Waddell & Reed Financial, Inc. Reports First Quarter Net Income of $30.6 Million and Earnings per Share of $0.36

* Financial Advisors up 12% to 2,835 compared to first quarter 2000

* Retail investment product sales up 10% over fourth quarter 2000

* Sales per advisor up 10% over fourth quarter 2000

* Total net sales of $165.8 million for quarter

* 82% of Equity Assets Rated 4 or 5 Stars by Morningstar



Apr 19, 2001, 01:00 ET from Waddell & Reed Financial, Inc.

    OVERLAND PARK, Kan., April 19 /PRNewswire/ -- Waddell & Reed Financial,
 Inc. (NYSE:   WDR and WDR.B) today reported first quarter net income of
 $30.6 million or $0.36 per share on a diluted basis, compared with net income
 of $36.1 million or $0.41 per share for the first quarter of 2000. Quarter
 over quarter, net income per share decreased 12%. During the first quarter of
 2000, $2.1 million of net pre-tax gains were realized from investment security
 sales to facilitate the acquisition of The Legend Group ("Legend").  Excluding
 these net gains, last year's first quarter net income would have been
 $34.9 million, or $0.40 per share on a diluted basis.
     "The continuing decline in the financial markets had an obvious adverse
 impact on our assets under management and on sales, our primary sources of
 revenue and profits," stated Keith A. Tucker, Chairman and Chief Executive
 Officer of Waddell & Reed Financial, Inc.  "Despite this adverse external
 environment, we are confident that our long-term prospects will continue to be
 outstanding.  We have achieved positive net sales, maintained low redemption
 rates, and succeeded in recruiting advisors, while managing home and field
 office expenses.  So far in the second quarter, our key growth drivers are
 showing sequential and year over year improvement. Despite weakened financial
 markets, redemption rates, net inflows, account growth and financial advisor
 headcount are meeting our targets. In short, during this period of financial
 stress our business is expanding, not contracting, as more people seek sound
 long-term financial assistance that is based on reasonable market
 expectations.  We anticipate this will continue and that average assets under
 management for the second quarter will be in line with the first quarter's."
     Total net sales, including institutional and separate account business,
 were $165.8 million for this year's first quarter compared with $261.6 million
 for the same period last year.  Redemption rates on retail mutual funds
 increased slightly in the first quarter of 2001 to 8.7% compared with 7.7% for
 the first quarter of 2000.  The quarter-to-date redemption rate through
 February 2001 was 7.4%. Net sales in March fell from January and February's
 pace as redemptions by shareholders rose to pay income taxes.
     Following is a brief analysis of changes in the major categories of
 operations.  Schedules providing more detail are included in this release as
 well as on our corporate website at www.waddell.com .
 
     Adjusted Diluted Earnings per Share
        1Q01 Over 1Q00:  Down $0.04 or -10.0%
        Excluding realized gains on investment securities, net income decreased
        by $4.2 million, or 12%, to $30.6 million, while average diluted shares
        outstanding decreased by 1.7 million, or 2%. The average number of
        diluted shares outstanding for this year's first quarter was
        85.5 million compared to 87.2 million shares in the same quarter last
        year.
 
        1Q01 Over 4Q00:  Down $0.04 or -10.0%
        Net income decreased by $4.0 million, or 12%, while the average number
        of diluted shares outstanding decreased by 1.4 million, or 2%, to
        85.5 million compared to 86.9 million for the fourth quarter of 2000.
 
     Management Fee Revenue
        1Q01 Over 1Q00:  Down $7.6 million or -11.9%
        Total average assets under management declined by 10% from the first
        quarter of 2000.  Total management fee revenue declined by 12%.
        Management fees from mutual funds decreased $6.6 million, or 12%,
        driven primarily by a 9% decline in average mutual fund assets.  The
        management fee rate for mutual funds decreased to 66.9 basis points in
        2001's first quarter from 68.1 basis points for 2000's period.   The
        decline in equity markets led to equity mutual funds comprising a
        smaller percentage of total mutual fund assets under management when
        compared with the prior year.
 
        Management fee revenues from institutional and separate accounts
        declined by $1.0 million, or 15%.  Average institutional and separate
        account assets under management declined by 14%.  In the first quarter
        of 2000, we earned $0.6 million in performance fees related to one of
        our separately managed accounts. Excluding the 2000 performance fee,
        the average management fee rate for institutional and separate accounts
        improved to 48.6 basis points from 44.2 basis points as new business
        with higher fee rates offset lost business with substantially lower
        rates.
 
        1Q01 Over 4Q00:  Down $6.8 million or -10.9%
        Average mutual fund assets under management declined by 7% resulting in
        mutual fund management fees declining by $4.8 million, or 9%.  Mutual
        fund management fee rates decreased to 66.9 basis points in the first
        quarter of 2001 from 67.2 basis points in the fourth quarter of 2000 as
        the decline in equity markets led to equity mutual funds comprising a
        smaller percentage of total mutual fund assets under management.
 
        Management fee revenues from institutional and separate accounts
        declined by $2.0 million, or 25%.  Two accounts earned performance fees
        totaling $2.0 million in the fourth quarter of 2000 as performance
        measurements were met. Excluding the fourth quarter 2000 performance
        fees, management fee revenues from separate accounts remained flat as
        the average management fee rate for separate accounts improved to
        48.6 basis points from 44.8 basis points.
 
     Investment Product Sales ($ in millions; excludes money market fund sales,
      Legend sales and sales at net asset value)
 
 
                                1Q01     1Q00     % change     4Q00    % change
 
     Front-load (Class A)      $394.0   $456.3      -13.7%    $331.2     19.0%
     W&R Target funds
      (variable products)*      173.0    155.4       11.3%     179.3     -3.5%
     Front load product total   567.0    611.7       -7.3%     510.5     11.1%
 
     Back-load (Class B)         72.0    111.2      -35.3%      64.2     12.1%
     Level-load (Class C)        31.6     97.9      -67.7%      32.5     -2.8%
     Deferred load product
      total                     103.6    209.1      -50.5%      96.7      7.1%
 
     Total retail product sales 670.6    820.8      -18.3%     607.2     10.4%
     Institutional and
      separate accounts         355.2    317.5       11.9%     263.3     34.9%
     Total investment product
       sales                 $1,025.8 $1,138.3      - 9.9%    $870.5     17.8%
 
     * First quarter 2001 includes $34.5 million of commissionable variable
       annuity exchanges.
 
