Company Quick10K Filing
Quick10K
SEI Investments
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$52.60 152 $8,020
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-05-29 Shareholder Vote, Other Events, Exhibits
8-K 2019-01-30 Earnings, Exhibits
8-K 2018-12-11 Other Events, Exhibits
8-K 2018-11-14 Regulation FD, Exhibits
8-K 2018-05-30 Shareholder Vote, Other Events, Exhibits
8-K 2018-01-31 Earnings, Exhibits
HCA HCA Healthcare 42,650
ACGL Arch Capital Group 13,500
MDCO Medicines 2,350
CRTO Criteo 1,340
EYES Second Sight Medical Products 117
SMTX SMTC 92
APWC Asia Pacific Wire & Cable 31
GLGI Greystone Logistics 0
BHAC Barington/Hilco Acquisition 0
ACXM Acxiom 0
SEIC 2019-03-31
Part I. Financial Information
Item 1. Consolidated Financial Statements.
Note 1. Summary of Significant Accounting Policies
Note 2. Investment in Unconsolidated Affiliate
Note 3. Composition of Certain Financial Statement Captions
Note 4. Fair Value Measurements
Note 5. Marketable Securities
Note 6. Line of Credit
Note 7. Shareholders' Equity
Note 8. Accumulated Other Comprehensive Loss
Note 9. Business Segment Information
Note 10. Income Taxes
Note 11. Commitments and Contingencies
Note 12. Business Acquisition
Note 13. Goodwill and Intangible Assets
Note 14. Revenues From Contracts with Customers
Note 15. Leases
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
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.
EX-31.1 seic-3311910qex311.htm
EX-31.2 seic-3311910qex312.htm
EX-32 seic-3311910qex32.htm
EX-99.1 seic-earningsreleaseex9914.htm

SEI Investments Earnings 2019-03-31

SEIC 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Document
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 ________________________________________
FORM 10-Q
________________________________________
 

ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2019
or
¨
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
________________________________________ 
 
seinwnaka15.jpg
________________________________________
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)
 ________________________________________
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  ý    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  ý    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See 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
ý
 
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 Exchange Act).   Yes  ¨    No  ý
The number of shares outstanding of the registrant’s common stock, as of the close of business on April 18, 2019:
Common Stock, $.01 par value
 
152,520,183






SEI INVESTMENTS COMPANY

TABLE OF CONTENTS
 
 
 
 
 
 
 
 
 
 
PART I - FINANCIAL INFORMATION
 
 
 
 
 
 
Page
Item 1.
Financial Statements.
 
 
 
Consolidated Balance Sheets (Unaudited) -- March 31, 2019 and December 31, 2018
 
 
Consolidated Statements of Operations (Unaudited) -- For the Three Months Ended March 31, 2019 and 2018
 
 
Consolidated Statements of Comprehensive Income (Unaudited) -- For the Three Months Ended March 31, 2019 and 2018
 
 
Consolidated Statements of Cash Flows (Unaudited) -- For the Three Months Ended March 31, 2019 and 2018
 
 
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
 



Page 1 of 43





PART I.        FINANCIAL INFORMATION

Item 1.    Consolidated Financial Statements.

SEI Investments Company
Consolidated Balance Sheets
(unaudited)
(In thousands, except par value)

 
March 31, 2019
 
December 31, 2018
Assets
 
 
 
Current Assets:
 
 
 
Cash and cash equivalents
$
669,323

 
$
754,525

Restricted cash
3,517

 
3,514

Receivables from investment products
52,562

 
49,869

Receivables, net of allowance for doubtful accounts of $633 and $718
333,724

 
315,336

Securities owned
33,433

 
30,892

Other current assets
35,049

 
36,676

Total Current Assets
1,127,608

 
1,190,812

Property and Equipment, net of accumulated depreciation of $345,129 and $338,206
146,753

 
145,863

Operating Lease Right-of-Use Assets
45,297

 

Capitalized Software, net of accumulated amortization of $406,871 and $395,171
307,736

