XML 44 R18.htm IDEA: XBRL DOCUMENT
v3.20.2

Equity Method Investments in Affiliates | 6 Months Ended
--- | ---
Jun. 30, 2020
Equity Method Investments and Joint Ventures [Abstract] |
Equity Method Investments in Affiliates | Equity Method Investments in Affiliates In the first quarter of 2020, the Company completed its minority investment in Comvest Partners. The Company’s purchase price allocation was measured using financial models that included assumptions of expected market performance, net client cash flows and discount rates. The financial results of certain Affiliates accounted for under the equity method, including those of Comvest Partners, are recognized in the Consolidated Financial Statements one quarter in arrears. The following table presents the change in Equity method investments in Affiliates (net):
| Equity Method Investments in Affiliates (Net)
Balance, as of December 31, 2019 | $ | 2,195.6 |
Earnings | 120.4 |
Intangible amortization and impairments | (216.2 | )
Distributions of earnings | (160.2 | )
Foreign currency translation | (23.2 | )
Investments in Affiliates | 86.5 |
Other | (11.9 | )
Balance, as of June 30, 2020 | $ | 1,991.0 |
Definite-lived acquired client relationships at the Company’s Affiliates accounted for under the equity method are amortized over their expected period of economic benefit. The Company recognized amortization expense for these relationships of $38.9 million and $62.1 million for the three and six months ended June 30, 2019, respectively, and $36.9 million and $76.2 million for the three and six months ended June 30, 2020, respectively. Based on relationships existing as of June 30, 2020, the Company estimates the annual amortization expense attributable to its Affiliates will be approximately $150 million in 2020, approximately $120 million in 2021, and approximately $50 million in each of 2022, 2023, and 2024. In the first quarter of 2019, the Company recorded a $415.0 million expense to reduce the carrying value to fair value of an Affiliate. In March 2019, the Company concluded that the growth expectations of the Affiliate had declined and determined that the estimated fair value of the Affiliate had also declined meaningfully. Therefore, the Company performed a valuation to determine whether the fair value of the Affiliate had declined below its carrying value. The fair value of the investment was determined using a discounted cash flow analysis, a level 3 fair value measurement, that included a projected compounded asset based fee growth over the first five years of (13)%, discount rates of 11% and 20% for asset and performance based fees, respectively, and a market participant tax rate of 25%. Based on the discounted cash flow analysis, the Company concluded that the fair value of its investment had declined below its carrying value and that the decline was other-than-temporary. In October 2019, the Company sold its interest in the Affiliate. In the first quarter of 2020, the Company recorded a $140.0 million expense to reduce the carrying value to fair value of an Affiliate. The decline in the fair value was a result of a decline in assets under management and a reduction in projected growth, which decreased the forecasted revenue associated with the investment. The fair value of the investment was determined using a discounted cash flow analysis, a level 3 fair value measurement, that included projected compounded growth in assets under management over the first five years of (2)%, discount rates of 11% and 20% for asset and performance based fees, respectively, and a market participant tax rate of 25%. Based on the discounted cash flow analysis, the Company concluded that the fair value of its investment had declined below its carrying value and that the decline was other-than-temporary. As of June 30, 2020, the estimated fair values of the Company’s Affiliates accounted for under the equity method exceeded their carrying values. If financial markets worsen as a result of COVID-19 or other factors, the fair values of these assets could drop below their carrying values for periods considered other than temporary, resulting in future impairments. The Company has determined that certain of its Affiliates accounted for under the equity method are significant under Rule 10-01(b)(1) of Regulation S-X. For the three and six months ended June 30, 2019, these Affiliates recognized revenue of $519.9 million and $1,168.2 million, respectively, and net income of $238.5 million and $580.7 million, respectively. For the three and six months ended June 30, 2020, these Affiliates recognized revenue of $460.1 million and $1,165.3 million, respectively, and net income of $128.5 million and $555.6 million, respectively.

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

X
- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI http://asc.fasb.org/topic&trid=2196965 + Details
Name: | us-gaap_EquityMethodInvestmentsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration