Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 14, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | WADDELL & REED FINANCIAL INC | |
Entity Central Index Key | 1,052,100 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 82,806,327 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Assets: | ||
Cash and cash equivalents | $ 529,784 | $ 558,495 |
Cash and cash equivalents - restricted | 22,064 | 66,880 |
Investment securities | 319,247 | 291,743 |
Receivables: | ||
Funds and separate accounts | 25,670 | 34,399 |
Customers and other | 153,322 | 220,660 |
Income taxes receivable | 4,377 | 10,594 |
Prepaid expenses and other current assets | 23,213 | 34,800 |
Total current assets | 1,077,677 | 1,217,571 |
Property and equipment, net | 105,812 | 105,434 |
Deferred sales commissions, net | 5,279 | 24,262 |
Goodwill and identifiable intangible assets | 152,618 | 158,118 |
Deferred income taxes | 26,833 | 32,692 |
Other non-current assets | 30,398 | 17,074 |
Total assets | 1,398,617 | 1,555,151 |
Liabilities: | ||
Accounts payable | 27,260 | 32,858 |
Payable to investment companies for securities | 41,213 | 113,648 |
Payable to third party brokers | 33,708 | 49,848 |
Payable to customers | 61,735 | 120,420 |
Accrued compensation | 75,606 | 69,335 |
Other current liabilities | 62,386 | 57,104 |
Total current liabilities | 301,908 | 443,213 |
Long-term debt | 189,562 | 189,432 |
Accrued pension and postretirement costs | 24,726 | 48,810 |
Other non-current liabilities | 26,572 | 27,241 |
Total liabilities | 542,768 | 708,696 |
Commitments and contingencies | ||
Redeemable noncontrolling interests | 10,372 | |
Stockholders' equity: | ||
Preferred stock-$1.00 par value: 5,000 shares authorized; none issued | ||
Class A Common stock-$0.01 par value: 250,000 shares authorized; 99,701 shares issued; 82,819 shares outstanding (82,850 at December 31, 2015) | 997 | 997 |
Additional paid-in capital | 293,134 | 331,611 |
Retained earnings | 1,151,376 | 1,141,608 |
Cost of 16,882 common shares in treasury (16,851 at December 31, 2015) | (542,011) | (566,256) |
Accumulated other comprehensive loss | (58,019) | (61,505) |
Total stockholders' equity | 845,477 | 846,455 |
Total liabilities, redeemable noncontrolling interests and stockholders' equity | $ 1,398,617 | $ 1,555,151 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Consolidated Balance Sheets | ||
Preferred stock-par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock-shares authorized | 5,000 | 5,000 |
Preferred stock-shares issued | 0 | 0 |
Class A Common stock-par value (in dollars per share) | $ 0.01 | $ 0.01 |
Class A Common stock-shares authorized | 250,000 | 250,000 |
Class A Common stock-shares issued | 99,701 | 99,701 |
Class A Common stock-shares outstanding | 82,819 | 82,850 |
Common shares in treasury | 16,882 | 16,851 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues: | ||||
Investment management fees | $ 138,745 | $ 175,218 | $ 424,403 | $ 543,237 |
Underwriting and distribution fees | 135,778 | 165,130 | 428,748 | 503,616 |
Shareholder service fees | 28,563 | 35,761 | 92,959 | 108,704 |
Total | 303,086 | 376,109 | 946,110 | 1,155,557 |
Operating expenses: | ||||
Underwriting and distribution | 152,999 | 189,065 | 508,080 | 580,247 |
Compensation and related costs (including share-based compensation of $12,425, $12,073, $38,573 and $35,880, respectively) | 40,214 | 46,157 | 151,495 | 152,481 |
General and administrative | 23,280 | 25,458 | 61,708 | 79,033 |
Subadvisory fees | 2,566 | 2,305 | 6,984 | 7,086 |
Depreciation | 4,541 | 4,117 | 13,163 | 12,215 |
Intangible asset impairment | 5,700 | 5,700 | ||
Total | 229,300 | 267,102 | 747,130 | 831,062 |
Operating income | 73,786 | 109,007 | 198,980 | 324,495 |
Investment and other income (loss) | 7,878 | (16,872) | (1,653) | (12,891) |
Interest expense | (2,792) | (2,765) | (8,336) | (8,296) |
Income before provision for income taxes | 78,872 | 89,370 | 188,991 | 303,308 |
Provision for income taxes | 24,067 | 41,312 | 63,146 | 120,692 |
Net income | 54,805 | 48,058 | 125,845 | 182,616 |
Net income attributable to redeemable noncontrolling interests | 978 | 1,355 | ||
Net income attributable to Waddell & Reed Financial, Inc. | $ 53,827 | $ 48,058 | $ 124,490 | $ 182,616 |
Net income per share attributable to Waddell and Reed Financial, Inc. common shareholders, basic and diluted: | ||||
Net income per share attributable to Waddell and Reed Financial, Inc. common shareholders, basic and diluted (in dollars per share) | $ 0.65 | $ 0.58 | $ 1.51 | $ 2.18 |
Weighted average shares outstanding, basic and diluted: | ||||
Weighted average shares outstanding, basic and diluted (in shares) | 82,834 | 83,469 | 82,629 | 83,709 |
Consolidated Statements of Inc5
Consolidated Statements of Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Consolidated Statements of Income | ||||
Compensation and related costs, share-based compensation | $ 12,425 | $ 12,073 | $ 38,573 | $ 35,880 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Consolidated Statements of Comprehensive Income | ||||
Net income | $ 54,805 | $ 48,058 | $ 125,845 | $ 182,616 |
Other comprehensive income: | ||||
Unrealized appreciation (depreciation) of available for sale investment securities during the period, net of income tax expense (benefit) of $1, $(5), $2, and $(0), respectively | (344) | (1,321) | 1,616 | (4,485) |
Pension and postretirement benefits, net of income tax expense (benefit) of $(167), $526, $1,018 and $1,477, respectively | (167) | 888 | 1,870 | 2,764 |
Comprehensive income | 54,294 | 47,625 | 129,331 | 180,895 |
Comprehensive income (loss) attributable to redeemable noncontrolling interests | 978 | 1,355 | ||
Comprehensive income attributable to Waddell & Reed Financial, Inc. | $ 53,316 | $ 47,625 | $ 127,976 | $ 180,895 |
Consolidated Statements of Com7
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Consolidated Statements of Comprehensive Income | ||||
Unrealized appreciation of available for sale investment securities during the period, income tax expense (benefit) | $ 1 | $ (5) | $ 2 | $ 0 |
Pension and postretirement benefits, income tax expense | $ (167) | $ 526 | $ 1,018 | $ 1,477 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders’ Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income(Loss) | Total |
Balance at the beginning of the period at Dec. 31, 2014 | $ (50,443) | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | $ 182,616 | |||||
Other comprehensive income | (1,721) | |||||
Balance at the end of the period at Sep. 30, 2015 | (52,164) | |||||
Balance at the beginning of the period at Jun. 30, 2015 | (51,731) | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 48,058 | |||||
Other comprehensive income | (433) | |||||
Balance at the end of the period at Sep. 30, 2015 | (52,164) | |||||
Balance at the beginning of the period at Dec. 31, 2015 | $ 997 | $ 331,611 | $ 1,141,608 | $ (566,256) | (61,505) | 846,455 |
Balance (in shares) at Dec. 31, 2015 | 99,701 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 124,490 | 124,490 | ||||
Recognition of equity compensation | 38,573 | 38,573 | ||||
Net issuance/forfeiture of nonvested shares | (72,229) | 72,229 | ||||
Dividends accrued, $1.38 per share | (114,722) | (114,722) | ||||
Tax impact of share-based payment arrangements | (4,821) | (4,821) | ||||
Repurchase of common stock | (47,984) | (47,984) | ||||
Other comprehensive income | 3,486 | 3,486 | ||||
Balance at the end of the period at Sep. 30, 2016 | $ 997 | 293,134 | 1,151,376 | (542,011) | (58,019) | 845,477 |
Balance (in shares) at Sep. 30, 2016 | 99,701 | |||||
Increase (Decrease) in Redeemable Noncontrolling Interest | ||||||
Adoption of consolidation guidance on January 1, 2016 - redeemable noncontrolling interests in sponsored funds | 14,330 | |||||
Net income | 1,355 | |||||
Net redemption of redeemable noncontrolling interests in sponsored funds | (5,313) | |||||
Balance at the end of the period at Sep. 30, 2016 | 10,372 | |||||
Balance at the beginning of the period at Jun. 30, 2016 | (57,508) | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 53,827 | |||||
Other comprehensive income | (511) | |||||
Balance at the end of the period at Sep. 30, 2016 | $ 997 | $ 293,134 | $ 1,151,376 | $ (542,011) | $ (58,019) | 845,477 |
Balance (in shares) at Sep. 30, 2016 | 99,701 | |||||
Balance at the end of the period at Sep. 30, 2016 | $ 10,372 |
Consolidated Statement of Stoc9
Consolidated Statement of Stockholders’ Equity (Parenthetical) - $ / shares | Jul. 20, 2016 | Sep. 30, 2016 |
Consolidated Statement of Stockholders’ Equity | ||
Dividends accrued, per share (in dollars per share) | $ 0.46 | $ 1.38 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 125,845 | $ 182,616 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 13,163 | 12,218 |
Write down of impaired assets | 5,700 | |
Amortization of deferred sales commissions | 21,842 | 34,251 |
Share-based compensation | 38,573 | 35,880 |
Excess tax benefits from share-based payment arrangements | (2,234) | (5,357) |
Investments gain, net | (13,834) | (2,799) |
Net purchases and sales or maturities of trading securities | (24,353) | 59 |
Deferred income taxes | 4,840 | (2,384) |
Net change in trading securities held by consolidated sponsored funds | (57,444) | |
Other | 525 | 17,965 |
Changes in assets and liabilities: | ||
Cash and cash equivalents - restricted | 44,816 | 36,990 |