     Underwriting and Distribution Fee Revenue
        1Q01 Over 1Q00: Up $3.4 million or 7.4%
        Underwriting and distribution fee revenues are derived primarily from
        sales commissions from front-load products, and to a lesser extent from
        asset-based fees earned on deferred-load products. Legend, acquired on
        March 31, 2000, contributed $8.4 million to underwriting and
        distribution revenues for the first quarter of 2001.  Excluding
        Legend's contribution, revenues were down $5.0 million, or 11%, driven
        primarily by the 7% decline in front-load investment product sales. The
        first quarter of 2000 was a record sales quarter, making for a
        difficult quarter-over-quarter comparison.  The strength of last year's
        quarter, coupled with adverse market volatility this year, led to the
        decline in sales, quarter over quarter.
 
        1Q01 Over 4Q00:  Down $3.1 million or -6.0%
        Legend's operations accounted for $2.2 million of the decrease in
        distribution revenues as their sales and assets under advisement
        declined. The remaining decrease was primarily attributable to the
        decline in variable product sales that have higher commission rates
        than others and also attributable to lower sales of other mutual funds
        and financial plans.  Overall, retail investment product sales and
        sales force productivity were both up 10%.
 
     Shareholder Service Fee Revenue
        1Q01 Over 1Q00:  Up $3.1 million or 27.3%
        Legend's custodial services fee revenue, which is based on a percentage
        of the applicable assets, contributed $1.4 million to service fee
        revenue during the first quarter of 2001. Non-Legend shareholder
        service fee revenue was $12.9 million, an increase of 15% over last
        year's first quarter. Over 80% of this revenue is comprised of transfer
        agency fees charged for shareholder accounts, while the remainder comes
        from retirement plan fees and accounting service fees. The number of
        shareholder accounts increased to 2.04 million at March 31, 2001,
        compared with 1.82 million at March 31, 2000.
 
        1Q01 Over 4Q00:  Down $0.2 million or -1.6%
        Legend's asset-based custodial service fee revenue declined
        $0.2 million as custodial assets under advisement declined. Other
        shareholder service fee revenue was flat when compared with fourth
        quarter.  The increase in additional fee revenue from growth in
        shareholder accounts in 2001 was offset by higher fourth quarter 2000
        transfer agency fee revenue associated with year-end dividend and
        capital gains distributions.
 
     Underwriting and Distribution Expense and Margin
 
      1Q01 Over 1Q00:  Up $2.3 million or 5.6%
        Legend contributed $6.9 million to the increase in underwriting and
        distribution expense. Excluding Legend's contribution, these expenses
        were down $4.6 million, or 11%, in correlation with the decline in
        related revenues. Indirect distribution costs declined as advertising
        and marketing programs were significantly reduced, more overhead
        expenses were reimbursed from mutual funds, and sales-related legal
        costs declined. Distribution margin, excluding Legend's contribution,
        was 9.0% in both 2000 and 2001's first quarter. Including Legend's
        contribution, distribution margin was 10.5% for this year's first
        quarter.
 
        1Q01 Over 4Q00:  Down $2.8 million or -5.9%
        The sequential decrease in underwriting and distribution expenses was
        due primarily to the decline in related revenues. Distribution margin
        was relatively unchanged at 10.5% compared with 10.6% in the fourth
        quarter of 2000.
 
     Other Operating Expenses
        1Q01 Over 1Q00:  Compensation up $0.8 million or 5.8%; General and
        Administrative Expense down $0.6 million or 9.0%
 
        Base salaries increased $1.8 million due largely to last year's
        increase in personnel and salaries; however, this was somewhat offset
        by a reduction in amounts accrued for incentive-based compensation and
        bonuses.
 
        Legend contributed $0.8 million to general and administrative costs.
        Excluding Legend's contribution, these costs were down $1.4 million or
        22%. A greater portion of information systems support was dedicated to
        underwriting and distribution efforts during the year, the costs of
        which are included in underwriting and distribution expense.  In
        addition, costs incurred in 2000 associated with restructuring and
        renaming our fund families and adding additional share classes were not
        incurred in 2001, resulting in a favorable comparison. Costs also were
        lower for professional services and consulting, and client service
        costs.
 
        1Q01 Over 4Q00:  Compensation and Related Costs Remain Relatively
        Unchanged up 0.2%; General and Administrative Expense down $1.3 million
        or -17.9%
 
        First quarter compensation and related costs remained flat when
        compared with the fourth quarter of last year.  Increased salaries were
        offset by reduced incentive-based compensation.
 
        Approximately 35% of the decline in general and administrative expenses
        was due to additional programming and systems costs allocated to our
        underwriting and distribution efforts in the current year.  Various
        other expenses also declined including costs associated with the
        relocation of our client services and information systems operations to
        our new building in the fourth quarter of 2000, costs associated with
        mutual fund shareholder expenses, costs for professional services and
        consulting, and custodial fee payments.
 
 
 
                         WADDELL & REED FINANCIAL, INC.
                      Schedule of Selected Operating Data
                (Amounts in thousands except for per share data)
 
                                               Three Months Ended
                                                   March 31,
                                               2001         2000       % Change
     Operating Revenues:
                 Investment management
                  fees                        $56,203      $63,805       -11.9
                 Underwriting &
                  distribution fees            48,867       45,481         7.4
                 Shareholder service fees      14,372       11,294        27.3
 
                 Total operating revenues     119,442      120,580        -0.9
 
     Operating Expenses:
                 Underwriting and
                  distribution                 43,720       41,396         5.6
                 Compensation and related
                  costs                        14,810       14,001         5.8
                 General and
                  administrative                6,019        6,612        -9.0
                 Depreciation                   1,240          631        96.5
 
                 Total operating expense       65,789       62,640         5.0
 
     Other Income (Expense):
 
                 Investment & other
                  income (a)                    1,708        4,162       -59.0
                 Interest expense              (4,398)      (2,499)       76.0
                 Amortization of goodwill      (1,652)        (929)       77.8
 
                 Total other income
                  (expense)                    (4,342)         734      -691.6
 
                 Income before taxes           49,311       58,674       -16.0
 
                 Provision for taxes           18,715       22,548       -17.0
 
                 Net Income                   $30,596      $36,126       -15.3
 
                 Net Income per share -
                  diluted                       $0.36        $0.41       -12.2
 
                 Weighted average number
                 of shares outstanding -
                  diluted                      85,538       87,213
 
     Operating Margin
          - Consolidated                         44.9%        48.1%
          - Excluding Legend                     47.6%        48.1%
 
     Distribution Margin
          - Consolidated                         10.5%         9.0%
          - Excluding Legend                      9.0%         9.0%
 
     (a)  First quarter 2000 includes $2.1 million ($1.3 million after-tax) of
          net realized gains relating to securities sold to facilitate
          the acquisition of Legend.  The impact on earnings per share
          was $0.01.
 
