Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 21, 2018 | Jun. 30, 2017 | |
Document and Entity Information | |||
Entity Registrant Name | AFFILIATED MANAGERS GROUP, INC. | ||
Entity Central Index Key | 1,004,434 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 9,252,014,628 | ||
Entity Common Stock, Shares Outstanding | 54,496,210 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Revenue | $ 2,305 | $ 2,194.6 | $ 2,484.5 |
Operating expenses: | |||
Compensation and related expenses | 979 | 932.4 | 1,027.7 |
Selling, general and administrative | 373.1 | 398.1 | 443.8 |
Intangible amortization and impairments | 86.4 | 110.2 | 115.4 |
Depreciation and other amortization | 20.3 | 19.5 | 18.8 |
Other operating expenses (net) | 40.5 | 29.1 | 43.8 |
Total operating expenses | 1,499.3 | 1,489.3 | 1,649.5 |
Operating income before income from equity method investments | 805.7 | 705.3 | 835 |
Income from equity method investments | 302.2 | 328.8 | 288.9 |
Operating income | 1,107.9 | 1,034.1 | 1,123.9 |
Non-operating (income) and expenses: | |||
Investment and other income | (60) | (33.8) | (15.3) |
Interest expense | 85.3 | 89.4 | 88.9 |
Imputed interest expense and contingent payment arrangements | 15.5 | 3.9 | (40.3) |
Total other non-operating (income) and expenses | 40.8 | 59.5 | 33.3 |
Income before income taxes | 1,067.1 | 974.6 | 1,090.6 |
Income tax expense | 58.4 | 235.6 | 263.4 |
Net income | 1,008.7 | 739 | 827.2 |
Net income (non-controlling interests) | (319.2) | (266.2) | (317.7) |
Net income (controlling interest) | $ 689.5 | $ 472.8 | $ 509.5 |
Average shares outstanding - basic (in shares) | 56 | 54.2 | 54.3 |
Average shares outstanding - diluted (in shares) | 58.6 | 57 | 57.2 |
Earnings per share - basic (in dollars per share) | $ 12.30 | $ 8.73 | $ 9.37 |
Earnings per share - diluted (in dollars per share) | 12.03 | 8.57 | 9.17 |
Dividends per share (in dollars per share) | $ 0.80 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 1,008.7 | $ 739 | $ 827.2 |
Other comprehensive income (loss): | |||
Foreign currency translation gain (loss) | 128 | (115.3) | (93.2) |
Change in net realized and unrealized gain (loss) on derivative securities, net of tax | (0.8) | 0.1 | 1.9 |
Change in net unrealized gain (loss) on investment securities, net of tax | (7.7) | (35.2) | 22.1 |
Other comprehensive income (loss) | 119.5 | (150.4) | (69.2) |
Comprehensive income | 1,128.2 | 588.6 | 758 |
Comprehensive income (non-controlling interests) | (337.6) | (220.6) | (298.4) |
Comprehensive income (controlling interest) | $ 790.6 | $ 368 | $ 459.6 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||
Cash and cash equivalents | $ 439.5 | $ 430.8 |
Receivables | 433.8 | 383.3 |
Investments in marketable securities | 77.8 | 122.4 |
Other investments | 165 | 147.5 |
Fixed assets (net) | 111 | 110.1 |
Goodwill | 2,662.5 | 2,628.1 |
Acquired client relationships (net) | 1,449.7 | 1,497.4 |
Equity method investments in Affiliates | 3,304.7 | 3,368.3 |
Other assets | 58.1 | 61.2 |
Total assets | 8,702.1 | 8,749.1 |
Liabilities and Equity | ||
Payables and accrued liabilities | 807.2 | 729.3 |
Senior bank debt | 809 | 868.6 |
Senior notes | 741.3 | 939.4 |
Convertible securities | 304.4 | 301.6 |
Deferred income tax liability (net) | 467.4 | 660.8 |
Other liabilities | 182.4 | 149.4 |
Total liabilities | 3,311.7 | 3,649.1 |
Commitments and contingencies | ||
Redeemable non-controlling interests | 811.9 | 673.5 |
Equity: | ||
Common stock ($0.01 par value, 153.0 shares authorized; 58.5 shares outstanding in 2016 and 2017) | 0.6 | 0.6 |
Additional paid-in capital | 808.6 | 1,073.5 |
Accumulated other comprehensive loss | (21.8) | (122.9) |
Retained earnings | 3,698.5 | 3,054.4 |
Total stockholders' equity before treasury stock | 4,485.9 | 4,005.6 |
Less: Treasury stock, at cost (1.8 shares in 2016 and 3.4 shares in 2017) | (663.7) | (386) |
Total stockholders’ equity | 3,822.2 | 3,619.6 |
Non-controlling interests | 756.3 | 806.9 |
Total equity | 4,578.5 | 4,426.5 |
Total liabilities and equity | $ 8,702.1 | $ 8,749.1 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 153 | 153 |
Common stock, shares outstanding (in shares) | 58.5 | 58.5 |
Treasury stock, shares (in shares) | 3.4 | 1.8 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock at Cost | Non- controlling Interests |
Beginning Balance (in shares) at Dec. 31, 2014 | 55.8 | ||||||
Beginning Balance at Dec. 31, 2014 | $ 3,643.2 | $ 0.6 | $ 763.4 | $ 31.8 | $ 2,072.1 | $ (240.9) | $ 1,016.2 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 827.2 | 509.5 | 317.7 | ||||
Other comprehensive income (loss) | (69.2) | (49.9) | (19.3) | ||||
Share-based compensation | 34.2 | 34.2 | |||||
Common stock issued under share-based incentive plans | 54 | (131) | 185 | ||||
Tax benefit from share-based incentive plans | 44.5 | 44.5 | |||||
Shares repurchases | (366) | (366) | |||||
Investments in Affiliates | 33.8 | 33.8 | |||||
Affiliate equity activity: | |||||||
Affiliate equity expense | 68.5 | 16.9 | 51.6 | ||||
Issuances | 1.7 | 0.1 | 1.6 | ||||
Repurchases | 48 | 48.4 | (0.4) | ||||
Changes in redemption value of Redeemable non-controlling interests | (81.6) | (81.6) | |||||
Transfers to Redeemable non-controlling interests | (49.5) | (49.5) | |||||
Capital Contributions by Affiliate equity holders | 11.7 | 11.7 | |||||
Distributions to non-controlling interests | $ (431.4) | (431.4) | |||||
Ending Balance (in shares) at Dec. 31, 2015 | 55.8 | ||||||
Ending Balance at Dec. 31, 2015 | $ 3,769.1 | 0.6 | 694.9 | (18.1) | 2,581.6 | (421.9) | 932 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 739 | 472.8 | 266.2 | ||||
Other comprehensive income (loss) | (150.4) | (104.8) | (45.6) | ||||
Share-based compensation | 39.2 | 39.2 | |||||
Common stock issued under share-based incentive plans | 15.5 | (53.8) | 69.3 | ||||
Shares repurchases | (33.4) | (33.4) | |||||
Forward equity | $ 5.2 | 5.2 | |||||
Common stock issued under forward equity agreement (in shares) | 2.7 | ||||||
Common stock issued under forward equity agreement | $ 440.3 | 0 | 440.3 | ||||
Issuance costs and other | (3) | (3) | |||||
Affiliate equity activity: | |||||||
Affiliate equity expense | 41.2 | 10 | 31.2 | ||||
Issuances | 11.9 | (2.8) | 14.7 | ||||
Repurchases | 15.3 | 14.9 | 0.4 | ||||
Changes in redemption value of Redeemable non-controlling interests | (71.4) | (71.4) | |||||
Transfers to Redeemable non-controlling interests | (42.6) | (42.6) | |||||
Capital Contributions by Affiliate equity holders | 4.7 | 4.7 | |||||
Distributions to non-controlling interests | $ (354.1) | (354.1) | |||||
Ending Balance (in shares) at Dec. 31, 2016 | 58.5 | ||||||
Ending Balance at Dec. 31, 2016 | $ 4,426.5 | 0.6 | 1,073.5 | (122.9) | 3,054.4 | (386) | 806.9 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 1,008.7 | 689.5 | 319.2 | ||||
Other comprehensive income (loss) | 119.5 | 101.1 | 18.4 | ||||
Share-based compensation | 40.4 | 40.4 | |||||
Common stock issued under share-based incentive plans | 21 | (117.6) | 138.6 | ||||
Shares repurchases | (416.3) | (416.3) | |||||
Issuance costs and other | 0.6 | 0.6 | |||||
Dividends ($0.80 per share) | (45.4) | (45.4) | |||||
Affiliate equity activity: | |||||||
Affiliate equity expense | 50 | 13.2 | 36.8 | ||||
Issuances | 3.1 | (0.6) | 3.7 | ||||
Repurchases | 34.6 | 40.6 | (6) | ||||
Changes in redemption value of Redeemable non-controlling interests | (241.5) | (241.5) | 0 | ||||
Transfers to Redeemable non-controlling interests | (76.8) | (76.8) | |||||
Capital Contributions by Affiliate equity holders | 6.3 | 6.3 | |||||
Distributions to non-controlling interests | $ (352.2) | (352.2) | |||||
Ending Balance (in shares) at Dec. 31, 2017 | 58.5 | ||||||
Ending Balance at Dec. 31, 2017 | $ 4,578.5 | $ 0.6 | $ 808.6 | $ (21.8) | $ 3,698.5 | $ (663.7) | $ 756.3 |
CONSOLIDATED STATEMENTS OF CHA7
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Stockholders' Equity [Abstract] | |||
Dividends paid (in dollars per share) | $ 0.80 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flow from (used in) operating activities: | |||
Net income | $ 1,008.7 | $ 739 | $ 827.2 |
Adjustments to reconcile Net income to net cash flow from operating activities: | |||
Intangible amortization and impairments | 86.4 | 110.2 | 115.4 |
Depreciation and other amortization | 20.3 | 19.5 | 18.8 |
Deferred income tax provision | (123.6) | 59.3 | 101.2 |
Income from equity method investments | (302.2) | (328.8) | (288.9) |
Distributions received from equity method investments | 429.8 | 346.4 | 346.1 |
Share-based compensation and Affiliate equity expense | 90.4 | 80.4 | 102.7 |
Other non-cash items | (26.3) | (16.1) | (38) |
Changes in assets and liabilities: | |||
Purchases of trading securities by Affiliate sponsored consolidated products | (34.1) | (86.2) | (4.6) |
Sales of trading securities by Affiliate sponsored consolidated products | 29.9 | 82.8 | 4.1 |
(Increase) decrease in receivables | (53.5) | 29.6 | 54.5 |
(Increase) decrease in other assets | (7.7) | (6.1) | 6.7 |
Increase (decrease) in payables, accrued liabilities and other liabilities | 52.3 | 20.3 | (32) |
Cash flow from operating activities | 1,170.4 | 1,050.3 | 1,213.2 |
Cash flow from (used in) investing activities: | |||
Investments in Affiliates | (30.6) | (1,361.3) | (297.7) |
Purchase of fixed assets | (18.5) | (20.2) | (38.2) |
Purchase of investment securities | (37.2) | (16) | (13.5) |
Sale of investment securities | 100.1 | 65.3 | 24.9 |
Cash flow from (used in) investing activities | 13.8 | (1,332.2) | (324.5) |
Cash flow from (used in) financing activities: | |||
Borrowings of senior bank debt and senior notes | 545 | 1,350 | 1,253.3 |
Repayments of senior debt, senior notes and convertible securities | (805) | (1,125) | (1,256) |
Issuance of common stock | 41.9 | 465.8 | 57.8 |
Dividends paid on common stock | (44.9) | 0 | 0 |
Repurchase of common stock | (393.2) | (33.4) | (413.7) |
Distributions to non-controlling interests | (352.2) | (354.1) | (431.4) |
Affiliate equity issuances and repurchases | (165.7) | (104) | (120.6) |
Excess tax benefit from share-based compensation | 0 | 0 | 44.5 |
Settlement of forward equity sale agreement | 5.2 | 0 | 0.1 |
Other financing items | (20.8) | 1.6 | 8.3 |
Cash flow from (used in) financing activities | (1,189.7) | 200.9 | (857.7) |
Effect of foreign exchange rate changes on cash and cash equivalents | 14.2 | (49.9) | (17.8) |
Net increase (decrease) in cash and cash equivalents | 8.7 | (130.9) | 13.2 |
Cash and cash equivalents at beginning of period | 430.8 | 563.8 | 550.6 |
Net cash outflows upon the consolidation and deconsolidation of Affiliate sponsored products | 0 | (2.1) | 0 |
Cash and cash equivalents at end of period | 439.5 | 430.8 | 563.8 |
Supplemental disclosure of cash flow information: | |||
Interest paid | 82.1 | 85 | 76.4 |
Income taxes paid | 165 | 152.3 | 89.6 |
Supplemental disclosure of non-cash financing activities: | |||
Stock issued under incentive plans | 59.3 | 17.2 | 10.7 |
Stock received for tax withholdings on share-based payments | 20 | 9.8 | 3.6 |
Payables recorded for Share repurchases | 23.1 | 0 | 0 |
Payables recorded for Affiliate equity repurchases | 47.3 | 12.1 | 62.3 |
Stock received for the exercise of stock options | $ 30.2 | $ 11.2 | $ 0 |
Business and Summary of Signifi
Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Business and Summary of Significant Accounting Policies | Business and Summary of Significant Accounting Policies (a) Organization and Nature of Operations Affiliated Managers Group, Inc. (“AMG” or the “Company”) is a global asset management company with equity investments in leading boutique investment management firms, referred to as “Affiliates.” AMG’s Affiliates provide active return-oriented strategies to assist institutional, retail and high net worth clients worldwide in achieving their investment objectives. Each of AMG’s Affiliates operates through distinct entities, typically organized as limited liability companies or limited partnerships (or equivalent non-U.S. forms), which affords AMG the flexibility to design a separate operating agreement for each Affiliate. Each operating agreement reflects the specific terms of AMG’s economic participation in the Affiliate through a “structured partnership interest.” AMG’s structured partnership interests consist of arrangements through which AMG shares in the Affiliate’s revenue without regard to expenses and arrangements through which AMG shares in the Affiliate’s revenue less certain agreed-upon expenses. When AMG owns a controlling interest in an Affiliate, its structured partnership interest is typically calculated by reference to the Affiliate’s revenue without regard to expenses and a set percentage of revenue is allocated to fund operating expenses, including compensation (the “Operating Allocation”), while the remaining revenue (the “Owners’ Allocation”) is allocated to AMG and Affiliate management equity owners in proportion to their respective ownership interests. When AMG does not own a controlling interest in an Affiliate, but has significant influence, AMG accounts for its interest in the Affiliate under the equity method. For these Affiliates, AMG uses structured partnership interests in which its share of the Affiliate’s earnings or losses is contractually calculated, allocated and distributed using a formula whereby its share is based on a percentage of the Affiliate’s revenue less certain agreed-upon expenses. This type of partnership interest allows AMG to benefit from any increase in revenue or any decrease in the expenses that are included in the calculation, but also directly exposes it to any decrease in revenue or any increase in such expenses. AMG also uses structured partnership interests in which its share of the Affiliate’s earnings or losses is contractually calculated, allocated and distributed using a formula whereby its share is based on a percentage of the Affiliate’s revenue without regard to expenses. In this type of partnership interest, AMG’s contractual share of revenue generally has priority over distributions to Affiliate management. (b) Basis of Presentation and Use of Estimates The financial statements are prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”). All dollar amounts, except per share data in the text and tables herein, are stated in millions unless otherwise indicated. All material intercompany balances and transactions have been eliminated. In 2017, the Company changed its Consolidated Statement of Income presentation to include Income from equity method investments in Operating income, as its equity method Affiliates are integral to the Company’s operations. This change, along with other reclassifications, has been made to the prior period’s financial statements to conform to the current period’s presentation. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. (c) Principles of Consolidation In evaluating whether an investment must be consolidated, the Company evaluates the risk, rewards, and significant terms of each of its Affiliate and other investments to determine if an investment is considered a voting rights entity (“VRE”) or a variable interest entity (“VIE”). An entity is a VRE when the total equity investment at risk is sufficient to enable the entity to finance its activities independently and when the equity holders have the obligation to absorb losses, the right to receive residual returns and the right to direct the activities of the entity that most significantly impact its economic performance. An entity is a VIE when it lacks one or more of the characteristics of a VRE, which for the Company are Affiliates structured as partnerships (or similar entities) where the limited partners lack substantive kick-out or substantive participation rights over the general partner. Assessing whether an entity is a VRE or VIE involves judgment. Upon the occurrence of certain events, management reviews and reconsiders its previous conclusion regarding the status of an entity as a VRE or a VIE. The Company consolidates VREs when it has control over significant operating, financial and investing decisions of the investment. When the Company lacks control, but is deemed to have significant influence, the Company accounts for the investment under the equity method. Other investments in which the Company does not have rights to exercise significant influence are accounted for under the cost method. Under the cost method, income is recognized when dividends are declared. The Company consolidates VIEs when it is the primary beneficiary of the entity, which is defined as having the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses of or the right to receive benefits from the entity that could potentially be significant to the VIE. The Company applies the equity method of accounting to VIEs where the Company is not the primary beneficiary but has the ability to exercise significant influence over operating and financial matters of the VIE. Investments in Affiliates Substantially all of the Company’s Affiliates are considered VIEs and are either consolidated or accounted for under the equity method. A limited number of the Company’s Affiliates are considered VREs and most of these are accounted for under the equity method. When an Affiliate is consolidated, the portion of the Affiliate’s management equity owners’ earnings attributable to Owners’ Allocation is included in Net income (non-controlling interests) in the Consolidated Statements of Income. Undistributed Operating and Owners’ Allocation attributable to Affiliate management equity owners, along with their share of any tangible or intangible net assets, are presented within Non-controlling interests on the Consolidated Balance Sheets. Affiliate equity interests where the holder has certain rights to demand settlement are presented, at their current redemption values, as Redeemable non-controlling interests on the Consolidated Balance Sheets. The Company periodically issues, sells and repurchases the Affiliate equity of its consolidated Affiliates. Because these transactions take place between entities under common control, any gains or losses attributable to these transactions are required to be included within Additional Paid-in Capital, net of any related income tax effects in the period of the change. When an Affiliate is accounted for under the equity method, the Company’s share of an Affiliate’s earnings or losses, net of amortization and impairments, is included in Income from equity method investments in the Consolidated Statements of Income and the Company’s interest in the Affiliate is reported in Equity method investments in Affiliates in the Consolidated Balance Sheets. The Company’s share of income taxes incurred directly by Affiliates accounted for under the equity method is recorded within Income tax expense in the Consolidated Statements of Income. The Company periodically evaluates its equity method investments for impairment. In such impairment evaluations, the Company assesses whether or not the fair value of the investment has declined below its carrying value for a period considered to be other-than-temporary. If the Company determines that a decline in fair value below the carrying value of the investment is other-than-temporary, then the carrying value of the investment is reduced to its fair value and this reduction would be recorded in Income from equity method investments. Affiliate Sponsored Investment Vehicles The Company’s Affiliates sponsor various investment products where they also act as the investment advisor. These investment products are typically owned primarily by third-party investors; however, certain products are funded with general partner and seed capital investments from the Company and its consolidated Affiliates. Investors are generally entitled to substantially all of the economics of these products, except for the management and performance fees earned by consolidated Affiliates or any gains or losses attributable to the Company or its consolidated Affiliates’ investments in these products. As a result, the Company does not generally consolidate these products unless the Company and/or the Affiliate’s interest in the product is considered substantial. When consolidating these products, the Company retains the specialized investment company accounting principles of the underlying products, and all of the underlying investments are carried at fair value in Investments in marketable securities in the Consolidated Balance Sheets with corresponding changes in the investments’ fair values reflected in Other operating expenses (net) in the Consolidated Statements of Income. Purchases and sales of securities are presented within purchases and sales by Affiliate sponsored consolidated products in the Consolidated Statements of Cash Flows. When Affiliates no longer control these products, due to a reduction in ownership or other reasons, the products are deconsolidated. (d) Cash and Cash Equivalents The Company considers all highly liquid investments, including money market mutual funds, with original maturities of three months or less to be cash equivalents. Cash equivalents are stated at cost, which approximates market value due to the short-term maturity of these investments. Money market mutual funds with a floating net asset value (“NAV”) would not meet the definition of a cash equivalent if the fund has enacted liquidity fees or redemption gates. (e) Receivables The Company’s Affiliates earn asset and performance based fees, which are billed based on the terms of the related contracts. Billed but uncollected asset and performance based fees are presented within Receivables on the Consolidated Balance Sheets and are generally short-term in nature. Certain of the Company’s Affiliates in the UK act as intermediaries between clients and their sponsored investment products. Normal settlement periods on transactions initiated by these clients with the sponsored investment products result in unsettled fund share receivables and payables that are presented on a gross basis within Receivables and Payables and accrued liabilities on the Consolidated Balance Sheets. The gross presentation of these receivables and offsetting payables reflects the legal relationship between the underlying investor and the Company’s Affiliates. (f) Investments in Marketable Securities Investments in marketable securities are classified as either trading or available-for-sale and carried at fair value. Unrealized gains or losses on investments classified as available-for-sale are reported, net of tax, as a separate component of Accumulated other comprehensive loss in Equity until realized when they are reported in Investment and other income in the Consolidated Statements of Income. Realized and unrealized gains or losses related to trading securities are reported within Investment and other income. Realized gains and losses are recorded on the trade date on a specific identified basis. If a decline in the fair value of an available-for-sale investment is determined