(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 x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ¨ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See ~~the~~ definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

~~Large accelerated filer~~ x ~~Accelerated filer~~ ¨ ~~Non-accelerated filer~~ ¨ ~~Smaller reporting company~~ ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ¨ No ¨

Indicate the number of shares outstanding of each of the ~~issuer’s~~issuer's classes of common stock, as of ~~November 6, 2008: 190,589,562~~July 31, 2009: 191,042,910 shares of common stock, par value $.01 per share.


	September 30, 2008		December 31, 2007		June 30, 2009		December 31, 2008
Assets
Current Assets:
Cash and cash equivalents	$	345,790	$	360,921	$	493,128	$	416,643
Restricted cash		34,250		10,250		17,000		14,000
Receivables from regulated investment companies		35,047		38,198		25,802		28,364
Receivables, net of allowance for doubtful accounts of $2,956 and $3,032 (Note 4)		218,729		236,911
Receivables, net of allowance for doubtful accounts of $3,479 and $2,656 (Note 4)						181,771		179,845
Deferred income taxes		52,417		17,310		21,339		84,830
Securities owned		12,093		16,777
Other current assets		15,791		14,567		33,961		15,989

Total Current Assets		714,117		694,934		773,001		739,671

Property and Equipment, net of accumulated depreciation and amortization of $136,968 and $126,591 (Note 4)		150,735		143,516
Property and Equipment, net of accumulated depreciation and amortization of $148,728 and $142,240 (Note 4)						144,058		148,124

Capitalized Software, net of accumulated amortization of $47,455 and $34,915		258,190		231,684
Capitalized Software, net of accumulated amortization of $62,208 and $52,113						285,118		270,606

Marketable Securities (Note 6)		86,017		77,169
Investments Available for Sale (Note 6)						69,119		75,380

Trading Securities (Note 6)						96,176		11,313

Goodwill (Notes 2 and 3)		22,842		22,842		22,842		22,842

Intangible Assets, net of accumulated amortization of $21,607 and $15,864 (Notes 2 and 3)		54,434		60,177
Intangible Assets, net of accumulated amortization of $27,352 and $23,523 (Notes 2 and 3)						48,689		52,518

Other Assets		17,039		22,043		19,819		21,261

Total Assets	$	1,303,374	$	1,252,365	$	1,458,822	$	1,341,715

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


	September 30, 2008			December 31, 2007		June 30, 2009			December 31, 2008
Liabilities and Shareholders’ Equity
Current Liabilities:
Current portion of long-term debt	$	7,200		$	8,000	$	6,400		$	7,200
Accounts payable		12,047			8,690		13,134			12,308
Payable to regulated investment companies		762			601		79			97
Accrued liabilities (Note 4)		134,462			186,902		97,030			134,776
Capital Support Agreements (Note 7)		112,423			25,122
Capital Support Agreements (Notes 5 and 7)							29,973			173,983
Deferred revenue		621			1,052		969			1,530

Total Current Liabilities		267,515			230,367		147,585			329,894

Long-term Debt		29,623			43,971		272,288			24,332

Deferred Income Taxes		81,978			73,600		96,295			104,548

Minority Interest		128,858			136,149

Other Long-term Liabilities (Note 11)		12,021			11,895		4,913			4,067

Commitments and Contingencies
Shareholders’ Equity:
Common stock, $.01 par value, 750,000 shares authorized; 191,286 and 194,375 shares issued and outstanding		1,913			1,944
Equity:
SEI Investments Company shareholders’ equity:
Common stock, $.01 par value, 750,000 shares authorized; 190,969 and 191,195 shares issued and outstanding							1,910			1,912
Capital in excess of par value		474,615			445,474		499,646			485,721
Retained earnings		309,645			298,975		338,715			289,682
Accumulated other comprehensive (loss) income, net		(2,794	)		9,990
Accumulated other comprehensive loss, net							(3,445	)		(8,163	)

Total Shareholders’ Equity		783,379			756,383
Total SEI Investments Company shareholders’ equity							836,826			769,152

Total Liabilities and Shareholders’ Equity	$	1,303,374		$	1,252,365
Noncontrolling interest							100,915			109,722

Total Equity							937,741			878,874

Total Liabilities and Equity						$	1,458,822		$	1,341,715

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


			Three Months Ended September 30,							Three Months Ended June 30,
			2008				2007			2009			2008
Revenues:
Asset management, administration and distribution fees			$	243,162			$	280,287		$	183,209		$	260,931
Information processing and software servicing fees				56,577				58,485			54,694			57,088
Transaction-based and trade execution fees				16,347				10,864			14,106			11,504

Total revenues				316,086				349,636			252,009			329,523

Expenses:
Commissions and fees				42,336				44,184			36,139			43,045
Compensation, benefits and other personnel				80,932				88,463			67,031			83,529
Consulting, outsourcing and professional fees				26,213				23,703			18,711			26,611
Data processing and computer related				11,325				10,410			11,177			11,229
Facilities, supplies and other costs				18,656				16,607			16,203			18,417
Depreciation and amortization				11,675				10,991			12,762			11,498

Total expenses				191,137				194,358			162,023			194,329

Income from operations				124,949				155,278			89,986			135,194

Net loss from investments				(42,047	)			(202	)		(2,533	)		(27,294	)
Interest and dividend income				3,384				4,381			1,937			3,223
Interest expense				(903	)			(1,267	)		(1,051	)		(808	)
Minority interest				(31,078	)			(46,463	)

Net income before income taxes				54,305				111,727			88,339			110,315
Income taxes				19,810				38,428			24,212			27,572

Net income				34,495				73,299			64,127			82,743

Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments				(7,641	)			1,581
Unrealized holding (loss) gain on investments:
Unrealized holding (losses) gains during the period net of income tax benefit (expense) of $755 and $(11)	(1,263	)				84
Less: reclassification adjustment for losses realized in net income, net of income tax benefit of $469 and $36	783			(480	)	62		146
Less: Net income attributable to the noncontrolling interest											(22,556	)		(36,579	)

Other comprehensive (loss) income				(8,121	)			1,727

Comprehensive income			$	26,374			$	75,026
Net income attributable to SEI Investments Company										$	41,571		$	46,164

Basic earnings per common share			$	.18			$	.38		$	.22		$	.24

Diluted earnings per common share			$	.18			$	.37		$	.22		$	.24

Dividends declared per common share										$	.08		$	.08

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


			Nine Months Ended September 30,							Six Months Ended June 30,
			2008				2007			2009			2008
Revenues:
Asset management, administration and distribution fees			$	764,152			$	813,338		$	352,573		$	520,990
Information processing and software servicing fees				173,804				168,131			116,911			117,227
Transaction-based and trade execution fees				41,561				34,150			31,136			25,214

Total revenues				979,517				1,015,619			500,620			663,431

Expenses:
Commissions and fees				130,676				129,857			73,692			88,340
Compensation, benefits and other personnel				248,353				261,293			143,899			167,421
Consulting, outsourcing and professional fees				79,581				67,199			39,861			53,368
Data processing and computer related				33,102				31,404			22,692			21,777
Facilities, supplies and other costs				54,458				51,867			31,636			35,802
Depreciation and amortization				34,693				25,867			25,324			23,018

Total expenses				580,863				567,487			337,104			389,726

Income from operations				398,654				448,132			163,516			273,705

Net loss from investments				(93,387	)			(1,515	)		(16,983	)		(51,340	)
Interest and dividend income				10,745				13,314			3,648			7,361
Interest expense				(2,678	)			(3,696	)		(1,850	)		(1,775	)
Minority interest				(107,837	)			(134,439	)
Other				—				2,952

Net income before income taxes				205,497				324,748			148,331			227,951
Income taxes				75,892				118,571			33,141			56,747

Net income				129,605				206,177			115,190			171,204

Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments				(10,625	)			3,906
Unrealized holding (loss) gain on investments:
Unrealized holding (losses) gains during the period net of income tax benefit (expense) of $1,343 and $(383)	(2,271	)				510
Less: reclassification adjustment for losses realized in net income, net of income tax benefit of $74 and $34	112			(2,159	)	60		570
Less: Net income attributable to the noncontrolling interest											(39,419	)		(76,094	)

Other comprehensive (loss) income				(12,784	)			4,476

Comprehensive income			$	116,821			$	210,654
Net income attributable to SEI Investments Company										$	75,771		$	95,110

Basic earnings per common share			$	.67			$	1.05		$	.40		$	.49

Diluted earnings per common share			$	.66			$	1.02		$	.40		$	.48

Dividends declared per common share			$	.08			$	.07		$	.08		$	.08

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


	Nine Months Ended September 30,						Six Months Ended June 30,
	2008			2007			2009			2008
Cash flows from operating activities:
Net income	$	129,605		$	206,177		$	115,190		$	171,204
Adjustments to reconcile net income to net cash provided by operating activities		80,675			59,725			18,529			(58,506	)

Net cash provided by operating activities		210,280			265,902			133,719			112,698

Cash flows from investing activities:
Additions to restricted cash		(24,000	)		—			(3,000	)		(16,572	)
Additions to property and equipment		(23,726	)		(22,360	)		(6,594	)		(8,959	)
Additions to capitalized software		(39,470	)		(50,126	)		(24,607	)		(25,949	)
Purchase of marketable securities		(55,207	)		(31,776	)		(252,403	)		(16,935	)
Sale of marketable securities		29,629			26,747			—			10,049
Maturities of marketable securities		17,000			—			13,999			17,000
Cash received from sale of joint venture		—			3,116
Other		—			(231	)

Net cash used in investing activities		(95,774	)		(74,630	)		(272,605	)		(41,366	)

Cash flows from financing activities:
Payments on long-term debt		(15,148	)		(22,695	)		(6,844	)		(10,552	)
Proceeds from borrowings on long-term debt								254,000			—
Purchase and retirement of common stock		(111,169	)		(183,856	)		(10,464	)		(91,601	)
Proceeds from issuance of common stock		20,341			35,170			8,218			15,044
Tax benefit on stock options exercised		5,285			16,038			1,059			4,183
Payment of dividends		(28,946	)		(25,683	)		(30,598	)		(28,942	)

Net cash used in financing activities		(129,637	)		(181,026	)
Net cash provided by (used in) financing activities								215,371			(111,868	)

Net (decrease) increase in cash and cash equivalents		(15,131	)		10,246
Net increase (decrease) in cash and cash equivalents								76,485			(40,536	)
Cash and cash equivalents, beginning of period		360,921			286,948			416,643			360,921

Cash and cash equivalents, end of period	$	345,790		$	297,194		$	493,128		$	320,385

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

SEI Investments Company (the Company), a Pennsylvania corporation, provides investment processing, fund processing, and investment management business outsourcing solutions to corporations, financial institutions, financial advisors, and ~~affluent~~ultra-high-net-worth families in the United States, Canada, the United Kingdom, continental Europe, and other various locations throughout the world. Investment processing solutions utilize the Company’s proprietary software system to track investment activities in multiple types of investment accounts, including personal trust, corporate trust, institutional trust, and non-trust investment accounts, thereby allowing banks and trust companies to outsource trust and investment related activities. 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.

The fund processing solution offers a full range of administration and distribution support services to mutual funds, collective trust funds, single-manager hedge funds, ~~fund~~funds of hedge funds, private equity funds and other types of investment funds. Administrative services include fund accounting, trustee and custodial support, legal support, transfer agency and shareholder servicing. Distribution support services range from market and industry insight and analysis to identifying distribution opportunities. Revenues from fund processing solutions are recognized in Asset management, administration and distribution 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.

The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of ~~America, consistent~~America. Except as disclosed herein, there have been no significant changes in ~~all material respects with those applied~~significant accounting policies during the six months ended June 30, 2009 as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2007.~~2008. Certain financial information and accompanying note disclosure normally included in the Company’s Annual Report on Form 10-K has 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 ~~to present fairly~~for a fair presentation of the financial position of the Company as of ~~September~~June 30, ~~2008,~~2009, the results of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2008~~2009 and ~~2007,~~2008, and cash flows for the ~~nine~~six month periods ended ~~September~~June 30, ~~2008~~2009 and ~~2007.~~2008. 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, ~~2007.~~2008.

~~Except~~The Company adopted Statement of Financial Accounting Standards (SFAS) No. 160 (SFAS 160), “Noncontrolling Interest in Consolidated Financial Statements, an amendment of Accounting Research Bulletin No. 51” in January 2009. SFAS 160 established accounting and reporting standards that require the ownership interests in subsidiaries not held by the parent to be clearly identified, labeled and presented in the consolidated statement of financial position within equity, but separate from the parent’s equity. This statement also required the amount of consolidated net income attributable to the parent and to the noncontrolling interest to be clearly identified and presented on the face of the consolidated statement of income.

The Company has involvement with various variable interest entities (VIE or VIEs). These VIEs consist of LSV Employee Group, an SEI-sponsored money market fund, and other investment products in the form of Cayman Island investment companies (Cayman companies), Irish-domiciled funds which do not qualify as ~~disclosed herein, there~~Undertakings for Collective Investment in Transferable Securities (non-UCITS), Canadian unit trusts and collective investment trusts.

In 2006, the Company provided an unsecured guaranty with the lenders of LSV Employee Group in order to facilitate the acquisition of partnership interest in LSV. The Company determined that LSV Employee Group is a VIE because the partners of LSV Employee Group do not have ~~been~~any equity at risk because the Company guaranteed the loan. The Company determined it was the primary beneficiary because of the requirement under the guaranty agreement for the Company to absorb any loss in the event of default on the loan by LSV Employee Group (See Note 2).

In 2007, the Company entered into Capital Support Agreements with three of its money market funds to protect the money market fund shareholders from absorbing the credit losses associated with senior notes issued by structured investment vehicles (SIV or SIVs). At the time the Company provided the Capital Support Agreements, the funds became VIEs; however, management concluded the Company was not the primary beneficiary. Management compared the credit risk absorbed through the Capital Support Agreements due to the SIV securities and the interest rate and credit risk associated with the non-SIVs absorbed by the money market funds shareholders to determine if the Company’s risk represented the majority. This analysis determined that the interest rate and credit risk absorbed by the money market fund shareholders was more variable than the credit risk absorbed by the Company. Therefore, the Company is not bearing more than 50 percent of the expected losses on the money market funds and the Company is not the primary beneficiary. Subsequently, the Company purchased the remaining SIV securities from two of the money market funds. As a result of these purchases, the Capital Support Agreements with these funds were cancelled and, therefore, these funds are no longer considered VIEs (See Note 7).

Other variable interest entities are in the form of Cayman companies, Irish-domiciled non-UCITS, Canadian unit trusts and collective investment trusts established for the purpose of offering alternative investment products to clients. Clients of the Company are the equity holders in all of these VIEs. The Company governs all decision making authority of the Cayman companies, Irish domiciled non-UCITS, Canadian unit trusts and the collective investment trusts from which it receives a fee. The Company has no equity investment in the entities. Management has concluded that the Company does not have a significant variable interest in these entities and, therefore, is not the primary beneficiary.

On June 12, 2009, the Financial Accounting Standards Board (FASB) issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)” (SFAS 167), which amends FASB Interpretation No. 46(R), “Consolidation of Variable Interest Entities,” (FIN 46(R)), to require an enterprise to perform an ongoing analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity. Additionally, an enterprise is required to assess whether it has an implicit financial responsibility to ensure that a variable interest entity operates as designed when determining whether it has the power to direct the activities of the variable interest entity that most significantly impact the entity’s economic performance. SFAS 167 amends FIN 46(R) to require ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity. Before this Statement, FIN 46(R) required reconsideration of whether an enterprise is the primary beneficiary of a variable interest entity only when specific events occurred. SFAS 167 also amends FIN 46(R) to add an additional reconsideration event for determining whether an entity is a variable interest entity when any changes in ~~significant accounting policies during~~facts and circumstances occur such that the ~~nine months ended September 30, 2008~~holders of the equity investment at risk, as ~~compared~~a group, lose the power from voting rights or similar rights of those investments to direct the ~~significant accounting policies described~~activities of the entity that most significantly impact the entity’s economic performance. SFAS 167 is effective for the Company beginning in the ~~Company’s Annual Report~~first quarter 2010. The Company is currently evaluating the impact SFAS 167 will have on ~~Form 10-K for the year ended December 31, 2007.~~its consolidated financial statements.

Cash and cash equivalents ~~includes $191,056 and $185,536~~ at ~~September~~June 30, ~~2008~~2009 and December 31, ~~2007,~~2008 includes $348,655 and $282,155, respectively, primarily invested in SEI-sponsored open-ended money market mutual funds. Cash includes $37,660 and ~~cash equivalents also includes $74,402 and $82,374~~$60,515 at ~~September~~June 30, ~~2008~~2009 and December 31, ~~2007,~~2008, respectively, from ~~LSV, of which the Company has a 43 percent partnership interest (See Note 2).~~LSV.

Restricted cash at ~~September~~June 30, ~~2008~~2009 and December 31, ~~2007~~2008 includes ~~$11,000~~$17,000 and ~~$10,000,~~$14,000, 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 and $250 segregated for regulatory purposes related to trade-execution services conducted by our subsidiary located in the United Kingdom. Restricted cash at September 30, 2008 also includes $23,000 segregated for the benefitbroker-dealers.

Page 9 of ~~certain SEI-sponsored money market mutual funds according to the provisions of the Capital Support Agreements (See Note 7).~~50

The Company capitalized ~~$39,470~~$24,607 and ~~$50,126~~$25,949 of software development costs during the ~~nine~~six months ended ~~September~~June 30, ~~2008~~2009 and ~~2007,~~2008, respectively. As of ~~September~~June 30, ~~2008,~~2009, capitalized software placed into service included on the accompanying Consolidated Balance Sheet had a weighted average remaining life of approximately ~~13.6~~12.9 years. Amortization expense related to capitalized software was ~~$12,704~~$10,095 and ~~$5,497~~$8,434 during the ~~nine~~six months ended ~~September~~June 30, ~~2008~~2009 and ~~2007,~~2008, respectively.

The Company placed the initial version of the Global Wealth Platform into service in July ~~2007. Enhancements~~2007 and has subsequently implemented enhancements and upgrades to ~~expand the functionality of~~ the platform ~~were implemented in October 2007 and April 2008.~~through a series of releases. The total amount of capitalized software development costs related to the platform placed into service and being amortized as of ~~September~~June 30, ~~2008~~2009 was ~~$219,775.~~$279,503, which includes $55,160 related to a release placed into service in January 2009. The Global Wealth Platform has an estimated useful life of 15 years and a weighted average remaining life of 13.0 years. Amortization expense related to the platform was $9,208 and $7,308, during the ~~nine~~six months ended ~~September~~June 30, 2009 and 2008 ~~was $10,979.~~respectively.

In February 2007, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 159 (SFAS 159), “The Fair Value Option for Financial Assets and Financial Liabilities.” SFAS 159 permits companies to choose to measure certain financial instruments and certain other items at fair value. The standard requires that unrealized gains and losses on items for which the fair value option has been elected be reported in earnings. SFAS 159 was effective for the Company on January 1, 2008. The Company elected not to apply the fair value option to any of its financial instruments on the date the standard became effective and, therefore, SFAS 159 had no impact on its consolidated financial position, results of operations or cash flows. The Company may elect to apply the fair value option to any financial instruments acquired after the effective date of SFAS 159.

In September 2006, the FASB issued SFAS No. 157 (SFAS 157), “Fair Value Measurements,” which defines fair value, establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements. The Company adopted the provisions of SFAS 157 ~~does not require any new fair value measurements but rather eliminates inconsistencies~~ in ~~guidance found in various prior accounting pronouncements. SFAS 157 was effective for the Company on~~ January 1, 2008. However, in February 2008, the FASB issued FASB Staff Position (FSP) FAS 157-2 which delayed the effective date of SFAS 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). ~~In October 2008,~~The Company adopted the ~~FASB issued FSP FAS 157-3 which clarifies the application~~provisions of SFAS 157 ~~in a market that is not active and provides an example~~as they relate to ~~illustrate key considerations in determining the fair value of a financial asset when the market for that financial asset is not active. SFAS 157 becomes effective for all~~ nonfinancial assets and liabilities ~~for periods beginning after November 15, 2008, which will be the Company’s first quarter of fiscal~~in January 2009. The ~~Company has adopted SFAS 157 for financial assets and liabilities recognized at fair value on a recurring basis. The partial~~ adoption of SFAS 157 for ~~financial~~nonfinancial assets and liabilities did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows. See Note 5 for information on related disclosures regarding fair value measurements.

~~Page 7~~On April 9, 2009, the FASB issued FASB Staff Position (FSP) FAS 157-4, “Determining Fair Value When the Volume and Level of 43Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (FSP 157-4), and FSP FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments” (FSP 107-1). FSP 157-4 provides additional guidance for estimating fair value in accordance with FAS 157, “Fair Value Measurements,” when the volume and level of activity for the asset or liability has significantly decreased. FSP 157-4 also includes guidance on identifying circumstances that indicate a transaction is not orderly. FSP 107-1 amends FAS 107, “Disclosures about Fair Value of Financial instruments,” to require disclosures about fair value of financial instruments for interim reporting periods as well as in annual financial statements. FSP 107-1 also amends Accounting Principles Board (APB) Opinion No. 28, “Interim Financial Reporting,” to require those disclosures in summarized financial information at interim reporting periods. The Company adopted FSP 157-4 and FSP 107-1 in the second quarter 2009. The adoption of FSP 157-4 and FSP 107-1 did not have a material impact on the Company’s consolidated financial statements.

