SEIC » Topics » Liquidity and Capital Resources

This excerpt taken from the SEIC 10-Q filed Nov 10, 2008.

Liquidity and Capital Resources

 

     For the Nine Months Ended
September 30,
 
     2008     2007  

Net cash provided by operating activities

   $ 210,280     $ 265,902  

Net cash used in investing activities

     (95,774 )     (74,630 )

Net cash used in financing activities

     (129,637 )     (181,026 )
                

Net (decrease) increase in cash and cash equivalents

     (15,131 )     10,246  

Cash and cash equivalents, beginning of period

     360,921       286,948  
                

Cash and cash equivalents, end of period

   $ 345,790     $ 297,194  
                

Cash requirements and liquidity needs are primarily funded through our cash flow from operations and our capacity for additional borrowing. At September 30, 2008, our unused sources of liquidity consisted of cash and cash equivalents of $345.8 million and the amount available under our credit facility. Cash and cash equivalents includes $74.4 million at September 30, 2008 from LSV, of which the Company has a 43 percent partnership interest (See Note 2 to the Consolidated Financial Statements). Our cash and cash equivalents include accounts managed by our subsidiaries and minority-owned subsidiaries that are used in their operations or to cover specific business and regulatory requirements. The availability of this cash for other purposes beyond the operations of these subsidiaries may be limited. The actual amount of cash and cash equivalents that is free and available for other general corporate purposes is reduced by these cash accounts. The credit facility agreement became effective in July, 2007 and initially provided for borrowings of up to $200.0 million. The agreement was amended in March 2008 to provide an additional $100.0 million in borrowings, raising the total aggregate limit to $300.0 million. The aggregate amount of the credit facility may be increased by an additional $100.0 million under certain conditions set forth in the agreement. Due to the outstanding letters of credit associated with the Capital Support Agreements (See “Money Market Fund Support” earlier in this discussion), the unrestricted amount available for working capital needs is limited to $144.0 million. The availability of the credit facility is subject to the compliance with certain covenants set forth in the agreement.

 

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We have arrangements with two mutual funds sponsored by SEI as previously described under the section “Money Market Fund Support.” As of November 6, 2008, we may be required to provide capital to these mutual funds under certain conditions up to an aggregate amount of $296.4 million. In the event that capital must be provided to these mutual funds, we may, at our discretion, utilize the credit facility or contribute the required capital from unrestricted cash. However, so long as the letters of credit remain outstanding, the amount available under the credit facility will be reduced by the amount of the letters of credit. Therefore, only the remaining $144.0 million is unrestricted and may be used for other purposes as determined by management. Some of the covenants contained within the credit facility were amended as a result of the Capital Support Agreements that provide certain allowances and exemptions for transactions arising solely from the Capital Support Agreements. As of November 6, 2008, capital contributions made to the mutual funds by the Company were minimal.

Cash flows from operations decreased $55.6 million in 2008 compared to 2007 primarily due to the decline in net income and the net change in working capital accounts. Our working capital accounts were primarily affected by increased payments for incentive compensation in 2008 compared to 2007 and the change in deferred taxes in 2008 due to the non-cash charge related to the Capital Support Agreements.

Net cash used in investing activities includes:

 

   

The capitalization of costs incurred in developing computer software. In 2007, the Global Wealth Platform was placed into service. We will continue the development of the Global Wealth Platform through a series of releases to expand the functionality of the platform. The costs associated with these enhancements will be capitalized. We capitalized $39.5 million of software development costs in 2008 as compared to $50.1 million in 2007. The decrease in capitalized costs was primarily due to a higher proportion of spending related to the operation of the platform in 2008, which is not eligible for capitalization (See Note 1 to the Consolidated Financial Statements);

 

   

Purchases, sales and maturities of marketable securities. We had net cash outflows of $8.6 million for purchases of marketable securities in 2008 as compared to net cash outflows of $5.0 million in 2007. Cash outflows for marketable securities in 2008 were primarily for the purchase of U.S. government agency securities purchased to satisfy applicable regulatory requirements of SPTC, the securities issued by SIVs purchased from the SDIT MM Fund and U.S. Treasury securities purchased by SIDCO (See Notes 6 and 7 to the Consolidated Financial Statements). Purchases of marketable securities in 2007 mainly comprised investments for the start-up of new investment products;

 

   

Capital expenditures. Our capital expenditures in 2008 primarily include new computer-related equipment associated with the Global Wealth Platform. In 2007, capital expenditures also included costs related to the expansion of our corporate headquarters, which was completed in 2007. During the second quarter 2008, we initiated a new expansion project at our corporate headquarters. Total costs for this project are expected to be at least $13.4 million. The project is expected to be completed in 2009; and

 

   

Restricted cash requirements. We reserved $23.0 million in cash to secure our obligations as of September 30, 2008 related to the Capital Support Agreements (See Note 7 to the Consolidated Financial Statements).