 
309,500

Investments Available for Sale
109,824

 
111,901

Investments in Affiliated Funds, at fair value
5,339

 
4,887

Investment in Unconsolidated Affiliate
56,422

 
52,342

Goodwill
64,489

 
64,489

Intangible Assets, net of accumulated amortization of $6,011 and $5,090
30,749

 
31,670

Deferred Contract Costs
24,145

 
24,007

Deferred Income Taxes
1,877

 
2,042

Other Assets, net
32,882

 
34,155

Total Assets
$
1,953,121

 
$
1,971,668

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


Page 2 of 43





SEI Investments Company
Consolidated Balance Sheets
(unaudited)
(In thousands, except par value)

 
March 31, 2019
 
December 31, 2018
Liabilities and Equity
 
 
 
Current Liabilities:
 
 
 
Accounts payable
$
5,242

 
$
10,920

Accrued liabilities
173,860

 
279,634

Short-term operating lease liabilities
8,448

 

Deferred revenue
4,979

 
5,154

Total Current Liabilities
192,529

 
295,708

Long-term Income Taxes Payable

803

 
803

Deferred Income Taxes
56,909

 
57,795

Long-term Operating Lease Liabilities
41,838

 

Other Long-term Liabilities
24,492

 
24,215

Total Liabilities
316,571

 
378,521

Commitments and Contingencies

 

Shareholders' Equity:
 
 
 
Common stock, $.01 par value, 750,000 shares authorized; 152,276 and 153,634 shares issued and outstanding
1,523

 
1,536

Capital in excess of par value
1,111,366

 
1,106,641

Retained earnings
552,381

 
517,970

Accumulated other comprehensive loss, net
(28,720
)
 
(33,000
)
Total Shareholders' Equity
1,636,550

 
1,593,147

Total Liabilities and Shareholders' Equity
$
1,953,121

 
$
1,971,668

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

Page 3 of 43





SEI Investments Company
Consolidated Statements of Operations
(unaudited)
(In thousands, except per share data)
 
 
Three Months Ended March 31,
 
2019
 
2018
Revenues:
 
 
 
Asset management, administration and distribution fees
$
313,944

 
$
316,209

Information processing and software servicing fees
86,876

 
89,389

Total revenues
400,820

 
405,598

Expenses:
 
 
 
Subadvisory, distribution and other asset management costs
43,805

 
45,205

Software royalties and other information processing costs
8,128

 
8,718

Compensation, benefits and other personnel
130,335

 
124,277

Stock-based compensation
5,038

 
5,195

Consulting, outsourcing and professional fees
50,206

 
48,707

Data processing and computer related
20,992

 
20,591

Facilities, supplies and other costs
18,745

 
17,613

Amortization
12,679

 
11,854

Depreciation
7,331

 
7,122

Total expenses
297,259

 
289,282

Income from operations
103,561

 
116,316

Net gain (loss) from investments
1,279

 
(410
)
Interest and dividend income
4,257

 
2,502

Interest expense
(157
)
 
(257
)
Equity in earnings of unconsolidated affiliate
37,317

 
40,607

Income before income taxes
146,257

 
158,758

Income taxes
32,276

 
18,920

Net income
$
113,981

 
$
139,838

Basic earnings per common share
$
0.74

 
$
0.89

Shares used to compute basic earnings per share
153,310

 
157,434

Diluted earnings per common share
$
0.73

 
$
0.86

Shares used to compute diluted earnings per share
156,541

 
163,424

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

Page 4 of 43





SEI Investments Company
Consolidated Statements of Comprehensive Income
(unaudited)
(In thousands)
 
 
Three Months Ended March 31,
 
2019
 
2018
Net income
 
 
$
113,981

 
 
 
$
139,838

Other comprehensive gain, net of tax:
 
 
 
 
 
 
 
Foreign currency translation adjustments
 
 
3,397

 
 
 
3,377

Unrealized gain (loss) on investments:
 
 
 
 
 
 
 
Unrealized gains (losses) during the period, net of income taxes of $(240) and $424
797

 
 
 
(1,357
)
 
 
Less: reclassification adjustment for losses (gains) realized in net income, net of income taxes of $(24) and $(15)
86

 
883

 
(273
)
 
(1,630
)
Total other comprehensive gain, net of tax
 
 
4,280

 
 
 
1,747

Comprehensive income
 
 
$
118,261

 
 
 
$
141,585

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

Page 5 of 43





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 March 31, 2019
Balance, January 1, 2019
153,634