The calculations of basic and diluted earnings per share for the three months ended ~~September~~June 30, ~~2008~~2009 and ~~2007~~2008 are:


	For the Three Month Period Ended September 30, 2008					For the Three Month Period Ended June 30, 2009
	Income (Numerator)		Shares (Denominator)	Per Share Amount		Income (Numerator)		Shares (Denominator)	Per Share Amount
Basic earnings per common share	$	34,495	191,554	$	.18	$	41,571	191,023	$	.22

Dilutive effect of stock options		—	3,142				—	910

Diluted earnings per common share	$	34,495	194,696	$	.18	$	41,571	191,933	$	.22


	For the Three Month Period Ended September 30, 2007
	Income (Numerator)		Shares (Denominator)	Per Share Amount
Basic earnings per common share	$	73,299	194,930	$	.38

Dilutive effect of stock options		—	5,391

Diluted earnings per common share	$	73,299	200,321	$	.37

Employee stock options to purchase ~~9,226,000~~19,522,000 and ~~3,468,000~~9,256,000 shares of common stock, with an average exercise price of ~~$27.57~~$22.35 and ~~$29.62,~~$27.58, were outstanding during the three month periods ended ~~September~~June 30, ~~2008~~2009 and ~~2007,~~2008, respectively, but not included in the computation of diluted earnings per common share because the effect on diluted earnings per common share would have been anti-dilutive.

The calculations of basic and diluted earnings per share for the ~~nine~~six months ended ~~September~~June 30, ~~2008~~2009 and ~~2007~~2008 are:


	For the Nine Month Period Ended September 30, 2008					For the Six Month Period Ended June 30, 2009
	Income (Numerator)		Shares (Denominator)	Per Share Amount		Income (Numerator)		Shares (Denominator)	Per Share Amount
Basic earnings per common share	$	129,605	192,457	$	.67	$	75,771	191,053	$	.40

Dilutive effect of stock options		—	3,843				—	618

Diluted earnings per common share	$	129,605	196,300	$	.66	$	75,771	191,671	$	.40


	For the Nine Month Period Ended September 30, 2007					For the Six Month Period Ended June 30, 2008
	Income (Numerator)		Shares (Denominator)	Per Share Amount		Income (Numerator)		Shares (Denominator)	Per Share Amount
Basic earnings per common share	$	206,177	196,720	$	1.05	$	95,110	192,908	$	.49

Dilutive effect of stock options		—	6,155				—	4,194

Diluted earnings per common share	$	206,177	202,875	$	1.02	$	95,110	197,102	$	.48

Employee stock options to purchase ~~9,226,000~~24,377,000 and ~~3,456,000~~5,911,000 shares of common stock, with an average exercise price of ~~$27.57~~$20.85 and ~~$29.64,~~$30.79, were outstanding during the ~~nine~~six month periods ended ~~September~~June 30, ~~2008~~2009 and ~~2007,~~2008, respectively, but not included in the computation of diluted earnings per common share because the exercise price of the options 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.

Accumulated other comprehensive ~~income (loss) consist~~loss, net of tax, consists of:

Noncontrolling interest on the accompanying Consolidated Balance Sheet as of December 31, 2008 includes a cumulative reclass adjustment of $3,148 as a result of the Company’s adoption of SFAS 160. This reclass adjustment relates to foreign currency translation adjustments.

For purposes of the Consolidated Statements of Cash Flows, the Company considers investment instruments purchased with an original maturity of three months or less to be cash equivalents.

The following table provides the details of the adjustments to reconcile net income to net cash provided by operating activities for the ~~nine~~six months ended ~~September~~June 30:

~~In December 2007,~~On April 9, 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments (FSP 115-2).” FSP 115-2 establishes a new method of recognizing and reporting other-than-temporary impairments of debt securities. FSP 115-2 also contains additional disclosure requirements related to debt and equity securities. The Company adopted FSP 115-2 in the second quarter 2009. The adoption of FSP 115-2 did not have a material impact on the Company’s consolidated financial statements.

On May 28, 2009, the FASB issued SFAS No. ~~141 (revised 2007)~~165, “Subsequent Events” (SFAS ~~141R)~~165), ~~“Business Combinations”~~which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. The Company adopted SFAS 165 in the second quarter 2009. Since SFAS 165 only requires additional disclosures, the adoption of SFAS 165 did not have any impact on the Company’s consolidated financial statements.

On June 12, 2009, the FASB issued SFAS No. ~~160 (SFAS 160), “Noncontrolling Interests in Consolidated~~166, “Accounting for Transfers of Financial ~~Statements,~~ Assets—an amendment of ~~Accounting Research Bulletin~~FASB Statement No. ~~51.” SFAS 141R will change how business acquisitions are accounted for~~140” (SFAS 166), which improves the relevance, representational faithfulness, and ~~will impact~~comparability of the information that a reporting entity provides in its financial statements ~~both~~about a transfer of financial assets; the effects of a transfer on ~~the acquisition date~~its financial position, financial performance, and cash flows, and a transferor’s continuing involvement, if any, in ~~subsequent periods.~~transferred financial assets. SFAS 160 will change the accounting and reporting for minority interests, which will be re-characterized as noncontrolling interests and classified as a component of equity. SFAS 141R and SFAS 160 will become166 is effective for the Company beginning in the first quarter ~~of fiscal 2009. Early adoption is not permitted.~~2010. The Company is currently evaluating the impact ~~that~~ SFAS ~~141R and SFAS 160~~166 will have on its consolidated financial ~~statements.~~statements, but does not believe it will have a significant impact upon adoption.

Certain prior year amounts have been reclassified to conform to current year presentation.

The Company has performed an evaluation of subsequent events through August 5, 2009, which is the FASB issued FASB Statement No. 161 (SFAS 161), “Disclosures about Derivative Instruments and Hedging Activities.” SFAS 161 requires companies with derivative instruments to disclose information that should enable financial-statement users to understand how and why a company uses derivative instruments, how derivative instruments and related hedged items are accounted for under FASB Statement No. 133 “Accounting for Derivative Instruments and Hedging Activities” and how derivative instruments and related hedged items affect a company’s financial position, financial performance and cash flows. SFAS 161 is effective fordate the financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The Company is currently evaluating the impact, if any, that SFAS 161 will have on its consolidated financial statements.were issued.

In April 2008, the FASB issued FSP 142-3 (FSP 142-3), “Determination of the Useful Life of Intangible Assets.” FSP 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142 (SFAS 142), “Goodwill and Other Intangible Assets.” The intent of this new guidance is to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under other accounting pronouncements. FSP 142-3 is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2008. The Company is currently evaluating the impact, if any, that FSP 142-3 will have on its consolidated financial statements.

In September 2008, the FASB issued FSP No. FAS 133-1 and FIN 45-4 (FSP 133-1 and FIN 45-4), “Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161” that introduces new disclosure requirements for credit derivatives and guarantees and clarifies the effective date of SFAS 161. The new disclosure requirements are designed to result in similar disclosures for financial instruments with similar risks and rewards relating to credit risk, regardless of their legal form. The provisions of FSP 133-1 and FIN 45-4 are effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The Company is currently evaluating the impact, if any, that FSP 133-1 and FIN 45-4 will have on its consolidated financial statements.

The Company has an investment in the general partnership LSV Asset Management (LSV), a registered investment advisor that provides investment advisory services to institutions, including pension plans and investment companies. LSV is currently an investment sub-advisor for a number of SEI-sponsored mutual funds. The Company’s total partnership interest in LSV was approximately 43 percent ~~during 2007~~through March 31, 2009 and ~~2008.~~approximately 42 percent for the three month period ended June 30, 2009 (See Issuance of Partnership Interest below). LSV Employee Group is owned by several current employees of LSV and was formed for the sole purpose of owning a partnership interest in LSV. The Company does not own any interest in LSV Employee Group.

~~In January 2006, two~~Two partners of LSV, excluding the Company, sold in the aggregate an eight percent interest in LSV to LSV Employee Group. The Company entered into a Guaranty Agreement with LSV Employee Group, Bank of America, N.A. (formerly LaSalle Bank National Association) as administrative agent (the Agent), and certain other lenders in order to facilitate the acquisition of certain partnership interests of LSV by LSV Employee Group. LSV Employee Group obtained financing from the Agent and certain other lenders in the form of a term loan pursuant to the terms of a Credit Agreement (See LSV Employee Group Term Loan below).

Pursuant to the terms and conditions of the Guaranty Agreement, the Company provided an unsecured guaranty to the lenders of all obligations of LSV Employee Group under the Credit Agreement. In the event of default by LSV Employee Group, the lenders have the right to seek payment from the Company of all obligations of LSV Employee Group under the Credit Agreement. As recourse for such payment, the Company will be subrogated to the rights of the lenders under the Credit Agreement and the Guaranty Agreement, including the security interest in the pledged interests transferred to LSV Employee Group.

As a result of this transaction, LSV Employee Group meets the definition of a variable interest entity and the Company ~~has a controlling financial interest~~is the primary beneficiary in ~~LSV through its direct ownership~~accordance with the guidance of ~~LSV and guaranty of LSV Employee Group’s debt.~~FIN 46(R). The Company therefore consolidates the assets, liabilities and operations of LSV and LSV Employee Group in its Consolidated Financial Statements. The Company’s ~~percentage of~~ direct ownership in LSV at the date of this transaction was unchanged, ~~(approximately~~or approximately 43 ~~percent) as a result of this transaction.~~percent. The amount of ownership of the other existing partners ~~(approximately~~of LSV was approximately 57 ~~percent) of LSV~~percent and is included in Minority interest. Assuming no other changes in the Company’s relationship with LSV and LSV Employee Group, the Company would no longer be required to consolidate the assets, liabilities and operations of LSV and LSV Employee Group after the LSV Employee Group Term Loan is paid in full. Additionally, the Company may not be required to consolidate LSV and LSV Employee Group if the Company’s percentage of direct ownership in LSV decreases to certain levels.Noncontrolling Interest.

The Company determined that $72,220 of the $92,000 purchase price related to identifiable intangible assets and the remaining $19,780 was goodwill. The identifiable intangible assets have an estimated life of ten years and are amortized on a straight-line basis. The Company recognized ~~$5,416~~$3,611 in amortization expense during the ~~nine~~six months ended ~~September~~June 30, ~~2008~~2009 and ~~2007,~~2008, which is reflected in Depreciation and amortization expense on the accompanying Consolidated ~~Statements~~Statement of Operations. Amortization expense recognized in the Consolidated ~~Statements~~Statement of Operations associated with the assets of LSV Employee Group was eliminated through ~~Minority~~Noncontrolling interest and had no impact on net income.


	September 30, 2008			December 31, 2007			June 30, 2009			December 31, 2008
Intangible asset, at cost	$	72,220		$	72,220		$	72,220		$	72,220
Accumulated amortization		(19,860	)		(14,444	)		(25,277	)		(21,666	)

Net book value	$	52,360		$	57,776		$	46,943		$	50,554

In March 2009, certain partners (the Contributing Partners) of LSV, including the Company, agreed to designate a portion of their partnership interest for the purpose of providing an interest in LSV to a select group of key employees. Until such time an interest in LSV is issued to a key employee, all profits, losses, distributions and other rights and obligations relating to such unissued interests remains with the Contributing Partners. Each issuance must be authorized by unanimous vote of all Contributing Partners. The issuance of an interest in LSV to a key employee provides them an interest in the future profits of LSV. It does not provide them any rights in the management of the partnership or the ability to direct the operations or affairs of LSV.

In April 2009, the Contributing Partners agreed to provide certain employees an interest in LSV from the Contributing Partners, thereby reducing the Company’s interest in LSV to approximately 42 percent. The Company’s direct interest in LSV and its indirect interest in LSV through LSV Employee Group was reduced to less than 50 percent. The Company evaluated the effect of this transaction in accordance with the guidance established in SFAS 160 and determined that the reduction of the Company’s interest of less than one percent in LSV was not a significant economic event that had any effect on the control of the operations or affairs of LSV. The Company’s controlling interest in LSV was unchanged. The Company continued to consolidate the assets, liabilities and operations of LSV and LSV Employee Group.

In order to finance a portion of the purchase price, LSV Employee Group obtained financing from Bank of America, N.A. (formerly LaSalle Bank National Association) and certain other lenders in the form of a term loan pursuant to the terms of a Credit Agreement. The principal amount of the term loan was $82,800. The principal amount and interest of the term loan are paid in quarterly installments. The total outstanding principal balance of the term loan must be paid in full by January 2011. LSV Employee Group may prepay the term loan in whole or in part at any time without penalty. As of ~~September~~June 30, ~~2008,~~2009, the remaining unpaid principal balance of the term loan was ~~$36,823~~$24,688, of which ~~$7,200~~$6,400 is classified as current and included in Current portion of long-term debt and the remaining ~~$29,623~~$18,288 is included in Long-term debt on the accompanying Consolidated Balance Sheets. LSV Employee Group made principal payments of ~~$15,148~~$6,844 and ~~$13,695~~$10,552 during the ~~nine~~six months ended ~~September~~June 30, ~~2008~~2009 and ~~2007,~~2008, respectively. Interest expense for the ~~nine~~six months ended ~~September~~June 30, ~~2008~~2009 and ~~2007~~2008 on the Consolidated Statements of Operations includes ~~$1,930~~$793 and ~~$2,962,~~$1,264, respectively, in interest costs associated with the borrowings of LSV Employee Group which was eliminated through ~~Minority~~Noncontrolling interest and had no impact on net income.

LSV Employee Group made a principal payment of ~~$5,274~~$2,496 in ~~October 2008.~~July 2009. The remaining unpaid principal balance of the term loan at ~~October~~July 31, ~~2008~~2009 was ~~$31,549.~~$22,192. The Company, in its capacity as guarantor, currently has no obligation of payment relating to the term loan of LSV Employee Group.

The ~~fair~~book value of LSV Employee Group’s long-term debt is ~~approximately $2,853 in excess~~considered to be representative of ~~the carrying amount~~its fair value based upon an estimation using borrowing rates currently available for bank loans with similar terms and maturities.

LSV Employee Group entered into two interest rate swap agreements to convert its floating rate long-term debt to fixed rate debt. ~~These swaps have~~One of these swap agreements terminated on March 31, 2009. The remaining swap agreement has a ~~total~~ notional value of ~~$33,392.~~$26,240. Payments are made every 90 days and the termination ~~dates~~date of the ~~swaps are March 2009 and~~remaining swap agreement is January 2011. The net effect from the interest rate swaps on the Company’s earnings during the six months ended June 30, 2009 and 2008 was minimal.

In June 2003, the Company purchased an additional percentage ownership in LSV. The total purchase price was allocated to LSV’s net tangible and intangible assets based upon their estimated fair values at the date of purchase. The excess purchase price over the value of the net tangible and identifiable intangible assets was recorded as goodwill. The total amount of goodwill from this transaction amounted to $3,062 and is included on the accompanying Consolidated Balance Sheets.

The Company identified an intangible asset related to customer contracts that met the contractual-legal criterion for recognition apart from goodwill. The fair value of the intangible asset was determined to be $3,821 with a definite life of eight and a half years. The identified intangible asset is amortized on a straight-line basis. The Company recognized ~~$327~~$218 of amortization expense during the ~~nine~~six months ended ~~September~~June 30, ~~2008~~2009 and ~~2007,~~2008, which is reflected in Depreciation and amortization expense on the accompanying Consolidated Statements of Operations.


	September 30, 2008			December 31, 2007			June 30, 2009				December 31, 2008
Trade receivables	$	54,494		$	49,852		$	55,014		��	$	49,656
Fees earned, not billed		164,690			186,157			125,129				130,341
Other receivables		2,501			3,934			5,107				2,504

		221,685			239,943			185,250				182,501
Less: Allowance for doubtful accounts		(2,956	)		(3,032	)		(3,479	)			(2,656	)

	$	218,729		$	236,911		$	181,771			$	179,845

Fees earned, not billed represents receivables 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.

Receivables from regulated investment companies on the accompanying Consolidated Balance Sheets primarily represent fees receivable for distribution, investment advisory, and administration services to various regulated investment companies sponsored by SEI.

Property and Equipment on the accompanying Consolidated Balance Sheets consists of:


	September 30, 2008			December 31, 2007			June 30, 2009			December 31, 2008
Buildings	$	128,604		$	128,296		$	131,351		$	131,321
Equipment		64,414			62,272			62,797			63,952
Land		9,695			9,548			9,695			9,695
Purchased software		58,029			43,580			60,147			58,846
Furniture and fixtures		18,526			19,603			18,368			18,141
Leasehold improvements		5,850			6,357			5,631			5,288
Construction in progress		2,585			451			4,797			3,121

		287,703			270,107			292,786			290,364
Less: Accumulated depreciation and amortization		(136,968	)		(126,591	)		(148,728	)		(142,240	)

Property and Equipment, net	$	150,735		$	143,516		$	144,058		$	148,124

The Company recognized ~~$16,100~~$10,873 and ~~$14,418~~$10,653 in depreciation and amortization expense related to property and equipment for the ~~nine~~six months ended ~~September~~June 30, 2009 and 2008, ~~and 2007,~~ respectively.

~~Accrued sub-advisor and investment officer fees relates to services provided by fund advisors to SEI-sponsored mutual funds and other investment programs.~~

SFAS 157 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. SFAS 157 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used by the Company to measure fair value:

Level 1 – Quoted prices in active markets for identical assets or liabilities without adjustment. The Company’s Level 1 assets primarily include investments in ~~SEI-sponsored~~ mutual funds sponsored by SEI and LSV that are quoted daily.

Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. The Company’s Level 2 assets primarily include ~~U.S. Treasury~~ securities ~~and U.S. government agency mortgage-backed debt securities~~issued by the Government National Mortgage Association with quoted prices that are traded less frequently than exchange-traded instruments. The value of these assets is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment by management. The Company’s Level 3 financial assets include SIV securities ~~issued by structured investment vehicles (SIVs)~~ (See Notes 6 and 7). The Company elected the fair value option under SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities" (SFAS 159) to ~~value~~account for these securities. The Company’s Level 3 financial liabilities include the remaining Capital Support ~~Agreements~~Agreement which ~~are~~is considered a derivative financial ~~instruments~~instrument (See Note 7).

The fair value of an asset or liability may include inputs from more than one level in the fair value hierarchy. The lowest level of significant inputs used to value the asset or liability determines which level the asset or liability is classified in its entirety.

~~The fair value of securities issued by SIVs has been greatly affected by recent~~Recent liquidity issues surrounding collateralized debt obligations and ~~asset backed~~asset-backed securities has greatly affected the fair value of SIV securities. ~~Market price quotes may not be readily available for some positions. The~~Given the lack of any reliable market data on the SIV securities owned by the Company ~~values~~or held by SEI-sponsored money market funds, the fair value of these securities ~~issued by SIVs~~is determined using a net asset value approach which considers the value of the underlying ~~assets.~~collateral of the SIV securities. The valuation model is maintained by an independent third party. The underlying ~~assets~~collateral is comprised of asset-backed securities and collateralized debt obligations that are specifically identified by its CUSIP or ISIN number. The Company obtains quotes primarily from two independent external pricing vendors for each security. Other pricing vendors may

be used in limited situations when a security quote can not be obtained from either of the two primary independent external pricing vendors. The average of the two quotes received is used to value each security. Additionally, the securities are aggregated by type or sector (i.e. home equity line of credit, sub-prime 1^st liens, residential mortgage-backed securities, etc.) and the weighted average quote of all securities within a sector held by the SIV is compared with the range of quotes received for similar securities within the same sector from the trading desk of an affiliate of the third party that maintains the SIV pricing model. The weighted average quote of all securities within a sector held by the SIV must be within the range of quotes received from the trading desk within that same sector. If the weighted average quote for all securities within a sector held by the SIV is outside that range, the average quote received from the pricing vendors may be adjusted. In any event, the value assigned to each security held by the SIV will be the lower of (i) the average of the quotes received from the pricing vendors or (ii) the lowest quote received from the trading desk for a similar security.

A portion of the securities that comprise the underlying collateral of the SIV securities lack price quotes. These securities that lack price quotes are adjusted by the weighted average percentage movement of securities held as collateral within the same sector classification. For example, a residential mortgage-backed security that has not received a quote for an extended period of time will be adjusted by the weighted average percentage movement of all quoted residential mortgage-backed securities held as collateral by the SIV security. Also, as previously stated, the weighted average price of all securities within a sector is compared with the range of quotes received from the trading desk of an affiliate of the independent third party that maintains the valuation model. The weighted average quote of all securities within a sector must be within the range of quotes received from the trading desk within that same sector. If the average quote is not within the range, the quote may be adjusted. The average quote will only be adjusted downward to the lowest figure.

