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Summary of Significant Accounting Policies | 3 Months Ended
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Mar. 31, 2016
Accounting Policies [Abstract] |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Nature of Operations SEI Investments Company (the Company), a Pennsylvania corporation, provides investment processing, investment management, and investment operations solutions 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 solutions consist of application and business process outsourcing services, professional services and transaction-based services. Revenues from investment processing solutions are recognized in Information processing and software servicing fees on the accompanying Consolidated Statements of Operations, except for fees earned associated with trade execution services which are recognized in Transaction-based and trade execution fees. 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 solutions offer investment managers support for traditional investment products such as mutual funds, collective investment trusts, exchange-traded funds, and institutional and separate accounts, by providing outsourcing services including fund and investment accounting, administration, reconciliation, investor servicing and client reporting. These solutions also provide support to managers focused on alternative investments who manage hedge funds, funds of hedge funds, private equity funds and real estate funds, across registered, partnership and separate account structures domiciled in the United States and overseas. Revenues from investment operations solutions 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, 2016, the results of operations for the three months ended March 31, 2016 and 2015, and cash flows for the three month periods ended March 31, 2016 and 2015. 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, 2015. There have been no significant changes in significant accounting policies during the three months ended March 31, 2016 as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 with the exception of the adoption of Accounting Standards Update (ASU) No. 2015-02, Consolidation (Topic 810) - Amendments to the Consolidation Analysis (See Note 3) and ASU No. 2015-07, Fair Value Measurement (Topic 820) - Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (See Note 5). Cash and Cash Equivalents Cash and cash equivalents includes $402,910 and $448,957 at March 31, 2016 and December 31, 2015, 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 $5,000 at March 31, 2016 and December 31, 2015 segregated for regulatory purposes related to trade-execution services conducted by SEI Investments (Europe) Limited. Restricted cash also includes $500 at March 31, 2016 and December 31, 2015, 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 for broker-dealers. Capitalized Software The Company capitalized $9,477 and $7,989 of software development costs during the three months ended March 31, 2016 and 2015, respectively. The Company's software development costs primarily relate to the continued development of the SEI Wealth Platform SM (the Platform). The Company capitalized $7,645 and $7,330 of software development costs for significant enhancements to the Platform during the three months ended March 31, 2016 and 2015, respectively. As of March 31, 2016, the net book value of the Platform was $282,311. The Platform has an estimated useful life of 15 years and a weighted average remaining life of 6.3 years. Amortization expense for the Platform was $10,955 and $10,301 during the three months ended March 31, 2016 and 2015, respectively. The Company also capitalized $1,832 and $659 of software development costs during the three months ended March 31, 2016 and 2015, respectively, related to new technological capabilities for the Investment Managers segment. Earnings per Share The calculations of basic and diluted earnings per share for the three months ended March 31, 2016 and 2015 are:
| For the Three Months Ended March 31, 2016
| Income (Numerator) |  | Shares (Denominator) |  | Per Share Amount
Basic earnings per common share | $ | 77,497 |  |  | 163,013,000 |  |  | $ | 0.48 |
Dilutive effect of stock options | — |  |  | 3,132,000 |  |  |
Diluted earnings per common share | $ | 77,497 |  |  | 166,145,000 |  |  | $ | 0.47 |
| For the Three Months Ended March 31, 2015
| Income (Numerator) |  | Shares (Denominator) |  | Per Share Amount
Basic earnings per common share | $ | 84,611 |  |  | 166,695,000 |  |  | $ | 0.51 |
Dilutive effect of stock options | — |  |  | 4,008,000 |  |  |
Diluted earnings per common share | $ | 84,611 |  |  | 170,703,000 |  |  | $ | 0.50 |
