-income programs $ 80,971 $ 93,458 (13)% $ 85,111 $ 92,404 (8)%
Collective trust fund programs 5 68 (93)% 5 82 (94)%
Liquidity funds 2,097 2,681 (22)% 2,160 2,651 (19)%
Total assets under management $ 83,073 $ 96,207 (14)% $ 87,276 $ 95,137 (8)%
Client assets under advisement 3,987 4,516 (12)% 4,438 4,331 2%
Total assets $ 87,060 $ 100,723 (14)% $ 91,714 $ 99,468 (8)%
Investment Managers:
Collective trust fund programs $ 131,435 $ 84,553 55% $ 109,034 $ 81,294 34%
Liquidity funds 285 469 (39)% 359 480 (25)%
Total assets under management $ 131,720 $ 85,022 55% $ 109,393 $ 81,774 34%
Client assets under administration (A) 893,361 853,810 5% 891,108 835,570 7%
Total assets $ 1,025,081 $ 938,832 9% $ 1,000,501 $ 917,344 9%
Investments in New Businesses:
Equity and fixed-income programs $ 2,016 $ 1,870 8% $ 2,021 $ 1,807 12%
Liquidity funds 262 236 11% 274 203 35%
Total assets under management $ 2,278 $ 2,106 8% $ 2,295 $ 2,010 14%
Client assets under advisement 1,165 1,406 (17)% 1,281 1,367 (6)%
Total assets $ 3,443 $ 3,512 (2)% $ 3,576 $ 3,377 6%
LSV:
Equity and fixed-income programs (B) $ 87,818 $ 103,583 (15)% $ 92,134 $ 100,530 (8)%


Total:	Total:											Total:
Equity and fixed-income programs (C)	Equity and fixed-income programs (C)	$	264,954	$	301,807	(12)%	$	277,947	$	295,379	(6)%	Equity and fixed-income programs (C)	$	247,618	$	299,681	(17)%	$	267,836	$	296,811	(10)%
Collective trust fund programs	Collective trust fund programs	131,447		84,628		55%	109,046		81,383		34%	Collective trust fund programs	143,830		89,452		61%	120,640		84,073		43%
Liquidity funds	Liquidity funds	13,509		10,589		28%	13,003		10,684		22%	Liquidity funds	11,320		10,798		5%	12,441		10,720		16%
Total assets under management	Total assets under management	$	409,910	$	397,024	3%	$	399,996	$	387,446	3%	Total assets under management	$	402,768	$	399,931	1%	$	400,917	$	391,604	2%
Client assets under advisement	Client assets under advisement	5,152		5,922		(13)%	5,719		5,698		—%	Client assets under advisement	5,320		6,081		(13)%	5,586		5,825		(4)%
Client assets under administration (D)	Client assets under administration (D)	897,524		858,215		5%	895,440		839,931		7%	Client assets under administration (D)	786,585		855,659		(8)%	859,155		845,173		2%
Platform-only assets	Platform-only assets	13,142		13,292		(1)%	13,560		12,749		6%	Platform-only assets	13,271		13,863		(4)%	13,464		13,120		3%
Total assets	Total assets	$	1,325,728	$	1,274,453	4%	$	1,314,715	$	1,245,824	6%	Total assets	$	1,207,944	$	1,275,534	(5)%	$	1,279,122	$	1,255,722	2%

(A) ~~Average client~~Collective trust fund program average assets are included in assets under ~~administration in~~management since SEI is the ~~Investment Managers segment for the three months ended June 30, 2022 include $80.7 billion that~~trustee. Fees earned on this product are ~~at fee levels below our normal full service assets.~~less than fees earned on customized asset management programs.

(B) Equity and fixed-income programs include assets managed by LSV in which fees are based solely on performance ~~only.~~and are not calculated as an asset-based fee. The average value of these assets for the three months ended ~~June~~September 30, 2022 was ~~$2.1~~$1.8 billion.

(C) Equity and fixed-income programs include ~~$6.9~~$6.3 billion of average assets invested in various asset allocation funds for the three months ended ~~June~~September 30, 2022.

(D) In addition to the ~~numbers~~assets presented, SEI also administers an additional ~~$13.1~~$12.7 billion of average assets in Funds of Funds assets for the three months ended ~~June~~September 30, 2022 on which SEI does not earn an administration fee.

~~(E) Platform assets under management and Platform-only assets combined are total Platform assets in the Investment Advisors segment.~~

In the preceding tables, assets under management are total assets of our clients or their customers invested in equity and fixed-income investment programs, collective trust fund programs, and liquidity funds for which we provide asset management services through our subsidiaries and partnerships in which we have a significant interest. Assets under advisement include assets for which we provide advisory services through a subsidiary to the accounts but do not manage the underlying assets. Assets under administration include total assets of our clients or their customers for which we provide administrative services, including client fund balances for which we provide administration and/or distribution services through our subsidiaries and partnerships in which we have a significant interest. Platform-only assets include total assets of our clients or their customers which are not invested in any SEI-sponsored investment products. The assets presented in the preceding tables do not include assets processed on SWP and are not included in the accompanying Consolidated Balance Sheets because we do not own them.

3433

Business Segments

Revenues, Expenses and Operating Profit (Loss) for our business segments for the three and ~~six~~nine months ended ~~June~~September 30, 2022 compared to the three and ~~six~~nine months ended ~~June~~September 30, 2021 were as follows:


