Waddell & Reed Financial (WDR) 10-Q 4 Aug 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Jul. 28, 2017
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	Jun. 30, 2017
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		83,591,353
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q2

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Assets:
Cash and cash equivalents	$ 427,939	$ 555,102
Cash and cash equivalents - restricted	38,298	31,137
Investment securities	501,827	328,750
Receivables:
Funds and separate accounts	21,187	27,181
Customers and other	99,272	128,095
Prepaid expenses and other current assets	23,810	21,574
Total current assets	1,112,333	1,091,839
Property and equipment, net	95,455	102,449
Goodwill and identifiable intangible assets	147,069	148,569
Deferred income taxes	32,928	31,430
Other non-current assets	24,541	31,985
Total assets	1,412,326	1,406,272
Liabilities:
Accounts payable	28,590	28,023
Payable to investment companies for securities	63,967	53,691
Payable to third party brokers	24,363	31,735
Payable to customers	38,699	82,918
Short-term notes payable	94,945
Accrued compensation	40,198	41,672
Other current liabilities	96,133	58,939
Total current liabilities	386,895	296,978
Long-term debt	94,747	189,605
Accrued pension and postretirement costs	31,959	38,379
Other non-current liabilities	25,839	26,655
Total liabilities	539,440	551,617
Commitments and contingencies
Redeemable noncontrolling interests	28,718	10,653
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; 83,598 shares outstanding (83,118 at December 31, 2016)	997	997
Additional paid-in capital	282,576	291,908
Retained earnings	1,112,697	1,135,694
Cost of 16,103 common shares in treasury (16,583 at December 31, 2016)	(505,120)	(531,268)
Accumulated other comprehensive loss	(46,982)	(53,329)
Total stockholders' equity	844,168	844,002
Total liabilities, redeemable noncontrolling interests and stockholders' equity	$ 1,412,326	$ 1,406,272

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Jun. 30, 2017	Dec. 31, 2016
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	83,598	83,118
Common shares in treasury	16,103	16,583

Consolidated Statements of Inco

Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Revenues:
Investment management fees	$ 130,878	$ 140,880	$ 261,314	$ 285,658
Underwriting and distribution fees	128,776	146,312	257,607	292,970
Shareholder service fees	27,003	32,016	54,300	64,396
Total	286,657	319,208	573,221	643,024
Operating expenses:
Underwriting and distribution	151,119	181,245	301,443	355,081
Compensation and related costs (including share-based compensation of $14,054, $12,625, $28,239 and $26,147, respectively)	47,224	58,341	96,630	111,281
General and administrative	28,153	19,276	53,877	38,428
Subadvisory fees	3,194	2,325	5,891	4,418
Depreciation	5,175	4,260	10,396	8,622
Intangible asset impairment	900		1,500
Total	235,765	265,447	469,737	517,830
Operating income	50,892	53,761	103,484	125,194
Investment and other income (loss)	2,021	687	4,150	(9,531)
Interest expense	(2,788)	(2,776)	(5,574)	(5,544)
Income before provision for income taxes	50,125	51,672	102,060	110,119
Provision for income taxes	26,162	18,101	44,561	39,079
Net income	23,963	33,571	57,499	71,040
Net income (loss) attributable to redeemable noncontrolling interests	656	(124)	1,136	377
Net income attributable to Waddell & Reed Financial, Inc.	$ 23,307	$ 33,695	$ 56,363	$ 70,663
Net income per share attributable to Waddell and Reed Financial, Inc. common shareholders, basic and diluted (in dollars per share)	$ 0.28	$ 0.41	$ 0.67	$ 0.86
Weighted average shares outstanding, basic and diluted (in shares)	83,611	82,947	83,843	82,526

Consolidated Statements of Inc5

Consolidated Statements of Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Consolidated Statements of Income
Compensation and related costs, share-based compensation	$ 14,054	$ 12,625	$ 28,239	$ 26,147

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Consolidated Statements of Comprehensive Income
Net income	$ 23,963	$ 33,571	$ 57,499	$ 71,040
Other comprehensive income:
Unrealized appreciation of available for sale investment securities during the period, net of income tax benefit of $192, $0, $1,673, and $0, respectively	1,235	1,884	4,834	1,960
Pension and postretirement benefit, net of income tax expense of $429, $566, $894, and $1,185, respectively	727	960	1,513	2,037
Comprehensive income	25,925	36,415	63,846	75,037
Comprehensive income (loss) attributable to redeemable noncontrolling interests	656	(124)	1,136	377
Comprehensive income attributable to Waddell & Reed Financial, Inc.	$ 25,269	$ 36,539	$ 62,710	$ 74,660

Consolidated Statements of Com7

Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Consolidated Statements of Comprehensive Income
Unrealized appreciation of available for sale investment securities during the period, income tax expense (benefit)	$ 192	$ 0	$ 1,673	$ 0
Pension and postretirement benefits, income tax expense	$ 429	$ 566	$ 894	$ 1,185

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, 2015					$ (61,505)
Increase (Decrease) in Stockholders' Equity
Net income						$ 70,663
Other comprehensive income					3,997
Balance at the end of the period at Jun. 30, 2016					(57,508)
Balance at the beginning of the period at Mar. 31, 2016					(60,352)
Increase (Decrease) in Stockholders' Equity
Net income						33,695
Other comprehensive income					2,844
Balance at the end of the period at Jun. 30, 2016					(57,508)
Balance at the beginning of the period at Dec. 31, 2016	$ 997	$ 291,908	$ 1,135,694	$ (531,268)	(53,329)	844,002
Balance (in shares) at Dec. 31, 2016	99,701
Increase (Decrease) in Stockholders' Equity
Adoption of share-based compensation guidance on January 1, 2017		3,504	(2,200)			1,304
Net income			56,363			56,363
Recognition of equity compensation		25,325	297			25,622
Net issuance/forfeiture of nonvested shares		(38,161)		38,161
Dividends accrued, $0.92 per share			(77,457)			(77,457)
Repurchase of common stock				(12,013)		(12,013)
Other comprehensive income					6,347	6,347
Balance at the end of the period at Jun. 30, 2017	$ 997	282,576	1,112,697	(505,120)	(46,982)	844,168
Balance (in shares) at Jun. 30, 2017	99,701
Balance at the beginning of the period at Dec. 31, 2016						10,653
Increase (Decrease) in Redeemable Noncontrolling Interest
Net income						1,136
Net redemption and deconsolidation of redeemable noncontrolling interests in sponsored funds						16,929
Balance at the end of the period at Jun. 30, 2017						28,718
Balance at the beginning of the period at Mar. 31, 2017					(48,944)
Increase (Decrease) in Stockholders' Equity
Net income						23,307
Other comprehensive income					1,962
Balance at the end of the period at Jun. 30, 2017	$ 997	$ 282,576	$ 1,112,697	$ (505,120)	$ (46,982)	844,168
Balance (in shares) at Jun. 30, 2017	99,701
Balance at the end of the period at Jun. 30, 2017						$ 28,718

Consolidated Statement of Stoc9

Consolidated Statement of Stockholders’ Equity (Parenthetical) - $ / shares	Apr. 27, 2017	Jun. 30, 2017
Consolidated Statement of Stockholders’ Equity
Dividends accrued, per share (in dollars per share)	$ 0.46	$ 0.92