Net cash used in financing activities includes:

 

   

Principal payments of our debt. We made the final payments for the outstanding balance of our Senior Notes in 2007, which includes a principal payment of $4.0 million in the first quarter for the remaining balance of our Series A Senior Notes. Principal payments in 2008 are comprised solely of payments made by LSV Employee Group for amounts included in our debt. LSV Employee Group made principal payments of $15.1 million in 2008 and $13.7 million in 2007.

 

   

The repurchase of our common stock. Our Board of Directors has authorized the repurchase of up to $1.5 billion worth of our common stock. Through November 6, 2008, we repurchased approximately 254.5 million shares of our common stock at a cost of $1.4 billion and had $86.7 million of authorization remaining for the purchase of our common stock under this program. We spent approximately $113.1 million during the first nine months of 2008 and $183.9 million during the first nine months of 2007 for the repurchase of our common stock. Currently, there is no expiration date for our common stock repurchase program; and

 

   

Dividend payments. Cash dividends paid were $28.9 million or $.15 per share in the first nine months of 2008 and $25.7 million or $.13 per share in the first nine months of 2007. Our Board of Directors intends to declare future dividends on a semi-annual basis.

We believe our operating cash flow, available borrowing capacity, and existing cash and cash equivalents should provide adequate funds for continuing operations; continued investment in new products and equipment; our common stock repurchase program; future dividend payments; and expansion of our corporate headquarters.

 

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This excerpt taken from the SEIC 10-Q filed Jul 31, 2008.

Liquidity and Capital Resources

 

     For the Six Months Ended
June 30,
 
     2008     2007  

Net cash provided by operating activities

   $ 112,698     $ 133,450  

Net cash used in investing activities

     (41,366 )     (54,620 )

Net cash used in financing activities

     (111,868 )     (119,486 )
                

Net decrease in cash and cash equivalents

     (40,536 )     (40,656 )

Cash and cash equivalents, beginning of period

     360,921       286,948  
                

Cash and cash equivalents, end of period

   $ 320,385     $ 246,292  
                

Cash requirements and liquidity needs are primarily funded through our cash flow from operations and our capacity for additional borrowing. At June 30, 2008, our unused sources of liquidity consisted of unrestricted cash and cash equivalents of $320.4 million and the amount available under our credit facility. The credit facility agreement became effective in July, 2007 and initially provided for borrowings of up to $200.0 million. The agreement was amended in March 2008 to provide an additional $100.0 million in borrowings, raising the total aggregate limit to $300.0 million. The aggregate amount of the credit facility may be increased by an additional $100.0 million under certain conditions set forth in the agreement. Due to the outstanding letters of credit associated with the Capital Support Agreements (See “Money Market Fund Support” earlier in this discussion), the unrestricted amount available for working capital needs is limited to $150.0 million. The availability of the credit facility is subject to the compliance with certain covenants set forth in the agreement.

We have arrangements with three mutual funds sponsored by SEI as previously described under the section “Money Market Fund Support.” We may be required to provide capital to these mutual funds under certain conditions up to an aggregate amount of $173.0 million. In the event that capital must be provided to these mutual funds, we may, at our discretion, utilize the credit facility or contribute the required capital from unrestricted cash. However, so long as the letters of credit remain outstanding, the amount available under the credit facility will be reduced by the amount of the letters of credit. Therefore, only the remaining $150.0 million is unrestricted and may be used for other purposes as determined by management. Some of the covenants contained within the credit facility were amended as a result of the Capital Support Agreements that provide certain allowances and exemptions for transactions arising solely from the Capital Support Agreements. As of July 30, 2008, capital contributions made to the mutual funds by the Company were minimal.