		Three Months Ended June 30,						Percent Change		Six Months Ended June 30,								Percent Change		Three Months Ended September 30,								Percent Change		Nine Months Ended September 30,						Percent Change
		2022			2021				2022				2021				2022				2021						2022			2021
Private Banks:	Private Banks:																						Private Banks:
Revenues	Revenues	$	124,184		$	123,676		—%		$	337,732			$	241,284			40%	Revenues	$	122,660			$	123,018				—%		$	460,392		$	364,302		26%
Expenses	Expenses	121,060			117,654			3%		243,015				228,378				6%	Expenses	116,661				116,679				—%		359,676			345,057			4%
Operating Profit	Operating Profit	$	3,124		$	6,022		(48)%		$	94,717			$	12,906			NM	Operating Profit	$	5,999			$	6,339			(5)%		$	100,716		$	19,245		NM
Operating Margin	Operating Margin	3		%	5		%			28		%		5		%			Operating Margin	5		%		5		%				22		%	5		%
Investment Advisors:	Investment Advisors:																		Investment Advisors:
Revenues	Revenues	$	113,194		$	119,396		(5)%		$	232,424			$	232,690			—%	Revenues	$	109,565			$	124,768			(12)%		$	341,989		$	357,458		(4)%
Expenses	Expenses	63,375			59,133			7%		127,895				114,160				12%	Expenses	61,150				62,107				(2)%		189,045			176,267			7%
Operating Profit	Operating Profit	$	49,819		$	60,263		(17)%		$	104,529			$	118,530			(12)%	Operating Profit	$	48,415			$	62,661			(23)%		$	152,944		$	181,191		(16)%
Operating Margin	Operating Margin	44		%	50		%			45		%		51		%			Operating Margin	44		%		50		%				45		%	51		%
Institutional Investors:	Institutional Investors:																		Institutional Investors:
Revenues	Revenues	$	83,483		$	85,699		(3)%		$	170,322			$	170,198			—%	Revenues	$	78,260			$	85,759			(9)%		$	248,582		$	255,957		(3)%
Expenses	Expenses	43,925			41,895			5%		89,283				81,053				10%	Expenses	42,149				41,643				1%		131,432			122,696			7%
Operating Profit	Operating Profit	$	39,558		$	43,804		(10)%		$	81,039			$	89,145			(9)%	Operating Profit	$	36,111			$	44,116			(18)%		$	117,150		$	133,261		(12)%
Operating Margin	Operating Margin	47		%	51		%			48		%		52		%			Operating Margin	46		%		51		%				47		%	52		%
Investment Managers:	Investment Managers:																		Investment Managers:
Revenues	Revenues	$	155,926		$	142,808		9%		$	312,827			$	279,227			12%	Revenues	$	156,015			$	147,412			6%		$	468,842		$	426,639		10%
Expenses	Expenses	100,807			84,995			19%		199,644				168,015				19%	Expenses	100,876				89,594				13%		300,520			257,609			17%
Operating Profit	Operating Profit	$	55,119		$	57,813		(5)%		$	113,183			$	111,212			2%	Operating Profit	$	55,139			$	57,818			(5)%		$	168,322		$	169,030		—%
Operating Margin	Operating Margin	35		%	40		%			36		%		40		%			Operating Margin	35		%		39		%				36		%	40		%
Investments in New Businesses:	Investments in New Businesses:																		Investments in New Businesses:
Revenues	Revenues	$	4,883		$	4,072		20%		$	9,808			$	7,938			24%	Revenues	$	4,834			$	4,365			11%		$	14,642		$	12,303		19%
Expenses	Expenses	12,844			13,631			(6)%		24,794				27,035				(8)%	Expenses	9,915				12,820				(23)%		34,709			39,855			(13)%
Operating Loss	Operating Loss	$	(7,961)		$	(9,559)		NM		$	(14,986)			$	(19,097)			NM	Operating Loss	$	(5,081)			$	(8,455)			NM		$	(20,067)		$	(27,552)		NM

For additional information pertaining to our business segments, see Note 9 to the Consolidated Financial Statements.

3534

Private Banks


		Three Months Ended June 30,				Percent Change		Six Months Ended June 30,						Percent Change		Three Months Ended September 30,						Percent Change		Nine Months Ended September 30,						Percent Change
		2022		2021			2022			2021			2022				2021				2022			2021
Revenues:	Revenues:																	Revenues:
Information processing and software servicing fees	Information processing and software servicing fees	$	93,203	$	89,264	4%		$	274,240		$	173,567		58%	Information processing and software servicing fees	$	93,580		$	88,340			6%		$	367,820		$	261,907		40%
Asset management, administration & distribution fees	Asset management, administration & distribution fees	30,981		34,412		(10)%		63,492			67,717			(6)%	Asset management, administration & distribution fees	29,080			34,678			(16)%		92,572			102,395			(10)%
Total revenues	Total revenues	$	124,184	$	123,676	—%		$	337,732		$	241,284		40%	Total revenues	$	122,660		$	123,018		—%		$	460,392		$	364,302		26%

Revenues ~~increased~~decreased slightly in the three month period and increased ~~$96.4~~$96.1 million, or ~~40%~~26%, in the ~~six~~nine month period ended ~~June~~September 30, 2022 and were primarily affected by:

•Early termination fees of $88.0 million recorded during the first quarter 2022 from a significant investment processing client; and

•Increased investment processing fees from new client ~~conversions and growth from existing SWP clients, in part due to market appreciation during 2021;~~conversions; partially offset by

•~~One-time early termination fees from a TRUST 3000~~® ~~client recorded in the second quarter 2021;~~

•The negative impact from foreign currency exchange rate fluctuations between the U.S. dollar and the British pound on our foreign operations; ~~and~~

•Decreased investment management fees from existing international clients due to market depreciation during ~~2022.~~2022;

•Decreased investment processing fees from lost clients and market depreciation during 2022; and

•One-time early termination fees from a TRUST 3000® client recorded in the second quarter 2021.

Operating margins ~~decreased~~were 5% in the three month periods and increased to 3%22% compared to 5% in the nine month period. Operating income decreased slightly in the three month period and increased ~~to 28% compared to 5% in the six month period. Operating income decreased by $2.9 million, or 48%, in the three month period and increased $81.8~~$81.5 million in the ~~six~~nine month period and was primarily affected by:

•An increase in revenues; and

•Decreased direct expenses associated with lower investment management fees from existing international clients; partially offset by

•Increased personnel costs due to competitive labor markets;

•Increased costs, mainly personnel and consulting costs, primarily related to maintenance, support and client migrations to SWP;

•The negative impact from foreign currency exchange rate fluctuations between the U.S. dollar and the British pound on our foreign operations; and

•Increased amortization expense related to deferred sales commissions.