 
$
1,536

 
$
1,106,641

 
$
517,970

 
$
(33,000
)
 
$
1,593,147

Net income

 

 

 
113,981

 

 
113,981

Other comprehensive gain

 

 

 

 
4,280

 
4,280

Purchase and retirement of common stock
(1,725
)
 
(17
)
 
(9,202
)
 
(79,570
)
 

 
(88,789
)
Issuance of common stock under employee stock purchase plan
32

 

 
1,322

 

 

 
1,322

Issuance of common stock upon exercise of stock options
335

 
4

 
7,567

 

 

 
7,571

Stock-based compensation

 

 
5,038

 

 

 
5,038

Balance, March 31, 2019
152,276

 
$
1,523

 
$
1,111,366

 
$
552,381

 
$
(28,720
)
 
$
1,636,550


 
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 March 31, 2018
Balance, January 1, 2018
157,069

 
$
1,571

 
$
1,027,709

 
$
467,467

 
$
(19,908
)
 
$
1,476,839

Cumulative effect upon adoption of ASC 606

 

 

 
14,402

 

 
14,402

Net income

 

 

 
139,838

 

 
139,838

Other comprehensive gain

 

 

 

 
1,747

 
1,747

Purchase and retirement of common stock
(1,122
)
 
(11
)
 
(5,461
)
 
(76,784
)
 

 
(82,256
)
Issuance of common stock under employee stock purchase plan
16

 

 
1,005

 

 

 
1,005

Issuance of common stock upon exercise of stock options
2,027

 
20

 
56,864

 

 

 
56,884

Stock-based compensation

 

 
5,195

 

 

 
5,195

Balance, March 31, 2018
157,990

 
$
1,580

 
$
1,085,312

 
$
544,923

 
$
(18,161
)
 
$
1,613,654

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


Page 6 of 43





SEI Investments Company
Consolidated Condensed Statements of Cash Flows
(unaudited)
(In thousands)
 
 
Three Months Ended March 31,
 
2019
 
2018
Cash flows from operating activities:
 
 
 
Net income
$
113,981

 
$
139,838

Adjustments to reconcile net income to net cash provided by operating activities (See Note 1)
(54,082
)
 
(35,664
)
Net cash provided by operating activities
59,899

 
104,174

Cash flows from investing activities:
 
 
 
Additions to property and equipment
(7,317
)
 
(5,611
)
Additions to capitalized software
(9,937
)
 
(12,887
)
Purchases of marketable securities
(43,672
)
 
(15,466
)
Prepayments and maturities of marketable securities
45,200

 
18,588

Net cash used in investing activities
(15,726
)
 
(15,376
)
Cash flows from financing activities:
 
 
 
Repayments under revolving credit facility

 
(10,000
)
Purchase and retirement of common stock
(90,777
)
 
(87,995
)
Proceeds from issuance of common stock
8,893

 
57,889

Payment of dividends
(50,760
)
 
(47,179
)
Net cash used in financing activities
(132,644
)
 
(87,285
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
3,272

 
2,541

Net (decrease) increase in cash, cash equivalents and restricted cash
(85,199
)
 
4,054

Cash, cash equivalents and restricted cash, beginning of period
758,039

 
747,752

Cash, cash equivalents and restricted cash, end of period
$
672,840

 
$
751,806

 
 
 
 
Non-cash operating activities:
 
 
 
Operating lease right-of-use assets and lease liabilities recorded upon adoption of ASC 842
$
44,169