Cash flows from operations decreased $20.8 million in 2008 compared to 2007 primarily due to the decline in net income and the net change in working capital accounts. Our working capital accounts were primarily affected by increased payments for incentive compensation in 2008 compared to 2007 and the change in deferred taxes in 2008 due to the non-cash charge related to the Capital Support Agreements.

Net cash used in investing activities includes the capitalization of costs incurred in developing computer software, purchases, sales and maturities of marketable securities, and capital expenditures. In 2007, the Global Wealth Platform was placed into service. We will continue the development of the Global Wealth Platform through a series of releases to expand the functionality of the platform. The costs associated with these enhancements will be capitalized. We capitalized $25.9 million of software development costs in 2008 as compared to $35.7 million in 2007. The decrease in capitalized costs was primarily due to a higher proportion of spending related to the operation of the platform in 2008, which is not eligible for capitalization (See Note 1 to the Consolidated Financial Statements).

We had net cash inflows of $10.1 million from sales and maturities of marketable securities in 2008 as compared to net cash outflows of $6.7 million from purchases of marketable securities in 2007. Cash inflows from marketable securities in 2008 were mainly comprised of proceeds from the maturity of U.S. Treasury securities held by SIDCO. Purchases of marketable securities in 2007 mainly comprised investments for the start-up of new investment products. Capital expenditures in 2008 primarily include new computer-related equipment associated with the Global Wealth Platform. In 2007, capital expenditures also included costs related to the expansion of our corporate headquarters, which was completed in 2007. During the second quarter 2008, we initiated a new expansion project at our corporate headquarters. Total costs for this project are expected to be at least $13.4 million. The project is expected to be completed in early 2009.

 

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Net cash used in investing activities in 2008 was also impacted by the requirement to reserve $15.5 million in cash to secure our obligations as of June 30, 2008 related to the Capital Support Agreements.

Net cash used in financing activities primarily includes principal payments of our debt, the repurchase of our common stock and dividend payments. We made the final payments for the outstanding balance of our Senior Notes in 2007, which includes a principal payment of $4.0 million in the first quarter for the remaining balance of our Series A Senior Notes. Principal payments in 2008 are comprised solely of payments made by LSV Employee Group for amounts included in our debt. LSV Employee Group made principal payments of $10.6 million in 2008 and $9.0 million in 2007.

Our Board of Directors has authorized the repurchase of up to $1.5 billion worth of our common stock. Through July 30, 2008, we repurchased approximately 253.0 million shares of our common stock at a cost of $1.4 billion and had $113.6 million of authorization remaining for the purchase of our common stock under this program. We spent approximately $96.4 million during the first six months of 2008 and $124.7 million during the first six months of 2007 for the repurchase of our common stock. Currently, there is no expiration date for our common stock repurchase program.

Cash dividends paid were $28.9 million or $.15 per share in the first six months of 2008 and $25.7 million or $.13 per share in the first six months of 2007. Our Board of Directors intends to declare future dividends on a semi-annual basis.

We believe our operating cash flow, available borrowing capacity, and existing cash and cash equivalents should provide adequate funds for continuing operations; continued investment in new products and equipment; our common stock repurchase program; future dividend payments; and expansion of our corporate headquarters.

This excerpt taken from the SEIC 10-Q filed May 2, 2008.

Liquidity and Capital Resources

 

     For the Three Months Ended
March 31,
 
     2008     2007  

Net cash provided by operating activities

   $ 68,265     $ 58,709  

Net cash used in investing activities

     (28,826 )     (29,544 )

Net cash used in financing activities

     (63,981 )     (44,628 )
                

Net decrease in cash and cash equivalents

     (24,542 )     (15,463 )

Cash and cash equivalents, beginning of period

     360,921       286,948  
                

Cash and cash equivalents, end of period

   $ 336,379     $ 271,485  
                

Cash requirements and liquidity needs are primarily funded through our cash flow from operations and our capacity for additional borrowing. At March 31, 2008, our unused sources of liquidity consisted of unrestricted cash and cash equivalents of $336.4 million and the amount available under our credit facility. The credit facility agreement became effective in July, 2007 and initially provided for borrowings of up to $200.0 million. The agreement was amended in March 2008 to provide an additional $100 million in borrowings, raising the total aggregate limit to $300.0 million. The aggregate amount of the credit facility may be increased by an additional $100.0 million under certain conditions set forth in the agreement. Due to the outstanding letters of credit associated with the Capital Support Agreements (See “Money Market Fund Support” earlier in this discussion), the unrestricted amount available for working capital needs is limited to $150.0 million. The availability of the credit facility is subject to the compliance with certain covenants set forth in the agreement.

