Stockholders' Equity

12 Months Ended

Dec. 31, 2018

12. Stockholders’ Equity

Earnings per Share

For the years ended December 31, 2018, 2017 and 2016, earnings per share were computed as follows:


	2018		2017	2016

Net income attributable to Waddell & Reed Financial, Inc.	$	183,588	141,279	156,695

Weighted average shares outstanding, basic and diluted		80,468	83,573	82,668

Earnings per share, basic and diluted	$	2.28	1.69	1.90

Dividends

The Board of Directors declared dividends on our Class A common stock of $1.00 per share, $1.63 per share and $1.84 per share for the years ended December 31, 2018, 2017 and 2016, respectively. In December 2018, the Board of Directors declared a quarterly dividend on our Class A common stock of $0.25 per share payable on February 1, 2019 to stockholders of record as of January 11, 2019. As of December 31, 2018 and 2017, other current liabilities included $19.2 million and $20.7 million, respectively, for dividends payable to stockholders.

Common Stock Repurchases

The Board of Directors has authorized the repurchase of our Class A common stock in the open market and/or private purchases. The acquired shares may be used for corporate purposes, including as shares issued to employees in our share‑based compensation programs. There were 6,963,269 shares, 1,842,337 shares and 2,320,726 shares repurchased in the open market or privately during the years ended December 31, 2018, 2017 and 2016, respectively. The repurchased shares include; 729,882 shares, 402,337 shares and 423,726 shares repurchased from employees who elected to tender shares to cover their income tax withholdings with respect to vesting of stock awards during the years ended December 31, 2018, 2017 and 2016, respectively.

Accumulated Other Comprehensive Loss

The following tables summarize other comprehensive income (loss) activity for the years ended December 31, 2018 and 2017.


				Total
	Unrealized		Postretirement	accumulated
	gains (losses) on		benefits	other
	AFS investment		unrealized	comprehensive
Year ended December 31, 2018	securities		gains (losses)	income (loss)
	(in thousands)
Balance at December 31, 2017	$	145	379	524
Amount reclassified to retained earnings for ASUs adopted in 2018		(955)	107	(848)
Other comprehensive (loss) income before reclassification		(360)	736	376
Amount reclassified from accumulated other comprehensive income (loss)		373	(94)	279
Net current period other comprehensive (loss) income		(942)	749	(193)
Balance at December 31, 2018	$	(797)	1,128	331


			Change in
			valuation
			allowance for
			unrealized			Total
	Unrealized		gains		Postretirement	accumulated
	gains (losses)		(losses) on		benefits	other
	on investment		investment		unrealized	comprehensive
Year ended December 31, 2017	securities		securities		gains (losses)	income (loss)
	(in thousands)
Balance at December 31, 2016	$	(3,972)		(3,388)	603	(6,757)
Other comprehensive income (loss) before reclassification		4,039		3,743	(106)	7,676
Amount reclassified from accumulated other comprehensive income (loss)		78		(355)	(118)	(395)
Net current period other comprehensive income (loss)		4,117		3,388	(224)	7,281
Balance at December 31, 2017	$	145		—	379	524

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


		For the year ended December 31, 2018
			Tax
			(expense)		Statement of income
	Pre-tax		benefit	Net of tax	line item or retained earnings
	(in thousands)
Reclassifications included in net income or retained earnings for ASUs adopted in 2018:
Sponsored funds investment gains	$	1,295	(340)	955	Retained earnings
Losses on available for sale debt securities	$	(489)	116	(373)	Investment and other income (loss)
Amortization of postretirement benefits		122	(135)	(13)	Compensation and benefits and retained earnings
Total	$	928	(359)	569


	For the year ended December 31, 2017
			Tax
			benefit
	Pre-tax		(expense)	Net of tax	Statement of income line item
	(in thousands)
Reclassifications included in net income:
Sponsored funds investment losses	$	(124)	46	(78)	Investment and other income (loss)
Valuation allowance		—	355	355	Provision for income taxes
Amortization of postretirement benefits		184	(66)	118	Compensation and benefits
Total	$	60	335	395

- Definition

The combined disclosure used to capture the disclosure pertaining to an entity's earnings per share and disclosures related to accounts comprising shareholders' equity, including other comprehensive income. Includes: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables; effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

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