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Fair Value Measurements | 9 Months Ended
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Sep. 30, 2018
Fair Value Disclosures [Abstract] |
Fair Value Measurements | 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, 2017 |
|  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Financial Assets |  |  |  |  |  |  |
Cash equivalents | $ | 40.4 |  |  | $ | 40.4 |  |  | $ | — |  |  | $ | — |
Investments in marketable securities | 77.8 |  |  | 77.8 |  |  | — |  |  | — |
Derivative financial instruments(1) | 0.2 |  |  | — |  |  | 0.2 |  |  | — |
Financial Liabilities(2) |  |  |  |  |  |  |
Contingent payment arrangements | $ | 9.4 |  |  | $ | — |  |  | $ | — |  |  | $ | 9.4 |
Affiliate equity repurchase obligations | 49.2 |  |  | — |  |  | — |  |  | 49.2 |
Derivative financial instruments | 0.6 |  |  | — |  |  | 0.6 |  |  | — |
|  |  | Fair Value Measurements
| September 30, 2018 |
|  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Financial Assets |  |  |  |  |  |  |
Cash equivalents | $ | 48.1 |  |  | $ | 48.1 |  |  | $ | — |  |  | $ | — |
Investments in marketable securities | 144.1 |  |  | 144.1 |  |  | — |  |  | — |
Derivative financial instruments(1) | 1.0 |  |  | — |  |  | 1.0 |  |  | — |
Financial Liabilities(2) |  |  |  |  |  |  |
Contingent payment arrangements | $ | 4.3 |  |  | $ | — |  |  | $ | — |  |  | $ | 4.3 |
Affiliate equity repurchase obligations | 28.7 |  |  | — |  |  | — |  |  | 28.7 |
Derivative financial instruments | 4.5 |  |  | — |  |  | 4.5 |  |  | — |
__________________________
(1) | Amounts are presented within Other investments and assets.
(2) | Amounts are presented within Other liabilities.
Level 3 Financial Assets and Liabilities The following tables present the changes in level 3 liabilities:
| For the Three Months Ended September 30,
| 2017 | 2018
| Contingent Payment Arrangements |  | Affiliate Equity Repurchase Obligations |  | Contingent Payment Arrangements |  | Affiliate Equity Repurchase Obligations
Balance, beginning of period | $ | 7.8 |  |  | $ | 70.7 |  |  | $ | 4.2 |  |  | $ | 36.9 |
Net realized and unrealized (gains) losses(1) | 0.3 |  |  | (0.2 | ) |  | 0.1 |  |  | — |
Purchases and issuances(2) | — |  |  | 11.1 |  |  | — |  |  | 40.1 |
Settlements and reductions | — |  |  | (35.9 | ) |  | — |  |  | (48.3 | )
Balance, end of period | $ | 8.1 |  |  | $ | 45.7 |  |  | $ | 4.3 |  |  | $ | 28.7 |
Net change in unrealized (gains) losses relating to instruments still held at the reporting date(1) | $ | 0.3 |  |  | $ | — |  |  | $ | 0.1 |  |  | $ | — |
| For the Nine Months Ended September 30,
| 2017 |  | 2018
| Contingent Payment Arrangements |  | Affiliate Equity Repurchase Obligations |  | Contingent Payment Arrangements |  | Affiliate Equity Repurchase Obligations
Balance, beginning of period | $ | 8.6 |  |  | $ | 12.1 |  |  | $ | 9.4 |  |  | $ | 49.2 |
Net realized and unrealized (gains) losses(1) | 2.3 |  |  | (0.2 | ) |  | (0.3 | ) |  | — |
Purchases and issuances(2) | — |  |  | 161.5 |  |  | — |  |  | 86.0 |
Settlements and reductions | (2.8 | ) |  | (127.7 | ) |  | (4.8 | ) |  | (106.5 | )
Balance, end of period | $ | 8.1 |  |  | $ | 45.7 |  |  | $ | 4.3 |  |  | $ | 28.7 |
Net change in unrealized (gains) losses relating to instruments still held at the reporting date(1) | $ | 2.3 |  |  | $ | — |  |  | $ | 0.4 |  |  | $ | — |
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(1) | Accretion and changes in the expected value of the Company’s contingent payment arrangements and Affiliate equity repurchase obligations are recorded in Other expenses (net) in the Consolidated Statements of Income.