We have arrangements with three mutual funds sponsored by SEI as previously described under the section “Money Market Fund Support.” We may be required to provide capital to these mutual funds under certain conditions up to an aggregate amount of $164.0 million. In the event that capital must be provided to these mutual funds, we may, at our discretion, utilize the credit facility or contribute the required capital from unrestricted cash. However, so long as the letters of credit remain outstanding, the amount available under the credit facility will be reduced by the amount of the letters of credit. Therefore, only the remaining $150.0 million is unrestricted and may be used for other purposes as determined by management. Some of the covenants contained within the credit facility were amended as a result of the Capital Support Agreements that provide certain allowances and exemptions for transactions arising solely from the Capital Support Agreements. As of April 25, 2008, capital contributions made to the mutual funds by the Company were minimal.

 

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Cash flows from operations increased $9.6 million in 2008 compared to 2007 due primarily to increased collections of accounts receivable in 2008 and the net change in our other working capital accounts. Increased personnel compensation payments partially offset the increase in net cash from operating activities.

Net cash used in investing activities primarily includes the capitalization of costs incurred in developing computer software and capital expenditures. In 2007, the Global Wealth Platform was placed into service. We will continue the development of the Global Wealth Platform through a series of releases to expand the functionality of the platform. The costs associated with these enhancements will be capitalized. We capitalized $12.2 million of software development costs in 2008 as compared to $17.8 million in 2007. The decrease in capitalized costs was primarily due to a higher proportion of spending related to the operation of the platform in 2008, which is not eligible for capitalization (See Note 1 to the Consolidated Financial Statements).

Capital expenditures in 2008 primarily include new computer-related equipment associated with the Global Wealth Platform. In 2007, capital expenditures also included costs related to the expansion of our corporate headquarters, which was completed in 2007. During the second quarter 2008, we intend to initiate a new expansion project at our corporate headquarters. Total costs for this project are expected to be at least $8.5 million. The project is expected to be completed in early 2009.

Net cash used in investing activities in 2008 was also impacted by the requirement to reserve $12.5 million in cash to secure our obligations as of March 31, 2008 related to the Capital Support Agreements.

Net cash used in financing activities primarily includes principal payments of our debt, the repurchase of our common stock and dividend payments. We made the final payments for the outstanding balance of our Senior Notes in 2007, which includes a principal payment of $4.0 million in the first quarter for the remaining balance of our Series A Senior Notes. Principal payments in 2008 are comprised solely of payments made by LSV Employee Group for amounts included in our debt. LSV Employee Group made principal payments of $5.2 million in 2008 and $4.1 million in 2007.

Our Board of Directors has authorized the repurchase of up to $1.5 billion worth of our common stock. Through April 25, 2008, we repurchased approximately 251.1 million shares of our common stock at a cost of $1.4 billion and had $158.8 million of authorization remaining for the purchase of our common stock under this program. We spent approximately $50.9 million during the first quarter of 2008 and $45.3 million during the first quarter of 2007 for the repurchase of our common stock. Currently, there is no expiration date for our common stock repurchase program.

Cash dividends paid were $13.6 million or $.07 per share in the first quarter of 2008 and $11.9 million or $.06 per share in the first quarter of 2007. Our Board of Directors intends to declare future dividends on a semi-annual basis.

We believe our operating cash flow, available borrowing capacity, and existing cash and cash equivalents should provide adequate funds for continuing operations; continued investment in new products and equipment; our common stock repurchase program; future dividend payments; and expansion of our corporate headquarters.

This excerpt taken from the SEIC 10-K filed Feb 26, 2008.

Liquidity and Capital Resources

 

Year Ended December 31,

   2007     2006     2005  

Net cash provided by operating activities

   $ 361,457     $ 346,170     $ 214,437  

Net cash used in investing activities

     (96,058 )     (118,016 )     (116,256 )

Net cash used in financing activities

     (191,426 )     (71,334 )     (185,019 )
                        

Net increase (decrease) in cash and cash equivalents

     73,973       156,820       (86,838 )

Cash and cash equivalents, beginning of year

     286,948       130,128       216,966  
                        

Cash and cash equivalents, end of year

   $ 360,921     $ 286,948     $ 130,128  

Cash requirements and liquidity needs are primarily funded through our cash flow from operations and our capacity for additional borrowing. At December 31, 2007, our unused sources of liquidity consisted of unrestricted cash and cash equivalents of $360.9 million and the amount available under our credit facility. In July 2007, we entered into a new credit facility agreement and terminated the old credit facility agreement which was scheduled to expire in September 2007. The credit facility agreement provides for borrowings of up to $200.0 million and expires in July 2012. The aggregate amount of the credit facility may be increased by an additional $100.0 million under certain conditions set forth in the agreement. Due to the outstanding letters of credit associated with the Capital Support Agreements (See “Money Market Fund Support” earlier in this discussion), the amount available for borrowings has been reduced to $50.0 million. The availability of the credit facility is subject to the compliance with certain covenants set forth in the agreement.

Cash flows from operations increased $15.3 million in 2007 compared to 2006 and $131.7 million in 2006 compared to 2005. The increase in cash flows in 2007 was primarily caused by the increase in net income of $22.8 million. Cash flows in 2006 were significantly affected by the consolidation of the accounts of LSV. The net change in our working capital accounts partially offset the increase in net cash from operating activities in 2007 and 2006.

Net cash used in investing activities primarily includes the capitalization of costs incurred in developing computer software, purchases and sales of marketable securities, and capital expenditures. In 2007, the Global Wealth Platform was placed into service. We will continue the development of the Global Wealth Platform through a series of releases to expand the functionality of the platform. The costs associated with these enhancements will be capitalized. We capitalized $61.4 million of software development costs in 2007 as compared to $73.3 million in 2006. The decrease in capitalized costs was primarily due to a higher proportion of spending related to the operation of the platform in 2007, which is not eligible for capitalization (See Note 1 to the Consolidated Financial Statements).

We had $4.5 million and $16.8 million in net purchases of marketable securities in 2007 and 2006, respectively. Purchases and sales of marketable securities are mainly for the start-up of new investment products to be offered to our clients or to satisfy regulatory requirements of certain subsidiaries. The length of time we remain invested in our investment products is dependent upon client subscriptions. We will redeem our investment as clients subscribe to these new products.

Capital expenditures in 2007 and 2006 primarily include the expansion of our corporate headquarters, which was substantially completed during 2007. Total costs for the expansion were approximately $27.0 million, of which $11.5 million was spent in 2007. Capital expenditures in 2007 and 2006 also include new computer-related equipment, mainly servers, associated with the release of the Global Wealth Platform.

Net cash used in financing activities primarily includes the repurchase of our common stock, dividend payments, and principal payments on our debt. Our board of directors has authorized the repurchase of our common stock of up to $1.4 billion, which includes an additional authorization of $100.0 million on October 23, 2007. As of January 31, 2008, we still had $112.2 million of authorization remaining for the purchase of our common stock under this program (See Note 9 to the Consolidated Financial Statements).

 

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Table of Contents

The following table lists information regarding repurchases of our common stock during 2007, 2006, and 2005:

 

Year

   Total Number of
Shares Repurchased
   Average Price
Paid
per Share
   Total Cost
(in thousands)

2007

   7,161,000    $ 28.64    $ 205,085

2006

   4,689,000      23.40      109,734

2005

   8,886,000      18.47      164,118

Cash dividends paid were $25.7 million or $.13 per share in 2007, $22.7 million or $.12 per share in 2006 and $21.3 million or $.11 per share in 2005. Our board of directors declared a cash dividend of $.07 per share on December 10, 2007. The dividend was paid on January 18, 2008 for $13.6 million.

Principal payments on our debt were $9.0 million in 2007 and $5.4 million in 2006. Payments in 2007 include a voluntary principal pre-payment of $5.0 million consisting of the remaining balance of our Senior Notes. Principal payments made by LSV Employee Group for amounts included in our debt were $19.7 million in 2007 and $11.2 million in 2006.

We believe our operating cash flow, available borrowing capacity, and existing cash and cash equivalents should provide adequate funds for continuing operations; continued investment in new products and equipment; our common stock repurchase program; future dividend payments; and expansion of our corporate headquarters.

