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Stockholders' Equity

12 Months Ended

Dec. 31, 2020

Stockholders' Equity

Stockholders' Equity

12. Stockholders’ Equity

Earnings per Share

For the years ended December 31, 2020, 2019 and 2018, earnings per share were computed as follows:


		2020			2019		2018

		(in thousands, except for per share amounts)
Net income attributable to Waddell & Reed Financial, Inc.		$	70,457		114,992		183,588

Weighted average shares outstanding, basic and diluted			64,974		73,299		80,468

Earnings per share, basic and diluted		$	1.08		1.57		2.28

Dividends

The Board of Directors declared dividends on our common stock of $1.00 per share, $1.00 per share and $1.00 per share for the years ended December 31, 2020, 2019 and 2018, respectively. During the fourth quarter of 2020, the Board of Directors declared a quarterly dividend on our common stock of $0.25 per share that was paid on February 1, 2021 to stockholders of record as of January 11, 2021. As of December 31, 2020 and 2019, other current liabilities included $15.6 million and $17.2 million, respectively, for dividends payable to stockholders.

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 share-based compensation programs. There were 7,995,730 shares, 9,164,564 shares and 6,963,269 shares repurchased in the open market or privately during the years ended December 31, 2020, 2019 and 2018, respectively. The repurchased shares include 554,062 shares, 548,132 shares and 729,882 shares repurchased from employees who tendered shares to cover their income tax withholdings with respect to vesting of stock awards during the years ended December 31, 2020, 2019 and 2018, respectively. The terms of the Merger Agreement restrict our ability to repurchase shares of our common

stock while the merger is pending; however, we may continue to repurchase shares of our common stock from employees to cover their tax withholdings in connection with the vesting of restricted shares.

Accumulated Other Comprehensive Income

The following tables summarize other comprehensive income activity for the years ended December 31, 2020 and 2019.


										Total
					Unrealized			Postretirement		accumulated
					gains (losses) on			benefits		other
					AFS investment			unrealized		comprehensive
Year ended December 31, 2020					securities			gains (losses)		income (loss)

					(in thousands)
Balance at December 31, 2019					$	2,521		713		3,234
Other comprehensive income (loss) before reclassification						823		(309)		514
Amount reclassified from accumulated other comprehensive income						(648)		(203)		(851)
Net current period other comprehensive income (loss)						175		(512)		(337)
Balance at December 31, 2020					$	2,696		201		2,897


										Total
					Unrealized			Postretirement		accumulated
					gains (losses) on			benefits		other
					AFS investment			unrealized		comprehensive
Year ended December 31, 2019					securities			gains (losses)		income (loss)

					(in thousands)
Balance at December 31, 2018					$	(797)		1,128		331
Other comprehensive income (loss) before reclassification						3,496		(36)		3,460
Amount reclassified from accumulated other comprehensive income						(178)		(379)		(557)
Net current period other comprehensive income (loss)						3,318		(415)		2,903
Balance at December 31, 2019					$	2,521		713		3,234

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


			For the year ended December 31, 2020
					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		$	853		(205)		648		Investment and other income
Amortization of postretirement benefits			269		(66)		203		Compensation and benefits
Total		$	1,122		(271)		851


		For the year ended December 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		$	234		(56)		178		Investment and other income
Amortization of postretirement benefits			495		(116)		379		Compensation and benefits
Total		$	729		(172)		557

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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