Investment Advisors


		Three Months Ended June 30,				Percent Change		Six Months Ended June 30,						Percent Change		Three Months Ended September 30,						Percent Change		Nine Months Ended September 30,						Percent Change
		2022		2021			2022			2021			2022				2021				2022			2021
Revenues:	Revenues:																	Revenues:
Investment management fees-SEI fund programs	Investment management fees-SEI fund programs	$	67,490	$	75,039	(10)%		$	139,483		$	147,693		(6)%	Investment management fees-SEI fund programs	$	63,688		$	77,123			(17)%		$	203,171		$	224,816		(10)%
Separately managed account fees	Separately managed account fees	40,398		38,345		5%		82,406			73,059			13%	Separately managed account fees	39,915			41,688			(4)%		122,321			114,747			7%
Other fees	Other fees	5,306		6,012		(12)%		10,535			11,938			(12)%	Other fees	5,962			5,957			—%		16,497			17,895			(8)%
Total revenues	Total revenues	$	113,194	$	119,396	(5)%		$	232,424		$	232,690		—%	Total revenues	$	109,565		$	124,768		(12)%		$	341,989		$	357,458		(4)%

Revenues decreased ~~$6.2~~$15.2 million, or 5%12%, in the three month period and decreased ~~slightly~~$15.5 million, or 4%, in the ~~six~~nine month period ended ~~June~~September 30, 2022 and were primarily affected by:

•Decreased investment management fees from SEI fund programs resulting from negative cash flows from a significant client loss during ~~2021~~the third-quarter 2022 and the significant decline in market conditions during 2022; partially offset by

•Increased separately managed account program fees from positive cash flows into our Strategist programs and market appreciation occurring during 2021.

3635

Operating margin decreased to 44% compared to 50% in the three month period and decreased to 45% compared to 51% in the ~~six~~nine month period. Operating income decreased ~~$10.4~~$14.2 million, or ~~17%~~23%, in the three month period and decreased ~~$14.0~~$28.2 million, or ~~12%~~16%, in the ~~six~~nine month period and was primarily affected by:

•A decrease in revenues;

•Increased direct expenses associated with increased assets into our separately managed account program; and

•Increased personnel and technology costs as well as increased promotion ~~costs.~~costs; partially offset by

•Decreased direct expenses related to a significant client loss during third-quarter 2022.

Institutional Investors

Revenues decreased ~~$2.2~~$7.5 million, or 3%9%, in the three month period and ~~increased slightly~~decreased $7.4 million, or 3%, in the ~~six~~nine month period ended ~~June~~September 30, 2022 and were primarily affected by:

•~~Added revenues from the acquisitions of SEI Novus and Atlas Master Trust during the fourth quarter 2021; and~~

•~~The positive impact to investment management fees from market appreciation in 2021; partially offset by~~

•Decreased investment management fees from defined benefit client ~~losses;~~losses and the significant decline in market conditions during 2022; and

•The negative impact from foreign currency exchange rate fluctuations between the U.S. dollar and the British pound on our foreign ~~operations.~~operations; partially offset by

•Added revenues from the acquisitions of SEI Novus and Atlas Master Trust during the fourth quarter 2021.

Operating margin decreased to ~~47%~~46% compared to 51% in the three month period and decreased to ~~48%~~47% compared to 52% in the ~~six~~nine month period. Operating income decreased ~~$4.2~~$8.0 million, or ~~10%~~18%, in the three month period and decreased ~~$8.1~~$16.1 million, or 9%12%, in the ~~six~~nine month period and was primarily affected by:

•A decrease in revenues;

•Increased personnel, professional fees, amortization and other costs related to the acquisitions of SEI Novus and Atlas Master Trust; partially offset by

•Decreased direct expenses associated with investment management fees.

Investment Managers

Revenues increased ~~$13.1~~$8.6 million, or 9%6%, in the three month period and increased ~~$33.6~~$42.2 million, or ~~12%~~10%, in the ~~six~~nine month period ended ~~June~~September 30, 2022 and were primarily affected by:

•Higher valuations of existing client assets from market appreciation in ~~2021;~~2021 which impacted revenues in early 2022; and

•Positive cash flows into alternative, traditional and separately managed account offerings from new and existing clients; partially offset by

•Client losses and fund closures.

Operating margin decreased to 35% compared to ~~40%~~39% in the three month period and decreased to 36% compared to 40% in the ~~six~~nine month period. Operating income decreased $2.7 million, or 5%, in the three month period and ~~increased $2.0 million, or 2%,~~decreased slightly in the ~~six~~nine month period and was primarily affected by:

•~~An increase in revenues; partially offset by~~

•Increased personnel costs due to competitive labor markets;

•Increased costs associated with new business, primarily personnel expenses and third-party vendor costs; and

•Increased non-capitalized investment spending, mainly consulting ~~costs.~~costs; partially offset by

•An increase in revenues;

Other

Corporate overhead expenses

Corporate overhead expenses primarily consist of general and administrative expenses and other costs not directly attributable to a reportable business segment. Corporate overhead expenses were ~~$23.8~~$89.5 million and ~~$22.3~~$21.4 million in the three months ended ~~June~~September 30, 2022 and 2021, respectively, and ~~$47.8~~$137.4 million and ~~$43.8~~$65.2 million in the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively. The increase in corporate overhead expenses in the three and ~~six~~nine month periods is primarily due to ~~an increase~~personnel costs associated with the VSP of $57.0 million (See Note 14 to the Consolidated Financial Statements). Corporate overhead expenses in the three and nine month periods also increased due to higher personnel costs, consulting and professional ~~fees.~~fees and severance costs unrelated to the VSP of $5.2 million.

3736

Other income and expense

Other income and expense items on the accompanying Consolidated Statements of Operations consists of:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
Net (loss) gain from investments	Net (loss) gain from investments	$	(2,620)	$	377	$	(3,109)	$	709	Net (loss) gain from investments	$	(1,406)	$	(575)	$	(4,515)	$	134
Interest and dividend income	Interest and dividend income	1,853		878		2,701		1,823		Interest and dividend income	3,962		892		6,663		2,715
Interest expense	Interest expense	(211)		(130)		(461)		(253)		Interest expense	(143)		(101)		(604)		(354)
Equity in earnings of unconsolidated affiliate	Equity in earnings of unconsolidated affiliate	29,813		35,065		62,272		68,415		Equity in earnings of unconsolidated affiliate	26,654		35,005		88,926		103,420
Total other income and expense items, net	Total other income and expense items, net	$	28,835	$	36,190	$	61,403	$	70,694	Total other income and expense items, net	$	29,067	$	35,221	$	90,470	$	105,915

Net (loss) gain from investments

Net losses from investments in the three and ~~six~~nine months ended ~~June~~September 30, 2022 were primarily due to unrealized mark-to-market losses recorded in current earnings associated with ~~the~~Company-sponsored mutual funds and LSV-sponsored investment ~~funds and Company-sponsored mutual~~ funds from the significant decline in market conditions in 2022 (See Note 5).