to be other-than-temporary, the carrying amount of the asset is reduced to its fair value, and the difference is charged to Investment and other income in the period incurred. (g) Fair Value Measurements The Company determines the fair value of certain investment securities and other financial and non-financial assets and liabilities. Fair value is determined based on the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, utilizing a hierarchy of three different valuation techniques: Level 1 - Unadjusted quoted market prices for identical instruments in active markets; Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs, or significant value drivers, are observable; and Level 3 - Prices reflect the Company’s own assumptions concerning unobservable inputs to the valuation model. These inputs require significant management judgment and reflect the Company’s assumptions that market participants would use in pricing the asset or liability. (h) Fixed Assets Fixed assets are recorded at cost and depreciated using the straight-line method over their estimated useful lives. The estimated useful lives of office equipment and furniture and fixtures range from three to ten years . Computer software developed or obtained for internal use is amortized over the estimated useful life of the software, generally three to seven years. Leasehold improvements are amortized over the shorter of their estimated useful lives or the term of the lease, and buildings are amortized over their expected useful lives. The costs of improvements that extend the life of a fixed asset are capitalized, while the cost of repairs and maintenance are expensed as incurred. Land and artwork are not depreciated; artwork is included in Land, improvements and other. (i) Leases The Company and its Affiliates currently lease office space and equipment under various leasing arrangements. As these leases expire, it can be expected that in the normal course of business they will be renewed or replaced. Leases are classified as either capital leases or operating leases, as appropriate. Most lease agreements for office space that are classified as operating leases contain renewal options, rent escalation clauses or other inducements provided by the landlord. Rent expense is accrued to recognize lease escalation provisions and inducements provided by the landlord, if any, on a straight-line basis over the lease term and is reported in Other operating expenses (net) on the Consolidated Statements of Income. (j) Acquired Client Relationships and Goodwill Each Affiliate in which the Company makes an investment has identifiable assets arising from contractual or other legal rights with their clients (“acquired client relationships”). In determining the value of acquired client relationships, the Company analyzes the net present value of these Affiliates’ existing client relationships based on a number of factors, including: the Affiliate’s historical and potential future operating performance; the Affiliate’s historical and potential future rates of attrition of existing clients; the stability and longevity of existing client relationships; the Affiliate’s recent, as well as long-term, investment performance; the characteristics of the firm’s products and investment styles; the stability and depth of the Affiliate’s management team; and the Affiliate’s history and perceived franchise or brand value. The Company has determined that certain of its acquired client relationships meet the criteria to be considered indefinite-lived assets because the Company expects the contracts to be renewed annually and, therefore, the cash flows generated by these contracts to continue indefinitely. Accordingly, the Company does not amortize these intangible assets, but instead reviews these assets annually or more frequently whenever events or circumstances occur indicating that the recorded indefinite-lived assets may be impaired. Each reporting period, the Company assesses whether events or circumstances have occurred that indicate that the indefinite life criteria are no longer met. If the indefinite life criteria are no longer met, the Company would assess whether the carrying value of the assets exceeds its fair value, an impairment loss would be recorded in an amount equal to any such excess and these assets would be reclassified to definite-lived. The expected period of economic benefit of definite-lived acquired client relationships are determined based on an analysis of the historical and projected attrition rates of each Affiliate’s existing clients, and other factors that may influence the expected future economic benefit the Company will derive from the relationships. The expected lives of definite-lived acquired client relationships are analyzed annually or more frequently whenever events or circumstances have occurred that indicate the expected period of economic benefit may no longer be appropriate. The Company tests for the possible impairment of indefinite and definite-lived intangible assets annually or more frequently whenever events or changes in circumstances indicate that the carrying amount of the asset is not recoverable. If such indicators exist, the Company compares the fair value of the asset to the carrying value of the asset. If the carrying value is greater than the fair value, an impairment loss would be recorded in Intangible amortization and impairments in the Consolidated Statements of Income. Goodwill represents the future economic benefits arising from assets acquired in a business combination that are not individually identified and separately recognized. Goodwill is not amortized, but is instead reviewed for impairment. The Company assesses goodwill for impairment at least annually, as of September 30th, or more frequently whenever events or circumstances occur indicating that the recorded goodwill may be impaired. If the carrying amount of goodwill exceeds the fair value, an impairment loss would be recorded in Intangible amortization and impairments. (k) Issuance Costs Issuance costs related to the Company’s senior bank debt are amortized over the remaining term of the senior unsecured multicurrency revolving credit facility (the “revolver”) and the senior unsecured term loan facility (the “term loan” and, together with the revolver, the “credit facilities”), which approximates the effective interest method. Issuance costs associated with the revolver and term loan are included in Other assets and as a reduction of the related debt balance, respectively, in the Consolidated Balance Sheets. Issuance costs associated with the Company’s senior notes are amortized over the shorter of the period to the first investor put date or the Company’s estimate of the expected term of the security, and are included as a reduction of the related debt balance in the Consolidated Balance Sheets. The expense resulting from the amortization of these issuance costs is reported in Interest expense in the Consolidated Statements of Income. (l) Derivative Financial Instruments From time to time, the Company may utilize financial instruments to offset its exposure to interest rates and market changes and the Company’s Affiliates may use foreign currency forward contracts to hedge the risk of foreign exchange rate movements. The Company records derivatives in the Consolidated Balance Sheets at fair value. If the Company’s derivatives qualify as cash flow hedges, the effective portion of the unrealized gain or loss is recorded in Accumulated other comprehensive loss as a separate component of stockholders’ equity and reclassified to Investment and other income when the hedged cash flows are recorded in earnings. Hedge effectiveness is generally measured by comparing the present value of the cumulative change in the expected future variable cash flows of the hedged contract with the present value of the cumulative change in the expected future variable cash flows of the hedged item. To the extent that the critical terms of the hedged item and the derivative are not identical, hedge ineffectiveness would be reported in Investment and other income. If the Company’s or its Affiliates’ derivatives do not qualify as cash flow or fair value hedges, changes in the fair value of the derivatives are recognized as a gain or loss in Investment and other income. (m) Contingent Payment Arrangements The Company periodically enters into contingent payment arrangements in connection with its business combinations. In these arrangements, the Company agrees to pay additional consideration to the sellers to the extent that certain specified financial targets are achieved. For consolidated Affiliates, the Company estimates the fair value of these potential future obligations at the time a business combination is consummated and records a liability in Other liabilities on its Consolidated Balance Sheet. The Company then accretes the obligation to its expected payment amount over the period until the arrangement is measured. If the Company’s expected payment amount subsequently changes, the obligation is reduced or increased in the current period resulting in a gain or loss, respectively. Both gains and losses resulting from changes to expected payments and the accretion of these obligations to their expected payment amounts are reflected within Imputed interest expense and contingent payment arrangements. For Affiliates accounted for under the equity method of accounting, the Company records a liability when a payment becomes probable in Payables and accrued liabilities, with a corresponding increase to the carrying value of the Affiliate in Equity method investments in Affiliates in the Consolidated Balance Sheets. (n) Income Taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of differences between the financial reporting bases of assets and liabilities and their respective tax bases, using tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in Income tax expense in the Consolidated Statements of Income in the period when the change is enacted. The Company regularly assesses the recoverability of its deferred income tax assets to determine whether these assets are more-likely-than-not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their recorded amount, or that the recorded deferred tax assets are not realizable, the Company would adjust the deferred tax asset valuation allowance to record the deferred tax assets at their current value, which would increase or decrease Income tax expense, respectively. The Company records unrecognized tax benefits based on whether it is more-likely-than-not that the uncertain tax positions will be sustained on the basis of the technical merits of the position. If it is determined an uncertain tax position is more-likely-than-not to be sustained, the Company records the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority in Income tax expense. Interest and penalties related to unrecognized tax benefits are also recorded in Income tax expense. On December 22, 2017, changes in U.S. tax laws were enacted, which significantly revised U.S. corporate income tax by, among other things, lowering corporate income tax rates, implementing a modified territorial tax system and imposing a one-time transition tax on deemed repatriated foreign earnings and profits. The SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of GAAP in situations when a Company does not have the necessary information available, prepared or analyzed to complete the accounting for certain income tax effects of the changes in U.S. tax laws and allows the Company to record provisional amounts. Changes to provisional amounts or new amounts resulting from new guidance, interpretations or other information or from further evaluation of the impact of the changes in U.S. tax laws will be recorded in subsequent reporting periods not to extend beyond one year from the enactment date. (o) Foreign Currency Translation Assets and liabilities denominated in a functional currency other than U.S. dollars are translated into U.S. dollars using exchange rates in effect as of the balance sheet date. Revenue and expenses denominated in a functional currency other than U.S. dollars are translated into U.S. dollars using average exchange rates for the relevant period. Because of the long-term nature of the Company’s investments in its Affiliates, net translation exchange gains and losses resulting from foreign currency translation are recorded in Accumulated other comprehensive loss as a separate component of stockholders’ equity. Foreign currency transaction gains and losses are reflected in Investment and other income. (p) Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash investments. The Company and its Affiliates maintain cash and cash equivalents, investments and, at times, certain financial instruments with various high credit-quality financial institutions. These financial institutions are typically located in countries in which the Company and its Affiliates operate. For the Company and certain Affiliates, cash deposits at a financial institution may exceed Federal Deposit Insurance Corporation insurance limits. (q) Revenue Recognition The Company’s revenue primarily represents asset and performance based fees earned by its consolidated Affiliates for managing the assets of clients. Asset based fees are recognized as services are rendered and are typically based upon a percentage of the value of a client’s assets under management. Any fees collected in advance are deferred and recognized as income over the period earned. Performance fees are generally assessed as a percentage of the investment performance realized on a client’s account. Performance fees are recognized when they are earned (i.e., when they become billable to customers and are not subject to claw-back) based on the contractual terms of agreements and when collection is reasonably assured. Carried interest is recognized upon the earlier of the termination of the investment product or when the likelihood of claw-back is improbable. Also included in revenue are fees earned by broker-dealers and administrative fees for services provided to Affiliate sponsored investment products. The Company and certain of its consolidated Affiliates have contractual arrangements with third parties to provide certain distribution-related services. These third parties are primarily compensated based on the value of client assets over time. Distribution-related fees earned by consolidated Affiliates are presented in Revenue in the Consolidated Statements of Income gross of any related expenses when the Company or the Affiliate is the principal in its role as primary obligor under its sales and distribution arrangements. Distribution-related expenses incurred by consolidated Affiliates are presented within Selling, general and administrative expenses in the Consolidated Statements of Income. (r) Earnings Per Share The calculation of basic earnings per share is based on the weighted average number of shares of the Company’s common stock outstanding during the period. Diluted earnings per share is similar to basic earnings per share, but adjusts for the dilutive effect of the potential issuance of incremental shares of the Company’s common stock. The Company had convertible securities outstanding during the periods presented and is required to apply the if-converted method to these securities in its calculation of diluted earnings per share. Under the if-converted method, shares that are issuable upon conversion are deemed outstanding, regardless of whether the securities are contractually convertible into the Company’s common stock at that time. For this calculation, the interest expense (net of tax) attributable to these dilutive securities is added back to Net income (controlling interest), reflecting the assumption that the securities have been converted. Issuable shares for these securities and related interest expense are excluded from the calculation if an assumed conversion would be anti-dilutive to diluted earnings per share. (s) Share-Based Compensation Plans The Company recognizes expenses for all share-based payments based on their grant date fair values over the requisite service period. The Company records these expenses only for awards that are expected to vest. Tax windfalls or shortfalls are recognized in Income tax expense and have been classified as operating activities in the Consolidated Statements of Cash Flows. Taxes paid by the Company when it withholds shares to satisfy tax withholding obligations are classified as a financing activity. Prior to 2016, the Company reported any tax benefits realized upon the exercise of stock options or vesting of restricted stock that were in excess of the expense recognized for reporting purposes as a financing activity in the Consolidated Statements of Cash Flows. If the tax benefit ultimately realized was greater than or less than the expense recognized, the tax windfall or shortfall was recognized in stockholders’ equity. To the extent the shortfall exceeded the cumulative windfall tax benefits, the excess was recognized in Income tax expense. (t) Recent Accounting Developments Effective January 1, 2017, the Company adopted Accounting Standard Update (“ASU”) 2016-07, Investments - Equity Method and Joint Ventures: Simplifying the Transition to the Equity Method of Accounting, and ASU 2016-06, Derivatives, and Hedging: Contingent Put and Call Options in Debt Instruments. The adoption of these updates did not have a significant impact on the Company’s Consolidated Financial Statements. In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU 2014-09, Revenue from Contracts with Customers, and subsequently issued several related amendments. The standard provides a comprehensive model for revenue recognition and is effective for the Company and its consolidated Affiliates for interim and annual periods beginning after December 15, 2017 and for interim and annual periods beginning after December 15, 2018 for the Company’s equity method Affiliates. The standard may be adopted using either the full or modified retrospective method. The Company has selected the modified retrospective method where the cumulative effect of initially applying the standard is recognized within the Company’s Consolidated Financial Statements as of January 1, 2018. As of December 31, 2017, the Company does not expect a significant impact to its Consolidated Financial Statements upon adoption of the standard as it relates to the timing of recognition of its Revenue, presentation of Revenue on a gross or net basis, or the capitalization of revenue related costs. The Company will continue to assess the impact of adoption for its equity method Affiliates. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Liabilities. Under the new standard, all equity investments in unconsolidated entities (other than those accounted for using the equity method of accounting) will generally be measured at fair value with any changes recognized through earnings. The standard is effective for interim and annual periods beginning after December 15, 2017 and must be adopted using a modified retrospective method. The Company does not expect the adoption of this standard to have a significant impact on its Consolidated Financial Statements. In February 2016, the FASB issued ASU 2016-02, Leases, which requires lessees to record right-of-use assets and lease liabilities arising from most operating leases on the statement of financial position. The standard is effective |
Investments in Marketable Secur
Investments in Marketable Securities | 12 Months Ended |
Dec. 31, 2017 | |
Marketable Securities [Abstract] | |
Investments in Marketable Securities | Investments in Marketable Securities Investments in marketable securities at December 31, 2016 and 2017 were $122.4 million and $77.8 million , respectively. The following is a summary of the cost, gross unrealized gains and losses and fair value of investments classified as available-for-sale and trading: Available-for-Sale Trading December 31, 2016 December 31, 2017 December 31, 2016 December 31, 2017 Cost $ 66.1 $ 18.3 $ 34.4 $ 48.8 Unrealized Gains 17.6 2.7 6.6 10.3 Unrealized Losses (1.8 ) (0.4 ) (0.5 ) (1.9 ) Fair Value $ 81.9 $ 20.6 $ 40.5 $ 57.2 For the years ended December 31, 2016 and 2017 , the Company received proceeds of $61.1 million and $82.3 million , respectively, from the sale of investments classified as available-for-sale and recorded net gains of $19.2 million and $29.2 million , respectively. For the years ended December 31, 2016 and 2017 , the Company received proceeds of $82.8 million and $29.9 million , respectively, from the sale of investments classified as trading and recorded net gains of $1.0 million and $6.6 million , respectively. The realized gains and losses on securities held in Affiliate sponsored consolidated products were recorded in Other operating expenses (net), other realized gains and losses were recorded in Investment and other income. |
Other Investments
Other Investments | 12 Months Ended |
Dec. 31, 2017 | |
Investments, All Other Investments [Abstract] | |
Other Investments | Other Investments Other investments consist of investments in funds advised by Affiliates that are carried at fair value. The income or loss related to these investments is recorded in Investment and other income. See Note 11 for additional information on Other investments. |
Investments in Affiliates and A
Investments in Affiliates and Affiliate Sponsored Investment Products | 12 Months Ended |
Dec. 31, 2017 | |
Variable Interest Entities | |
Investments in Affiliates and Affiliate Sponsored Investment Products | Investments in Affiliates and Affiliate Sponsored Investment Products Investments in Affiliates The Company’s Affiliates are consolidated or accounted for under the equity method, depending upon the underlying structure of and relationship with each Affiliate. Substantially all of the Company’s consolidated Affiliates are considered VIEs. The unconsolidated assets, net of liabilities and non-controlling interests of equity method Affiliates considered VIEs, and the Company’s maximum risk of loss were as follows: December 31, 2016 December 31, 2017 Unconsolidated Carrying Value and Unconsolidated Carrying Value and Affiliates accounted for under the equity method $ 1,047.6 $ 2,846.8 $ 1,594.4 $ 2,765.7 Affiliate Sponsored Investment Products The net assets of Affiliate sponsored investment products that were considered VIEs accounted for under the equity method and the Company’s maximum risk of loss were as follows: December 31, 2016 December 31, 2017 Unconsolidated VIE Net Assets Carrying Value and Maximum Risk of Loss Unconsolidated VIE Net Assets Carrying Value and Maximum Risk of Loss Affiliate sponsored investment products $ 1,756.6 $ 9.4 $ 2,154.6 $ 10.2 |
Senior Bank Debt