Customer and other receivables | 67,338 | 44,219 |
Payable to investment companies for securities and payable to customers | (131,120) | (84,815) |
Receivables from funds and separate accounts | 8,729 | 5,782 |
Other assets | (2,826) | (14,771) |
Deferred sales commissions | (2,859) | (9,093) |
Accounts payable and payable to third party brokers | (21,738) | (24,622) |
Other liabilities | (8,904) | 4,434 |
Net cash provided by operating activities | 66,059 | 230,573 |
Cash flows from investing activities: | ||
Purchases of available for sale and equity method securities | (71,852) | (25,893) |
Proceeds from sales of available for sale and equity method securities | 148,373 | 30,363 |
Additions to property and equipment | (13,933) | (20,635) |
Net cash of sponsored funds on consolidation | 6,887 | |
Other | (194) | (2,200) |
Net cash provided by (used in) investing activities | 69,281 | (18,365) |
Cash flows from financing activities: | ||
Dividends paid | (114,736) | (108,249) |
Repurchase of common stock | (47,984) | (63,277) |
Net subscriptions from (redemptions and distributions to) redeemable noncontrolling interests in sponsored funds | (3,695) | |
Excess tax benefits from share-based payment arrangements | 2,234 | 5,357 |
Other | 130 | |
Net cash used in financing activities | (164,051) | (166,169) |
Net increase (decrease) in cash and cash equivalents | (28,711) | 46,039 |
Cash and cash equivalents at beginning of period | 558,495 | 566,621 |
Cash and cash equivalents at end of period | $ 529,784 | $ 612,660 |
Description of Business and Sig
Description of Business and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Description of Business and Significant Accounting Policies | |
Description of Business and Significant Accounting Policies | 1. Waddell & Reed Financial, Inc. and Subsidiaries Waddell & Reed Financial, Inc. and subsidiaries (hereinafter referred to as the “Company,” “we,” “our” and “us”) derive revenues from investment management and advisory services, investment product underwriting and distribution, and/or shareholder services administration provided to the Waddell & Reed Advisors group of mutual funds (the “Advisors Funds”), Ivy Funds (the “Ivy Funds”), Ivy Variable Insurance Portfolios (the “Ivy VIP”) and InvestEd Portfolios (“InvestEd”) (collectively, the Advisors Funds, Ivy Funds, Ivy VIP and InvestEd are referred to as the “Funds”), the Ivy Global Investors Fund SICAV (the “SICAV”) and its sub-funds (the “IGI Funds”), and institutional and separately managed accounts. The Funds and the institutional and separately managed accounts operate under various rules and regulations set forth by the United States Securities and Exchange Commission (the “SEC”). The IGI Funds are regulated by Luxembourg’s Commission de Surveillance du Secteur Financier as an undertaking for collective investment in transferable securities (“UCITS”). Services to the Funds are provided under investment management agreements, underwriting agreements, and shareholder servicing and accounting service agreements that set forth the fees to be charged for these services. Services to the IGI Funds are provided under investment management and distribution agreements. The majority of these agreements are subject to annual review and approval by each Fund’s board of trustees. Our revenues are largely dependent on the total value and composition of assets under management. Accordingly, fluctuations in financial markets and composition of assets under management can significantly impact our revenues and results of operations. Basis of Presentation We have prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures are adequate to enable a reasonable understanding of the information presented. The information in this Quarterly Report on Form 10-Q should be read in conjunction with Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2015 (the “2015 Form 10-K”). Certain amounts in the prior years’ financial statements have been reclassified for consistent presentation. The accompanying unaudited consolidated financial statements are prepared consistent with the accounting policies described in Note 1 to the consolidated financial statements included in our 2015 Form 10-K except as noted below. In our opinion, the accompanying unaudited consolidated financial statements reflect all adjustments (consisting of only a normal and recurring nature) necessary to present fairly our financial position at September 30, 2016, the results of operations and cash flows for the nine months ended September 30, 2016 and 2015 in conformity with accounting principles generally accepted in the United States. Investments Securities and Investments in Sponsored Funds Sponsored funds, which include the Funds, the IGI Funds and privately offered funds structured in the form of limited liability companies, are investments we have made for general corporate investment purposes and to provide seed capital for new investment products. The Company’s initial investment in a new investment product typically represents 100% ownership in that product. Sponsored funds are initially consolidated and are accounted for as trading securities. The Company has classified its investments in certain sponsored funds as either equity method investments (when the Company owns between 20% and 50% of the fund) or as available for sale investments (when the Company owns less than 20% of the fund) as described in Note 4. Investments held by our broker-dealer entities or certain investments that are anticipated to be purchased and sold on a more frequent basis are classified as trading. |
Cash and Cash Equivalents
Cash and Cash Equivalents | 9 Months Ended |
Sep. 30, 2016 | |
Cash and Cash Equivalents | |
Cash and Cash Equivalents | 2. Cash and cash equivalents include cash on hand and short-term investments. We consider all highly liquid investments with maturities upon acquisition of 90 days or less to be cash equivalents. Cash and cash equivalents - restricted represents cash held for the benefit of customers segregated in compliance with federal and other regulations. |
New Accounting Guidance
New Accounting Guidance | 9 Months Ended |
Sep. 30, 2016 | |
New Accounting Guidance | |
New Accounting Guidance | 3. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “ Revenue from Contracts with Customers, ” which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This standard also specifies the accounting for certain costs to obtain or fulfill a contract with a customer. This ASU will supersede much of the existing revenue recognition guidance in accounting principles generally accepted in the United States and is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period; early application is permitted for the first interim period within annual reporting periods beginning after December 15, 2016. ASU 2014-09 permits the use of either the retrospective or cumulative effect transition method. We have evaluated our population of contracts and concluded that the adoption of this ASU will have an immaterial impact on our consolidated financial statements and related disclosures. In January 2016, the FASB issued ASU 2016-01, “ Recognition and Measurement of Financial Assets and Financial Liabilities, ” which provides updated guidance on the recognition, measurement, presentation and disclosure of certain financial assets and financial liabilities. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We are evaluating the estimated impact the adoption of this ASU will have on our consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, “ Leases, ” which increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This ASU will be presented using a modified retrospective approach, which includes a number of optional practical expedients that entities may elect to apply. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early application permitted. We are evaluating the estimated impact the adoption of this ASU will have on our consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-07,“ Simplifying the Transition to the Equity Method of Accounting. ” The amendments in this ASU eliminate the requirement that when an investment qualifies for the use of equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively as if the equity method had been in effect during all previous periods that the investment had been held. ASU 2016-07 also requires that an entity that has an available for sale equity security that becomes qualified for the equity method recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. ASU 2016-07 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. We have concluded that the adoption of this ASU will have an immaterial impact on our consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-09, “ Improvements to Employee Share-Based Payment Accounting, ” which requires recognition of all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement and classification of excess tax benefits along with other income tax cash flows as an operating activity; allows an entity to either estimate the number of awards that are expected to vest or account for forfeitures when they occur; and permits withholding up to the maximum statutory tax rates in the applicable jurisdictions. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods, with early adoption permitted. Upon adoption of this standard on January 1, 2017, the Company will account for forfeitures when they occur. We do not expect a material impact on our consolidated financial statements and related disclosures upon adoption of this ASU. However, after the adoption date, recognition of excess tax benefits as income tax benefit and tax deficiencies as income tax expense in the income statement may result in increased volatility in our provision for income taxes and effective tax rate. In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments.” The ASU changes the impairment model for most financial assets, and will require the use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. ASU 2016-13 is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. We are evaluating the estimated impact the adoption of this ASU will have on our consolidated financial statements and related disclosures. In August 2016, the FASB issued ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments.” This ASU eliminates the diversity in practice related to the classification of certain cash receipts and payments for debt prepayment or extinguishment costs, the maturing of a zero coupon bond, the settlement of contingent liabilities arising from a business combination, proceeds from insurance settlements, distributions from certain equity method investees and beneficial interests obtained in a financial asset securitization. ASU 2016-15 designates the appropriate cash flow classification, including requirements to allocate certain components of these cash receipts and payments among operating, investing and financing activities. This ASU i s effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2017, with early adoption permitted. We are evaluating the estimated impact the adoption of ASU 2016-15 will have on our consolidated financial statements and related disclosures. |
Investment Securities
Investment Securities | 9 Months Ended |
Sep. 30, 2016 | |
Investment Securities | |
Investment Securities | 4. Investment securities at September 30, 2016 and December 31, 2015 are as follows: September 30, December 31, 2016 2015 (in thousands) Available for sale securities: Sponsored funds $ Sponsored privately offered funds Total available for sale securities Trading securities: Mortgage-backed securities Corporate bond Common stock Consolidated sponsored funds — Sponsored funds Total trading securities Equity method securities: Sponsored funds Sponsored privately offered funds Total equity method securities Total securities $ The following is a summary of the gross unrealized gains (losses) related to securities classified as available for sale at September 30, 2016: Amortized Unrealized Unrealized cost gains losses Fair value (in thousands) Available for sale securities: Sponsored funds $ Sponsored privately offered funds — $ The following is a summary of the gross unrealized gains (losses) related to securities classified as available for sale at December 31, 2015: Amortized Unrealized Unrealized cost gains losses Fair value (in thousands) Available for sale securities: Sponsored funds $ Sponsored privately offered funds — $ A summary of available for sale sponsored funds with fair values below carrying values at September 30, 2016 and December 31, 2015 is as follows: Less than 12 months 12 months or longer Total Unrealized Unrealized Unrealized September 30, 2016 Fair value losses Fair value losses Fair value losses (in thousands) Sponsored funds $ Less than 12 months 12 months or longer Total Unrealized Unrealized Unrealized December 31, 2015 Fair value losses Fair value losses Fair value losses (in thousands) Sponsored funds $ Based upon our assessment of these sponsored funds, the time frame the investments have been in a loss position and our intent to hold sponsored funds until they have recovered, we determined that a write-down was not necessary at September 30, 2016. The corporate bond accounted for as trading matures in 2018. Mortgage-backed securities accounted for as trading and held as of September 30, 2016 mature in 2022. Sponsored funds The Company has classified its investments in the Advisor Funds, Ivy Funds and IGI Funds as either trading, equity method investments (when the Company owns between 20% and 50% of the fund) or as available for sale investments (when the Company owns less than 20% of the fund). These entities do not meet the criteria of a variable interest entity (“VIE”) and are considered to be voting interest entities (“VOE”). The Company has determined the Advisor and Ivy Funds are VOEs because the structure of the investment products is such that the voting rights held by the equity holders provide for equality among equity investors. The Company has determined that the IGI Funds are VOEs as their legal structure and the powers of their equity investors prevent the IGI Funds from meeting characteristics of being a VIE. Sponsored privately offered funds The Company holds interests in privately offered funds structured in the form of limited liability companies. The members of these entities have the substantive ability to remove the Company as managing member or dissolve the entity upon a simple majority vote. These entities do not meet the criteria of a variable interest entity and are considered to be voting interest entities. Consolidated sponsored funds The following table details the balances related to consolidated sponsored funds at September 30, 2016, as well as the Company’s net interest in these funds: September 30, 2016 (in thousands) Cash $ Investments Other assets Other liabilities Redeemable noncontrolling interests Net interest in consolidated sponsored funds $ During the nine months ended September 30, 2016, we consolidated the Ivy Funds and IGI Funds in which we provided initial seed capital at the time of the fund’s formation. When we no longer have a controlling financial interest in a sponsored fund, it is deconsolidated from our financial statements. We deconsolidated $44.2 million of these investments from our consolidated balance sheet during the first quarter of 2016. There was no impact to the consolidated statement of income as a result of this deconsolidation. Accounting standards establish a framework for measuring fair value and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of the asset. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset. An individual investment’s fair value measurement is assigned a level based upon the observability of the inputs that are significant to the overall valuation. The three-level hierarchy of inputs is summarized as follows: · Level 1 – Investments are valued using quoted prices in active markets for identical securities. · Level 2 – Investments are valued using other significant observable inputs, including quoted prices in active markets for similar securities. · Level 3 – Investments are valued using significant unobservable inputs, including the Company’s own assumptions in determining the fair value of investments. Assets classified as Level 2 can have a variety of observable inputs. These observable inputs are collected and utilized, primarily by an independent pricing service, in pricing approaches evaluated differently depending upon the specific asset to determine a value. The fair value of municipal bonds is measured based on pricing models that take into account, among other factors, information received from market makers and broker-dealers, current trades, bid-wants lists, offerings, market movements, the callability of the bond, state of issuance and benchmark yield curves. The fair value of corporate bonds is measured using various techniques, which consider recently executed trades in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads and fundamental data relating to the issuer. Securities’ values classified as Level 3 are primarily determined through the use of a single quote (or multiple quotes) from dealers in the securities using proprietary valuation models. These quotes involve significant unobservable inputs, and thus, the related securities are classified as Level 3 securities. The following tables summarize our investment securities as of September 30, 2016 and December 31, 2015 that are recognized in our consolidated balance sheets using fair value measurements based on the differing levels of inputs. September 30, 2016 Level 1 Level 2 Level 3 Total (in thousands) Available for sale securities: Sponsored funds $ — — Sponsored privately offered funds measured at net asset value (1) — — — Trading securities: Mortgage-backed securities — — Corporate bonds — — Common stock — — Consolidated sponsored funds — Sponsored funds — — Equity method securities: (2) Sponsored funds — — Sponsored privately offered funds measured at net asset value (1) — — — Total $ — December 31, 2015 Level 1 Level 2 Level 3 Total (in thousands) Available for sale securities: Sponsored funds $ — — Sponsored privately offered funds measured at net asset value (1) — — — Trading securities: Mortgage-backed securities — — Corporate bonds — — Common stock — — Sponsored funds — — Equity method securities: (2) Sponsored funds — — Sponsored privately offered funds measured at net asset value (1) — — — Total $ — (1) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets. (2) Substantially all of the Company’s equity method investments are investment companies that record their underlying investments at fair value. Fair value is measured using the Company’s share of the investee’s underlying net income or loss, which is predominantly representative of fair value adjustments in the investments held by the investee. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | 5. In January 2016, the Company implemented an economic hedge program that uses total return swap contracts to hedge market risk with its investments in certain sponsored funds. As of September 30, 2016, we had 100% of our investments in sponsored funds, excluding our available for sale portfolio, hedged, 87% of which were hedged with total return swap contracts. Certain of the consolidated sponsored funds may utilize derivative financial instruments within their portfolios in pursuit of their stated investment objectives. We do not hedge for speculative purposes. As of September 30, 2016, excluding derivative financial instruments held in certain consolidated sponsored funds, the Company was party to three total return swap contracts with a combined notional value of $160.5 million. These derivative instruments are not designated as hedges for accounting purposes. Changes in fair value of the total return swap contracts are recognized in investment and other income (loss), net on the Company’s consolidated statement of income. The Company posted $7.0 million in cash collateral with the counterparties of the total return swap contracts as of September 30, 2016. The cash collateral is included in customers and other receivables on the Company’s consolidated balance sheet. The Company does not record its fair value in derivative transactions against the posted collateral. The following table presents the fair value of the derivative financial instruments, excluding derivative financial instruments held in certain consolidated sponsored funds as of September 30, 2016: September 30, 2016 Balance sheet location Fair value (in thousands) Total return swap contracts Other current liabilities $ The following is a summary of net losses recognized in income for the three and nine months ended September 30, 2016: Income statement Three months ended Nine months ended location September 30, 2016 September 30, 2016 (in thousands) (in thousands) Total return swap contracts Investment and other income (loss) $ $ |
Goodwill and Identifiable Intan
Goodwill and Identifiable Intangible Assets | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Identifiable Intangible Assets | |
Goodwill and Identifiable Intangible Assets | 6. Goodwill represents the excess of purchase price over the tangible assets and identifiable intangible assets of an acquired business. Our goodwill is not deductible for tax purposes. Goodwill and identifiable intangible assets (all considered indefinite lived) at September 30, 2016 and December 31, 2015 are as follows: September 30, December 31, 2016 2015 (in thousands) Goodwill $ Mutual fund management advisory contracts Mutual fund management subadvisory contracts Other — Total identifiable intangible assets Total $ We performed a review of the intangible asset associated with the subadvisory agreement during the third quarter of 2016 due to a recent decline in the related assets under management. The decline can be attributed to a realignment of fund offerings and additional asset reductions. We recorded an impairment charge of $5.7 million in the third quarter of 2016 to this intangible asset as a result of the reduction in assets and associated cash flows, and reduced the associated deferred tax liability by $2.1 million. |
Indebtedness
Indebtedness | 9 Months Ended |
Sep. 30, 2016 | |
Indebtedness | |
Indebtedness | 7. Debt is reported at its carrying amount in the consolidated balance sheet. The fair value of the Company’s outstanding indebtedness is approximately $204.5 million at September 30, 2016 compared to the carrying value net of debt issuance costs of $189.6 million. Fair value is calculated based on Level 2 inputs. |
Income Tax Uncertainties
Income Tax Uncertainties | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Uncertainties | |
Income Tax Uncertainties | 8. As of January 1, 2016 and September 30, 2016, the Company had unrecognized tax benefits, including penalties and interest, of $11.9 million ($8.7 million net of federal benefit) and $11.9 million ($8.5 million net of federal benefit), respectively, that if recognized, would impact the Company’s effective tax rate. In the accompanying consolidated balance sheet, unrecognized tax benefits that are not expected to be settled within the next 12 months are included in other liabilities; unrecognized tax benefits that are expected to be settled within the next 12 months are included in income taxes payable; unrecognized tax benefits that reduce a net operating loss, similar tax loss, or tax credit carryforward are presented as a reduction to noncurrent deferred income taxes. The Company’s accounting policy with respect to interest and penalties related to income tax uncertainties is to classify these amounts as income taxes. As of January 1, 2016, the total amount of accrued interest and penalties related to uncertain tax positions recognized in the consolidated balance sheet was $3.4 million ($2.8 million net of federal benefit). The total amount of penalties and interest, net of federal benefit, related to income tax uncertainties recognized in the statement of income for the nine month period ended September 30, 2016 was $0.3 million. The total amount of accrued penalties and interest related to uncertain tax positions at September 30, 2016 of $3.8 million ($3.1 million net of federal benefit) is included in the total unrecognized tax benefits described above. In the ordinary course of business, many transactions occur for which the ultimate tax outcome is uncertain. In addition, respective tax authorities periodically audit our income tax returns. These audits examine our significant tax filing positions, including the timing and amounts of deductions and the allocation of income among tax jurisdictions. The Company is currently under federal audit for the 2014 tax year. The 2013 and 2015 federal income tax returns are open tax years that remain subject to potential future audit. State income tax returns for all years after 2011 and, in certain states, income tax returns for 2011, are subject to potential future audit by tax authorities in the Company’s major state tax jurisdictions. |
Pension Plan and Postretirement
Pension Plan and Postretirement Benefits Other Than Pension | 9 Months Ended |
Sep. 30, 2016 | |
Pension Plan and Postretirement Benefits Other Than Pension | |
Pension Plan and Postretirement Benefits Other Than Pension | 9. We provide a noncontributory retirement plan that covers substantially all employees and certain vested employees of our former parent company (the “Pension Plan”). Benefits payable under the Pension Plan are based on employees’ years of service and compensation during the final 10 years of employment. We also sponsor an unfunded defined benefit postretirement medical plan that covers substantially all employees, as well as our advisors, who are independent contractors. The medical plan is contributory with participant contributions adjusted annually. The medical plan does not provide for post age 65 benefits with the exception of a small group of employees that were grandfathered when such plan was established. During the third quarter of 2016, the Company amended the plan to discontinue the availability of coverage for any individuals who retire after December 31, 2016. Qualified employees who retire on or before December 31, 2016 may continue to participate in retiree coverage under the plan. The plan amendment resulted in an $8.5 million curtailment gain, recorded as part of net other postretirement benefit costs, summarized in the table below. The components of net periodic pension and other postretirement costs related to these plans were as follows: Other Other Pension Benefits Postretirement Benefits Pension Benefits Postretirement Benefits Three months ended September 30, Three months ended September 30, Nine months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 2016 2015 2016 2015 (in thousands) (in thousands) Components of net periodic benefit cost: Service cost Interest cost Expected return on plan assets — — — — Actuarial (gain) loss amortization — — Prior service cost amortization Transition obligation amortization — — — — Curtailment gain — — — — — — Total (1) $ (1) For the three months ended September 30, 2016, $(1.5) million and $(3.2) million of net periodic pension and other postretirement benefit costs were included in compensation and related costs and underwriting and distribution expense, respectively. For the nine months ended September 30, 2016, $3.1 million and $(0.3) million of net periodic pension and other postretirement benefit costs were included in compensation and related costs and underwriting and distribution expense, respectively. During the first quarter of 2016, we contributed $20.0 million to the Pension Plan. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity | |
Stockholders' Equity | 10. 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, 2016 2015 2016 2015 (in thousands, except per share amounts) Net income attributable to Waddell & Reed Financial, Inc. $ Weighted average shares outstanding, basic and diluted Earnings per share, basic and diluted $ Dividends On July 20, 2016, the Board of Directors approved a dividend on our common stock in the amount of $0.46 per share to stockholders of record on October 11, 2016 to be paid on November 1, 2016. The total dividend to be paid is approximately $38.1 million and is included in other current liabilities as of September 30, 2016. 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 28,537 shares and 812,764 shares repurchased in the open market or privately during the three months ended September 30, 2016 and 2015, respectively, which includes 28,537 shares and 108 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 2,230,034 shares and 1,435,355 shares repurchased in the open market or privately during the nine months ended September 30, 2016 and 2015, respectively, which includes 333,034 shares and 312,199 shares, respectively, repurchased from employees who tendered shares to cover their minimum income tax withholdings with respect to vesting of stock awards during each of these two periods. Accumulated Other Comprehensive Income (Loss) The following tables summarize other comprehensive income (loss) activity for the three and nine months ended September 30, 2016 and September 30, 2015. 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 September 30, 2016 securities securities gains (losses) income (loss) (in thousands) Balance at June 30, 2016 $ Other comprehensive income (loss) before reclassification Amount reclassified from accumulated other comprehensive income (loss) Net current period other comprehensive loss Balance at September 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 September 30, 2015 securities securities gains (losses) income (loss) (in thousands) Balance at June 30, 2015 $ Other comprehensive loss before reclassification — Amount reclassified from accumulated other comprehensive income Net current period other comprehensive income (loss) Balance at September 30, 2015 $ $ Change in valuation allowance for unrealized Pension and Total Unrealized gains postretirement accumulated gains (losses) (losses) on benefits other on investment investment unrealized comprehensive Nine months ended September 30, 2016 securities securities gains (losses) income (loss) (in thousands) Balance at December 31, 2015 $ Other comprehensive income (loss) before reclassification Amount reclassified from accumulated other comprehensive income (loss) Net current period other comprehensive income Balance at September 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 Nine months ended September 30, 2015 securities securities gains (losses) income (loss) (in thousands) Balance at December 31, 2014 $ Other comprehensive loss before reclassification — Amount reclassified from accumulated other comprehensive income (loss) Net current period other comprehensive income (loss) Balance at September 30, 2015 $ $ Reclassifications from accumulated other comprehensive income (loss) and included in net income are summarized in the tables that follow. For the three months ended September 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 $ Investment and other income (loss) Valuation allowance — Provision for income taxes Amortization of pension and postretirement benefits Underwriting and distribution expense and Compensation and related costs Total $ For the three months ended September 30, 2015 Tax (expense) Pre-tax benefit Net of tax Statement of income line item (in thousands) Reclassifications included in net income: Realized loss on sale of sponsored investment securities $ Investment and other income (loss) Valuation allowance — Provision for income taxes Amortization of pension and postretirement benefits Underwriting and distribution expense and Compensation and related costs Total $ For the nine months ended September 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 $ Investment and other income (loss) Valuation allowance — Provision for income taxes Amortization of pension and postretirement benefits Underwriting and distribution expense and Compensation and related costs Total $ For the nine months ended September 30, 2015 Tax (expense) Pre-tax benefit Net of tax Statement of income line item (in thousands) Reclassifications included in net income: Realized gain on sale of sponsored investment securities $ Investment and other income (loss) Valuation allowance — Provision for income taxes Amortization of pension and postretirement benefits Underwriting and distribution expense and Compensation and related costs Total $ |
Redeemable noncontrolling Inter
Redeemable noncontrolling Interests | 9 Months Ended |
Sep. 30, 2016 | |
Redeemable noncontrolling Interests. | |
Redeemable noncontrolling Interests | 11. The earnings related to redeemable noncontrolling interests included in net income for the three and nine months ended September 30, 2016 were $1.0 million and $1.4 million, respectively. Noncontrolling interests in consolidated sponsored funds may fluctuate from period to period and are impacted by changes in the Company’s percentage of ownership in sponsored funds, changes in third party investment in sponsored funds and market volatility in the sponsored funds’ underlying investments. The following table details a rollforward of redeemable noncontrolling interests in consolidated sponsored funds for the nine months ended September 30, 2016: Nine months ended September 30, 2016 (in thousands) Redeemable noncontrolling interests in sponsored funds upon adoption of new consolidation accounting guidance on January 1, 2016 $ Redeemable noncontrolling interests in sponsored funds consolidated during the period Redeemable noncontrolling interests ownership change during the period Redeemable noncontrolling interests deconsolidation Net income attributable to redeemable noncontrolling interests Ending balance of redeemable noncontrolling interest in consolidated sponsored funds $ |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Contingencies | |
Contingencies | 12. The Company is involved from time to time in various legal proceedings, regulatory investigations and claims incident to the normal conduct of business, which may include proceedings that are specific to us and others generally applicable to business practices within the industries in which we operate. A substantial legal liability or a significant regulatory action against us could have an adverse effect on our business, financial condition and on the results of operations in a particular quarter or year. The Company establishes reserves for litigation and similar matters when those matters present material loss contingencies that management determines to be both probable and reasonably estimable in accordance with ASC 450, "Contingencies." These amounts are not reduced by amounts that may be recovered under insurance or claims against third parties, but undiscounted receivables from insurers or other third parties may be accrued separately. The Company regularly revises such accruals in light of new information. The Company discloses the nature of the contingency when management believes it is reasonably possible the outcome may be significant to the Company’s consolidated financial statements and, where feasible, an estimate of the possible loss. For purposes of our litigation contingency disclosures, “significant” includes material matters as well as other items that management believes should be disclosed. Management’s judgment is required related to contingent liabilities because the outcomes are difficult to predict. In an action filed on February 18, 2016 in the United States District Court for the District of Kansas, Saket Kapor [sic], Peter Brockett and Hieu Phan v. Ivy Investment Management Company, et. al. (Case No. 2:16-cv-02106-JWL-TJJ), the Company's registered investment advisor subsidiaries, the trustees of two of the Company’s affiliated mutual funds, and an officer of a Company subsidiary were sued in a putative derivative action by three mutual fund shareholders alleging breach of fiduciary duty and breach of contract claims relating to investments held in the affiliated mutual funds. On behalf of the mutual funds, the plaintiffs seek monetary damages and demand a jury trial. On April 18, 2016, the plaintiffs dismissed the complaint in the United States District Court for the District of Kansas and filed a similar complaint against the same defendants, regarding the same substantive allegations and causes of action, in the District Court of Johnson County, Kansas (Case No. I6CV02338 Div.4). On April 25, 2016, the plaintiffs voluntarily dismissed the officer of a Company subsidiary as a defendant. On June 30, 2016, all remaining defendants filed separate motions to dismiss the complaint. On August 22, 2016, the plaintiffs filed an amended complaint that removed Saket Kapor [sic] and Peter Brockett as plaintiffs and in their stead added Audrey Ohman as a named plaintiff, but otherwise did not change the substantive allegations raised in the initial complaint. On September 14, 2016, all remaining defendants filed separate motions to dismiss the amended complaint. Oral arguments in the matter are scheduled for November 10, 2016. To date, no discovery has taken place. In the opinion of management, the ultimate resolution and outcome of this matter is uncertain. Given the preliminary nature of the proceedings and the Company's dispute over the merits of the claims, the Company is unable to estimate a range of reasonably possible loss, if any, that such matter may represent. While the ultimate resolution of this matter is uncertain, an adverse determination against the Company could have a material adverse impact on our business, financial condition and results of operations. The Company has reviewed all other legal and regulatory matters and as a result of such process provided an aggregate accrual for such matters in the amount of $3.0 million at September 30, 2016. |