 
                         WADDELL & REED FINANCIAL, INC.
                      Schedule of Selected Operating Data
                (Amounts in thousands except for per share data)
 
                                               Three Months Ended
                                                  December 31,
                                                      2000             % Change
     Operating Revenues:
                 Investment management fees           63,050             -10.9
                 Underwriting &
                  distribution fees                   52,007              -6.0
                 Shareholder service fees             14,600              -1.6
 
                 Total operating revenues            129,657              -7.9
 
     Operating Expenses:
                 Underwriting and
                  distribution                        46,476              -5.9
                 Compensation and related
                  costs                               14,781               0.2
                 General and
                  administrative                       7,327             -17.9
                 Depreciation                          1,180               5.1
 
                 Total operating expense              69,764              -5.7
 
     Other Income (Expense):
 
                 Investment & other
                  income (a)                           2,603             -34.4
                 Interest expense                     (3,765)             16.8
                 Amortization of goodwill             (1,525)              8.3
 
                 Total other income
                  (expense)                           (2,687)             61.6
 
                 Income before taxes                  57,206             -13.8
 
                 Provision for taxes                  22,567             -17.1
 
                 Net Income                          $34,639             -11.7
 
                 Net Income per share -
                  diluted                              $0.40             -10.0
 
                 Weighted average number
                 of shares outstanding -
                  diluted                             86,912
 
     Operating Margin
            - Consolidated                              46.2%
            - Excluding Legend                          49.5%
 
     Distribution Margin
            - Consolidated                              10.6%
            - Excluding Legend                           9.0%
 
     (a)  First quarter 2000 includes $2.1 million ($1.3 million after-tax) of
          net realized gains relating to securities sold to facilitate
          the acquisition of Legend.  The impact on earnings per share
          was $0.01.
 
 
     Proposed Combination of Two Classes of Common Stock
     On January 25, 2001, we announced that our Board of Directors had approved
 the combination of our two classes of common stock by converting shares of our
 Class B common stock into shares of Class A common stock on a one-for-one
 basis. The combination will result from the merger of a wholly owned
 subsidiary into the Company that will be subject to the approval of a majority
 of the voting power of the Class A and Class B common stock, voting together
 as a single class, and a majority of the Class B common stock, voting as a
 separate class. The transaction will be submitted to stockholders at the
 upcoming annual meeting on April 25, 2001. We believe that the elimination of
 the dual classes of common stock will better align the voting rights of all
 stockholders with their ownership interests. We also believe that the
 combination will increase the overall liquidity of our common stock and
 eliminate the complexity, and resulting market confusion, of having two
 publicly traded classes of common stock.
 
     Stock Repurchase Program
     In the first quarter of 2001, we repurchased 4.0 million Class B shares
 for $30.50 per share at a total cost, including commissions, of
 $122.0 million.  Total shares outstanding of Class A and B combined common
 stock as of March 31, 2000 were 79.7 million.  As of March 31, 2000, we had
 20.0 million shares held in Treasury Stock at a cost of $420.2 million.
 
     Headquarters Sale-Leaseback
     On March 7, 2001, we completed the sale of our two home office buildings
 to Mesirow Realty Sale-Leaseback, with whom we also entered into an agreement
 to lease the buildings back for a period of fifteen years. The net proceeds
 from this sale were $28.2 million and resulted in a realized gain of
 approximately $1.8 million, which was deferred and will be amortized over the
 term of the operating lease.
 
     Additional Product Offerings Through Nationwide
     The steps taken last year to provide broader depth to our insurance
 product offerings are continuing to progress.  Nationwide Financial Services
 ("Nationwide") now underwrites substantially all of the variable annuity and
 variable universal life products sold by our sales force.  Nationwide's
 reputation for quality products and superior service enhances the
 attractiveness of these products to our advisors and clients.  Nationwide also
 has developed a survivorship life product, a qualified group retirement plan
 and term insurance for distribution by our financial advisors.
 
     Termination of Agreements by United Investors Life Insurance Company
     On February 28, 2001, United Investors Life Insurance Company ("UILIC")
 terminated the Principal Underwriting Agreement between UILIC and the Company,
 effective April 30, 2001. This agreement provided for the sale of variable
 products underwritten by UILIC by our financial advisors. As a result,
 beginning May 1, 2001, Nationwide will be the sole provider of variable
 products invested in our mutual funds for distribution by our financial
 advisors. Management believes that the profitability of the two insurers'
 variable product lines is equivalent.
     In addition, on February 28, 2001, UILIC terminated the General Agent
 Contract by and between UILIC and the Company, effective December 31, 2001.
 This agreement provides for the sale of non-variable life insurance products
 underwritten by UILIC and distributed by our financial advisors. We are
 currently in the process of negotiating with several insurance carriers for
 the sale of their products by our financial advisors to complement the other
 non-UILIC life products currently available for distribution by our financial
 advisors. In addition, we recently have entered into an agreement with BISYS
 to provide our financial advisors with access to an extensive array of
 traditional life and disability insurance products for sale to our clients. As
 a result, management does not anticipate any material adverse effects from the
 termination of the UILIC General Agent Contract.
 
     United Investors Life Insurance Company Litigation
     As previously disclosed, we are in litigation with UILIC, and other
 related parties over terms of a compensation agreement signed in July 1999 by
 UILIC and Waddell & Reed, Inc. The compensation is paid by UILIC to us on
 variable annuities underwritten by UILIC and distributed by us. The agreement
 provides for us to be paid annual compensation of 0.25% on all variable
 annuity policies' assets under management issued after January 1, 2000 ("post-
 1999 assets"), and annual compensation of 0.20% on variable annuity policies'
 assets under management issued before that date ("pre-2000 assets").  The
 validity and duration of that agreement has been challenged by UILIC in a
 complaint filed in May 2000, in the Circuit Court of Jefferson County,
 Alabama.  We have subsequently named Torchmark as a third-party defendant in a
 tortious interference claim.
     On April 9, 2001, the Circuit Court of Jefferson County, Alabama, issued
 two orders.  In the first order on the issue of the contract being valid, our
 motion for summary judgment was denied.  This issue is currently set for trial
 in September 2001.  In the second order on the issue of whether annual
 compensation of 0.20% on pre-2000 assets terminates with the Principal
 Underwriting Agreement, UILIC's motion for summary judgment was granted.  The
 annual compensation of 0.25% on post-1999 assets was not addressed by these
 orders.  These completely incongruous orders prevent us from collecting fees
 on pre-2000 assets after May 2001 unless our efforts for immediate legal
 relief are successful or we prevail at or after the September 2001
 proceedings. While management believes that the Company will ultimately
 prevail, if it does not, the revenue impact at current market levels is
 estimated to be $2.4 million over the remaining three quarters of 2001. In the
 future, this impact should be mitigated by a pre-2000 asset balance that is
 expected to decline as clients migrate their variable policies to other
 products with superior features and service.
 
 
 
                            Assets Under Management
                             (amounts in millions)
 
 
     Ending
                    1Q 01        1Q 00       % change      4Q 00     % change
     Mutual Fund
     Equity        $23,229      $31,186      -25.5 %      $27,579      -15.8%
     Fixed Income    3,184        3,289       -3.2 %        3,105        2.5%
     Money Market    1,191          873       36.4 %        1,108        7.5%
     Total         $27,604      $35,348      -21.9 %      $31,792      -13.2%
 
     Institutional
      and separate
      accounts       4,645        6,132      -24.2 %        4,933       -5.8%
     Total         $32,249      $41,480      -22.3 %      $36,725      -12.2%
 
     Average*
 
                    1Q 01        1Q 00       % change      4Q 00     % change
     Mutual Funds
     Equity        $26,125      $29,270       -10.7%      $28,498       -8.3%
     Fixed Income    3,171        3,403        -6.8%        3,090        2.6%
     Money Market    1,072          825        29.9%          966       11.0%
     Total         $30,368      $33,498        -9.3%      $32,554       -6.7%
 
     Institutional
      and separate
      accounts       4,934        5,722       -13.8%        5,200       -5.1%
     Total         $35,302      $39,220       -10.0%      $37,754       -6.5%
 
 
     * Average calculated using daily ending balances for mutual funds and
       monthly ending balances for institutional and private accounts.
 
 
                                  Other Items
 
 
                      1Q 01       1Q 00     % change        4Q 00     % change
     Retail
      Redemption Rate  8.7%         7.7%                      7.1%
     Sales per advisor
      (000s)***
        Total          239          323       -26.0%          218        9.6%
        2+ Years *     328          460       -28.7%          290       13.1%
 
        0 to 2 Years ** 55           95       -42.1%           53        3.8%
        Other          119          164       -27.4%           65       83.1%
 
 
     Number of
      financial
      advisors ***   2,835        2,522        12.4%       2,865        -1.0%
     Average number
      of financial
      advisors***    2,809        2,544        10.4%       2,788         0.8%
 
     Number of
      shareholder
      accounts   2,035,449    1,820,771        11.8%   1,976,412         3.0%
 
 
      *      Advisors licensed with the Company for two or more years.
      **    Advisors licensed with the Company for less than two years.
      ***  Excludes Legend Retirement Advisors
 
                         Waddell & Reed Financial, Inc.
                 Change in Assets(includes money market funds)
                                   (Millions)
 
                                             Institutional
                                                      Separate
                           Retail         Y Shares    Accounts       Total
     March 31, 2001 QTD
     Beginning Assets     $31,374.5        $417.7     $4,933.0     $36,725.2
 
     Sales (net of sales
      charges)[a]             956.5          39.7        315.5       1,311.7
     Redemptions [a]         (948.8)        (15.8)      (181.3)     (1,145.9)
     Net Sales [b]              7.7          23.9        134.2         165.8
 
     Net Exchanges and
      Adjustments              (3.2)          5.9          5.0           7.7
     Reinvested Dividends
      and Capital Gains        70.8           0.8         26.3          97.9
     Net Flows                 75.3          30.6        165.5         271.4
 
     Market Appreciation/
      (Depreciation)       (4,231.4)        (63.0)      (453.0)     (4,747.4)
     Ending Assets        $27,218.4        $385.3     $4,645.5     $32,249.2
 
     December 31, 2000 QTD
     Beginning Assets     $33,697.2        $395.8     $5,927.0     $40,020.0
 
     Sales (net of sales
      charges)                919.1          63.0        200.3       1,182.4
     Redemptions             (797.8)        (13.9)    (1,071.9)     (1,883.6)
     Net Sales                121.3          49.1      (871.6)       (701.2)
 
     Net Exchanges              0.4           1.4          0.0           1.8
     Reinvested Dividends
      and Capital Gains      (240.8)         (4.9)        38.6        (207.1)
     Net Flows               (119.1)         45.6       (833.0)       (906.5)
 
     Market Appreciation/
     (Depreciation)        (2,203.6)        (23.7)      (161.0)     (2,388.3)
     Ending Assets        $31,374.5        $417.7     $4,933.0     $36,725.2
 
 
     March 31, 2000 QTD
     Beginning Assets     $31,486.0        $423.0     $5,393.0     $37,302.0
 
     Sales (net of sales
      charges)              1,043.6          35.1        282.5       1,361.2
     Redemptions            (903.0)        (50.2)      (146.4)     (1,099.6)
     Net Sales               140.6         (15.1)       136.1         261.6
 
     Net Exchanges            (0.2)         (1.0)         0.0          (1.2)
     Reinvested Dividends
      and Capital Gains       41.7           0.3         37.5          79.5
     Net Flows               182.1         (15.8)       173.6         339.9
 
     Market Appreciation/
      (Depreciation)       3,226.9          45.5        565.2       3,837.6
     Ending Assets       $34,895.0        $452.7     $6,131.8     $41,479.5
 
     [a] First quarter 2001 includes $34.5 of retail commissionable variable
         annuity exchanges.
 
     [b] Total net sales for the months of January, February and March of 2001
         were $154.6, $39.9 and ($28.7), respectively.  Retail
         net sales for the same periods were $28.8, $27.6 and ($48.7),
         respectively.
 
     Redemption Rates - Long Term Mutual Funds
                                              Quarter to Date
                                            2001          2000
 
     Retail                                 8.7%          7.7%
     Total                                  8.8%          8.2%
 
     Forward-looking Statements
     The statements in this press release relating to matters that are not
 historical facts are forward-looking statements based on management's belief
 and assumptions using currently available information and expectations as of
 the date hereof, are not guarantees of future performance and involve certain
 risks, uncertainties and assumptions that are difficult to predict.  Although
 we believe that the expectations reflected in such forward-looking statements
 are reasonable, we cannot give any assurances that these expectations will
 prove to be correct.  Therefore, actual outcomes and results could materially
 differ from what is expressed, implied or forecast in such statements.  Such
 differences could be caused by a number of factors including, but not limited
 to, a risk that the expected benefits from the expansion of our distribution
 channels may not be as beneficial as anticipated, results of adverse
 litigation, less favorable economic and market conditions, that the expected
 benefits of the combination of our two classes of common stock may not come to
 fruition, and other risks as set out in the reports we have filed with the
 SEC.  Should one or more of these risks materialize or should the underlying
 assumptions prove incorrect, actual results could differ materially from those
 forecasted or expected.  We assume no duty to publicly update or revise such
 statements, whether as a result of new information, future events or
 otherwise.
 