Senior Bank Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Senior Bank Debt | Senior Bank Debt The Company has a senior unsecured multicurrency revolving $1.45 billion credit facility and a senior unsecured $385.0 million term loan facility. The credit facilities mature on September 30, 2020. Subject to certain conditions, the Company may further increase the commitments under the revolver by up to $350.0 million and borrow up to an additional $65.0 million under the term loan. The Company pays interest on any outstanding obligations under the credit facilities at specified rates, based either on the LIBOR rate or the prime rate as in effect from time to time. As of December 31, 2016 and 2017 , the Company had outstanding borrowings under the revolver of $485.0 million and $425.0 million, respectively, and the weighted-average interest rate on outstanding borrowings was 1.88% and 2.76% , respectively. As of December 31, 2016 and 2017 , the Company had outstanding borrowings under the term loan of $385.0 million in each period, and the weighted-average interest rate on outstanding borrowings was 1.87% and 2.69% , respectively. The Company pays commitment fees on the unused portion of its revolver. For the years ended December 31, 2016 and 2017 , these fees amounted to $1.0 million and $1.5 million , respectively. The credit facilities contain financial covenants with respect to leverage and interest coverage, as well as customary affirmative and negative covenants, including limitations on priority indebtedness, asset dispositions and fundamental corporate changes, and certain customary events of default. |
Senior Notes
Senior Notes | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Senior Notes | Senior Notes In 2017, the Company redeemed, canceled and retired all $200.0 million principal amount outstanding of its 6.375% senior unsecured notes due 2042 at a redemption price equal to 100% of the principal amount. At December 31, 2017, the Company had two senior notes outstanding and their respective principal terms are summarized in the following table: 2024 Senior Notes 2025 Senior Notes Issue date February 2014 February 2015 Maturity date February 2024 August 2025 Potential Call Date (1) Any Time Any Time Par value (in millions) $ 400.0 $ 350.0 Call Price (1) As Defined As Defined Stated coupon 4.25 % 3.50 % Coupon frequency Semi-annually Semi-annually __________________________ (1) The senior notes may be redeemed at any time, in whole or in part, at a make-whole redemption price plus accrued and unpaid interest. |
Convertible Securities
Convertible Securities | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Convertible Securities | Convertible Securities At December 31, 2017 , the Company had junior convertible trust preferred securities outstanding (the “junior convertible securities”). The carrying value and principal amount at maturity of the junior convertible securities were as follows: December 31, 2016 December 31, 2017 Carrying Value Principal Amount at Maturity Carrying Value Principal Amount at Maturity Junior convertible securities (1) $ 307.5 $ 430.8 $ 309.9 $ 430.8 __________________________ (1) The carrying value is accreted to the principal amount at maturity over a remaining life of 20 years. The junior convertible securities bear interest at a rate of 5.15% per annum, payable quarterly in cash. Each $ 50 security is convertible, at any time, into 0.25 shares of the Company’s common stock, which represents a conversion price of $200 per share, subject to customary anti-dilution adjustments. Holders of the junior convertible securities have no rights to put these securities to the Company. Upon conversion, holders will receive cash or shares of the Company’s common stock, or a combination thereof, at the Company’s election. The Company may redeem the junior convertible securities if the closing price of its common stock exceeds $260 per share for 20 trading days in a period of 30 consecutive trading days. The junior convertible securities are considered contingent payment debt instruments under federal income tax regulations, which require the Company to deduct interest in an amount greater than its reported interest expense. These deductions will generate annual deferred tax liabilities of $7.2 million . These deferred tax liabilities will be reclassified directly to stockholders’ equity if the Company’s common stock is trading above certain thresholds at the time of the conversion of the securities. |
Forward Equity and Equity Distr
Forward Equity and Equity Distribution Program | 12 Months Ended |
Dec. 31, 2017 | |
Forward Equity Sale Agreements | |
Forward Equity and Equity Distribution Program | Forward Equity and Equity Distribution Program The Company has equity distribution and forward equity agreements with several major securities firms under which it may, from time to time, issue and sell shares of its common stock (immediately or on a forward basis) having an aggregate sales price of up to $500.0 million (the “equity distribution program”). As of December 31, 2017 , no sales have occurred under the equity distribution program. In 2016, the Company entered into an agreement to sell approximately 2.9 million shares of the Company’s common stock at a price of $167.25 per share on a forward basis and issued 2.7 million shares to settle a portion of this forward equity sale and received proceeds of $440.3 million , and net settled 0.2 million shares for cash at an average share price of $144.59 . As of December 31, 2016, no shares remained outstanding under this agreement. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments From time to time, the Company seeks to offset its exposure to interest rate and market changes and certain of its Affiliates seek to offset their exposure to changes in foreign exchange rates by entering into derivative contracts. For the years ended December 31, 2016 and 2017 , the Company’s Affiliates realized $0.2 million and $1.6 million of gains, respectively, and $1.2 million and $2.2 million of losses, respectively, upon the settlement of certain foreign currency forward contracts. Such realized gains and losses are presented in Revenue, Operating expenses or Investment and other income, depending on the risk being hedged. At December 31, 2016 and 2017 , the Company’s Affiliates had unrealized gains of $0.6 million and $0.2 million , respectively, and unrealized losses of $0.5 million and $0.6 million , respectively, related to outstanding foreign currency forward contracts. Such unrealized gains and losses are presented within Accumulated other comprehensive loss. During the fourth quarter of 2017, the Company recognized an expense of $2.5 million under a market based derivative contract. This contract expired on December 29, 2017. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies From time to time, the Company and its Affiliates may be subject to claims, legal proceedings and other contingencies in the ordinary course of their business activities. Any such matters are subject to various uncertainties, and it is possible that some of these matters may be resolved in a manner unfavorable to the Company or its Affiliates. The Company and its Affiliates establish accruals, as necessary, for matters for which the outcome is probable and the amount of the liability can be reasonably estimated. In 2017, Third Avenue Management, LLC (“Third Avenue”) settled various legal actions relating to the liquidation and closure of the Third Avenue Focused Credit Fund, including those against the Company. Third Avenue and its insurers paid amounts due under the settlement. The Company has committed to co-invest in certain Affiliate sponsored investment products. As of December 31, 2017 , these unfunded commitments were $98.8 million and may be called in future periods. As of December 31, 2017 , the Company was contingently liable, upon achievement by certain Affiliates of specified financial targets, to make payments through 2019 related to the Company’s investments in these Affiliates. For its consolidated Affiliates, the Company was contingently liable for up to $18.2 million in payments, and expected to make payments of $10.2 million ( $8.2 million in 2018). The present value of these expected payments was $9.4 million . For its equity method Affiliates, the Company was contingently liable to make payments up to $170.0 million through 2018, and expected to make no payments. Affiliate equity interests provide holders with a conditional right to put their interests to the Company over time. See Note 20. In addition, in connection with an investment in an Affiliate accounted for under the equity method, the Company entered into an arrangement with a minority owner of the Affiliate that gives such owner the right to sell a portion of its ownership interest in the Affiliate to the Company annually beginning in the fourth quarter of 2018. The purchase price of these conditional purchases will be at fair market value on the date of the transaction. The Company and certain Affiliates operate under regulatory authorities that require the maintenance of minimum financial or capital requirements. Management is not aware of any significant violations of such requirements. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
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, 2016 Level 1 Level 2 Level 3 Financial Assets Cash equivalents $ 64.1 $ 64.1 $ — $ — Investments in marketable securities (1) Trading securities 40.5 40.5 — — Available-for-sale securities 81.9 81.9 — — Other investments 3.4 3.4 — — Foreign currency forward contracts (2) 0.6 — 0.6 — Financial Liabilities (2) Contingent payment arrangements $ 8.6 $ — $ — $ 8.6 Affiliate equity obligations 12.1 — — 12.1 Foreign currency forward contracts 0.5 — 0.5 — Fair Value Measurements December 31, 2017 Level 1 Level 2 Level 3 Financial Assets Cash equivalents $ 40.4 $ 40.4 $ — $ — Investments in marketable securities (1) Trading securities 57.2 57.2 — — Available-for-sale securities 20.6 20.6 — — Foreign currency forward contracts (2) 0.2 — 0.2 — Financial Liabilities (2) Contingent payment arrangements $ 9.4 $ — $ — $ 9.4 Affiliate equity obligations 49.2 — — 49.2 Foreign currency forward contracts 0.6 — 0.6 — __________________________ (1) Principally investments in equity securities. (2) Amounts are presented within Other assets or Other liabilities. During 2017, the Company measured the fair value of one of its equity method investments using a discounted cash flow analysis. See Note 13. The following are descriptions of the significant financial assets and liabilities measured at fair value and the fair value methodologies used. Cash equivalents consist primarily of highly liquid investments in daily redeeming money market funds, without enacted liquidity fees or redemption gates that are valued at net asset value (“NAV”). Investments in marketable securities consist primarily of investments in publicly traded securities and funds advised by Affiliates that are valued at NAV. Publicly traded securities valued using unadjusted quoted market prices for identical instruments in active markets are classified as level 1. Publicly traded securities valued using quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active are classified as level 2. Investments in funds advised by Affiliates that are valued at NAV are classified as level 1. 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. The significant unobservable inputs that are used in the fair value measurement of these obligations are growth and discount rates. Increases in the growth rate result in a higher obligation while increases in the discount rate results in a lower obligation. Affiliate equity obligations include agreements to repurchase Affiliate equity. The significant unobservable inputs that are used in the fair value measurement of the agreements to repurchase Affiliate equity are growth and discount rates. Increases in the growth rate result in a higher obligation while increases in the discount rate results in a lower obligation. Foreign currency forward contracts use model-derived valuations in which all significant inputs are observable in active markets to determine fair value. It is the Company’s policy to value financial assets or liabilities transferred as of the beginning of the period in which the transfer occurs. There were no significant transfers of financial assets or liabilities from level 1 to level 2 in 2016 or 2017 . Level 3 Financial Assets and Liabilities The following tables present the changes in level 3 liabilities: For the Years Ended December 31, 2016 2017 Contingent Payment Arrangements Affiliate Equity Obligations Contingent Payment Arrangements Affiliate Equity Obligations Balance, beginning of period $ 10.2 $ 62.3 $ 8.6 $ 12.1 Net realized and unrealized (gains) losses (1) (1.6 ) 3.1 7.6 5.5 Purchases and issuances (2) — 69.1 — 206.1 Settlements and reductions — (122.4 ) (6.8 ) (174.5 ) Balance, end of period $ 8.6 $ 12.1 $ 9.4 $ 49.2 Net change in unrealized (gains) losses relating to instruments still held at the reporting date $ (1.6 ) $ — $ 2.8 $ — __________________________ (1) Accretion and changes in the expected value of the Company’s contingent payment arrangements and Affiliate equity obligations are recorded in Imputed interest expense and contingent payment arrangements. (2) Includes transfers from Redeemable non-controlling interests and other activity. The following table presents certain quantitative information about the significant unobservable inputs used in valuing the Company’s level 3 financial liabilities: Quantitative Information about Level 3 Fair Value Measurements Valuation Techniques Unobservable Input Fair Value at Range at December 31, 2016 Fair Value at Range at December 31, 2017 Contingent payment arrangements Discounted cash flow Growth rates $ 8.6 3% - 8% $ 9.4 7% - 8% Discount rates 14% - 15% 15% - 16% Affiliate equity obligations Discounted cash flow Growth rates 12.1 4% - 10% 49.2 0% - 11% Discount rates 15% - 16% 12% - 16% Investments Measured at NAV as a Practical Expedient The Company’s Affiliates sponsor investment products in which the Company and Affiliates may make general partner and seed capital investments. The Company uses the NAV of these investments as a practical expedient for their fair value. 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, 2016 December 31, 2017 Category of Investment Fair Value Unfunded Commitments Fair Value Unfunded Commitments Private equity (1) $ 137.8 $ 92.2 $ 156.1 $ 98.8 Other funds (2) 9.7 — 8.9 — Other investments (3) $ 147.5 $ 92.2 $ 165.0 $ 98.8 __________________________ (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 $59.9 million and $80.1 million as of December 31, 2016 and 2017, respectively. Other Financial Assets and Liabilities Not Carried at Fair Value The carrying amount of Receivables and Payables and accrued liabilities approximates fair value because of the short-term nature of these instruments. The carrying value of notes receivable, which is reported in Other 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 bank debt, approximates fair value because the debt has 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, 2016 December 31, 2017 Carrying Value Fair Value Carrying Value Fair Value Fair Value Hierarchy Senior notes $ 945.1 $ 936.0 $ 745.7 $ 765.2 Level 2 Convertible securities 307.5 466.9 309.9 549.8 Level 2 |
Goodwill and Acquired Client Re
Goodwill and Acquired Client Relationships | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Acquired Client Relationships | Goodwill and Acquired Client Relationships The following tables present the changes in the Company’s consolidated Affiliates’ Goodwill and components of Acquired client relationships (net): Goodwill 2016 2017 Balance, as of January 1, $ 2,668.4 $ 2,628.1 Foreign currency translation (40.3 ) 34.4 Balance, as of December 31, $ 2,628.1 $ 2,662.5 As of September 30, 2017, the Company completed impairment assessments on its goodwill and no impairments were indicated. Acquired Client Relationships (Net) Definite-lived Indefinite-lived Total Gross Book Value Accumulated Amortization Net Book Value Net Book Value Net Book Value Balance, as of December 31, 2015 $ 1,301.8 $ (680.4 ) $ 621.4 $ 1,065.0 $ 1,686.4 Intangible amortization and impairments — (107.7 ) (107.7 ) (2.5 ) (110.2 ) Foreign currency translation (11.8 ) — (11.8 ) (67.0 ) (78.8 ) Balance, as of December 31, 2016 $ 1,290.0 $ (788.1 ) $ 501.9 $ 995.5 $ 1,497.4 Intangible amortization and impairments — (86.4 ) (86.4 ) — (86.4 ) Foreign currency translation 5.5 — 5.5 33.2 38.7 Balance, as of December 31, 2017 $ 1,295.5 $ (874.5 ) $ 421.0 $ 1,028.7 $ 1,449.7 Definite-lived acquired client relationships are amortized over their expected period of economic benefit. The Company recorded amortization expense, in Intangible amortization and impairments, for these relationships of $115.4 million , $107.7 million and $86.4 million , respectively, for the years ended December 31, 2015, 2016 and 2017. Based on relationships existing as of December 31, 2017 , the Company estimates that its consolidated annual amortization expense will be approximately $85 million in 2018 and 2019, $50 million in 2020 and $30 million in 2021 and 2022. During 2017 , the Company completed impairment assessments on its definite-lived and indefinite-lived acquired client relationships and no impairments were indicated. |
Equity Method Investments in Af
Equity Method Investments in Affiliates | 12 Months Ended |
Dec. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Investments in Affiliates | Equity Method Investments in Affiliates In 2016, the Company completed investments in Systematica Investments L.P. and Baring Private Equity Asia, both of which closed on January 4, 2016, Capula Investment Management, LLP, Mount Lucas Management LP and Capeview Capital LLP, all of which closed on July 1, 2016, Partner Fund Management, L.P., which closed on September 30, 2016, and Winton Group Ltd., which closed on October 4, 2016. The purchase price allocations were completed using financial models that included assumptions of expected market performance, net client cash flows and discount rates. The majority of the consideration paid is deductible for U.S. tax purposes over a 15-year life. The financial results of certain equity method Affiliates are recognized in the Consolidated Financial Statements one quarter in arrears. The purchase price allocation for the 2016 investments was as follows: Total Definite-lived acquired client relationships (1) $ 560.8 Indefinite-lived acquired client relationships 36.9 Tangible assets 2.0 Deferred tax liability (91.8 ) Goodwill 854.4 Consideration paid $ 1,362.3 __________________________ (1) The expected period of economic benefit utilized in the purchase price allocation for these definite-lived acquired client relationships was 15 years. For these new investments, the Company recorded amortization expense on the definite-lived acquired client relationships of $17.0 million and $58.0 million for the years ended December 31, 2016 and 2017, respectively. The following table presents the change in Equity method investments in Affiliates: 2016 2017 Balance, January 1, $ 1,937.1 3,368.3 Equity method earnings 388.0 501.4 Equity method intangible amortization and impairments (59.2 ) (199.2 ) Distributions of earnings from equity method investments (346.4 ) (429.8 ) Investments 1,361.3 29.8 Foreign currency translation 8.0 62.3 Other (1) 79.5 (28.1 ) Balance, December 31, $ 3,368.3 $ 3,304.7 __________________________ (1) Primarily reflects deferred income taxes recorded on new investments. The definite-lived acquired relationships at the Company’s equity method Affiliates are amortized over their expected period of economic benefit. The Company recognized amortization expense for these relationships of $34.3 million , $59.2 million and $106.1 million , respectively, for the years ended December 31, 2015, 2016 and 2017. Based on relationships existing as of December 31, 2017 , the Company estimates the annual amortization expense attributable to its existing equity method Affiliates to be approximately $120 million in each of the next five years. During 2017, the Company determined that the fair value of an equity method investment had declined below its carrying value. The decline in the fair value of this investment was the result of a cumulative decline in assets under management, coupled with the recent loss of a significant client, which has decreased the forecasted revenue of the firm. The fair value of the investment was determined using a discounted cash flow analysis, a level 3 fair value measurement, that projected future cash flows associated with the investment and discount rates that were developed with input from valuation experts. The significant assumptions used in the cash flow analysis include a projected growth rate of 10.0% , discount rates of 14.0% and 25.0% for asset and performance based fees, respectively, and a market participant tax rate of 25.0% . The Company considered the decline in fair value to be other-than-temporary and, accordingly, the Company recognized an impairment of $93.1 million . For the Company’s remaining equity and cost method investments, the Company completed its annual evaluation and no impairments were identified. The following table presents summarized financial information for Affiliates accounted for under the equity method: For the Years Ended December 31, 2015 (2) 2016 (2) 2017 Revenue (1) $ 2,217.1 $ 2,200.9 $ 3,126.3 Net income (1) 431.5 1,068.9 2,182.7 December 31, 2016 2017 Assets $ 1,915.3 $ 3,324.9 Liabilities and Non-controlling interests 862.4 1,405.5 __________________________ (1) Revenue and the associated Net income include asset and performance based fees and the impact of consolidated investment products. (2) Revenue and Net income reflect investments in new Affiliates for the full-year, regardless of the date of the Company’s investment. The Company’s share of undistributed earnings from equity method investments was $192.5 million as of December 31, 2017 . The Company has determined that one of its equity method Affiliates is significant under Rule 10-01(b)(1) of Regulation S-X. For the years ended December 31, 2016 and 2017, this equity method Affiliate recognized revenue of $944.1 million and $1,317.8 million , respectively, and net income of $529.0 million and $806.6 million , respectively. |
Fixed Assets and Lease Commitme
Fixed Assets and Lease Commitments | 12 Months Ended |
Dec. 31, 2017 | |
Fixed Assets and Lease Commitments [Abstract] | |
Fixed Assets and Lease Commitments | Fixed Assets and Lease Commitments Fixed assets consisted of the following: December 31, 2016 2017 Building and leasehold improvements $ 103.5 $ 111.9 Software 52.5 50.8 Equipment 39.5 44.5 Furniture and fixtures 20.8 21.4 Land, improvements and other 17.9 18.7 Fixed assets, at cost 234.2 247.3 Accumulated depreciation and amortization (124.1 ) (136.3 ) Fixed assets, net $ 110.1 $ 111.0 The Company and its consolidated Affiliates lease office space and equipment for their operations. At December 31, 2017 , the Company’s aggregate future minimum payments for operating leases having initial or non-cancelable lease terms greater than one year were payable as follows: Year Required Minimum Payments 2018 $ 37.0 2019 33.9 2020 35.3 2021 33.6 2022 26.6 Thereafter 89.9 Consolidated rent expense for 2015 , 2016 and 2017 was $36.3 million , $35.5 million and $37.5 million , respectively. |
