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Section 1: 8-K (8-K)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):

April 19, 2018

 

WADDELL & REED FINANCIAL, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

 

001-13913

 

51-0261715

(State or Other
Jurisdiction of
Incorporation)

 

(Commission
File Number)

 

(IRS Employer
Identification No.)

 

6300 Lamar Avenue

Overland Park, Kansas 66202

(Address of Principal Executive Offices) (Zip Code)

 

(913) 236-2000

(Registrant’s telephone number, including area code)

 


 

(Registrant’s Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o             Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o             Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o             Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o             Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company  o

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o

 

 

 



 

ITEM 7.01                                  REGULATION FD DISCLOSURE.

 

Effective January 1, 2018, Waddell & Reed Financial, Inc. (the “Company”) changed the presentation of certain line items in its consolidated statements of income that are intended to improve the transparency of the Company’s financial statements through clearer alignment of operating expenses with financial statement captions. Specifically, the Company revised its accounting policy related to the reporting of indirect underwriting and distribution expenses in the former underwriting and distribution caption and certain expenses historically reported as general and administrative.  Expenses previously recorded as Underwriting and distribution expenses will be reclassified into (a) the following existing operating expense captions:  Compensation and benefits and General and administrative, and (b) the following newly created operating expense captions: Distribution, Technology, Occupancy, and Marketing and advertising.  Certain expenses historically reported as general and administrative will be reclassified into the following newly created operating expense captions:  Technology, Occupancy, and Marketing and advertising.  The Company considers the change in policy to be preferable and does not consider the change to be material to its consolidated financial statements. These changes were applied retrospectively to all periods presented and do not affect net income attributable to the Company.

 

On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2017-07, “Compensation — Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”.  As a result, the Company retrospectively reclassified all net periodic pension costs, other than the historical service cost, from Compensation and benefits to Investment and other income (loss) within the consolidated statements of income.  The reclassification of expenses as a result of the adoption of ASU 2017-07 does not affect net income attributable to the Company.

 

Supplemental financial information regarding the impact of the Company’s change in classification of certain expenses during 2016 and 2017 is furnished as Exhibit 99.1 hereto and incorporated herein by reference.  This supplemental information will also be posted on the “Investor Relations” section of the Company’s Web site at ir.waddell.com.

 

ITEM 9.01                                  FINANCIAL STATEMENTS AND EXHIBITS.

 

(d)                                 Exhibits.

 

Exhibit No.

 

Description

99.1

 

Supplemental financial information regarding reclassification of expenses

 

2



 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

WADDELL & REED FINANCIAL, INC.

 

 

Date: April 19, 2018

By:

/s/ Benjamin R. Clouse

 

 

Senior Vice President and

 

 

Chief Financial Officer

 

3


(Back To Top)

Section 2: EX-99.1 (EX-99.1)

Exhibit 99.1

 

The table below reflects the retrospective change in the Company’s accounting policy for reporting certain expenses for all periods presented.

 

Unaudited Schedule of Operating Data

(Amounts in thousands, except for per share and margin data)

 

 

 

Three Months Ended Mar. 31, 2017

 

Three Months Ended Jun. 30, 2017

 

Three Months Ended Sep. 30, 2017

 

Three Months Ended Dec. 31, 2017

 

 

 

Previously
Reported (1)

 

Expense
Reclassification

 

ASU
2017-07

 

Adjusted

 

Previously
Reported (1)

 

Expense
Reclassification

 

ASU
2017-07

 

Adjusted

 

Previously
Reported (1)

 

Expense
Reclassification

 

ASU
2017-07

 

Adjusted

 

Previously
Reported (1)

 

Expense
Reclassification

 

ASU
2017-07

 

Adjusted

 

Total Revenues

 

$

286,564

 

 

 

$

286,564

 

$

286,657

 

 

 

$

286,657

 

$

289,447

 

 

 

$

289,447

 

$

294,476

 

 

 

$

294,476

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Underwriting and distribution

 

149,863

 

(149,863

)

 

 

150,693

 

(150,693

)

 

 

141,830

 

(141,830

)

 

 

151,038

 

(151,038

)

 

 

Distribution

 

 

108,437

 

 

108,437

 

 

109,060

 

 

109,060

 

 

106,878

 

 

106,878

 

 

107,889

 