The pricing vendors utilize widely-accepted pricing models, which are evaluated by the pricing vendor, that vary by asset class and incorporate available trade, bid, and other market information. The market inputs that these vendors seek for their evaluation of securities include: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and other available market data. Broker quotes may be binding or non-binding. For certain security types, additional inputs may be used. The pricing vendors may prioritize inputs differently from time to time for any security based on current market conditions. For each asset class, the pricing vendor has a team of evaluators that gather information from market sources and integrate relevant credit information, perceived market movements and sector news into the evaluated pricing models. For a structured security evaluation, including mortgage-backed securities, these evaluators would consider various characteristics including issuer, vintage, purpose of loan, collateral attributes, prepayment speeds and credit ratings in order to properly identify trades and quotes for similar securities which are gathered for use in the evaluation process. Evaluators follow multiple review processes throughout each month that assess the available market, credit and deal level information in support of the evaluation process. If it is determined that sufficient objectively verifiable information does not exist to support a security’s valuation, the pricing vendor will discontinue providing a quote on that security. As previously stated, securities that lack a quote from a pricing vendor are valued using external pricing services that incorporate market information, where available, or through the use of matrix pricing or other acceptable measures. Securities which lack market information are grouped by sector and valued by utilizing the most recent quoted price ~~of the underlying asset~~ and adjusting that price by the weighted average percentage change in the respective sector ~~using indices or~~of all other ~~relative benchmarks.~~similar securities that are held by the SIV.

The Company evaluated the inputs used by the pricing vendors in accordance with the fair value hierarchy established in SFAS 157. This process required gaining an understanding of their valuation methodologies, processes, models and inputs. The pricing vendors provided information about each model, the inputs used and the order of priority of each input. In the event management disagrees with a quoted price from a vendor, the Company may challenge that price and request an evaluation. The Company considered each vendor’s qualification to provide quotes pertaining to each security. All pricing vendors used are considered to be market leaders that have a long history of providing reliable information to their clients.

In the event a market transaction does exist for a SIV security, management evaluates the publicly available information surrounding the transaction in order to assess if the price used represents the fair value according to the guidance in SFAS 157. In management’s opinion, the price of certain SIV securities used in recent transactions were from distressed sales and did not represent the implied fair value of the Capital Support Agreements is determined through the use of an option pricing model designed for credit default swaps. The value is primarily affected by assumptions pertaining to the underlying assets, mainly default percentages and recovery rates specific to each security coveredSIV securities held by the ~~Capital Support Agreement.~~Company or by the SEI-sponsored money market funds.

The fair value of certain financial assets and liabilities of the Company was determined using the following inputs at ~~September~~June 30, 2009:

The fair value of certain financial assets and liabilities of the Company was determined using the following inputs at December 31, 2008:


	Fair Value Measurements at Reporting Date Using								Fair Value Measurements at Reporting Date Using
Assets	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Equity available-for-sale securities	$	20,904	$	20,904	$	—	$	—	$	17,747	$	17,747	$	—	$	—
Fixed income available-for-sale securities		56,380		—		56,380		—
Securities issued by SIVs		8,733		—		—		8,733
Fixed income securities owned		12,093		—		12,093		—
Fixed-income available-for-sale securities										57,633		—		57,633		—
Trading securities issued by SIVs										5,713		—		—		5,713
Other trading securities										5,600		3,903		—		1,697

	$	98,110	$	20,904	$	68,473	$	8,733	$	86,693	$	21,650	$	57,633	$	7,410

Liabilities
Capital Support Agreements	$	112,423	$	—	$	—	$	112,423	$	173,983	$	—	$	—	$	173,983

	$	112,423	$	—	$	—	$	112,423	$	173,983	$	—	$	—	$	173,983

The table below presents a reconciliation for all assets and liabilities of the Company measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the period from January 1, ~~2008~~2009 to ~~September~~June 30, ~~2008:~~2009:

~~The $6,588 loss recognized in earnings relates to the unrealized losses of~~Losses from Trading securities issued by SIVs is primarily due to the purchase of SIV securities from SEI-sponsored money market mutual funds during the ~~nine~~six months ended ~~September~~June 30, ~~2008~~2009 and ~~is reflected~~are recognized in Net loss from investments on the accompanying Consolidated Statements of Operations (See ~~Notes 6 and~~Note 7).

The ~~$87,301~~$144,010 included in earnings for the Company’s Capital Support Agreements primarily relates to the reduction in the Company’s obligation related to the Capital Support Agreements as a result of the Company’s purchase of SIV securities from SEI-sponsored money market funds during the six months ended June 30, 2009 and is recognized in Net loss from investments on the accompanying Consolidated Statements of Operations (See Note 7).

The $53,096 recognized in earnings relates to the change in fair value of the Capital Support Agreements during the ~~nine~~six months ended ~~September~~June 30, 2008 and is ~~reflected~~recognized in Net loss from investments on the accompanying Consolidated Statements of Operations (See Note 7).

~~Available~~Investments available for sale ~~securities~~ of the Company’s non-broker-dealer subsidiaries consist of:


	As of September 30, 2008									As of June 30, 2009
	Cost Amount		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cost Amount		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
SEI-sponsored mutual funds	$	18,829	$	61	$	(1,449	)	$	17,441	$	18,297	$	—	$	(1,286	)	$	17,011
Other mutual funds		3,806		—		(343	)		3,463		3,485		—		(411	)		3,074
Debt securities		56,781		—		(401	)		56,380		47,604		1,430		—			49,034

	$	79,416	$	61	$	(2,193	)	$	77,284	$	69,386	$	1,430	$	(1,697	)	$	69,119


	As of December 31, 2007									As of December 31, 2008
	Cost Amount		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Cost Amount		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
SEI-sponsored mutual funds	$	34,213	$	306	$	(935	)	$	33,584	$	18,739	$	—	$	(3,759	)	$	14,980
LSV-sponsored mutual funds		6,781		1,608		—			8,389
Other mutual funds		4,055		62		—			4,117		3,336		—		(569	)		2,767
Debt securities		30,823		256		—			31,079		55,762		1,871		—			57,633

	$	75,872	$	2,232	$	(935	)	$	77,169	$	77,837	$	1,871	$	(4,328	)	$	75,380

~~The net~~Net unrealized holding losses at ~~September~~June 30, ~~2008~~2009 were ~~$1,343~~$51 (net of income tax benefit of ~~$789)~~$216). ~~The net~~Net unrealized holding ~~gains~~losses at December 31, ~~2007~~2008 were ~~$816~~$1,524 (net of income tax ~~expense~~benefit of ~~$481)~~$933). These net unrealized ~~gains and~~ losses are reported as a separate component of Accumulated other comprehensive ~~gains~~loss on the accompanying Consolidated Balance Sheets.

During the three ~~and nine~~ months ended ~~September~~June 30, 2009, the Company recognized gross realized gains from available-for-sale securities of $23. There were no realized gains recognized during the three months ended June 30, 2008. During the six months ended June 30, 2009 and 2008, the Company recognized gross realized gains from available-for-sale securities of ~~$701~~$61 and ~~$1,775,~~$1,066, respectively. ~~Gross realized gains from available-for-sale securities during the three and nine months ended September 30, 2007 were minimal.~~ These gains are ~~reflected~~included in Net loss from investments on the accompanying Consolidated Statements of Operations. There were no realized losses recognized during the ~~nine~~six months ended ~~September~~June 30, ~~2008~~2009 and ~~2007.~~2008.

The Company has investments in two SEI-sponsored mutual funds which primarily invest in fixed-income securities, including debt securities issued by municipalities and mortgage-backed securities. ~~These~~The market value of these investments ~~have been~~has steadily decreased since the initial purchase in ~~an unrealized loss position for an extended period of time. Management believes~~2007. In August 2008, management concluded that the earnings potential and near term prospects of some of the issuers of the underlying securities held in the funds are uncertain and ~~has determined~~ that it iswas unlikely the investments will fully recover from a loss position in the foreseeable future. Due to these factors, the Company ~~recorded~~wrote-down the cost basis for these investments to their current market value in August 2008. Subsequently, the market value of these securities declined further and both securities were in an unrealized loss position. In June 2009, management determined it was unlikely that one of these securities would recover to its cost basis in the foreseeable future. Therefore, the Company recognized an Other-than-temporary impairment charge of ~~$1,961~~$901 during the three months ended ~~September~~June 30, ~~2008~~2009 for that security. The Other-than-temporary impairment charge is included in Net loss from investments on the accompanying Consolidated Statement of Operations. The market value of the second investment has increased substantially in the second quarter but remains in an unrealized loss position of $944 at June 30, 2009. The Company has the ability and ~~classified~~the intent to hold onto this ~~charge as~~security for a sufficient period of time to allow for a recovery. The Company continually evaluates its assessment of its investments on an ~~Other-than-temporary decline~~ongoing basis.

The Company has investments included in ~~market value. At September 30, 2008, the new~~Other mutual funds that have been in an unrealized loss position for a period of less than one year. These mutual funds primarily invest in a diversified mix of equity and fixed-income securities. The cost basis of these investments ~~inclusive of the impairment charge,~~ was ~~$15,967~~$3,439 with a fair value

~~Derivatives held by~~$411. Management did not record an other-than-temporary impairment charge at June 30, 2009 due to its assessment regarding the ~~Company were~~correlation of the decline in market value of these investments to the volatility in the ~~form of~~capital markets and the Company’s ability and intent to hold onto these securities for a sufficient duration to allow for a recovery.

On March 31, 2008, the Company’s derivative equity contracts held for the purpose of hedging market risk of certain available for sale securities ~~and~~reached their contractual maturity date. These derivatives were held ~~only~~ for the purpose of hedging such risk and not for speculation. On March 31, 2008, the Company’s derivative equity contracts reached their contractual maturity date. The Company received gross proceeds of $733 from the maturity of the derivative investments in April 2008. The Company no longer owns any derivative financial instruments to hedge market risk of available for sale securities.

~~There were no~~ Net loss from investments on the accompanying Consolidated Statements of Operations for the six months ended June 30, 2008 includes net gains ~~or losses recognized by the Company~~of $676 from changes in the fair value of derivative ~~instruments during~~instruments.

The Company’s debt securities are issued by the ~~three months ended September 30, 2008. During~~Government National Mortgage Association and are backed by the ~~three months ended September 30, 2007,~~full faith and credit of the U.S. government. These securities were purchased to satisfy applicable regulatory requirements of SEI Private Trust Company (SPTC) and have maturity dates which range from 2020 to 2038.

The Company has elected the fair value option under SFAS 159 for all of ~~$267 from changes in~~its trading securities and the amount on the accompanying Consolidated Balance Sheet represents the fair value of ~~derivative instruments. In the nine months ended September 30, 2008 and 2007, the Company recognized net gains (losses) of $676 and ($1,371), respectively, from derivative instruments. These~~all trading securities. Unrealized gains and losses from the change in fair value of these securities are ~~reflected~~recognized in Net loss from investments on the accompanying Consolidated Statements of Operations.

The Company’s debt securities are investments in U.S. government agency securities purchased to satisfy applicable regulatory requirements of SEI Private Trust Company (SPTC). The securities have maturity dates which range from 2033 to 2037.

~~On September~~During the six months ended June 30, ~~2008,~~2009, the Company ~~purchased the~~recognized unrealized losses from trading securities ~~issued by SIVs held by the SEI Daily Income Trust Money Market Fund. The cash purchase price~~ of ~~$15,321 was equal~~$160,165 primarily due to the ~~amortized cost~~purchase of ~~these~~SIV securities ~~and their fair value at this date~~from SEI-sponsored money market mutual funds. The net impact from SIV-related issues to the Company’s earnings was ~~$8,733. The Company elected~~$16,702 during the ~~fair value option~~six months ended June 30, 2009 primarily due to the reduction in the Company’s obligation under ~~SFAS 159 whereby~~ the ~~unrealized gains and losses~~Capital Support Agreements as a result of the ~~securities are recognized in current earnings. The unrealized losses~~purchases of the SIV securities ~~of $6,588 is reflected in Net loss from investments on the accompanying Consolidated Statements of Operations~~ (See Note 7).

~~At December 31, 2007,~~The Company has an investment related to the ~~Company’s broker-dealer subsidiary, SIDCO, had investments~~startup of a mutual fund sponsored by LSV. This is a U.S. dollar denominated fund that invests primarily in securities of Canadian and Australian companies as well as various other global securities. The underlying securities held by the fund are translated into U.S. ~~Treasury securities reflected~~dollars within the fund. The Company has purchased equity and currency futures contracts as ~~Securities owned on the accompanying Consolidated Balance Sheet. During the nine months ended September 30, 2008, the Company received proceeds~~part of ~~$17,000 from the maturity of these investments~~an economic hedging strategy to minimize its exposure to price and ~~purchased $11,965 of zero-coupon U.S. Treasury securities scheduled to mature in December 2008. These securities~~currency risk inherent with this investment. The equity futures contracts had a notional value of $5,058 and are

expected to hedge the price risk associated with movements of certain Canadian, Australian and global indices. The Company also purchased currency futures contracts with a notional value of $2,995 that are expected to hedge the currency risk associated with movements of the U.S. dollar against the Canadian and Australian dollars since the underlying securities of the fund are predominately denominated in those currencies. The fair value of ~~$12,093 at September 30, 2008. Due to specialized accounting practices applicable to investments by broker-dealers,~~ the ~~securities held by SIDCO at December 31, 2007 and September 30, 2008~~futures contracts are ~~reported at~~netted against the fair value of the investment in the LSV-sponsored fund. During the six months ended June 30, 2009, the Company recognized unrealized gains of $1,352 from the LSV-sponsored mutual fund and ~~changes in fair value are recorded in current period earnings.~~

~~Page 16~~unrealized losses of 43$643 from the equity and currency futures contracts.

~~During the three months ended December 31,~~In 2007, the Company entered into Capital Support Agreements with ~~three mutual funds (each a Fund or, together, the Funds),~~ the SEI Daily Income Trust Prime Obligation Fund (the SDIT PO Fund), the SEI Daily Income Trust Money Market Fund (the SDIT MM Fund), and the SEI Liquid Asset Trust Prime Obligation Fund ~~(the SLAT~~(SLAT PO Fund) (each a Fund or, together, the Funds). The Company is the advisor to the Funds. The sub-advisor to the Funds is Columbia Management, which is the primary investment management division of Bank of America Corporation. ~~Various clients of~~Among other money market instruments, the Company are investors in the Funds. SDIT PO Fund is rated AAA and Aaa by Standards & Poor’s Corporation (S&P) and Moody’s Investor Services Inc. (Moody’s), respectively, and the SDIT MM Fund is rated Aaa by Moody’s.

~~The~~ Funds ~~among other securities,~~ hold senior notes issued by SIVs. The senior notes are collateralized by residential mortgage-backed securities, commercial mortgage-backed securities, corporate collateralized debt obligations and collateralized debt obligations of asset-backed securities. AllSome of the SIVs ceased making payments on their outstanding notes on the scheduled maturity dates.

In October 2007, S&P advised the Company that it would place any mutual fund that had an AAA rating and owned certain SIVs on credit watch with negative implications unless the fund was provided credit support having an A-1 short-term rating by S&P. Although the Company was not obligated to provide the credit support required by S&P, in order to avoid a credit watch by S&P on the SDIT PO Fund, and to address the needs of customers who require an S&P AAA rating of the SDIT PO Fund, the The Company entered into the Capital Support ~~Agreement~~Agreements to ~~satisfy S&P’s requirement.~~ provide the necessary credit support related to the SIVs in default held by the Funds.

The Company ~~entered into similar agreements~~purchased the remaining SIVs held by the SDIT MM Fund in September 2008 for a cash purchase price of $15,288. As a result of this purchase, the Capital Support Agreement with the SDIT MM ~~and SLAT PO Funds.~~fund was canceled.

~~As of December 31, 2007,~~In March 2009, the ~~aggregate limit~~Company purchased all of the Company’s capital support commitments to the Funds according to the Capital Support Agreements was $130,500. During the nine months ended September 30, 2008, certain SIVs within the Funds suffered either a technical default or substantial price devaluation, triggering ratings downgradesGryphon (formerly Cheyne) notes from the principal rating agencies. As a result, the carrying value of these securities in the Funds was reduced as well. In addition, S&P required an increase in the capital support commitment for the SDIT PO Fund to maintain the Fund’s credit rating. As a result of these events, the Company amended the Capital Support Agreements with the SDIT PO Fund and the SLAT PO Fund for a total cash purchase price of $194,913. As a result of this purchase, the Company recognized a loss of $129,932 and the Company’s obligation according to ~~provide additional support.~~the Amended Capital Support Agreements was reduced by $116,038 for a net charge of $13,894.

On July 17, 2008, a significant SIV holding in Cheyne Finance LLC (Cheyne or Cheyne Notes) with an aggregate par value across the three Funds of $230,053 and market value on the books of the Funds of $151,835, or 66 percent of par value, was restructured. An opportunity was provided through the restructuring to liquidate the holdings for cash of approximately $117,327, or 51 percent of par value, including distributable cash. The Funds decided not to liquidate the holdings due to an assessment that the liquidation value understated the ultimate value of the underlying collateral. Instead, the Funds exchanged the Cheyne Notes for pass-through notes (Gryphon Notes) issued by a new entity, Gryphon Funding Limited, which holds the same collateral that was held in the Cheyne SIV.

~~On September 30, 2008,~~In June 2009, the Company purchased the ~~Gryphon Notes held~~remaining SIV securities owned by the ~~SDIT MM Fund. The~~SLAT PO Fund for a cash purchase price of ~~$15,321~~$57,490. As a result of this purchase, the Company recognized a loss of $31,184. The Company had previously recognized $25,564 in unrealized losses according to the Amended Capital Support Agreement. The net charge pertaining to this purchase was $5,620 in the three months ended June 30, 2009. The Amended Capital Support Agreement with the SLAT PO Fund was canceled immediately after the purchase of the SIV securities.

The total cash paid to the Funds for the purchases of the SIV securities through June 30, 2009 was $267,691. The purchase prices paid to the Funds were equal to the amortized cost of ~~these securities and their fair value at this date was $8,733. The Company recorded a loss of $6,588 as a result of this transaction. As of this date,~~ the ~~SDIT MM Fund no longer held any~~ SIV securities ~~and~~

on the ~~Capital Support Agreement with~~dates of purchase. In order to finance the ~~SDIT MM Fund lapsed.~~

As of September 30, 2008, the Company is committed to provide capital to the Funds, subject to the aggregate limit of $150,000 in the case of the SDIT PO Fund and $20,000 in the case of the SLAT PO Fund, if the Fund realizes payments or sales proceeds from specified SIV securities held by the Fund which are less than the amortized costpurchases of the SIV ~~securities. As of September 30, 2008, upon the ultimate sale or other disposition of a SIV security, the amount of capital that~~securities, the Company ~~is required~~borrowed an aggregate $254,000 through the Credit Facility. The letters of credit posted to ~~contribute to a Fund would be~~collateralize the least of the following amounts: (i) the amount, if any, by which the amortized cost of the SIV security exceeds the amount realized from the sale or other disposition of the SIV security; (ii) the amount, if any, necessary to restore the net asset value per share of the Fund to $0.9950 (or in the case of the SDIT PO Fund, so long as the SDIT PO Fund is rated AAA by S&P, $0.9975), or (iii) the remaining amount of the aggregate limit of the Capital Support Agreement applicable to the Fund, taking into account all prior contributions.

~~The Company secured $147,000 of the obligations~~Company’s obligation under the Capital Support Agreements for the SDIT PO and SLAT PO Funds through letters of credit of a third party bank rated A-1 by S&P. The Company had secured $3,000 of the previous obligations under the lapsed Capital Support Agreement with the SDIT MM Fund through a letter of credit. The letters of credit were ~~issued under the Company’s existing credit facility~~reduced from an aggregate $195,000 to $39,000 (See Note 8). The remaining $23,000 of the obligations is secured through segregated bank accounts. The Capital Support Agreements and the letters of credit have a term of one year and are scheduled to expire in November and December 2008.

In the event that the Company is required under the Capital Support Agreements to commit capital to any Fund, the Company will be required to pay the required capital contribution to the Fund and will not receive any consideration from the Fund, in the form of shares of the Fund or any other form, for the contributed capital. If the mark-to-market value of a SIV security is less than its amortized cost and if the aggregate net asset value of the Fund is less than $0.9950 (or in the case of theThe SDIT PO Fund ~~so long as the SDIT PO Fund is rated AAA by S&P, $0.9975), then, even though the loss has not been realized through the sale or other disposition of the~~continues to hold one SIV security the Company will be obligated to commit the required amount of capital so that the Funds net asset value is at least $0.9950 (or in the case of the SDIT PO Fund, $0.9975). However, in this case, the Company is not required to pay the capital contribution to the Funds.