Payables and Accrued Liabilitie
Payables and Accrued Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Payables and Accrued Liabilities | Payables and Accrued Liabilities Payables and accrued liabilities consisted of the following: December 31, 2016 2017 Accrued compensation $ 418.5 $ 472.5 Unsettled fund share payables 83.2 103.1 Accrued income taxes 87.7 93.0 Accrued share repurchases — 23.1 Accrued professional fees 26.1 22.5 Other 113.8 93.0 Payables and accrued liabilities $ 729.3 $ 807.2 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions A prior owner of one of the Company’s Affiliates retained an interest in certain of the Affiliate’s private equity investment partnerships. The prior owner’s interest is presented in the Company’s Consolidated Balance Sheets as either a liability in Other liabilities or as Non-controlling interests, depending on the structure of the prior owner’s investments in the partnerships. The total liability was $67.8 million and $61.2 million at December 31, 2016 and 2017 , respectively. The total non-controlling interest was $2.5 million at December 31, 2016 . The Company and its Affiliates earn asset and performance based fees, distribution and servicing and other fees and incur distribution and servicing and other expenses for services provided to Affiliate sponsored investment products. In addition, Affiliate management owners and Company officers may serve as trustees or directors of certain investment vehicles from which the Company or an Affiliate earns fees. The Company had liabilities to related parties for contingent payment arrangements in connection with certain business combinations. The net present value of the total amounts payable were $8.6 million and $9.4 million as of December 31, 2016 and 2017, respectively, and were included in Other liabilities. In 2016, there were no payments made associated with these liabilities. In 2017, the Company made $6.8 million in such payments. For the years ended December 31, 2016 and 2017, the Company adjusted its estimates of contingent payment obligations and recorded gains attributable to the controlling interest of $2.8 million and expenses from adjustments to its contingent payment obligations of $6.6 million , respectively. These amounts are included in Imputed interest expense and contingent payment arrangements. The Company has related party transactions in association with its Affiliate equity transactions, as more fully described in Notes 19 and 20. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common Stock The Company is authorized to issue up to 150.0 million shares of Voting Common Stock and 3.0 million shares of Class B Non-Voting Common Stock. As more fully described in Note 8, the Company is party to an equity distribution program under which the Company may sell shares of its common stock. The Company’s Board of Directors authorized share repurchase programs in January 2017 and May 2015, authorizing the Company to repurchase up to 1.9 million and 3.0 million shares of its common stock, respectively, and these authorizations have no expiry. In 2017, the Company repurchased 2.4 million shares of this total authorized amount, at an average price per share of $173.19 . As of December 31, 2017, 1.6 million shares remained available for repurchase under the January 2017 Plan and no shares remained available for repurchase under the May 2015 Plan. See Note 27. The following is a summary of the Company’s share repurchase activity for the years ended December 31, 2015, 2016 and 2017: Year Shares Repurchased Average Price 2015 1.7 $ 209.39 2016 0.2 161.16 2017 2.4 173.19 Preferred Stock The Company is authorized to issue up to 5.0 million shares of Preferred Stock. Any such Preferred Stock issued by the Company may rank prior to common stock as to dividend rights, liquidation preference or both, may have full or limited voting rights and may be convertible into shares of common stock. Financial Instruments The Company’s junior convertible securities contain an embedded right for holders to receive shares of the Company’s common stock under certain conditions. These arrangements, as well as the equity distribution program, meet the definition of equity and are not required to be accounted for separately as derivative instruments. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation Share-Based Incentive Plans The Company has established various plans under which it is authorized to grant restricted stock, restricted stock units, stock options and stock appreciation rights. The Company may also grant cash awards that can be notionally invested in one or more specified measurement funds, including the Company’s common stock. Awards granted under the Company’s share-based incentive plans typically participate in any dividends declared, but such amounts are deferred until delivery of the shares and are forfeitable if the requisite service is not satisfied. Dividends may be paid in cash or may be reinvested in the Company’s common stock. The total fair value of share-based compensation awards that vested was $27.4 million , $20.7 million and $59.4 million during the years ended December 31, 2015, 2016 and 2017, respectively. Share-Based Incentive Compensation The following is a summary of share-based compensation expense for the years ended December 31, 2015, 2016 and 2017: Year Share-Based Compensation Expense Tax Benefit 2015 $ 34.2 $ 13.2 2016 39.2 15.1 2017 40.4 13.6 The excess tax benefit recognized from share-based incentive plans was $5.1 million and $10.9 million during the years ended December 31, 2016 and 2017 , respectively, and classified as an operating cash flow. The Company had $66.4 million and $63.5 million of unrecognized share-based compensation as of December 31, 2016 and 2017 , respectively, which will be recognized over a weighted average period of approximately two years (assuming no forfeitures). Stock Options The following table summarizes the transactions of the Company’s stock options: Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Unexercised options outstanding—January 1, 2017 1.4 $ 108.53 Options granted 0.0 168.60 Options exercised (0.7 ) 97.54 Options forfeited (0.1 ) 140.26 Unexercised options outstanding—December 31, 2017 0.6 122.04 3.9 Exercisable at December 31, 2017 0.2 115.74 1.7 The Company granted stock options with fair values of $1.0 million , $16.4 million and $0.8 million in 2015 , 2016 and 2017 , respectively. Stock options generally vest over a period of three to four years and expire seven years after the grant date. All options have been granted with exercise prices equal to the closing price of the Company’s common stock on the grant date. In certain circumstances, option awards also require certain performance conditions to be satisfied in order for the options to be exercised. The Company generally uses treasury stock to settle stock option exercises. The total intrinsic value of options exercised during the years ended December 31, 2015 , 2016 and 2017 was $130.2 million , $27.7 million and $50.8 million , respectively. The cash received for options exercised was $25.6 million and $41.9 million during the years ended December 31, 2016 and 2017 , respectively. As of December 31, 2017 , the intrinsic value of exercisable options outstanding was $20.1 million , and 3.1 million options were available for grant under the Company’s option plans. The fair value of options granted was estimated using the Black-Scholes option pricing model. The weighted average fair value of options granted during the years ended December 31, 2015 , 2016 and 2017 was $54.92 , $39.02 and $48.05 , per option, respectively, based on the weighted-average grant date assumptions stated below. For the Years Ended December 31, 2015 2016 2017 Dividend yield 0.0 % 0.0 % 0.5 % Expected volatility (1) 26.7 % 30.7 % 28.0 % Risk-free interest rate (2) 1.5 % 1.6 % 2.1 % Expected life of options (in years) (3) 5.0 5.7 5.7 Forfeiture rate 0.0 % 0.0 % 0.0 % __________________________ (1) Expected volatility is based on historical and implied volatility. (2) Risk-free interest rate is based on the U.S. Treasury yield curve in effect at the date of grant. (3) Expected life of options (in years) is based on the Company’s historical and expected exercise behavior. Restricted Stock The following table summarizes the transactions of the Company’s restricted stock: Restricted Stock Weighted Average Grant Date Value Unvested units—January 1, 2017 0.6 $ 168.84 Units granted 0.2 152.99 Units vested (0.4 ) 166.22 Units forfeited (0.0 ) 170.39 Unvested units—December 31, 2017 0.4 162.32 The Company granted awards with fair values of $50.7 million , $28.0 million and $36.9 million in 2015 , 2016 and 2017 , respectively. These awards were valued based on the closing price of the Company’s common stock on the grant date and contain vesting conditions requiring service over a period of three to four years. In certain circumstances, awards also require certain performance conditions to be satisfied. As of December 31, 2017 , the Company had 1.1 million shares available for grant under its plans. |
Redeemable Non-Controlling Inte
Redeemable Non-Controlling Interests | 12 Months Ended |
Dec. 31, 2017 | |
Noncontrolling Interest [Abstract] | |
Redeemable Non-Controlling Interests | Redeemable Non-Controlling Interests Affiliate equity interests provide holders with an equity interest in one of the Company’s Affiliates, consistent with the structured partnership interests in place at the respective Affiliate. Affiliate equity holders generally have a conditional right to put their interests to the Company at certain intervals (between five and 15 years from the date the equity interest is received or on an annual basis following an Affiliate equity holder’s departure). The current redemption value of the Company’s Affiliate equity interests is presented as Redeemable non-controlling interests. Changes in the current redemption value are recorded to Additional paid-in capital. When the Company has an unconditional obligation to repurchase Affiliate equity interests, they are reclassified to Other liabilities. The following table presents the changes in Redeemable non-controlling interests: December 31, 2016 2017 Balance, as of January 1, $ 612.5 $ 673.5 Changes attributable to consolidated products 16.1 12.4 Transfers to Other liabilities (69.1 ) (192.3 ) Transfers from non-controlling interests 42.6 76.8 Changes in redemption value 71.4 241.5 Balance, as of December 31, $ 673.5 $ 811.9 |
Affiliate Equity
Affiliate Equity | 12 Months Ended |
Dec. 31, 2017 | |
Affiliate Equity | |
Affiliate Equity | Affiliate Equity Affiliate equity interests are allocated income in a manner that is consistent with the structured partnership interests in place at the respective Affiliate. The Company’s Affiliates generally pay quarterly distributions to Affiliate equity holders. Distributions paid to Affiliate equity holders were $431.4 million , $354.1 million and $352.2 million for the years ended December 31, 2015, 2016 and 2017, respectively. Affiliate equity interests provide the Company a conditional right to call (on an annual basis following an Affiliate equity holder’s departure) and Affiliate equity holders have a conditional right to put their interests at certain intervals (between five and 15 years from the date the equity interest is received or on an annual basis following an Affiliate equity holder’s departure). Affiliate equity holders are also permitted to sell their equity interests to other individuals or entities in certain cases, subject to the Company's approval or other restrictions. The purchase price of these conditional purchases are generally calculated based upon a multiple of cash flow distributions, which is intended to represent fair value. The Company, at its option, may pay for Affiliate equity purchases in cash, shares of its common stock or other forms of consideration and can consent to the transfer of these interests to other individuals or entities. The Company periodically repurchases Affiliate equity interests from and issues Affiliate equity interests to its Affiliate partners, its employees and its officers. The amount of cash paid for repurchases was $130.8 million , $115.8 million and $174.7 million for the years ended December 31, 2015, 2016 and 2017, respectively. The total amount of cash received for issuances was $6.1 million , $11.8 million and $9.0 million for the years ended December 31, 2015, 2016 and 2017, respectively. Sales and repurchases of Affiliate equity generally occur at fair value; however, the Company also grants Affiliate equity to its Affiliate partners, its employees and its officers as a form of compensation. If the equity is issued for consideration below the fair value of the equity or repurchased for consideration above the fair value of the equity, then such difference is recorded as compensation expense over the requisite service period. The following is a summary of Affiliate equity expense: For the Years Ended December 31, 2015 2016 2017 Controlling interest $ 16.9 $ 10.0 $ 13.2 Non-controlling interest 51.6 31.2 36.8 Total $ 68.5 $ 41.2 $ 50.0 The following is a summary of unrecognized Affiliate equity expense for the years ended December 31, 2015, 2016 and 2017: Unrecognized Affiliate Equity Expense Year Controlling Interest Remaining Life Non-Controlling Interest Remaining Life 2015 $ 22.4 3 years $ 51.9 5 years 2016 31.3 4 years 70.7 5 years 2017 33.3 5 years 95.9 6 years The Company records amounts receivable from and payable to Affiliate equity holders in connection with the transfer of Affiliate equity interests that have not settled at the end of the period. The total receivable was $22.9 million and $12.4 million at December 31, 2016 and 2017 , respectively, and was included in Other assets. The total payable was $12.1 million and $49.2 million as of December 31, 2016 and 2017 , respectively, and was included in Other liabilities. Effects of Changes in the Company’s Ownership in Affiliates The Company periodically acquires interests from, and transfers interests to, Affiliate equity holders. Because these transactions do not result in a change of control, any gain or loss related to these transactions is recorded to Additional paid-in capital, which increases or decreases the controlling interest’s equity. No gain or loss related to these transactions is recognized in the Consolidated Statements of Income or Comprehensive Income. While the Company presents the current redemption value of Affiliate equity within Redeemable non-controlling interests with changes in the current redemption value increasing or decreasing the controlling interest’s equity over time, the following table discloses the cumulative effect that ownership changes had on the controlling interest’s equity related only to Affiliate equity transactions that settled during the periods: For the Years Ended December 31, 2015 2016 2017 Net income (controlling interest) $ 509.5 $ 472.8 $ 689.5 Increase / (decrease) in controlling interest paid-in capital from purchases and sales of Affiliate equity issuances 0.9 1.6 (1.0 ) Decrease in controlling interest paid-in capital related to Affiliate equity repurchases (87.6 ) (38.0 ) (116.2 ) Net income attributable to controlling interest and transfers from non-controlling interests $ 422.8 $ 436.4 $ 572.3 |
Benefit Plans
Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Benefit Plans | Benefit Plans The Company has a defined contribution plan that is a qualified employee profit-sharing plan, covering substantially all of its employees. Under this plan, the Company is able to make discretionary contributions for the benefit of its employees that are qualified plan participants, up to Internal Revenue Service limits. The Company’s consolidated Affiliates have their own qualified defined contribution retirement plans covering their respective employees or, for several Affiliates, have their employees covered under the Company’s plan. In each case, the relevant Affiliate is able to make discretionary contributions for the benefit of its employees, as applicable, that are qualified plan participants, up to Internal Revenue Service limits. Consolidated expenses related to these plans were $18.7 million , $18.9 million and $20.1 million for the years ended December 31, 2015, 2016 and 2017, respectively. The controlling interest’s portion of expenses related to these plans were $3.1 million , $3.7 million and $3.9 million for the years ended December 31, 2015, 2016 and 2017, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes On December 22, 2017, changes in U.S. tax laws were enacted, which significantly revised U.S. corporate income tax by, among other things, lowering corporate income tax rates, implementing a modified territorial tax system and imposing a one-time transition tax on deemed repatriated foreign earnings and profits. As of December 31, 2017, the Company had not completed its accounting for the tax effects of changes in U.S. tax laws. However, in accordance with SAB 118, the Company recorded a provisional one-time net benefit of $194.1 million as a reasonable estimate of the impacts of the changes in U.S. tax laws. The net benefit was primarily due to the re-measurement of the Company’s deferred tax assets and liabilities, principally deferred tax liabilities associated with its intangible assets and convertible securities, which resulted in a benefit of $216.9 million , partially offset by a $22.8 million transition tax on its deemed repatriated foreign earnings and profits. The Company is still analyzing certain aspects of the changes in U.S. tax laws and evaluating its calculations, which could potentially affect the re-measurement of its deferred tax assets and liabilities or give rise to new deferred tax amounts. The Company has also not yet completed its accounting for the transition tax and the amount may change once the Company finalizes its calculation of foreign earnings and profits previously deferred from U.S. federal taxation and the amounts held in cash or other specified assets. The provisional amounts recorded by the Company are based on guidance, interpretations and other information available as of January 24, 2018. The impact of the changes in U.S. tax laws may be refined as further guidance, interpretations or information becomes available or upon completion by the Company of its evaluation of the impact of the changes in U.S. tax laws. The Company’s consolidated income tax provision includes taxes attributable to the controlling interest and, to a lesser extent, taxes attributable to non-controlling interests. The 2017 provisional impact of the changes in U.S. tax laws is reflected in the tables below. The following table presents our consolidated provision for income taxes: For the Years Ended December 31, 2015 2016 2017 Controlling interests: Current tax $ 152.4 $ 168.1 $ 173.8 Intangible-related deferred taxes 77.7 84.3 (98.5 ) Other deferred taxes 27.7 (23.2 ) (24.9 ) Total controlling interests 257.8 229.2 50.4 Non-controlling interests: Current tax $ 9.8 $ 8.2 $ 8.2 Deferred taxes (4.2 ) (1.8 ) (0.2 ) Total non-controlling interests 5.6 6.4 8.0 Provision for income taxes $ 263.4 $ 235.6 $ 58.4 Income before income taxes (controlling interest) $ 767.3 $ 702.0 $ 739.9 Effective tax rate attributable to controlling interests (1) 33.6 % 32.6 % 6.8 % __________________________ (1) Taxes attributable to the controlling interest divided by Income before income taxes (controlling interest). The consolidated provision for income taxes consisted of the following: For the Years Ended December 31, 2015 2016 2017 Current: Federal $ 106.3 $ 103.4 $ 109.0 State 18.3 22.9 18.9 Foreign 37.6 50.0 54.1 Total current 162.2 176.3 182.0 Deferred: Federal 103.8 62.3 (124.9 ) State 14.8 10.0 10.4 Foreign (17.4 ) (13.0 ) (9.1 ) Total deferred 101.2 59.3 (123.6 ) Provision for income taxes $ 263.4 $ 235.6 $ 58.4 For financial reporting purposes, Income before income taxes consisted of the following: For the Years Ended December 31, 2015 2016 2017 Domestic $ 827.6 $ 688.1 $ 756.5 International 263.0 286.5 310.6 $ 1,090.6 $ 974.6 $ 1,067.1 The following table reconciles the U.S. federal statutory tax rate to the Company’s effective tax rate: For the Years Ended December 31, 2015 2016 2017 Statutory U.S. federal tax rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal benefit 2.6 2.9 2.7 Effect of foreign operations (3.5 ) (4.6 ) (5.4 ) Equity compensation 0.8 (0.4 ) (0.7 ) Effect of changes in tax law, rates (0.8 ) (0.3 ) (25.2 ) Other (0.5 ) — 0.4 Effective tax rate (controlling interest) 33.6 % 32.6 % 6.8 % Effect of income from non-controlling interests (9.2 ) (8.4 ) (1.3 ) Effective tax rate 24.4 % 24.2 % 5.5 % Deferred income tax liability (net) reflects the expected future tax consequences of temporary differences between the financial reporting basis and tax basis of the Company’s assets and liabilities. The significant components of the Company’s Deferred income tax liability (net) are as follows: December 31, 2016 2017 Deferred Tax Assets State net operating loss carryforwards $ 17.4 $ 16.8 Foreign loss carryforwards 14.6 16.3 Tax benefit of uncertain tax positions 12.1 11.4 Deferred compensation 34.1 10.4 Foreign tax credits 10.0 — Accrued expenses 3.9 1.3 Total deferred tax assets 92.1 56.2 Valuation allowance (22.1 ) (24.1 ) Deferred tax assets, net of valuation allowance $ 70.0 $ 32.1 Deferred Tax Liabilities Intangible asset amortization $ (396.8 ) $ (258.6 ) Non-deductible intangible amortization (177.0 ) (150.8 ) Convertible securities interest (109.0 ) (77.9 ) Deferred income (47.2 ) (5.9 ) Other (0.8 ) (6.3 ) Total deferred tax liabilities (730.8 ) (499.5 ) Deferred income tax liability (net) $ (660.8 ) $ (467.4 ) At December 31, 2017, the Company had available state net operating loss carryforwards of $432.6 million , which will expire over a 19 -year period. At December 31, 2017, the Company had foreign loss carryforwards of $61.5 million , of which $51.8 million will expire over a 20 -year period and the balance will carry forward indefinitely. The Company believes that it is more-likely-than-not that the benefit from a portion of the state and foreign loss carryforwards will not be realized and has, therefore, recorded a valuation allowance of $24.1 million on the deferred tax assets related to these state and foreign loss carryforwards. For the years ended December 31, 2016 and 2017, the Company increased its valuation allowance $1.6 million and $2.0 million , respectively, related to an increase in the loss carryforwards that are not expected to be realized. The Company continues not to provide for U.S. income taxes on the excess of the financial reporting basis over tax basis in the Company’s investments in foreign subsidiaries considered permanent in duration. Such amount would generally become taxable upon the repatriation of assets from, or a sale or liquidation of, the subsidiaries. While a determination of the potential amount of unrecognized deferred U.S. income tax liability related to these amounts is not practicable because of the numerous assumptions associated with this hypothetical calculation, as of December 31, 2017, the estimated amount of such difference was $270.9 million . A reconciliation of the changes in unrecognized tax benefits is as follows: For the Years Ended December 31, 2015 2016 2017 Balance, as of January 1, $ 28.8 $ 26.9 $ 26.8 Additions based on current year tax positions 2.2 3.8 6.0 Additions based on prior years’ tax positions 1.6 0.6 1.5 Reductions related to lapses of statutes of limitations (4.3 ) (4.7 ) (2.3 ) Additions (reductions) related to foreign exchange rates (1.4 ) 0.2 0.4 Balance, as of December 31, $ 26.9 $ 26.8 $ 32.4 Included in the balance of unrecognized tax benefits at December 31, 2015, 2016 and 2017, are $25.3 million , $26.0 million and $32.4 million , respectively, of tax benefits that, if recognized, would favorably affect the Company’s effective tax rate. The Company records accrued interest and penalties, if any, related to unrecognized tax benefits in Income tax expense. The Company had $1.8 million , $1.4 million and $1.7 million in interest related to unrecognized tax benefits accrued at December 31, 2015, 2016 and 2017, respectively, which are included in the table above. For the years ended December 31, 2015, 2016 and 2017, no significant interest or penalties were recorded in Income tax expense. The Company is subject to U.S. federal, state and local and foreign income tax in multiple jurisdictions. The Company is also periodically subject to tax examinations in these jurisdictions. The completion of examinations may result in the payment of additional taxes and/or the recognition of tax benefits. The Company is generally no longer subject to income tax examinations by U.S. federal, state and local or foreign taxing authorities for periods prior to 2011. The Company does not expect any significant changes to its liability for tax benefits during the next 12 months. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The calculation of basic earnings per share is based on the weighted average number of shares of the Company’s common stock outstanding during the period. Diluted earnings per share is similar to basic earnings per share, but adjusts for the dilutive effect of the potential issuance of incremental shares of the Company’s common stock. The following is a reconciliation of the numerator and denominator used in the calculation of basic and diluted earnings per share available to common stockholders: For the Years Ended December 31, 2015 2016 2017 Numerator Net income (controlling interest) $ 509.5 $ 472.8 $ 689.5 Interest expense on convertible securities, net of taxes 15.3 15.5 15.5 Net income (controlling interest), as adjusted $ 524.8 $ 488.3 $ 705.0 Denominator Average shares outstanding (basic) 54.3 54.2 56.0 Effect of dilutive instruments: Stock options and restricted stock units 0.7 0.6 0.4 Junior convertible securities 2.2 2.2 2.2 Average shares outstanding (diluted) 57.2 57.0 58.6 Average shares outstanding (diluted) in the table above exclude share awards that have not satisfied performance conditions and the anti-dilutive effect of the following shares: For the Years Ended December 31, 2015 2016 2017 Stock options and restricted stock units 0.0 0.6 0.1 The Company may settle portions of its Affiliate equity purchases in shares of its common stock. Because it is the Company’s intent to settle these potential purchases in cash, the calculation of diluted earnings per share excludes any potential dilutive effect from possible share settlements of Affiliate equity purchases. |
Comprehensive Income
Comprehensive Income | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Comprehensive Income | Comprehensive Income The following tables show the tax effects allocated to each component of Other comprehensive income (loss): For the Year Ended December 31, 2015 Pre-Tax Tax Benefit (Expense) Net of Tax Foreign currency translation adjustment $ (93.2 ) $ — $ (93.2 ) Change in net realized and unrealized gain (loss) on derivative securities 2.3 (0.4 ) 1.9 Change in net unrealized gain (loss) on investment securities 34.8 (12.7 ) 22.1 Other comprehensive income (loss) $ (56.1 ) $ (13.1 ) $ (69.2 ) For the Year Ended December 31, 2016 Pre-Tax Tax Benefit (Expense) Net of Tax Foreign currency translation adjustment $ (115.3 ) $ — $ (115.3 ) Change in net realized and unrealized gain (loss) on derivative securities 0.3 (0.2 ) 0.1 Change in net unrealized gain (loss) on investment securities (58.3 ) 23.1 (35.2 ) Other comprehensive income (loss) $ (173.3 ) $ 22.9 $ (150.4 ) For the Year Ended December 31, 2017 Pre-Tax Tax Benefit (Expense) Net of Tax Foreign currency translation adjustment $ 128.0 $ — $ 128.0 Change in net realized and unrealized gain (loss) on derivative securities (0.7 ) (0.1 ) (0.8 ) Change in net unrealized gain (loss) on investment securities (15.0 ) 7.3 (7.7 ) Other comprehensive income (loss) $ 112.3 $ 7.2 $ 119.5 The components of accumulated other comprehensive income (loss), net of taxes, were as follows: Foreign Currency Translation Adjustment Realized and Unrealized Gains (Losses) on Derivative Securities Unrealized Gains (Losses) on Investment Securities (1) Total Balance, as of December 31, 2015 $ (98.6 ) $ 0.3 $ 45.0 $ (53.3 ) Other comprehensive gain (loss) before reclassifications (115.3 ) (1.0 ) (22.5 ) (138.8 ) Amounts reclassified — 1.1 (12.7 ) (11.6 ) Net other comprehensive gain (loss) (115.3 ) 0.1 (35.2 ) (150.4 ) Balance, as of December 31, 2016 $ (213.9 ) $ 0.4 $ 9.8 $ (203.7 ) Other comprehensive gain (loss) before reclassifications 128.0 (1.6 ) 15.7 142.1 Amounts reclassified — 0.8 (23.4 ) (22.6 ) Net other comprehensive gain (loss) 128.0 (0.8 ) (7.7 ) 119.5 Balance, as of December 31, 2017 $ (85.9 ) $ (0.4 ) $ 2.1 $ (84.2 ) __________________________ (1) See Note 2 for amounts reclassified from Other comprehensive income (loss). |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | Selected Quarterly Financial Data (Unaudited) The following is a summary of the quarterly results of operations of the Company for the years ended December 31, 2016 and 2017 : 2016 First Quarter Second Quarter Third Quarter Fourth Quarter Revenue $ 545.4 $ 554.1 $ 544.7 $ 550.3 Operating income 246.8 247.0 238.5 301.9 Income before income taxes 230.5 235.9 226.2 281.9 Net income (controlling interest) 104.0 108.3 110.2 150.2 Earnings per share (diluted) $ 1.90 $ 1.98 $ 2.02 $ 2.67 2017 First Quarter Second Quarter Third Quarter Fourth Quarter (1) Revenue $ 544.3 $ 570.9 $ 585.7 $ 604.1 Operating income 262.5 275.9 289.5 280.0 Income before income taxes 253.3 266.9 282.9 264.0 Net income (controlling interest) 122.5 126.3 125.4 315.4 Earnings per share (diluted) $ 2.13 $ 2.22 $ 2.22 $ 5.50 __________________________ (1) In the fourth quarter of 2017, the Company recorded a provisional one-time net benefit from changes in U.S tax laws (see Note 22) and an expense associated with the impairment of one of its Affiliates accounted for under the equity method (see Note 13). |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | Segment and Geographic Information In the first quarter of 2017, the Company’s Chief Operating Decision Maker (the “CODM”) changed the manner in which he assesses the Company’s performance. In 2016, the CODM assessed the performance of the Company in three business segments representing three distribution channels. Given an increase in the number of the Company’s Affiliates accounted for under the equity method of accounting and changes in the way investment management services are delivered, during the first quarter of 2017, the CODM began to assess the performance of the Company as a single global active asset management company. As a result, the CODM now reviews information organized around one operating segment to evaluate and manage the Company’s business operations. Therefore, in the first quarter of 2017, the Company determined that it has one reportable segment. Prior period segment disclosures have been updated accordingly. In connection with this change, the Company completed impairment assessments based on its former three distribution channels, as well as its single global active asset management reporting unit, and determined that there were no impairments under either approach. The following table presents Revenue and Fixed assets (net) of the Company by geographic location. Revenue by geographic location is primarily based on the location of an Affiliate. For the Years Ended December 31, 2015 2016 2017 Revenue United States $ 1,657.2 $ 1,477.5 $ 1,571.4 United Kingdom 645.3 566.4 587.3 Other 182.0 150.7 146.3 Total $ 2,484.5 $ 2,194.6 $ 2,305.0 December 31, 2015 2016 2017 Fixed Assets, Net United States $ 98.6 $ 97.3 $ 97.8 United Kingdom 12.3 9.9 11.4 Other 3.2 2.9 1.8 Total $ 114.1 $ 110.1 $ 111.0 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company’s Board of Directors authorized a share repurchase program in January 2018 authorizing the Company to repurchase up to 3.4 million shares of its common stock, and this authorization has no expiry. As of the January 2018 authorization, there were a total of 5.0 million shares remaining available for repurchase under the Company’s repurchase programs. As of February 21, 2018, the Company had repurchased 0.7 million shares of common stock, at an average share price of $193.18 |
Schedule II Valuation and Quali
Schedule II Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2017 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule II Valuation and Qualifying Accounts | Schedule II Valuation and Qualifying Accounts (in millions) Balance Beginning of Period Additions Charged to Costs and Expenses Additions Charged to Other Accounts Deductions Balance End of Period Income Tax Valuation Allowance Year Ending December 31, 2017 $ 22.1 $ 1.1 $ 0.9 $ — $ 24.1 2016 20.5 1.3 0.3 — 22.1 2015 18.4 2.1 — — 20.5 Other Allowances (1) Year Ending December 31, 2017 $ 10.3 $ 0.6 $ — $ 7.3 $ 3.6 2016 10.6 5.0 — 5.3 10.3 2015 12.1 0.7 — 2.2 10.6 __________________________ (1) Other Allowances represented reserves on notes received in connection with transfers of our interests in certain Affiliates, as well as other receivable amounts, which we considered uncollectible. Deductions represent the reversal of such reserves upon collection of the amounts due. |
Business and Summary of Signi37
Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation and Use of Estimates The financial statements are prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”). All dollar amounts, except per share data in the text and tables herein, are stated in millions unless otherwise indicated. All material intercompany balances and transactions have been eliminated. In 2017, the Company changed its Consolidated Statement of Income presentation to include Income from equity method investments in Operating income, as its equity method Affiliates are integral to the Company’s operations. This change, along with other reclassifications, has been made to the prior period’s financial statements to conform to the current period’s presentation. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. |
Principles of Consolidation | Principles of Consolidation In evaluating whether an investment must be consolidated, the Company evaluates the risk, rewards, and significant terms of each of its Affiliate and other investments to determine if an investment is considered a voting rights entity (“VRE”) or a variable interest entity (“VIE”). An entity is a VRE when the total equity investment at risk is sufficient to enable the entity to finance its activities independently and when the equity holders have the obligation to absorb losses, the right to receive residual returns and the right to direct the activities of the entity that most significantly impact its economic performance. An entity is a VIE when it lacks one or more of the characteristics of a VRE, which for the Company are Affiliates structured as partnerships (or similar entities) where the limited partners lack substantive kick-out or substantive participation rights over the general partner. Assessing whether an entity is a VRE or VIE involves judgment. Upon the occurrence of certain events, management reviews and reconsiders its previous conclusion regarding the status of an entity as a VRE or a VIE. The Company consolidates VREs when it has control over significant operating, financial and investing decisions of the investment. When the Company lacks control, but is deemed to have significant influence, the Company accounts for the investment under the equity method. Other investments in which the Company does not have rights to exercise significant influence are accounted for under the cost method. Under the cost method, income is recognized when dividends are declared. The Company consolidates VIEs when it is the primary beneficiary of the entity, which is defined as having the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses of or the right to receive benefits from the entity that could potentially be significant to the VIE. The Company applies the equity method of accounting to VIEs where the Company is not the primary beneficiary but has the ability to exercise significant influence over operating and financial matters of the VIE. Investments in Affiliates Substantially all of the Company’s Affiliates are considered VIEs and are either consolidated or accounted for under the equity method. A limited number of the Company’s Affiliates are considered VREs and most of these are accounted for under the equity method. When an Affiliate is consolidated, the portion of the Affiliate’s management equity owners’ earnings attributable to Owners’ Allocation is included in Net income (non-controlling interests) in the Consolidated Statements of Income. Undistributed Operating and Owners’ Allocation attributable to Affiliate management equity owners, along with their share of any tangible or intangible net assets, are presented within Non-controlling interests on the Consolidated Balance Sheets. Affiliate equity interests where the holder has certain rights to demand settlement are presented, at their current redemption values, as Redeemable non-controlling interests on the Consolidated Balance Sheets. The Company periodically issues, sells and repurchases the Affiliate equity of its consolidated Affiliates. Because these transactions take place between entities under common control, any gains or losses attributable to these transactions are required to be included within Additional Paid-in Capital, net of any related income tax effects in the period of the change. When an Affiliate is accounted for under the equity method, the Company’s share of an Affiliate’s earnings or losses, net of amortization and impairments, is included in Income from equity method investments in the Consolidated Statements of Income and the Company’s interest in the Affiliate is reported in Equity method investments in Affiliates in the Consolidated Balance Sheets. The Company’s share of income taxes incurred directly by Affiliates accounted for under the equity method is recorded within Income tax expense in the Consolidated Statements of Income. The Company periodically evaluates its equity method investments for impairment. In such impairment evaluations, the Company assesses whether or not the fair value of the investment has declined below its carrying value for a period considered to be other-than-temporary. If the Company determines that a decline in fair value below the carrying value of the investment is other-than-temporary, then the carrying value of the investment is reduced to its fair value and this reduction would be recorded in Income from equity method investments. Affiliate Sponsored Investment Vehicles The Company’s Affiliates sponsor various investment products where they also act as the investment advisor. These investment products are typically owned primarily by third-party investors; however, certain products are funded with general partner and seed capital investments from the Company and its consolidated Affiliates. Investors are generally entitled to substantially all of the economics of these products, except for the management and performance fees earned by consolidated Affiliates or any gains or losses attributable to the Company or its consolidated Affiliates’ investments in these products. As a result, the Company does not generally consolidate these products unless the Company and/or the Affiliate’s interest in the product is considered substantial. When consolidating these products, the Company retains the specialized investment company accounting principles of the underlying products, and all of the underlying investments are carried at fair value in Investments in marketable securities in the Consolidated Balance Sheets with corresponding changes in the investments’ fair values reflected in Other operating expenses (net) in the Consolidated Statements of Income. Purchases and sales of securities are presented within purchases and sales by Affiliate sponsored consolidated products in the Consolidated Statements of Cash Flows. When Affiliates no longer control these products, due to a reduction in ownership or other reasons, the products are deconsolidated. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments, including money market mutual funds, with original maturities of three months or less to be cash equivalents. Cash equivalents are stated at cost, which approximates market value due to the short-term maturity of these investments. Money market mutual funds with a floating net asset value (“NAV”) would not meet the definition of a cash equivalent if the fund has enacted liquidity fees or redemption gates. |
Receivables | Receivables The Company’s Affiliates earn asset and performance based fees, which are billed based on the terms of the related contracts. Billed but uncollected asset and performance based fees are presented within Receivables on the Consolidated Balance Sheets and are generally short-term in nature. Certain of the Company’s Affiliates in the UK act as intermediaries between clients and their sponsored investment products. Normal settlement periods on transactions initiated by these clients with the sponsored investment products result in unsettled fund share receivables and payables that are presented on a gross basis within Receivables and Payables and accrued liabilities on the Consolidated Balance Sheets. The gross presentation of these receivables and offsetting payables reflects the legal relationship between the underlying investor and the Company’s Affiliates. |
Investments in Marketable Securities | Investments in Marketable Securities Investments in marketable securities are classified as either trading or available-for-sale and carried at fair value. Unrealized gains or losses on investments classified as available-for-sale are reported, net of tax, as a separate component of Accumulated other comprehensive loss in Equity until realized when they are reported in Investment and other income in the Consolidated Statements of Income. Realized and unrealized gains or losses related to trading securities are reported within Investment and other income. Realized gains and losses are recorded on the trade date on a specific identified basis. If a decline in the fair value of an available-for-sale investment is determined to be other-than-temporary, the carrying amount of the asset is reduced to its fair value, and the difference is charged to Investment and other income in the period incurred. |
Fair Value Measurements | Fair Value Measurements The Company determines the fair value of certain investment securities and other financial and non-financial assets and liabilities. Fair value is determined based on the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, utilizing a hierarchy of three different valuation techniques: Level 1 - Unadjusted quoted market prices for identical instruments in active markets; Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs, or significant value drivers, are observable; and Level 3 - Prices reflect the Company’s own assumptions concerning unobservable inputs to the valuation model. These inputs require significant management judgment and reflect the Company’s assumptions that market participants would use in pricing the asset or liability. |
Fixed Assets | Fixed Assets Fixed assets are recorded at cost and depreciated using the straight-line method over their estimated useful lives. The estimated useful lives of office equipment and furniture and fixtures range from three to ten years . Computer software developed or obtained for internal use is amortized over the estimated useful life of the software, generally three to seven years. Leasehold improvements are amortized over the shorter of their estimated useful lives or the term of the lease, and buildings are amortized over their expected useful lives. The costs of improvements that extend the life of a fixed asset are capitalized, while the cost of repairs and maintenance are expensed as incurred. Land and artwork are not depreciated; artwork is included in Land, improvements and other. |
Leases | Leases The Company and its Affiliates currently lease office space and equipment under various leasing arrangements. As these leases expire, it can be expected that in the normal course of business they will be renewed or replaced. Leases are classified as either capital leases or operating leases, as appropriate. Most lease agreements for office space that are classified as operating leases contain renewal options, rent escalation clauses or other inducements provided by the landlord. Rent expense is accrued to recognize lease escalation provisions and inducements provided by the landlord, if any, on a straight-line basis over the lease term and is reported in Other operating expenses (net) on the Consolidated Statements of Income. |
