Stockholders' Equity

9 Months Ended

Sep. 30, 2019

Stockholders' Equity

Stockholders' Equity

10. Stockholders’ Equity

Earnings per Share

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

	Three months ended			Nine months ended
	September 30,			September 30,
	2019		2018	2019		2018
	(in thousands, except per share amounts)
Net income attributable to Waddell & Reed Financial, Inc.	$	33,054	46,305	$	99,056	137,120
Weighted average shares outstanding, basic and diluted		72,387	79,595		74,446	81,372
Earnings per share, basic and diluted	$	0.46	0.58	$	1.33	1.69

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 with a November 1, 2019 payment date and an October 11, 2019 record date. The total dividend paid on November 1, 2019 was $17.7 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 2,480,019 shares and 1,424,612 shares repurchased in the open market or privately during the three months ended September 30, 2019 and 2018, respectively, which includes 19 shares and 225 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. There were 6,849,238 shares and 4,519,546 shares repurchased in the open market or privately during the nine months ended September 30, 2019 and 2018, respectively, which includes 440,002 shares and 630,159 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 and nine months ended September 30, 2019 and September 30, 2018.

	For the three months ended September 30,
				Total
	Unrealized		Postretirement	accumulated
	gains (losses) on		benefits	other
	AFS investment		unrealized	comprehensive
	securities		gains (losses)	income (loss)
	(in thousands)
Balance at June 30, 2019	$	2,142	939	3,081
Other comprehensive income before reclassification		379	—	379
Amount reclassified from accumulated other comprehensive (loss)		(83)	(94)	(177)
Net current period other comprehensive income (loss)		296	(94)	202
Balance at September 30, 2019	$	2,438	845	3,283
Balance at June 30, 2018	$	(1,772)	440	(1,332)
Other comprehensive income before reclassification		218	—	218
Amount reclassified from accumulated other comprehensive income (loss)		44	(24)	20
Net current period other comprehensive income (loss)		262	(24)	238
Balance at September 30, 2018	$	(1,510)	416	(1,094)

	For the nine months ended September 30,
				Total
	Unrealized		Postretirement	accumulated
	gains (losses)		benefits	other
	on investment		unrealized	comprehensive
	securities		gains (losses)	income (loss)
	(in thousands)
Balance at December 31, 2018	$	(797)	1,128	331
Other comprehensive income before reclassification		3,413	—	3,413
Amount reclassified from accumulated other comprehensive (loss)		(178)	(283)	(461)
Net current period other comprehensive income (loss)		3,235	(283)	2,952
Balance at September 30, 2019	$	2,438	845	3,283
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		(744)	—	(744)
Amount reclassified from accumulated other comprehensive income (loss)		44	(70)	(26)
Net current period other comprehensive (loss) income		(1,655)	37	(1,618)
Balance at September 30, 2018	$	(1,510)	416	(1,094)

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

			Tax
For the three months ended September 30, 2019	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	$	109	(26)	83	Investment and other income
Amortization of postretirement benefits		124	(30)	94	Compensation and benefits
Total	$	233	(56)	177

			Tax
			benefit
For the three months ended September 30, 2018	Pre-tax		(expense)	Net of tax	Statement of income line item
	(in thousands)
Reclassifications included in net income:
Losses on available for sale debt securities	$	(58)	14	(44)	Investment and other income
Amortization of postretirement benefits		31	(7)	24	Compensation and benefits
Total	$	(27)	7	(20)

			Tax
For the nine months ended September 30, 2019	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	$	234	(56)	178	Investment and other income
Amortization of postretirement benefits		371	(88)	283	Compensation and benefits
Total	$	605	(144)	461

			Tax
			(expense)		Statement of income
For the nine months ended September 30, 2018	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		(58)	14	(44)	Investment and other income
Amortization of postretirement benefits		92	(129)	(37)	Compensation and benefits and retained earnings
Total	$	1,329	(455)	874