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash flows from operating activities:
Net income	$ 57,499	$ 71,040
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	10,396	8,627
Amortization of deferred sales commissions	2,675	19,661
Share-based compensation	25,622	26,147
Investments gain, net	(4,662)	(8,560)
Net purchases of trading securities	(15,613)	(24,996)
Net change in trading securities held by consolidated sponsored funds	(114,407)	(45,455)
Other	2,388	(908)
Changes in assets and liabilities:
Cash and cash equivalents - restricted	(7,161)	33,680
Customer and other receivables	28,823	54,004
Payable to investment companies for securities and payable to customers	(33,943)	(100,595)
Receivables from funds and separate accounts	5,994	8,309
Other assets	1,600	6,560
Accounts payable and payable to third party brokers	(6,805)	(22,852)
Other liabilities	10,332	(6,216)
Net cash provided by operating activities	(37,262)	18,446
Cash flows from investing activities:
Purchases of available for sale and equity method securities	(28,881)	(104)
Proceeds from sales of available for sale and equity method securities	14,917	17,986
Additions to property and equipment	(3,704)	(9,265)
Net cash of sponsored funds on consolidation		6,887
Other		(196)
Net cash (used in) provided by investing activities	(17,668)	15,308
Cash flows from financing activities:
Dividends paid	(77,236)	(76,616)
Repurchase of common stock	(12,013)	(47,461)
Net subscriptions, (redemptions, distributions and deconsolidations) of redeemable noncontrolling interests in sponsored funds	16,929	(2,224)
Other	87	1,510
Net cash used in financing activities	(72,233)	(124,791)
Net decrease in cash and cash equivalents	(127,163)	(91,037)
Cash and cash equivalents at beginning of period	555,102	558,495
Cash and cash equivalents at end of period	$ 427,939	$ 467,458

Description of Business and Sig

Description of Business and Significant Accounting Policies	6 Months Ended
	Jun. 30, 2017
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. (hereinafter referred to as the “Company,” “we,” “our” or “us”) is a holding company, incorporated in the state of Delaware in 1981, that conducts business through its subsidiaries. Founded in 1937, we are one of the oldest mutual fund complexes in the United States, having introduced the Waddell & Reed Advisors group of mutual funds (the “Advisors Funds”) in 1940. Over time, we added additional mutual funds: Ivy Funds (the “Ivy Funds”); Ivy Variable Insurance Portfolios, our variable product offering (“Ivy VIP”); InvestEd Portfolios, our 529 college savings plan (“InvestEd”); Ivy High Income Opportunities Fund, a closed-end mutual fund (“IVH”); and the Ivy Global Investors Société d’Investissement à Capital Variable ( the “SICAV”) and its Ivy Global Investors sub‑funds (the “IGI Funds”), an undertaking for the collective investment in transferable securities (“UCITS”). In 2016, we introduced the Ivy NextShares ® exchange-traded managed funds (“Ivy NextShares”). In April of 2017, we launched index funds in partnership with ProShares ® Advisors LLC (“Ivy ProShares”) (collectively, the Advisors Funds, Ivy Funds, Ivy VIP, InvestEd, IVH, Ivy NextShares and Ivy ProShares are referred to as the “Funds”). As of June 30, 2017, we had $80.4 billion in assets under management. We derive our revenues from providing investment management, investment advisory, investment product underwriting and distribution, and shareholder services administration to the Funds, the IGI Funds, and institutional and separately managed accounts. Investment management fees are based on the amount of average assets under management and are affected by sales levels, financial market conditions, redemptions and the composition of assets. Our underwriting and distribution revenues consist of fees earned on fee‑based asset allocation products and related advisory services, asset‑based service and distribution fees promulgated under Rule 12b-1 of the Investment Company Act of 1940, as amended (“Rule 12b-1”), commissions derived from sales of investment and insurance products, and distribution fees on certain variable products. The products sold have various commission structures and the revenues received from those sales vary based on the type and dollar amount sold. Shareholder service fee revenue includes transfer agency fees, custodian fees from retirement plan accounts, and portfolio accounting and administration fees, and is earned based on assets under management or number of client accounts. 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, 2016 (the “2016 Form 10-K”). Certain amounts in the prior year’s 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 2016 Form 10-K with the exception of the adoption of Accounting Standards Update (“ASU”) 2016-09, “ Improvements to Employee Share-Based Payment Accounting, ” effective January 1, 2017. As required by this ASU, excess tax benefits and tax shortfalls resulting from share-based compensation are recognized as income tax benefit or expense in the income statement on a prospective basis. Additionally, excess tax benefits or shortfalls recognized on share-based compensation are classified as an operating activity in the statement of cash flows. The Company has applied this provision prospectively, and thus, the prior period presented in the statement of cash flows has not been adjusted. This ASU allows entities to withhold shares issued during the settlement of a stock award or option, as a means of meeting minimum tax withholding due by the employee, in an amount up to the employees’ maximum individual tax rate in the relevant jurisdiction without resulting in a liability classification of the award. The value of the withheld shares is then remitted by the Company in cash to the taxing authorities on the employees’ behalf. The Company’s historical policy to withhold shares equivalent to the minimum individual tax rate is consistent with the thresholds meeting the classification of an equity award and, therefore, a retrospective classification adjustment was not required. This ASU requires that all cash payments made to taxing authorities on the employees’ behalf for withheld shares be presented as financing activities on the statement of cash flows. As this requirement is consistent with the Company’s historical accounting policy, a retrospective adjustment to presentation of the statement of cash flows was not required. This standard also allows for the option to account for forfeitures as they occur when determining the amount of share-based compensation expense to be recognized, rather than estimating expected forfeitures over the course of a vesting period. The Company elected to account for forfeitures as they occur. The net cumulative effect to the Company from the adoption of this ASU was an increase to additional paid-in capital of $3.5 million, a reduction to retained earnings of $2.2 million and an increase to the non-current deferred tax asset of $1.3 million as of January 1, 2017. 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 June 30, 2017, and the results of operations and cash flows for the six months ended June 30, 2017 and 2016 in conformity with accounting principles generally accepted in the United States.

New Accounting Guidance

New Accounting Guidance	6 Months Ended
	Jun. 30, 2017
New Accounting Guidance
New Accounting Guidance	2. In May 2014, the Financial Accounting Standards Board (“FASB”) issued 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. This ASU permits the use of either the retrospective or cumulative effect transition method. The Company has assessed its revenue streams to identify contracts that are subject to the requirements of the new standard. The Company plans to review the identified contracts and while we have not identified material changes in the timing of revenue recognition, we continue to evaluate the quantitative impact the ASU will have on the consolidated financial statements and related disclosures. In February 2016, 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. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. Although the Company is evaluating the estimated impact the adoption of this ASU will have on our consolidated financial statements and related disclosures, the Company currently believes the most significant changes will be related to the recognition of new right-of-use assets and lease liabilities on the Company’s consolidated balance sheet for real estate operating leases. In August 2016, 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. This ASU 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 this ASU will have on our consolidated financial statements and related disclosures. In November 2016, FASB issued ASU 2016-18, “Statement of Cash Flows: Restricted Cash.” This ASU is intended to reduce diversity in practice by adding or clarifying guidance on classification and presentation of changes in restricted cash on the statement of cash flows. The amendments in this ASU require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The amendments in this ASU should be applied retrospectively to all periods presented. We are evaluating the estimated impact the adoption of this ASU will have on our consolidated financial statements and related disclosures. In March 2017, FASB issued ASU 2017-07, “Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” This ASU changes the income statement presentation of defined benefit plan expense by requiring separation between operating expense (service cost component) and non-operating expense (all other components, including interest cost, amortization of prior service cost, curtailments and settlements, etc.). The operating expense component is reported with similar compensation costs while the non-operating components are reported in a separate line item outside of operating items. In addition, only the service cost component is eligible for capitalization as part of an asset. This ASU is 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 this ASU will have on our consolidated financial statements and related disclosures. In May 2017, FASB issued ASU 2017-09, “Compensation-Stock Compensation: Scope of Modification Accounting.” This ASU provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in ASC 718, “Compensation – Stock Compensation Topic.” This ASU is 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 this ASU will have on our consolidated financial statements and related disclosures.

