SEI INVESTMENTS CO [SEIC] Filings

10-Q 1 seic-20220930.htm FORM 10-Q seic-20220930

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 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 October 20, 2022:


Common Stock, $0.01 par value						134,828,481

SEI INVESTMENTS COMPANY

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Page

Item 1.

Financial Statements.

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

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

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

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

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

Notes to Consolidated Financial Statements

Item 2.

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

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

Item 4.

Controls and Procedures.

PART II - OTHER INFORMATION

Item 1.

Legal Proceedings.

Item 1A.

Risk Factors.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

Item 6.

Exhibits.

Signatures

PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements.

SEI Investments Company

Consolidated Balance Sheets

(unaudited)

(In thousands, except par value)


	September 30, 2022		December 31, 2021
Assets
Current Assets:
Cash and cash equivalents	$	791,437	$	831,407
Restricted cash	351		351
Receivables from investment products	91,223		59,036
Receivables, net of allowance for doubtful accounts of $2,336 and $1,602	482,692		441,609
Securities owned	31,586		28,267
Other current assets	54,931		43,559
Total Current Assets	1,452,220		1,404,229
Property and Equipment, net of accumulated depreciation of $431,473 and $409,248	182,522		178,869
Operating Lease Right-of-Use Assets	24,187		33,614
Capitalized Software, net of accumulated amortization of $579,352 and $545,307	234,228		243,446
Available for Sale and Equity Securities	109,375		129,541
Investments in Affiliated Funds, at fair value	5,620		6,916
Investment in Unconsolidated Affiliate	39,012		107,918
Goodwill	117,509		117,232
Intangible Assets, net of accumulated amortization of $27,133 and $17,716	58,201		68,782
Deferred Contract Costs	37,790		36,236
Deferred Income Taxes	2,253		2,983
Other Assets, net	32,514		24,936
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)


	September 30, 2022		December 31, 2021
Liabilities and Equity
Current Liabilities:
Accounts payable	$	8,209	$	10,312
Accrued liabilities	294,987		324,382
Current portion of long-term operating lease liabilities	11,202		11,328
Deferred revenue	13,025		9,721
Total Current Liabilities	327,423		355,743
Borrowings Under Revolving Credit Facility	—		40,000
Long-term Income Taxes Payable	803		803
Deferred Income Taxes	3,545		48,876
Long-term Operating Lease Liabilities	18,361		27,639
Other Long-term Liabilities	14,986		20,878
Total Liabilities	365,118		493,939
Commitments and Contingencies
Shareholders' Equity:
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	1,285,224		1,246,608
Retained earnings	711,330		632,614
Accumulated other comprehensive loss, net	(67,589)		(19,843)
Total Shareholders' Equity	1,930,313		1,860,763
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 September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenues:
Asset management, administration and distribution fees	$	372,133	$	393,296	$	1,148,824	$	1,143,451
Information processing and software servicing fees	99,201		92,026		385,623		273,208
Total revenues	471,334		485,322		1,534,447		1,416,659
Expenses:
Subadvisory, distribution and other asset management costs	47,334		55,619		150,485		161,610
Software royalties and other information processing costs	6,909		7,348		21,863		20,561
Compensation, benefits and other personnel	227,127		150,188		545,532		429,188
Stock-based compensation	10,766		11,318		31,339		31,173
Consulting, outsourcing and professional fees	58,558		55,868		184,320		165,657
Data processing and computer related	30,950		26,650		93,020		79,746
Facilities, supplies and other costs	19,704		14,124		57,464		49,851
Amortization	10,382		14,674		43,777		43,749
Depreciation	8,558		8,408		24,942		25,141
Total expenses	420,288		344,197		1,152,742		1,006,676
Income from operations	51,046		141,125		381,705		409,983
Net (loss) gain from investments	(1,406)		(575)		(4,515)		134
Interest and dividend income	3,962		892		6,663		2,715
Interest expense	(143)		(101)		(604)		(354)
Equity in earnings of unconsolidated affiliate	26,654		35,005		88,926		103,420
Income before income taxes	80,113		176,346		472,175		515,898
Income taxes	18,454		38,301		108,932		114,605
Net income	$	61,659	$	138,045	$	363,243	$	401,293
Basic earnings per common share	$	0.46	$	0.98	$	2.66	$	2.83
Shares used to compute basic earnings per share	135,203		140,507		136,524		141,928
Diluted earnings per common share	$	0.45	$	0.97	$	2.63	$	2.79
Shares used to compute diluted earnings per share	136,345		142,426		137,958		143,981
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 September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income	$	61,659	$	138,045	$	363,243	$	401,293
Other comprehensive loss, net of tax:
Foreign currency translation adjustments	(17,909)		(5,546)		(37,090)		(2,867)
Unrealized loss on investments:
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)	83		238		401		670
Total other comprehensive loss, net of tax	(21,826)		(6,021)		(47,746)		(3,745)
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
	For the Three Months Ended September 30, 2022
Balance, July 1, 2022	135,480	$	1,355	$	1,272,971	$	693,525	$	(45,763)	$	1,922,088
Net income	—	—		—		61,659		—		61,659
Other comprehensive loss	—	—		—		—		(21,826)		(21,826)
Purchase and retirement of common stock	(890)	(9)		(5,571)		(43,854)		—		(49,434)
Issuance of common stock under employee stock purchase plan	24	—		1,123		—		—		1,123
Issuance of common stock upon exercise of stock options	202	2		5,935		—		—		5,937
Stock-based compensation	—	—		10,766		—		—		10,766

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
	For the Three Months Ended September 30, 2021
Balance, July 1, 2021	141,027	$	1,410	$	1,219,487	$	599,231	$	(14,522)	$	1,805,606
Net income	—	—		—		138,045		—		138,045
Other comprehensive loss	—	—		—		—		(6,021)		(6,021)
Purchase and retirement of common stock	(1,980)	(21)		(11,751)		(108,123)		—		(119,895)
Issuance of common stock under employee stock purchase plan	22	1		1,119		—		—		1,120
Issuance of common stock upon exercise of stock options	236	3		7,912		—		—		7,915
Stock-based compensation	—	—		11,318		—		—		11,318

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
	For the Nine Months Ended September 30, 2022
Balance, January 1, 2022	138,449	$	1,384	$	1,246,608	$	632,614	$	(19,843)	$	1,860,763
Net income	—	—		—		363,243		—		363,243
Other comprehensive loss	—	—		—		—		(47,746)		(47,746)
Purchase and retirement of common stock	(4,573)	(46)		(28,622)		(230,149)		—		(258,817)
Issuance of common stock under employee stock purchase plan	69	1		3,380		—		—		3,381
Issuance of common stock upon exercise of stock options	871	9		32,519		—		—		32,528
Stock-based compensation	—	—		31,339		—		—		31,339
Dividends declared ($0.40 per share)	—	—		—		(54,378)		—		(54,378)
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
	For the Nine Months Ended September 30, 2021
Balance, January 1, 2021	143,396	$	1,434	$	1,190,001	$	565,270	$	(16,798)	$	1,739,907
Net income	—	—		—		401,293		—		401,293
Other comprehensive loss	—	—		—		—		(3,745)		(3,745)
Purchase and retirement of common stock	(5,218)	(53)		(30,979)		(285,021)		—		(316,053)
Issuance of common stock under employee stock purchase plan	64	1		3,224		—		—		3,225
Issuance of common stock upon exercise of stock options	1,063	11		34,666		—		—		34,677
Stock-based compensation	—	—		31,173		—		—		31,173
Dividends declared ($0.37 per share)	—	—		—		(52,389)		—		(52,389)
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)