 

107,889

 

Compensation and benefits

 

48,570

 

17,582

 

883

 

67,035

 

46,449

 

17,907

 

976

 

65,332

 

31,076

 

12,503

 

26,057

 

69,636

 

55,281

 

20,513

 

(6,521

)

69,273

 

General and administrative

 

25,724

 

(3,529

)

 

22,195

 

28,153

 

(4,866

)

 

23,287

 

27,832

 

(4,432

)

 

23,400

 

23,811

 

(3,742

)

 

20,069

 

Technology

 

 

16,977

 

 

16,977

 

 

17,780

 

 

17,780

 

 

16,039

 

 

16,039

 

 

15,282

 

 

15,282

 

Occupancy

 

 

7,785

 

 

7,785

 

 

7,548

 

 

7,548

 

 

7,645

 

 

7,645

 

 

7,743

 

 

7,743

 

Marketing and advertising

 

 

2,611

 

 

2,611

 

 

3,264

 

 

3,264

 

 

3,197

 

 

3,197

 

 

3,353

 

 

3,353

 

Depreciation

 

5,221

 

 

 

5,221

 

5,175

 

 

 

5,175

 

5,230

 

 

 

5,230

 

5,357

 

 

 

5,357

 

Subadvisory fees

 

2,697

 

 

 

2,697

 

3,194

 

 

 

3,194

 

3,566

 

 

 

3,566

 

3,717

 

 

 

3,717

 

Intangible asset impairment

 

600

 

 

 

600

 

900

 

 

 

900

 

 

 

 

 

 

 

 

 

Total Operating Expenses

 

$

232,675

 

 

883

 

233,558

 

$

234,564

 

 

976

 

235,540

 

$

209,534

 

 

26,057

 

235,591

 

$

239,204

 

 

(6,521

)

232,683

 

Operating Income

 

53,889

 

 

(883

)

53,006

 

52,093

 

 

(976

)

51,117

 

79,913

 

 

(26,057

)

53,856

 

55,272

 

 

6,521

 

61,793

 

Investment and other income (loss)

 

2,129

 

 

883

 

3,012

 

2,021

 

 

976

 

2,997

 

7,236

 

 

26,057

 

33,293

 

4,303

 

 

(6,521

)

(2,218

)

Interest expense

 

(2,786

)

 

 

(2,786

)

(2,788

)

 

 

(2,788

)

(2,796

)

 

 

(2,796

)

(2,909

)

 

 

(2,909

)

Income before provision for income taxes

 

53,232

 

 

 

53,232

 

51,326

 

 

 

51,326

 

84,353

 

 

 

84,353

 

56,666

 

 

 

56,666

 

Provision for income taxes

 

18,881

 

 

 

18,881

 

26,608

 

 

 

26,608

 

29,499

 

 

 

29,499

 

26,380

 

 

 

26,380

 

Net income

 

$

34,351

 

 

 

$

34,351

 

$

24,718

 

 

 

$

24,718

 

$

54,854

 

 

 

$

54,854

 

$

30,286

 

 

 

$

30,286

 

Net income attributable to redeemable noncontrolling interests

 

480

 

 

 

480

 

656

 

 

 

656

 

1,272

 

 

 

1,272

 

522

 

 

 

522

 

Net income attributable to Waddell & Reed Financial, Inc.

 

$

33,871

 

 

 

$

33,871

 

$

24,062

 

 

 

$

24,062

 

$

53,582

 

 

 

$

53,582

 

$

29,764

 

 

 

$

29,764

 

Net income per share attributable to Waddell & Reed Financial, Inc. common shareholders, basic and diluted

 

$

0.40

 

 

 

 

 

$

0.40

 

$

0.29

 

 

 

 

 

$

0.29

 

$

0.64

 

 

 

 

 

$

0.64

 

$

0.36

 

 

 

 

 

$

0.36

 

Weighted average shares outstanding, basic and diluted

 

84,077

 

 

 

 

 

84,077

 

83,611

 

 

 

 

 

83,611

 

83,476

 

 

 

 

 

83,476

 

83,137

 

 

 

 

 

83,137

 

Operating margin

 

18.8

%

 

 

 

 

18.5

%

18.2

%

 

 

 

 

17.8

%

27.6

%

 

 

 

 