In connection with the Capital Support Agreements, the Company recorded an expense for $87,301 for the nine months ended September 30, 2008, which is reflected in Net loss from investments on the accompanying Consolidated Statements of Operations. As of September 30, 2008, the aggregate obligation that the Company has recorded in connection with the Capital Support Agreements is $112,423, but the Company has not been required to pay such amount because the Funds have not realized any material losses from the ultimate sale or disposition of the SIV securities. Cash payments made under the Capital Support Agreements as of ~~September~~June 30, ~~2008 were minimal. At September 30, 2008, the aggregate~~2009 with a par value of $60,145. The Company’s obligation under the SIVs covered by the Capital Support Agreements on the books of the SDIT PO Fund and SLAT PO Fund was $348,355. At September 30, 2008, the aggregate market value of the SIVs covered by the Capital Support Agreements on the books of the two Funds was $223,320.

~~On November 5, 2008, the Company entered into an~~ Amended ~~and Restated~~ Capital Support Agreement with the SDIT PO Fund ~~(the SDIT PO~~was $29,973 at June 30, 2009. The Amended ~~Agreement) which extended the termination date under the original~~ Capital Support Agreement with the SDIT PO Fund is scheduled to terminate in November ~~6, 2009. In addition,~~2009; however, the Company expects to purchase the remaining SIV security from the SDIT PO ~~Amended Agreement requires~~Fund prior to the termination date of the agreement.

The Company recognized gains from the change in fair value and cash paydowns received from SIV securities of $3,360 and $2,812, respectively, during the three and six month periods ended June 30, 2009. Total SIV-related charges were $2,260 and $16,702 in the three and six months periods ended June 30, 2009, respectively. At June 30, 2009, the aggregate par value and market value of all SIV securities owned by the Company was $261,597 and $91,564, respectively.

The remaining Capital Support Agreement with the SDIT PO Fund is considered a derivative contract in accordance with applicable accounting guidance and is categorized as a Level 3 liability as specified by SFAS 157 (see Note 5). This Level 3 liability comprises 20 percent of the Company’s total current liabilities at June 30, 2009. The fair value of the derivative contract approximates the value of the Company’s actual obligation at June 30, 2009. The value of the Capital Support Agreement will be determined at least quarterly. In the event payments are not required to ~~provide additional support~~be paid to the SDIT PO Fund, in order to maintain the Aaa rating of the Fund by Moody’s. The SDIT PO Amended Agreement provides that if the SDIT PO Fund realizes payments or sales proceeds from the ultimate disposition of any of the specified SIV securities which are less than its amortized cost, the Company will be required to provide capital to the Fund equal to the amount by which the amortized cost of the specified SIV security exceeds the amount realized from the sale or other disposition of such security. The specified SIV securities in the SDIT PO Fund had an aggregate par value of $272,512 on November 5, 2008. Under the SDIT PO Amended Agreement, the Company must maintain collateral in the form of a letter of credit and/or a segregated cash account equal to the difference between the amortized cost value and the market value of the specified SIV securities plus an amount equal to ten percent of the market value of the specified SIV securities. At current market values, the Company is not required to post any additional collateral pursuant to the SDIT PO Amended Agreement because the amount of collateral already maintained under the Capital Support Agreement prior to the execution of the SDIT PO Amended Agreement is sufficient to satisfy the Company’s collateral obligations. If the market values of the specified SIV securities decline further, however, the Companyexpense may be ~~required to post additional collateral. As~~reversed in a ~~result~~subsequent period.

Page 23 of entering into the SDIT PO Amended Agreement on November 5, 2008, and assuming market values on that date hold, an additional non-cash expense of $13,926 would be recorded in the three months ended December 31, 2008.50

At this time, the termination date under the SLAT PO Fund Capital Support Agreement has not been extended and is currently scheduled to expire in December 2008. The Company may determine to seek an extension of the termination date under the SLAT PO Fund Capital Support Agreement.

As of ~~November 6, 2008,~~July 31, 2009, the amount which would be accrued for the Company’s contribution ~~obligations~~obligation under the Amended Capital Support ~~Agreements, including the SDIT PO Amended~~ Agreement ~~based on that day’s market value of the portfolio assets of the Funds, including the SIVs covered by the Capital Support Agreements,~~ was ~~$132,797.~~$29,973. Based upon this valuation and assuming no other changes in the portfolio assets through ~~December 31, 2008, an~~September 30, 2009, no additional non-cash expense ~~of $20,373~~ would be recorded in the three months ended ~~December 31, 2008.~~

In accordance with Financial Accounting Standards Board Interpretation No. 46, “Consolidation of Variable Interest Entities” (Revised) (FIN 46(R)), the Company has a significant variable interest in the Funds as a result of the Capital Support Agreements but determined it was not the primary beneficiary and would not be required to consolidate the Funds in its Consolidated Financial Statements. The support provided by the Company would not absorb a majority of the variability created by the assets of the Funds.

The Company has determined that the Capital Support Agreements are derivative contracts. The fair value of the contracts was determined using a valuation model for credit default swaps. The fair value of the derivative contracts approximates the value of the Company’s actual obligation at September 30, 2008. The Company will adjust the value of the Capital Support Agreements quarterly. In the event the Company is not required to make any payments to the Funds, or values increase, such expense may be reversed in a subsequent period.2009.

The Company’s future obligation under the Amended Capital Support ~~Agreements~~Agreement is affected by ~~changes~~prevailing conditions in the credit markets as they impact the value of the SIV ~~securities~~security owned by the SDIT PO Fund and the creditworthiness of the SIV ~~securities.~~security. The fair market value of the SIV ~~securities~~security is derived from current market prices or, in the event no market price exists, ~~management determines the fair value using various factors, including the Funds’ fair~~from independent external valuation procedures. The Company’s future obligation under the current SLAT PO Fund Capital Support Agreement is also affected by the overall asset levels of the SLAT PO Fund. Changes in the net asset value of the Fund are dependent upon net investments or redemptions in the Fund and the net asset value of the portfolio assets of the Fund. Changes in these amounts, including changes in portfolio assets resulting from mark-to-market adjustments, will affect the per share net asset value of the Fund.

The Company believes changes in the value of the specified SIV securities is the primary factor affecting its obligation and required collateral pertaining to the SDIT PO Amended Agreement. Changes in the value of the specified SIV securities can cause the Company’s obligation to fluctuate on a daily basis.sources (See Note 5).

~~On July 25, 2007 (the Closing Date), the~~The Company ~~entered into~~has a five-year ~~$200,000~~$300,000 Credit Agreement (the Credit Facility) ~~with certain lenders. The Credit Facility became available on the Closing Date and terminates~~which expires in July 2012. On March 19, 2008, the Company and the lenders amended the Credit Facility to increase the aggregate principal amount by $100,000 to $300,000. The aggregate amount of the Credit Facility may be increased by an additional $100,000 under certain conditions set forth in the agreement. At termination,2012, at which time any aggregate principal amount of loans outstanding ~~under the Credit Facility~~ becomes payable in full. Any borrowings made under the Credit Facility will accrue interest at ~~0.45~~0.75 percent per annum above the London Interbank Offer Rate (“LIBOR”). There is also a commitment fee equal to ~~0.09~~0.15 percent per annum on the daily unused portion of the facility. The aggregate amount of the Credit Facility may be increased by an additional $100,000 to $400,000 under certain conditions set forth in the agreement. The Credit Facility, as amended, contains various covenants, none of which negatively affect the Company’s liquidity or capital resources. Both the interest rate and commitment fee prices may increase if the Company’s leverage ratio reaches certain levels.

In 2009, the Company purchased SIV securities from the SEI-sponsored money market mutual funds (See Note 7). In order to finance the purchases of the SIV securities, the Company borrowed $254,000 from the Credit Facility. As a result of the purchases, the letters of credit posted to collateralize the Company’s obligations under the Amended Capital Support Agreements were reduced from an aggregate $195,000 to $39,000. The Company was in compliance with all covenants of the Credit Facility during 2009.

As of June 30, 2009, the Company’s ability to borrow from the Credit Facility is not limited by any covenant of the agreement. In management’s opinion, the leverage ratio is the most restrictive of all of the covenants contained in the Credit Facility. The leverage ratio is calculated as consolidated indebtedness divided by earnings before interest, taxes, depreciation, amortization and other items as defined by the covenant during the last four quarters (EBITDA). The amount of consolidated indebtedness according to the terms of the covenant includes the capital commitment under the Amended Capital Support Agreements and the outstanding debt of LSV Employee Group. The Company must maintain at all times prior to and including September 30, ~~2008,~~2009, a ratio of consolidated indebtedness of not more than 2.25 times the amount of EBITDA, at all times from October 1, 2009 through and including December 31, 2009, not more than 2.00 times EBITDA, and at all times thereafter, not more than 1.75 times EBITDA. As of June 30, 2009, the Company’s leverage ratio is 1.36 times EBITDA.

Through the Credit Facility, the Company provided letters of credit of a third party bank to secure ~~$150,000 of~~the existing obligations of the Company under the Amended Capital Support ~~Agreements were issued under~~Agreements. As of June 30, 2009, the ~~Credit Facility~~Company had a total of $39,000 in ~~order to satisfy a major rating agency’s requirement that the Funds have credit support having an A-1 short-term rating (See Note 7).~~outstanding letters of credit. The letters of credit have a term of one year and contain a fronting fee of 0.125 percent per annum on the face amount of each letter of credit which is payable quarterly in arrears. In addition, a participation fee ofranging from 0.45 percent to 1.25 percent, depending upon the Company’s leverage ratio, is payable quarterly in arrears on the face amount of each letter of credit. The participation fee may increase if the Company’s leverage ratio reaches certain levels. As the letters of credit remain outstanding, the amount available under the Credit Facility will be reduced by the face amount of the letters of credit. ~~Therefore, $150,000~~The letters of credit are due to expire in November and early December 2009.

As of July 31, 2009, letters of credit of $39,000 to secure the existing obligations of the Company under the Amended Capital Support Agreements remained outstanding. The amount of the Credit Facility ~~is committed and only the remaining $150,000~~that is unrestricted and ~~may be used~~available for other purposes as determined by the ~~Company. Certain provisions and terms of the Credit Facility were amended that provide for a waiver of any breach to various covenants. The~~ Company ~~had no borrowings under the Credit Facility and was in compliance with all covenants at September 30, 2008. In November 2008, the Company and the lenders under the Credit Facility amended the~~is $7,000.

~~terms~~The Company considers the book value of long-term debt related to the borrowings through the Credit Facility to ~~increase the maximum amount~~be representative of contingent obligations that may be incurred by the Company to $297,550, the maximum amount that is required under the Capital Support Agreements, including the SDIT PO Amended Agreement. Also in November 2008, the Company obtained a letter of credit of a third party bank for $6,000 with a term of one year. As of November 6, 2008, $156,000 of the Credit Facility is committed and only the remaining $144,000 is unrestricted and may be used for other purposes as determined by the Company.its fair value.

The Company’s Canadian subsidiary has a credit facility agreement (the Canadian Credit Facility) for the purpose of facilitating the settlement of mutual fund transactions. The Canadian Credit Facility has no stated expiration date. The amount of the facility is generally limited to $2,000 Canadian dollars or the equivalent amount in U.S. dollars. The Canadian Credit Facility does not contain any covenants which restrict the liquidity or capital resources of the Company. The Company had no borrowings under the Canadian Credit Facility and was in compliance with all covenants during the ~~nine~~three months ended ~~September~~June 30, ~~2008.~~2009.

The Company currently has one active equity compensation plan, the 2007 Equity Compensation Plan (the 2007 Plan), which provides for the grant of incentive stock options, non-qualified stock options and stock appreciation rights with respect to up to 20 million shares of common stock of the Company, subject to adjustment for stock splits, reclassifications, mergers and other events. Permitted grantees under the 2007 Plan include employees, non-employee directors and consultants who perform services for the Company. The plan is administered by the Compensation Committee of the Board of Directors of the Company. There were no grants of incentive stock options or stock appreciation rights made under the plan in ~~2008~~2009 or ~~2007.~~2008.

The Company discontinued any further grants under the Company’s 1998 Equity Compensation Plan (the 1998 Plan) as a result of the approval of the 2007 Plan. No options are available for grant from this plan. Grants made from the 1998 Plan continue in effect under the terms of the grant.

All outstanding stock options have performance based vesting ~~conditions based on~~provisions that tie the ~~attainment~~vesting of ~~certain~~stock options to the Company’s financial performance. The Company’s stock options vest at a rate of 50 percent when a specified diluted earning per share target is achieved, and the remaining 50 percent when a second, higher specified diluted earnings per share ~~targets established at~~target is achieved. Stock options granted prior to 2006 fully vest after seven years from the date of grant. Beginning in 2006, the seven year vesting trigger was eliminated and, as a result, options do not vest due to the passage of time but solely as a result of achievement of the financial vesting targets. Earnings per share targets are calculated exclusive of stock-based compensation expense, net of tax. The ~~first performance condition determines vesting~~diluted earnings per share targets are established at time of ~~50 percent of the options,~~grant and ~~a second performance condition determines the vesting of the remaining 50 percent of the options. The performance conditions~~ are measured annually on December 31. ~~Options granted prior~~The amount of stock-based compensation expense is based upon management’s estimate of when the earnings per share targets may be achieved. If management’s estimate of the attainment of the earnings per share targets proves to ~~2006 also~~be inaccurate, the remaining amount of stock-based compensation expense could ~~vest~~be accelerated, spread out over a longer period, or reversed. This may cause volatility in ~~their entirety seven years from~~ the ~~date~~recognition of ~~grant. All options outstanding have a ten year life. The Company believes that awarding stock options with performance-based vesting schedules better aligns~~stock-based compensation expense in future periods and could materially affect the ~~interests of stockholders~~Company’s net income and ~~employees.~~net income per share.

The Company recognized stock-based compensation expense in its Consolidated Financial Statements in the three month periods ended ~~September~~June 30, ~~2008~~2009 and ~~2007,~~2008, respectively, as follows:


	Three Months Ended September 30,						Three Months Ended June 30,
	2008			2007			2009			2008
Stock-based compensation expense	$	3,746		$	7,002		$	3,361		$	4,527
Less: Deferred tax benefit		(1,063	)		(2,460	)		(1,233	)		(1,124	)

Stock-based compensation expense, net of tax	$	2,683		$	4,542		$	2,128		$	3,403

Basic and diluted earnings per share	$	.01		$	.02		$	.01		$	.02

The Company recognized stock-based compensation expense in its Consolidated Financial Statements in the ~~nine~~six month periods ended ~~September~~June 30, ~~2008~~2009 and ~~2007,~~2008, respectively, as follows:


	Nine Months Ended September 30,						Six Months Ended June 30,
	2008			2007			2009			2008
Stock-based compensation expense	$	12,956		$	20,460		$	6,791		$	9,210
Less: Deferred tax benefit		(3,765	)		(6,501	)		(2,058	)		(2,702	)

Stock-based compensation expense, net of tax	$	9,191		$	13,959		$	4,733		$	6,508

Basic and diluted earnings per share	$	.05		$	.07		$	.02		$	.03

Management expects that certain option grants, which do not vest due to the passage of time, will not attain their higher specified diluted earnings per share targets; therefore, the Company has discontinued the amortization of the unrecognized stock-based compensation cost associated with these grants. These option grants have an unrecognized compensation cost of $21,299.

As of ~~September~~June 30, ~~2008,~~2009, there was approximately ~~$53,679~~$45,154 of unrecognized compensation cost remaining, adjusted for estimated forfeitures, related to unvested employee stock options. The Company estimates that compensation cost will be recognized according to the following schedule:


Period	Stock-Based Compensation Expense		Stock-Based Compensation Expense
Remainder of 2008	$	3,627
2009		14,498
Remainder of 2009			$	6,654
2010		13,456		12,269
2011		9,695		11,327
2012		6,067		6,823
2013		4,227		5,083
2014		2,109		1,499
2015				1,499

	$	53,679	$	45,154

During the ~~nine~~six months ended ~~September~~June 30, 2009, the Company revised its previous estimate made as of December 31, 2008 of when certain vesting targets are expected to be achieved. This change in management’s estimate resulted in a decrease of $3,550 in stock-based compensation expense in the six months ended June 30, 2009.

During the six months ended June 30, 2008, the Company revised its estimate of when certain vesting targets are expected to be achieved. This change in management’s estimate resulted in a decrease of ~~$2,413~~$1,789 in stock-based compensation expense in the ~~nine~~six months ended ~~September~~June 30, 2008.

During the nine month period ended September 30, 2007, the Company accelerated the recognition of $1,160 in stock-based compensation expense due to a change in management’s estimate of when certain vesting targets are expected to be achieved.

The Company issues new common shares associated with the exercise of stock options. The total intrinsic value of options exercised during the ~~nine~~six months ended ~~September~~June 30, 2009 and 2008 was $3,007 and ~~2007 was $17,885 and $45,391,~~$12,319, respectively. The total options outstanding as of ~~September~~June 30, 2009 and 2008 was 26,409,000 and ~~2007 was 25,563,000 and 26,104,000,~~26,089,000, respectively.

The Company’s Board of Directors has authorized the repurchase of the ~~Company’s~~Company's common stock on the open market or through private transactions of up to an aggregate of $1,528,365. Through ~~September~~June 30, ~~2008,~~2009, a total of ~~253,692,000~~255,781,000 shares at an aggregate cost of ~~$1,429,263~~$1,459,410 have been purchased and retired. The Company purchased ~~4,668,000~~980,000 shares at a total cost of ~~$113,068~~$13,581 during the ~~nine~~six months ended ~~September~~June 30, ~~2008.~~2009.

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.

On May ~~20, 2008,~~21, 2009, the Board of Directors declared a cash dividend of $.08 per share on the ~~Company’s~~Company's common stock, which was paid on June ~~20, 2008,~~23, 2009, to shareholders of record on June ~~17, 2008.~~18, 2009.

Cash dividends declared during the ~~nine~~six month periods ended ~~September~~June 30, 2009 and 2008 were $15,301 and ~~2007 were~~ $15,339, ~~and $13,806,~~ respectively.

Private Banks -– provides investment processing and investment management programs to banks and trust institutions ~~worldwide;~~worldwide and independent wealth advisers located in the United Kingdom;

Investment Advisors -– provides investment management programs 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 programs and administrative outsourcing solutions to retirement plan sponsors and not-for-profit organizations worldwide;

Investment Managers -– provides investment processing, fund processing and operational outsourcing solutions to investment managers, fund companies and banking institutions located in the United States and to investment managers worldwide of alternative asset classes such as single-manager hedge funds, ~~fund~~funds of hedge funds, private equity funds and ~~private equity~~registered hedge funds;

Investments in New Businesses -– provides investment management programs to ~~affluent~~ultra-high-net-worth families residing in the United States ~~and Europe~~ through the SEI Wealth Network^®; and

LSV Asset Management – is a registered investment advisor that provides investment advisory services to institutions, including pension plans and investment companies.

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 and ~~nine~~six months ended ~~September~~June 30, ~~2008~~2009 and ~~2007.~~2008. 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.

The following tables highlight certain unaudited financial information about each of the Company’s business segments for the three months ended ~~September~~June 30, ~~2008~~2009 and ~~2007.~~2008.