Investment Securities

Investment Securities	6 Months Ended
	Jun. 30, 2017
Investment Securities
Investment Securities	3. Investment securities at June 30, 2017 and December 31, 2016 are as follows: June 30, December 31, 2017 2016 (in thousands) Available for sale securities: Certificates of deposit $ 10,001 — Commercial paper 4,985 — Corporate bonds 34,147 — Sponsored funds 145,937 122,806 Sponsored privately offered funds — 570 Total available for sale securities 195,070 123,376 Trading securities: Mortgage-backed securities 12 13 Corporate bonds 16,098 — Common stock 110 101 Consolidated sponsored funds 215,116 145,710 Sponsored funds 30,945 29,541 Sponsored privately offered funds 631 — Total trading securities 262,912 175,365 Equity method securities: Sponsored funds 40,154 26,775 Sponsored privately offered funds 3,691 3,234 Total equity method securities 43,845 30,009 Total securities $ 501,827 328,750 Certificates of deposit, commercial paper and corporate bonds accounted for as available for sale and held as of June 30, 2017 mature as follows: Amortized cost Fair value (in thousands) Within one year $ 24,008 24,007 After one year but within five years 20,140 20,126 After 10 years 5,000 5,000 $ 49,148 49,133 Mortgage-backed securities and corporate bonds accounted for as trading and held as of June 30, 2017 mature as follows: Fair value (in thousands) Within one year $ 6,014 After one year but within five years 10,089 After five years but within 10 years 7 $ 16,110 The following is a summary of the gross unrealized gains (losses) related to securities classified as available for sale at June 30, 2017: Amortized Unrealized Unrealized cost gains losses Fair value (in thousands) Available for sale securities: Certificates of deposit $ 10,000 2 (1) 10,001 Commercial paper 4,981 4 — 4,985 Corporate bonds 34,166 1 (20) 34,147 Sponsored funds 149,078 1,630 (4,771) 145,937 $ 198,225 1,637 (4,792) 195,070 The following is a summary of the gross unrealized gains (losses) related to securities classified as available for sale at December 31, 2016: Amortized Unrealized Unrealized cost gains losses Fair value (in thousands) Available for sale securities: Sponsored funds $ 129,427 828 (7,449) 122,806 Sponsored privately offered funds 265 305 — 570 $ 129,692 1,133 (7,449) 123,376 A summary of available for sale investment securities with fair values below carrying values at June 30, 2017 and December 31, 2016 is as follows: Less than 12 months 12 months or longer Total Unrealized Unrealized Unrealized June 30, 2017 Fair value losses Fair value losses Fair value losses (in thousands) Certificates of deposit $ 4,999 (1) — — 4,999 (1) Corporate bonds 24,146 (20) — — 24,146 (20) Sponsored funds 33,506 (1,190) 35,900 (3,581) 69,406 (4,771) $ 62,651 (1,211) 35,900 (3,581) 98,551 (4,792) Less than 12 months 12 months or longer Total Unrealized Unrealized Unrealized December 31, 2016 Fair value losses Fair value losses Fair value losses (in thousands) Sponsored funds $ 71,051 (1,834) 34,182 (5,615) 105,233 (7,449) Based upon our assessment of these investment securities, the time frame the investments have been in a loss position and our intent to hold the investment securities until they have recovered, we determined that a write-down was not necessary at June 30, 2017. Sponsored Funds The Company has classified its investments in the Ivy Funds, Ivy Nextshares, Ivy ProShares 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 Ivy Funds, Ivy NextShares and Ivy ProShares 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 VIE and are considered to be VOEs. Consolidated Sponsored Funds The following table details the balances related to consolidated sponsored funds at June 30, 2017, and at December 31, 2016, as well as the Company’s net interest in these funds: June 30, December 31, 2017 2016 (in thousands) Cash $ 3,706 6,885 Investments 215,116 145,710 Other assets 7,847 763 Other liabilities (6,800) (390) Redeemable noncontrolling interests (28,718) (10,653) Net interest in consolidated sponsored funds $ 191,151 142,315 During the six months ended June 30, 2017, we consolidated certain of the Ivy Funds, Ivy NextShares and Ivy ProShares in which we provided initial seed capital at the time of the funds’ formation. When we no longer have a controlling financial interest in a sponsored fund, it is deconsolidated from our consolidated financial statements. During the first six months of 2017, we closed three IGI Funds and deconsolidated three Ivy ProShares, as we no longer have a controlling interest in the funds. Accordingly, we deconsolidated $2.6 million from cash and cash equivalents, $7.3 million from investments and $9.9 million from redeemable noncontrolling interests. Four IGI Funds remain consolidated as of June 30, 2017. There was no impact to the consolidated statements of income as a result of the closures and deconsolidations, as the funds were carried at fair value. Fair Value 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 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. The following tables summarize our investment securities as of June 30, 2017 and December 31, 2016 that are recognized in our consolidated balance sheets using fair value measurements based on the differing levels of inputs. June 30, 2017 Level 1 Level 2 Level 3 Other Assets Not Held at Fair Value Total (in thousands) Available for sale securities: Certificates of deposit $ — 10,001 — — 10,001 Commercial paper — 4,985 — — 4,985 Corporate bonds — 34,147 — — 34,147 Sponsored funds 145,937 — — — 145,937 Trading securities: Mortgage-backed securities — 12 — — 12 Corporate bonds — 16,098 — 16,098 Common stock 110 — — — 110 Consolidated sponsored funds 132,187 82,929 — — 215,116 Sponsored funds 30,945 — — — 30,945 Sponsored privately offered funds measured at net asset value (1) — — — 631 631 Equity method securities: (2) Sponsored funds 40,154 — — — 40,154 Sponsored privately offered funds measured at net asset value (1) — — — 3,691 3,691 Total $ 349,333 148,172 — 4,322 501,827 December 31, 2016 Level 1 Level 2 Level 3 Other Assets Not Held at Fair Value Total (in thousands) Available for sale securities: Sponsored funds $ 122,806 — — — 122,806 Sponsored privately offered funds measured at net asset value (1) — — — 570 570 Trading securities: Mortgage-backed securities — 13 — — 13 Common stock 101 — — — 101 Consolidated sponsored funds 100,847 44,863 — — 145,710 Sponsored funds 29,541 — — — 29,541 Equity method securities: (2) Sponsored funds 26,775 — — — 26,775 Sponsored privately offered funds measured at net asset value (1) — — — 3,234 3,234 Total $ 280,070 44,876 — 3,804 328,750 (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.

Derivative Financial Instrument

Derivative Financial Instruments	6 Months Ended
	Jun. 30, 2017
Derivative Financial Instruments
Derivative Financial Instruments	4. In 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 June 30, 2017, we had 99% of our investments in sponsored funds, excluding our available for sale portfolio, hedged, 89% 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. Excluding derivative financial instruments held in certain consolidated sponsored funds, the Company was party to eight total return swap contracts with a combined notional value of $238.2 million and $160.2 million as of June 30, 2017 and December 31, 2016, respectively. These derivative financial 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 $8.3 million and $7.1 million in cash collateral with the counterparties of the total return swap contracts as of June 30, 2017 and December 31, 2016, respectively. 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 June 30, 2017 and December 31, 2016: June 30, December 31, 2017 2016 Balance sheet location Fair value Fair value (in thousands) Total return swap contracts Other assets, (Other current liabilities) $ 884 (475) The following is a summary of net losses recognized in Income for the three and six months ended June 30, 2017 and June 30, 2016: Three months ended Six months ended Income statement June 30, June 30, location 2017 2016 2017 2016 (in thousands) (in thousands) Total return swap contracts Investment and other (loss) $ (7,421) (6,707) (18,466) (21,929)

Goodwill and Identifiable Intan

Goodwill and Identifiable Intangible Assets	6 Months Ended
	Jun. 30, 2017
Goodwill and Identifiable Intangible Assets
Goodwill and Identifiable Intangible Assets	5. 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 June 30, 2017 and December 31, 2016 are as follows: June 30, December 31, 2017 2016 (in thousands) Goodwill $ 106,970 106,970 Mutual fund management advisory contracts 38,699 38,699 Mutual fund management subadvisory contract 1,200 2,700 Other 200 200 Total identifiable intangible assets 40,099 41,599 Total $ 147,069 148,569

Indebtedness

Indebtedness	6 Months Ended
	Jun. 30, 2017
Indebtedness
Indebtedness	6. Debt is reported at its carrying amount in the consolidated balance sheet. The fair value of the Company’s senior unsecured notes maturing January 13, 2018 is $96.4 million at June 30, 2017 compared to the carrying value net of debt issuance costs of $94.9 million, which is listed under short-term notes payable in the consolidated balance sheet. The fair value of the Company’s senior unsecured notes maturing January 13, 2021 is $102.9 million at June 30, 2017 compared to the carrying value net of debt issuance costs of $94.7 million, which is listed under long-term debt in the consolidated balance sheet. Fair value is calculated based on Level 2 inputs.