Description of Business and S23
Description of Business and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Description of Business and Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation We have prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures are adequate to enable a reasonable understanding of the information presented. The information in this Quarterly Report on Form 10-Q should be read in conjunction with Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2015 (the “2015 Form 10-K”). Certain amounts in the prior years’ financial statements have been reclassified for consistent presentation. The accompanying unaudited consolidated financial statements are prepared consistent with the accounting policies described in Note 1 to the consolidated financial statements included in our 2015 Form 10-K except as noted below. In our opinion, the accompanying unaudited consolidated financial statements reflect all adjustments (consisting of only a normal and recurring nature) necessary to present fairly our financial position at September 30, 2016, the results of operations and cash flows for the nine months ended September 30, 2016 and 2015 in conformity with accounting principles generally accepted in the United States. |
Investment Securities and Investments in Sponsored Funds | Investments Securities and Investments in Sponsored Funds Sponsored funds, which include the Funds, the IGI Funds and privately offered funds structured in the form of limited liability companies, are investments we have made for general corporate investment purposes and to provide seed capital for new investment products. The Company’s initial investment in a new investment product typically represents 100% ownership in that product. Sponsored funds are initially consolidated and are accounted for as trading securities. The Company has classified its investments in certain sponsored funds as either equity method investments (when the Company owns between 20% and 50% of the fund) or as available for sale investments (when the Company owns less than 20% of the fund) as described in Note 4. Investments held by our broker-dealer entities or certain investments that are anticipated to be purchased and sold on a more frequent basis are classified as trading. |
Investment Securities (Tables)
Investment Securities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Investment Securities | |
Schedule of investment securities | September 30, December 31, 2016 2015 (in thousands) Available for sale securities: Sponsored funds $ Sponsored privately offered funds Total available for sale securities Trading securities: Mortgage-backed securities Corporate bond Common stock Consolidated sponsored funds — Sponsored funds Total trading securities Equity method securities: Sponsored funds Sponsored privately offered funds Total equity method securities Total securities $ |
Summary of the gains (losses) related to securities | The following is a summary of the gross unrealized gains (losses) related to securities classified as available for sale at September 30, 2016: Amortized Unrealized Unrealized cost gains losses Fair value (in thousands) Available for sale securities: Sponsored funds $ Sponsored privately offered funds — $ The following is a summary of the gross unrealized gains (losses) related to securities classified as available for sale at December 31, 2015: Amortized Unrealized Unrealized cost gains losses Fair value (in thousands) Available for sale securities: Sponsored funds $ Sponsored privately offered funds — $ |
Summary of available for sale sponsored funds with fair values below carrying values | Less than 12 months 12 months or longer Total Unrealized Unrealized Unrealized September 30, 2016 Fair value losses Fair value losses Fair value losses (in thousands) Sponsored funds $ Less than 12 months 12 months or longer Total Unrealized Unrealized Unrealized December 31, 2015 Fair value losses Fair value losses Fair value losses (in thousands) Sponsored funds $ |
Summary of balances related to consolidated sponsored funds as well the company’s net interest in these funds | September 30, 2016 (in thousands) Cash $ Investments Other assets Other liabilities Redeemable noncontrolling interests Net interest in consolidated sponsored funds $ |
Derivative Financial Instrume25
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Financial Instruments | |
Schedule of fair value of derivative financial instruments, excluding derivative financial instruments held in certain consolidated sponsored funds | September 30, 2016 Balance sheet location Fair value (in thousands) Total return swap contracts Other current liabilities $ |
Schedule of net losses recognized in income of derivative financial instrument | Income statement Three months ended Nine months ended location September 30, 2016 September 30, 2016 (in thousands) (in thousands) Total return swap contracts Investment and other income (loss) $ $ |
Goodwill and Identifiable Int26
Goodwill and Identifiable Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Identifiable Intangible Assets | |
Schedule of goodwill and identifiable intangible assets | September 30, December 31, 2016 2015 (in thousands) Goodwill $ Mutual fund management advisory contracts Mutual fund management subadvisory contracts Other — Total identifiable intangible assets Total $ |
Pension Plan and Postretireme27
Pension Plan and Postretirement Benefits Other Than Pension (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Pension Plan and Postretirement Benefits Other Than Pension | |
Schedule of components of net periodic pension and other postretirement costs | Other Other Pension Benefits Postretirement Benefits Pension Benefits Postretirement Benefits Three months ended September 30, Three months ended September 30, Nine months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 2016 2015 2016 2015 (in thousands) (in thousands) Components of net periodic benefit cost: Service cost Interest cost Expected return on plan assets — — — — Actuarial (gain) loss amortization — — Prior service cost amortization Transition obligation amortization — — — — Curtailment gain — — — — — — Total (1) $ (1) For the three months ended September 30, 2016, $(1.5) million and $(3.2) million of net periodic pension and other postretirement benefit costs were included in compensation and related costs and underwriting and distribution expense, respectively. For the nine months ended September 30, 2016, $3.1 million and $(0.3) million of net periodic pension and other postretirement benefit costs were included in compensation and related costs and underwriting and distribution expense, respectively. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity | |
Components of basic and diluted earnings per share | Three months ended Nine months ended September 30, September 30, 2016 2015 2016 2015 (in thousands, except per share amounts) Net income attributable to Waddell & Reed Financial, Inc. $ Weighted average shares outstanding, basic and diluted Earnings per share, basic and diluted $ |
Summary of other comprehensive income (loss) activity | 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 September 30, 2016 securities securities gains (losses) income (loss) (in thousands) Balance at June 30, 2016 $ Other comprehensive income (loss) before reclassification Amount reclassified from accumulated other comprehensive income (loss) Net current period other comprehensive loss Balance at September 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 September 30, 2015 securities securities gains (losses) income (loss) (in thousands) Balance at June 30, 2015 $ Other comprehensive loss before reclassification — Amount reclassified from accumulated other comprehensive income Net current period other comprehensive income (loss) Balance at September 30, 2015 $ $ Change in valuation allowance for unrealized Pension and Total Unrealized gains postretirement accumulated gains (losses) (losses) on benefits other on investment investment unrealized comprehensive Nine months ended September 30, 2016 securities securities gains (losses) income (loss) (in thousands) Balance at December 31, 2015 $ Other comprehensive income (loss) before reclassification Amount reclassified from accumulated other comprehensive income (loss) Net current period other comprehensive income Balance at September 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 Nine months ended September 30, 2015 securities securities gains (losses) income (loss) (in thousands) Balance at December 31, 2014 $ Other comprehensive loss before reclassification — Amount reclassified from accumulated other comprehensive income (loss) Net current period other comprehensive income (loss) Balance at September 30, 2015 $ $ |
