9.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,
	2017		2016	2017		2016
	(in thousands, except per share amounts)

Net income attributable to Waddell & Reed Financial, Inc.	$	23,307	33,695	$	56,363	70,663

Weighted average shares outstanding, basic and diluted		83,611	82,947		83,843	82,526

Earnings per share, basic and diluted	$	0.28	0.41	$	0.67	0.86

Dividends

On April 27, 2017, 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, 2017 paid on August 1, 2017. The total dividend paid was approximately $38.5 million and was included in other current liabilities as of June 30, 2017.

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 issuing shares to employees in our stock-based compensation programs.

There were 237,472 shares and 1,075,826 shares repurchased in the open market or privately during the three months ended June 30, 2017 and 2016, respectively, which includes 237,472 shares and 300,826 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 714,354 shares and 2,201,497 shares repurchased in the open market or privately during the six months ended June 30, 2017 and 2016, respectively, which includes 239,354 shares and 304,497 shares, respectively, repurchased from employees who tendered shares to cover their minimum income tax withholdings with respect to the vesting of stock awards during each of these two reporting periods.

Accumulated Other Comprehensive Loss

The following tables summarize other comprehensive loss activity for the three months ended June 30, 2017 and June 30, 2016.


			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, 2017	securities		securities		gains (losses)	income (loss)
	(in thousands)
Balance at March 31, 2017	$	(2,641)		(1,120)	(45,183)	(48,944)
Other comprehensive income before reclassification		722		619	—	1,341
Amount reclassified from accumulated other comprehensive income (loss)		(67)		(39)	727	621
Net current period other comprehensive income		655		580	727	1,962
Balance at June 30, 2017	$	(1,986)	$	(540)	(44,456)	(46,982)


			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
Six months ended June 30, 2017	securities		securities		gains (losses)	income (loss)
	(in thousands)
Balance at December 31, 2016	$	(3,972)		(3,388)	(45,969)	(53,329)
Other comprehensive income before reclassification		2,145		2,942	—	5,087
Amount reclassified from accumulated other comprehensive income (loss)		(159)		(94)	1,513	1,260
Net current period other comprehensive income		1,986		2,848	1,513	6,347
Balance at June 30, 2017	$	(1,986)	$	(540)	(44,456)	(46,982)


			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)

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


		For the three months ended June 30, 2017
			Tax
			(expense)
	Pre-tax		benefit	Net of tax	Statement of income line item
	(in thousands)
Reclassifications included in net income:
Sponsored funds investment gains	$	106	(39)	67	Investment and other income (loss)
Valuation allowance		—	39	39	Provision for income taxes
Amortization of pension and postretirement benefits		(1,156)	429	(727)	Underwriting and distribution expense and Compensation and related costs
Total	$	(1,050)	429	(621)


	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 six months ended June 30, 2017
			Tax
			(expense)
	Pre-tax		benefit	Net of tax	Statement of income line item
	(in thousands)
Reclassifications included in net income:
Sponsored funds investment gains	$	253	(94)	159	Investment and other income (loss)
Valuation allowance		—	94	94	Provision for income taxes
Amortization of pension and postretirement benefits		(2,407)	894	(1,513)	Underwriting and distribution expense and Compensation and related costs
Total	$	(2,154)	894	(1,260)


	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)