Income Tax Uncertainties

Income Tax Uncertainties	6 Months Ended
	Jun. 30, 2017
Income Tax Uncertainties
Income Tax Uncertainties	7. As of January 1, 2017 and June 30, 2017, the Company had unrecognized tax benefits, including penalties and interest, of $11.5 million ($8.4 million net of federal benefit) and $12.3 million ($9.0 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 current liabilities; unrecognized tax benefits that are expected to be settled within the next 12 months are included in other non-current liabilities; unrecognized tax benefits that reduce a net operating loss, similar tax loss, or tax credit carryforward are presented as a reduction to non-current 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, 2017, the total amount of accrued interest and penalties related to uncertain tax positions recognized in the consolidated balance sheet was $3.8 million ($3.1 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 six month period ended June 30, 2017 was $0.3 million. The total amount of accrued penalties and interest related to uncertain tax positions at June 30, 2017 of $4.2 million ($3.4 million net of federal benefit) is included as a reduction to non-current Deferred income taxes 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. Additionally, the Company is currently under audit in a state jurisdiction in which it operates. It is reasonably possible that the Company will settle the audits in these jurisdictions within the next 12-month period. The Company’s liability for unrecognized tax benefits, including penalties and interest, is not expected to decrease significantly upon settlement of these audits. Additionally, such settlements are not anticipated to have a significant impact on the results of operations. The 2013, 2015 and 2016 federal income tax returns are open tax years that remain subject to potential future audit. State income tax returns for all years after 2012 and, in certain states, income tax returns for 2012, 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	6 Months Ended
	Jun. 30, 2017
Pension Plan and Postretirement Benefits Other Than Pension
Pension Plan and Postretirement Benefits Other Than Pension	8. 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. On July 26, 2017, the Compensation Committee of the Company’s Board of Directors approved an amendment to freeze the Pension Plan effective September 30, 2017. After September 30, 2017, participants in the Pension Plan will not accrue additional benefits for future service or compensation. Participants will retain benefits accumulated as of September 30, 2017 in accordance with the terms of the Pension Plan. During the first six months of 2017, we contributed $10.0 million to the Pension Plan. We also sponsor an unfunded defined benefit postretirement medical plan that previously covered substantially all employees, as well as financial advisors licensed with Waddell & Reed, Inc. The medical plan is contributory with participant contributions adjusted annually. The medical plan does not provide for benefits after age 65 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 this plan to discontinue the availability of coverage for any individuals who retire after December 31, 2016. 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 June 30, Three months ended June 30, Six months ended June 30, Six months ended June 30, 2017 2016 2017 2016 2017 2016 2017 2016 (in thousands) (in thousands) Components of net periodic benefit cost: Service cost 2,683 3,106 — 185 5,409 6,099 — 370 Interest cost 1,604 2,277 14 92 3,258 4,716 29 184 Expected return on plan assets (2,558) (3,427) — — (5,117) (6,963) — — Actuarial (gain) loss amortization 1,169 1,469 (45) (38) 2,434 3,107 (90) (77) Prior service cost (credit) amortization 31 93 (1) 1 62 187 (2) 2 Transition obligation amortization 1 1 — — 2 2 — — Total (1) $ 2,930 3,519 (32) 240 6,048 7,148 (63) 479 (1) For the three months ended June 30, 2017, $1.8 million and $1.1 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 six months ended June 30, 2017, $3.7 million and $2.3 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

Stockholders' Equity	6 Months Ended
	Jun. 30, 2017
Stockholders' Equity
Stockholders' Equity	9. Earnings per Share The components of basic and diluted earnings per share were as follows: Three months ended Six months ended June 30, June 30, 2017 2016 2017 2016 (in thousands, except per share amounts) Net income attributable to Waddell & Reed Financial, Inc. $ 23,307 33,695 $ 56,363 70,663 Weighted average shares outstanding, basic and diluted 83,611 82,947 83,843 82,526 Earnings per share, basic and diluted $ 0.28 0.41 $ 0.67 0.86 Dividends On April 27, 2017, the Board of Directors approved a dividend on our common stock in the amount of $0.46 per share to stockholders of record on July 11, 2017 paid on August 1, 2017. The total dividend paid was approximately $38.5 million and was included in other current liabilities as of June 30, 2017. 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 237,472 shares and 1,075,826 shares repurchased in the open market or privately during the three months ended June 30, 2017 and 2016, respectively, which includes 237,472 shares and 300,826 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 714,354 shares and 2,201,497 shares repurchased in the open market or privately during the six months ended June 30, 2017 and 2016, respectively, which includes 239,354 shares and 304,497 shares, respectively, repurchased from employees who tendered shares to cover their minimum income tax withholdings with respect to the vesting of stock awards during each of these two reporting periods. Accumulated Other Comprehensive Loss The following tables summarize other comprehensive loss activity for the three months ended June 30, 2017 and June 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 June 30, 2017 securities securities gains (losses) income (loss) (in thousands) Balance at March 31, 2017 $ (2,641) (1,120) (45,183) (48,944) Other comprehensive income before reclassification 722 619 — 1,341 Amount reclassified from accumulated other comprehensive income (loss) (67) (39) 727 621 Net current period other comprehensive income 655 580 727 1,962 Balance at June 30, 2017 $ (1,986) $ (540) (44,456) (46,982) 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 June 30, 2016 securities securities gains (losses) income (loss) (in thousands) Balance at March 31, 2016 $ (3,682) (3,211) (53,459) (60,352) Other comprehensive income before reclassification 1,554 919 — 2,473 Amount reclassified from accumulated other comprehensive income (loss) (370) (219) 960 371 Net current period other comprehensive income 1,184 700 960 2,844 Balance at June 30, 2016 $ (2,498) $ (2,511) (52,499) (57,508) Change in valuation allowance for unrealized Pension and Total Unrealized gains postretirement accumulated gains (losses) (losses) on benefits other on investment investment unrealized comprehensive Six months ended June 30, 2017 securities securities gains (losses) income (loss) (in thousands) Balance at December 31, 2016 $ (3,972) (3,388) (45,969) (53,329) Other comprehensive income before reclassification 2,145 2,942 — 5,087 Amount reclassified from accumulated other comprehensive income (loss) (159) (94) 1,513 1,260 Net current period other comprehensive income 1,986 2,848 1,513 6,347 Balance at June 30, 2017 $ (1,986) $ (540) (44,456) (46,982) Change in valuation allowance for unrealized Pension and Total Unrealized gains postretirement accumulated (gains) losses (losses) on benefits other on investment investment unrealized comprehensive Six months ended June 30, 2016 securities securities gains (losses) income (loss) (in thousands) Balance at December 31, 2015 $ (3,729) (3,240) (54,536) (61,505) Other comprehensive income before reclassification 1,550 917 — 2,467 Amount reclassified from accumulated other comprehensive income (loss) (319) (188) 2,037 1,530 Net current period other comprehensive income 1,231 729 2,037 3,997 Balance at June 30, 2016 $ (2,498) $ (2,511) (52,499) (57,508) Reclassifications from accumulated other comprehensive loss and included in net income are summarized in the tables that follow. For the three months ended June 30, 2017 Tax (expense) Pre-tax benefit Net of tax Statement of income line item (in thousands) Reclassifications included in net income: Sponsored funds investment gains $ 106 (39) 67 Investment and other income (loss) Valuation allowance — 39 39 Provision for income taxes Amortization of pension and postretirement benefits (1,156) 429 (727) Underwriting and distribution expense and Compensation and related costs Total $ (1,050) 429 (621) For the three months ended June 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 $ 589 (219) 370 Investment and other income (loss) Valuation allowance — 219 219 Provision for income taxes Amortization of pension and postretirement benefits (1,526) 566 (960) Underwriting and distribution expense and Compensation and related costs Total $ (937) 566 (371) For the six months ended June 30, 2017 Tax (expense) Pre-tax benefit Net of tax Statement of income line item (in thousands) Reclassifications included in net income: Sponsored funds investment gains $ 253 (94) 159 Investment and other income (loss) Valuation allowance — 94 94 Provision for income taxes Amortization of pension and postretirement benefits (2,407) 894 (1,513) Underwriting and distribution expense and Compensation and related costs Total $ (2,154) 894 (1,260) For the six months ended June 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 $ 508 (189) 319 Investment and other income (loss) Valuation allowance — 188 188 Provision for income taxes Amortization of pension and postretirement benefits (3,222) 1,185 (2,037) Underwriting and distribution expense and Compensation and related costs Total $ (2,714) 1,184 (1,530)