 

SOURCE Waddell & Reed Financial, Inc.
    OVERLAND PARK, Kan., April 19 /PRNewswire/ -- Waddell & Reed Financial,
 Inc. (NYSE:   WDR and WDR.B) today reported first quarter net income of
 $30.6 million or $0.36 per share on a diluted basis, compared with net income
 of $36.1 million or $0.41 per share for the first quarter of 2000. Quarter
 over quarter, net income per share decreased 12%. During the first quarter of
 2000, $2.1 million of net pre-tax gains were realized from investment security
 sales to facilitate the acquisition of The Legend Group ("Legend").  Excluding
 these net gains, last year's first quarter net income would have been
 $34.9 million, or $0.40 per share on a diluted basis.
     "The continuing decline in the financial markets had an obvious adverse
 impact on our assets under management and on sales, our primary sources of
 revenue and profits," stated Keith A. Tucker, Chairman and Chief Executive
 Officer of Waddell & Reed Financial, Inc.  "Despite this adverse external
 environment, we are confident that our long-term prospects will continue to be
 outstanding.  We have achieved positive net sales, maintained low redemption
 rates, and succeeded in recruiting advisors, while managing home and field
 office expenses.  So far in the second quarter, our key growth drivers are
 showing sequential and year over year improvement. Despite weakened financial
 markets, redemption rates, net inflows, account growth and financial advisor
 headcount are meeting our targets. In short, during this period of financial
 stress our business is expanding, not contracting, as more people seek sound
 long-term financial assistance that is based on reasonable market
 expectations.  We anticipate this will continue and that average assets under
 management for the second quarter will be in line with the first quarter's."
     Total net sales, including institutional and separate account business,
 were $165.8 million for this year's first quarter compared with $261.6 million
 for the same period last year.  Redemption rates on retail mutual funds
 increased slightly in the first quarter of 2001 to 8.7% compared with 7.7% for
 the first quarter of 2000.  The quarter-to-date redemption rate through
 February 2001 was 7.4%. Net sales in March fell from January and February's
 pace as redemptions by shareholders rose to pay income taxes.
     Following is a brief analysis of changes in the major categories of
 operations.  Schedules providing more detail are included in this release as
 well as on our corporate website at www.waddell.com .
 
     Adjusted Diluted Earnings per Share
        1Q01 Over 1Q00:  Down $0.04 or -10.0%
        Excluding realized gains on investment securities, net income decreased
        by $4.2 million, or 12%, to $30.6 million, while average diluted shares
        outstanding decreased by 1.7 million, or 2%. The average number of
        diluted shares outstanding for this year's first quarter was
        85.5 million compared to 87.2 million shares in the same quarter last
        year.
 
        1Q01 Over 4Q00:  Down $0.04 or -10.0%
        Net income decreased by $4.0 million, or 12%, while the average number
        of diluted shares outstanding decreased by 1.4 million, or 2%, to
        85.5 million compared to 86.9 million for the fourth quarter of 2000.
 
     Management Fee Revenue
        1Q01 Over 1Q00:  Down $7.6 million or -11.9%
        Total average assets under management declined by 10% from the first
        quarter of 2000.  Total management fee revenue declined by 12%.
        Management fees from mutual funds decreased $6.6 million, or 12%,
        driven primarily by a 9% decline in average mutual fund assets.  The
        management fee rate for mutual funds decreased to 66.9 basis points in
        2001's first quarter from 68.1 basis points for 2000's period.   The
        decline in equity markets led to equity mutual funds comprising a
        smaller percentage of total mutual fund assets under management when
        compared with the prior year.
 
        Management fee revenues from institutional and separate accounts
        declined by $1.0 million, or 15%.  Average institutional and separate
        account assets under management declined by 14%.  In the first quarter
        of 2000, we earned $0.6 million in performance fees related to one of
        our separately managed accounts. Excluding the 2000 performance fee,
        the average management fee rate for institutional and separate accounts
        improved to 48.6 basis points from 44.2 basis points as new business
        with higher fee rates offset lost business with substantially lower
        rates.
 
        1Q01 Over 4Q00:  Down $6.8 million or -10.9%
        Average mutual fund assets under management declined by 7% resulting in
        mutual fund management fees declining by $4.8 million, or 9%.  Mutual
        fund management fee rates decreased to 66.9 basis points in the first
        quarter of 2001 from 67.2 basis points in the fourth quarter of 2000 as
        the decline in equity markets led to equity mutual funds comprising a
        smaller percentage of total mutual fund assets under management.
 
        Management fee revenues from institutional and separate accounts
        declined by $2.0 million, or 25%.  Two accounts earned performance fees
        totaling $2.0 million in the fourth quarter of 2000 as performance
        measurements were met. Excluding the fourth quarter 2000 performance
        fees, management fee revenues from separate accounts remained flat as
        the average management fee rate for separate accounts improved to
        48.6 basis points from 44.8 basis points.
 
     Investment Product Sales ($ in millions; excludes money market fund sales,
      Legend sales and sales at net asset value)
 
 
                                1Q01     1Q00     % change     4Q00    % change
 
     Front-load (Class A)      $394.0   $456.3      -13.7%    $331.2     19.0%
     W&R Target funds
      (variable products)*      173.0    155.4       11.3%     179.3     -3.5%
     Front load product total   567.0    611.7       -7.3%     510.5     11.1%
 
     Back-load (Class B)         72.0    111.2      -35.3%      64.2     12.1%
     Level-load (Class C)        31.6     97.9      -67.7%      32.5     -2.8%
     Deferred load product
      total                     103.6    209.1      -50.5%      96.7      7.1%
 
     Total retail product sales 670.6    820.8      -18.3%     607.2     10.4%
     Institutional and
      separate accounts         355.2    317.5       11.9%     263.3     34.9%
     Total investment product
       sales                 $1,025.8 $1,138.3      - 9.9%    $870.5     17.8%
 
     * First quarter 2001 includes $34.5 million of commissionable variable
       annuity exchanges.
 
     Underwriting and Distribution Fee Revenue
        1Q01 Over 1Q00: Up $3.4 million or 7.4%
        Underwriting and distribution fee revenues are derived primarily from
        sales commissions from front-load products, and to a lesser extent from
        asset-based fees earned on deferred-load products. Legend, acquired on
        March 31, 2000, contributed $8.4 million to underwriting and
        distribution revenues for the first quarter of 2001.  Excluding
        Legend's contribution, revenues were down $5.0 million, or 11%, driven
        primarily by the 7% decline in front-load investment product sales. The
        first quarter of 2000 was a record sales quarter, making for a
        difficult quarter-over-quarter comparison.  The strength of last year's
        quarter, coupled with adverse market volatility this year, led to the
        decline in sales, quarter over quarter.
 