Acquired Client Relationships and Goodwill | Acquired Client Relationships and Goodwill Each Affiliate in which the Company makes an investment has identifiable assets arising from contractual or other legal rights with their clients (“acquired client relationships”). In determining the value of acquired client relationships, the Company analyzes the net present value of these Affiliates’ existing client relationships based on a number of factors, including: the Affiliate’s historical and potential future operating performance; the Affiliate’s historical and potential future rates of attrition of existing clients; the stability and longevity of existing client relationships; the Affiliate’s recent, as well as long-term, investment performance; the characteristics of the firm’s products and investment styles; the stability and depth of the Affiliate’s management team; and the Affiliate’s history and perceived franchise or brand value. The Company has determined that certain of its acquired client relationships meet the criteria to be considered indefinite-lived assets because the Company expects the contracts to be renewed annually and, therefore, the cash flows generated by these contracts to continue indefinitely. Accordingly, the Company does not amortize these intangible assets, but instead reviews these assets annually or more frequently whenever events or circumstances occur indicating that the recorded indefinite-lived assets may be impaired. Each reporting period, the Company assesses whether events or circumstances have occurred that indicate that the indefinite life criteria are no longer met. If the indefinite life criteria are no longer met, the Company would assess whether the carrying value of the assets exceeds its fair value, an impairment loss would be recorded in an amount equal to any such excess and these assets would be reclassified to definite-lived. The expected period of economic benefit of definite-lived acquired client relationships are determined based on an analysis of the historical and projected attrition rates of each Affiliate’s existing clients, and other factors that may influence the expected future economic benefit the Company will derive from the relationships. The expected lives of definite-lived acquired client relationships are analyzed annually or more frequently whenever events or circumstances have occurred that indicate the expected period of economic benefit may no longer be appropriate. The Company tests for the possible impairment of indefinite and definite-lived intangible assets annually or more frequently whenever events or changes in circumstances indicate that the carrying amount of the asset is not recoverable. If such indicators exist, the Company compares the fair value of the asset to the carrying value of the asset. If the carrying value is greater than the fair value, an impairment loss would be recorded in Intangible amortization and impairments in the Consolidated Statements of Income. Goodwill represents the future economic benefits arising from assets acquired in a business combination that are not individually identified and separately recognized. Goodwill is not amortized, but is instead reviewed for impairment. The Company assesses goodwill for impairment at least annually, as of September 30th, or more frequently whenever events or circumstances occur indicating that the recorded goodwill may be impaired. If the carrying amount of goodwill exceeds the fair value, an impairment loss would be recorded in Intangible amortization and impairments. |
Issuance Costs | Issuance Costs Issuance costs related to the Company’s senior bank debt are amortized over the remaining term of the senior unsecured multicurrency revolving credit facility (the “revolver”) and the senior unsecured term loan facility (the “term loan” and, together with the revolver, the “credit facilities”), which approximates the effective interest method. Issuance costs associated with the revolver and term loan are included in Other assets and as a reduction of the related debt balance, respectively, in the Consolidated Balance Sheets. Issuance costs associated with the Company’s senior notes are amortized over the shorter of the period to the first investor put date or the Company’s estimate of the expected term of the security, and are included as a reduction of the related debt balance in the Consolidated Balance Sheets. The expense resulting from the amortization of these issuance costs is reported in Interest expense in the Consolidated Statements of Income. |
Derivative Financial Instruments | Derivative Financial Instruments From time to time, the Company may utilize financial instruments to offset its exposure to interest rates and market changes and the Company’s Affiliates may use foreign currency forward contracts to hedge the risk of foreign exchange rate movements. The Company records derivatives in the Consolidated Balance Sheets at fair value. If the Company’s derivatives qualify as cash flow hedges, the effective portion of the unrealized gain or loss is recorded in Accumulated other comprehensive loss as a separate component of stockholders’ equity and reclassified to Investment and other income when the hedged cash flows are recorded in earnings. Hedge effectiveness is generally measured by comparing the present value of the cumulative change in the expected future variable cash flows of the hedged contract with the present value of the cumulative change in the expected future variable cash flows of the hedged item. To the extent that the critical terms of the hedged item and the derivative are not identical, hedge ineffectiveness would be reported in Investment and other income. If the Company’s or its Affiliates’ derivatives do not qualify as cash flow or fair value hedges, changes in the fair value of the derivatives are recognized as a gain or loss in Investment and other income. |
Contingent Payment Arrangements | Contingent Payment Arrangements The Company periodically enters into contingent payment arrangements in connection with its business combinations. In these arrangements, the Company agrees to pay additional consideration to the sellers to the extent that certain specified financial targets are achieved. For consolidated Affiliates, the Company estimates the fair value of these potential future obligations at the time a business combination is consummated and records a liability in Other liabilities on its Consolidated Balance Sheet. The Company then accretes the obligation to its expected payment amount over the period until the arrangement is measured. If the Company’s expected payment amount subsequently changes, the obligation is reduced or increased in the current period resulting in a gain or loss, respectively. Both gains and losses resulting from changes to expected payments and the accretion of these obligations to their expected payment amounts are reflected within Imputed interest expense and contingent payment arrangements. For Affiliates accounted for under the equity method of accounting, the Company records a liability when a payment becomes probable in Payables and accrued liabilities, with a corresponding increase to the carrying value of the Affiliate in Equity method investments in Affiliates in the Consolidated Balance Sheets. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of differences between the financial reporting bases of assets and liabilities and their respective tax bases, using tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in Income tax expense in the Consolidated Statements of Income in the period when the change is enacted. The Company regularly assesses the recoverability of its deferred income tax assets to determine whether these assets are more-likely-than-not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their recorded amount, or that the recorded deferred tax assets are not realizable, the Company would adjust the deferred tax asset valuation allowance to record the deferred tax assets at their current value, which would increase or decrease Income tax expense, respectively. The Company records unrecognized tax benefits based on whether it is more-likely-than-not that the uncertain tax positions will be sustained on the basis of the technical merits of the position. If it is determined an uncertain tax position is more-likely-than-not to be sustained, the Company records the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority in Income tax expense. Interest and penalties related to unrecognized tax benefits are also recorded in Income tax expense. On December 22, 2017, changes in U.S. tax laws were enacted, which significantly revised U.S. corporate income tax by, among other things, lowering corporate income tax rates, implementing a modified territorial tax system and imposing a one-time transition tax on deemed repatriated foreign earnings and profits. The SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of GAAP in situations when a Company does not have the necessary information available, prepared or analyzed to complete the accounting for certain income tax effects of the changes in U.S. tax laws and allows the Company to record provisional amounts. Changes to provisional amounts or new amounts resulting from new guidance, interpretations or other information or from further evaluation of the impact of the changes in U.S. tax laws will be recorded in subsequent reporting periods not to extend beyond one year from the enactment date. |
Foreign Currency Translation | Foreign Currency Translation Assets and liabilities denominated in a functional currency other than U.S. dollars are translated into U.S. dollars using exchange rates in effect as of the balance sheet date. Revenue and expenses denominated in a functional currency other than U.S. dollars are translated into U.S. dollars using average exchange rates for the relevant period. Because of the long-term nature of the Company’s investments in its Affiliates, net translation exchange gains and losses resulting from foreign currency translation are recorded in Accumulated other comprehensive loss as a separate component of stockholders’ equity. Foreign currency transaction gains and losses are reflected in Investment and other income. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash investments. The Company and its Affiliates maintain cash and cash equivalents, investments and, at times, certain financial instruments with various high credit-quality financial institutions. These financial institutions are typically located in countries in which the Company and its Affiliates operate. For the Company and certain Affiliates, cash deposits at a financial institution may exceed Federal Deposit Insurance Corporation insurance limits. |
Revenue Recognition | Revenue Recognition The Company’s revenue primarily represents asset and performance based fees earned by its consolidated Affiliates for managing the assets of clients. Asset based fees are recognized as services are rendered and are typically based upon a percentage of the value of a client’s assets under management. Any fees collected in advance are deferred and recognized as income over the period earned. Performance fees are generally assessed as a percentage of the investment performance realized on a client’s account. Performance fees are recognized when they are earned (i.e., when they become billable to customers and are not subject to claw-back) based on the contractual terms of agreements and when collection is reasonably assured. Carried interest is recognized upon the earlier of the termination of the investment product or when the likelihood of claw-back is improbable. Also included in revenue are fees earned by broker-dealers and administrative fees for services provided to Affiliate sponsored investment products. The Company and certain of its consolidated Affiliates have contractual arrangements with third parties to provide certain distribution-related services. These third parties are primarily compensated based on the value of client assets over time. Distribution-related fees earned by consolidated Affiliates are presented in Revenue in the Consolidated Statements of Income gross of any related expenses when the Company or the Affiliate is the principal in its role as primary obligor under its sales and distribution arrangements. Distribution-related expenses incurred by consolidated Affiliates are presented within Selling, general and administrative expenses in the Consolidated Statements of Income. |
Earnings Per Share | Earnings Per Share The calculation of basic earnings per share is based on the weighted average number of shares of the Company’s common stock outstanding during the period. Diluted earnings per share is similar to basic earnings per share, but adjusts for the dilutive effect of the potential issuance of incremental shares of the Company’s common stock. The Company had convertible securities outstanding during the periods presented and is required to apply the if-converted method to these securities in its calculation of diluted earnings per share. Under the if-converted method, shares that are issuable upon conversion are deemed outstanding, regardless of whether the securities are contractually convertible into the Company’s common stock at that time. For this calculation, the interest expense (net of tax) attributable to these dilutive securities is added back to Net income (controlling interest), reflecting the assumption that the securities have been converted. Issuable shares for these securities and related interest expense are excluded from the calculation if an assumed conversion would be anti-dilutive to diluted earnings per share. |
Share-Based Compensation Plans | Share-Based Compensation Plans The Company recognizes expenses for all share-based payments based on their grant date fair values over the requisite service period. The Company records these expenses only for awards that are expected to vest. Tax windfalls or shortfalls are recognized in Income tax expense and have been classified as operating activities in the Consolidated Statements of Cash Flows. Taxes paid by the Company when it withholds shares to satisfy tax withholding obligations are classified as a financing activity. Prior to 2016, the Company reported any tax benefits realized upon the exercise of stock options or vesting of restricted stock that were in excess of the expense recognized for reporting purposes as a financing activity in the Consolidated Statements of Cash Flows. If the tax benefit ultimately realized was greater than or less than the expense recognized, the tax windfall or shortfall was recognized in stockholders’ equity. To the extent the shortfall exceeded the cumulative windfall tax benefits, the excess was recognized in Income tax expense. |
Recent Accounting Developments | Recent Accounting Developments Effective January 1, 2017, the Company adopted Accounting Standard Update (“ASU”) 2016-07, Investments - Equity Method and Joint Ventures: Simplifying the Transition to the Equity Method of Accounting, and ASU 2016-06, Derivatives, and Hedging: Contingent Put and Call Options in Debt Instruments. The adoption of these updates did not have a significant impact on the Company’s Consolidated Financial Statements. In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU 2014-09, Revenue from Contracts with Customers, and subsequently issued several related amendments. The standard provides a comprehensive model for revenue recognition and is effective for the Company and its consolidated Affiliates for interim and annual periods beginning after December 15, 2017 and for interim and annual periods beginning after December 15, 2018 for the Company’s equity method Affiliates. The standard may be adopted using either the full or modified retrospective method. The Company has selected the modified retrospective method where the cumulative effect of initially applying the standard is recognized within the Company’s Consolidated Financial Statements as of January 1, 2018. As of December 31, 2017, the Company does not expect a significant impact to its Consolidated Financial Statements upon adoption of the standard as it relates to the timing of recognition of its Revenue, presentation of Revenue on a gross or net basis, or the capitalization of revenue related costs. The Company will continue to assess the impact of adoption for its equity method Affiliates. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Liabilities. Under the new standard, all equity investments in unconsolidated entities (other than those accounted for using the equity method of accounting) will generally be measured at fair value with any changes recognized through earnings. The standard is effective for interim and annual periods beginning after December 15, 2017 and must be adopted using a modified retrospective method. The Company does not expect the adoption of this standard to have a significant impact on its Consolidated Financial Statements. In February 2016, the FASB issued ASU 2016-02, Leases, which requires lessees to record right-of-use assets and lease liabilities arising from most operating leases on the statement of financial position. The standard is effective for interim and annual periods beginning after December 15, 2018 for the Company and its consolidated Affiliates and for interim and annual periods beginning after December 15, 2019 for the Company’s equity method Affiliates. The standard must be adopted using a modified retrospective method. The Company is evaluating the impact of this standard on its Consolidated Financial Statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments, which clarifies how cash receipts and cash payments are classified in the statement of cash flows. The standard is effective for interim and annual periods beginning after December 15, 2017 and must be adopted using a full retrospective method. The Company does not expect the adoption of this standard to have a significant impact on its Consolidated Financial Statements. In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business, which provides guidance on evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The standard is effective for interim and annual periods beginning after December 15, 2017. The Company will apply the standard prospectively upon adoption. The impact of this standard on the Company’s Consolidated Financial Statements will depend on acquisitions (or disposals) of assets or businesses by the Company in periods following adoption. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other: Simplifying the Accounting for Goodwill Impairment. Under the new standard, a goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value. The standard is effective for interim and annual periods beginning after December 15, 2019. The Company will apply the standard prospectively upon adoption. The Company is evaluating the impact of this standard on its Consolidated Financial Statements. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation, which simplifies modification accounting related to share-based arrangements. Under the new standard, modification assessments will not be required if fair value, vesting conditions and classification would be unaffected by a modification. The standard is effective for interim and annual periods beginning after December 15, 2017. The Company will apply the standard prospectively upon adoption. The Company does not expect the adoption of this standard to have a significant impact on its Consolidated Financial Statements. |
Fair Value of Financial Instruments | The following are descriptions of the significant financial assets and liabilities measured at fair value and the fair value methodologies used. Cash equivalents consist primarily of highly liquid investments in daily redeeming money market funds, without enacted liquidity fees or redemption gates that are valued at net asset value (“NAV”). Investments in marketable securities consist primarily of investments in publicly traded securities and funds advised by Affiliates that are valued at NAV. Publicly traded securities valued using unadjusted quoted market prices for identical instruments in active markets are classified as level 1. Publicly traded securities valued using quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active are classified as level 2. Investments in funds advised by Affiliates that are valued at NAV are classified as level 1. 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. The significant unobservable inputs that are used in the fair value measurement of these obligations are growth and discount rates. Increases in the growth rate result in a higher obligation while increases in the discount rate results in a lower obligation. Affiliate equity obligations include agreements to repurchase Affiliate equity. The significant unobservable inputs that are used in the fair value measurement of the agreements to repurchase Affiliate equity are growth and discount rates. Increases in the growth rate result in a higher obligation while increases in the discount rate results in a lower obligation. Foreign currency forward contracts use model-derived valuations in which all significant inputs are observable in active markets to determine fair value. It is the Company’s policy to value financial assets or liabilities transferred as of the beginning of the period in which the transfer occurs. |
Investments in Marketable Sec38
Investments in Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Marketable Securities [Abstract] | |
Schedule of Cost, Gross Unrealized Gains and Losses, and Fair Value of Investments | The following is a summary of the cost, gross unrealized gains and losses and fair value of investments classified as available-for-sale and trading: Available-for-Sale Trading December 31, 2016 December 31, 2017 December 31, 2016 December 31, 2017 Cost $ 66.1 $ 18.3 $ 34.4 $ 48.8 Unrealized Gains 17.6 2.7 6.6 10.3 Unrealized Losses (1.8 ) (0.4 ) (0.5 ) (1.9 ) Fair Value $ 81.9 $ 20.6 $ 40.5 $ 57.2 |
Investments in Affiliates and39
Investments in Affiliates and Affiliate Sponsored Investment Products (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Variable Interest Entities | |
Schedule of Net Assets and Liabilities and Maximum Risk of Losses Related to Unconsolidated VIEs | The net assets of Affiliate sponsored investment products that were considered VIEs accounted for under the equity method and the Company’s maximum risk of loss were as follows: December 31, 2016 December 31, 2017 Unconsolidated VIE Net Assets Carrying Value and Maximum Risk of Loss Unconsolidated VIE Net Assets Carrying Value and Maximum Risk of Loss Affiliate sponsored investment products $ 1,756.6 $ 9.4 $ 2,154.6 $ 10.2 Substantially all of the Company’s consolidated Affiliates are considered VIEs. The unconsolidated assets, net of liabilities and non-controlling interests of equity method Affiliates considered VIEs, and the Company’s maximum risk of loss were as follows: December 31, 2016 December 31, 2017 Unconsolidated Carrying Value and Unconsolidated Carrying Value and Affiliates accounted for under the equity method $ 1,047.6 $ 2,846.8 $ 1,594.4 $ 2,765.7 |
Senior Notes (Tables)
Senior Notes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Principal Terms of Senior Notes Outstanding | At December 31, 2017, the Company had two senior notes outstanding and their respective principal terms are summarized in the following table: 2024 Senior Notes 2025 Senior Notes Issue date February 2014 February 2015 Maturity date February 2024 August 2025 Potential Call Date (1) Any Time Any Time Par value (in millions) $ 400.0 $ 350.0 Call Price (1) As Defined As Defined Stated coupon 4.25 % 3.50 % Coupon frequency Semi-annually Semi-annually __________________________ (1) The senior notes may be redeemed at any time, in whole or in part, at a make-whole redemption price plus accrued and unpaid interest. |