Interest and dividend income

Interest and dividend income is earned based upon the amount of cash that is invested daily. The increase in interest and dividend income in the three and ~~six~~nine months ended ~~June~~September 30, 2022 was due to an overall increase in interest rates.

Equity in earnings of unconsolidated affiliate

Equity in earnings of unconsolidated affiliate reflects our ownership interest in LSV. As of ~~June~~September 30, 2022, our total partnership interest in LSV was 38.6%. The table below presents the revenues and net income of LSV and the proportionate share in LSV's earnings.


		Three Months Ended June 30,				Percent Change		Six Months Ended June 30,									Percent Change		Three Months Ended September 30,								Percent Change		Nine Months Ended September 30,				Percent Change
		2022		2021			2022			2021						2022				2021					2022				2021
Revenues of LSV	Revenues of LSV	$	99,814	$	116,392		(14)%			$	208,264			$	227,229				(8)%		Revenues of LSV	$	91,588			$		115,728	(21)%		$	299,852	$	342,957	(13)%
Net income of LSV	Net income of LSV	77,193		90,520		(15)%		160,984				176,440					(9)%	Net income of LSV	69,013				90,365				(24)%		229,997		266,805		(14)%

SEI's proportionate share in earnings of LSV	SEI's proportionate share in earnings of LSV	$	29,813	$	35,065	(15)%		$	62,272			$	68,415				(9)%	SEI's proportionate share in earnings of LSV	$	26,654			$	35,005			(24)%		$	88,926	$	103,420	(14)%

The decrease in earnings from LSV in the three and ~~six~~nine months ended ~~June~~September 30, 2022 was primarily due to negative cash flows from existing clients, market depreciation and client losses. Average assets under management by LSV decreased ~~$8.4~~$11.8 billion to ~~$92.1~~$88.5 billion during the ~~six~~nine months ended ~~June~~September 30, 2022 as compared to ~~$100.5~~$100.3 billion during the ~~six~~nine months ended ~~June~~September 30, 2021, a decrease of 8%12%.

Amortization

Amortization expense on the accompanying Consolidated Statements of Operations consists of:


		Three Months Ended June 30,				Percent Change		Six Months Ended June 30,									Percent Change		Three Months Ended September 30,								Percent Change		Nine Months Ended September 30,				Percent Change
		2022		2021			2022			2021						2022				2021					2022				2021
Capitalized software development costs	Capitalized software development costs	$	13,204	$	13,402		(1)%			$	26,758			$	26,775				—%		Capitalized software development costs	$	7,287			$		13,408	(46)%		$	34,045	$	40,183	(15)%
Intangible assets acquired through acquisitions and asset purchases	Intangible assets acquired through acquisitions and asset purchases	3,243		921		252%		6,496				2,117					207%	Intangible assets acquired through acquisitions and asset purchases	3,038				1,196				154%		9,534		3,312		188%
Other	Other	80		58		38%		80				58					38%	Other	118				70				69%		198		254		(22)%
Total amortization expense	Total amortization expense	$	16,527	$	14,381	15%		$	33,334			$	28,950				15%	Total amortization expense	$	10,443			$	14,674			(29)%		$	43,777	$	43,749	—%

Capitalized software development costs

Capitalized software development costs are amortized on a project basis using the straight-line method over the estimated economic life of the product or enhancement. The capitalization of the initial development work related to SWP began in mid-2007 when the platform was determined to be ready for its intended use. The amortization expense related to the initial software development costs ~~capitalized in 2007~~ ended in the second quarter of 2022. As a result, ~~we expect~~ amortization expense related to capitalized software ~~in service as of June 30, 2022 to decline to approximately $6.7 million~~development costs declined in the ~~third quarter~~three and nine months ended September 30, 2022 (See Note 1 to the Consolidated Financial Statements).

3837

Intangible assets acquired through acquisitions and asset purchases

The increase in amortization expense in the three and ~~six~~nine month periods was due to the acquisitions of Finomial, SEI Novus and Atlas Master Trust during the fourth quarter 2021. Through these transactions, we acquired intangible assets related to technology, trade names and client relationships which are amortized over the estimated useful life of the assets (See Note 12 to the Consolidated Financial Statements).

Income Taxes

The effective income tax rates for the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021 differ from the federal income tax statutory rate due to the following:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
Statutory rate	Statutory rate	21.0	%	21.0	%	21.0	%	21.0	%	Statutory rate	21.0	%	21.0	%	21.0	%	21.0	%
State taxes, net of federal tax benefit	State taxes, net of federal tax benefit	2.8		3.2		2.8		3.2		State taxes, net of federal tax benefit	3.4		2.5		2.9		3.0
Foreign tax expense and tax rate differential	Foreign tax expense and tax rate differential	(0.1)		(0.1)		(0.1)		(0.1)		Foreign tax expense and tax rate differential	(0.2)		(0.1)		(0.1)		(0.1)
Tax benefit from stock option exercises	Tax benefit from stock option exercises	(0.3)		(1.2)		(0.3)		(1.2)		Tax benefit from stock option exercises	(1.1)		(0.6)		(0.5)		(1.0)

State settlements										State settlements	—		(0.3)		—		(0.2)
Provision-to-return adjustment										Provision-to-return adjustment	—		(0.5)		—		(0.2)
Other, net	Other, net	(0.3)		(0.6)		(0.3)		(0.4)		Other, net	(0.1)		(0.3)		(0.2)		(0.3)
		23.1	%	22.3	%	23.1	%	22.5	%		23.0	%	21.7	%	23.1	%	22.2	%

The increase in the effective tax rate for the three months ended September 30, 2022 was primarily due to an increase in the ~~three~~state effective tax rate and ~~six month periods~~one-time state settlements which reduced the effective rate in 2021. Provision-to-return adjustments and statutory limitations which lowered the 2021 effective rate are expected to be realized in the fourth quarter of 2022. The increase was partially offset by increased tax benefits related to the stock option exercises as a percentage of net income in the third quarter of 2022 compared to the third quarter of 2021.