Summary of reclassifications from accumulated other comprehensive income (loss) and included in net income | For the three months ended September 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 $ Investment and other income (loss) Valuation allowance — Provision for income taxes Amortization of pension and postretirement benefits Underwriting and distribution expense and Compensation and related costs Total $ For the three months ended September 30, 2015 Tax (expense) Pre-tax benefit Net of tax Statement of income line item (in thousands) Reclassifications included in net income: Realized loss on sale of sponsored investment securities $ Investment and other income (loss) Valuation allowance — Provision for income taxes Amortization of pension and postretirement benefits Underwriting and distribution expense and Compensation and related costs Total $ For the nine months ended September 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 $ Investment and other income (loss) Valuation allowance — Provision for income taxes Amortization of pension and postretirement benefits Underwriting and distribution expense and Compensation and related costs Total $ For the nine months ended September 30, 2015 Tax (expense) Pre-tax benefit Net of tax Statement of income line item (in thousands) Reclassifications included in net income: Realized gain on sale of sponsored investment securities $ Investment and other income (loss) Valuation allowance — Provision for income taxes Amortization of pension and postretirement benefits Underwriting and distribution expense and Compensation and related costs Total $ |
Redeemable Noncontrolling Int29
Redeemable Noncontrolling Interests (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Redeemable noncontrolling Interests. | |
Schedule of rollforward of redeemable noncontrolling interests in consolidated sponsored funds | Nine months ended September 30, 2016 (in thousands) Redeemable noncontrolling interests in sponsored funds upon adoption of new consolidation accounting guidance on January 1, 2016 $ Redeemable noncontrolling interests in sponsored funds consolidated during the period Redeemable noncontrolling interests ownership change during the period Redeemable noncontrolling interests deconsolidation Net income attributable to redeemable noncontrolling interests Ending balance of redeemable noncontrolling interest in consolidated sponsored funds $ |
Description of Business and S30
Description of Business and Significant Accounting Policies (Details) | 9 Months Ended |
Sep. 30, 2016 | |
Description of Business and Significant Accounting Policies | |
Ownership interest of seed investment in new product (as a percent) | 100.00% |
Investment Securities - Investm
Investment Securities - Investment securities and summary of the gains (losses) related to securities (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Available for sale securities: | ||
Amortized cost | $ 129,670 | $ 47,300 |
Unrealized gains | 1,011 | 759 |
Unrealized losses | (5,317) | (6,682) |
Fair value | 125,364 | 41,377 |
Trading securities: | ||
Fair value | 153,508 | 29,813 |
Equity method securities | ||
Equity method securities | 40,375 | 220,553 |
Total investment securities | 319,247 | 291,743 |
Sponsored funds | ||
Available for sale securities: | ||
Amortized cost | 129,406 | 46,800 |
Unrealized gains | 723 | 434 |
Unrealized losses | (5,317) | (6,682) |
Fair value | 124,812 | 40,552 |
Trading securities: | ||
Fair value | 29,597 | 29,701 |
Equity method securities | ||
Equity method securities | 37,100 | 217,380 |
Sponsored privately offered funds measured at net asset value | ||
Available for sale securities: | ||
Amortized cost | 264 | 500 |
Unrealized gains | 288 | 325 |
Fair value | 552 | 825 |
Equity method securities | ||
Equity method securities | 3,275 | 3,173 |
Mortgage-backed securities | ||
Trading securities: | ||
Fair value | 15 | 20 |
Corporate bonds | ||
Trading securities: | ||
Fair value | 3 | 5 |
Common Stock | ||
Trading securities: | ||
Fair value | 101 | $ 87 |
Consolidated Sponsored Funds | ||
Trading securities: | ||
Fair value | $ 123,792 |
Investment Securities - Availab
Investment Securities - Available for sale sponsored funds with fair values below carrying values (Details) - Sponsored funds - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Fair value | ||
Less than 12 months | $ 40,736 | $ 3,476 |
12 months or longer | 34,863 | 33,619 |
Total temporarily impaired securities | 75,599 | 37,095 |
Unrealized losses | ||
Less than 12 months | (528) | (166) |
12 months or longer | (4,789) | (6,516) |
Total Unrealized losses on temporarily impaired securities | $ (5,317) | $ (6,682) |
Investment Securities - Consoli
Investment Securities - Consolidated sponsored funds (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 | |
Investment Securities | |||||
Cash | $ 529,784 | $ 558,495 | $ 612,660 | $ 566,621 | |
Redeemable noncontrolling interests | (10,372) | ||||
Deconsolidated sponsored funds value | $ 44,200 | ||||
Consolidated Sponsored Funds | |||||
Investment Securities | |||||
Cash | 4,524 | ||||
Investments | 123,792 | ||||
Other assets | 1,017 | ||||
Other liabilities | (1,093) | ||||
Redeemable noncontrolling interests | (10,372) | ||||
Net interest in consolidated sponsored funds | $ 117,868 |
Investment Securities - Fair va
Investment Securities - Fair value of investment securities (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Fair value of investments | ||
Available-for-sale Securities | $ 125,364 | $ 41,377 |
Trading Securities | 153,508 | 29,813 |
Equity method securities | 40,375 | 220,553 |
Total investment securities | 319,247 | 291,743 |
Total | ||
Fair value of investments | ||
Total investment securities | 319,247 | 291,743 |
Sponsored funds | ||
Fair value of investments | ||
Available-for-sale Securities | 124,812 | 40,552 |
Trading Securities | 29,597 | 29,701 |
Equity method securities | 37,100 | 217,380 |
Sponsored funds | Total | ||
Fair value of investments | ||
Available-for-sale Securities | 124,812 | 40,552 |
Trading Securities | 29,597 | 29,701 |
Equity method securities | 37,100 | 217,380 |
Sponsored privately offered funds measured at net asset value | ||
Fair value of investments | ||
Available-for-sale Securities | 552 | 825 |
Equity method securities | 3,275 | 3,173 |
Sponsored privately offered funds measured at net asset value | Total | ||
Fair value of investments | ||
Available-for-sale Securities | 552 | 825 |
Equity method securities | 3,275 | 3,173 |
Mortgage-backed securities | ||
Fair value of investments | ||
Trading Securities | 15 | 20 |
Mortgage-backed securities | Total | ||
Fair value of investments | ||
Trading Securities | 15 | 20 |
Corporate bonds | ||
Fair value of investments | ||
Trading Securities | 3 | 5 |
Corporate bonds | Total | ||
Fair value of investments | ||
Trading Securities | 3 | 5 |
Common Stock | ||
Fair value of investments | ||
Trading Securities | 101 | 87 |
Common Stock | Total | ||
Fair value of investments | ||
Trading Securities | 101 | 87 |
Consolidated Sponsored Funds | ||
Fair value of investments | ||
Trading Securities | 123,792 | |
Consolidated Sponsored Funds | Total | ||
Fair value of investments | ||
Trading Securities | 123,792 | |
Level 1 | ||
Fair value of investments | ||
Total investment securities | 279,003 | 287,720 |
Level 1 | Sponsored funds | ||
Fair value of investments | ||
Available-for-sale Securities | 124,812 | 40,552 |
Trading Securities | 29,597 | 29,701 |
Equity method securities | 37,100 | 217,380 |
Level 1 | Common Stock | ||
Fair value of investments | ||
Trading Securities | 101 | 87 |
Level 1 | Consolidated Sponsored Funds | ||
Fair value of investments | ||
Trading Securities | 87,393 | |
Level 2 | ||
Fair value of investments | ||
Total investment securities | 36,417 | 25 |
Level 2 | Mortgage-backed securities | ||
Fair value of investments | ||
Trading Securities | 15 | 20 |
Level 2 | Corporate bonds | ||
Fair value of investments | ||
Trading Securities | 3 | $ 5 |
Level 2 | Consolidated Sponsored Funds | ||
Fair value of investments | ||
Trading Securities | $ 36,399 |
Derivative Financial Instrume35
Derivative Financial Instruments (Details) - Not designated as a hedge $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016USD ($)contract | Sep. 30, 2016USD ($)contract | |
Total return swap contracts | ||
Derivative Financial Instruments | ||
Number of contracts | contract | 3 | 3 |
Notional value | $ 160,500 | $ 160,500 |
Cash collateral with the counterparties | 7,000 | 7,000 |
Total return swap contracts | Investment and other income (loss) | ||
Derivative Financial Instruments | ||
Net gains (losses) recognized in income | (8,837) | (30,767) |
Total return swap contracts | Other current liabilities | ||
Derivative Financial Instruments | ||
Fair value | $ 404 | $ 404 |
Sponsored funds | ||
Derivative Financial Instruments | ||
Investment ownership interest (as a percent) | 100.00% | |
Sponsored funds | Total return swap contracts | ||
Derivative Financial Instruments | ||
Investment ownership interest (as a percent) | 87.00% |
Goodwill and Identifiable Int36
Goodwill and Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | |
Goodwill and identifiable intangible assets | |||
Goodwill | $ 106,970 | $ 106,970 | $ 106,970 |
Mutual fund management advisory contracts | 42,748 | 42,748 | 42,748 |
Mutual fund management subadvisory contracts | 2,700 | 2,700 | 8,400 |
Other | 200 | 200 | |
Total identifiable intangible assets | 45,648 | 45,648 | 51,148 |
Total goodwill and identifiable intangible assets | 152,618 | 152,618 | $ 158,118 |
Write down of impaired assets | 5,700 | $ 5,700 | |
MFC | |||
Goodwill and identifiable intangible assets | |||
Write down of impaired assets | 5,700 | ||