Contingencies

Contingencies	6 Months Ended
	Jun. 30, 2017
Contingencies
Contingencies	10. 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 Topic.” 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 April 18, 2016 in the District Court of Johnson County, Kansas, Hieu Phan and Audrey Ohman v. Ivy Investment Management Company, et. al. (Case No. I6CV02338 Div. 4), two individuals who allegedly purchased shares of two affiliated registered investment companies (mutual funds) for which two of the Company’s subsidiaries provide investment management services filed a putative derivative action on behalf of the two nominal defendant affiliated mutual fund trusts alleging breach of fiduciary duty and breach of contract claims relating to investments held in the affiliated mutual funds by the Company's registered investment adviser subsidiaries, the two nominal defendant trusts, the current trustees and three retired trustees of the nominal defendant trusts, and an officer of the Company (who plaintiffs subsequently voluntarily dismissed). On behalf of the nominal defendant trusts, plaintiffs seek monetary damages and demand a jury trial. On April 6, 2017, the court granted one of the nominal defendant trust’s motion to dismiss the claims of plaintiff Ohman for lack of standing, without leave to amend. On May 2, 2017, the remaining nominal defendant filed a motion to stay the litigation pending the investigation and recommendation of special litigation committees of each of the nominal defendant trusts, a special committee of independent trustees established by the board of each trust and empowered to, among other things, investigate the claims alleged in the complaint; examine, and make recommendations to the board of trustees regarding, the merits of such alleged claims; and to make a recommendation to the court concerning the proper resolution of the litigation. On June 13, 2017, the court granted a 60-day stay until August 12, 2017. Trial is currently set for July 16, 2018 through August 10, 2018, although there can be no assurance that the trial will take place on those dates. The Company denies that any of its subsidiaries breached their fiduciary duties to, or committed a breach of the investment management agreement with, the nominal defendant trusts. To date, only limited preliminary 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. In an action filed on June 23, 2017 and amended on June 26, 2017 in the U.S. District Court for the District of Kansas, Schapker v. Waddell & Reed Financial, Inc., et al, (Case No. 17-2365 D. Kan.) , Stacy Schapker, a participant in the Company’s 401(k) and Thrift Plan, as amended and restated (the “401(k) Plan”), filed a lawsuit against the Company, the Company’s Board of Directors, the Administrative Committee of the 401(k) Plan, and unnamed Jane and John Doe Defendants 1-25. The amended complaint, which is filed on behalf of the 401(k) Plan and a proposed class of 401(k) Plan participants, purports to assert claims for breach of fiduciary duty and prohibited transactions under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) based on the 401(k) Plan’s offering of investments managed by the Company or its affiliates from June 23, 2011 to present. The amended complaint seeks, among other things, an order compelling the disgorgement of fees paid to the Company and its affiliates by the 401(k) Plan and the restoration of losses to the 401(k) Plan arising from defendants alleged ERISA violations, attorneys’ fees and other injunctive and equitable relief. The Company believes the allegations are without merit and intends to vigorously defend this matter. 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.

Description of Business and S21

Description of Business and Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2017
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, 2016 (the “2016 Form 10-K”). Certain amounts in the prior year’s 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 2016 Form 10-K with the exception of the adoption of Accounting Standards Update (“ASU”) 2016-09, “ Improvements to Employee Share-Based Payment Accounting, ” effective January 1, 2017. As required by this ASU, excess tax benefits and tax shortfalls resulting from share-based compensation are recognized as income tax benefit or expense in the income statement on a prospective basis. Additionally, excess tax benefits or shortfalls recognized on share-based compensation are classified as an operating activity in the statement of cash flows. The Company has applied this provision prospectively, and thus, the prior period presented in the statement of cash flows has not been adjusted. This ASU allows entities to withhold shares issued during the settlement of a stock award or option, as a means of meeting minimum tax withholding due by the employee, in an amount up to the employees’ maximum individual tax rate in the relevant jurisdiction without resulting in a liability classification of the award. The value of the withheld shares is then remitted by the Company in cash to the taxing authorities on the employees’ behalf. The Company’s historical policy to withhold shares equivalent to the minimum individual tax rate is consistent with the thresholds meeting the classification of an equity award and, therefore, a retrospective classification adjustment was not required. This ASU requires that all cash payments made to taxing authorities on the employees’ behalf for withheld shares be presented as financing activities on the statement of cash flows. As this requirement is consistent with the Company’s historical accounting policy, a retrospective adjustment to presentation of the statement of cash flows was not required. This standard also allows for the option to account for forfeitures as they occur when determining the amount of share-based compensation expense to be recognized, rather than estimating expected forfeitures over the course of a vesting period. The Company elected to account for forfeitures as they occur. The net cumulative effect to the Company from the adoption of this ASU was an increase to additional paid-in capital of $3.5 million, a reduction to retained earnings of $2.2 million and an increase to the non-current deferred tax asset of $1.3 million as of January 1, 2017. 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 June 30, 2017, and the results of operations and cash flows for the six months ended June 30, 2017 and 2016 in conformity with accounting principles generally accepted in the United States.

Investment Securities (Tables)

Investment Securities (Tables)	6 Months Ended
	Jun. 30, 2017
Investment Securities
Schedule of investment securities	June 30, December 31, 2017 2016 (in thousands) Available for sale securities: Certificates of deposit $ 10,001 — Commercial paper 4,985 — Corporate bonds 34,147 — Sponsored funds 145,937 122,806 Sponsored privately offered funds — 570 Total available for sale securities 195,070 123,376 Trading securities: Mortgage-backed securities 12 13 Corporate bonds 16,098 — Common stock 110 101 Consolidated sponsored funds 215,116 145,710 Sponsored funds 30,945 29,541 Sponsored privately offered funds 631 — Total trading securities 262,912 175,365 Equity method securities: Sponsored funds 40,154 26,775 Sponsored privately offered funds 3,691 3,234 Total equity method securities 43,845 30,009 Total securities $ 501,827 328,750
Summary of maturities of securities held	Certificates of deposit, commercial paper and corporate bonds accounted for as available for sale and held as of June 30, 2017 mature as follows: Amortized cost Fair value (in thousands) Within one year $ 24,008 24,007 After one year but within five years 20,140 20,126 After 10 years 5,000 5,000 $ 49,148 49,133 Mortgage-backed securities and corporate bonds accounted for as trading and held as of June 30, 2017 mature as follows: Fair value (in thousands) Within one year $ 6,014 After one year but within five years 10,089 After five years but within 10 years 7 $ 16,110
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 June 30, 2017: Amortized Unrealized Unrealized cost gains losses Fair value (in thousands) Available for sale securities: Certificates of deposit $ 10,000 2 (1) 10,001 Commercial paper 4,981 4 — 4,985 Corporate bonds 34,166 1 (20) 34,147 Sponsored funds 149,078 1,630 (4,771) 145,937 $ 198,225 1,637 (4,792) 195,070 The following is a summary of the gross unrealized gains (losses) related to securities classified as available for sale at December 31, 2016: Amortized Unrealized Unrealized cost gains losses Fair value (in thousands) Available for sale securities: Sponsored funds $ 129,427 828 (7,449) 122,806 Sponsored privately offered funds 265 305 — 570 $ 129,692 1,133 (7,449) 123,376
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 June 30, 2017 Fair value losses Fair value losses Fair value losses (in thousands) Certificates of deposit $ 4,999 (1) — — 4,999 (1) Corporate bonds 24,146 (20) — — 24,146 (20) Sponsored funds 33,506 (1,190) 35,900 (3,581) 69,406 (4,771) $ 62,651 (1,211) 35,900 (3,581) 98,551 (4,792) Less than 12 months 12 months or longer Total Unrealized Unrealized Unrealized December 31, 2016 Fair value losses Fair value losses Fair value losses (in thousands) Sponsored funds $ 71,051 (1,834) 34,182 (5,615) 105,233 (7,449)
Summary of balances related to consolidated sponsored funds as well the company’s net interest in these funds	June 30, December 31, 2017 2016 (in thousands) Cash $ 3,706 6,885 Investments 215,116 145,710 Other assets 7,847 763 Other liabilities (6,800) (390) Redeemable noncontrolling interests (28,718) (10,653) Net interest in consolidated sponsored funds $ 191,151 142,315
Schedule of fair value of investment securities	June 30, 2017 Level 1 Level 2 Level 3 Other Assets Not Held at Fair Value Total (in thousands) Available for sale securities: Certificates of deposit $ — 10,001 — — 10,001 Commercial paper — 4,985 — — 4,985 Corporate bonds — 34,147 — — 34,147 Sponsored funds 145,937 — — — 145,937 Trading securities: Mortgage-backed securities — 12 — — 12 Corporate bonds — 16,098 — 16,098 Common stock 110 — — — 110 Consolidated sponsored funds 132,187 82,929 — — 215,116 Sponsored funds 30,945 — — — 30,945 Sponsored privately offered funds measured at net asset value (1) — — — 631 631 Equity method securities: (2) Sponsored funds 40,154 — — — 40,154 Sponsored privately offered funds measured at net asset value (1) — — — 3,691 3,691 Total $ 349,333 148,172 — 4,322 501,827 December 31, 2016 Level 1 Level 2 Level 3 Other Assets Not Held at Fair Value Total (in thousands) Available for sale securities: Sponsored funds $ 122,806 — — — 122,806 Sponsored privately offered funds measured at net asset value (1) — — — 570 570 Trading securities: Mortgage-backed securities — 13 — — 13 Common stock 101 — — — 101 Consolidated sponsored funds 100,847 44,863 — — 145,710 Sponsored funds 29,541 — — — 29,541 Equity method securities: (2) Sponsored funds 26,775 — — — 26,775 Sponsored privately offered funds measured at net asset value (1) — — — 3,234 3,234 Total $ 280,070 44,876 — 3,804 328,750 (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. Substantially all of the Company’s equity method investments are investment companies that record their underlying investments at fair value.