        1Q01 Over 4Q00:  Down $3.1 million or -6.0%
        Legend's operations accounted for $2.2 million of the decrease in
        distribution revenues as their sales and assets under advisement
        declined. The remaining decrease was primarily attributable to the
        decline in variable product sales that have higher commission rates
        than others and also attributable to lower sales of other mutual funds
        and financial plans.  Overall, retail investment product sales and
        sales force productivity were both up 10%.
 
     Shareholder Service Fee Revenue
        1Q01 Over 1Q00:  Up $3.1 million or 27.3%
        Legend's custodial services fee revenue, which is based on a percentage
        of the applicable assets, contributed $1.4 million to service fee
        revenue during the first quarter of 2001. Non-Legend shareholder
        service fee revenue was $12.9 million, an increase of 15% over last
        year's first quarter. Over 80% of this revenue is comprised of transfer
        agency fees charged for shareholder accounts, while the remainder comes
        from retirement plan fees and accounting service fees. The number of
        shareholder accounts increased to 2.04 million at March 31, 2001,
        compared with 1.82 million at March 31, 2000.
 
        1Q01 Over 4Q00:  Down $0.2 million or -1.6%
        Legend's asset-based custodial service fee revenue declined
        $0.2 million as custodial assets under advisement declined. Other
        shareholder service fee revenue was flat when compared with fourth
        quarter.  The increase in additional fee revenue from growth in
        shareholder accounts in 2001 was offset by higher fourth quarter 2000
        transfer agency fee revenue associated with year-end dividend and
        capital gains distributions.
 
     Underwriting and Distribution Expense and Margin
 
      1Q01 Over 1Q00:  Up $2.3 million or 5.6%
        Legend contributed $6.9 million to the increase in underwriting and
        distribution expense. Excluding Legend's contribution, these expenses
        were down $4.6 million, or 11%, in correlation with the decline in
        related revenues. Indirect distribution costs declined as advertising
        and marketing programs were significantly reduced, more overhead
        expenses were reimbursed from mutual funds, and sales-related legal
        costs declined. Distribution margin, excluding Legend's contribution,
        was 9.0% in both 2000 and 2001's first quarter. Including Legend's
        contribution, distribution margin was 10.5% for this year's first
        quarter.
 
        1Q01 Over 4Q00:  Down $2.8 million or -5.9%
        The sequential decrease in underwriting and distribution expenses was
        due primarily to the decline in related revenues. Distribution margin
        was relatively unchanged at 10.5% compared with 10.6% in the fourth
        quarter of 2000.
 
     Other Operating Expenses
        1Q01 Over 1Q00:  Compensation up $0.8 million or 5.8%; General and
        Administrative Expense down $0.6 million or 9.0%
 
        Base salaries increased $1.8 million due largely to last year's
        increase in personnel and salaries; however, this was somewhat offset
        by a reduction in amounts accrued for incentive-based compensation and
        bonuses.
 
        Legend contributed $0.8 million to general and administrative costs.
        Excluding Legend's contribution, these costs were down $1.4 million or
        22%. A greater portion of information systems support was dedicated to
        underwriting and distribution efforts during the year, the costs of
        which are included in underwriting and distribution expense.  In
        addition, costs incurred in 2000 associated with restructuring and
        renaming our fund families and adding additional share classes were not
        incurred in 2001, resulting in a favorable comparison. Costs also were
        lower for professional services and consulting, and client service
        costs.
 
        1Q01 Over 4Q00:  Compensation and Related Costs Remain Relatively
        Unchanged up 0.2%; General and Administrative Expense down $1.3 million
        or -17.9%
 
        First quarter compensation and related costs remained flat when
        compared with the fourth quarter of last year.  Increased salaries were
        offset by reduced incentive-based compensation.
 
        Approximately 35% of the decline in general and administrative expenses
        was due to additional programming and systems costs allocated to our
        underwriting and distribution efforts in the current year.  Various
        other expenses also declined including costs associated with the
        relocation of our client services and information systems operations to
        our new building in the fourth quarter of 2000, costs associated with
        mutual fund shareholder expenses, costs for professional services and
        consulting, and custodial fee payments.
 
 
 
                         WADDELL & REED FINANCIAL, INC.
                      Schedule of Selected Operating Data
                (Amounts in thousands except for per share data)
 
                                               Three Months Ended
                                                   March 31,
                                               2001         2000       % Change
     Operating Revenues:
                 Investment management
                  fees                        $56,203      $63,805       -11.9
                 Underwriting &
                  distribution fees            48,867       45,481         7.4
                 Shareholder service fees      14,372       11,294        27.3
 
                 Total operating revenues     119,442      120,580        -0.9
 
     Operating Expenses:
                 Underwriting and
                  distribution                 43,720       41,396         5.6
                 Compensation and related
                  costs                        14,810       14,001         5.8
                 General and
                  administrative                6,019        6,612        -9.0
                 Depreciation                   1,240          631        96.5
 
                 Total operating expense       65,789       62,640         5.0
 
     Other Income (Expense):
 
                 Investment & other
                  income (a)                    1,708        4,162       -59.0
                 Interest expense              (4,398)      (2,499)       76.0
                 Amortization of goodwill      (1,652)        (929)       77.8
 
                 Total other income
                  (expense)                    (4,342)         734      -691.6
 
                 Income before taxes           49,311       58,674       -16.0
 
                 Provision for taxes           18,715       22,548       -17.0
 
                 Net Income                   $30,596      $36,126       -15.3
 
                 Net Income per share -
                  diluted                       $0.36        $0.41       -12.2
 
                 Weighted average number
                 of shares outstanding -
                  diluted                      85,538       87,213
 
     Operating Margin
          - Consolidated                         44.9%        48.1%
          - Excluding Legend                     47.6%        48.1%
 
     Distribution Margin
          - Consolidated                         10.5%         9.0%
          - Excluding Legend                      9.0%         9.0%
 
     (a)  First quarter 2000 includes $2.1 million ($1.3 million after-tax) of
          net realized gains relating to securities sold to facilitate
          the acquisition of Legend.  The impact on earnings per share
          was $0.01.
 