 
$

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

Page 7 of 43





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 investment processing, investment management, and investment operations platforms to financial institutions, financial advisors, institutional investors, investment managers and ultra-high-net-worth families in the United States, Canada, the United Kingdom, continental Europe and various other locations throughout the world.
Investment processing platforms consist of application and business process outsourcing services, professional services and transaction-based services. Revenues from investment processing platforms are recognized in Information processing and software servicing fees on the accompanying Consolidated Statements of Operations.
Investment management programs consist of mutual funds, alternative investments and separate accounts. These include a series of money market, equity, fixed-income and alternative investment portfolios, primarily in the form of registered investment companies. The Company serves as the administrator and investment advisor for many of these products. Revenues from investment management programs are recognized in Asset management, administration and distribution fees on the accompanying Consolidated Statements of Operations.
Investment operations platforms consist of outsourcing services including fund and investment accounting, administration, reconciliation, investor servicing and client reporting. Revenues from investment operations 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 March 31, 2019, the results of operations for the three months ended March 31, 2019 and 2018, and cash flows for the three-month periods ended March 31, 2019 and 2018. 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, 2018.
The Company adopted the requirements of the Accounting Standards Update (ASU) No. 2016-2 Leases (Topic 842) (Accounting Standards Codifications (ASC) 842 (ASC 842)) using the modified retrospective method during the three months ended March 31, 2019. As a result of the adoption of ASC 842, the Company recorded additional lease assets and net lease liabilities of $44,169 as of January 1, 2019. Upon implementation, the Company elected the package of practical expedients permitted under the transition guidance within the new standard which allowed the Company to carryforward the historical lease identification, classification and initial direct cost. ASC 842 did not materially impact the Company’s consolidated net income or consolidated cash flows (see following caption "Leases"). With the exception of the adoption of ASC 842, there have been no significant changes in significant accounting policies during the three months ended March 31, 2019 as compared to the significant accounting policies described in the Company's Annual Report on Form 10-K for the year ended December 31, 2018.
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 entities either do not meet the definition of a VIE or the Company does not hold a variable interest in the entities. The entities either qualify for the money market scope exception, or are entities in which the Company’s asset management, distribution, administration and custodial fees are commensurate with the services

Page 8 of 43





provided and include fair terms and conditions, or are entities that are limited partnerships which have substantive kick-out rights. The Company acts as a fiduciary and does not hold any other interests other than insignificant seed money investments in the pooled investment vehicles. For this reason, the Company also concluded that it is not required to consolidate the pooled investment vehicles under the voting interest entity (VOE) 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 $7,905 and $6,654 in fees during the three months ended March 31, 2019 and 2018, respectively.
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).
Cash and Cash Equivalents
Cash and cash equivalents includes $269,591 and $315,840 at March 31, 2019 and December 31, 2018, respectively, primarily invested in SEI-sponsored open-ended money market mutual funds. The SEI-sponsored mutual funds are Level 1 assets.
Restricted Cash
Restricted cash includes $3,000 at March 31, 2019 and December 31, 2018 segregated for regulatory purposes related to trade-execution services conducted by SEI Investments (Europe) Limited. Restricted cash also includes $517 and $514 at March 31, 2019 and December 31, 2018, respectively, 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 $9,937 and $12,887 of software development costs during the three months ended March 31, 2019 and 2018, respectively. The Company's software development costs primarily relate to the continued development of the SEI Wealth PlatformSM (SWP). The Company capitalized $9,739 and $12,042 of software development costs for significant enhancements to SWP during the three months ended March 31, 2019 and 2018, respectively. As of March 31, 2019, the net book value of SWP was $288,006. The net book value includes $45,180 of capitalized software development costs in-progress associated with future releases. SWP has a weighted average remaining life of 8.5 years. Amortization expense for SWP was $10,399 and $9,719 during the three months ended March 31, 2019 and 2018, respectively.
Earnings per Share
The calculations of basic and diluted earnings per share for the three months ended March 31, 2019 and 2018 are:
 
Three Months Ended March 31,
 
2019
 
2018
Net income
$
113,981

 
$
139,838

Shares used to compute basic earnings per common share
153,310,000

 
157,434,000

Dilutive effect of stock options
3,231,000

 
5,990,000

Shares used to compute diluted earnings per common share
156,541,000

 
163,424,000

Basic earnings per common share
$
0.74

 
$
0.89

Diluted earnings per common share
$
0.73

 
$
0.86


During the three months ended March 31, 2019 and 2018, employee stock options to purchase 6,323,000 and 6,054,000 shares of common stock with an average exercise price of $54.81 and $52.73, respectively, were outstanding but not included in the computation of diluted earnings per common share. These options for the three month periods were not included in the computation of diluted earnings per common share because either the performance conditions have not