	Private Banks			Investment Advisors			Institutional Investors			Investment Managers			Investments In New Businesses			LSV			Total			Private Banks			Investment Advisors			Institutional Investors			Investment Managers			Investments In New Businesses			LSV			Total
	For the Three Month Period Ended September 30, 2008																					For the Three Month Period Ended June 30, 2009
Revenues	$	99,882		$	58,846		$	52,757		$	38,202		$	1,811		$	64,588		$	316,086		$	86,645		$	39,582		$	42,164		$	33,371		$	1,169		$	49,078		$	252,009
Expenses (1)		79,545			30,775			30,525			26,566			4,023			40,754			212,188			70,761			25,939			23,264			22,245			2,325			31,709			176,243

Operating profit (loss)	$	20,337		$	28,071		$	22,232		$	11,636		$	(2,212	)	$	23,834		$	103,898		$	15,884		$	13,643		$	18,900		$	11,126		$	(1,156	)	$	17,369		$	75,766
Profit margin		20	%		48	%		42	%		30	%		N/A			37	%		33	%		18	%		35	%		45	%		33	%		N/A			35	%		30	%


	Private Banks			Investment Advisors			Institutional Investors			Investment Managers			Investments In New Businesses			LSV			Total			Private Banks			Investment Advisors			Institutional Investors			Investment Managers			Investments In New Businesses			LSV			Total
	For the Three Month Period Ended September 30, 2007																					For the Three Month Period Ended June 30, 2008
Revenues	$	104,280		$	65,715		$	51,275		$	35,844		$	1,881		$	90,641		$	349,636		$	103,602		$	61,848		$	51,300		$	37,307		$	1,864		$	73,602		$	329,523
Expenses (2)		82,846			31,257			30,980			25,445			5,020			56,252			231,800			85,367			31,551			29,328			25,012			4,147			45,840			221,245

Operating profit (loss)	$	21,434		$	34,458		$	20,295		$	10,399		$	(3,139	)	$	34,389		$	117,836		$	18,235		$	30,297		$	21,972		$	12,295		$	(2,283	)	$	27,762		$	108,278
Profit margin		21	%		52	%		40	%		29	%		N/A			38	%		34	%		18	%		49	%		43	%		33	%		N/A			38	%		33	%

A reconciliation of the total operating profit reported for the business segments to income from operations in the Consolidated Statements of Operations for the quarters ended ~~September~~June 30, ~~2008~~2009 and ~~2007~~2008 is as follows:


	2008			2007			2009			2008
Total operating profit from segments above	$	103,898		$	117,836		$	75,766		$	108,278
Corporate overhead expenses		(10,420	)		(9,754	)		(8,697	)		(10,347	)
Minority interest reflected in segments		33,291			49,016
Noncontrolling interest reflected in segments								24,737			39,082
LSV Employee Group (1)		(1,820	)		(1,820	)		(1,820	)		(1,819	)

Income from operations	$	124,949		$	155,278		$	89,986		$	135,194

The following tables provide additional information for the three months ended ~~September~~June 30, ~~2008~~2009 and ~~2007~~2008 as required by SFAS 131 pertaining to our business segments:


									Capital Expenditures				Depreciation and Amortization
	Capital Expenditures				Depreciation and Amortization					2009		2008		2009		2008
	2008		2007		2008		2007
Private Banks	$	16,175	$	13,437	$	6,806	$	6,085	$	9,294	$	11,325	$	7,524	$	6,514
Investment Advisors		5,832		4,898		1,618		1,571		3,333		3,904		1,793		1,641
Institutional Investors		2,009		1,146		409		429		655		727		417		442
Investment Managers		2,799		1,437		520		478		854		817		508		561
Investments in New Businesses		505		248		100		119		208		222		96		109
LSV		28		59		204		275		17		—		210		205

Total from business segments	$	27,348	$	21,225	$	9,657	$	8,957	$	14,361	$	16,995	$	10,548	$	9,472
LSV Employee Group		—		—		1,820		1,821		—		—		1,820		1,820
Corporate Overhead		919		407		198		213		235		211		394		206

	$	28,267	$	21,632	$	11,675	$	10,991	$	14,596	$	17,206	$	12,762	$	11,498

The following tables highlight certain unaudited financial information about each of the Company’s business segments for the ~~nine~~six months ended ~~September~~June 30, ~~2008~~2009 and ~~2007.~~2008.


	Private Banks			Investment Advisors			Institutional Investors			Investment Managers			Investments In New Businesses			LSV			Total			Private Banks			Investment Advisors			Institutional Investors			Investment Managers			Investments In New Businesses			LSV			Total
	For the Nine Month Period Ended September 30, 2008																					For the Six Month Period Ended June 30, 2009
Revenues	$	310,538		$	181,213		$	154,746		$	112,002		$	5,509		$	215,509		$	979,517		$	183,593		$	77,090		$	81,543		$	66,703		$	2,423		$	89,268		$	500,620
Expenses (3)		251,079			93,702			89,993			77,542			12,822			133,950			659,088			149,559			53,048			47,434			45,112			5,618			58,155			358,926

Operating profit (loss)	$	59,459		$	87,511		$	64,753		$	34,460		$	(7,313	)	$	81,559		$	320,429		$	34,034		$	24,042		$	34,109		$	21,591		$	(3,195	)	$	31,113		$	141,694
Profit margin		19	%		48	%		42	%		31	%		N/A			38	%		33	%		19	%		31	%		42	%		32	%		N/A			35	%		28	%


	Private Banks			Investment Advisors			Institutional Investors			Investment Managers			Investments In New Businesses			LSV			Total			Private Banks			Investment Advisors			Institutional Investors			Investment Managers			Investments In New Businesses			LSV			Total
	For the Nine Month Period Ended September 30, 2007																					For the Six Month Period Ended June 30, 2008
Revenues	$	302,108		$	192,724		$	146,815		$	105,131		$	5,347		$	263,494		$	1,015,619		$	210,656		$	122,367		$	101,989		$	73,800		$	3,698		$	150,921		$	663,431
Expenses (4)		241,668			91,550			89,334			74,649			14,597			162,411			674,209			171,534			62,927			59,468			50,976			8,799			93,196			446,900

Operating profit (loss)	$	60,440		$	101,174		$	57,481		$	30,482		$	(9,250	)	$	101,083		$	341,410		$	39,122		$	59,440		$	42,521		$	22,824		$	(5,101	)	$	57,725		$	216,531
Profit margin		20	%		52	%		39	%		29	%		N/A			38	%		34	%		19	%		49	%		42	%		31	%		N/A			38	%		33	%

A reconciliation of the total operating profit reported for the business segments to income from operations in the Consolidated Statements of Operations for the ~~nine~~six month periods ended ~~September~~June 30, ~~2008~~2009 and ~~2007~~2008 is as follows:


	2008			2007			2009			2008
Total operating profit from segments above	$	320,429		$	341,410		$	141,694		$	216,531
Corporate overhead expenses		(30,876	)		(30,459	)		(18,338	)		(20,456	)
Minority interest reflected in segments		114,561			142,641
Noncontrolling interest reflected in segments								43,800			81,270
LSV Employee Group (2)		(5,460	)		(5,460	)		(3,640	)		(3,640	)

Income from operations	$	398,654		$	448,132		$	163,516		$	273,705

The following tables provide additional information for the ~~nine~~six months ended ~~September~~June 30, ~~2008~~2009 and ~~2007~~2008 as required by SFAS 131 pertaining to our business segments:


	Capital Expenditures				Depreciation and Amortization				Capital Expenditures				Depreciation and Amortization
	2008		2007		2008		2007		2009		2008		2009		2008
Private Banks	$	38,563	$	45,071	$	19,893	$	13,276	$	20,163	$	22,388	$	15,014	$	13,087
Investment Advisors		13,577		16,307		4,880		3,111		7,182		7,745		3,546		3,262
Institutional Investors		3,806		3,554		1,282		1,152		1,314		1,797		874		873
Investment Managers		4,728		4,477		1,633		1,306		1,636		1,929		1,057		1,113
Investments in New Businesses		980		811		323		287		425		475		200		223
LSV		87		1,045		614		678		53		59		419		410

Total from business segments	$	61,741	$	71,265	$	28,625	$	19,810	$	30,773	$	34,393	$	21,110	$	18,968
LSV Employee Group		—		—		5,461		5,461		—		—		3,640		3,641
Corporate Overhead		1,455		1,221		607		596		428		536		574		409

	$	63,196	$	72,486	$	34,693	$	25,867	$	31,201	$	34,929	$	25,324	$	23,018

The gross liability for unrecognized tax benefits at ~~September~~June 30, ~~2008~~2009 and December 31, ~~2007~~2008 was ~~$13,609~~$4,926 and ~~$13,329,~~$13,453, respectively, exclusive of interest and penalties, of which ~~$12,894~~$4,182 and ~~$12,719~~$13,071 would affect the effective tax rate if the Company were to recognize the tax benefit. ~~The~~As a result of the resolution of federal and state income tax audits, the Company ~~has~~ recognized ~~$1,129~~a reduction of $7,525 of its tax liability for unrecognized tax benefits during the ~~nine~~six months ended ~~September~~June 30, ~~2008 relating to the expiration of the statute of limitations.~~2009.

The Company classifies interest and penalties on unrecognized tax benefits as income tax expense. As of ~~September~~June 30, ~~2008~~2009 and December 31, ~~2007,~~2008, the combined amount of accrued interest and penalties related to tax positions taken on tax returns was ~~$2,211~~$650 and ~~$1,865,~~$2,337, respectively.


	September 30, 2008		December 31, 2007		June 30, 2009		December 31, 2008
Gross liability for unrecognized tax benefits, exclusive of interest and penalties	$	13,609	$	13,329	$	4,926	$	13,453
Interest and penalties on unrecognized benefits		2,211		1,865		650		2,337

Total gross uncertain tax positions	$	15,820	$	15,194	$	5,576	$	15,790

Amount included in Current liabilities	$	3,799	$	3,299	$	663	$	11,723
Amount included in Other long-term liabilities		12,021		11,895		4,913		4,067

	$	15,820	$	15,194	$	5,576	$	15,790

The Company files income tax returns in the United States on a consolidated basis and in many U.S. state and foreign jurisdictions. The Company is subject to examination of income tax returns by the Internal Revenue Service (IRS) and other domestic and foreign tax authorities. An examination of the Company’s Canadian subsidiary 2005 and 2006 tax ~~return~~returns is currently being conducted by the ~~IRS.~~Canadian tax authority. The ~~2005 and 2006~~Company is no longer subject to U.S. federal income tax ~~returns of one of the Company’s subsidiaries are under~~ examination for years before 2008 and is no longer subject to state, local or foreign income tax examinations by ~~a foreign tax authority. In addition, some of the prior year tax returns of the Company’s subsidiaries are being examined by certain state tax authorities.~~authorities for years before 2000.

The Company estimates it will recognize ~~$192~~$567 of unrecognized tax benefits within the next twelve months due to the expiration of the statute of ~~limitations.~~limitations and resolution of income tax audits. These unrecognized tax benefits are related to tax positions taken on certain federal, state and ~~state~~foreign tax returns. However, the timing of the resolution of income tax examinations is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ materially from the amounts accrued for each year. While it is reasonably possible that some issues ~~in the IRS and other examinations~~under examination could be resolved in the next twelve months, based upon the current facts and circumstances, the Company cannot reasonably estimate the timing of such resolution or total range of potential changes as it relates to the current unrecognized tax benefits that are recorded as part of the Company’s financial statements.

The Company estimates that future estimated tax payments in 2009 may be partially or fully offset by the recognition of losses related to the Amended Capital Support Agreements (See Note 7). The expected tax benefit from these losses amounts to $18,023 and is included in Other current assets on the accompanying Consolidated Balance Sheet.

This discussion reviews and analyzes the consolidated financial condition at ~~September~~June 30, ~~2008~~2009 and ~~2007,~~2008, the consolidated results of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2008~~2009 and ~~2007~~2008 and other key factors that may affect future performance. This discussion should be read in conjunction with the Consolidated Financial Statements and the Notes to the Consolidated Financial Statements.

We are a leading global provider of investment processing, fund processing, and investment management business outsourcing solutions that help corporations, financial institutions, financial advisors, and affluent families create and manage wealth. Investment processing fees are earned as monthly fees for contracted services including computer processing services, software licenses, and trust operations services, as well as transaction-based fees for providing securities valuation and trade-execution. Fund processing and investment management fees are earned as a percentage of average assets under management or administration. As of ~~September~~June 30, ~~2008,~~2009, through our subsidiaries and partnerships in which we have a significant interest, we administer ~~$430.7~~$359.8 billion in mutual fund and pooled assets, manage ~~$161.8~~$135.7 billion in assets, and operate from ~~more than 20 offices in over a dozen countries.~~numerous countries worldwide.

Private Banks – provides investment processing and investment management programs to banks and trust institutions ~~worldwide;~~worldwide and independent wealth advisers located in the United Kingdom;

Institutional Investors -– provides investment management programs and administrative outsourcing solutions to retirement plan sponsors and not-for-profit organizations worldwide;

Investments in New Businesses – provides investment management programs to ~~affluent~~ultra-high-net-worth families residing in the United States ~~and Europe~~ through the SEI Wealth Network^®; and

LSV Asset Management – is a registered investment advisor that provides investment advisory services to institutions, including pension plans and investment companies.

Revenues, Expenses and Income from Operations by business segment for the three and ~~nine~~six months ended ~~September~~June 30, ~~2008~~2009 compared to the three and ~~nine~~six months ended ~~September~~June 30, ~~2007~~2008 were as follows:


	Three Months Ended September 30,								Nine Months Ended September 30,								Three Months Ended June 30,								Six Months Ended June 30,
	2008			2007			Percent Change		2008			2007			Percent Change		2009			2008			Percent Change		2009			2008			Percent Change
Revenues:
Private Banks	$	99,882		$	104,280		(4	%)	$	310,538		$	302,108		3	%	$	86,645		$	103,602		(16	%)	$	183,593		$	210,656		(13	%)
Investment Advisors		58,846			65,715		(10	%)		181,213			192,724		(6	%)		39,582			61,848		(36	%)		77,090			122,367		(37	%)
Institutional Investors		52,757			51,275		3	%		154,746			146,815		5	%		42,164			51,300		(18	%)		81,543			101,989		(20	%)
Investment Managers		38,202			35,844		7	%		112,002			105,131		7	%		33,371			37,307		(11	%)		66,703			73,800		(10	%)
Investments in New Businesses		1,811			1,881		(4	%)		5,509			5,347		3	%		1,169			1,864		(37	%)		2,423			3,698		(34	%)
LSV		64,588			90,641		(29	%)		215,509			263,494		(18	%)		49,078			73,602		(33	%)		89,268			150,921		(41	%)

Total revenues	$	316,086		$	349,636		(10	%)	$	979,517		$	1,015,619		(4	%)	$	252,009		$	329,523		(24	%)	$	500,620		$	663,431		(25	%)
Expenses:
Private Banks		79,545			82,846		(4	%)		251,079			241,668		4	%		70,761			85,367		(17	%)		149,559			171,534		(13	%)
Investment Advisors		30,775			31,257		(2	%)		93,702			91,550		2	%		25,939			31,551		(18	%)		53,048			62,927		(16	%)
Institutional Investors		30,525			30,980		(1	%)		89,993			89,334		1	%		23,264			29,328		(21	%)		47,434			59,468		(20	%)
Investment Managers		26,566			25,445		4	%		77,542			74,649		4	%		22,245			25,012		(11	%)		45,112			50,976		(12	%)
Investments in New Businesses		4,023			5,020		(20	%)		12,822			14,597		(12	%)		2,325			4,147		(44	%)		5,618			8,799		(36	%)
LSV		40,754			56,252		(28	%)		133,950			162,411		(18	%)		31,709			45,840		(31	%)		58,155			93,196		(38	%)

Total expenses	$	212,188		$	231,800		(8	%)	$	659,088		$	674,209		(2	%)	$	176,243		$	221,245		(20	%)	$	358,926		$	446,900		(20	%)
Income from business segments:
Private Banks		20,337			21,434		(5	%)		59,459			60,440		(2	%)		15,884			18,235		(13	%)		34,034			39,122		(13	%)
Investment Advisors		28,071			34,458		(19	%)		87,511			101,174		(14	%)		13,643			30,297		(55	%)		24,042			59,440		(60	%)
Institutional Investors		22,232			20,295		10	%		64,753			57,481		13	%		18,900			21,972		(14	%)		34,109			42,521		(20	%)
Investment Managers		11,636			10,399		12	%		34,460			30,482		13	%		11,126			12,295		(10	%)		21,591			22,824		(5	%)
Investments in New Businesses		(2,212	)		(3,139	)	30	%		(7,313	)		(9,250	)	21	%		(1,156	)		(2,283	)	49	%		(3,195	)		(5,101	)	37	%
LSV		23,834			34,389		(31	%)		81,559			101,083		(19	%)		17,369			27,762		(37	%)		31,113			57,725		(46	%)

Total income from business segments	$	103,898		$	117,836		(12	%)	$	320,429		$	341,410		(6	%)	$	75,766		$	108,278		(30	%)	$	141,694		$	216,531		(35	%)
Corporate overhead		(10,420	)		(9,754	)	7	%		(30,876	)		(30,459	)	1	%		(8,697	)		(10,347	)	(16	%)		(18,338	)		(20,456	)	(10	%)
LSV Employee Group (1)		(1,820	)		(1,820	)	—			(5,460	)		(5,460	)	—			(1,820	)		(1,819	)	—			(3,640	)		(3,640	)	—
Minority interest reflected in segments (2)		33,291			49,016		(32	%)		114,561			142,641		(20	%)
Noncontrolling interest reflected in segments (2)																		24,737			39,082		(37	%)		43,800			81,270		(46	%)

Income from operations	$	124,949		$	155,278		(20	%)	$	398,654		$	448,132		(11	%)	$	89,986		$	135,194		(33	%)	$	163,516		$	273,705		(40	%)

This table presents assets of our clients, or of our clients’ customers, for which we provide management or administrative services. These assets are not included in our balance sheets because we do not own them.

Assets under management are total assets of our clients or their customers invested in our equity and fixed-income investment programs, collective trust fund programs, and liquidity funds for which we provide asset management services. Assets under management and administration are total assets of our clients or their customers for which we provide administrative services, including client proprietary fund balances for which we provide administration and/or distribution services.

Consolidated revenues ~~declined $33.6~~decreased $77.5 million, or ~~ten~~24 percent, to ~~$316.1~~$252.0 million for the three months ended ~~September~~June 30, ~~2008~~2009 compared to the three months ended ~~September~~June 30, ~~2007.~~2008. For the ~~nine~~six month period ended June 30, 2009, revenues declined ~~$36.1~~$162.8 million, or ~~four~~25 percent, to ~~$979.5~~$500.6 million compared to the prior year period. Net income attributable to SEI decreased ~~$38.8~~$4.6 million, or 5310 percent, to ~~$34.5~~$41.6 million for the three month period and ~~$76.6~~$19.3 million, or 3720 percent, to ~~$129.6~~$75.8 million for the ~~nine~~six month period. ~~Consolidated operating margins of the business segments declined to 33 percent from 34 percent in the three and nine month periods.~~ Diluted earnings per share for the three month period were ~~$.18~~$.22 per share as compared to ~~$.37~~$.24 per share a year ago, a decrease of 51eight percent. In the ~~nine~~six month period, diluted earnings per share decreased to ~~$.66~~$.40 per share as compared to ~~$1.02~~$.48 per share a year ago, a decrease of 3517 percent.

In our opinion, the following items had a significant impact on our financial results for the three and ~~nine~~six month periods ended ~~September~~June 30, ~~2008~~2009 and ~~2007:~~2008:

Revenues from asset-based fees across all our business segments were negatively affected by ~~declining~~the sharp declines in the capital markets in late 2008 and the first quarter of 2009, particularly in the LSV and Investment Advisors ~~and Institutional Investors~~ segments. ~~Widespread weakness in~~The unfavorable capital market conditions decreased the value of assets we manage or administer for our existing clients, resulting in decreased base revenues in the segments. Our assets under management decreased $42.5 billion during the past 12 months, of which $17.5 billion pertained to assets managed by LSV.

The ~~unfavorable~~decline of the capital markets had a significant negative impact on the revenue and profits of LSV. Revenues earned by LSV were ~~$215.5~~$89.3 million in the ~~nine~~six months ended ~~September~~June 30, ~~2008~~2009 compared to ~~$263.5~~$150.9 million in the prior year comparable period, a decrease of ~~$48.0~~$61.6 million or 1841 percent. Our proportionate share in the earnings of LSV in the ~~nine~~six month period of ~~2008~~2009 was ~~$81.6~~$31.1 million compared to ~~$101.1~~$57.7 million for the same period in ~~2007,~~2008, a decrease of ~~$19.5~~$26.6 million or 1946 percent.

~~We recorded a non-cash charge~~Our earnings were adversely affected by further losses of ~~$34.2~~$2.3 million ~~(or $.11 diluted earnings per share)~~ and ~~$87.3~~$16.7 million ~~(or $.28 diluted earnings per share)~~ in the three and ~~nine~~six months ended ~~September~~June 30, ~~2008,~~2009, respectively, associated with SIV-related issues involving SEI-sponsored money market funds. Cumulative losses from SIV-related issues as of June 30, 2009 totaled $200.0 million. During the six months ended June 30, 2009, we borrowed $254.0 million from our credit facility and used the proceeds to purchase a majority of the SIV securities held by the funds. As a result, the Capital Support Agreement related to ~~agreements that provide capital support to money market funds holding investments that are exposed to liquidity and credit risk (See Note 7 to~~ the ~~Consolidated Financial Statements). On September 30, 2008, we purchased investments from one of our money market funds included in these agreements. The cash purchase price of $15.3 million~~SLAT Prime Obligation Fund was equal to the amortized cost of these investments and we immediately recorded a loss of $6.6 million (or $.02 diluted earnings per share) from the transaction. The support agreement applicable to those securities lapsed. These support agreements are described in greater detailcanceled. Our obligation under the ~~caption~~Capital Support Agreement with the SDIT Prime Obligation Fund was $30.0 million at June 30, 2009 (See “Money Market Fund Support” later in this ~~discussion.~~discussion).