 
                         WADDELL & REED FINANCIAL, INC.
                      Schedule of Selected Operating Data
                (Amounts in thousands except for per share data)
 
                                               Three Months Ended
                                                  December 31,
                                                      2000             % Change
     Operating Revenues:
                 Investment management fees           63,050             -10.9
                 Underwriting &
                  distribution fees                   52,007              -6.0
                 Shareholder service fees             14,600              -1.6
 
                 Total operating revenues            129,657              -7.9
 
     Operating Expenses:
                 Underwriting and
                  distribution                        46,476              -5.9
                 Compensation and related
                  costs                               14,781               0.2
                 General and
                  administrative                       7,327             -17.9
                 Depreciation                          1,180               5.1
 
                 Total operating expense              69,764              -5.7
 
     Other Income (Expense):
 
                 Investment & other
                  income (a)                           2,603             -34.4
                 Interest expense                     (3,765)             16.8
                 Amortization of goodwill             (1,525)              8.3
 
                 Total other income
                  (expense)                           (2,687)             61.6
 
                 Income before taxes                  57,206             -13.8
 
                 Provision for taxes                  22,567             -17.1
 
                 Net Income                          $34,639             -11.7
 
                 Net Income per share -
                  diluted                              $0.40             -10.0
 
                 Weighted average number
                 of shares outstanding -
                  diluted                             86,912
 
     Operating Margin
            - Consolidated                              46.2%
            - Excluding Legend                          49.5%
 
     Distribution Margin
            - Consolidated                              10.6%
            - Excluding Legend                           9.0%
 
     (a)  First quarter 2000 includes $2.1 million ($1.3 million after-tax) of
          net realized gains relating to securities sold to facilitate
          the acquisition of Legend.  The impact on earnings per share
          was $0.01.
 
 
     Proposed Combination of Two Classes of Common Stock
     On January 25, 2001, we announced that our Board of Directors had approved
 the combination of our two classes of common stock by converting shares of our
 Class B common stock into shares of Class A common stock on a one-for-one
 basis. The combination will result from the merger of a wholly owned
 subsidiary into the Company that will be subject to the approval of a majority
 of the voting power of the Class A and Class B common stock, voting together
 as a single class, and a majority of the Class B common stock, voting as a
 separate class. The transaction will be submitted to stockholders at the
 upcoming annual meeting on April 25, 2001. We believe that the elimination of
 the dual classes of common stock will better align the voting rights of all
 stockholders with their ownership interests. We also believe that the
 combination will increase the overall liquidity of our common stock and
 eliminate the complexity, and resulting market confusion, of having two
 publicly traded classes of common stock.
 
     Stock Repurchase Program
     In the first quarter of 2001, we repurchased 4.0 million Class B shares
 for $30.50 per share at a total cost, including commissions, of
 $122.0 million.  Total shares outstanding of Class A and B combined common
 stock as of March 31, 2000 were 79.7 million.  As of March 31, 2000, we had
 20.0 million shares held in Treasury Stock at a cost of $420.2 million.
 
     Headquarters Sale-Leaseback
     On March 7, 2001, we completed the sale of our two home office buildings
 to Mesirow Realty Sale-Leaseback, with whom we also entered into an agreement
 to lease the buildings back for a period of fifteen years. The net proceeds
 from this sale were $28.2 million and resulted in a realized gain of
 approximately $1.8 million, which was deferred and will be amortized over the
 term of the operating lease.
 
     Additional Product Offerings Through Nationwide
     The steps taken last year to provide broader depth to our insurance
 product offerings are continuing to progress.  Nationwide Financial Services
 ("Nationwide") now underwrites substantially all of the variable annuity and
 variable universal life products sold by our sales force.  Nationwide's
 reputation for quality products and superior service enhances the
 attractiveness of these products to our advisors and clients.  Nationwide also
 has developed a survivorship life product, a qualified group retirement plan
 and term insurance for distribution by our financial advisors.
 
     Termination of Agreements by United Investors Life Insurance Company
     On February 28, 2001, United Investors Life Insurance Company ("UILIC")
 terminated the Principal Underwriting Agreement between UILIC and the Company,
 effective April 30, 2001. This agreement provided for the sale of variable
 products underwritten by UILIC by our financial advisors. As a result,
 beginning May 1, 2001, Nationwide will be the sole provider of variable
 products invested in our mutual funds for distribution by our financial
 advisors. Management believes that the profitability of the two insurers'
 variable product lines is equivalent.
     In addition, on February 28, 2001, UILIC terminated the General Agent
 Contract by and between UILIC and the Company, effective December 31, 2001.
 This agreement provides for the sale of non-variable life insurance products
 underwritten by UILIC and distributed by our financial advisors. We are
 currently in the process of negotiating with several insurance carriers for
 the sale of their products by our financial advisors to complement the other
 non-UILIC life products currently available for distribution by our financial
 advisors. In addition, we recently have entered into an agreement with BISYS
 to provide our financial advisors with access to an extensive array of
 traditional life and disability insurance products for sale to our clients. As
 a result, management does not anticipate any material adverse effects from the
 termination of the UILIC General Agent Contract.
 
     United Investors Life Insurance Company Litigation
     As previously disclosed, we are in litigation with UILIC, and other
 related parties over terms of a compensation agreement signed in July 1999 by
 UILIC and Waddell & Reed, Inc. The compensation is paid by UILIC to us on
 variable annuities underwritten by UILIC and distributed by us. The agreement
 provides for us to be paid annual compensation of 0.25% on all variable
 annuity policies' assets under management issued after January 1, 2000 ("post-
 1999 assets"), and annual compensation of 0.20% on variable annuity policies'
 assets under management issued before that date ("pre-2000 assets").  The
 validity and duration of that agreement has been challenged by UILIC in a
 complaint filed in May 2000, in the Circuit Court of Jefferson County,
 Alabama.  We have subsequently named Torchmark as a third-party defendant in a
 tortious interference claim.
     On April 9, 2001, the Circuit Court of Jefferson County, Alabama, issued
 two orders.  In the first order on the issue of the contract being valid, our
 motion for summary judgment was denied.  This issue is currently set for trial
 in September 2001.  In the second order on the issue of whether annual
 compensation of 0.20% on pre-2000 assets terminates with the Principal
 Underwriting Agreement, UILIC's motion for summary judgment was granted.  The
 annual compensation of 0.25% on post-1999 assets was not addressed by these
 orders.  These completely incongruous orders prevent us from collecting fees
 on pre-2000 assets after May 2001 unless our efforts for immediate legal
 relief are successful or we prevail at or after the September 2001
 proceedings. While management believes that the Company will ultimately
 prevail, if it does not, the revenue impact at current market levels is
 estimated to be $2.4 million over the remaining three quarters of 2001. In the
 future, this impact should be mitigated by a pre-2000 asset balance that is
 expected to decline as clients migrate their variable policies to other
 products with superior features and service.
 