This excerpt taken from the SEIC 10-Q filed Nov 9, 2007.

Liquidity and Capital Resources

 

     For the Nine Months Ended
September 30,
 
     2007     2006  

Net cash provided by operating activities

   $ 265,902     $ 251,900  

Net cash used in investing activities

     (74,630 )     (88,756 )

Net cash used in financing activities

     (181,026 )     (61,991 )
                

Net increase in cash and cash equivalents

     10,246       101,153  

Cash and cash equivalents, beginning of period

     286,948       130,128  
                

Cash and cash equivalents, end of period

   $ 297,194     $ 231,281  
                

Cash requirements and liquidity needs are primarily funded through our cash flow from operations and our capacity for additional borrowing. At September 30, 2007, our unused sources of liquidity consisted of unrestricted cash and cash equivalents of $297.2 million and the full amount available through a credit facility of $200.0 million. In July 2007, we entered into a new credit facility agreement and terminated the old credit facility agreement which was scheduled to expire in September 2007. The new credit facility agreement provides for borrowings of up to $200.0 million and expires in July 2012. The availability of the new credit facility is subject to the compliance with certain covenants set forth in the agreement.

In November 2007, we provided guarantees in the form of Capital Support Agreements with two mutual funds sponsored by the Company as previously described under the section “Subsequent Event—Money Market Fund Support.” We may be required to provide capital to these mutual funds under certain conditions up to an aggregate amount of $129.0 million. In the event that capital must be provided to these mutual funds, we may, at our discretion, utilize the credit facility or contribute the required capital from unrestricted cash. However, so long as the letters of credit remain outstanding, the amount available under the credit facility will be reduced by the amount of the letters of credit. Therefore, only the remaining $71.0 million is unrestricted and may be used for other purposes as determined by management. The aggregate amount of the credit facility may be increased by an additional $100.0 million under certain conditions set forth in the agreement. Some of the covenants contained within the credit facility were amended as a result of the Capital Support Agreements that provide certain allowances and exemptions for transactions arising solely from the Capital Support Agreements. As of November 8, 2007, the Company had not made any capital contribution to the mutual funds.

Cash flows from operations increased $14.0 million in 2007 compared to 2006 due primarily to an increase in net income. Cash flows in 2006 were significantly affected by the requirement to consolidate the accounts of LSV and LSV Employee Group, which increased net cash provided by operating activities by $70.5 million.

Net cash used in investing activities primarily includes the capitalization of costs incurred in developing computer software, purchases and sales of marketable securities, and capital expenditures. In July 2007, the Global Wealth Platform was placed into service. Previously capitalized software development costs of $199.6 million, which includes $35.7 million capitalized during the first six months of 2007, will be amortized evenly over a period of 15 years. We capitalized $14.4 million in the third quarter for enhancements and upgrades to the Global Wealth Platform. Our intention is to implement enhancements and upgrades into the platform through a series of releases. The capitalized costs associated with these releases will be amortized over the remaining useful life of the platform. Throughout 2007, we capitalized a total of $50.1 million, as compared to $53.9 million during the same period of 2006, in software development costs.

We had $5.0 million and $17.2 million in net purchases of marketable securities in 2007 and 2006, respectively. Purchases and sales of marketable securities are mainly for the start-up of new investment products to be offered to our clients. The length of time we remain invested in these investment products is dependent upon client subscriptions. We will redeem our investment as clients subscribe to these new products.

 

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Capital expenditures in 2007 and 2006 primarily include the expansion of our corporate headquarters, which was substantially completed during the third quarter 2007. Through September 30, 2007, we spent approximately $25.7 million related to the expansion project, of which $10.6 million was spent in the first nine months of 2007. Capital expenditures in 2007 and 2006 also include new computer-related equipment associated with the release of the Global Wealth Platform.

Net cash used in financing activities primarily includes principal payments of our debt, the repurchase of our common stock and dividend payments. Principal payments on our debt were $9.0 million in 2007 and $5.4 million in 2006. Payments in 2007 include a voluntary principal pre-payment of $5.0 million consisting of the remaining balance of our Senior Notes. Principal payments made by LSV Employee Group for amounts included in our debt were $13.7 million in 2007 and $7.3 million in 2006.

Our Board of Directors has authorized the repurchase of up to $1.4 billion worth of our common stock. Through October 31, 2007, we repurchased approximately 248.3 million shares of our common stock at a cost of $1.3 billion and had $133.4 million of authorization remaining for the purchase of our common stock under this program. We spent approximately $183.9 million during the first nine months of 2007 and $81.6 million during the first nine months of 2006 for the repurchase of our common stock. Currently, there is no expiration date for our common stock repurchase program.

Cash dividends paid were $25.7 million or $.13 per share in the first nine months of 2007 and $22.7 million or $.11 per share in the first nine months of 2006. Our Board of Directors intends to declare future dividends on a semi-annual basis.

We believe our operating cash flow, available borrowing capacity, and existing cash and cash equivalents should provide adequate funds for continuing operations, continued investment in new products and equipment, our common stock repurchase program and future dividend payments.

This excerpt taken from the SEIC 10-Q filed Aug 2, 2007.

Liquidity and Capital Resources

 

     For the Six Months Ended
June 30,
 
     2007     2006  
Net cash provided by operating activities    $ 133,450     $ 166,036  
Net cash used in investing activities      (54,620 )     (50,561 )
Net cash used in financing activities      (119,486 )     (68,319 )
                
Net increase in cash and cash equivalents      (40,656 )     47,156  
Cash and cash equivalents, beginning of period      286,948       130,128  
                
Cash and cash equivalents, end of period    $ 246,292     $ 177,284  
                

Cash requirements and liquidity needs are primarily funded through our cash flow from operations and our capacity for additional borrowing. At June 30, 2007, our unused sources of liquidity consisted of unrestricted cash and cash equivalents of $246.3 million and the full amount available through a credit facility of $200.0 million which was scheduled to expire in September 2007. In July 2007, we replaced the credit facility. The new credit facility agreement provides for borrowings of up to $200.0 million and expires in July 2012. The availability of the new credit facility is subject to the compliance with certain covenants set forth in the agreement.

Cash flows from operations decreased $32.6 million in 2007 compared to 2006. Cash flows in 2006 were significantly affected by the requirement to consolidate the accounts of LSV and LSV Employee Group, which increased net cash provided by operating activities by $52.1 million. An increase in net income favorably affected cash flows in 2007, but was offset by the net change in our working capital accounts.

Net cash used in investing activities primarily includes the capitalization of costs incurred in developing computer software, purchases and sales of marketable securities, and capital expenditures. Capitalized software development costs were $35.7 million in 2007 as compared to $36.8 million in 2006. The Global Wealth Platform was placed into service in July 2007. Capitalized software development costs of $199.6 million will be amortized over 15 years beginning in the third quarter of 2007. We will continue to incur significant development costs as enhancements and upgrades to expand the functionality of the Global Wealth Platform are developed and implemented. We expect to incur expenses related to maintenance and training as we enter the operational stage in the development of the platform.

We had $6.7 million and $3.4 million in net purchases of marketable securities in 2007 and 2006, respectively. Purchases of marketable securities in 2007 mainly comprised investments for the start-up of new investment products. Capital expenditures in 2007 and 2006 primarily include the expansion of our corporate headquarters. The total cost of the expansion is estimated to be at least $24.4 million and is expected to be completed in the third quarter of 2007. Through June 30, 2007, we have spent approximately $22.4 million related to the expansion project, of which $7.4 million was spent in the first six months of 2007.

Net cash used in financing activities primarily includes principal payments of our debt, the repurchase of our common stock and dividend payments. Principal payments on our debt were $4.0 million in 2007 and $9.2 million in 2006. Principal payments made by LSV Employee Group for amounts included in our debt were $9.0 million in 2007. We made our final payment for the Series A Senior Notes in the first quarter of 2007. As of June 30, 2007, the outstanding balance on our Senior Notes was $5.0 million, of which $1.0 million is classified as current.

Our Board of Directors has authorized the repurchase of up to $1.3 billion worth of our common stock. Through

 

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July 31, 2007, we repurchased approximately 245.7 million shares of our common stock at a cost of $1.2 billion and had $87.3 million of authorization remaining for the purchase of our common stock under this program. We spent approximately $124.7 million during the first six months of 2007 and $68.4 million during the first six months of 2006 for the repurchase of our common stock. Currently, there is no expiration date for our common stock repurchase program.