	Nine Months Ended September 30,
	2022		2021
Cash flows from operating activities:
Net income	$	363,243	$	401,293
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	428,519		483,881
Cash flows from investing activities:
Additions to property and equipment	(32,319)		(22,520)
Additions to capitalized software	(24,827)		(19,486)
Purchases of marketable securities	(124,454)		(168,333)
Prepayments and maturities of marketable securities	124,040		133,895
Sales of marketable securities	179		327
Other investing activities	(2,961)		(11,425)
Net cash used in investing activities	(60,342)		(87,542)
Cash flows from financing activities:
Repayments under revolving credit facility	(40,000)		—
Payment of contingent consideration	(868)		(3,965)
Purchase and retirement of common stock	(266,549)		(315,811)
Proceeds from issuance of common stock	35,909		37,902
Payment of dividends	(109,830)		(105,516)
Net cash used in financing activities	(381,338)		(387,390)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(26,809)		(2,442)
Net (decrease) increase in cash, cash equivalents and restricted cash	(39,970)		6,507
Cash, cash equivalents and restricted cash, beginning of period	831,758		787,727
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 September 30, 2022, the results of operations for the three and nine months ended September 30, 2022 and 2021, and cash flows for the nine-months ended 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 nine months ended 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 $7,896 and $11,629 in fees during the three months ended September 30, 2022 and 2021, respectively. During the nine months ended September 30, 2022 and 2021, the Company waived $28,120 and $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 $305,877 and $290,256 at 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 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 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 $24,827 and $19,486 of software development costs during the nine months ended 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 September 30, 2022, the net book value of SWP was $225,725. The net book value includes $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 10.0 years. Amortization expense for SWP was $29,696 and $35,834 during the nine months ended 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 nine months ended September 30, 2022 and 2021 are:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income	$	61,659	$	138,045	$	363,243	$	401,293
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	1,142,000		1,919,000		1,434,000		2,053,000
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	$	0.46	$	0.98	$	2.66	$	2.83
Diluted earnings per common share	$	0.45	$	0.97	$	2.63	$	2.79

During the three months ended September 30, 2022 and 2021, employee stock options to purchase 11,862,000 and 11,347,000 shares of common stock with an average exercise price of $60.26 and $57.80, respectively, were outstanding but not included in the computation of diluted earnings per common share. During the nine months ended September 30, 2022 and 2021, employee stock options to purchase 12,048,000 and 11,531,000 shares of common stock with an average exercise price of $60.27 and $57.78, respectively, were outstanding but not included in the computation of diluted earnings per common share. These options for the three and 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 nine months ended September 30:


	2022		2021
Net income	$	363,243	$	401,293
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	24,942		25,141
Amortization	43,777		43,749
Equity in earnings of unconsolidated affiliate	(88,926)		(103,420)
Distributions received from unconsolidated affiliate	103,504		110,559
Stock-based compensation	31,339		31,173
Provision for losses on receivables	734		1,569
Deferred income tax expense	(41,419)		(6,639)
Net loss (gain) from investments	4,515		(134)

Change in other long-term liabilities	3,014		2,103
Change in other assets	(4,820)		314
Contract costs capitalized, net of amortization	(1,554)		(482)
Other	(6,934)		921
Change in current assets and liabilities
(Increase) decrease in
Receivables from investment products	(32,187)		(4,537)
Receivables	(41,697)		(58,537)
Other current assets	(11,422)		(3,919)
Advances due from unconsolidated affiliate	54,328		51,422
(Decrease) increase in
Accounts payable	(2,103)		3,006
Accrued liabilities	27,092		(9,851)
Deferred revenue	3,093		150
Total adjustments	65,276		82,588
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 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 September 30, 2022, the Company’s total investment in LSV was $39,012. The Company receives partnership distributions from LSV on a quarterly basis. The Company received partnership distributions from LSV of $103,504 and $110,559 in the nine months ended 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 $26,654 and $35,005 during the three months ended September 30, 2022 and 2021, respectively. During the nine months ended September 30, 2022 and 2021, the Company's proportionate share in the earnings of LSV was $88,926 and $103,420, respectively.

These tables contain condensed financial information of LSV:


Condensed Statement of Operations	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenues	$	91,588	$	115,728	$	299,852	$	342,957
Net income	69,013		90,365		229,997		266,805


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

Current liabilities	$	64,263	$	82,858
Non-current liabilities	3,260		3,863
Partners’ capital	48,011		89,129
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:


	September 30, 2022		December 31, 2021
Trade receivables	$	121,181	$	111,209
Fees earned, not billed	332,457		315,255
Other receivables	31,390		16,747
	485,028		443,211
Less: Allowance for doubtful accounts	(2,336)		(1,602)
	$	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:


	September 30, 2022		December 31, 2021
Buildings	$	210,108	$	209,766
Equipment	175,059		153,158
Land	26,439		24,651
Purchased software