Page 9 of 43





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.
Leases
The Company determines if an arrangement is a lease at the inception of the contract. The Company's operating leases are included in Operating lease right-of-use (ROU) assets, Short-term operating lease liabilities, and Long-term operating lease liabilities on the accompanying Consolidated Balance Sheet.
The operating lease ROU assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit interest rate, the Company utilizes an estimated incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. In determining the discount rate used in the present value calculation, the Company has elected to apply the portfolio approach for leases of equipment provided the leases commenced at or around the same time. This election allows the Company to account for leases at a portfolio level provided that the resulting accounting at this level would not differ materially from the accounting at the individual lease level. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.
The Company has elected to account for lease and non-lease components separately. Operating lease ROU assets include all contractual lease payments and initial direct costs incurred less any lease incentives. Facility leases generally only contain lease expense and non-component items such as taxes and pass through charges. Only the lease components are included in the ROU assets and lease liabilities. Additionally, the Company has elected not to apply the recognition requirements of ASC 842 to leases which have a lease term of less than one year at the commencement date.
The majority of the Company's leases for corporate facilities and equipment contain terms for renewal and extension of the lease agreement. The exercise of lease renewal options is generally at the Company’s sole discretion. The Company includes the lease extensions when it is reasonably certain the Company will exercise the extension. The Company’s lease agreements do not contain any material variable lease payments, material residual value guarantees or any material restrictive covenants. The Company does not currently have any finance leases.
See Note 15 for information on related disclosures regarding leases.
Reclassifications
Certain prior year amounts have been reclassified to conform to current year presentation.
New Accounting Pronouncements
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13) which requires that expected credit losses relating to financial assets measured on an amortized cost basis and available-for-sale debt securities be recorded through an allowance for credit losses. ASU 2016-13 limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and also requires the reversal of previously recognized credit losses if fair value increases. ASU 2016-13 becomes effective for the Company during the first quarter of 2020. Early adoption is permitted. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures.
In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment (ASU 2017-04). The objective of ASU 2017-04 is to simplify the subsequent measurement of goodwill by entities performing their annual goodwill impairment tests by comparing the fair value of a reporting unit, including income tax effects from any tax-deductible goodwill, with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds fair value. ASU 2017-04 is effective for the Company beginning in the first quarter of 2020. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2017-04 on its consolidated financial statements and related disclosures.
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13) which modifies the disclosure requirements on fair value measurements. ASU 2018-13 is effective for the Company beginning in the first quarter of 2020. The Company is currently evaluating the impact of adopting ASU 2018-13 on its consolidated financial statements and related disclosures.
In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities (ASU 2018-17). The new standard changes how entities evaluate decision-making fees under the variable interest entity guidance. ASU 2018-17 is effective for the Company beginning in the first quarter of

Page 10 of 43





2020. The Company is currently evaluating the impact of adopting ASU 2018-17 on its consolidated financial statements and related disclosures.
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 three months ended March 31:
 
2019
 
2018
Net income
$
113,981

 
$
139,838

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation
7,331

 
7,122

Amortization
12,679

 
11,854

Equity in earnings of unconsolidated affiliate
(37,317
)
 
(40,607
)
Distributions received from unconsolidated affiliate
33,237

 
45,617

Stock-based compensation
5,038

 
5,195

Provision for losses on receivables
(85
)
 
93

Deferred income tax expense
(984
)
 
2,083

Net (gain) loss from investments
(1,279
)
 
410

Change in other long-term liabilities
277

 
579

Change in other assets
1,334

 
290

Contract costs capitalized, net of amortization
(138
)
 
(1,234
)
Other
(63
)
 
450

Change in current assets and liabilities
 
 
 
(Increase) decrease in
 
 
 
Receivables from investment products
(2,693
)
 
1,757

Receivables
(18,304
)
 
(25,657
)
Other current assets
574

 
(3,564
)
(Decrease) increase in
 
 
 
Accounts payable
(5,678
)
 
3,195

Accrued liabilities
(47,836
)
 
(43,522
)
Deferred revenue
(175
)
 
275

Total adjustments
(54,082
)
 
(35,664
)
Net cash provided by operating activities
$
59,899

 
$
104,174



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 March 31, 2019 was 38.9 percent. The Company accounts for its interest in LSV using the equity method because of its less than 50 percent 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 March 31, 2019, the Company’s total investment in LSV was $56,422. The Company receives partnership distributions from LSV on a quarterly basis. The Company received partnership distributions from LSV of $33,237 and $45,617 in the three months ended March 31, 2019 and 2018, respectively. As such, the Company considers these distribution payments

Page 11 of 43





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 $37,317 and $40,607 during the three months ended March 31, 2019 and 2018, respectively.
These tables contain condensed financial information of LSV:
Condensed Statement of Operations
 
Three Months Ended March 31,
 
 
2019
 
2018
Revenues
 
$
120,915

 
$
131,718

Net income
 
95,948

 
104,406



Condensed Balance Sheets

 
March 31, 2019
 
December 31, 2018
Current assets
 
$
148,489

 
$
138,083

Non-current assets
 
5,047

 
1,165

Total assets
 
$
153,536

 
$
139,248

 
 
 
 
 
Current liabilities
 
$
47,557

 
$
47,874

Non-current liabilities
 
5,019

 

Partners’ capital
 
100,960

 
91,374

Total liabilities and partners’ capital
 
$
153,536

 
$
139,248



Note 3.
Composition of Certain Financial Statement Captions
Receivables
Receivables on the accompanying Consolidated Balance Sheets consist of: 
 
March 31, 2019
 
December 31, 2018
Trade receivables
$
83,594

 
$
76,362

Fees earned, not billed
237,478

 
226,001

Other receivables
13,285

 
13,691

 
334,357

 
316,054

Less: Allowance for doubtful accounts
(633
)
 
(718
)
 
$
333,724

 
$
315,336


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.

Page 12 of 43





Property and Equipment
Property and Equipment on the accompanying Consolidated Balance Sheets consists of:
 
March 31, 2019
 
December 31, 2018
Buildings
$
160,830

 
$
160,796

Equipment
128,154

 
126,954

Land
10,772

 
10,772

Purchased software
139,794

 
139,245

Furniture and fixtures
18,312

 
18,103

Leasehold improvements
20,136

 
18,959

Construction in progress
13,884

 
9,240

 
491,882

 
484,069

Less: Accumulated depreciation
(345,129
)
 
(338,206
)
Property and Equipment, net
$
146,753

 
$
145,863


The Company recognized $7,331 and $7,122 in depreciation expense related to property and equipment for the three months ended March 31, 2019 and 2018, respectively.
Deferred Contract Costs
Deferred contract costs, which primarily consist of deferred sales commissions, were $24,145 and $24,007 as of March 31, 2019 and December 31, 2018, respectively. The Company deferred expenses related to contract costs of $1,126 and $1,816 during the three months ended March 31, 2019 and 2018, respectively. Amortization expense related to deferred contract costs were $988 and $582 during the three months ended March 31, 2019 and 2018, respectively. There was no impairment loss in relation to deferred contract costs during the three months ended March 31, 2019.
Accrued Liabilities
Accrued liabilities on the accompanying Consolidated Balance Sheets consist of: 
 
March 31, 2019
 
December 31, 2018
Accrued employee compensation
$
31,825

 
$
97,603

Accrued consulting, outsourcing and professional fees
33,031

 
31,000

Accrued sub-advisory, distribution and other asset management fees
42,616

 
42,583

Accrued dividend payable

 
50,761

Accrued income taxes
28,464

 
6,559

Other accrued liabilities
37,924

 
51,128

Total accrued liabilities
$
173,860

 
$
279,634



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 Government National Mortgage Association (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 2021 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.

Page 13 of 43





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 three months ended March 31, 2019 were consistent with those as described in our Annual Report on Form 10-K at December 31, 2018. The Company had no Level 3 financial assets at March 31, 2019 or December 31, 2018 that were required to be measured at fair value on a recurring basis. The Company's Level 3 financial liabilities at March 31, 2019 and December 31, 2018 consist entirely of the estimated contingent consideration of $12,120 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 correlation coefficient. There were no transfers of financial assets between levels within the fair value hierarchy during the three months ended March 31, 2019.
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
Assets
 
March 31, 2019
 
Quoted Prices
in
Active  Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
Equity available-for-sale securities
 
$
11,111

 
$
11,111

 
$

Fixed-income available-for-sale securities
 
98,713

 

 
98,713

Fixed-income securities owned
 
33,433

 

 
33,433

Investment funds sponsored by LSV (1)
 
5,339

 
 
 
 
 
 
