Fair Value Measurements

The following tables summarize the Company’s financial assets and liabilities that are measured at fair value on a recurring basis:



			Fair Value Measurements
	December 31, 2015		Fair Value Measurements
	December 31, 2015		Level 1		Level 2		Level 3
Financial Assets
Cash equivalents	$	65.9	$	65.9	$	—	$	—
Investments in marketable securities⁽¹⁾
Trading securities	19.4		19.4		—		—
Available-for-sale securities	180.5		180.5		—		—
Other investments⁽²⁾	23.3		20.7		2.6		—
Financial Liabilities⁽³⁾
Contingent payment arrangements	$	10.2	$	—	$	—	$	10.2
Affiliate equity obligations	62.3		—		—		62.3



			Fair Value Measurements
	December 31, 2016		Fair Value Measurements
	December 31, 2016		Level 1		Level 2		Level 3
Financial Assets
Cash equivalents	$	64.1	$	64.1	$	—	$	—
Investments in marketable securities⁽¹⁾
Trading securities	40.5		40.5		—		—
Available for sale securities	81.9		81.9		—		—
Other investments⁽²⁾	3.4		3.4		—		—
Foreign currency forward contracts⁽³⁾	0.6		—		0.6		—
Financial Liabilities⁽³⁾
Contingent payment arrangements	$	8.6	$	—	$	—	$	8.6
Affiliate equity obligations	12.1		—		—		12.1
Foreign currency forward contracts	0.5		—		0.5		—

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⁽¹⁾	Principally investments in equity securities.


⁽²⁾	The Company adopted ASU 2015-07 and no longer includes $126.0 million and $144.1 million as of December 31, 2015 and 2016, respectively, of investments in certain entities for which fair value was measured using NAV as a practical expedient.


⁽³⁾	Amounts are presented within Other assets or Other liabilities.

The following are descriptions of the significant financial assets and liabilities measured at fair value and the fair value methodologies used.

Cash equivalents consist primarily of highly liquid investments in daily redeeming money market funds, without enacted liquidity fees or redemption gates.

Investments in marketable securities consist primarily of investments in publicly traded securities and in funds advised by Affiliates that are valued at NAV. Publicly traded securities valued using unadjusted quoted market prices for identical instruments in active markets are classified as level 1. Publicly traded securities valued using quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active are classified as level 2.

Other investments consist primarily of funds advised by Affiliates that are valued using NAV. Investments in funds that calculate NAVs are classified as level 1. Investments in funds valued using other inputs that are observable or can be corroborated by observable market data, such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active, are classified as level 2.

Contingent payment arrangements represent the present value of the expected future settlement of contingent payment arrangements related to the Company’s investments in consolidated Affiliates. The significant unobservable inputs that are used in the fair value measurement of these obligations are growth and discount rates. Increases in the growth rate result in a higher obligation while an increase in the discount rate results in a lower obligation.

Affiliate equity obligations include agreements to repurchase Affiliate equity. The significant unobservable inputs that are used in the fair value measurement of the agreements to repurchase Affiliate equity are growth and discount rates. Increases in the growth rate result in a higher obligation while an increase in the discount rate results in a lower obligation.

Foreign currency forward contracts use model-derived valuations in which all significant inputs are observable in active markets to determine fair value and are classified as level 2.

It is the Company’s policy to value financial assets or liabilities transferred as of the beginning of the period in which the transfer occurs. There were no significant transfers of financial assets or liabilities from level 1 to level 2 in 2015 or 2016.

Level 3 Financial Liabilities

The following table presents the changes in Level 3 liabilities:



	For the Years Ended December 31,
	2015							2016
	Contingent Payment Arrangements				Affiliate Equity Obligations			Contingent Payment Arrangements				Affiliate Equity Obligations
Balance, beginning of period	$	59.3			$	21.5		$	10.2			$	62.3
Net (gains) losses	(40.9		)	⁽¹⁾	(1.4		)	(1.6		)	⁽¹⁾	3.1
Purchases and issuances	9.3				158.0			—				69.1
Settlements and reductions	(17.5		)		(115.8		)	—				(122.4		)
Balance, end of period	$	10.2			$	62.3		$	8.6			$	12.1

Net change in unrealized (gains) losses relating to instruments still held at the reporting date	$	(40.9	)		$	—		$	(1.6	)		$	—

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⁽¹⁾	Accretion and changes in the expected value of the Company’s contingent payment arrangements are recorded in Imputed interest expense and contingent payment arrangements.

The following table presents certain quantitative information about the significant unobservable inputs used in valuing the Company’s level 3 financial liabilities:



	Quantitative Information about Level 3 Fair Value Measurements
	Valuation Techniques	Unobservable Input	Fair Value at December 31, 2015		Range at December 31, 2015	Fair Value at December 31, 2016		Range at December 31, 2016
Contingent payment arrangements	Discounted cash flow	Growth rates	$	10.2	3% - 8%	$	8.6	3% - 8%
		Discount rates			15%			14% - 15%
Affiliate equity obligations	Discounted cash flow	Growth rates	62.3		1% - 9%	12.1		4% - 10%
		Discount rates			14% - 15%			15% - 16%

Investments in Certain Entities that Calculate Net Asset Value

The Company uses the NAV of certain investments as their fair value. The NAVs provided by the investees have been derived from the fair values of the underlying assets and liabilities as of the measurement dates. The following table summarizes the nature of these investments and any related liquidity restrictions or other factors that may impact the ultimate value realized:



	December 31, 2015				December 31, 2016
Category of Investment	Fair Value		Unfunded Commitments		Fair Value		Unfunded Commitments
Private equity⁽¹⁾	$	126.0	$	76.8	$	137.8	$	92.2
Other funds⁽²⁾	72.3		—		36.8		—
	$	198.3	$	76.8	$	174.6	$	92.2

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⁽¹⁾	These funds primarily invest in a broad range of private equity funds, as well as make direct investments. Distributions will be received as the underlying assets are liquidated over the life of the funds, which is generally up to 15 years. The fair value of private equity funds is determined using NAV one quarter in arrears (adjusted for current period calls and distributions).


⁽²⁾	These are multi-disciplinary funds that invest across various asset classes and strategies, including long/short equity, credit and real estate. Investments are generally redeemable on a daily, monthly or quarterly basis.

Other Financial Assets and Liabilities Not Carried at Fair Value

The carrying amount of Receivables and Payables and accrued liabilities approximates fair value because of the short-term nature of these instruments. The carrying value of notes receivable approximates fair value because interest rates and other terms are at market rates. The carrying value of the credit facilities approximates fair value because the debt has variable interest based on selected short-term rates. The following table summarizes the Company’s other financial liabilities not carried at fair value:



	December 31, 2015				December 31, 2016
	Carrying Value		Fair Value		Carrying Value		Fair Value		Fair Value Hierarchy
Senior notes	$	944.6	$	966.3	$	945.1	$	936.0	Level 2
Convertible securities	305.2		483.6		307.5		466.9		Level 2