18.6

%

18.8

%

 

 

 

 

21.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Broker-Dealer

 

 

74,529

 

 

74,529

 

 

76,062

 

 

76,062

 

 

75,100

 

 

75,100

 

 

76,494

 

 

76,494

 

Unaffiliated

 

 

33,908

 

 

33,908

 

 

32,998

 

 

32,998

 

 

31,778

 

 

31,778

 

 

31,395

 

 

31,395

 

Total

 

 

$

108,437

 

 

$

108,437

 

 

$

109,060

 

 

$

109,060

 

 

$

106,878

 

 

$

106,878

 

 

$

107,889

 

 

$

107,889

 

 

Unaudited Schedule of Operating Data

(Amounts in thousands, except for per share and margin data)

 

 

 

Six Months Ended Jun. 30, 2017

 

Nine Months Ended Sep. 30, 2017

 

Year Ended Dec. 31, 2017

 

 

 

Previously
Reported (1)

 

Expense
Reclassification

 

ASU
2017-07

 

Adjusted

 

Previously
Reported (1)

 

Expense
Reclassification

 

ASU
2017-07

 

Adjusted

 

Previously
Reported (1)

 

Expense
Reclassification

 

ASU
2017-07

 

Adjusted

 

Total Revenues

 

$

573,221

 

 

 

$

573,221

 

$

862,668

 

 

 

$

862,668

 

$

1,157,144

 

 

 

$

1,157,144

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Underwriting and distribution

 

300,556

 

(300,556

)

 

 

442,386

 

(442,386

)

 

 

593,424

 

(593,424

)

 

 

Distribution

 

 

217,497

 

 

217,497

 

 

324,375

 

 

324,375

 

 

432,264

 

 

432,264

 

Compensation and benefits

 

95,019

 

35,489

 

1,859

 

132,367

 

126,095

 

47,992

 

27,916

 

202,003

 

181,376

 

68,505

 

21,395

 

271,276

 

General and administrative

 

53,877

 

(8,395

)

 

45,482

 

81,709

 

(12,827

)

 

68,882

 

105,520

 

(16,569

)

 

88,951

 

Technology

 

 

34,757

 

 

34,757

 

 

50,796

 

 

50,796

 

 

66,078

 

 

66,078

 

Occupancy

 

 

15,333

 

 

15,333

 

 

22,978

 

 

22,978

 

 

30,721

 

 

30,721

 

Marketing and advertising

 

 

5,875

 

 

5,875

 

 

9,072

 

 

9,072

 

 

12,425

 

 

12,425

 

Depreciation

 

10,396

 

 

 

10,396

 

15,626

 

 

 

15,626

 

20,983

 

 

 

20,983

 

Subadvisory fees

 

5,891

 

 

 

5,891

 

9,457

 

 

 

9,457

 

13,174

 

 

 

13,174

 

Intangible asset impairment

 

1,500

 

 

 

1,500

 

1,500

 

 

 

1,500

 

1,500

 

 

 

1,500

 

Total Operating Expenses

 

$

467,239

 

 

1,859

 

$

469,098

 

$

676,773

 

 

27,916

 

$

704,689

 

$

915,977

 

 

21,395

 

$

937,372

 

Operating Income

 

105,982

 

 

(1,859

)

104,123

 

185,895

 

 

(27,916

)

157,979

 

241,167

 

 

(21,395

)

219,772

 

Investment and other income (loss)

 

4,150

 

 

1,859

 

6,009

 

11,386

 

 

27,916

 

39,302

 

15,689

 

 

21,395

 

37,084

 

Interest expense

 

(5,574

)

 

 

(5,574

)

(8,370

)

 

 

(8,370

)

(11,279

)

 

 

(11,279

)

Income before provision for income taxes

 

104,558

 

 

 

104,558

 

188,911

 

 

 

188,911

 

245,577

 

 

 

245,577

 

Provision for income taxes

 

45,489

 

 

 

45,489

 

74,988

 

 

 

74,988

 

101,368

 

 

 

101,368

 

Net income

 

$

59,069

 

 

 

$

59,069

 

$

113,923

 

 

 

$

113,923

 

$

144,209

 

 

 

$

144,209

 

Net income attributable to redeemable noncontrolling interests

 

1,136

 

 

 

1,136

 

2,408

 

 

 

2,408

 

2,930

 

 

 

2,930

 

Net income attributable to Waddell & Reed Financial, Inc.