Reduction of deferred tax liability | $ (2,100) |
Indebtedness (Details)
Indebtedness (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Indebtedness | ||
Fair value of outstanding indebtedness | $ 204,500 | |
Long-term debt | $ 189,562 | $ 189,432 |
Income Tax Uncertainties (Detai
Income Tax Uncertainties (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Income Tax Uncertainties | ||
Unrecognized tax benefits, including penalties and interest that if recognized would impact effective tax rate | $ 11.9 | $ 11.9 |
Unrecognized tax benefits, including penalties and interest, net of federal tax benefit that if recognized would affect effective tax rate | 8.5 | 8.7 |
Accrued interest and penalties related to uncertain tax positions | 3.8 | 3.4 |
Accrued interest and penalties related to uncertain tax positions, net of federal benefit | 3.1 | $ 2.8 |
Total expense of interest and penalties, net of federal benefit related to uncertain tax positions | $ 0.3 |
Pension Plan and Postretireme39
Pension Plan and Postretirement Benefits Other Than Pension (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Pension Benefits | |||||
Pension Plan and Postretirement Benefits Other than Pension | |||||
Final number of years of employee's compensation to determine the benefits payable | 10 years | ||||
Employer contributions | $ 20,000 | ||||
Components of net periodic benefit cost: | |||||
Service cost | $ 3,050 | $ 3,020 | $ 9,149 | $ 9,061 | |
Interest cost | 2,358 | 2,105 | 7,074 | 6,315 | |
Expected return on plan assets | (3,482) | (3,628) | (10,445) | (10,884) | |
Actuarial (gain) loss amortization | 1,554 | 1,293 | 4,661 | 3,879 | |
Prior service cost amortization | 93 | 115 | 280 | 345 | |
Transition obligation amortization | 1 | 1 | 3 | 3 | |
Total | 3,574 | 2,906 | 10,722 | 8,719 | |
Pension Benefits | Compensation and Related Costs | |||||
Components of net periodic benefit cost: | |||||
Total | (1,500) | $ 3,100 | |||
Other Postretirement Benefits | |||||
Pension Plan and Postretirement Benefits Other than Pension | |||||
Age of employees after which the plan does not provide benefits | 65 years | ||||
Components of net periodic benefit cost: | |||||
Service cost | 185 | 227 | $ 555 | 683 | |
Interest cost | 91 | 99 | 275 | 297 | |
Actuarial (gain) loss amortization | (38) | (115) | |||
Prior service cost amortization | 1 | 5 | 3 | 15 | |
Curtailment gain | (8,475) | (8,475) | |||
Total | (8,236) | $ 331 | (7,757) | $ 995 | |
Other Postretirement Benefits | Underwriting and Distribution Expense | |||||
Components of net periodic benefit cost: | |||||
Total | $ (3,200) | $ (300) |
Stockholders' Equity - Earnings
Stockholders' Equity - Earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 20, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Components of basic and diluted earnings per share | |||||
Net income attributable to Waddell & Reed Financial, Inc. | $ 53,827 | $ 48,058 | $ 124,490 | $ 182,616 | |
Weighted average shares outstanding - basic and diluted | 82,834,000 | 83,469,000 | 82,629,000 | 83,709,000 | |
Earnings per share: | |||||
Earnings per share, basic and diluted (in dollars per share) | $ 0.65 | $ 0.58 | $ 1.51 | $ 2.18 | |
Dividends | |||||
Dividends accrued, per share (in dollars per share) | $ 0.46 | $ 1.38 | |||
Dividends to be paid | $ 38,100 | $ 38,100 | |||
Common stock repurchases | |||||
Shares repurchased in the open market or privately | 28,537 | 812,764 | 2,230,034 | 1,435,355 | |
Shares repurchased from employees to cover minimum income tax withholdings | 28,537 | 108 | 333,034 | 312,199 |
Stockholders' Equity - Other co
Stockholders' Equity - Other comprehensive income (loss) activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
AOCI Attributable to Parent, Net of Tax | ||||
Balance at the beginning of the period | $ 846,455 | |||
Net current period other comprehensive income (loss) | 3,486 | |||
Balance at the end of the period | $ 845,477 | 845,477 | ||
Accumulated Other Comprehensive Income(Loss) | ||||
AOCI Attributable to Parent, Net of Tax | ||||
Balance at the beginning of the period | (57,508) | $ (51,731) | (61,505) | $ (50,443) |
Other comprehensive income (loss) before reclassification | 1,460 | (3,427) | 3,923 | (3,807) |
Amount reclassified from accumulated other comprehensive income (loss) | (1,971) | 2,994 | (437) | 2,086 |
Net current period other comprehensive income (loss) | (511) | (433) | 3,486 | (1,721) |
Balance at the end of the period | (58,019) | (52,164) | (58,019) | (52,164) |
Unrealized (gains) losses on investment securities | ||||
AOCI Attributable to Parent, Net of Tax | ||||
Balance at the beginning of the period | (2,498) | (2,713) | (3,729) | (727) |
Other comprehensive income (loss) before reclassification | 1,660 | (2,165) | 3,207 | (2,387) |
Amount reclassified from accumulated other comprehensive income (loss) | (1,871) | 1,330 | (2,187) | (434) |
Net current period other comprehensive income (loss) | (211) | (835) | 1,020 | (2,821) |
Balance at the end of the period | (2,709) | (3,548) | (2,709) | (3,548) |
Change in valuation allowance for unrealized gains (losses) on investment securities | ||||
AOCI Attributable to Parent, Net of Tax | ||||
Balance at the beginning of the period | (2,511) | (2,649) | (3,240) | (1,471) |
Other comprehensive income (loss) before reclassification | 1,022 | (1,262) | 1,938 | (1,420) |
Amount reclassified from accumulated other comprehensive income (loss) | (1,155) | 776 | (1,342) | (244) |
Net current period other comprehensive income (loss) | (133) | (486) | 596 | (1,664) |
Balance at the end of the period | (2,644) | (3,135) | (2,644) | (3,135) |
Pension and postretirement benefits | ||||
AOCI Attributable to Parent, Net of Tax | ||||
Balance at the beginning of the period | (52,499) | (46,369) | (54,536) | (48,245) |
Other comprehensive income (loss) before reclassification | (1,222) | (1,222) | ||
Amount reclassified from accumulated other comprehensive income (loss) | 1,055 | 888 | 3,092 | 2,764 |
Net current period other comprehensive income (loss) | (167) | 888 | 1,870 | 2,764 |
Balance at the end of the period | $ (52,666) | $ (45,481) | $ (52,666) | $ (45,481) |
Stockholders' Equity - Reclassi
Stockholders' Equity - Reclassifications from accumulated other comprehensive income (loss) and included in net income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Reclassifications from accumulated other comprehensive income (loss) | ||||
Reclassifications included in net income: | ||||
Pre-tax | $ 1,369 | $ (3,533) | $ (1,350) | $ (3,556) |
Tax (expense) benefit | 602 | 539 | 1,787 | 1,470 |
Net of tax | 1,971 | (2,994) | 437 | (2,086) |
Realized loss on sale of sponsored investment securities | Investment and other income (loss) | Reclassifications from accumulated other comprehensive income (loss) | ||||
Reclassifications included in net income: | ||||
Pre-tax | 2,980 | (2,119) | 3,483 | 685 |
Tax (expense) benefit | (1,109) | 789 | (1,296) | (251) |
Net of tax | 1,871 | (1,330) | 2,187 | 434 |
Change in valuation allowance for unrealized gains (losses) on investment securities | ||||
Reclassifications included in net income: | ||||
Net of tax | 1,155 | (776) | 1,342 | 244 |
Change in valuation allowance for unrealized gains (losses) on investment securities | Provision for income taxes | Reclassifications from accumulated other comprehensive income (loss) | ||||
Reclassifications included in net income: | ||||
Tax (expense) benefit | 1,155 | (776) | 1,342 | 244 |
Net of tax | 1,155 | (776) | 1,342 | 244 |
Pension and postretirement benefits | ||||
Reclassifications included in net income: | ||||
Net of tax | (1,055) | (888) | (3,092) | (2,764) |
Pension and postretirement benefits | Underwriting and distribution expense and Compensation and related costs | Reclassifications from accumulated other comprehensive income (loss) | ||||
Reclassifications included in net income: | ||||
Pre-tax | (1,611) | (1,414) | (4,833) | (4,241) |
Tax (expense) benefit | 556 | 526 | 1,741 | 1,477 |
Net of tax | $ (1,055) | $ (888) | $ (3,092) | $ (2,764) |
Redeemable Noncontrolling Int43
Redeemable Noncontrolling Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | |
Redeemable noncontrolling interests in consolidated sponsored funds | ||
Net income attributable to redeemable noncontrolling interests | $ 978 | $ 1,355 |
Ending balance of redeemable noncontrolling interest in consolidated sponsored funds | 10,372 | 10,372 |
Consolidated Sponsored Funds | ||
Redeemable noncontrolling interests in consolidated sponsored funds | ||
Redeemable noncontrolling interests in sponsored funds upon adoption of new accounting guidance on January 1, 2016 | 14,330 | |
Redeemable noncontrolling interests in sponsored funds consolidated during the period | 18,249 | |
Redeemable noncontrolling interests ownership change during the period | 20,672 | |
Redeemable noncontrolling interests deconsolidation | (44,234) | |
Net income attributable to redeemable noncontrolling interests | 1,355 | |
Ending balance of redeemable noncontrolling interest in consolidated sponsored funds | $ 10,372 | $ 10,372 |
Contingencies (Details)
Contingencies (Details) $ in Millions | Feb. 18, 2016item | Sep. 30, 2016USD ($) |
Contingencies | ||
Number of affiliated mutual fund trustees involved in litigation | 2 | |
Number of mutual fund shareholders involved in litigation | 3 | |
Accured contingencies related to other matters | $ | $ 3 |