Derivative Financial Instrume23

Derivative Financial Instruments (Tables)	6 Months Ended
	Jun. 30, 2017
Derivative Financial Instruments
Schedule of fair value of derivative financial instruments, excluding derivative financial instruments held in certain consolidated sponsored funds	June 30, December 31, 2017 2016 Balance sheet location Fair value Fair value (in thousands) Total return swap contracts Other assets, (Other current liabilities) $ 884 (475)
Schedule of net losses recognized in income of derivative financial instrument	Three months ended Six months ended Income statement June 30, June 30, location 2017 2016 2017 2016 (in thousands) (in thousands) Total return swap contracts Investment and other (loss) $ (7,421) (6,707) (18,466) (21,929)

Goodwill and Identifiable Int24

Goodwill and Identifiable Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2017
Goodwill and Identifiable Intangible Assets
Schedule of goodwill and identifiable intangible assets	June 30, December 31, 2017 2016 (in thousands) Goodwill $ 106,970 106,970 Mutual fund management advisory contracts 38,699 38,699 Mutual fund management subadvisory contract 1,200 2,700 Other 200 200 Total identifiable intangible assets 40,099 41,599 Total $ 147,069 148,569

Pension Plan and Postretireme25

Pension Plan and Postretirement Benefits Other Than Pension (Tables)	6 Months Ended
	Jun. 30, 2017
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 June 30, Three months ended June 30, Six months ended June 30, Six months ended June 30, 2017 2016 2017 2016 2017 2016 2017 2016 (in thousands) (in thousands) Components of net periodic benefit cost: Service cost 2,683 3,106 — 185 5,409 6,099 — 370 Interest cost 1,604 2,277 14 92 3,258 4,716 29 184 Expected return on plan assets (2,558) (3,427) — — (5,117) (6,963) — — Actuarial (gain) loss amortization 1,169 1,469 (45) (38) 2,434 3,107 (90) (77) Prior service cost (credit) amortization 31 93 (1) 1 62 187 (2) 2 Transition obligation amortization 1 1 — — 2 2 — — Total (1) $ 2,930 3,519 (32) 240 6,048 7,148 (63) 479 For the three months ended June 30, 2017, $1.8 million and $1.1 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 six months ended June 30, 2017, $3.7 million and $2.3 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)	6 Months Ended
	Jun. 30, 2017
Stockholders' Equity
Components of basic and diluted earnings per share	Three months ended Six months ended June 30, June 30, 2017 2016 2017 2016 (in thousands, except per share amounts) Net income attributable to Waddell & Reed Financial, Inc. $ 23,307 33,695 $ 56,363 70,663 Weighted average shares outstanding, basic and diluted 83,611 82,947 83,843 82,526 Earnings per share, basic and diluted $ 0.28 0.41 $ 0.67 0.86
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 June 30, 2017 securities securities gains (losses) income (loss) (in thousands) Balance at March 31, 2017 $ (2,641) (1,120) (45,183) (48,944) Other comprehensive income before reclassification 722 619 — 1,341 Amount reclassified from accumulated other comprehensive income (loss) (67) (39) 727 621 Net current period other comprehensive income 655 580 727 1,962 Balance at June 30, 2017 $ (1,986) $ (540) (44,456) (46,982) 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 June 30, 2016 securities securities gains (losses) income (loss) (in thousands) Balance at March 31, 2016 $ (3,682) (3,211) (53,459) (60,352) Other comprehensive income before reclassification 1,554 919 — 2,473 Amount reclassified from accumulated other comprehensive income (loss) (370) (219) 960 371 Net current period other comprehensive income 1,184 700 960 2,844 Balance at June 30, 2016 $ (2,498) $ (2,511) (52,499) (57,508) Change in valuation allowance for unrealized Pension and Total Unrealized gains postretirement accumulated gains (losses) (losses) on benefits other on investment investment unrealized comprehensive Six months ended June 30, 2017 securities securities gains (losses) income (loss) (in thousands) Balance at December 31, 2016 $ (3,972) (3,388) (45,969) (53,329) Other comprehensive income before reclassification 2,145 2,942 — 5,087 Amount reclassified from accumulated other comprehensive income (loss) (159) (94) 1,513 1,260 Net current period other comprehensive income 1,986 2,848 1,513 6,347 Balance at June 30, 2017 $ (1,986) $ (540) (44,456) (46,982) Change in valuation allowance for unrealized Pension and Total Unrealized gains postretirement accumulated (gains) losses (losses) on benefits other on investment investment unrealized comprehensive Six months ended June 30, 2016 securities securities gains (losses) income (loss) (in thousands) Balance at December 31, 2015 $ (3,729) (3,240) (54,536) (61,505) Other comprehensive income before reclassification 1,550 917 — 2,467 Amount reclassified from accumulated other comprehensive income (loss) (319) (188) 2,037 1,530 Net current period other comprehensive income 1,231 729 2,037 3,997 Balance at June 30, 2016 $ (2,498) $ (2,511) (52,499) (57,508)
Summary of reclassifications from accumulated other comprehensive income (loss) and included in net income	For the three months ended June 30, 2017 Tax (expense) Pre-tax benefit Net of tax Statement of income line item (in thousands) Reclassifications included in net income: Sponsored funds investment gains $ 106 (39) 67 Investment and other income (loss) Valuation allowance — 39 39 Provision for income taxes Amortization of pension and postretirement benefits (1,156) 429 (727) Underwriting and distribution expense and Compensation and related costs Total $ (1,050) 429 (621) For the three months ended June 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 $ 589 (219) 370 Investment and other income (loss) Valuation allowance — 219 219 Provision for income taxes Amortization of pension and postretirement benefits (1,526) 566 (960) Underwriting and distribution expense and Compensation and related costs Total $ (937) 566 (371) For the six months ended June 30, 2017 Tax (expense) Pre-tax benefit Net of tax Statement of income line item (in thousands) Reclassifications included in net income: Sponsored funds investment gains $ 253 (94) 159 Investment and other income (loss) Valuation allowance — 94 94 Provision for income taxes Amortization of pension and postretirement benefits (2,407) 894 (1,513) Underwriting and distribution expense and Compensation and related costs Total $ (2,154) 894 (1,260) For the six months ended June 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 $ 508 (189) 319 Investment and other income (loss) Valuation allowance — 188 188 Provision for income taxes Amortization of pension and postretirement benefits (3,222) 1,185 (2,037) Underwriting and distribution expense and Compensation and related costs Total $ (2,714) 1,184 (1,530)

