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Derivative Financial Instruments | 3 Months Ended
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Mar. 31, 2019
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. The Company has two separate pound sterling-denominated forward foreign currency contracts (the “forward contracts”) with a large financial institution (the “counterparty”). Concurrent to entering into each of the forward contracts, the Company also entered into two separate collar contracts (the “collar contracts”) with the same counterparty for the same notional amounts and expiration dates as the forward contracts. Under one of the forward contracts, the Company will deliver £285.8 million for $400.0 million in 2024 and under the other forward contract, the Company will deliver £325.3 million for $450.0 million in 2021. Under one of the collar contracts, the Company sold a put option with a lower strike price of 1.288 U.S. dollars per one pound sterling and purchased a call option with an upper strike price of 1.535 U.S. dollars per one pound sterling. Under the other collar contract, the Company sold a put option with a lower strike price of 1.318 U.S. dollars per one pound sterling and purchased a call option with an upper strike price of 1.448 U.S. dollars per one pound sterling. The combination of the forward contracts and the collar contracts were designated as net investment hedges against fluctuations in foreign currency exchange rates on certain of the Company’s investments in Affiliates with the pound sterling as their functional currency. Changes in the fair values of the effective net investment hedges are reported in Foreign currency translation gain (loss) in the Consolidated Statements of Comprehensive Income. The Company assesses hedge effectiveness on a quarterly basis. The Company’s Affiliates use forward foreign currency contracts to hedge the risk of foreign exchange rate movements, which were not significant for the three months ended March 31, 2018 and 2019. Derivative financial instruments are presented in Other assets when in an unrealized gain position and in Other liabilities when in an unrealized loss position. When a right to offset exists between derivative financial instruments they are presented net in the Consolidated Balance Sheets. The following table summarizes the Company’s and its Affiliates’ derivative financial instruments measured at fair value on a recurring basis:
|  | December 31, 2018 |  | March 31, 2019
|  | Assets |  | Liabilities |  | Assets |  | Liabilities
Forward contracts |  | $ | 32.0 |  |  | $ | (1.4 | ) |  | $ | 17.2 |  |  | $ | (0.0 | )
Put options |  | — |  |  | (60.3 | ) |  | — |  |  |  | (42.4 | )
Call options |  | 34.1 |  |  | — |  |  | 26.6 |  |  |  | — |
Total |  | $ | 66.1 |  |  | $ | (61.7 | ) |  | $ | 43.8 |  |  | $ | (42.4 | )
The following table summarizes the effect of the derivative financial instruments on the Consolidated Statements of Comprehensive Income and the Consolidated Statements of Income. For the three months ended March 31, 2018, the Company and its Affiliates did not have any significant derivative financial instruments.
|  | For the Three Months Ended March 31, 2019
|  | Gain (Loss) Recognized in Other Comprehensive Income |  | Gain Recognized in Earnings from Excluded Components(1)
Forward contracts |  | $ | (16.8 | ) |  | $ | 3.5 |
Put options |  | 17.9 |  |  | — |
Call options |  | (7.5 | ) |  | — |
Total |  | $ | (6.4 | ) |  | $ | 3.5 |
(1) | The excluded components of the forward contracts are recognized in earnings on a straight-line basis over the respective period of the contracts as a reduction to Interest expense on the Consolidated Statements of Income.
As of March 31, 2019, the Company and its Affiliates did not have any significant gains (losses) reclassified from Accumulated other comprehensive loss into earnings. The terms of the Company’s forward contracts and collar contracts provide net settlement rights and require the Company and the counterparty to post cash collateral in certain circumstances throughout the duration of the contracts. As of March 31, 2019, the Company did no t hold any cash collateral from the counterpary and the counterparty held $14.9 million of cash collateral from the Company. 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 the Company 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. The Company’s forward contracts and collar contracts include contingent features that could require the Company or the counterparty to post additional collateral or give rise to termination rights, if certain specified rating downgrades were to occur. As of March 31, 2019, there were no derivative arrangements with a contingent feature that were in a net liability position.

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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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