These excerpts taken from the SEIC 10-K filed Feb 25, 2009.
Other income in 2008 relates to an adjustment for interest costs associated with borrowings in prior years at a time when various capital projects were underway. We incorrectly expensed all interest costs rather than capitalizing these costs as part of the cost basis of these capital projects (See Note 1 to the Consolidated Financial Statements).
This excerpt taken from the SEIC 10-Q filed May 6, 2005.
Other income on the accompanying Consolidated Statements of Operations consists of the following:
Equity in the earnings of unconsolidated affiliate on the accompanying Consolidated Statements of Operations includes our less than 50 percent ownership in the general partnership of LSV (See Note 4 to the Consolidated Financial Statements). The increase in LSVs net earnings is due to an increase in assets under management.
Net gain from investments consists of the following:
Derivative financial instruments are used to minimize the price risk associated with changes in the fair value of our seed investments in new investment management programs. These derivative financial investments did not qualify for hedge accounting under current accounting rules. As a result, changes in the fair value of these derivative financial instruments were recorded in current period earnings whereas the change in the fair value of the hedged asset will be realized upon sale in future period earnings. Managements decision to enter into derivative financial instruments that do not qualify for hedge accounting may cause volatility in quarterly earnings (See Note 1 to the Consolidated Financial Statements).
Interest income is earned based upon the amount of cash that is invested daily. Fluctuations in interest income recognized for one period in relation to another is due to changes in the average cash balance invested for the period and/or changes in interest rates. The increase in interest income was primarily due to an increase in interest rates in 2005 as compared to 2004.
Interest expense is directly attributable to our long-term debt and other borrowings. Interest expense for the three months ended March 31, 2005 decreased over the comparable period mainly due to the lower principal balances of debt outstanding.