Description of Business and S27

Description of Business and Significant Accounting Policies (Details) - USD ($) $ in Millions	Jan. 01, 2017	Jun. 30, 2017
Assets under management		$ 80,400
ASU 2016-09
Increase to additional paid-in capital	$ 3.5
Reduction to retained earnings	(2.2)
Increase to the non-current deferred tax asset	$ 1.3

Investment Securities - Investm

Investment Securities - Investment securities (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Available for sale securities:
Available for sale securities	$ 195,070	$ 123,376
Trading securities:
Trading securities	262,912	175,365
Equity method securities
Equity method securities	43,845	30,009
Total investment securities	501,827	328,750
Cerficates of deposit
Available for sale securities:
Available for sale securities	10,001
Commercial paper
Available for sale securities:
Available for sale securities	4,985
Mortgage-backed securities
Trading securities:
Trading securities	12	13
Corporate bonds
Available for sale securities:
Available for sale securities	34,147
Trading securities:
Trading securities	16,098
Common Stock
Trading securities:
Trading securities	110	101
Consolidated Sponsored Funds
Trading securities:
Trading securities	215,116	145,710
Sponsored funds
Available for sale securities:
Available for sale securities	145,937	122,806
Trading securities:
Trading securities	30,945	29,541
Equity method securities
Equity method securities	40,154	26,775
Sponsored privately offered funds
Available for sale securities:
Available for sale securities		570
Trading securities:
Trading securities	631
Equity method securities
Equity method securities	$ 3,691	$ 3,234

Investment Securities - Maturit

Investment Securities - Maturity (Details) $ in Thousands	Jun. 30, 2017USD ($)
Amortized Cost
Within one year	$ 24,008
After one year but within five years	20,140
After 10 years	5,000
Total amortized cost	49,148
Fair value
Within one year	24,007
After one year but within five years	20,126
After 10 years	5,000
Total fair value	49,133
Fair value
Within one year	6,014
After one year but within five years	10,089
After five years but within 10 years	7
Total fair value	$ 16,110

Investment Securities - Inves30

Investment Securities - Investment securities and summary of the gains (losses) related to securities (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Available for sale securities:
Amortized cost	$ 198,225	$ 129,692
Unrealized gains	1,637	1,133
Unrealized losses	(4,792)	(7,449)
Fair value	195,070	123,376
Cerficates of deposit
Available for sale securities:
Amortized cost	10,000
Unrealized gains	2
Unrealized losses	(1)
Fair value	10,001
Commercial paper
Available for sale securities:
Amortized cost	4,981
Unrealized gains	4
Fair value	4,985
Corporate bonds
Available for sale securities:
Amortized cost	34,166
Unrealized gains	1
Unrealized losses	(20)
Fair value	34,147
Sponsored funds
Available for sale securities:
Amortized cost	149,078	129,427
Unrealized gains	1,630	828
Unrealized losses	(4,771)	(7,449)
Fair value	$ 145,937	122,806
Sponsored privately offered funds
Available for sale securities:
Amortized cost		265
Unrealized gains		305
Fair value		$ 570

Investment Securities - Availab

Investment Securities - Available for sale sponsored funds with fair values below carrying values (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Fair value
Less than 12 months	$ 62,651
12 months or longer	35,900
Total temporarily impaired securities	98,551
Unrealized losses
Less than 12 months	(1,211)
12 months or longer	(3,581)
Total Unrealized losses on temporarily impaired securities	(4,792)
Cerficates of deposit
Fair value
Less than 12 months	4,999
Total temporarily impaired securities	4,999
Unrealized losses
Less than 12 months	(1)
Total Unrealized losses on temporarily impaired securities	(1)
Corporate bonds
Fair value
Less than 12 months	24,146
Total temporarily impaired securities	24,146
Unrealized losses
Less than 12 months	(20)
Total Unrealized losses on temporarily impaired securities	(20)
Sponsored funds
Fair value
Less than 12 months	33,506	$ 71,051
12 months or longer	35,900	34,182
Total temporarily impaired securities	69,406	105,233
Unrealized losses
Less than 12 months	(1,190)	(1,834)
12 months or longer	(3,581)	(5,615)
Total Unrealized losses on temporarily impaired securities	$ (4,771)	$ (7,449)

Investment Securities - Consoli

Investment Securities - Consolidated sponsored funds (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016	Dec. 31, 2015
Investment Securities
Cash	$ 427,939	$ 555,102	$ 467,458	$ 558,495
Redeemable noncontrolling interests	(28,718)	(10,653)
Consolidated Sponsored Funds
Investment Securities
Cash	3,706	6,885
Investments	215,116	145,710
Other assets	7,847	763
Other liabilities	(6,800)	(390)
Redeemable noncontrolling interests	(28,718)	(10,653)
Net interest in consolidated sponsored funds	191,151	$ 142,315
Deconsolidated cash and cash equivalents value	2,600
Deconsolidated investments value	7,300
Deconsolidated redeemable noncontrolling interest	$ 9,900

Investment Securities - Fair va

Investment Securities - Fair value of investment securities (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Fair value of investments
Available-for-sale Securities	$ 195,070	$ 123,376
Trading Securities	262,912	175,365
Equity method securities	43,845	30,009
Total investment securities	501,827	328,750
Cerficates of deposit
Fair value of investments
Available-for-sale Securities	10,001
Commercial paper
Fair value of investments
Available-for-sale Securities	4,985
Corporate bonds
Fair value of investments
Available-for-sale Securities	34,147
Trading Securities	16,098
Sponsored funds
Fair value of investments
Available-for-sale Securities	145,937	122,806
Trading Securities	30,945	29,541
Equity method securities	40,154	26,775
Sponsored privately offered funds
Fair value of investments
Available-for-sale Securities		570
Trading Securities	631
Equity method securities	3,691	3,234
Mortgage-backed securities
Fair value of investments
Trading Securities	12	13
Common Stock
Fair value of investments
Trading Securities	110	101
Consolidated Sponsored Funds
Fair value of investments
Trading Securities	215,116	145,710
Level 1
Fair value of investments
Total investment securities	349,333	280,070
Level 1 | Sponsored funds
Fair value of investments
Available-for-sale Securities	145,937	122,806
Trading Securities	30,945	29,541
Equity method securities	40,154	26,775
Level 1 | Common Stock
Fair value of investments
Trading Securities	110	101
Level 1 | Consolidated Sponsored Funds
Fair value of investments
Trading Securities	132,187	100,847
Level 2
Fair value of investments
Total investment securities	148,172	44,876
Level 2 | Cerficates of deposit
Fair value of investments
Available-for-sale Securities	10,001
Level 2 | Commercial paper
Fair value of investments
Available-for-sale Securities	4,985
Level 2 | Corporate bonds
Fair value of investments
Available-for-sale Securities	34,147
Trading Securities	16,098
Level 2 | Mortgage-backed securities
Fair value of investments
Trading Securities	12	13
Level 2 | Consolidated Sponsored Funds
Fair value of investments
Trading Securities	82,929	44,863
Other Assets Not Held at Fair Value
Fair value of investments
Total investment securities	4,322	3,804
Other Assets Not Held at Fair Value | Sponsored privately offered funds
Fair value of investments
Available-for-sale Securities		570
Trading Securities	631
Equity method securities	$ 3,691	$ 3,234