The increase in the effective tax rate for the nine months ended September 30, 2022 was primarily due to decreased tax benefits related to the lower volume of stock option exercises in 2022 compared to the prior year ~~period.~~period as well as the timing of one-time state settlements which reduced the effective rate in 2021. Provision-to-return adjustments and statutory limitations which lowered the 2021 effective rate for the nine month period are expected to be realized in the fourth quarter of 2022.

Stock-Based Compensation

We recognized ~~$20.6~~$31.3 million and ~~$19.9~~$31.2 million in stock-based compensation expense during the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively. The amount of stock-based compensation expense we recognize is primarily based upon management's estimate of when the financial vesting targets of outstanding stock options may be achieved. Any change in the estimate could result in the amount of stock-based compensation expense to be accelerated, spread out over a longer period, or reversed. This may cause volatility in the recognition of stock-based compensation expense in future periods and could materially affect earnings.

We revised our estimate of when some vesting targets are expected to be achieved. This change in estimate resulted in a decrease of ~~$663 thousand~~$2.8 million in stock-based compensation expense during the ~~six~~nine months ended ~~June~~September 30, 2022. We expect to recognize ~~$18.6~~approximately $9.3 million in stock-based compensation expense during the remainder of 2022.

Fair Value Measurements

The fair value of financial assets and liabilities, except for the investment funds sponsored by LSV, is determined in accordance with the fair value hierarchy. The fair value of the investment funds sponsored by LSV is measured using the net asset value per share (NAV) as a practical expedient. The fair value of all other financial assets are determined using Level 1 or Level 2 inputs and consist mainly of investments in equity or fixed-income mutual funds that are quoted daily and Government National Mortgage Association (GNMA) and other U.S. government agency securities that are single issuer pools that are valued based on current market data of similar assets. Level 3 financial liabilities at ~~June~~September 30, 2022 and December 31, 2021 consist entirely of the estimated contingent consideration resulting from an acquisition (See Note 12 to the Consolidated Financial Statements).

Regulatory Matters

Like many firms operating within the financial services industry, we are experiencing a complex and changing regulatory environment across our markets. Our current scale and reach as a provider to the financial services industry, the introduction and implementation of new solutions for our financial services industry clients, the increased regulatory

oversight of the financial services industry generally, new laws and regulations affecting the financial services industry and ever-changing regulatory interpretations of existing laws and regulations, and a greater propensity of regulators to pursue enforcement actions and other sanctions against regulated entities, have made this an increasingly challenging and costly regulatory environment in which to operate.

SEI and some of our regulated subsidiaries have undergone or been scheduled to undergo a range of periodic or thematic reviews, examinations or investigations by numerous regulatory authorities around the world, including the Office of the Comptroller of the Currency, the Securities and Exchange Commission, the Financial Industry Regulatory Authority, the Financial Conduct Authority of the United Kingdom (FCA), the Central Bank of Ireland and others. These regulatory activities typically result in the identification of matters or practices to be addressed by us or our subsidiaries and, in certain circumstances, the regulatory authorities require remediation activities or pursue enforcement proceedings against

us or our subsidiaries. From time to time, the regulators in different jurisdictions will elevate their level of scrutiny of our operations as our business expands or is deemed critical to the operations of the relevant financial markets. As described under the caption “Regulatory Considerations” in our Annual Report on Form 10-K, the range of possible sanctions that are available to regulatory authorities include limitations on our ability to engage in business for specified periods of time, the revocation of registration, censures and fines. The direct and indirect costs of responding to these regulatory activities and of complying with new or modified regulations, as well as the potential financial costs and potential reputational impact against us of any enforcement proceedings that might result, is uncertain but could have a material adverse impact on our operating results or financial position.

Liquidity and Capital Resources


		Six Months Ended June 30,					Nine Months Ended September 30,
		2022		2021			2022		2021
Net cash provided by operating activities	Net cash provided by operating activities	$	330,615	$	324,997	Net cash provided by operating activities	$	428,519	$	483,881
Net cash used in investing activities	Net cash used in investing activities	(42,516)		(56,087)		Net cash used in investing activities	(60,342)		(87,542)
Net cash used in financing activities	Net cash used in financing activities	(332,173)		(277,936)		Net cash used in financing activities	(381,338)		(387,390)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	Effect of exchange rate changes on cash, cash equivalents and restricted cash	(15,660)		2,578		Effect of exchange rate changes on cash, cash equivalents and restricted cash	(26,809)		(2,442)
Net decrease in cash, cash equivalents and restricted cash		(59,734)		(6,448)
Net (decrease) increase in cash, cash equivalents and restricted cash						Net (decrease) increase in cash, cash equivalents and restricted cash	(39,970)		6,507
Cash, cash equivalents and restricted cash, beginning of period	Cash, cash equivalents and restricted cash, beginning of period	831,758		787,727		Cash, cash equivalents and restricted cash, beginning of period	831,758		787,727
Cash, cash equivalents and restricted cash, end of period	Cash, cash equivalents and restricted cash, end of period	$	772,024	$	781,279	Cash, cash equivalents and restricted cash, end of period	$	791,788	$	794,234

Our credit facility provides for borrowings up to $325.0 million and is scheduled to expire in April 2026 (See Note 6 to the Consolidated Financial Statements). In November 2021, we borrowed $40.0 million under the credit facility for the funding of an acquisition (See Note 12 to the Consolidated Financial Statements). We made principal payments of $40.0 million during the ~~six~~nine month period ended ~~June~~September 30, 2022 to fully repay the outstanding balance of the credit facility.

As of ~~July 15,~~October 20, 2022, we had outstanding letters of credit of $6.0 million which reduced the amount available under the credit facility. These letters of credit were primarily issued for the expansion of the corporate headquarters and are due to expire in late 2022. As of ~~July 15,~~October 20, 2022, the amount of the credit facility available for corporate purposes was $319.0 million.

The availability of the credit facility is subject to compliance with certain covenants set forth in the agreement. The credit facility contains covenants which restrict our ability to engage in transactions with affiliates other than wholly-owned subsidiaries or to incur liens or certain types of indebtedness as defined in the agreement. In the event of a default under the credit facility, we would also be restricted from paying dividends on, or repurchasing, our common stock. Currently, our ability to borrow from the credit facility is not limited by any covenant of the agreement (See Note 6 to the Consolidated Financial Statements).