 
 
                            Assets Under Management
                             (amounts in millions)
 
 
     Ending
                    1Q 01        1Q 00       % change      4Q 00     % change
     Mutual Fund
     Equity        $23,229      $31,186      -25.5 %      $27,579      -15.8%
     Fixed Income    3,184        3,289       -3.2 %        3,105        2.5%
     Money Market    1,191          873       36.4 %        1,108        7.5%
     Total         $27,604      $35,348      -21.9 %      $31,792      -13.2%
 
     Institutional
      and separate
      accounts       4,645        6,132      -24.2 %        4,933       -5.8%
     Total         $32,249      $41,480      -22.3 %      $36,725      -12.2%
 
     Average*
 
                    1Q 01        1Q 00       % change      4Q 00     % change
     Mutual Funds
     Equity        $26,125      $29,270       -10.7%      $28,498       -8.3%
     Fixed Income    3,171        3,403        -6.8%        3,090        2.6%
     Money Market    1,072          825        29.9%          966       11.0%
     Total         $30,368      $33,498        -9.3%      $32,554       -6.7%
 
     Institutional
      and separate
      accounts       4,934        5,722       -13.8%        5,200       -5.1%
     Total         $35,302      $39,220       -10.0%      $37,754       -6.5%
 
 
     * Average calculated using daily ending balances for mutual funds and
       monthly ending balances for institutional and private accounts.
 
 
                                  Other Items
 
 
                      1Q 01       1Q 00     % change        4Q 00     % change
     Retail
      Redemption Rate  8.7%         7.7%                      7.1%
     Sales per advisor
      (000s)***
        Total          239          323       -26.0%          218        9.6%
        2+ Years *     328          460       -28.7%          290       13.1%
 
        0 to 2 Years ** 55           95       -42.1%           53        3.8%
        Other          119          164       -27.4%           65       83.1%
 
 
     Number of
      financial
      advisors ***   2,835        2,522        12.4%       2,865        -1.0%
     Average number
      of financial
      advisors***    2,809        2,544        10.4%       2,788         0.8%
 
     Number of
      shareholder
      accounts   2,035,449    1,820,771        11.8%   1,976,412         3.0%
 
 
      *      Advisors licensed with the Company for two or more years.
      **    Advisors licensed with the Company for less than two years.
      ***  Excludes Legend Retirement Advisors
 
                         Waddell & Reed Financial, Inc.
                 Change in Assets(includes money market funds)
                                   (Millions)
 
                                             Institutional
                                                      Separate
                           Retail         Y Shares    Accounts       Total
     March 31, 2001 QTD
     Beginning Assets     $31,374.5        $417.7     $4,933.0     $36,725.2
 
     Sales (net of sales
      charges)[a]             956.5          39.7        315.5       1,311.7
     Redemptions [a]         (948.8)        (15.8)      (181.3)     (1,145.9)
     Net Sales [b]              7.7          23.9        134.2         165.8
 
     Net Exchanges and
      Adjustments              (3.2)          5.9          5.0           7.7
     Reinvested Dividends
      and Capital Gains        70.8           0.8         26.3          97.9
     Net Flows                 75.3          30.6        165.5         271.4
 
     Market Appreciation/
      (Depreciation)       (4,231.4)        (63.0)      (453.0)     (4,747.4)
     Ending Assets        $27,218.4        $385.3     $4,645.5     $32,249.2
 
     December 31, 2000 QTD
     Beginning Assets     $33,697.2        $395.8     $5,927.0     $40,020.0
 
     Sales (net of sales
      charges)                919.1          63.0        200.3       1,182.4
     Redemptions             (797.8)        (13.9)    (1,071.9)     (1,883.6)
     Net Sales                121.3          49.1      (871.6)       (701.2)
 
     Net Exchanges              0.4           1.4          0.0           1.8
     Reinvested Dividends
      and Capital Gains      (240.8)         (4.9)        38.6        (207.1)
     Net Flows               (119.1)         45.6       (833.0)       (906.5)
 
     Market Appreciation/
     (Depreciation)        (2,203.6)        (23.7)      (161.0)     (2,388.3)
     Ending Assets        $31,374.5        $417.7     $4,933.0     $36,725.2
 
 
     March 31, 2000 QTD
     Beginning Assets     $31,486.0        $423.0     $5,393.0     $37,302.0
 
     Sales (net of sales
      charges)              1,043.6          35.1        282.5       1,361.2
     Redemptions            (903.0)        (50.2)      (146.4)     (1,099.6)
     Net Sales               140.6         (15.1)       136.1         261.6
 
     Net Exchanges            (0.2)         (1.0)         0.0          (1.2)
     Reinvested Dividends
      and Capital Gains       41.7           0.3         37.5          79.5
     Net Flows               182.1         (15.8)       173.6         339.9
 
     Market Appreciation/
      (Depreciation)       3,226.9          45.5        565.2       3,837.6
     Ending Assets       $34,895.0        $452.7     $6,131.8     $41,479.5
 
     [a] First quarter 2001 includes $34.5 of retail commissionable variable
         annuity exchanges.
 
     [b] Total net sales for the months of January, February and March of 2001
         were $154.6, $39.9 and ($28.7), respectively.  Retail
         net sales for the same periods were $28.8, $27.6 and ($48.7),
         respectively.
 
     Redemption Rates - Long Term Mutual Funds
                                              Quarter to Date
                                            2001          2000
 
     Retail                                 8.7%          7.7%
     Total                                  8.8%          8.2%
 
     Forward-looking Statements
     The statements in this press release relating to matters that are not
 historical facts are forward-looking statements based on management's belief
 and assumptions using currently available information and expectations as of
 the date hereof, are not guarantees of future performance and involve certain
 risks, uncertainties and assumptions that are difficult to predict.  Although
 we believe that the expectations reflected in such forward-looking statements
 are reasonable, we cannot give any assurances that these expectations will
 prove to be correct.  Therefore, actual outcomes and results could materially
 differ from what is expressed, implied or forecast in such statements.  Such
 differences could be caused by a number of factors including, but not limited
 to, a risk that the expected benefits from the expansion of our distribution
 channels may not be as beneficial as anticipated, results of adverse
 litigation, less favorable economic and market conditions, that the expected
 benefits of the combination of our two classes of common stock may not come to
 fruition, and other risks as set out in the reports we have filed with the
 SEC.  Should one or more of these risks materialize or should the underlying
 assumptions prove incorrect, actual results could differ materially from those
 forecasted or expected.  We assume no duty to publicly update or revise such
 statements, whether as a result of new information, future events or
 otherwise.
 
 SOURCE  Waddell & Reed Financial, Inc.