Convertible Securities (Tables)
Convertible Securities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Value of Convertible Securities | The carrying value and principal amount at maturity of the junior convertible securities were as follows: December 31, 2016 December 31, 2017 Carrying Value Principal Amount at Maturity Carrying Value Principal Amount at Maturity Junior convertible securities (1) $ 307.5 $ 430.8 $ 309.9 $ 430.8 __________________________ (1) The carrying value is accreted to the principal amount at maturity over a remaining life of 20 years. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis | 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, 2016 Level 1 Level 2 Level 3 Financial Assets Cash equivalents $ 64.1 $ 64.1 $ — $ — Investments in marketable securities (1) Trading securities 40.5 40.5 — — Available-for-sale securities 81.9 81.9 — — Other investments 3.4 3.4 — — Foreign currency forward contracts (2) 0.6 — 0.6 — Financial Liabilities (2) Contingent payment arrangements $ 8.6 $ — $ — $ 8.6 Affiliate equity obligations 12.1 — — 12.1 Foreign currency forward contracts 0.5 — 0.5 — Fair Value Measurements December 31, 2017 Level 1 Level 2 Level 3 Financial Assets Cash equivalents $ 40.4 $ 40.4 $ — $ — Investments in marketable securities (1) Trading securities 57.2 57.2 — — Available-for-sale securities 20.6 20.6 — — Foreign currency forward contracts (2) 0.2 — 0.2 — Financial Liabilities (2) Contingent payment arrangements $ 9.4 $ — $ — $ 9.4 Affiliate equity obligations 49.2 — — 49.2 Foreign currency forward contracts 0.6 — 0.6 — __________________________ (1) Principally investments in equity securities. (2) Amounts are presented within Other assets or Other liabilities. |
Schedule of Changes in Level 3 Financial Assets and Liabilities | The following tables present the changes in level 3 liabilities: For the Years Ended December 31, 2016 2017 Contingent Payment Arrangements Affiliate Equity Obligations Contingent Payment Arrangements Affiliate Equity Obligations Balance, beginning of period $ 10.2 $ 62.3 $ 8.6 $ 12.1 Net realized and unrealized (gains) losses (1) (1.6 ) 3.1 7.6 5.5 Purchases and issuances (2) — 69.1 — 206.1 Settlements and reductions — (122.4 ) (6.8 ) (174.5 ) Balance, end of period $ 8.6 $ 12.1 $ 9.4 $ 49.2 Net change in unrealized (gains) losses relating to instruments still held at the reporting date $ (1.6 ) $ — $ 2.8 $ — __________________________ (1) Accretion and changes in the expected value of the Company’s contingent payment arrangements and Affiliate equity obligations are recorded in Imputed interest expense and contingent payment arrangements. (2) Includes transfers from Redeemable non-controlling interests and other activity. |
Schedule of Quantitative Information | The following table presents certain quantitative information about the significant unobservable inputs used in valuing the Company’s level 3 financial liabilities: Quantitative Information about Level 3 Fair Value Measurements Valuation Techniques Unobservable Input Fair Value at Range at December 31, 2016 Fair Value at Range at December 31, 2017 Contingent payment arrangements Discounted cash flow Growth rates $ 8.6 3% - 8% $ 9.4 7% - 8% Discount rates 14% - 15% 15% - 16% Affiliate equity obligations Discounted cash flow Growth rates 12.1 4% - 10% 49.2 0% - 11% Discount rates 15% - 16% 12% - 16% |
Schedule of Investments | 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, 2016 December 31, 2017 Category of Investment Fair Value Unfunded Commitments Fair Value Unfunded Commitments Private equity (1) $ 137.8 $ 92.2 $ 156.1 $ 98.8 Other funds (2) 9.7 — 8.9 — Other investments (3) $ 147.5 $ 92.2 $ 165.0 $ 98.8 __________________________ (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 $59.9 million and $80.1 million as of December 31, 2016 and 2017, respectively. |
Schedule of Financial Liabilities not Carried at Fair Value | The following table summarizes the Company’s other financial liabilities not carried at fair value: December 31, 2016 December 31, 2017 Carrying Value Fair Value Carrying Value Fair Value Fair Value Hierarchy Senior notes $ 945.1 $ 936.0 $ 745.7 $ 765.2 Level 2 Convertible securities 307.5 466.9 309.9 549.8 Level 2 |
Goodwill and Acquired Client 43
Goodwill and Acquired Client Relationships (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Goodwill | The following tables present the changes in the Company’s consolidated Affiliates’ Goodwill and components of Acquired client relationships (net): Goodwill 2016 2017 Balance, as of January 1, $ 2,668.4 $ 2,628.1 Foreign currency translation (40.3 ) 34.4 Balance, as of December 31, $ 2,628.1 $ 2,662.5 |
Schedule of Changes in, and the Components of, Acquired Client Relationships | Acquired Client Relationships (Net) Definite-lived Indefinite-lived Total Gross Book Value Accumulated Amortization Net Book Value Net Book Value Net Book Value Balance, as of December 31, 2015 $ 1,301.8 $ (680.4 ) $ 621.4 $ 1,065.0 $ 1,686.4 Intangible amortization and impairments — (107.7 ) (107.7 ) (2.5 ) (110.2 ) Foreign currency translation (11.8 ) — (11.8 ) (67.0 ) (78.8 ) Balance, as of December 31, 2016 $ 1,290.0 $ (788.1 ) $ 501.9 $ 995.5 $ 1,497.4 Intangible amortization and impairments — (86.4 ) (86.4 ) — (86.4 ) Foreign currency translation 5.5 — 5.5 33.2 38.7 Balance, as of December 31, 2017 $ 1,295.5 $ (874.5 ) $ 421.0 $ 1,028.7 $ 1,449.7 |
Equity Method Investments in 44
Equity Method Investments in Affiliates (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Aggregate Purchase Price Allocation for Investments | The purchase price allocation for the 2016 investments was as follows: Total Definite-lived acquired client relationships (1) $ 560.8 Indefinite-lived acquired client relationships 36.9 Tangible assets 2.0 Deferred tax liability (91.8 ) Goodwill 854.4 Consideration paid $ 1,362.3 __________________________ (1) The expected period of economic benefit utilized in the purchase price allocation for these definite-lived acquired client relationships was 15 years. |
Schedule of Changes in Equity Method Investments in Affiliates | The following table presents the change in Equity method investments in Affiliates: 2016 2017 Balance, January 1, $ 1,937.1 3,368.3 Equity method earnings 388.0 501.4 Equity method intangible amortization and impairments (59.2 ) (199.2 ) Distributions of earnings from equity method investments (346.4 ) (429.8 ) Investments 1,361.3 29.8 Foreign currency translation 8.0 62.3 Other (1) 79.5 (28.1 ) Balance, December 31, $ 3,368.3 $ 3,304.7 __________________________ (1) Primarily reflects deferred income taxes recorded on new investments. The following table presents summarized financial information for Affiliates accounted for under the equity method: For the Years Ended December 31, 2015 (2) 2016 (2) 2017 Revenue (1) $ 2,217.1 $ 2,200.9 $ 3,126.3 Net income (1) 431.5 1,068.9 2,182.7 December 31, 2016 2017 Assets $ 1,915.3 $ 3,324.9 Liabilities and Non-controlling interests 862.4 1,405.5 __________________________ (1) Revenue and the associated Net income include asset and performance based fees and the impact of consolidated investment products. (2) Revenue and Net income reflect investments in new Affiliates for the full-year, regardless of the date of the Company’s investment. |
Schedule of Financial Information for Affiliates Accounted for Under the Equity Method | The following table presents the change in Equity method investments in Affiliates: 2016 2017 Balance, January 1, $ 1,937.1 3,368.3 Equity method earnings 388.0 501.4 Equity method intangible amortization and impairments (59.2 ) (199.2 ) Distributions of earnings from equity method investments (346.4 ) (429.8 ) Investments 1,361.3 29.8 Foreign currency translation 8.0 62.3 Other (1) 79.5 (28.1 ) Balance, December 31, $ 3,368.3 $ 3,304.7 __________________________ (1) Primarily reflects deferred income taxes recorded on new investments. The following table presents summarized financial information for Affiliates accounted for under the equity method: For the Years Ended December 31, 2015 (2) 2016 (2) 2017 Revenue (1) $ 2,217.1 $ 2,200.9 $ 3,126.3 Net income (1) 431.5 1,068.9 2,182.7 December 31, 2016 2017 Assets $ 1,915.3 $ 3,324.9 Liabilities and Non-controlling interests 862.4 1,405.5 __________________________ (1) Revenue and the associated Net income include asset and performance based fees and the impact of consolidated investment products. (2) Revenue and Net income reflect investments in new Affiliates for the full-year, regardless of the date of the Company’s investment. |
Fixed Assets and Lease Commit45
Fixed Assets and Lease Commitments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fixed Assets and Lease Commitments [Abstract] | |
Schedule of Fixed Assets | Fixed assets consisted of the following: December 31, 2016 2017 Building and leasehold improvements $ 103.5 $ 111.9 Software 52.5 50.8 Equipment 39.5 44.5 Furniture and fixtures 20.8 21.4 Land, improvements and other 17.9 18.7 Fixed assets, at cost 234.2 247.3 Accumulated depreciation and amortization (124.1 ) (136.3 ) Fixed assets, net $ 110.1 $ 111.0 |
Schedule of Aggregate Future Minimum Payments for Operating Leases | At December 31, 2017 , the Company’s aggregate future minimum payments for operating leases having initial or non-cancelable lease terms greater than one year were payable as follows: Year Required Minimum Payments 2018 $ 37.0 2019 33.9 2020 35.3 2021 33.6 2022 26.6 Thereafter 89.9 |
Payables and Accrued Liabilit46
Payables and Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Payables and accrued liabilities consisted of the following: December 31, 2016 2017 Accrued compensation $ 418.5 $ 472.5 Unsettled fund share payables 83.2 103.1 Accrued income taxes 87.7 93.0 Accrued share repurchases — 23.1 Accrued professional fees 26.1 22.5 Other 113.8 93.0 Payables and accrued liabilities $ 729.3 $ 807.2 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Recent Share Repurchase Activity | The following is a summary of the Company’s share repurchase activity for the years ended December 31, 2015, 2016 and 2017: Year Shares Repurchased Average Price 2015 1.7 $ 209.39 2016 0.2 161.16 2017 2.4 173.19 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Recent Share-Based Compensation Expense | The following is a summary of share-based compensation expense for the years ended December 31, 2015, 2016 and 2017: Year Share-Based Compensation Expense Tax Benefit 2015 $ 34.2 $ 13.2 2016 39.2 15.1 2017 40.4 13.6 |
Schedule of Transactions of the Company's Stock Options | The following table summarizes the transactions of the Company’s stock options: Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Unexercised options outstanding—January 1, 2017 1.4 $ 108.53 Options granted 0.0 168.60 Options exercised (0.7 ) 97.54 Options forfeited (0.1 ) 140.26 Unexercised options outstanding—December 31, 2017 0.6 122.04 3.9 Exercisable at December 31, 2017 0.2 115.74 1.7 |
Schedule of Assumptions Used to Determine Fair Value of Options Granted | The fair value of options granted was estimated using the Black-Scholes option pricing model. The weighted average fair value of options granted during the years ended December 31, 2015 , 2016 and 2017 was $54.92 , $39.02 and $48.05 , per option, respectively, based on the weighted-average grant date assumptions stated below. For the Years Ended December 31, 2015 2016 2017 Dividend yield 0.0 % 0.0 % 0.5 % Expected volatility (1) 26.7 % 30.7 % 28.0 % Risk-free interest rate (2) 1.5 % 1.6 % 2.1 % Expected life of options (in years) (3) 5.0 5.7 5.7 Forfeiture rate 0.0 % 0.0 % 0.0 % __________________________ (1) Expected volatility is based on historical and implied volatility. (2) Risk-free interest rate is based on the U.S. Treasury yield curve in effect at the date of grant. (3) Expected life of options (in years) is based on the Company’s historical and expected exercise behavior. |
Schedule of Transactions of the Company's Restricted Stock | The following table summarizes the transactions of the Company’s restricted stock: Restricted Stock Weighted Average Grant Date Value Unvested units—January 1, 2017 0.6 $ 168.84 Units granted 0.2 152.99 Units vested (0.4 ) 166.22 Units forfeited (0.0 ) 170.39 Unvested units—December 31, 2017 0.4 162.32 |
Redeemable Non-Controlling In49
Redeemable Non-Controlling Interests (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Noncontrolling Interest [Abstract] | |
Schedule of Changes in Redeemable Non-Controlling Interests | The following table presents the changes in Redeemable non-controlling interests: December 31, 2016 2017 Balance, as of January 1, $ 612.5 $ 673.5 Changes attributable to consolidated products 16.1 12.4 Transfers to Other liabilities (69.1 ) (192.3 ) Transfers from non-controlling interests 42.6 76.8 Changes in redemption value 71.4 241.5 Balance, as of December 31, $ 673.5 $ 811.9 |
Affiliate Equity (Tables)
Affiliate Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Affiliate Equity | |
Schedule of Affiliate Equity Expense | The following is a summary of Affiliate equity expense: For the Years Ended December 31, 2015 2016 2017 Controlling interest $ 16.9 $ 10.0 $ 13.2 Non-controlling interest 51.6 31.2 36.8 Total $ 68.5 $ 41.2 $ 50.0 |
Schedule of Affiliate Equity Unrecognized Expense | The following is a summary of unrecognized Affiliate equity expense for the years ended December 31, 2015, 2016 and 2017: Unrecognized Affiliate Equity Expense Year Controlling Interest Remaining Life Non-Controlling Interest Remaining Life 2015 $ 22.4 3 years $ 51.9 5 years 2016 31.3 4 years 70.7 5 years 2017 33.3 5 years 95.9 6 years |
Schedule of the Effect of Changes in the Company's Ownership Interest in its Affiliates on the Controlling Interest's Equity | While the Company presents the current redemption value of Affiliate equity within Redeemable non-controlling interests with changes in the current redemption value increasing or decreasing the controlling interest’s equity over time, the following table discloses the cumulative effect that ownership changes had on the controlling interest’s equity related only to Affiliate equity transactions that settled during the periods: For the Years Ended December 31, 2015 2016 2017 Net income (controlling interest) $ 509.5 $ 472.8 $ 689.5 Increase / (decrease) in controlling interest paid-in capital from purchases and sales of Affiliate equity issuances 0.9 1.6 (1.0 ) Decrease in controlling interest paid-in capital related to Affiliate equity repurchases (87.6 ) (38.0 ) (116.2 ) Net income attributable to controlling interest and transfers from non-controlling interests $ 422.8 $ 436.4 $ 572.3 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Provision Attributable to Controlling and Non-Controlling Interests | The following table presents our consolidated provision for income taxes: For the Years Ended December 31, 2015 2016 2017 Controlling interests: Current tax $ 152.4 $ 168.1 $ 173.8 Intangible-related deferred taxes 77.7 84.3 (98.5 ) Other deferred taxes 27.7 (23.2 ) (24.9 ) Total controlling interests 257.8 229.2 50.4 Non-controlling interests: Current tax $ 9.8 $ 8.2 $ 8.2 Deferred taxes (4.2 ) (1.8 ) (0.2 ) Total non-controlling interests 5.6 6.4 8.0 Provision for income taxes $ 263.4 $ 235.6 $ 58.4 Income before income taxes (controlling interest) $ 767.3 $ 702.0 $ 739.9 Effective tax rate attributable to controlling interests (1) 33.6 % 32.6 % 6.8 % __________________________ (1) Taxes attributable to the controlling interest divided by Income before income taxes (controlling interest). |
Schedule of Consolidated Provision for Income Taxes | The consolidated provision for income taxes consisted of the following: For the Years Ended December 31, 2015 2016 2017 Current: Federal $ 106.3 $ 103.4 $ 109.0 State 18.3 22.9 18.9 Foreign 37.6 50.0 54.1 Total current 162.2 176.3 182.0 Deferred: Federal 103.8 62.3 (124.9 ) State 14.8 10.0 10.4 Foreign (17.4 ) (13.0 ) (9.1 ) Total deferred 101.2 59.3 (123.6 ) Provision for income taxes $ 263.4 $ 235.6 $ 58.4 |
Schedule of Components of Income before Income Taxes | For financial reporting purposes, Income before income taxes consisted of the following: For the Years Ended December 31, 2015 2016 2017 Domestic $ 827.6 $ 688.1 $ 756.5 International 263.0 286.5 310.6 $ 1,090.6 $ 974.6 $ 1,067.1 |
Schedule of Effective Income Tax Rate Computed Using Income before Income Taxes and Applying U.S. Federal Income Tax Rate | The following table reconciles the U.S. federal statutory tax rate to the Company’s effective tax rate: For the Years Ended December 31, 2015 2016 2017 Statutory U.S. federal tax rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal benefit 2.6 2.9 2.7 Effect of foreign operations (3.5 ) (4.6 ) (5.4 ) Equity compensation 0.8 (0.4 ) (0.7 ) Effect of changes in tax law, rates (0.8 ) (0.3 ) (25.2 ) Other (0.5 ) — 0.4 Effective tax rate (controlling interest) 33.6 % 32.6 % 6.8 % Effect of income from non-controlling interests (9.2 ) (8.4 ) (1.3 ) Effective tax rate 24.4 % 24.2 % 5.5 % |
Schedule of Components of Deferred Tax Assets and Liabilities | The significant components of the Company’s Deferred income tax liability (net) are as follows: December 31, 2016 2017 Deferred Tax Assets State net operating loss carryforwards $ 17.4 $ 16.8 Foreign loss carryforwards 14.6 16.3 Tax benefit of uncertain tax positions 12.1 11.4 Deferred compensation 34.1 10.4 Foreign tax credits 10.0 — Accrued expenses 3.9 1.3 Total deferred tax assets 92.1 56.2 Valuation allowance (22.1 ) (24.1 ) Deferred tax assets, net of valuation allowance $ 70.0 $ 32.1 Deferred Tax Liabilities Intangible asset amortization $ (396.8 ) $ (258.6 ) Non-deductible intangible amortization (177.0 ) (150.8 ) Convertible securities interest (109.0 ) (77.9 ) Deferred income (47.2 ) (5.9 ) Other (0.8 ) (6.3 ) Total deferred tax liabilities (730.8 ) (499.5 ) Deferred income tax liability (net) $ (660.8 ) $ (467.4 ) |
Schedule of Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of the changes in unrecognized tax benefits is as follows: For the Years Ended December 31, 2015 2016 2017 Balance, as of January 1, $ 28.8 $ 26.9 $ 26.8 Additions based on current year tax positions 2.2 3.8 6.0 Additions based on prior years’ tax positions 1.6 0.6 1.5 Reductions related to lapses of statutes of limitations (4.3 ) (4.7 ) (2.3 ) Additions (reductions) related to foreign exchange rates (1.4 ) 0.2 0.4 Balance, as of December 31, $ 26.9 $ 26.8 $ 32.4 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of the Numerator and Denominator used in the Calculation of Basic and Diluted Earnings per Share | The following is a reconciliation of the numerator and denominator used in the calculation of basic and diluted earnings per share available to common stockholders: For the Years Ended December 31, 2015 2016 2017 Numerator Net income (controlling interest) $ 509.5 $ 472.8 $ 689.5 Interest expense on convertible securities, net of taxes 15.3 15.5 15.5 Net income (controlling interest), as adjusted $ 524.8 $ 488.3 $ 705.0 Denominator Average shares outstanding (basic) 54.3 54.2 56.0 Effect of dilutive instruments: Stock options and restricted stock units 0.7 0.6 0.4 Junior convertible securities 2.2 2.2 2.2 Average shares outstanding (diluted) 57.2 57.0 58.6 |
Schedule of Diluted Earnings per Share Calculations, Excluding the Anti-dilutive Effect of Shares | Average shares outstanding (diluted) in the table above exclude share awards that have not satisfied performance conditions and the anti-dilutive effect of the following shares: For the Years Ended December 31, 2015 2016 2017 Stock options and restricted stock units 0.0 0.6 0.1 |
Comprehensive Income (Tables)
Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Tax Effects Allocated to each Component of Other Comprehensive Income | The following tables show the tax effects allocated to each component of Other comprehensive income (loss): For the Year Ended December 31, 2015 Pre-Tax Tax Benefit (Expense) Net of Tax Foreign currency translation adjustment $ (93.2 ) $ — $ (93.2 ) Change in net realized and unrealized gain (loss) on derivative securities 2.3 (0.4 ) 1.9 Change in net unrealized gain (loss) on investment securities 34.8 (12.7 ) 22.1 Other comprehensive income (loss) $ (56.1 ) $ (13.1 ) $ (69.2 ) For the Year Ended December 31, 2016 Pre-Tax Tax Benefit (Expense) Net of Tax Foreign currency translation adjustment $ (115.3 ) $ — $ (115.3 ) Change in net realized and unrealized gain (loss) on derivative securities 0.3 (0.2 ) 0.1 Change in net unrealized gain (loss) on investment securities (58.3 ) 23.1 (35.2 ) Other comprehensive income (loss) $ (173.3 ) $ 22.9 $ (150.4 ) For the Year Ended December 31, 2017 Pre-Tax Tax Benefit (Expense) Net of Tax Foreign currency translation adjustment $ 128.0 $ — $ 128.0 Change in net realized and unrealized gain (loss) on derivative securities (0.7 ) (0.1 ) (0.8 ) Change in net unrealized gain (loss) on investment securities (15.0 ) 7.3 (7.7 ) Other comprehensive income (loss) $ 112.3 $ 7.2 $ 119.5 |
Schedule of Components of Accumulated Other Comprehensive Income, Net of Taxes | The components of accumulated other comprehensive income (loss), net of taxes, were as follows: Foreign Currency Translation Adjustment Realized and Unrealized Gains (Losses) on Derivative Securities Unrealized Gains (Losses) on Investment Securities (1) Total Balance, as of December 31, 2015 $ (98.6 ) $ 0.3 $ 45.0 $ (53.3 ) Other comprehensive gain (loss) before reclassifications (115.3 ) (1.0 ) (22.5 ) (138.8 ) Amounts reclassified — 1.1 (12.7 ) (11.6 ) Net other comprehensive gain (loss) (115.3 ) 0.1 (35.2 ) (150.4 ) Balance, as of December 31, 2016 $ (213.9 ) $ 0.4 $ 9.8 $ (203.7 ) Other comprehensive gain (loss) before reclassifications 128.0 (1.6 ) 15.7 142.1 Amounts reclassified — 0.8 (23.4 ) (22.6 ) Net other comprehensive gain (loss) 128.0 (0.8 ) (7.7 ) 119.5 Balance, as of December 31, 2017 $ (85.9 ) $ (0.4 ) $ 2.1 $ (84.2 ) __________________________ (1) See Note 2 for amounts reclassified from Other comprehensive income (loss). |
Selected Quarterly Financial 54
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Results of Operations | The following is a summary of the quarterly results of operations of the Company for the years ended December 31, 2016 and 2017 : 2016 First Quarter Second Quarter Third Quarter Fourth Quarter Revenue $ 545.4 $ 554.1 $ 544.7 $ 550.3 Operating income 246.8 247.0 238.5 301.9 Income before income taxes 230.5 235.9 226.2 281.9 Net income (controlling interest) 104.0 108.3 110.2 150.2 Earnings per share (diluted) $ 1.90 $ 1.98 $ 2.02 $ 2.67 2017 First Quarter Second Quarter Third Quarter Fourth Quarter (1) Revenue $ 544.3 $ 570.9 $ 585.7 $ 604.1 Operating income 262.5 275.9 289.5 280.0 Income before income taxes 253.3 266.9 282.9 264.0 Net income (controlling interest) 122.5 126.3 125.4 315.4 Earnings per share (diluted) $ 2.13 $ 2.22 $ 2.22 $ 5.50 __________________________ (1) In the fourth quarter of 2017, the Company recorded a provisional one-time net benefit from changes in U.S tax laws (see Note 22) and an expense associated with the impairment of one of its Affiliates accounted for under the equity method (see Note 13). |