The credit facility contains terms that utilize the London InterBank Offered Rate (LIBOR) as a potential component of the interest rate to be applied to any borrowings; however, an alternative reference rate is included under the agreement which provides for a specified replacement rate upon a LIBOR cessation event. At the time of a LIBOR cessation event, the replacement rate, the Secured Overnight Financing Rate (SOFR), self-executes without the need for negotiations or a formal amendment process.

The majority of excess cash reserves are primarily placed in accounts located in the United States that invest entirely in SEI-sponsored money market mutual funds denominated in the U.S. dollar. We also utilize demand deposit accounts or money market accounts at several well-established financial institutions located in the United States. Accounts used to manage these excess cash reserves do not impose any restrictions or limitations that would prevent us from being able to

access such cash amounts immediately. As of ~~July 15,~~October 20, 2022, the amount of cash and cash equivalents considered free and immediately accessible for other general corporate purposes was ~~$386.2~~$389.7 million.

Cash and cash equivalents include accounts managed by subsidiaries that are used in their operations or to cover specific business and regulatory requirements. The availability of this cash for other purposes beyond the operations of these subsidiaries may be limited. We therefore do not include accounts of foreign subsidiaries in the calculation of free and immediately accessible cash for other general corporate purposes. A portion of the undistributed earnings of foreign subsidiaries are deemed repatriated. Any subsequent transfer of available cash related to the repatriated earnings of foreign subsidiaries could significantly increase free and immediately accessible cash.

Cash flows from operations ~~increased $5.6~~decreased $55.4 million in the first ~~six~~nine months of 2022 compared to the first ~~six~~nine months of 2021 primarily from the ~~increase~~decline in net income. The ~~negative~~positive impact from the change in the Company's working capital accounts partially offset the ~~increase~~decrease in cash flows from operations.

Net cash used in investing activities includes:

•Purchases, sales and maturities of marketable securities. Purchases, sales and maturities of marketable securities in the first ~~six~~nine months of 2022 and 2021 were as follows:


		Six Months Ended June 30,					Nine Months Ended September 30,
		2022		2021			2022		2021
Purchases	Purchases	$	(96,642)	$	(81,541)	Purchases	$	(124,454)	$	(168,333)
Sales and maturities	Sales and maturities	90,659		64,194		Sales and maturities	124,219		134,222
Net investing activities from marketable securities	Net investing activities from marketable securities	$	(5,983)	$	(17,347)	Net investing activities from marketable securities	$	(235)	$	(34,111)

See Note 5 to the Consolidated Financial Statements for more information related to marketable securities.

•The capitalization of costs incurred in developing computer software. We capitalized ~~$13.8~~$24.8 million of software development costs in the first ~~six~~nine months of 2022 as compared to ~~$12.3~~$19.5 million in the first ~~six~~nine months of 2021. The majority of our software development costs are related to significant enhancements for the expanded functionality of the SEI Wealth Platform. We capitalized $5.3 million of software development costs in the first nine months of 2022 for a new platform for the Investment Managers segment.

•Capital expenditures. Capital expenditures in the first ~~six~~nine months of 2022 were ~~$19.8~~$32.3 million as compared to ~~$15.5~~$22.5 million in the first ~~six~~nine months of 2021. Expenditures in 2022 and 2021 include capital outlays for purchased software and equipment for data center operations. We continue to evaluate improvements to our information technology infrastructure which, if implemented, will result in additional expenditures for purchased software and equipment for data center operations.

Net cash used in financing activities includes:

•Principal repayments on revolving credit facility. In November 2021, we borrowed $40.0 million for the funding of an acquisition. We made principal payments of $40.0 million during the first six months of 2022 to fully repay the outstanding balance of the credit facility.

•The repurchase of common stock. Our Board of Directors has authorized the repurchase of common stock through multiple authorizations. Currently, there is no expiration date for the common stock repurchase program. We had total capital outlays of ~~$210.3~~$266.5 million during the first ~~six~~nine months of 2022 and ~~$197.3~~$315.8 million during the first ~~six~~nine months of 2021 for the repurchase of common stock.

•Proceeds from the issuance of common stock. We received ~~$28.8~~$35.9 million in proceeds from the issuance of common stock during the first ~~six~~nine months of 2022 and 2021. These proceeds were primarily from stock option exercise activity.

•Dividend payments. Cash dividends paid were $109.8 million in the first ~~six~~nine months of 2022 as compared to $105.5 million in the first ~~six~~nine months of 2021.

Cash Requirements

Cash requirements and liquidity needs are primarily funded through cash flow from operations and our capacity for additional borrowing. At ~~June~~September 30, 2022, unused sources of liquidity consisted of cash and cash equivalents and the amount available under our credit facility.

We are obligated to make payments in connection with the credit facility, operating leases, maintenance contracts and other commitments. We believe our operating cash flow, available borrowing capacity, and existing cash and cash equivalents will provide adequate funds for these obligations and ongoing operations. We currently anticipate that our

available funds and cash flow from operations will be sufficient to meet our operational cash needs and fund our stock repurchase program for at least the next 12 months and for the foreseeable future.

Forward-Looking Information and Risk Factors

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Certain information contained in this discussion is or may be considered forward-looking. Forward-looking statements relate to future operations, strategies, financial results or other developments. Forward-looking statements are based upon estimates and assumptions that involve certain 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.

Among the risks and uncertainties which may affect our future operations, strategies, financial results or other developments are those risks described in our latest Annual Report on Form 10-K in Part I, Item 1A. These risks include the following:

•changes in capital markets that may affect our revenues and earnings;

•product development risk;

•risk of failure by a third-party service provider;

•pricing pressure from increased competition, disruptive technology and poor investment performance;

•the affect on our earnings and cashflows from the performance of LSV Asset Management;

•consolidation within our target markets;

•external factors affecting the fiduciary management market;

•software defects, development delays or installation difficulties, which would harm our business and reputation and expose us to potential liability;

•data and cyber security risks;

•risk of the disclosure and misuse of personal data;

•risk of outages, data losses, and disruptions of services;

•intellectual property risks;

•third-party service providers in our operations;

•poor investment performance of our investment products or a client preference for products other than those which we offer or for products that generate lower fees;

•investment advisory contracts which may be terminated or may not be renewed on favorable terms;

•operational risks associated with the processing of investment transactions;

•systems and technology risks;

•the affect of extensive governmental regulation;

•litigation and regulatory examinations and investigations;

