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Derivative Financial Instruments

12 Months Ended

Dec. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

In 2020, the Company terminated its pound sterling-denominated forward foreign currency contracts and its corresponding collar contracts, which were designated as net investment hedges, and upon settlement, the Company received net proceeds of $24.9 million. The net proceeds from the termination of the contracts are presented within sale of investment securities in the Consolidated Statements of Cash Flows.

During 2021, the Company terminated its interest rate swap contract (the “interest rate swap”) with a large financial institution (the “swap counterparty”), and upon settlement paid $0.4 million. The interest rate swap was designated as a cash flow hedge and was used to exchange a portion of the Company’s LIBOR-based interest payments for fixed rate interest payments.

Certain of the Company’s Affiliates use forward foreign currency contracts to hedge the risk of foreign exchange rate movements, which are designated as cash flow hedges. These contracts do not include set-off rights and are therefore presented on a gross basis in Other assets and Other liabilities, which were $0.9 million and $0.8 million, respectively, as of December 31, 2021, and $0.5 million and $0.9 million, respectively, as of December 31, 2022.

The following table summarizes the effects of the derivative financial instruments on the Consolidated Statements of Comprehensive Income and the Consolidated Statements of Income:

						For the Years Ended December 31,
						2021												2022
						Gain (Loss) Recorded in Other Comprehensive Income (loss)						Gain (loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings												Loss Recorded in Other Comprehensive Income (Loss)						Loss Reclassified from Accumulated Other Comprehensive Loss into Earnings
Forward foreign currency contracts						$	(1.0)					$	1.0											$	(0.5)					$	(1.0)
Interest rate swap						1.9						(0.4)												—						—
Total						$	0.9					$	0.6											$	(0.5)					$	(1.0)

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- References

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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 https://asc.fasb.org/topic&trid=2229140

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 50
-Paragraph 5
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=126731327&loc=d3e90205-114008

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