Employee stock options to purchase 10,506,000 and 10,051,000 shares of common stock, with an average exercise price of $34.05 and $30.02, were outstanding during the three months ended March 31, 2016 and 2015, respectively, but not included in the computation of diluted earnings per common share because either the performance conditions have not been satisfied or would have been satisfied if the reporting date was the end of the contingency period or the option’s 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 three months ended March 31:
| 2016 |  | 2015
Net income | $ | 77,497 |  |  | $ | 84,611 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
Depreciation | 6,447 |  |  | 5,995 |
Amortization | 11,012 |  |  | 10,358 |
Equity in earnings of unconsolidated affiliates | (29,192 | ) |  | (34,033 | )
Distributions received from unconsolidated affiliate | 34,525 |  |  | 37,003 |
Stock-based compensation | 3,789 |  |  | 3,750 |
Provision for losses on receivables | 51 |  |  | (117 | )
Deferred income tax expense | (1,029 | ) |  | (102 | )
Gain from sale of SEI AK | (2,791 | ) |  | (2,791 | )
Net loss (gain) from investments | 126 |  |  | (250 | )
Change in other long-term liabilities | 279 |  |  | 464 |
Change in other assets | 1,099 |  |  | 100 |
Other | 676 |  |  | (1,628 | )
Change in current asset and liabilities |  |  |
Decrease (increase) in |  |  |
Receivables from investment products | (3,535 | ) |  | 1,387 |
Receivables | (6,585 | ) |  | (6,137 | )
Other current assets | (2,622 | ) |  | (6,835 | )
Increase (decrease) in |  |  |
Accounts payable | (157 | ) |  | (3,902 | )
Accrued liabilities | (12,120 | ) |  | (11,812 | )
Deferred revenue | 551 |  |  | 1,869 |
Total adjustments | 524 |  |  | (6,681 | )
Net cash provided by operating activities | $ | 78,021 |  |  | $ | 77,930 |
New Accounting Pronouncements On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The updated standard permits the use of either the retrospective or cumulative effect transition method. ASU 2014-09 currently becomes effective for the Company during the first quarter 2018. The Company is currently evaluating the transition method that will be elected and the effect that the updated standard will have on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU No. 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (ASU 2016-08), that amends the principal versus agent guidance in ASU 2014-09. ASU 2016-08 clarifies that the analysis must focus on whether the entity has control of the goods or services before they are transferred to the customer. ASU 2016-08 also provides additional guidance about how to apply the control principle when services are provided and when goods or services are combined with other goods or services. The effective date of the standard for the Company will coincide with ASU 2014-09 during the first quarter 2018. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing (ASU 2016-10) that amends the revenue guidance in ASU 2014-09 on identifying performance obligations and accounting for licenses of intellectual property. ASU 2016-10 changed the FASB's previous proposals on renewals of right-to-use licenses and contractual restrictions. The effective date of the standard for the Company will coincide with ASU 2014-09 during the first quarter 2018. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01) that will significantly change the income statement impact of equity investments held by an entity, and the recognition of changes in fair value of financial liabilities when the fair value option is elected. ASU 2016-01 becomes effective for the Company during the first quarter 2018. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases (ASU 2016-02) requiring lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with the exception of short-term leases. For lessees, leases will continue to be classified as either operating or finance leases in the income statement. Lessor accounting is similar to the current model but updated to align with certain changes to the lessee model. Lessors will continue to classify leases as operating, direct financing or sales-type leases. The new standard must be adopted using a modified retrospective transition and requires application of the new guidance at the beginning of the earliest comparative period presented. The updated standard is effective for the Company beginning in the first quarter of 2019. Early adoption is permitted. The Company is currently evaluating the transition method that will be elected and the effect that the updated standard will have on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting (ASU 2016-09) requiring an entity to record all excess tax benefits and tax deficiencies as an income tax benefit or expense in the income statement. ASU 2016-09 will also require an entity to elect an accounting policy to either estimate the number of forfeitures or account for forfeitures when they occur. ASU 2016-09 becomes effective for the Company during the first quarter 2017. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. Reclassifications Certain prior year amounts have been reclassified to conform to current year presentation.

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