•our ability to capture the expected value from acquisitions, divestitures, joint ventures, minority stakes or strategic alliances;

•increased costs and regulatory risks from the growth of our business;

•fiduciary or other legal liability for client losses from our investment management operations;

•our ability to receive dividends or other payments in needed amounts from our subsidiaries;

•the exit by the United Kingdom from the European Union;

•the effectiveness of our business, risk management and business continuity strategies, models and processes;

•financial and non-financial covenants which may restrict our ability to manage liquidity needs;

•changes in, or interpretation of, accounting principles or tax rules and regulations;

•fluctuations in foreign currency exchange rates;

•fluctuations in interest rates affecting the value of our fixed-income investment securities;

•our ability to hire and retain qualified employees;

•the competence and integrity of our employees and third-parties;

•stockholder activism efforts;

•retention of executive officers and senior management personnel;

•unforeseen or catastrophic events, including the emergence of pandemic, extreme weather events or other natural disasters; and

•geopolitical unrest and other events.

We conduct operations through many regulated wholly-owned subsidiaries. These subsidiaries include:

•SEI Investments Distribution Co., or SIDCO, a broker-dealer registered with the SEC under the Securities Exchange Act of 1934 and a member of the Financial Industry Regulatory Authority, Inc., or FINRA;

•SEI Investments Management Corporation, or SIMC, an investment advisor registered with the SEC under the Investment Advisers Act of 1940 and with the Commodity Futures Trading Commission, or CFTC, under the Commodity Exchange Act;

•SEI Private Trust Company, or SPTC, a limited purpose federal thrift chartered and regulated by the Office of the Comptroller of the Currency;

•SEI Trust Company, or STC, a Pennsylvania trust company, regulated by the Pennsylvania Department of Banking and Securities;

•SEI Institutional Transfer Agent, Inc., or SITA, a transfer agent registered with the SEC under the Securities Exchange Act of 1934;

•SEI Investments (Europe) Limited, or SIEL, an investment manager and financial institution subject to regulation by the Financial Conduct Authority of the United Kingdom;

•SEI Investments Canada Company, or SEI Canada, an investment fund manager that has various other capacities that is regulated by the Ontario Securities Commission and various provincial authorities;

•SEI Investments Global, Limited, or SIGL, a management company for Undertakings for Collective Investment in Transferable Securities, or UCITS, and for Alternative Investment Funds, or AIFs, that is regulated primarily by the Central Bank of Ireland, or CBI;

•SEI Investments - Global Fund Services, Ltd., or GFSL, an authorized provider of administration services for Irish and non-Irish collective investment schemes that is regulated by the CBI;

•SEI Investments - Depositary and Custodial Services (Ireland) Limited, or D&C, an authorized provider of depositary and custodial services that is regulated by the CBI;

•SEI Investments - Luxembourg S.A., or SEI Lux, a professional of the specialized financial sector subject to regulation by the Commission de Surveillance du Secteur Financier of the Grand Duchy of Luxembourg;

•SEI Investments Global (Cayman), Ltd., a full mutual fund administrator that is regulated by the Cayman Island Monetary Authority; and

•SEI Investments (South Africa) (PTY) Limited, a Private Company that is a licensed Financial Service Provider regulated by the Financial Sector Conduct Authority.

In addition to the regulatory authorities listed above, our subsidiaries are subject to the jurisdiction of regulatory authorities in other foreign countries. In addition to our wholly-owned subsidiaries, we also own a minority interest of approximately 38.6% in LSV, which is also an investment advisor registered with the SEC.

The Company, its regulated subsidiaries, their regulated services and solutions and their customers are all subject to extensive legislation, regulation, and supervision that recently has been subject to, and continues to experience, significant change and increased regulatory activity. These changes and regulatory activities could have a material adverse effect on us and our clients.

The various governmental agencies and self-regulatory authorities that regulate or supervise the Company and its subsidiaries have broad administrative powers. In the event of a failure to comply with laws, regulations, and requirements of these agencies and authorities, the possible business process changes required or sanctions that may be imposed include the suspension of individual employees, limitations on our ability to engage in business for specified periods of time, the revocation of applicable registration as a broker-dealer, investment advisor or other regulated entity, and, as the case may be, censures and fines. Additionally, certain securities and banking laws applicable to us and our subsidiaries provide for certain private rights of action that could give rise to civil litigation. Any litigation could have significant financial and non-financial consequences including monetary judgments and the requirement to take action or limit activities that could ultimately affect our business.

Governmental scrutiny from regulators, legislative bodies, and law enforcement agencies with respect to matters relating to our regulated subsidiaries and their activities, services and solutions, our business practices, our past actions and other matters has increased dramatically in the past several years. Responding to these examinations, investigations, actions,

and lawsuits, regardless of the ultimate outcome of the proceeding, is time consuming and expensive and can divert the time and effort of our senior management from our business. Penalties, fines and changes to business processes sought by regulatory authorities have increased substantially over the last several years, and certain regulators have been more likely in recent years to commence enforcement actions or to advance or support legislation targeted at the financial services industry. We continue to be subject to inquiries from examinations and investigations by supervisory and enforcement divisions of regulatory authorities and expect this to continue in the future. We believe this is also the case with many of our regulated clients. Governmental scrutiny and legal and enforcement proceedings can also have a negative impact on our reputation, our relationship with clients and prospective clients, and on the morale and performance of our employees, which could adversely affect our businesses and results of operations.

We are subject to U.S. and foreign anti-money laundering and financial transparency laws that require implementation of regulations applicable to financial services companies, including standards for verifying client identification and monitoring client transactions and detecting and reporting suspicious activities. We offer investment and banking solutions that also are subject to regulation by the federal and state securities and banking authorities, as well as foreign regulatory

authorities, where applicable. Existing or future regulations that affect these solutions could lead to a reduction in sales of these solutions or require modifications of these solutions.

We must comply with economic sanctions and embargo programs administered by the Office of Foreign Assets Control (OFAC) and similar national and multinational bodies and governmental agencies outside the United States, as well as anti-corruption and anti-money laundering laws and regulations throughout the world. We can incur higher costs and face greater compliance risks in structuring and operating our businesses to comply with these requirements. Furthermore, a violation of a sanction or embargo program or anti-corruption or anti-money laundering laws and regulations could subject us and our subsidiaries, and individual employees, to regulatory enforcement actions as well as significant civil and criminal penalties.