 

$

57,933

 

 

 

$

57,933

 

$

111,515

 

 

 

$

111,515

 

$

141,279

 

 

 

$

141,279

 

Net income per share attributable to Waddell & Reed Financial, Inc. common shareholders, basic and diluted

 

$

0.69

 

 

 

 

 

$

0.69

 

$

1.33

 

 

 

 

 

$

1.33

 

$

1.69

 

 

 

 

 

$

1.69

 

Weighted average shares outstanding, basic and diluted

 

83,843

 

 

 

 

 

83,843

 

83,719

 

 

 

 

 

83,719

 

83,573

 

 

 

 

 

83,573

 

Operating margin

 

18.5

%

 

 

 

 

18.2

%

21.5

%

 

 

 

 

18.3

%

20.8

%

 

 

 

 

19.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Broker-Dealer

 

 

150,591

 

 

150,591

 

 

225,691

 

 

225,691

 

 

302,185

 

 

302,185

 

Unaffiliated

 

 

66,906

 

 

66,906

 

 

98,684

 

 

98,684

 

 

130,079

 

 

130,079

 

Total

 

 

$

217,497

 

 

$

217,497

 

 

$

324,375

 

 

$

324,375

 

 

$

432,264

 

 

$

432,264

 

 



 

The table below reflects the retrospective change in the Company’s accounting policy for reporting certain expenses for all periods presented.

 

Unaudited Schedule of Operating Data

(Amounts in thousands, except for per share and margin data)

 

 

 

Three Months Ended Mar. 31, 2016

 

Three Months Ended Jun. 30, 2016

 

Three Months Ended Sep. 30, 2016

 

Three Months Ended Dec. 31, 2016

 

 

 

Previously
Reported (1)

 

Expense
Reclassification

 

ASU
2017-07

 

Adjusted

 

Previously
Reported (1)

 

Expense
Reclassification

 

ASU
2017-07

 

Adjusted

 

Previously
Reported (1)

 

Expense
Reclassification

 

ASU
2017-07

 

Adjusted

 

Previously
Reported (1)

 

Expense
Reclassification

 

ASU
2017-07

 

Adjusted

 

Total Revenues

 

$

323,816

 

 

 

$

323,816

 

$

319,208

 

 

 

$

319,208

 

$

303,086

 

 

 

$

303,086

 

$

292,913

 

 

 

$

292,913

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Underwriting and distribution

 

173,197

 

(173,197

)

 

 

180,669

 

(180,669

)

 

 

152,392

 

(152,392

)

 

 

158,390

 

(158,390

)

 

 

Distribution

 

 

129,624

 

 

129,624

 

 

132,825

 

 

132,825

 

 

111,633

 

 

111,633

 

 

111,899

 

 

111,899

 

Compensation and benefits

 

51,848

 

17,569

 

1,154

 

70,571

 

57,351

 

23,563

 

1,093

 

82,007

 

39,173

 

14,543

 

1,124

 

54,840

 

52,450

 

18,637

 

(10,667

)

60,420

 

General and administrative

 

19,152

 

1,030

 

 

20,182

 

19,276

 

(1,396

)

 

17,880

 

23,280

 

(1,847

)

 

21,433

 

22,287

 

(963

)

 

21,324

 

Technology

 

 

14,444

 

 

14,444

 

 

14,569

 

 

14,569

 

 

16,988

 

 

16,988

 

 

17,044

 

 

17,044

 

Occupancy

 

 

7,842

 

 

7,842

 

 

7,808

 

 

7,808

 

 

7,899

 

 

7,899

 

 

7,857

 

 

7,857

 

Marketing and advertising

 

 

2,688

 

 

2,688

 

 

3,300

 

 

3,300

 

 

3,176

 

 

3,176

 

 

3,916

 

 

3,916

 

Depreciation

 

4,362

 

 

 

4,362

 

4,260

 

 

 

4,260

 

4,541

 

 

 

4,541

 

5,196

 

 

 

5,196

 

Subadvisory fees

 

2,093

 

 

 

2,093

 

2,325

 

 

 

2,325

 

2,566

 

 

 

2,566

 