(2) | Includes transfers from Redeemable non-controlling interests.
The following table presents certain quantitative information about the significant unobservable inputs used in valuing the Company’s level 3 fair value measurements:
| Quantitative Information About Level 3 Fair Value Measurements
| Valuation Techniques |  | Unobservable Input |  | Fair Value at December 31, 2017 |  | Range at December 31, 2017 |  | Fair Value at September 30, 2018 |  | Range at September 30, 2018
Contingent payment arrangements | Discounted cash flow |  | Growth rates |  | $ | 9.4 |  |  | 7% - 8% |  | $ | 4.3 |  |  | 7%
|  |  | Discount rates |  |  |  |  | 15% - 16% |  |  |  |  | 15%
Affiliate equity repurchase obligations | Discounted cash flow |  | Growth rates |  | 49.2 |  |  | 0% - 11% |  | 28.7 |  |  | 4% - 9%
|  |  | Discount rates |  |  |  |  | 12% - 16% |  |  |  |  | 14% - 16%
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. As of September 30, 2018, there were no changes to growth rates or discount rates that had a significant impact to contingent payment arrangements. Affiliate equity repurchase obligations include agreements to repurchase Affiliate equity. As of September 30, 2018, there were no changes to growth or discount rates that had a significant impact to Affiliate equity repurchase obligations recorded in prior periods. Investments Measured at NAV as a Practical Expedient The Company’s Affiliates sponsor investment products in which the Company and its Affiliates may make general partner and seed capital investments. The Company uses the net asset value (“NAV”) of these investments as a practical expedient for their fair value and reports these products within Other investments and assets. The following table summarizes the nature of the Company’s investments, unfunded commitments and any related liquidity restrictions or other factors that may impact the ultimate value realized:
| December 31, 2017 |  | September 30, 2018
Category of Investment | Fair Value |  | Unfunded Commitments |  | Fair Value |  | Unfunded Commitments
Private equity funds(1) | $ | 156.1 |  |  | $ | 98.8 |  |  | $ | 185.4 |  |  | $ | 130.4 |
Other funds(2) | 8.9 |  |  | — |  |  | 7.4 |  |  | — |
Other investments(3) | $ | 165.0 |  |  | $ | 98.8 |  |  | $ | 192.8 |  |  | $ | 130.4 |
___________________________
(1) | The Company uses NAV as a practical expedient one quarter in arrears (adjusted for current period calls and distributions) to determine the fair value. These funds primarily invest in a broad range of private equity funds, as well as making 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.
(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.
(3) | Fair value attributable to the controlling interest was $80.1 million and $115.0 million as of December 31, 2017 and September 30, 2018, respectively.
Other Financial Assets and Liabilities Not Carried at Fair Value The carrying amount of Receivables and Payables and accrued liabilities, which is reported in the Consolidated Condensed Balance Sheets, approximates fair value because of the short-term nature of these instruments. The carrying value of notes receivable, which is reported in Other investments and assets, approximates fair value because interest rates and other terms are at market rates. The carrying value of the credit facilities, which is reported in Senior debt in the Consolidated Condensed Balance Sheets, approximates fair value because the credit facilities have 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, 2017 |  | September 30, 2018 |  |
| Carrying Value |  | Fair Value |  | Carrying Value |  | Fair Value |  | Fair Value Hierarchy
Senior notes(1) | $ | 745.7 |  |  | $ | 765.2 |  |  | $ | 746.1 |  |  | $ | 743.8 |  |  | Level 2
Convertible securities | 309.9 |  |  | 549.8 |  |  | 311.8 |  |  | 498.7 |  |  | Level 2
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(1) | The carrying value of the senior notes is reported in Senior debt.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI http://asc.fasb.org/topic&trid=2155941 + Details
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