Our businesses are also subject to privacy and data protection information security legal requirements concerning the use and protection of certain personal information. These include those adopted pursuant to the Gramm-Leach-Bliley Act and the Fair and Accurate Credit Transactions Act of 2003 in the United States, the General Data Protection Regulation (GDPR) in the EU, Canada’s Personal Information Protection and Electronic Documents Act, the Cayman Islands' Data Protection Law, and various other laws. Privacy and data security legislation is a priority issue in many states and localities in the United States, as well as foreign jurisdictions outside of the EU. For example, California enacted the California Consumer Privacy Act (CCPA) which broadly regulates the sale of the consumer information of California residents and grants California residents certain rights to, among other things, access and delete data about them in certain circumstances. Other states are considering similar proposals. Such attempts by the states to regulate have the potential to create a patchwork of differing and/or conflicting state regulations. Ensuring compliance under ever-evolving privacy legislation, such as GDPR and CCPA, is an ongoing commitment, which involves substantial costs.

Compliance with existing and future regulations and responding to and complying with recent increased regulatory activity affecting broker-dealers, investment advisors, investment companies, financial institutions, and their service providers could have a significant impact on us. We periodically undergo regulatory examinations and respond to regulatory inquiries and document requests. In addition, recent and continuing legislative activity in the United States and in other jurisdictions (including the European Union and the United Kingdom) have made and continue to make extensive changes to the laws regulating financial services firms. As a result of these examinations, inquiries, and requests, as a result of increased civil litigation activity, and as a result of these new laws and regulations, we engage legal counsel and other subject matter experts, review our compliance procedures, solution and service offerings, and business operations, and make changes as we deem necessary or as may be required by the applicable authority. These additional activities and required changes may result in increased expense or may reduce revenues.

Our bank clients are subject to supervision by federal, state, and foreign banking and financial services authorities concerning the manner in which such clients purchase and receive our products and services. Our plan sponsor clients and our subsidiaries providing services to those clients are subject to supervision by the Department of Labor and compliance with employee benefit regulations. Investment advisor and broker-dealer clients are regulated by the SEC, state securities authorities, or FINRA. Existing or future regulations applicable to our clients may affect our clients’ purchase of our products and services.

In addition, see the discussion of governmental regulations in Item 1A “Risk Factors” in our latest Annual Report on Form 10-K for a description of the risks that the current regulatory regimes and proposed regulatory changes may present for our business.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Information required by this item is set forth under the captions "Our revenues and earnings are affected by changes in capital markets and significant changes in the value of financial instruments" and "Changes in interest rates may affect the value of our fixed-income investment securities" in Item 1A Risk Factors and under the caption "Impact of COVID-19" in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2021. There have been no material changes to this information as it is disclosed in our Annual Report on Form 10-K for 2021.

Item 4. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report are effective in ensuring that information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the

time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. A controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls systems are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

(b) Change in Internal Control over Financial Reporting

No change in our internal control over financial reporting occurred during the quarter ended ~~June~~September 30, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

We and certain of our subsidiaries are a party to or have property subject to litigation and other proceedings, examinations and investigations that arise in the ordinary course of our business that we do not believe are material. These types of matters could result in fines, penalties, cost reimbursements or contributions, compensatory or treble damages or non-monetary sanctions or relief. We believe the probability is remote that the outcome of any of these matters will have a material adverse effect on SEI as a whole, notwithstanding that the unfavorable resolution of any matter may have a material effect on our net earnings in any particular interim reporting period. We cannot predict the outcome of legal or other proceedings with certainty. These matters include the proceedings summarized in “Note 11. Commitments and Contingencies” included in our Notes to Consolidated Financial Statements.

Item 1A. Risk Factors.

Information regarding risk factors appears in Part I – Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. There have been no material changes in the risk factors from those disclosed in the Annual Report on Form 10-K for 2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(e) Our Board of Directors has authorized the repurchase of up to $5.328 billion worth of our common stock through multiple authorizations. Currently, there is no expiration date for the common stock repurchase program. ~~On June 1, 2022, the Board of Directors approved an increase in the stock repurchase program by an additional $200.0 million.~~

Information regarding the repurchase of common stock during the three months ended ~~June~~September 30, 2022 is as follows:

Period Total Number
of Shares
Purchased Average
Price Paid
per Share Total Number of
Shares Purchased as
Part of Publicly
Announced Program Approximate Dollar
Value of Shares that
May Yet Be
Purchased
Under the Program
April 2022 450,000 $ 56.95 450,000 $ 105,578,000
May 2022 750,000 55.30 750,000 64,105,000
June 2022 770,000 54.81 770,000 221,910,000
Total 1,970,000 $ 55.48 1,970,000


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
July 2022	100,000	$	54.03	100,000	$	216,507,000
August 2022	615,000	55.97		615,000	182,091,000
September 2022	175,000	54.94		175,000	172,477,000
Total	890,000	$	55.55	890,000

Item 6. Exhibits.

The following is a list of exhibits filed as part of the Form 10-Q.



~~10.1~~			~~Form of Restricted Stock Unit Grant Agreement with time-based vesting for employee awards under the Registrant's 2014 Omnibus Equity Compensation Plan.~~

31.1			Rule 13a-15(e)/15d-15(e) Certification of Chief Executive Officer.

31.2			Rule 13a-15(e)/15d-15(e) Certification of Chief Financial Officer.

32			Section 1350 Certifications.

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.DEF			XBRL Taxonomy Extension Definition Linkbase Document

101.LAB			XBRL Taxonomy Extension Label Linkbase Document

101.PRE			XBRL Taxonomy Extension Presentation Linkbase Document

4645

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

SEI INVESTMENTS COMPANY

Date:

~~July 25,~~October 28, 2022

By:

/s/ Dennis J. McGonigle

Dennis J. McGonigle

Chief Financial Officer

4746


Total:
Equity and fixed-income programs (C)	$	247,409	$	301,655	(18)%
Collective trust fund programs	142,047		87,024		63%
Liquidity funds	14,125		10,384		36%
Total assets under management	$	403,581	$	399,063	1%
Client assets under advisement	5,294		5,988		(12)%
Client assets under administration (D)	889,019		880,354		1%
Platform-only assets	12,642		13,566		(7)%
Total assets	$	1,310,536	$	1,298,971	1%