2,588

 

 

 

2,588

 

Intangible asset impairment

 

 

 

 

 

 

 

 

 

5,700

 

 

 

5,700

 

4,049

 

 

 

4,049

 

Total Operating Expenses

 

$

250,652

 

 

1,154

 

$

251,806

 

$

263,881

 

 

1,093

 

$

264,974

 

$

227,652

 

 

1,124

 

$

228,776

 

$

244,960

 

 

(10,667

)

$

234,293

 

Operating Income

 

73,164

 

 

(1,154

)

72,010

 

55,327

 

 

(1,093

)

54,234

 

75,434

 

 

(1,124

)

74,310

 

47,953

 

 

10,667

 

58,620

 

Investment and other income (loss)

 

(10,218

)

 

1,154

 

(9,064

)

687

 

 

1,093

 

1,780

 

7,878

 

 

1,124

 

9,002

 

890

 

 

(10,667

)

(9,777

)

Interest expense

 

(2,768

)

 

 

(2,768

)

(2,776

)

 

 

(2,776

)

(2,792

)

 

 

(2,792

)

(2,786

)

 

 

(2,786

)

Income before provision for income taxes

 

60,178

 

 

 

60,178

 

53,238

 

 

 

53,238

 

80,520

 

 

 

80,520

 

46,057

 

 

 

46,057

 

Provision for income taxes

 

21,610

 

 

 

21,610

 

18,682

 

 

 

18,682

 

24,634

 

 

 

24,634

 

16,958

 

 

 

16,958

 

Net income

 

$

38,568

 

 

 

$

38,568

 

$

34,556

 

 

 

$

34,556

 

$

55,886

 

 

 

$

55,886

 

$

29,099

 

 

 

$

29,099

 

Net income attributable to redeemable noncontrolling interests

 

501

 

 

 

501

 

(124

)

 

 

(124

)

978

 

 

 

978

 

59

 

 

 

59

 

Net income attributable to Waddell & Reed Financial, Inc.

 

$

38,067

 

 

 

$

38,067

 

$

34,680

 

 

 

$

34,680

 

$

54,908

 

 

 

$

54,908

 

$

29,040

 

 

 

$

29,040

 

Net income per share attributable to Waddell & Reed Financial, Inc. common shareholders, basic and diluted

 

$

0.46

 

 

 

 

 

$

0.46

 

$

0.42

 

 

 

 

 

$

0.42

 

$

0.66

 

 

 

 

 

$

0.66

 

$

0.35

 

 

 

 

 

$

0.35

 

Weighted average shares outstanding, basic and diluted

 

82,104

 

 

 

 

 

82,104

 

82,947

 

 

 

 

 

82,947

 

82,834

 

 

 

 

 

82,834

 

82,783

 

 

 

 

 

82,783

 

Operating margin

 

22.6

%

 

 

 

 

22.2

%

17.3

%

 

 

 

 

17.0

%

24.9

%

 

 

 

 

24.5

%

16.4

%

 

 

 

 

20.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Broker-Dealer

 

 

82,776

 

 

82,776

 

 

90,374

 

 

90,374

 

 

72,146

 

 

72,146

 

 

76,043

 

 

76,043

 

Unaffiliated

 

 

46,848

 

 

46,848

 

 

42,451

 

 

42,451

 

 

39,487

 

 

39,487

 

 

35,856

 

 

35,856

 

Total

 

 

$

129,624

 

 

$

129,624

 

 

$

132,825

 

 

$

132,825

 

 

$

111,633

 

 

$

111,633

 

 

$

111,899

 

 

$

111,899

 

 

Unaudited Schedule of Operating Data

(Amounts in thousands, except for per share and margin data)

 

 

 

Six Months Ended Jun. 30, 2016

 

Nine Months Ended Sep. 30, 2016

 

Year Ended Dec. 31, 2016

 

 

 

Previously
Reported (1)

 

Expense
Reclassification

 

ASU
2017-07

 

Adjusted

 

Previously
Reported (1)

 

Expense
Reclassification

 

ASU
2017-07

 

Adjusted

 

Previously
Reported (1)

 

Expense
Reclassification

 

ASU
2017-07

 

Adjusted

 

Total Revenues

 

$

643,024

 

 

 

$

643,024

 

$

946,110

 

 

 

$

946,110

 

$

1,239,023

 

 

 

$

1,239,023

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Underwriting and distribution

 

353,866

 

(353,866

)

 

 

506,258

 

(506,258

)

 

 

664,648

 

(664,648

)

 

 

Distribution

 

 

262,449

 

 

262,449

 

 

374,082

 

 

374,082

 

 

485,981

 

 

485,981

 

Compensation and benefits

 

109,199

 

41,132

 

2,247

 

152,578

 

148,372

 

55,675

 

3,371

 

207,418

 

200,822

 

74,312

 

(7,296

)

267,838

 

General and administrative

 

38,428

 

(366

)

 

38,062

 

61,708

 

(2,213

)

 

59,495

 

83,995

 

(3,176

)

 

80,819

 

Technology

 

 

29,013

 

 

29,013

 

 

46,001

 

 

46,001

 

 

63,045

 

 

63,045

 

Occupancy

 

 

15,650

 

 

15,650

 

 

23,549

 

 

23,549

 

 

31,406

 

 

31,406

 

Marketing and advertising

 

 

5,988

 

 

5,988

 

 

9,164

 

 

9,164

 

 

13,080

 

 

13,080

 

Depreciation

 

8,622

 

 

 

8,622

 

13,163

 

 

 

13,163

 

18,359

 

 

 

18,359

 

Subadvisory fees

 

4,418

 

 

 

4,418

 

6,984

 

 

 

6,984

 

9,572

 

 

 

9,572

 

Intangible asset impairment

 

 

 

 

 

5,700

 

 

 

5,700

 

9,749

 

 

 

9,749

 

Total Operating Expenses

 

$

514,533

 

 

2,247

 

$

516,780

 

$

742,185

 

 

3,371

 

$

745,556

 

$

987,145

 

 

(7,296

)

$

979,849

 

Operating Income

 

128,491

 

 

(2,247

)

126,244

 

203,925

 

 

(3,371

)

200,554

 

251,878

 

 

7,296

 

259,174

 

Investment and other income (loss)

 

(9,531

)

 

2,247

 

(7,284

)

(1,653

)

 

3,371

 

1,718

 

(763

)

 

(7,296

)

(8,059

)

Interest expense

 

(5,544

)

 

 

(5,544

)

(8,336

)

 

 

(8,336

)

(11,122

)

 

 

(11,122

)

Income before provision for income taxes

 

113,416

 

 

 

113,416

 

193,936

 

 

 

193,936

 

239,993

 

 

 

239,993

 

Provision for income taxes

 

40,292

 

 

 

40,292

 

64,926

 

 

 

64,926

 

81,884

 

 

 

81,884

 

Net income

 

$

73,124

 

 

 

$

73,124

 

$

129,010

 

 

 

$

129,010

 

$

158,109

 

 

 

$

158,109

 

Net income attributable to redeemable noncontrolling interests

 

377

 

 

 

377

 

1,355

 

 

 

1,355

 

1,414

 

 

 

1,414

 

Net income attributable to Waddell & Reed Financial, Inc.

 

$

72,747

 

 

 

$

72,747

 

$

127,655

 

 

 

$

127,655

 

$

156,695

 

 

 

$

156,695

 

Net income per share attributable to Waddell & Reed Financial, Inc. common shareholders, basic and diluted

 

$

0.88

 

 

 

 

 

$

0.88

 

$

1.54

 

 

 

 

 

$

1.54

 

$

1.90

 

 

 

 

 

$

1.90

 

Weighted average shares outstanding, basic and diluted

 

82,526

 

 

 

 

 

82,526

 

82,629

 

 

 

 

 

82,629

 

82,668

 

 

 

 

 

82,668

 

Operating margin

 

20.0

%

 

 

 

 

19.6

%

21.6

%

 

 

 

 

21.2

%

20.3

%

 

 

 

 

20.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Broker-Dealer

 

 

173,150

 

 

173,150

 

 

245,296

 

 

245,296

 

 

321,339

 

 

321,339

 

Unaffiliated

 

 

89,299

 

 

89,299

 

 

128,786

 

 

128,786

 

 

164,642

 

 

164,642

 

Total

 

 

$

262,449

 

 

$

262,449

 

 

$

374,082

 

 

$

374,082