We ~~recognized an additional $7.1 million~~continued to invest in ~~amortization expense during the nine months ended September 30, 2008 due to the initial release of~~ the Global Wealth Platform ~~which was placed into service in July 2007. The amortization expense was primarily recognized in~~and its operational infrastructure. During the ~~Private Banks and Investment Advisors business segments. We capitalized $39.5 million in the nine~~six months ended ~~September~~June 30, ~~2008~~2009, we capitalized $24.6 million for significant enhancements and new functionality for the platform, as compared to ~~$50.1~~$25.9 million in the comparable period of 2007 as a larger portion of our costs were incurred for maintenance and support for the operation of the platform. Capitalized costs in 2008 were for enhancements and upgrades to expand the functionality of the Global Wealth Platform.2008. We will continue to incur significant development costs for these enhancements and upgrades. Our intention is to implement enhancements and upgrades into the platform through a series of releases. ~~The~~Future releases may include enhancements that could replace significant components that currently exist in the platform. If this occurs, we would immediately expense the remaining net book value of previously capitalized development costs of those components that were replaced. We expect the next release of the Global Wealth Platform to occur in the fourth quarter of 2009. This release may include enhancements that replace certain functionality in the current version of the platform. We estimate the remaining net book value of the replaced functionality to be approximately $15.0 million which would be expensed sometime in 2009.

Our operating expenses during the first six months of 2009 decreased across all of our business segments. A portion of these declines were due to lower direct costs related to reduced revenues. In addition, a significant portion of these declines resulted from initiatives to reduce discretionary expenses across the company. Included in these actions were the elimination of non-strategic activities, process improvements and a reduction in our global workforce, which was undertaken during the first quarter of 2009. We incurred one-time termination costs associated with ~~these releases will be amortized over~~ the ~~remaining useful life~~workforce reduction of approximately $6.3 million during the ~~platform.~~first quarter of 2009, which is included in Compensation, benefits and other personnel expense on the accompanying Consolidated Statements of Operations.

During the nine months ended September 30, 2008 and 2007, we recognized approximately $13.0 million and $20.5 million, respectively, in stock-based compensation expense. This decrease was primarily due to stock options vesting in December 2007 and changes in our estimates in 2008Page 35 of ~~when outstanding stock options would vest. Our expenses recognized from stock options are described in greater detail under the caption “Stock-Based Compensation” later in this discussion.~~50

The prevailing economic conditions ~~and issues surrounding the credit markets~~ have extended our sales cycles and slowed the sales of new ~~business, particularly in the Private Banks and Investment Advisors segments.~~business. This resulted in a decrease in the amount of sales compensation ~~expense which has provided some support~~expense.

Our effective tax rate for the six months ended June 30, 2009 benefited from the realization of prior unrecognized tax benefits related to the conclusion of federal and state income tax audits during the first quarter of 2009. Our effective tax rate for the second quarter of 2009 was 36.8 percent. We expect our ~~operating margins in these business segments.~~effective tax rates for the remaining quarters of 2009 to continue at or near this level.

~~Page 29~~In March 2009, certain partners of 43LSV, including SEI, agreed to designate a portion of their partnership interest for the purpose of providing an interest in the partnership to a select group of key LSV employees. In April 2009, these contributing partners agreed to provide certain key LSV employees an interest in LSV thereby reducing our interest in LSV to approximately 42 percent. We evaluated the effect of this transaction in accordance with the guidance established in SFAS 160 and determined that the reduction of our interest in LSV was not a significant economic event that had any effect on the control of the operations or affairs of LSV. Our controlling interest in LSV was unchanged. We continue to consolidate the assets, liabilities and operations of LSV and LSV Employee Group.

In 2007, we entered into Capital Support Agreements with the SEI Daily Income Trust Prime Obligation Fund (the SDIT PO Fund), the SEI Daily Income Trust Money Market Fund (the SDIT MM Fund), and the SEI Liquid Asset Trust Prime Obligation Fund ~~(the SLAT~~(SLAT PO Fund) (each a Fund or, together, the Funds). The terms, conditions and ~~conditions~~subsequent amendments of the Capital Support Agreements are described in our latest Annual Report on Form 10-K in Part I,II, Item 2.7 under the caption titled “Money Market Fund Support”.

~~As of December 31, 2007,~~We purchased the aggregate limit of our required capital contributions to the Funds according to the Capital Support Agreements was $130.5 million. During the nine months ended September 30, 2008, certain structured investment vehicles (SIV or SIVs) within the Funds suffered either a technical default or substantial price devaluation, triggering ratings downgrades from the principal rating agencies. As a result, the carrying value of these securities in the Funds was reduced as well. In addition, Standard & Poor’s required the posting of additional capital support forremaining SIVs held by the SDIT POMM Fund ~~to maintain the Fund’s credit rating.~~in September 2008 for a cash purchase price of $15.3 million. As a result of ~~these events, we amended~~this purchase, the Capital Support ~~Agreements~~Agreement with the SDIT MM fund was canceled.

In March 2009, we purchased all of the Gryphon (formerly Cheyne) notes from the SDIT PO Fund and the SLAT PO Fund ~~to provide additional capital support. We also amended our credit facility to increase the aggregate amount available~~ for ~~borrowings by $100.0 million to $300.0 million (See Note 8 to the Consolidated Financial Statements for more information related to the letters of credit and credit facility).~~

On July 17, 2008, the SIV holding in Cheyne Finance LLC (Cheyne) had an aggregate par value across the three Funds of $230.1 million and market value on the books of the Funds of $151.8 million, or 66 percent of par value. On this date, the SIV holding in Cheyne was restructured and an opportunity was provided to liquidate the holdings for cash of approximately $117.3 million, or 51 percent of par value, including distributable cash. The Funds decided not to liquidate the holdings due to an assessment that the liquidation value understated the ultimate value of the underlying collateral. Instead, the Funds exchanged the Cheyne notes for pass-through notes (Gryphon Notes) issued by a ~~new entity, Gryphon Funding Limited, which holds the same collateral that was held in the Cheyne SIV.~~

~~On September 30, 2008, we purchased the Gryphon Notes held by the SDIT MM Fund. The~~total cash purchase price of ~~$15.3~~$194.9 million. As a result of this purchase, we recognized a loss of $129.9 million and our obligation according to the Amended Capital Support Agreements was reduced by $116.0 million for a net charge of $13.9 million.

In June 2009, we purchased the remaining SIV securities owned by the SLAT PO Fund for a cash purchase price of $57.5 million. As a result of this purchase, we recognized a loss of $31.2 million. We had previously recognized $25.6 million in unrealized losses according to the Amended Capital Support Agreement. The net charge pertaining to this purchase was $5.6 million in the three months ended June 30, 2009. The Amended Capital Support Agreement with the SLAT PO Fund was canceled immediately after the purchase of the SIV securities.

The total cash paid to the Funds for the purchases of the SIV securities through June 30, 2009 was $267.7 million. The purchase prices paid to the Funds were equal to the amortized cost of ~~these~~the SIV securities on the dates of purchase. In order to finance the purchases of the SIV securities, we borrowed an aggregate $254.0 million through our credit facility. The letters of credit posted to collateralize our obligation under the Capital Support Agreements were reduced from an aggregate $195.0 million to $39.0 million (See Liquidity and ~~their fair~~Capital Resources section later in this discussion).

The SDIT PO Fund continues to hold one SIV security with a par value ~~at this date was $8.7 million. The Company recognized a loss~~ of ~~$6.6~~$60.1 million as ~~a result~~ of ~~this transaction. As of this date,~~June 30, 2009. Our obligation under the ~~SDIT MM Fund no longer held any SIV securities and the~~Amended Capital Support Agreement with the SDIT ~~MM Fund lapsed.~~

~~As of September 30, 2008, we are committed to provide capital support to the Funds subject to an aggregate limit of $150.0 million for the SDIT~~ PO Fund ~~and $20.0~~was $30.0 million for the SLAT PO Fund for a total aggregate limit of $170.0 million. Of the new aggregate limit, we secured $147.0 million by our credit facility through letters of credit of a third party bank and secured the remaining $23.0 million through segregated bank accounts. We had secured $3.0 million of the previous obligations under the lapsedat June 30, 2009. The Amended Capital Support Agreement with the SDIT MMPO Fund ~~through a letter of credit which~~ is ~~due~~scheduled to ~~expire~~terminate in November ~~2008. As of September 30, 2008,~~2009; however, we expect to purchase the ~~amount of our credit facility that is unrestricted and may be used for general purposes was $150.0 million. The Capital Support Agreements for~~remaining SIV security from the SDIT PO Fund ~~and~~prior to the ~~SLAT PO Fund and the related letters of credit have scheduled expiration dates in November and December 2008.~~

In connection with the Capital Support Agreements, we recorded an expense for $87.3 million for the nine months ended September 30, 2008, which is reflected in Net loss from investments on the Consolidated Statements of Operationstermination date of the accompanying Consolidated Financial Statements. As of September 30, 2008, the aggregate amount of our obligation recorded in connection with the Capital Support Agreements was $112.4 million, but this amount was not required to be paid since the Funds have not realized any material lossesagreement.

We recognized gains from the ~~ultimate sale or disposition~~change in fair value and cash paydowns received from SIV securities of $3.4 million and $2.8 million, respectively, during the ~~SIV securities. Cash payments made under~~three and six month periods ended June 30, 2009. Total SIV-related charges were $2.3 million and $16.7 million in the ~~Capital Support Agreements as of September~~three and six months periods ended June 30, ~~2008 were minimal.~~2009, respectively. At ~~September~~June 30, ~~2008,~~2009, the aggregate par value and market value of ~~the SIVs covered~~all SIV securities owned by ~~the Capital Support Agreements on the books of the two Funds~~us was ~~$348.4~~$261.6 million and ~~$223.3~~$91.6 million, respectively. Included in these amounts is a significant SIV holding in Gryphon with an aggregate par value across the two Funds of $201.7 million and a market value on the books of the Funds of $115.0 million, or 57 percent of par value.

The ~~following table presents the aggregate impact from our support provided to the two Funds covered by the Capital Support Agreements during the third quarter and cumulative as of September 30, 2008:~~

~~On November 5, 2008, we entered into an~~remaining Amended ~~and Restated~~ Capital Support Agreement with the SDIT PO Fund (the SDIT PO Amended Agreement) which extended the termination date under the original Capital Support Agreement with the SDIT PO Fund to November 6, 2009. In addition, the SDIT PO Amended Agreement requires us to provide additional supportrelated to the SDIT PO Fund is considered a derivative contract in ~~order to maintain the Aaa rating~~accordance with applicable accounting guidance and is categorized as a Level 3 liability as specified by SFAS 157 (See Fair Value Measurements section later in this discussion). This Level 3 liability comprises 20 percent of our total current liabilities at June 30, 2009. The fair value of the ~~Fund by Moody’s.~~Amended Capital Support Agreement approximates the value of our actual obligation at June 30, 2009. The ~~SDIT PO~~value of the Amended Capital Support Agreement ~~provides that if~~related to the SDIT PO Fund ~~realizes payments or sales proceeds from the ultimate disposition of any of the specified SIV securities which are less than its amortized cost, we~~ will be determined at least quarterly. In the event payments are not required to ~~provide capital~~be paid to ~~the Fund equal to the amount by which the amortized cost of the specified SIV security exceeds the amount realized from the sale or other disposition of such security. The specified SIV securities in~~ the SDIT PO Fund, had an aggregate par value of $272.5 million on November 5, 2008. Under the SDIT PO Amended Agreement, we must maintain collateral in the form of a letter of credit and/or a segregated cash account equal to the difference between the amortized cost value and the market value of the specified SIV securities plus an amount equal to ten percent of the market value of the specified SIV securities. At current market values, we are not required to post any additional collateral pursuant to the SDIT PO Amended Agreement because the amount of collateral already maintained under the Capital Support Agreement prior to the execution of the SDIT PO Amended Agreement is sufficient to satisfy our collateral obligations. If the market values of the specified SIV securities decline further, however, wesuch expense may be ~~required to post additional collateral. As~~reversed in a result of entering into the SDIT PO Amended Agreement on November 5, 2008, and assuming market values on that date hold, an additional non-cash expense of $13.9 million would be recorded in the fourth quarter 2008. In November 2008, we amended the terms of the Credit Facility with the lenders to increase the maximum amount of contingent obligations that we may incur to $297.5 million, the maximum amount that is required under the Capital Support Agreements, including the SDIT PO Amended Agreement. We also obtained a letter of credit from a third party bank for $6.0 million. This letter of credit is scheduled to expire in November 2009. subsequent period.

As of ~~November 6, 2008, the amount of our credit facility that is unrestricted and may be used for general purposes was $144.0 million.~~

At this time, the termination date under the SLAT PO Fund Capital Support Agreement has not been extended and is currently scheduled to expire in December 2008. We may determine to seek an extension of the termination date under the SLAT PO Fund Capital Support Agreement.

All SIVs that remain on the books of the two Funds covered by the Capital Support Agreements at November 6, 2008 are in default. Three of the five remaining SIVs have restructured. We believe that the remaining defaulted SIV securities will be restructured, although we cannot predict the timing or net impact the restructuring will ultimately have on the realized value of these SIV securities. As of November 6, 2008,July 31, 2009, the amount which would be accrued for our contribution ~~obligations~~obligation under the Amended Capital Support ~~Agreements~~Agreement was ~~$132.8~~$30.0 million. At the close of business on November 6, 2008, the aggregate par value and market value of the SIVs covered by the Capital Support Agreements on the books of the two Funds was $345.1 million and $205.1 million, respectively. Based upon this valuation and assuming no other changes in the portfolio assets through ~~December 31, 2008, an~~September 30, 2009, no additional non-cash expense ~~of $20.4 million~~ would be recorded in the ~~fourth quarter 2008. For further information regarding~~three months ended September 30, 2009.

Our total risk of future loss from SIV securities is limited to the ~~portfolio assets~~aggregate remaining par value of the ~~Funds,~~SIV securities held by the ~~month-end holdings~~SDIT PO Fund and on our balance sheet offset by the cumulative losses from SIV-related issues we have already recognized. As of ~~each of the Funds can be viewed after the 15~~^th ~~day of the following month at http://www.seic.com/holdings_home.asp.~~

~~The following table presents~~2009, the aggregate ~~impact~~par value of these securities totaled $321.7 million. Cumulative losses from ~~our support provided~~SIV-related issues totaled $200.0 million. We do not engage in any lending activities or any other activity that exposes us to a risk of loss associated with the ~~two Funds covered by~~illiquidity issues in the credit markets.

When we entered into the Capital Support Agreements, ~~during~~ the ~~fourth quarter~~Funds became variable interest entities and we were considered to ~~date November 6, 2008 and cumulative as of November 6, 2008:~~

In November 2008, the amount of support provided to the SDIT PO Fund was increased to $272.5 million pursuant to the SDIT PO Amended Agreement and the amount of support provided to the SLAT PO Fund was increased to $25.0 million.

We have a significant variable interest in the ~~Funds as a result of~~Funds. Therefore, we needed to determine if we were the primary beneficiary according to the provisions established in FIN 46(R). Our analysis concluded that we were not the primary beneficiary because the support we provide under the Capital Support Agreements according to the provisions of FIN 46(R); however, we have determined that we are not the primary beneficiary and would not be required to consolidate the Funds in our Consolidated Financial Statements. The support we provided would not absorb a majority of the variability created by the assets of the Funds. As a result, we were not required to consolidate the accounts of the Funds into our Consolidated Financial Statements.

~~The~~Our future obligation under the Amended Capital Support ~~Agreements are considered derivative contracts in accordance with applicable accounting guidance and are categorized as Level 3 liabilities as specified by SFAS 157 (See Notes 1 and 5~~Agreement related to the ~~Consolidated Financial Statements for more information related~~SDIT PO Fund is affected by a number of factors including, but not limited to, ~~SFAS 157). These Level 3 liabilities comprise approximately 42 percent of our total current liabilities. The fair value of~~prevailing conditions in the ~~contracts was determined using a valuation model for~~ credit ~~default swaps. The fair value of the derivative contracts approximates the value of our actual obligation at September 30, 2008.~~

~~We believe changes in~~markets as they impact the value of the ~~specified~~SIV security owned by the Fund and the creditworthiness of the SIV security. The fair market value of the SIV security is derived from current market prices or, in the event no market price exists, from external valuation sources (See Fair Value Measurements section later in this discussion).

The market value of the underlying collateral of the SIV securities ~~is the primary factor that affects our obligation~~owned by us and ~~required collateral pertaining to~~held by the SDIT PO ~~Amended Agreement. Changes~~Fund has the most significant impact on our exposure to future losses from SIV-related issues. The losses we recognize from the change in ~~the~~market value of the ~~specified SIV securities can cause~~underlying collateral and our obligation tounder the Capital Support Agreement can fluctuate on a daily basis. Based on actual values as of ~~November 6, 2008,~~July 31, 2009, the impact of a ~~change of~~ one percent movement in the value of ~~these~~SIV securities ~~would cause our obligation with respect to~~owned by us or held by the SDIT PO ~~Amended Agreement~~Fund would be approximately $3.2 million to ~~change by approximately $2.7 million and~~ our ~~required collateral would change by approximately $2.4 million.~~earnings.

~~Our~~All outstanding stock options have performance based vesting ~~conditions based on~~provisions that tie the ~~attainment~~vesting of ~~certain earnings per share targets established~~stock options to our financial performance. Our stock options vest at ~~the date of grant. The first performance condition determines vesting~~a rate of 50 percent ~~of the options,~~when a specified diluted earning per share target is achieved, and ~~a second performance condition determines the vesting of~~ the remaining 50 percent ~~of the options. The performance conditions are measured annually on December 31. Options~~when a second, higher specified diluted earnings per share target is achieved. Stock options granted prior to 2006 ~~also could~~fully vest ~~in their entirety~~after seven years from the date of grant. Beginning in 2006, the seven year vesting trigger was eliminated and, as a result, options do not vest due to the passage of time but solely as a result of achievement of the financial vesting targets. Earnings per share targets are calculated exclusive of stock-based compensation expense, net of tax. The diluted earnings per share targets are established at time of grant and are measured annually on December 31. The amount of stock-based compensation expense is based upon our estimates of when we believe the earnings per share targets may be achieved. If our estimate of the attainment of the earnings per share targets proves to be inaccurate, the remaining amount of stock-based compensation expense could 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 our net income and net income per share. During the six months ended June 30, 2009, we revised our estimate made as of December 31, 2008 of when certain vesting targets are expected to be achieved. This change in management’s estimate resulted in a decrease of $3.6 million in stock-based compensation expense in the six months ended June 30, 2009.

During the ~~nine~~six months ended ~~September~~June 30, ~~2008~~2009 and ~~2007,~~2008, we recognized approximately ~~$13.0~~$6.8 million and ~~$20.5~~$9.2 million, respectively, in stock-based compensation expense, a decrease of ~~$7.5~~$2.4 million. This decrease consisted of the following components:

We expect that certain option grants, which do not vest due to the passage of time, will not attain their higher specified diluted earnings per share targets and; therefore, we discontinued the amortization of the unrecognized stock-based compensation cost associated with these grants. These option grants have an unrecognized compensation cost of $21.3 million.

