XML 51 R15.htm IDEA: XBRL DOCUMENT
v3.19.3

Derivative Financial Instruments | 9 Months Ended
--- | ---
Sep. 30, 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. In 2018, the Company entered into 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 £325.3 million for $450.0 million in 2021 and, under the other forward contract, the Company will deliver £285.8 million for $400.0 million in 2024. Under the collar contract expiring in 2021, 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. Under the collar contract expiring in 2024, 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. The combinations 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 loss in the Consolidated Statements of Comprehensive Income. The Company assesses hedge effectiveness on a quarterly basis. Certain of 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 and nine months ended September 30, 2018 and 2019. The following table summarizes the Company’s and its Affiliates’ derivative financial instruments measured at fair value on a recurring basis:
|  | December 31, 2018 |  | September 30, 2019
|  | Assets |  | Liabilities |  | Assets |  | Liabilities
Forward contracts |  | $ | 32.0 |  |  | $ | (1.4 | ) |  | $ | 73.9 |  |  | $ | (0.2 | )
Put options |  | — |  |  | (60.3 | ) |  | — |  |  |  | (63.1 | )
Call options |  | 34.1 |  |  | — |  |  | 11.5 |  |  |  | — |
Total |  | $ | 66.1 |  |  | $ | (61.7 | ) |  | $ | 85.4 |  |  | $ | (63.3 | )
The Company’s forward contracts and collar contracts with the counterparty are governed by an International Swaps and Derivative Association Master Agreement, which provides for legally enforceable rights to set-off. Given the contracts include this set-off right, the Company’s forward contracts and collar contracts were presented on a net basis in Other assets and were $4.9 million and $21.6 million as of December 31, 2018 and September 30, 2019, respectively. Certain of the Company’s consolidated Affiliates have entered into contracts that do not have set-off rights and are, therefore, presented on a gross basis in Other assets and Other liabilities and were $0.9 million and $1.4 million, respectively, as of December 31, 2018 and $0.7 million and $0.2 million, respectively, as of September 30, 2019. The following tables summarize the effects of derivative financial instruments on the Consolidated Statements of Comprehensive Income and the Consolidated Statements of Income:
|  | For the Three Months Ended September 30,
|  | 2018 |  | 2019
|  | Gain (Loss) Recognized in Other Comprehensive Income |  | Gain Reclassified from Accumulated Other Comprehensive Loss into Earnings |  | Gain Recognized in Earnings from Excluded Components(1) |  | Gain (Loss) Recognized in Other Comprehensive Income |  | Loss Reclassified from Accumulated Other Comprehensive Loss into Earnings |  | Gain Recognized in Earnings from Excluded Components(1)
Forward contracts |  | $ | (5.9 | ) |  | $ | 0.0 |  |  | $ | 0.5 |  |  | $ | 22.8 |  |  | $ |  | (0.0) |  |  | $ | 3.5 |
Put options |  | 1.6 |  |  | — |  |  | — |  |  | (8.4 | ) |  |  | — |  |  | — |
Call options |  | 0.3 |  |  | — |  |  | — |  |  | (7.5 | ) |  |  | — |  |  | — |
Total |  | $ | (4.0 | ) |  | $ | 0.0 |  |  | $ | 0.5 |  |  | $ | 6.9 |  |  | $ |  | (0.0 | ) |  | $ | 3.5 |
|  | For the Nine Months Ended September 30,
|  | 2018 |  | 2019
|  | Gain (Loss) Recognized in Other Comprehensive Income |  | Loss Reclassified from Accumulated Other Comprehensive Loss into Earnings |  | Gain Recognized in Earnings from Excluded Components(1) |  | Gain (Loss) Recognized in Other Comprehensive Income |  | Gain Reclassified from Accumulated Other Comprehensive Loss into Earnings |  | Gain Recognized in Earnings from Excluded Components(1)
Forward contracts |  | $ | (5.6 | ) |  | $ | (0.3 | ) |  | $ | 0.5 |  |  | $ | 32.6 |  |  | $ | 0.1 |  |  | $ | 10.4 |
Put options |  | 1.6 |  |  | — |  |  | — |  |  | (2.8 | ) |  | — |  |  | — |
Call options |  | 0.3 |  |  | — |  |  | — |  |  | (22.5 | ) |  | — |  |  | — |
Total |  | $ | (3.7 | ) |  | $ | (0.3 | ) |  | $ | 0.5 |  |  | $ | 7.3 |  |  | $ | 0.1 |  |  | $ | 10.4 |
___________________________
(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.
The terms of the Company’s forward contracts and collar contracts require the Company and the counterparty to post cash collateral in certain circumstances throughout the duration of the contracts. As of December 31, 2018 and September 30, 2019, the Company held $3.1 million and $21.6 million of cash collateral from the counterparty, respectively, and the counterparty held $28.0 million and no cash collateral from the Company, respectively. 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 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 give rise to termination rights, if certain specified rating downgrades were to occur. As of September 30, 2019, there were no derivative arrangements with a contingent feature that were in a net liability position.

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration