10.Stockholders’ Equity

Earnings per Share

The components of basic and diluted earnings per share were as follows:


	Three months ended			Six months ended
	June 30,			June 30,
	2016		2015	2016		2015
	(in thousands, except per share amounts)

Net income attributable to Waddell & Reed Financial, Inc.	$	33,695	67,445		70,663	134,558

Weighted average shares outstanding, basic and diluted		82,947	84,079		82,526	83,831

Earnings per share, basic and diluted	$	0.41	0.80		0.86	1.61

Dividends

On April 13, 2016, the Board of Directors approved a dividend on our common stock in the amount of $0.46 per share to stockholders of record on July 11, 2016 to be paid on August 1, 2016. The total dividend to be paid is approximately $38.1 million and is included in other current liabilities as of June 30, 2016.

Common Stock Repurchases

The Board of Directors has authorized the repurchase of our common stock in the open market and/or private purchases. The acquired shares may be used for corporate purposes, including shares issued to employees in our stock-based compensation programs.

There were 1,075,826 shares and 516,533 shares repurchased in the open market or privately during the three months ended June 30, 2016 and 2015, respectively, which includes 300,826 shares and 306,533 shares, respectively, repurchased from employees who tendered shares to cover their minimum income tax withholdings with respect to vesting of stock awards during these same reporting periods. There were 2,201,497 shares and 622,591 shares repurchased in the open market or privately during the six months ended June 30, 2016 and 2015, respectively, which includes 304,497 shares and 312,091 shares, respectively, repurchased from employees who tendered shares to cover their minimum income tax withholdings with respect to vesting of stock awards during each of these two periods.

Accumulated Other Comprehensive Income (Loss)

The following tables summarize other comprehensive income (loss) activity for the three and six months ended June 30, 2016 and June 30, 2015.


			Change in
			valuation
			allowance for
			unrealized		Pension and	Total
	Unrealized		gains		postretirement	accumulated
	gains (losses)		(losses) on		benefits	other
	on investment		investment		unrealized	comprehensive
Three months ended June 30, 2016	securities		securities		gains (losses)	income (loss)
	(in thousands)
Balance at March 31, 2016	$	(3,682)		(3,211)	(53,459)	(60,352)
Other comprehensive income before reclassification		1,554		919	—	2,473
Amount reclassified from accumulated other comprehensive income (loss)		(370)		(219)	960	371
Net current period other comprehensive income		1,184		700	960	2,844
Balance at June 30, 2016	$	(2,498)	$	(2,511)	(52,499)	(57,508)


			Change in
			valuation
			allowance for
			unrealized		Pension and	Total
	Unrealized		gains		postretirement	accumulated
	gains (losses)		(losses) on		benefits	other
	on investment		investment		unrealized	comprehensive
Three months ended June 30, 2015	securities		securities		gains (losses)	income (loss)
	(in thousands)
Balance at March 31, 2015	$	421		(809)	(47,302)	(47,690)
Other comprehensive loss before reclassification		(2,845)		(1,671)	—	(4,516)
Amount reclassified from accumulated other comprehensive income (loss)		(289)		(169)	933	475
Net current period other comprehensive income (loss)		(3,134)		(1,840)	933	(4,041)
Balance at June 30, 2015	$	(2,713)	$	(2,649)	(46,369)	(51,731)


			Change in
			valuation
			allowance for
			unrealized		Pension and	Total
	Unrealized		gains		postretirement	accumulated
	gains (losses)		(losses) on		benefits	other
	on investment		investment		unrealized	comprehensive
Six months ended June 30, 2016	securities		securities		gains (losses)	income (loss)
	(in thousands)
Balance at December 31, 2015	$	(3,729)		(3,240)	(54,536)	(61,505)
Other comprehensive income before reclassification		1,550		917	—	2,467
Amount reclassified from accumulated other comprehensive income (loss)		(319)		(188)	2,037	1,530
Net current period other comprehensive income		1,231		729	2,037	3,997
Balance at June 30, 2016	$	(2,498)	$	(2,511)	(52,499)	(57,508)


			Change in
			valuation
			allowance for
			unrealized		Pension and	Total
	Unrealized		gains		postretirement	accumulated
	(gains) losses		(losses) on		benefits	other
	on investment		investment		unrealized	comprehensive
Six months ended June 30, 2015	securities		securities		gains (losses)	income (loss)
	(in thousands)
Balance at December 31, 2014	$	(727)		(1,471)	(48,245)	(50,443)
Other comprehensive loss before reclassification		(222)		(158)	—	(380)
Amount reclassified from accumulated other comprehensive income (loss)		(1,764)		(1,020)	1,876	(908)
Net current period other comprehensive income (loss)		(1,986)		(1,178)	1,876	(1,288)
Balance at June 30, 2015	$	(2,713)	$	(2,649)	(46,369)	(51,731)

Reclassifications from accumulated other comprehensive income (loss) and included in net income are summarized in the tables that follow.


		For the three months ended June 30, 2016
			Tax
			(expense)
	Pre-tax		benefit	Net of tax	Statement of income line item
	(in thousands)
Reclassifications included in net income:
Sponsored funds investment gains	$	589	(219)	370	Investment and other income (loss)
Valuation allowance		—	219	219	Provision for income taxes
Amortization of pension and postretirement benefits		(1,526)	566	(960)	Underwriting and distribution expense and Compensation and related costs
Total	$	(937)	566	(371)


	For the three months ended June 30, 2015
			Tax
			(expense)
	Pre-tax		benefit	Net of tax	Statement of income line item
	(in thousands)
Reclassifications included in net income:
Realized gain on sale of sponsored investment securities	$	459	(170)	289	Investment and other income (loss)
Valuation allowance		—	169	169	Provision for income taxes
Amortization of pension and postretirement benefits		(1,330)	397	(933)	Underwriting and distribution expense and Compensation and related costs
Total	$	(871)	396	(475)


		For the six months ended June 30, 2016
			Tax
			(expense)
	Pre-tax		benefit	Net of tax	Statement of income line item
	(in thousands)
Reclassifications included in net income:
Sponsored funds investment gains	$	508	(189)	319	Investment and other income (loss)
Valuation allowance		—	188	188	Provision for income taxes
Amortization of pension and postretirement benefits		(3,222)	1,185	(2,037)	Underwriting and distribution expense and Compensation and related costs
Total	$	(2,714)	1,184	(1,530)


	For the six months ended June 30, 2015
			Tax
			(expense)
	Pre-tax		benefit	Net of tax	Statement of income line item
	(in thousands)
Reclassifications included in net income:
Realized gain on sale of sponsored investment securities	$	2,804	(1,040)	1,764	Investment and other income (loss)
Valuation allowance		—	1,020	1,020	Provision for income taxes
Amortization of pension and postretirement benefits		(2,827)	951	(1,876)	Underwriting and distribution expense and Compensation and related costs
Total	$	(23)	931	908