Based upon our current view of ~~the number of~~how many options ~~that~~ will vest and when they will vest, we estimate that stock-based compensation expense will be recognized according to the following schedule:


Period	Stock-Based Compensation Expense		Stock-Based Compensation Expense
Remainder of 2008	$	3,627
2009		14,498
Remainder of 2009			$	6,654
2010		13,456		12,269
2011		9,695		11,327
2012		6,067		6,823
2013		4,227		5,083
2014		2,109		1,499
2015				1,499

	$	53,679	$	45,154


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	Sep 30, 2008		Sep 30, 2007		Percent Change		Sep 30, 2008		Sep 30, 2007		Percent Change		June 30, 2009		June 30, 2008		Percent Change		June 30, 2009		June 30, 2008		Percent Change
Revenues:
Investment processing and software servicing fees	$	56,105	$	56,183	—		$	170,418	$	161,018	6	%	$	54,269	$	56,612	(4	%)	$	116,061	$	114,313	2	%
Asset management, administration & distribution fees		32,387		39,111	(17	%)		106,524		112,022	(5	%)		21,462		37,024	(42	%)		41,686		74,137	(44	%)
Transaction-based and trade execution fees		11,390		8,986	27	%		33,596		29,068	16	%		10,914		9,966	10	%		25,846		22,206	16	%

Total revenues	$	99,882	$	104,280	(4	%)	$	310,538	$	302,108	3	%	$	86,645	$	103,602	(16	%)	$	183,593	$	210,656	(13	%)

Revenues decreased ~~$4.4~~$17.0 million, or ~~four~~16 percent, in the three month period and $27.1 million, or 13 percent, in the six month period ended ~~September~~June 30, ~~2008~~2009 compared to the prior year corresponding period and were primarily affected by:

Operating margins remained at 18 percent in the ~~nine~~three month period and 19 percent in the six month period. Operating income decreased $2.4 million, or 13 percent, in the three month period and $5.1 million, or 13 percent, in the six month period and was primarily affected by:

Revenues decreased $22.3 million, or 36 percent, in the three month period and $45.3 million, or 37 percent, in the six month period ended ~~September~~June 30, ~~2008 compared to the prior year corresponding period~~2009 and were primarily affected by:

Operating margins ~~declined~~decreased to 2035 percent, as compared to 2149 percent in the three month period and were 31 percent, as compared to 49 percent in the six month period. Operating income decreased ~~$1.1~~by $16.7 million, or ~~five~~55 percent, in the three month period, and $35.4 million, or 60 percent, in the six month period and was primarily affected by:

Operating margins declined to 19 percent, as compared to 20 percent in the nine month period. Operating income decreased $1.0 million, or two percent, in the nine month period and was primarily affected by:

Revenues decreased ~~$6.9~~$9.1 million, or ~~ten~~18 percent, in the three month period and ~~$11.5~~$20.4 million, or ~~six~~20 percent, in the ~~nine~~six month period ended ~~September~~June 30, ~~2008~~2009 and were primarily affected by:

Operating margins ~~decreased~~increased to 4845 percent, as compared to ~~52 percent in the three and nine month periods. Operating income decreased by $6.4 million, or 19~~43 percent in the three month period and ~~$13.7~~remained at 42 percent in the six month period. Operating income decreased $3.1 million, or 14 percent, in the ~~nine~~three month period and $8.4 million, or 20 percent, in the six month period and was primarily affected by:

Revenues ~~increased $1.5~~decreased $3.9 million, or ~~three~~11 percent, in the three month period and ~~$7.9~~$7.1 million, or ~~five~~ten percent, in the ~~nine~~six month period ended ~~September~~June 30, ~~2008~~2009 and were primarily affected by:

Operating margins increased to 42 percent, as compared to 40 percent in the three month period and increased to 42 percent, as compared to 39 percent in the nine month period. Operating income increased $1.9 million, or 10 percent, in the three month period and $7.3 million, or 13 percent, in the nine month period and was primarily affected by:

~~Revenues increased $2.4 million, or seven percent, in the three month period and $6.9 million, or seven percent, in the nine month period ended September 30, 2008 and were primarily affected by:~~

Operating margins ~~increased to 30 percent, as compared to 29~~remained at 33 percent in the three month period and increased to 3132 percent, as compared to 2931 percent in the ~~nine~~six month period. Operating income ~~increased~~decreased $1.2 million, or 12ten percent, in the three month period, and ~~$4.0~~$1.2 million, or 13five percent in the ~~nine~~six month period, and was primarily affected by:

Revenues decreased ~~$26.1~~$24.5 million, or 2933 percent, in the three month period and ~~$48.0~~$61.7 million, or 1841 percent, in the ~~nine~~six month period ended ~~September~~June 30, ~~2008~~2009 and were primarily affected by:

Our total partnership interest in LSV ~~remained at~~declined to approximately 42 percent during the six month period ended June 30, 2009 and was approximately 43 percent during the ~~nine~~six month ~~periods~~period ended ~~September~~June 30, ~~2008 and 2007.~~2008. Operating margins decreased to 3735 percent, as compared to 38 percent in the three month ~~period~~ and ~~remained flat at 38 percent in the nine~~six month periods. Operating income decreased ~~$10.6~~$10.4 million, or 3137 percent, in the three month period, and ~~$19.5~~$26.6 million, or 1946 percent in the ~~nine~~six month period, and was primarily affected by:

Other income and expense items on the accompanying Consolidated Statements of Operations consists ~~of the following:~~of:

~~Minority interest includes the amount owned by other shareholders in which we have a significant or controlling interest.~~

Losses from Capital Support Agreements include a non-cash charge of $34.2 million and $87.3 million in the three and nine months ended September 30, 2008, respectively, related to agreements that provide capital support to money market funds (See Note 7 to the Consolidated Financial Statements).

~~On September 30, 2008,~~In March 2009, we purchased ~~the~~certain SIV securities ~~issued by the SIVs held by~~from the SDIT ~~Money Market Fund. The~~PO Fund and the SLAT PO Fund for a cash purchase price of ~~$15.3 million~~$194.9 million. In June 2009, we purchased the remaining SIV securities in the SLAT PO Fund for a cash purchase price of $57.5 million. The cash purchase prices paid to the Funds was equal to the amortized cost of ~~these securities and their fair value at this date was $8.7 million.~~the securities. We elected the fair value option under SFAS 159 whereby the unrealized gains and losses of the securities are recognized in current earnings. ~~The~~As of June 30, 2009, the total unrealized losses from the purchases of the SIV securities ofwere approximately ~~$6.6~~$160.7 million and are included in Decrease in fair value of financial ~~instruments (See Notes 6 and 7~~instruments. The reductions in our obligation related to the ~~Consolidated Financial Statements).~~

We have investments in two SEI-sponsored mutual funds which primarily invest in fixed-income securities, including debt securities issued by municipalities and mortgage-backed securities. These investments have been in an unrealized loss position for an extended period of time. Management believes that the earnings potential and near term prospects of someCapital Support Agreements as a result of the ~~issuers~~purchases of the ~~underlying~~SIV securities ~~held~~are included in ~~the funds are uncertain~~Gains (losses) from Capital Support Agreements (See “Money Market Fund Support” earlier in this discussion).

Interest and has determined that it is unlikely the investments will fully recover from a loss position in the foreseeable future. Due to these factors, we recorded an impairment charge of approximately $2.0 million during the three months ended September 30, 2008 and classified this charge as an Other-than-temporary decline in market value. At September 30, 2008, the new cost basis of these investments, inclusive of the impairment charge, was approximately $16.0 million and the fair value was approximately $14.6 million.dividend income

Interest income is earned based upon the amount of cash that is invested ~~daily.~~daily in short-term, highly liquid financial instruments, mainly money market funds. The decrease in interest income in the ~~nine~~six month period of ~~2008~~2009 compared to ~~2007~~2008 was primarily due to a decline in interest ~~rates~~rates.

Interest expense includes the interest charges and ~~lower cash balances.~~fees related to the borrowings under our Credit Facility and the borrowings of LSV Employee Group. The increase in interest expense in 2009 compared to 2008 is due to the expense incurred through our borrowings under the Credit Facility.

Noncontrolling interest includes the amount owned by other partners of LSV, partners of LSV Employee Group and the other shareholders of our Korean joint venture in which we have a significant or controlling interest.

Our effective tax rates were ~~36.5~~36.8 percent and ~~34.4~~37.1 percent for the three months ended ~~September~~June 30, ~~2008~~2009 and ~~2007,~~2008, respectively. For the ~~nine~~six months ended ~~September~~June 30, ~~2008~~2009 and ~~2007,~~2008, our effective tax rates were ~~36.9~~30.3 percent and ~~36.5~~37.1 percent, respectively. The ~~increase~~decrease in our effective tax rates was primarily due to the unavailability of tax credits for research and development. The statute that allows research and development tax credit expired on December 31, 2007 and it was not renewed until October 3, 2008 when the President signed the Emergency Economic Stabilization Act. We expect to see a favorable impact on our effective tax rate in the ~~fourth quarter~~six month period ended June 30, 2009 from the comparable period in 2008 was primarily due to the ~~renewal~~realization of prior unrecognized tax benefits related to the conclusion of federal and state income tax audits during the first quarter of 2009. We expect our effective tax rate for the remaining quarters of 2009 will be at or near our effective rate for the three months ended June 30, 2009.

In May 2009, the President proposed significant changes to the U.S. international tax laws, including a change which would subject the unrepatriated earnings of our non-U.S subsidiaries to be taxed at the U.S. federal income tax rate. These proposals would be effective for taxable years beginning after December 31, 2010. If enacted and depending upon its precise terms, such legislation could increase our overall effective tax rate. We will continue to monitor this ~~legislation.~~and other legislative proposals to determine what affect they would have on our tax rate.

WeThe fair value of our financial assets and liabilities ~~under~~is determined in accordance with the fair value hierarchy established in SFAS ~~157. Most~~No. 157 (SFAS 157), “Fair Value Measurements.” The fair value of most of our financial assets are ~~valued~~determined using Level 1 or Level 2 ~~inputs.~~inputs and consist mainly of investments in equity or fixed-income mutual funds that are quoted daily and Government National Mortgage Association (GNMA) securities that are single issuer pools that are valued based on current market data of similar assets. Our Level 3 financial assets and liabilities consist ~~solely~~mainly of SIV securities ~~issued by SIVs~~ and the remaining Capital Support ~~Agreements,~~Agreement with the SDIT PO Fund. The Capital Support Agreement is considered a derivative liability for accounting purposes, for which ~~there~~the fair value is not an active market for identical assets or liabilities from which to determine fair value. Also, there is not enough sufficient, current market information about similar assets or liabilities to use as observable data for all significant inputs into a valuation model. As of September 30, 2008, our Level 3 financials assets consist of approximately nine percent ofbased principally on changes in the ~~total assets we record at fair value.~~

~~The~~ fair value of ~~the~~SIV securities ~~issued~~held by the ~~SIVs~~SDIT PO Fund.

Recent liquidity issues surrounding collateralized debt obligations and asset-backed securities has greatly affected the fair value of SIV securities. Given the lack of any reliable market data on the SIV securities owned by us or held by SEI-sponsored money market funds, the fair value of these securities is determined using a net asset value approach which considers the value of the underlying ~~assets.~~collateral of the SIV securities. The valuation model is maintained by an independent third party. The underlying ~~assets~~collateral is comprised of asset-backed securities and collateralized debt obligations that are specifically identified by its CUSIP or ISIN number. We obtain quotes primarily from two independent external pricing vendors for each security. Other pricing vendors may be used in limited situations when a security quote can not be obtained from either of the two primary independent external pricing vendors. The average of the two quotes received is used to value each security. Additionally, the securities are aggregated by type or sector (i.e. home equity line of credit, sub-prime 1^st liens, residential mortgage-backed securities, etc.) and the weighted average quote of all securities within a sector held by the SIV is compared with the range of quotes received for similar securities within the same sector from the trading desk of an affiliate of the third party that maintains the SIV pricing model. The weighted average quote of all securities within a sector held by the SIV must be within the range of quotes received from the trading desk within that same sector. If the weighted average quote for all securities within a sector held by the SIV is outside that range, the average quote received from the pricing vendors may be adjusted. In any event, the value assigned to each security held by the SIV will be the lower of (i) the average of the quotes received from the pricing vendors or (ii) the lowest quote received from the trading desk for a similar security.

Securities that lack price quotes are adjusted by the weighted average percentage movement of securities held as collateral within the same sector classification. For example, a residential mortgage-backed security that has not received a quote for an extended period of time will be adjusted by the weighted average percentage movement of all quoted residential mortgage-backed securities held as collateral by the SIV security. Also, as previously stated, the weighted average price of all securities within a sector is compared with the range of quotes received from the trading desk of an affiliate of the independent third party that maintains the valuation model. The weighted average quote of all securities within a sector must be within the range of quotes received from the trading desk within that same sector. If the average quote is not within the range, the quote may be adjusted. The average quote will only be adjusted downward to the lowest figure.

We evaluated the inputs used by the pricing vendors in accordance with the fair value hierarchy established in SFAS 157. This process required gaining an understanding of their valuation methodologies, processes, models and inputs. The ~~Capital Support Agreements~~pricing vendors provided information about each model, the inputs used and the order of priority of each input. In the event we disagree with a quoted price from a vendor, we may challenge that price and

request an evaluation. We considered each vendor’s qualification to provide quotes pertaining to each security. All pricing vendors used are considered to be market leaders that have a long history of providing reliable information to their clients.

In the ~~only financial liabilities recorded at~~event a market transaction does exist for a SIV security, we evaluate the publicly available information surrounding the transaction in order to assess if the price used represents the fair ~~value. The~~value according to the guidance in SFAS 157. In our opinion, the price of certain SIV securities used in recent transactions were from distressed sales and did not represent the implied fair value of the ~~Capital Support Agreements is determined through the use of an option pricing model designed for credit default swaps. The value is primarily affected~~SIV securities held by ~~assumptions pertaining to the underlying assets, mainly default percentages and recovery rates specific to each security covered~~us or by the ~~Capital Support Agreement.~~SEI-sponsored money market funds.

The table below presents a reconciliation for all of our financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the period from January 1, ~~2008~~2009 to ~~September~~June 30, ~~2008:~~2009:

On June 12, 2009, the Financial Accounting Standards Board (FASB) issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)” (SFAS 167), which amends FASB Interpretation No. 46(R), “Consolidation of Variable Interest Entities,” (FIN 46(R)), to require an enterprise to perform an ongoing analysis to determine whether the enterprise’s variable interest or ~~other techniques are sensitive~~interests give it a controlling financial interest in a variable interest entity. Additionally, an enterprise is required to ~~assumptions used~~assess whether it has an implicit financial responsibility to ensure that a variable interest entity operates as designed when determining whether it has the power to direct the activities of the variable interest entity that most significantly impact the entity’s economic performance. SFAS 167 amends FIN 46(R) to require ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity. Before this Statement, FIN 46(R) required reconsideration of whether an enterprise is the primary beneficiary of a variable interest entity only when specific events occurred. SFAS 167 also amends FIN 46(R) to add an additional reconsideration event for ~~significant inputs. Where market data is available, the inputs used for valuation reflect that information as of our valuation date. When there~~determining whether an entity is a ~~lack~~variable interest entity when any changes in facts and circumstances occur such that the holders of ~~market data~~the equity investment at risk, as a group, lose the power from voting rights or similar rights of those investments to ~~use~~direct the activities of the entity that most significantly impact the entity’s economic performance. SFAS 167 is effective for us beginning in the ~~valuation process, judgment is then applied in formulating those inputs.~~first quarter 2010. We are currently evaluating the impact SFAS 167 will have on our consolidated financial statements.


	For the Nine Months Ended September 30,						For the Six Months Ended June 30,
	2008			2007			2009			2008
Net cash provided by operating activities	$	210,280		$	265,902		$	133,719		$	112,698
Net cash used in investing activities		(95,774	)		(74,630	)		(272,605	)		(41,366	)
Net cash used in financing activities		(129,637	)		(181,026	)
Net cash provided by (used in) financing activities								215,371			(111,868	)

Net (decrease) increase in cash and cash equivalents		(15,131	)		10,246
Net increase (decrease) in cash and cash equivalents								76,485			(40,536	)
Cash and cash equivalents, beginning of period		360,921			286,948			416,643			360,921

Cash and cash equivalents, end of period	$	345,790		$	297,194		$	493,128		$	320,385

Cash requirements and liquidity needs are primarily funded through our cash flow from operations and our capacity for additional borrowing. At ~~September~~June 30, ~~2008,~~2009, our unused sources of liquidity primarily consisted of cash

and cash equivalents. During March 2009, we borrowed $195.0 million through the credit facility and used the proceeds to purchase all of the Gryphon notes from the SDIT PO Fund and the SLAT PO Fund. In June 2009, we borrowed an additional $59.0 million through the credit facility and used the proceeds to purchase the remaining SIV securities in the SLAT PO Fund (See “Money Market Fund Support” earlier in this discussion). Our total borrowings through the credit facility as of June 30, 2009 were $254.0 million.

Cash and cash equivalents of ~~$345.8~~$493.1 million ~~and the amount available under our credit facility. Cash and cash equivalents~~ includes ~~$74.4~~$37.7 million at ~~September~~June 30, ~~2008~~2009 from LSV, of which ~~the Company has~~we have a 4342 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~~At June 30, 2009, the amount of cash and cash equivalents ~~that is~~considered free and ~~available~~immediately accessible for other general corporate purposes was $307.0 million.

Our credit facility is ~~reduced by these cash accounts.~~an unsecured senior revolving line of credit with JPMorgan Chase Bank, N.A., individually and as agent and a syndicate of other lenders. The credit facility ~~agreement became effective~~is scheduled to expire 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.2012. The availability of the credit facility is subject to the compliance with certain covenants set forth in the agreement.

~~Page 37~~ Currently, our ability to borrow from the credit facility is not limited by any covenant of 43

~~We have arrangements with two mutual funds sponsored~~the agreement. Of all of the covenants, we believe satisfying the leverage ratio could be the most difficult in the future. The leverage ratio is calculated as consolidated indebtedness divided by ~~SEI~~earnings before interest, taxes, depreciation, amortization and other items as ~~previously described~~defined by the covenant during the last four quarters (EBITDA). The amount of consolidated indebtedness according to the terms of the covenant include the capital commitment under the ~~section “Money Market~~Capital Support Agreement with the SDIT PO Fund ~~Support.”~~and the outstanding debt of LSV Employee Group. We must maintain at all times prior to and including September 30, 2009, a ratio of consolidated indebtedness of not more than 2.25 times the amount of EBITDA, at all times from October 1, 2009 through and including December 31, 2009, not more than 2.00 times EBITDA, and at all times thereafter, not more than 1.75 times EBITDA. As of ~~November 6, 2008,~~June 30, 2009, our leverage ratio is 1.36 times EBITDA. Although we ~~may be required~~expect this ratio to ~~provide capital~~increase in 2009 if unfavorable market conditions persist, we do not anticipate that this covenant or any covenant of the credit facility will restrict our ability 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~~facility.

The obligation under the ~~required capital from unrestricted cash. However, so long as~~Capital Support Agreement with the SDIT PO Fund is secured by letters of credit ~~remain outstanding,~~of a third party bank rated A-1 by S&P. The letters of credit were issued under the credit facility. The letters of credit have a term of one year with expiration dates beyond the expiration date of the Capital Support Agreement. The amount available under the credit facility ~~will be~~is reduced by the total amount of the letters of ~~credit.~~credit outstanding. In order to finance the purchase of the SIV securities, we borrowed an aggregate $254.0 million through the credit facility. As a result of the purchases of the SIV securities from the Funds in 2008 and 2009, the letters of credit posted to collateralize our obligations under the Capital Support Agreements was reduced to $39.0 million as of June 30, 2009.

As of July 31, 2009, letters of credit of $39.0 million remained outstanding and our total borrowings through the credit facility remained at $254.0 million. Therefore, ~~only~~ the remaining ~~$144.0~~$7.0 million of the credit facility 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.general purposes.

Cash flows from operations ~~decreased $55.6~~increased $21.0 million in ~~2008~~2009 compared to ~~2007~~2008 due primarily ~~due~~ to the net change in our working capital accounts. The increase was offset by the decline in net ~~income and the net change in working capital accounts.~~income. 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~~2009 due to the non-cash charge related to the Capital Support ~~Agreements.~~Agreements and lower expected payments for incentive compensation in 2009 compared to 2008.

We have long-term contractual agreements with banks and other financial institutions, especially within our Private Banks segment. These banks and financial institutions continue to meet the scheduled payment terms under these contracts. We have no reason to believe that these clients will be unable to satisfy current and future obligations. Additionally, the Investment Managers segment has contractual agreements with managers of hedge funds. There have been recent concerns and issues within the hedge fund industry. We believe our clients are stable and well-respected managers that will continue to remain viable entities over the long-term. These firms continue to meet all of their obligations. Our clients continue to meet their current financial obligations with us. We do not have any significant collectibility issues regarding our receivables as of June 30, 2009 and we have not received any indications that we should anticipate significant collectibility issues regarding our receivables in the near term.

We believe our operating cash flow ~~available borrowing capacity,~~ and existing cash and cash equivalents should provide adequate funds for ~~continuing~~ongoing operations; our obligation with respect to the Capital Support Agreement, continued investment in new products and equipment; our common stock repurchase program; and future dividend ~~payments; and expansion of our corporate headquarters.~~payments.

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Certain information contained in this discussion is or may be considered forward-looking. Forward-looking statements relate to future operations, strategies, financial results or other developments. Forward-looking statements are based upon estimates and assumptions that involve certain risks and uncertainties, many of which are beyond our control or are subject to change. Although we believe our assumptions are reasonable, they could be inaccurate. Our actual future revenues and income could differ materially from our expected results. We have no obligation to publicly update or revise any forward-looking statements.

Among the risks and uncertainties which may affect our future operations, strategies, financial results or other developments are those risks described in our latest Annual Report on Form 10-K in Part I, Item 1A. These risks include the following:

During the past several months, there has been widespread turmoil in the financial services industry. Much of this concern recently has been focused on the financial health of banks and involves our risks regarding the consolidation within our target markets and the failure by a third-party service provider. We have significant relationships with banks. A substantial portion of our revenues is derived from servicing banks. Additionally, we utilize the services of banks in our operations. In the event that any of these banks should fail, this could cause a disruption in our ability to provide services to our clients. Our revenues and earnings could be significantly affected if the financial health of certain banks continues to deteriorate or if they become insolvent.

The Company and our clients are subject to extensive governmental regulation. Our various business activities are conducted through entities which may be registered with the Securities and Exchange Commission (SEC) as an investment advisor, a broker-dealer, a transfer agent, an investment company or with the United States Office of Thrift Supervision or state banking authorities as a trust company. Our broker-dealer is also a member of the Financial Industry Regulatory Authority and is subject to its rules and oversight. In addition, various subsidiaries of the Company are registered with, and subject to the oversight of, regulatory authorities primarily in the United Kingdom and the Republic of Ireland. Many of our clients are subject to substantial regulation by federal and state banking, securities or insurance authorities or the Department of Labor. Compliance with existing and future regulations and responding to and complying with recent regulatory activity affecting broker-dealers, investment companies and their service providers could have a significant impact on us. We have responded and are currently responding to various regulatory examinations, inquiries and requests. As a result of these examinations, inquiries and requests, we review our compliance procedures and business operations and make changes as we deem necessary. One of these regulatory requests and inquiries relate to the payment by certain of our subsidiaries of expenses related to the marketing and distribution of shares of certain mutual fund clients of our fund administration and distribution business. A similar inquiry resulted in an SEC order sanctioning one of our mutual fund administrator competitors in 2006.