$
148,596

 
$
11,111

 
$
132,146


 
 
 
 
Fair Value Measurements at the End of the Reporting Period Using
Assets
 
December 31, 2018
 
Quoted Prices
in
Active  Markets
for Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
Equity available-for-sale securities
 
$
10,218

 
$
10,218

 
$

Fixed-income available-for-sale securities
 
101,683

 

 
101,683

Fixed-income securities owned
 
30,892

 

 
30,892

Investment funds sponsored by LSV (1)
 
4,887

 
 
 
 
 
 
$
147,680

 
$
10,218

 
$
132,575


(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
Investments Available for Sale
Investments available for sale classified as non-current assets consist of: 
 
At March 31, 2019
 
Cost
Amount
 
Gross
Unrealized
Gains
 
Gross
Unrealized
(Losses)
 
Fair
Value
SEI-sponsored mutual funds
$
7,429

 
$
77

 
$
(384
)
 
$
7,122

Equities and other mutual funds
3,475

 
514

 

 
3,989

Debt securities
99,401

 

 
(688
)
 
98,713

 
$
110,305

 
$
591

 
$
(1,072
)
 
$
109,824


Page 14 of 43





 
At December 31, 2018
 
Cost
Amount
 
Gross
Unrealized
Gains
 
Gross
Unrealized
(Losses)
 
Fair
Value
SEI-sponsored mutual funds
$
7,446

 
$

 
$
(788
)
 
$
6,658

Equities and other mutual funds
3,434

 
126

 

 
3,560

Debt securities
103,518

 

 
(1,835
)
 
101,683

 
$
114,398

 
$
126

 
$
(2,623
)
 
$
111,901


Net unrealized losses at March 31, 2019 and December 31, 2018 of the Company's available-for-sale debt securities were $530 (net of income tax benefit of $158) and $1,413 (net of income tax benefit of $422), respectively. 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 gains of $458 and gross realized losses of $182 during the three months ended March 31, 2018. Gross realized gains and losses from available-for-sale securities during the three months ended March 31, 2019 were immaterial. Gains and losses from available-for-sale securities, including amounts reclassified from accumulated comprehensive loss, are reflected in Net gain (loss) 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 investment primarily consists of U.S. dollar denominated funds that invest primarily in securities of Canadian, Australian and Japanese companies as well as various other global securities. The underlying securities held by the funds are translated into U.S. dollars within the funds. The funds had a fair value of $5,339 and $4,887 at March 31, 2019 and December 31, 2018, respectively. The Company recognized gains of $452 and losses of $500 during the three months ended March 31, 2019 and 2018, 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 $33,433 and $30,892 at March 31, 2019 and December 31, 2018, respectively. There were no material net gains or losses related to the securities during the three months ended March 31, 2019 and 2018.

Note 6.    Line of Credit
The Company has a five-year $300,000 Credit Agreement (the Credit Facility) with Wells Fargo Bank, National Association, and a syndicate of other lenders. The Credit Facility is scheduled to expire in June 2021, 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 percent to 1.00 percent or the London InterBank Offered Rate (LIBOR) plus a premium that can range from 1.25 percent to 2.00 percent depending on the Company’s Leverage Ratio (a ratio of consolidated indebtedness to consolidated EBITDA for the four 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 percent, b) the prime commercial lending rate of Wells Fargo, c) the applicable LIBOR plus 1.00 percent, or d) 0 percent. 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 percent of the amount of the unused portion to 0.30 percent, 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 percent plus a fronting fee of 0.175 percent of the aggregate face amount of the outstanding letters of credit issued under the Credit Facility.

Page 15 of 43





The Credit Facility contains covenants that restrict the ability of the Company to engage in mergers, consolidations, asset sales, investments, transactions with affiliates, or to incur liens, 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. None of the covenants of the Credit Facility negatively affect the Company’s liquidity or capital resources. 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.
As of March 31, 2019, the Company had outstanding letters of credit of $13,813 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 the remainder of 2019. The amount of the Credit Facility that is available for general corporate purposes as of March 31, 2019 was $286,187.
The Company was in compliance with all covenants of the Credit Facility during the three months ended March 31, 2019.

