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Derivative Financial Instruments | 9 Months Ended
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Sep. 30, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Financial Instruments | Derivative Financial Instruments The Company and its Affiliates may use derivative financial instruments to offset exposure to changes in interest rates, foreign currency exchange rates and markets. On August 28, 2018, the Company entered into a pound sterling-denominated forward foreign currency contract (the “forward contract”) with a large financial institution (the “counterparty”) to deliver £285.8 million for $400.0 million in 2024. Concurrent with entering into the forward contract, the Company entered into a collar contract (the “collar contract”) with the same counterparty, for the same notional amounts and expiration date as the forward contract, through the sale of a put option with a lower strike price of 1.288 U.S. dollars per one pound sterling and the purchase of a call option with an upper strike price of 1.535 U.S. dollars per one pound sterling. The forward contract and the collar contract were designated as net investment hedges against fluctuations in exchange rates on certain of the Company’s investments in Affiliates with the pound sterling as their functional currency. The forward contract’s excluded component is recognized in earnings on a straight-line basis over the respective period of the forward contract as a reduction to Interest expense in the Consolidated Statements of Income. All other changes in the fair values of the forward contract and the collar contract are reported in Foreign currency translation gain (loss) in the Consolidated Statements of Comprehensive Income. The Company assesses hedge ineffectiveness on a quarterly basis. Any hedge ineffectiveness is recorded in Investment and other income in the Consolidated Statements of Income. For the three and nine months ended September 30, 2018, there was no ineffectiveness recorded. The Company’s Affiliates use forward foreign currency contracts to hedge the risk of foreign exchange rate movements, none of which were significant. The following table summarizes the Company’s and its Affiliates’ derivative financial instruments measured at fair value on a recurring basis. As of December 31, 2017, the Company and its Affiliates did not have any significant derivative financial instruments.
|  | September 30, 2018
|  | Assets(1) |  | Liabilities(2)
Forward contracts |  | $ | 1.0 |  |  | $ | 6.4 |
Put option |  | — |  |  | 21.6 |
Call option |  | — |  |  | (23.5 | )
Total | $ | 1.0 |  |  | $ | 4.5 |
(1) | Amounts are presented in Other investments and assets in the Consolidated Condensed Balance Sheets.
(2) | Amounts are presented in Other liabilities in the Consolidated Condensed Balance Sheets.
The following table summarizes the effect of the derivative financial instruments on the Consolidated Statements of Comprehensive Income and the Consolidated Statements of Income. In the three and nine months ended September 30, 2017, the Company and its Affiliates did not have any significant derivative financial instruments.
|  | For the Three Months Ended September 30, 2018 |  | For the Nine Months Ended September 30, 2018
|  | Gain (Loss) Recognized in Other Comprehensive Income |  | Gain (Loss) Recognized in Earnings from Excluded Components(1) |  | Gain (Loss) Recognized in Other Comprehensive Income |  | Gain (Loss) Recognized in Earnings from Excluded Components(1)
Forward contracts |  | $ | (5.9 | ) |  | $ | 0.5 |  |  | $ | (5.6 | ) |  | $ | 0.5 |
Put option |  | 1.6 |  |  | — |  |  | 1.6 |  |  | — |
Call option |  | 0.3 |  |  | — |  |  | 0.3 |  |  | — |
Total |  | $ | (4.0 | ) |  | $ | 0.5 |  |  | $ | (3.7 | ) |  | $ | 0.5 |
(1) | The excluded components are recorded as a reduction in Interest expense.
In the three and nine months ended September 30, 2018, the Company and its Affiliates did not have any significant gains (losses) reclassified from Accumulated other comprehensive income into earnings. The terms of the Company’s forward contract and collar contract require the Company and the counterparty to post cash collateral in certain circumstances throughout the duration of the contracts. As of September 30, 2018, the Company held $3.1 million of cash collateral from the counterpary. The counterparty to the Company’s derivative contracts is a large financial institution. The derivative contracts are governed by an International Swaps and Derivative Association (“ISDA”) Master Agreement with the counterparty, which provides for settlement netting and close-out netting between the Company and the counterparty, which are legally enforceable rights to setoff. The Company also actively monitors its counterparty credit risk related to derivative financial instruments. The Company’s derivative contracts include provisions to protect against counterparty rating downgrades, which in certain cases may result in the counterparty posting additional collateral to the Company, or give rise to a termination right. The Company considers set-off rights and counterparty credit risk in the valuation of its positions, and recognizes a credit valuation adjustment as appropriate. In October 2018, the Company entered into an additional pound sterling-denominated forward foreign currency contract and an additional collar contract, which are further described in Note 19.

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- References No definition available. + Details
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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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