We offer investment and banking products that also are subject to regulation by the federal and state securities and banking authorities, as well as non-United States regulatory authorities, where applicable. Existing or future regulations that affect these products could lead to a reduction in sales of these products. ~~Directed brokerage payment arrangements offered~~

Our bank clients are subject to supervision by usfederal and state banking authorities concerning the manner in which such clients purchase and receive our products and services. Our plan sponsor clients and our subsidiaries providing services to those clients are ~~also~~ subject to supervision by the Department of Labor and compliance with employee benefit regulations. Investment advisor and broker-dealer clients are regulated by the SEC and ~~other federal regulatory~~state securities authorities.

~~Changes in the regulation of directed brokerage~~ Existing or ~~soft dollar payment arrangements or strategic decisions~~future regulations applicable to our clients may affect our clients’ purchase of our ~~clients regarding these arrangements could affect sales~~products and services.

In addition, see the discussion of ~~some services, primarily~~governmental regulations in Item 1A “Risk Factors” in our ~~brokerage services.~~latest Annual Report on Form 10-K for a description of the risks that proposed regulatory changes may present for our business.

Interest Rate Risk -– Our exposure to changes in interest rates primarily relates to our investment portfolio. Our excess cash is principally invested in short-term, highly liquid financial instruments, mainly money market funds, with a substantial portion of such investments having initial maturities of three months or less. The holdings in our investment portfolio most sensitive to interest rate risk include Government National Mortgage Association (GNMA) securities and a short-term mutual fund principally invested in securities of U.S. and foreign commercial banks and government agencies. We place our investments in financial instruments that meet high credit quality standards. While changes in interest rates could decrease interest income, we do not believe that we have a material exposure to changes in interest rates. We do not undertake any specific actions to cover our exposure to interest rate risk and are not a party to any interest rate risk management transactions.

Additionally, LSV Employee Group entered into two interest rate swap agreements to convert its floating rate long-term debt to fixed rate debt. ~~These swaps have~~One of these swap agreements terminated on March 31, 2009. The remaining swap agreement has a ~~total~~ notional value of ~~$33.4~~$26.2 million. Payments are made every 90 days and the termination ~~dates~~date of the ~~swaps are March 2009 and~~swap agreement is January 2011. The net effect from the interest rate swaps on the Company’s earnings during the three and six month periods ended June 30, 2009 was minimal.

~~Price~~Foreign Currency Risk – We ~~are exposed to price risk associated with changes~~transact business in the ~~fair value~~local currencies of ~~investments in marketable securities relating to~~various foreign countries, principally Canada, Ireland, the ~~startup~~United Kingdom and South Korea. The total of ~~new pooled investment offerings. The length~~all of ~~time that~~ our ~~funds remain invested in these new pooled investment offerings is dependent on client subscriptions. We will redeem~~foreign operations accounts for approximately 11 percent of total consolidated revenues. Also, most of our ~~investments as clients subscribe~~foreign operations match local currency revenues with local currency costs. Due to these ~~new investment offerings. We did~~reasons, we do not, ~~enter into or hold any derivatives for trading purposes during 2008 or 2007.~~

Income before income taxes include gains of $676 thousand and losses of $1.4 million in the nine month periods of 2008 and 2007, respectively, relating to changes in the fair value of derivative financial instruments. The aggregate effect of a hypothetical ten percent change in the fair value of our investments would be:at this time, hedge against foreign operations.

We are also exposed to price risk associated with certain agreements that provide capital support to money market funds holding senior notes issued by structured investment vehicles and securities issued by structured investment vehicles purchased from the SDIT MM Fund (See Note 7 to the Consolidated Financial Statements and “Money Market Fund Support” earlier in this discussion).

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report are effective in ensuring that information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 (the Exchange Act) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. A controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls systems are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

No change in our internal control over financial reporting occurred during the quarter ended ~~September~~June 30, ~~2008~~2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

On September 30, 2004, SIDCO was named as a defendant in a putative consolidated amended class action complaint (the “PBHG Complaint”) filed in the United States District Court for the District of Maryland titled “Stephen Carey v. Pilgrim Baxter & Associates, LTD, et. al.” The PBHG Complaint was purportedly made on behalf of all persons that purchased or held PBHG mutual funds during the period from November 1, 1998 to November 13, 2003 and related generally to various market timing practices allegedly permitted by the PBHG Funds. The suit named as defendants some 36 persons and entities, including various persons and entities affiliated with Pilgrim Baxter & Associates, Ltd., various PBHG Funds, various alleged market timers, various alleged facilitating brokers, various clearing brokers, various banks that allegedly financed the market timing activities, various distributors/underwriters and others. The PBHG Complaint alleged that SIDCO was the named distributor/underwriter from November 1998 until July 2001 for various PBHG funds in which market timing allegedly occurred during that period. The PBHG Complaint generally alleged that the prospectus for certain PBHG funds made misstatements and omissions concerning market timing practices in PBHG funds. The PBHG Complaint alleged that SIDCO violated Sections 11 and 12(a)(2) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 34(b) and 36(a) of the Investment Company Act of 1940, and that SIDCO breached its fiduciary duties, engaged in constructive fraud and aided and abetted the breach by others of their fiduciary duties. The PBHG Complaint did not name SIDCO or any of its affiliates as a market timer, facilitating or clearing broker or financier of market timers. The PBHG Complaint sought unspecified compensatory and punitive damages, disgorgement and restitution. ~~In 2006,~~On May 12, 2009, all claims against SIDCO related to the ~~plaintiffs submitted a proposed form of order dismissing SIDCO from the action, but the Court has not yet acted on the proposed order.~~PBHG Complaint were dismissed with prejudice.

Information regarding risk factors appears in Part ~~I -~~ I—Item 1A of ~~our~~the Company’s Annual Report on Form 10-K for the year ended December 31, 2007. The description of the risk factor regarding our exposure to liquidity issues in the subprime credit markets in our Annual Report on Form 10-K for the year ended December 31, 2007 has been modified to the following:

~~Liquidity issues in the subprime credit markets may affect our earnings and liquidity resources~~. Certain of our money market funds hold senior notes issued by structured investment vehicles which have either ceased making payments or potentially may cease making payments on its outstanding notes on the scheduled maturity dates. Because of the market conditions, we entered into support agreements to protect the shareholders of our money market funds from the liquidity risk associated with these securities. The amount of our obligation under these agreements and the corresponding charge against our earnings is dependent upon prevailing conditions in the credit markets that affect the value of money market instruments, including structured investment vehicles, on the creditworthiness of the structured investment vehicle securities and the overall asset levels of our money market funds. Additionally, in the event the fund realizes a loss from the sale or disposition of a structured investment vehicle, we would be required to pay an amount to the funds of our obligation that could negatively impact our liquidity resources.

2008. There have been no ~~other~~ material changes in our risk factors from those disclosed in ~~Part I – Item 2 under the caption ‘Forward-Looking Information and Risk Factors’ of this quarterly report on Form 10-Q and in~~ our Annual Report on Form 10-K for ~~2007.~~2008.

Information regarding the repurchase of common stock during the three months ended ~~September~~June 30, ~~2008~~2009 is as follows:

On May 21, 2009, we held our annual meeting of shareholders (the “2009 Annual Meeting”) at our corporate headquarters in Oaks, Pennsylvania. At our 2009 Annual Meeting, the shareholders voted on the matters listed below.

1. The election of two directors with a term expiring at our 2012 Annual Meeting of Shareholders:

The terms of office of each of the following directors continued after the meeting:

2. Ratification of the appointment of PricewaterhouseCoopers LLP as independent registered public accounting firm to examine SEI’s consolidated financial statements for 2009:

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Large accelerated filer x	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company ¨
		(Do not check if a smaller reporting company)


		Three Months Ended June 30,
		2009				2008
Net income		$	64,127			$	82,743
Other comprehensive gain (loss), net of tax:
Foreign currency translation adjustments			5,503				(62	)
Unrealized holding gain (loss) on investments:
Unrealized holding gains (losses) during the period, net of income tax (expense) benefit of $(164) and $454	1,034				(766)
Less: reclassification adjustment for losses (gains) realized in net income, net of income tax benefit of $322 and $0	555		1,589		—		(766	)

Total other comprehensive gain (loss), net of tax			7,092				(828	)
Comprehensive income		$	71,219			$	81,915
Comprehensive income attributable to the noncontrolling interest			(23,530	)			(35,647	)

Comprehensive income attributable to SEI Investments Company		$	47,689			$	46,268


		Six Months Ended June 30,
		2009					2008
Net income		$	115,190				$	171,204
Other comprehensive gain (loss), net of tax:
Foreign currency translation adjustments			3,733					(2,984	)
Unrealized holding gain (loss) on investments:
Unrealized holding gains (losses) during the period, net of income tax (expense) benefit of $(406) and $588	945				(1,008	)
Less: reclassification adjustment for losses (gains) realized in net income, net of income tax benefit (expense) of $311 and $(395)	528		1,473		(671	)		(1,679	)

Total other comprehensive gain (loss), net of tax			5,206					(4,663	)

Comprehensive income		$	120,396				$	166,541
Comprehensive income attributable to the noncontrolling interest			(39,907	)				(74,191	)

Comprehensive income attributable to SEI Investments Company		$	80,489				$	92,350


	Foreign Currency Translation Adjustments			Unrealized Holding Gains (Losses) on Investments			Accumulated Other Comprehensive Income (Loss)
Beginning balance (Dec. 31, 2007)	$	9,174		$	816		$	9,990
Current period change		(10,625	)		(2,159	)		(12,784	)

Ending balance (September 30, 2008)	$	(1,451	)	$	(1,343	)	$	(2,794	)


	Foreign Currency Translation Adjustments			Unrealized Holding Gains (Losses) on Investments			Accumulated Other Comprehensive Income (Loss)
Total accumulated comprehensive loss at December 31, 2008	$	(9,787	)	$	(1,524	)	$	(11,311	)
Less: Total accumulated comprehensive loss attributable to noncontrolling interest at December 31, 2008		3,148			—			3,148

Total accumulated comprehensive loss attributable to SEI Investments Company at December 31, 2008	$	(6,639	)	$	(1,524	)	$	(8,163	)

Total comprehensive income for the six months ended June 30, 2009	$	3,733		$	1,473		$	5,206
Less: Total comprehensive income attributable to noncontrolling interest for the six months ended June 30, 2009		(488	)		—			(488	)

Total comprehensive income attributable to SEI Investments Company for the six months ended June 30, 2009	$	3,245		$	1,473		$	4,718

Total accumulated comprehensive loss at June 30, 2009	$	(6,054	)	$	(51	)	$	(6,105	)
Less: Total accumulated comprehensive loss attributable to noncontrolling interest at June 30, 2009		2,660			—			2,660

Total accumulated comprehensive loss attributable to SEI Investments Company at June 30, 2009	$	(3,394	)	$	(51	)	$	(3,445	)


SEC 1296 (04-09)		Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.


	September 30, 2008		December 31, 2007
Accrued compensation	$	44,269	$	74,509
Accrued distribution fees		16,599		16,040
Accrued consulting		10,089		11,065
Accrued sub-advisor and investment officer fees		11,420		16,026
Other accrued liabilities		52,085		69,262

Total accrued liabilities	$	134,462	$	186,902


	June 30, 2009		December 31, 2008
Accrued employee compensation	$	22,068	$	35,425
Accrued employee benefits and other personnel		7,256		8,012
Accrued consulting, outsourcing and professional fees		14,691		15,055
Accrued distribution fees		3,102		14,228
Accrued brokerage fees		16,432		14,001
Accrued other commissions and fees		15,948		15,537
Accrued dividend payable		—		15,297
Other accrued liabilities		17,533		17,221

Total accrued liabilities	$	97,030	$	134,776


	Securities Issued by SIVs			Capital Support Agreements
Balance, January 1, 2008	$	—		$	(25,122	)
Total gains (losses) (realized/unrealized):
Included in earnings		(6,588	)		(87,301	)
Included in other comprehensive income		—			—
Purchases, issuances and settlements		15,321			—
Transfers in and out of Level 3		—			—

Balance, September 30, 2008	$	8,733		$	(112,423	)


	Trading Securities Issued by SIVs			Other Trading Securities			Capital Support Agreements
Balance, January 1, 2009	$	5,713		$	1,697		$	(173,983	)
Purchases, issuances and settlements, net		246,563			(1,536	)		—
Total gains or losses (realized/unrealized):
Included in earnings		(160,712	)		(161	)		144,010
Included in other comprehensive income		—			—			—
Transfers in and out of Level 3		—			—			—

Balance June 30, 2009	$	91,564		$	—		$	(29,973	)


	As of June 30, 2009
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
SIV securities	$	261,597	$	—	$	(170,033	)	$	91,564
LSV-sponsored mutual funds		4,000		612		—			4,612

	$	265,597	$	612	$	(170,033	)	$	96,176


	As of December 31, 2008
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
SIV securities	$	15,034	$	—	$	(9,321	)	$	5,713
LSV-sponsored mutual funds		4,000		—		(97	)		3,903
Other securities		1,971		—		(274	)		1,697

	$	21,005	$	—	$	(9,692	)	$	11,313


Asset Balances	As of September 30,				Percent Change
(In millions)	2008		2007		Percent Change
Private Banks:
Equity and fixed income programs	$	14,436	$	21,816	(34	%)
Collective trust fund programs		1,028		1,056	(3	%)
Liquidity funds		9,253		8,836	5	%

Total assets under management	$	24,717	$	31,708	(22	%)
Client assets under administration		12,301		15,655	(21	%)

Total assets	$	37,018	$	47,363	(22	%)
Investment Advisors:
Equity and fixed income programs		27,817		37,751	(26	%)
Collective trust fund programs		2,471		2,325	6	%
Liquidity funds		2,859		1,619	77	%

Total assets under management	$	33,147	$	41,695	(21	%)
Institutional Investors:
Equity and fixed income programs		39,775		43,504	(9	%)
Collective trust fund programs		1,001		907	10	%
Liquidity funds		3,930		4,342	(9	%)

Total assets under management	$	44,706	$	48,753	(8	%)
Investment Managers:
Equity and fixed income programs		10		24	(58	%)
Collective trust fund programs		6,453		6,814	(5	%)
Liquidity funds		699		360	94	%

Total assets under management	$	7,162	$	7,198	(1	%)
Client assets under administration		256,553		205,251	25	%

Total assets	$	263,715	$	212,449	24	%
Investments in New Businesses:
Equity and fixed income programs		704		907	(22	%)
Liquidity funds		115		40	188	%

Total assets under management	$	819	$	947	(14	%)
LSV:
Equity and fixed income programs	$	51,296	$	71,349	(28	%)
Consolidated:
Equity and fixed income programs (1)		134,038		175,351	(24	%)
Collective trust fund programs		10,953		11,102	(1	%)
Liquidity funds		16,856		15,197	11	%

Total assets under management	$	161,847	$	201,650	(20	%)
Client assets under administration (2)		268,854		220,906	22	%

Total assets	$	430,701	$	422,556	2	%


Asset Balances (In millions)	As of June 30,				Percent Change
Asset Balances (In millions)	2009		2008		Percent Change
Private Banks:
Equity and fixed income programs	$	10,892	$	18,163	(40	%)
Collective trust fund programs		1,176		955	23	%
Liquidity funds		7,581		8,345	(9	%)

Total assets under management	$	19,649	$	27,463	(28	%)
Client proprietary assets under administration		10,143		13,242	(23	%)

Total assets	$	29,792	$	40,705	(27	%)
Investment Advisors:
Equity and fixed income programs		21,705		31,938	(32	%)
Collective trust fund programs		2,621		2,259	16	%
Liquidity funds		2,469		2,410	2	%

Total assets under management	$	26,795	$	36,607	(27	%)
Institutional Investors:
Equity and fixed income programs		36,955		43,608	(15	%)
Collective trust fund programs		755		947	(20	%)
Liquidity funds		3,462		3,950	(12	%)

Total assets under management	$	41,172	$	48,505	(15	%)
Investment Managers:
Equity and fixed income programs		3		19	(84	%)
Collective trust fund programs		6,794		6,572	3	%
Liquidity funds		505		438	15	%

Total assets under management	$	7,302	$	7,029	4	%
Client proprietary assets under administration		213,930		228,722	(6	%)

Total assets	$	221,232	$	235,751	(6	%)
Investments in New Businesses:
Equity and fixed income programs		473		838	(44	%)
Liquidity funds		133		98	36	%

Total assets under management	$	606	$	936	(35	%)
LSV:
Equity and fixed income programs	$	40,210	$	57,692	(30	%)
Consolidated:
Equity and fixed income programs		110,238		152,258	(28	%)
Collective trust fund programs		11,346		10,733	6	%
Liquidity funds		14,150		15,241	(7	%)

Total assets under management	$	135,734	$	178,232	(24	%)
Client proprietary assets under administration		224,073		241,964	(7	%)

Total assets under management and administration	$	359,807	$	420,196	(14	%)


					Third Quarter 2008				Cumulative
	Par Value of Securities		Support Amount		Gross Charge		After-Tax Charge		Gross Charge		After-Tax Charge
Capital Support Agreement (1)	$	274,069	$	150,000	$	27,871	$	17,698	$	93,659	$	59,099
Capital Support Agreement (2)		74,286		20,000		7,289		4,629		18,765		11,841

Total	$	348,355	$	170,000	$	35,160	$	22,327	$	112,424	$	70,940


							Fourth Quarter to date November 6, 2008				Cumulative as of November 6, 2008
	Par Value of Securities		Support Amount		Required Collateral		Gross Charge		After-Tax Charge		Gross Charge		After-Tax Charge
Capital Support Agreement (1)	$	271,438	$	271,438	$	128,563	$	19,029	$	12,007	$	112,688	$	71,106
Capital Support Agreement (2)		73,710		25,000		25,000		1,344		848		20,109		12,688

Total	$	345,148	$	296,438	$	153,563	$	20,373	$	12,855	$	132,797	$	83,794


	Change in Stock-Based Compensation Expense
Stock-based compensation expense recognized in 2007 for grants that vested in December 2007	$	(10,075	)
Stock-based compensation cost recognized in 2008 for grants made in December 2007		4,985
Change in management’s estimate in 2008 of expected vesting of stock options		(2,413	)

	$	(7,503	)


	Change in Stock-Based Compensation Expense
Stock-based compensation cost recognized in 2009 for grants made in December 2008	$	3,545
Change in management’s estimate of expected vesting of stock options for grants that were outstanding at June 30, 2009		(5,733	)
Other items		(230	)

	$	(2,418	)


	Securities Issued by SIVs			Capital Support Agreements
Balance, January 1, 2008	$	—		$	(25,122	)
Total gains (losses) (realized/unrealized):
Included in earnings		(6,588	)		(87,301	)
Included in other comprehensive income		—			—
Purchases, issuances and settlements		15,321			—
Transfers in and out of Level 3		—			—

Balance, September 30, 2008	$	8,733		$	(112,423	)


Investment	Hypothetical Change In Value
Mutual Funds	$	2,090
Debt securities		6,511

	$	8,601


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
July 1 – 31, 2008	100,000	$	22.39	100,000	$	113,554,000
August 1 – 31, 2008	125,000		23.53	125,000		110,612,000
September 1 – 30, 2008	545,000		21.11	545,000		99,102,000

Total	770,000		21.67	770,000


Name of Director	Number of Votes For	Number of Votes Withheld
Richard B. Lieb	106,820,144	56,589,686
Carmen V. Romeo	106,076,810	57,333,021


Number of Votes For	Number of Votes Against	Number of Votes Withheld
161,060,227	2,028,186	321,418



~~10.23.3~~		~~Amendment No. 3 to Credit Agreement, dated as of November 5, 2008, among SEI Investments Company, JPMorgan Chase Bank, N.A., as administrative agent and certain financial institutions.~~

~~10.29.12~~		~~Twelfth Amendment, dated November 7, 2008, to Capital Support Agreement, dated December 3, 2007 between SEI Investments Company and SEI Liquid Asset Trust Prime Obligation Fund.~~

~~10.32~~		~~Amended and Restated Capital Support Agreement, dated November 5, 2008, between SEI Investments Company and SEI Daily Income Trust for and on behalf of its Prime Obligation Fund.~~

~~10.33~~		~~Letter of Credit, dated November 7, 2008 in favor of SEI Daily Income Trust Prime Obligation Fund.~~

31.1		Rule 13a-15(e)/15d-15(e) Certification of Chief Executive Officer.


31.2		Rule 13a-15(e)/15d-15(e) Certification of Chief Financial Officer.


	SEI INVESTMENTS COMPANY

Date: ~~November 10, 2008~~August 5, 2009	By:	/s/ Dennis J. McGonigle
			Dennis J. McGonigle
			Chief Financial Officer