Derivative Financial Instrume34

Derivative Financial Instruments (Details) - Not designated as a hedge $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017USD ($)contract	Jun. 30, 2016USD ($)	Jun. 30, 2017USD ($)contract	Jun. 30, 2016USD ($)	Dec. 31, 2016USD ($)
Total return swap contracts
Derivative Financial Instruments
Number of contracts | contract	8		8
Notional value	$ 238,200		$ 238,200		$ 160,200
Cash collateral with the counterparties	8,300		8,300		7,100
Total return swap contracts | Investment and other income (loss)
Derivative Financial Instruments
Net gains (losses) recognized in income	(7,421)	$ (6,707)	(18,466)	$ (21,929)
Total return swap contracts | Other assets
Derivative Financial Instruments
Fair value - assets	$ 884		$ 884
Total return swap contracts | Other current liabilities
Derivative Financial Instruments
Fair value - liabilities					$ (475)
Sponsored funds
Derivative Financial Instruments
Investment ownership interest (as a percent)			99.00%
Sponsored funds | Total return swap contracts
Derivative Financial Instruments
Investment ownership interest (as a percent)			89.00%

Goodwill and Identifiable Int35

Goodwill and Identifiable Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Goodwill and identifiable intangible assets
Goodwill	$ 106,970	$ 106,970
Other	200	200
Total identifiable intangible assets	40,099	41,599
Total goodwill and identifiable intangible assets	147,069	148,569
Mutual fund management advisory contracts
Goodwill and identifiable intangible assets
Mutual fund contracts	38,699	38,699
Mutual fund management subadvisory contracts
Goodwill and identifiable intangible assets
Mutual fund contracts	$ 1,200	$ 2,700

Indebtedness (Details)

Indebtedness (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Indebtedness
Short-term notes payable	$ 94,945
Long-term debt	94,747	$ 189,605
Senior 5.0% unsecured notes due, 2018 ("Series A Notes")
Indebtedness
Fair value of outstanding short-term indebtedness	96,400
Short-term notes payable	94,900
Senior 5.75% unsecured notes due, 2021 ("Series B Notes")
Indebtedness
Fair value of outstanding long-term indebtedness	102,900
Long-term debt	$ 94,700

Income Tax Uncertainties (Detai

Income Tax Uncertainties (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Income Tax Uncertainties
Unrecognized tax benefits, including penalties and interest that if recognized would impact effective tax rate	$ 12.3	$ 11.5
Unrecognized tax benefits, including penalties and interest, net of federal tax benefit that if recognized would affect effective tax rate	9	8.4
Accrued interest and penalties related to uncertain tax positions	4.2	3.8
Accrued interest and penalties related to uncertain tax positions, net of federal benefit	3.4	$ 3.1
Total expense of interest and penalties, net of federal benefit related to uncertain tax positions	$ 0.3

Pension Plan and Postretireme38

Pension Plan and Postretirement Benefits Other Than Pension (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
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			$ 10,000
Components of net periodic benefit cost:
Service cost	$ 2,683	$ 3,106	5,409	$ 6,099
Interest cost	1,604	2,277	3,258	4,716
Expected return on plan assets	(2,558)	(3,427)	(5,117)	(6,963)
Actuarial (gain) loss amortization	1,169	1,469	2,434	3,107
Prior service cost (credit) amortization	31	93	62	187
Transition obligation amortization	1	1	2	2
Total	2,930	3,519	6,048	7,148
Pension Benefits | Compensation and Related Costs
Components of net periodic benefit cost:
Total	1,800		$ 3,700
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		370
Interest cost	14	92	$ 29	184
Actuarial (gain) loss amortization	(45)	(38)	(90)	(77)
Prior service cost (credit) amortization	(1)	1	(2)	2
Total	(32)	$ 240	$ (63)	479
Other Postretirement Benefits | Underwriting and Distribution Expense
Components of net periodic benefit cost:
Total	$ 1,100			$ 2,300

Stockholders' Equity - Earnings

Stockholders' Equity - Earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands	Apr. 27, 2017	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Components of basic and diluted earnings per share
Net income		$ 23,307	$ 33,695	$ 56,363	$ 70,663
Weighted average shares outstanding - basic and diluted		83,611,000	82,947,000	83,843,000	82,526,000
Earnings per share:
Earnings per share, basic and diluted (in dollars per share)		$ 0.28	$ 0.41	$ 0.67	$ 0.86
Dividends
Dividends accrued, per share (in dollars per share)	$ 0.46			$ 0.92
Dividends to be paid		$ 38,500		$ 38,500
Common stock repurchases
Shares repurchased in the open market or privately		237,472	1,075,826	714,354	2,201,497
Shares repurchased from employees to cover minimum income tax withholdings		237,472	300,826	239,354	304,497

Stockholders' Equity - Other co

Stockholders' Equity - Other comprehensive income (loss) activity (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
AOCI Attributable to Parent, Net of Tax
Balance at the beginning of the period			$ 844,002
Net current period other comprehensive income (loss)			6,347
Balance at the end of the period	$ 844,168		844,168
Accumulated Other Comprehensive Income(Loss)
AOCI Attributable to Parent, Net of Tax
Balance at the beginning of the period	(48,944)	$ (60,352)	(53,329)	$ (61,505)
Other comprehensive income (loss) before reclassification	1,341	2,473	5,087	2,467
Amount reclassified from accumulated other comprehensive income (loss)	621	371	1,260	1,530
Net current period other comprehensive income (loss)	1,962	2,844	6,347	3,997
Balance at the end of the period	(46,982)	(57,508)	(46,982)	(57,508)
Unrealized (gains) losses on investment securities
AOCI Attributable to Parent, Net of Tax
Balance at the beginning of the period	(2,641)	(3,682)	(3,972)	(3,729)
Other comprehensive income (loss) before reclassification	722	1,554	2,145	1,550
Amount reclassified from accumulated other comprehensive income (loss)	(67)	(370)	(159)	(319)
Net current period other comprehensive income (loss)	655	1,184	1,986	1,231
Balance at the end of the period	(1,986)	(2,498)	(1,986)	(2,498)
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	(1,120)	(3,211)	(3,388)	(3,240)
Other comprehensive income (loss) before reclassification	619	919	2,942	917
Amount reclassified from accumulated other comprehensive income (loss)	(39)	(219)	(94)	(188)
Net current period other comprehensive income (loss)	580	700	2,848	729
Balance at the end of the period	(540)	(2,511)	(540)	(2,511)
Pension and postretirement benefits
AOCI Attributable to Parent, Net of Tax
Balance at the beginning of the period	(45,183)	(53,459)	(45,969)	(54,536)
Amount reclassified from accumulated other comprehensive income (loss)	727	960	1,513	2,037
Net current period other comprehensive income (loss)	727	960	1,513	2,037
Balance at the end of the period	$ (44,456)	$ (52,499)	$ (44,456)	$ (52,499)

Stockholders' Equity - Reclassi

Stockholders' Equity - Reclassifications from accumulated other comprehensive income (loss) and included in net income (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Reclassifications from accumulated other comprehensive income (loss)
Reclassifications included in net income:
Pre-tax	$ (1,050)	$ (937)	$ (2,154)	$ (2,714)
Tax (expense) benefit	429	566	894	1,184
Net of tax	(621)	(371)	(1,260)	(1,530)
Sponsored funds investment gains | Investment and other income (loss) | Reclassifications from accumulated other comprehensive income (loss)
Reclassifications included in net income:
Pre-tax	106	589	253	508
Tax (expense) benefit	(39)	(219)	(94)	(189)
Net of tax	67	370	159	319
Change in valuation allowance for unrealized gains (losses) on investment securities
Reclassifications included in net income:
Net of tax	39	219	94	188
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	39	219	94	188
Net of tax	39	219	94	188
Pension and postretirement benefits
Reclassifications included in net income:
Net of tax	(727)	(960)	(1,513)	(2,037)
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	(1,156)	(1,526)	(2,407)	(3,222)
Tax (expense) benefit	429	566	894	1,185
Net of tax	$ (727)	$ (960)	$ (1,513)	$ (2,037)

Contingencies (Details)

Contingencies (Details)	Apr. 18, 2016item
Contingencies
Number of mutual fund shareholders involved in litigation	2
Number of affiliated mutual fund trustees involved in litigation	2
Number of subsidiaries	2