Note 7.    Shareholders’ Equity
Stock-Based Compensation
The Company has only non-qualified stock options 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 percent when a specified diluted earnings per share target is achieved, and the remaining 50 percent when a second, higher specified diluted earnings per share target is achieved. Options do not vest due to the passage of time but solely 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. Earnings per share targets exclude the impact of stock-based compensation and are established at time of grant. 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 earnings per share 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 recognized stock-based compensation expense in its Consolidated Financial Statements in the three months ended March 31, 2019 and 2018, respectively, as follows: 
 
Three Months Ended March 31,
 
2019
 
2018
Stock-based compensation expense
$
5,038

 
$
5,195

Less: Deferred tax benefit
(946
)
 
(1,103
)
Stock-based compensation expense, net of tax
$
4,092

 
$
4,092

As of March 31, 2019, there was approximately $62,232 of unrecognized compensation cost remaining related to unvested employee stock options 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 three months ended March 31, 2019 was $9,601. The total options exercisable as of March 31, 2019 had an intrinsic value of $170,509. The total intrinsic value for options exercisable is calculated as the difference between the market value of the Company’s common stock as of March 31, 2019 and the weighted average exercise price of the options. The market value of the Company’s common stock as of March 31, 2019 was $52.25 as reported by the Nasdaq Stock Market, LLC. The weighted average exercise price of the options exercisable as of March 31, 2019 was $33.36. Total options that were outstanding as of March 31, 2019 were 15,347,000. Total options that were exercisable as of March 31, 2019 were 9,024,000.
Common Stock Buyback
The Company’s Board of Directors, under multiple authorizations, has authorized the repurchase of the Company’s common stock on the open market or through private transactions. The Company purchased 1,725,000 shares at a total cost of $88,791 during the three months ended March 31, 2019, 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. As of March 31, 2019, the Company had approximately $127,088 of authorization remaining for the purchase of common stock under the program.

Page 16 of 43





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.

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
Balance, January 1, 2019
$
(31,587
)
 
$
(1,413
)
 
$
(33,000
)
 
 
 
 
 
 
Other comprehensive gain before reclassifications
3,397

 
797

 
4,194

Amounts reclassified from accumulated other comprehensive loss

 
86

 
86

Net current-period other comprehensive gain
3,397

 
883

 
4,280

 
 
 
 
 
 
Balance, March 31, 2019
$
(28,190
)
 
$
(530
)
 
$
(28,720
)


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 investment management and administrative outsourcing platforms to retirement plan sponsors, healthcare systems and 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 internet-based investment services and advice platforms; entering new markets; and conducting other research and development activities.
The information in the following tables is derived from the Company’s internal financial reporting used for corporate management purposes. There are no inter-segment revenues for the three months ended March 31, 2019 and 2018. Management evaluates Company assets on a consolidated basis during interim periods. 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, 2018.
The following tables highlight certain financial information about each of the Company’s business segments for the three months ended March 31, 2019 and 2018.
 
Private
Banks
 
Investment
Advisors
 
Institutional
Investors
 
Investment
Managers
 
Investments
In New
Businesses
 
Total
 
For the Three Months Ended March 31, 2019
Revenues
$
118,259

 
$
94,761

 
$
80,113

 
$
104,649

 
$
3,038

 
$
400,820

Expenses
110,962

 
52,502

 
38,754

 
69,066

 
5,940

 
277,224

Operating profit (loss)
$
7,297

 
$
42,259

 
$
41,359

 
$
35,583

 
$
(2,902
)
 
$
123,596



Page 17 of 43





 
Private
Banks
 
Investment
Advisors
 
Institutional
Investors
 
Investment
Managers
 
Investments
In New
Businesses
 
Total
 
For the Three Months Ended March 31, 2018
Revenues
$
122,164

 
$
99,192

 
$
85,491

 
$
96,855

 
$
1,896

 
$
405,598

Expenses
112,202

 
52,453

 
41,249

 
63,338

 
5,098

 
274,340

Operating profit (loss)
$
9,962

 
$
46,739

 
$
44,242

 
$
33,517

 
$
(3,202
)
 
$
131,258


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 March 31, 2019 and 2018 is as follows: 
 
2019
 
2018
Total operating profit from segments
$
123,596

 
$
131,258

Corporate overhead expenses
(20,035
)
 
(14,942
)
Income from operations
$
103,561

 
$