Stockholders' Equity

3 Months Ended

Mar. 31, 2019

10.Stockholders’ Equity

Earnings per Share

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


	Three months ended
	March 31,
	2019		2018

Net income attributable to Waddell & Reed Financial, Inc.	$	32,053	46,337

Weighted average shares outstanding, basic and diluted		76,299	83,111

Earnings per share, basic and diluted	$	0.42	0.56

Dividends

During the quarter, the Board of Directors declared a quarterly dividend on our Class A common stock in the amount of $0.25 per share payable on May 1, 2019 to stockholders of record on April 10, 2019. The total dividend paid on May 1, 2019 was $18.8 million.

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

There were 2,226,325 shares and 996,309 shares repurchased in the open market or privately during the three months ended March 31, 2019 and 2018, respectively, which includes 149,073 shares and 121,309 shares, respectively, repurchased from employees who tendered shares to cover income tax withholdings with respect to vesting of stock awards during these two reporting periods.

Accumulated Other Comprehensive Income (Loss)

The following tables summarize accumulated other comprehensive income (loss) activity for the three months ended March 31, 2019 and March 31, 2018.


				Total
	Unrealized		Postretirement	accumulated
	gains (losses) on		benefits	other
	AFS investment		unrealized	comprehensive
Three months ended March 31, 2019	securities		gains (losses)	income (loss)
	(in thousands)
Balance at December 31, 2018	$	(797)	1,128	331
Other comprehensive income before reclassification		1,753	—	1,753
Amount reclassified from accumulated other comprehensive income (loss)		(95)	(94)	(189)
Net current period other comprehensive income (loss)		1,658	(94)	1,564
Balance at March 31, 2019	$	861	1,034	1,895


				Total
	Unrealized		Postretirement	accumulated
	gains (losses) on		benefits	other
	AFS investment		unrealized	comprehensive
Three months ended March 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 before reclassification		(1,131)	—	(1,131)
Amount reclassified from accumulated other comprehensive income (loss)		—	(23)	(23)
Net current period other comprehensive (loss) income		(2,086)	84	(2,002)
Balance at March 31, 2018	$	(1,941)	463	(1,478)

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


		For the three months ended March 31, 2019
			Tax
	Pre-tax		expense	Net of tax	Statement of income line item
	(in thousands)
Reclassifications included in net income:
Gains on available for sale debt securities	$	125	(30)	95	Investment and other income
Amortization of postretirement benefits		124	(30)	94	Compensation and benefits
Total	$	249	(60)	189


	For the three months ended March 31, 2018
			Tax		Statement of income
	Pre-tax		expense	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
Amortization of postretirement benefits		30	(114)	(84)	Compensation and benefits and retained earnings
Total	$	1,325	(454)	871

- 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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