Cash dividends paid were $25.7 million or $.13 per share in the first six months of 2007 and $22.7 million or $.11 per share in the first six months of 2006. Our Board of Directors intends to declare future dividends on a semi-annual basis.

We believe our operating cash flow, available borrowing capacity, and existing cash and cash equivalents should provide adequate funds for continuing operations; continued investment in new products and equipment; our common stock repurchase program; expansion of our corporate campus; future dividend payments; and principal and interest payments on our long-term debt.

This excerpt taken from the SEIC 10-Q filed May 3, 2007.

Liquidity and Capital Resources

 

     For the Three Months Ended
March 31,
 
     2007     2006  

Net cash provided by operating activities

   $ 58,709     $ 100,409  

Net cash used in investing activities

     (29,544 )     (18,723 )

Net cash used in financing activities

     (44,628 )     (38,855 )
                

Net (decrease) increase in cash and cash equivalents

     (15,463 )     42,831  

Cash and cash equivalents, beginning of period

     286,948       130,128  
                

Cash and cash equivalents, end of period

   $ 271,485     $ 172,959  
                

Cash requirements and liquidity needs are primarily funded through our cash flow from operations and our capacity for additional borrowing. We currently have a Credit Facility that provides for borrowings of up to $200.0 million. The availability of the Credit Facility is subject to the compliance with certain covenants set forth in the agreement. At March 31, 2007, our unused sources of liquidity consisted of unrestricted cash and cash equivalents of $271.5 million and the full amount available through the Credit Facility of $200.0 million.

Cash flows from operations decreased $41.7 million in 2007 compared to 2006. Cash flows in 2006 were significantly affected by the requirement to consolidate the accounts of LSV and LSV Employee Group, which increased net cash provided by operating activities by $49.9 million. In 2007, the cash flow activities related to LSV and LSV Employee Group decreased net cash from operating activities by $41.5 million. An increase in net income favorably affected cash flows in 2007, but was offset by the net change in our working capital accounts.

Net cash used in investing activities primarily includes the capitalization of costs incurred in developing computer software, purchases and sales of marketable securities, and capital expenditures. We continued to make

 

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substantial investments in the development of the Global Wealth Platform. We are currently in the application development stage of the project and a substantial portion of our expenditures are for development and eligible for capitalization under accounting rules. Capitalized software development costs were $17.8 million in 2007 as compared to $19.4 million in 2006. We expect to incur significant development costs throughout the remainder of 2007.

In 2007, we had $3.3 million in net purchases of marketable securities versus $0.9 million in net redemptions in 2006. Purchases of marketable securities in 2007 mainly comprised investments for the start-up of new investment products. Capital expenditures in 2007 and 2006 primarily include the expansion of our corporate headquarters. The total cost of the expansion is estimated to be at least $25.5 million and is expected to be completed in the third quarter of 2007. Through March 31, 2007, we have spent approximately $20.2 million related to the expansion project, of which $5.5 million was spent in the first quarter of 2007.

Net cash used in financing activities primarily includes principal payments of our debt, the repurchase of our common stock and dividend payments. Principal payments on our long-term debt were $4.0 million in 2007 and $5.4 million in 2006. Principal payments made by LSV Employee Group for amounts included in our long term debt were $4.1 million in 2007. We made our final payment for the Series A Senior Notes in the first quarter of 2007. As of March 31, 2007, the outstanding balance on our Senior Notes was $5.0 million, of which $1.0 million is classified as current.

Our Board of Directors has authorized the repurchase of up to $1.2 billion worth of our common stock. Through April 30, 2007, we repurchased approximately 121.7 million shares of our common stock at a cost of $1.2 billion and had $43.0 million of authorization remaining for the purchase of our common stock under this program. We spent approximately $45.3 million during the first quarter of 2007 and $31.9 million during the first quarter of 2006 for the repurchase of our common stock. Currently, there is no expiration date for our common stock repurchase program.

Cash dividends paid were $11.9 million or $.12 per share in the first quarter of 2007 and $10.9 million or $.11 per share in the first quarter of 2006. Our Board of Directors intends to declare future dividends on a semi-annual basis.

We believe our operating cash flow, available borrowing capacity, and existing cash and cash equivalents should provide adequate funds for continuing operations; continued investment in new products and equipment; our common stock repurchase program; expansion of our corporate campus; future dividend payments; and principal and interest payments on our long-term debt.

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