Segment and Geographic Inform55
Segment and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Revenue and Fixed Assets, net of the Company by Geographic Location | The following table presents Revenue and Fixed assets (net) of the Company by geographic location. Revenue by geographic location is primarily based on the location of an Affiliate. For the Years Ended December 31, 2015 2016 2017 Revenue United States $ 1,657.2 $ 1,477.5 $ 1,571.4 United Kingdom 645.3 566.4 587.3 Other 182.0 150.7 146.3 Total $ 2,484.5 $ 2,194.6 $ 2,305.0 December 31, 2015 2016 2017 Fixed Assets, Net United States $ 98.6 $ 97.3 $ 97.8 United Kingdom 12.3 9.9 11.4 Other 3.2 2.9 1.8 Total $ 114.1 $ 110.1 $ 111.0 |
Business and Summary of Signi56
Business and Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Equipment | Minimum | |
Fixed Assets | |
Estimated useful lives of office equipment, furniture and fixtures | 3 years |
Equipment | Maximum | |
Fixed Assets | |
Estimated useful lives of office equipment, furniture and fixtures | 10 years |
Computer software | Minimum | |
Fixed Assets | |
Estimated useful lives of office equipment, furniture and fixtures | 3 years |
Computer software | Maximum | |
Fixed Assets | |
Estimated useful lives of office equipment, furniture and fixtures | 7 years |
Investments in Marketable Sec57
Investments in Marketable Securities - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cost of investments in marketable securities, gross unrealized gains and losses | ||
Proceeds from sale of investment classified as available-for-sale | $ 82.3 | $ 61.1 |
Realized net gains on available-for-sale securities | 29.2 | 19.2 |
Proceeds from trading securities | 29.9 | 82.8 |
Realized net gains on trading securities | $ 6.6 | $ 1 |
Investments in Marketable Sec58
Investments in Marketable Securities - Summary of the Cost, Gross Unrealized Gains and Losses, and Fair Value of Investments (Details) - Equity Securities - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Available-for-Sale | ||
Cost | $ 18.3 | $ 66.1 |
Unrealized Gains | 2.7 | 17.6 |
Unrealized Losses | (0.4) | (1.8) |
Fair Value | 20.6 | 81.9 |
Trading | ||
Cost | 48.8 | 34.4 |
Unrealized Gains | 10.3 | 6.6 |
Unrealized Losses | (1.9) | (0.5) |
Fair Value | $ 57.2 | $ 40.5 |
Investments in Affiliates and59
Investments in Affiliates and Affiliate Sponsored Investment Products - Affiliate Accounted For Under Equity Method (Details) - Affiliates accounted for under the equity method - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Variable Interest Entity [Line Items] | ||
Unconsolidated VIE Net Assets | $ 1,594.4 | $ 1,047.6 |
Carrying Value and Maximum Exposure to Loss | $ 2,765.7 | $ 2,846.8 |
Investments in Affiliates and60
Investments in Affiliates and Affiliate Sponsored Investment Products - Affiliated Sponsored Investment Products (Details) - Affiliate sponsored investment products - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Variable Interest Entity [Line Items] | ||
Unconsolidated VIE Net Assets | $ 2,154.6 | $ 1,756.6 |
Carrying Value and Maximum Risk of Loss | $ 10.2 | $ 9.4 |
Senior Bank Debt (Details)
Senior Bank Debt (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument | ||
Term loan outstanding | $ 809 | $ 868.6 |
Credit Facility | ||
Debt Instrument | ||
Maximum borrowing capacity | 1,450 | |
Maximum borrowing capacity, additional amount | 350 | |
Line of credit facility amount outstanding | $ 425 | $ 485 |
Weighted average interest rate | 2.76% | 1.88% |
Commitment fee amount | $ 1.5 | $ 1 |
Term Loan Facility | ||
Debt Instrument | ||
Principal Amount at Maturity | 385 | |
Maximum borrowing capacity, additional amount | 65 | |
Term loan outstanding | $ 385 | $ 385 |
Weighted average interest rate on amount outstanding | 2.69% | 1.87% |
Senior Notes - Additional Infor
Senior Notes - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2017USD ($)note | |
Debt Instrument | |
Number of senior notes outstanding | note | 2 |
2022 Senior Notes | |
Debt Instrument | |
Notes redeemed, canceled and retired | $ | $ 200,000,000 |
Stated interest rate | 6.375% |
Redemption price (as percentage) | 100.00% |
Senior Notes - Principal Terms
Senior Notes - Principal Terms of Senior Notes Outstanding (Details) - Senior Notes $ in Millions | Dec. 31, 2017USD ($) | [1] |
2024 Senior Notes | ||
Debt Instrument | ||
Par value (in millions) | $ 400 | |
Stated coupon | 4.25% | |
2025 Senior Notes | ||
Debt Instrument | ||
Par value (in millions) | $ 350 | |
Stated coupon | 3.50% | |
[1] | The senior notes may be redeemed at any time, in whole or in part, at a make-whole redemption price plus accrued and unpaid interest. |
Convertible Securities - Carryi
Convertible Securities - Carrying Value and Principal Amount of Junior Convertible Securities (Details) - Junior convertible securities - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Debt Instrument | |||
Carrying Value | [1] | $ 309.9 | $ 307.5 |
Principal Amount at Maturity | $ 430.8 | $ 430.8 | |
Debt instrument term | 20 years | ||
[1] | The carrying value is accreted to the principal amount at maturity over a remaining life of 20 years. |
Convertible Securities - Additi
Convertible Securities - Additional Information (Details) - Junior Convertible Securities | 12 Months Ended |
Dec. 31, 2017USD ($)trading_day$ / shares | |
Debt Instrument | |
Stated interest rate | 5.15% |
Principal amount at maturity | $ | $ 50 |
Conversion ratio (in shares) | 0.25 |
Conversion price (in usd per share) | $ / shares | $ 200 |
Redemption closing price trigger (in usd per share) | $ / shares | $ 260 |
Number of trading days closing price has exceeded threshold | trading_day | 20 |
Number of consecutive trading days | trading_day | 30 |
Deferred tax liability | $ | $ 7,200,000 |
Forward Equity and Equity Dis66
Forward Equity and Equity Distribution Program (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Class of Stock | ||||
Proceeds from issuance of common stock | $ 41,900,000 | $ 465,800,000 | $ 57,800,000 | |
Common stock, shares outstanding (in shares) | 58,500,000 | 58,500,000 | 55,800,000 | 55,800,000 |
Equity Distribution Program | ||||
Class of Stock | ||||
Stock program, maximum amount authorized | $ 500,000,000 | |||
Proceeds from issuance of common stock | $ 0 | $ 440,300,000 | ||
Maximum number of shares available for sale under agreement (in shares) | 2,900,000 | |||
Common stock price (in dollars per share) | $ 167.25 | |||
Number of common shares issued (in shares) | 2,700,000 | |||
Number of shares net settled for cash (in shares) | 200,000 | |||
Average share price of shares net settled for cash (in dollars per share) | $ 144.59 | |||
Common stock, shares outstanding (in shares) | 0 |
Derivative Financial Instrume67
Derivative Financial Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Market Based Derivative | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Recognized expense on derivative | $ 2.5 | ||
Affiliated Entity | Foreign Currency Forward Contract | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains realized upon settlement of foreign currency forward contracts | $ 1.6 | $ 0.2 | |
Losses realized upon settlement of foreign currency forward contract on Derivative | 2.2 | 1.2 | |
Unrealized gains related to outstanding foreign currency contracts | 0.2 | 0.6 | |
Unrealized losses related to outstanding foreign currency contracts | $ 0.6 | $ 0.5 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Commitments and Contingencies | ||
Co-investment commitments in partnership | $ 98,800,000 | |
Consolidated Affiliates | ||
Commitments and Contingencies | ||
Other commitments | 18,200,000 | |
Other commitment, expected payments | 10,200,000 | |
Other commitments, present value of expected payments | 9,400,000 | |
Consolidated Affiliates | Scenario, Forecast | ||
Commitments and Contingencies | ||
Other commitment, expected payments | $ 8,200,000 | |
Equity Method Investee | ||
Commitments and Contingencies | ||
Other commitments | $ 170,000,000 | |
Equity Method Investee | Scenario, Forecast | ||
Commitments and Contingencies | ||
Other commitment, expected payments | $ 0 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis (Details) - Fair Value Measured on a Recurring Basis - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | |
Financial Assets | |||
Cash equivalents | $ 40.4 | $ 64.1 | |
Investments in marketable securities | |||
Trading | [1] | 57.2 | 40.5 |
Available-for-sale securities | [1] | 20.6 | 81.9 |
Other investments | 3.4 | ||
Foreign currency forward contracts | [2] | 0.2 | 0.6 |
Financial Liabilities | |||
Contingent payment arrangements | [2] | 9.4 | 8.6 |
Affiliate equity obligations | [2] | 49.2 | 12.1 |
Foreign currency forward contracts | [2] | 0.6 | 0.5 |
Level 1 | |||
Financial Assets | |||
Cash equivalents | 40.4 | 64.1 | |
Investments in marketable securities | |||
Trading | [1] | 57.2 | 40.5 |
Available-for-sale securities | [1] | 20.6 | 81.9 |
Other investments | 3.4 | ||
Foreign currency forward contracts | [2] | 0 | 0 |
Financial Liabilities | |||
Contingent payment arrangements | [2] | 0 | 0 |
Affiliate equity obligations | [2] | 0 | 0 |
Foreign currency forward contracts | [2] | 0 | 0 |
Level 2 | |||
Financial Assets | |||
Cash equivalents | 0 | 0 | |
Investments in marketable securities | |||
Trading | [1] | 0 | 0 |
Available-for-sale securities | [1] | 0 | 0 |
Other investments | 0 | ||
Foreign currency forward contracts | [2] | 0.2 | 0.6 |
Financial Liabilities | |||
Contingent payment arrangements | [2] | 0 | 0 |
Affiliate equity obligations | [2] | 0 | 0 |
Foreign currency forward contracts | [2] | 0.6 | 0.5 |
Level 3 | |||
Financial Assets | |||
Cash equivalents | 0 | 0 | |
Investments in marketable securities | |||
Trading | [1] | 0 | 0 |
Available-for-sale securities | [1] | 0 | 0 |
Other investments | 0 | ||
Foreign currency forward contracts | [2] | 0 | 0 |
Financial Liabilities | |||
Contingent payment arrangements | [2] | 9.4 | 8.6 |
Affiliate equity obligations | [2] | 49.2 | 12.1 |
Foreign currency forward contracts | [2] | $ 0 | $ 0 |
[1] | Principally investments in equity securities. | ||
[2] | Amounts are presented within Other assets or Other liabilities. |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in Level 3 Financial Assets and Liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
Contingent Payment Arrangements | |||
Changes in level 3 assets and liabilities | |||
Balance, beginning of period | $ 8.6 | $ 10.2 | |
Net realized and unrealized (gains) losses(1) | [1] | 7.6 | (1.6) |
Purchases and issuances(2) | [2] | 0 | 0 |
Settlements and reductions | (6.8) | 0 | |
Balance, end of period | 9.4 | 8.6 | |
Net change in unrealized (gains) losses relating to instruments still held at the reporting date | 2.8 | (1.6) | |
Affiliate Equity Obligations | |||
Changes in level 3 assets and liabilities | |||
Balance, beginning of period | 12.1 | 62.3 | |
Net realized and unrealized (gains) losses(1) | [1] | 5.5 | 3.1 |
Purchases and issuances(2) | [2] | 206.1 | 69.1 |
Settlements and reductions | (174.5) | (122.4) | |
Balance, end of period | 49.2 | 12.1 | |
Net change in unrealized (gains) losses relating to instruments still held at the reporting date | $ 0 | $ 0 | |
[1] | Accretion and changes in the expected value of the Company’s contingent payment arrangements and Affiliate equity obligations are recorded in Imputed interest expense and contingent payment arrangements. | ||
[2] | Includes transfers from Redeemable non-controlling interests and other activity. |
Fair Value Measurements - Quant
Fair Value Measurements - Quantitative Information About Level 3 (Details) - Discounted cash flow - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Contingent payment arrangements | ||
Quantitative information for Level 3 Fair Value Measurements Liabilities | ||
Fair value liabilities | $ 9.4 | $ 8.6 |
Contingent payment arrangements | Minimum | ||
Quantitative information for Level 3 Fair Value Measurements Liabilities | ||
Growth rates | 7.00% | 3.00% |
Discount rates | 15.00% | 14.00% |
Contingent payment arrangements | Maximum | ||
Quantitative information for Level 3 Fair Value Measurements Liabilities | ||
Growth rates | 8.00% | 8.00% |
Discount rates | 16.00% | 15.00% |
Affiliate equity obligations | ||
Quantitative information for Level 3 Fair Value Measurements Liabilities | ||
Fair value liabilities | $ 49.2 | $ 12.1 |
Affiliate equity obligations | Minimum | ||
Quantitative information for Level 3 Fair Value Measurements Liabilities | ||
Growth rates | 0.00% | 4.00% |
Discount rates | 12.00% | 15.00% |
Affiliate equity obligations | Maximum | ||
Quantitative information for Level 3 Fair Value Measurements Liabilities | ||
Growth rates | 11.00% | 10.00% |
Discount rates | 16.00% | 16.00% |
Fair Value Measurements - Natur
Fair Value Measurements - Nature of Investments and Related Liquidity (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | ||
NAV of investments at fair value | |||
Life of funds (in years) | 15 years | ||
Private equity | |||
NAV of investments at fair value | |||
Fair Value | [1] | $ 156.1 | $ 137.8 |
Unfunded Commitments | [1] | 98.8 | 92.2 |
Other funds | |||
NAV of investments at fair value | |||
Fair Value | [2] | 8.9 | 9.7 |
Unfunded Commitments | [2] | 0 | 0 |
Other investments | |||
NAV of investments at fair value | |||
Fair Value | [3] | 165 | 147.5 |
Unfunded Commitments | [3] | 98.8 | 92.2 |
Other investments | Parent | |||
NAV of investments at fair value | |||
Fair Value | $ 80.1 | $ 59.9 | |
[1] | 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 $59.9 million and $80.1 million as of December 31, 2016 and 2017, respectively. |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Liabilities not Carried at Fair Value (Details) - Level 2 - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior notes | $ 745.7 | $ 945.1 |
Convertible securities | 309.9 | 307.5 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior notes | 765.2 | 936 |
Convertible securities | $ 549.8 | $ 466.9 |
Goodwill and Acquired Client 74
Goodwill and Acquired Client Relationships - Schedule of Changes in Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Changes in goodwill | ||
Balance, as of January 1, | $ 2,628.1 | $ 2,668.4 |
Foreign currency translation | 34.4 | (40.3) |
Balance, as of December 31, | $ 2,662.5 | $ 2,628.1 |
Goodwill and Acquired Client 75
Goodwill and Acquired Client Relationships - Schedule of Changes in Acquired Client Relationships (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net Book Value | |||
Net book value balance at the beginning of the period | $ 1,497.4 | ||
Intangible amortization and impairments | (86.4) | $ (110.2) | $ (115.4) |
Net book value balance at the end of the period | 1,449.7 | 1,497.4 | |
Acquired Client Relationships (Net) | |||
Definite-lived | |||
Gross book value, balance at the beginning of the period | 1,290 | 1,301.8 | |
Accumulated amortization, balance at the beginning of the period | (788.1) | (680.4) | |
Net book value, balance at the beginning of the period | 501.9 | 621.4 | |
Intangible amortization and impairments | (86.4) | (107.7) | |
Foreign currency translation | 5.5 | (11.8) | |
Gross book value, balance at the end of the period | 1,295.5 | 1,290 | 1,301.8 |
Accumulated amortization, balance at the end of the period | (874.5) | (788.1) | (680.4) |
Net book value, balance at the end of the period | 421 | 501.9 | 621.4 |
Indefinite-lived | |||
Net book value, balance at the beginning of the period | 995.5 | 1,065 | |
Impairment | 0 | (2.5) | |
Foreign currency translation | 33.2 | (67) | |
Net book value, balance at the end of the period | 1,028.7 | 995.5 | 1,065 |
Net Book Value | |||
Net book value balance at the beginning of the period | 1,497.4 | 1,686.4 | |
Intangible amortization and impairments | (86.4) | (110.2) | |
Foreign currency translation | 38.7 | (78.8) | |
Net book value balance at the end of the period | $ 1,449.7 | $ 1,497.4 | $ 1,686.4 |
Goodwill and Acquired Client 76
Goodwill and Acquired Client Relationships - Additional Information (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill | ||||
Goodwill impairment | $ 0 | |||
Definite-lived and indefinite-lived intangibles impairments | $ 0 | |||
Acquired Client Relationships (Net) | ||||
Goodwill | ||||
Intangible amortization expense | 86,400,000 | $ 107,700,000 | $ 115,400,000 | |
Intangible future amortization expense in 2018 | 85,000,000 | |||
Intangible future amortization expense in 2019 | 85,000,000 | |||
Intangible future amortization expense in 2020 | 50,000,000 | |||
Intangible future amortization expense in 2021 | 30,000,000 | |||
Intangible future amortization expense in 2022 | $ 30,000,000 |
Equity Method Investments in 77
Equity Method Investments in Affiliates - Aggregate Purchase Price Allocation (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2015 | ||
Schedule of Equity Method Investments [Line Items] | ||||
Deferred tax liability | $ (660.8) | $ (467.4) | ||
Goodwill | 2,628.1 | 2,662.5 | $ 2,668.4 | |
Acquired Client Relationships (Net) | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Definite-lived acquired client relationships(1) | 501.9 | 421 | 621.4 | |
Indefinite-lived acquired client relationships | 995.5 | $ 1,028.7 | $ 1,065 | |
2016 New Seven Equity Method Investments | Equity Method Investee | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Tangible assets | 2 | |||
Deferred tax liability | (91.8) | |||
Goodwill | 854.4 | |||
Consideration paid | 1,362.3 | |||
2016 New Seven Equity Method Investments | Equity Method Investee | Acquired Client Relationships (Net) | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Definite-lived acquired client relationships(1) | [1] | 560.8 | ||
Indefinite-lived acquired client relationships | $ 36.9 | |||
Expected economic benefit period of acquired client relationship intangibles | 15 years | |||
[1] | The expected period of economic benefit utilized in the purchase price allocation for these definite-lived acquired client relationships was 15 years. |
Equity Method Investments in 78
Equity Method Investments in Affiliates - Additional Information (Details) - USD ($) | 12 Months Ended | |||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||
Schedule of Equity Method Investments [Line Items] | ||||||
Fair value assumptions, average projected growth rate | 10.00% | |||||
Fair value assumptions, discount rate for asset based fees | 14.00% | |||||
Fair value assumptions, discount rate for performance based fees | 25.00% | |||||
Fair value assumptions, market participant tax rate | 25.00% | |||||
Impairment of equity method investment | $ 93,100,000 | |||||
Equity method and cost method impairments | $ 0 | |||||
Revenue of equity method investment affiliate investment | [1] | 3,126,300,000 | 2,200,900,000 | [2] | $ 2,217,100,000 | [2] |
Net income of equity method affiliate investment | [1] | 2,182,700,000 | 1,068,900,000 | [2] | 431,500,000 | [2] |
Acquired Client Relationships (Net) | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Intangible amortization expense | 86,400,000 | 107,700,000 | 115,400,000 | |||
Intangible future amortization expense in 2018 | 85,000,000 | |||||
Intangible future amortization expense in 2019 | 85,000,000 | |||||
Intangible future amortization expense in 2020 | 50,000,000 | |||||
Intangible future amortization expense in 2021 | 30,000,000 | |||||
Intangible future amortization expense in 2022 | 30,000,000 | |||||
Acquired Client Relationships Under Equity Method Investments | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Intangible amortization expense | 106,100,000 | 59,200,000 | $ 34,300,000 | |||
Intangible future amortization expense in 2018 | 120,000,000 | |||||
Intangible future amortization expense in 2019 | 120,000,000 | |||||
Intangible future amortization expense in 2020 | 120,000,000 | |||||
Intangible future amortization expense in 2021 | 120,000,000 | |||||
Intangible future amortization expense in 2022 | 120,000,000 | |||||
Equity Method Investee | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Revenue of equity method investment affiliate investment | 1,317,800,000 | 944,100,000 | ||||
Net income of equity method affiliate investment | 806,600,000 | 529,000,000 | ||||
2016 New Seven Equity Method Investments | Equity Method Investee | Acquired Client Relationships (Net) | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Intangible amortization expense | $ 58,000,000 | $ 17,000,000 | ||||
[1] | Revenue and the associated Net income include asset and performance based fees and the impact of consolidated investment products. | |||||
[2] | Revenue and Net income reflect investments in new Affiliates for the full-year, regardless of the date of the Company’s investment. |
Equity Method Investments in 79
Equity Method Investments in Affiliates - Change in Equity Method Investments in Affiliates (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Change in Equity Method Investments in Affiliates [Roll Forward] | ||||
Balance, January 1, | $ 3,368.3 | $ 1,937.1 | ||
Equity method earnings | 501.4 | 388 | ||
Equity method intangible amortization and impairments | (199.2) | (59.2) | ||
Distributions of earnings from equity method investments | (429.8) | (346.4) | $ (346.1) | |
Investments | 29.8 | 1,361.3 | ||
Foreign currency translation | 62.3 | 8 | ||
Other | [1] | (28.1) | 79.5 | |
Balance, December 31, | $ 3,304.7 | $ 3,368.3 | $ 1,937.1 | |
[1] | Primarily reflects deferred income taxes recorded on new investments. |
Equity Method Investments in 80
Equity Method Investments in Affiliates - Financial Information for Affiliates Accounted for Under the Equity Method (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | [2] | |||
Equity Method Investments and Joint Ventures [Abstract] | ||||||
Revenue1 | [1] | $ 3,126.3 | $ 2,200.9 | [2] | $ 2,217.1 | |
Net income(1) | [1] | 2,182.7 | 1,068.9 | [2] | $ 431.5 | |
Assets | 3,324.9 | 1,915.3 | ||||
Liabilities and Non-controlling interests | 1,405.5 | $ 862.4 | ||||
Undistributed earnings from equity method affiliates | $ 192.5 | |||||
[1] | Revenue and the associated Net income include asset and performance based fees and the impact of consolidated investment products. | |||||
[2] | Revenue and Net income reflect investments in new Affiliates for the full-year, regardless of the date of the Company’s investment. |
Fixed Assets and Lease Commit81
Fixed Assets and Lease Commitments (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Fixed assets | |||
Fixed assets, at cost | $ 247.3 | $ 234.2 | |
Accumulated depreciation and amortization | (136.3) | (124.1) | |
Fixed assets, net | 111 | 110.1 | $ 114.1 |
Building and leasehold improvements | |||
Fixed assets | |||
Fixed assets, at cost | 111.9 | 103.5 | |
Software | |||
Fixed assets | |||
Fixed assets, at cost | 50.8 | 52.5 | |
Equipment | |||
Fixed assets | |||
Fixed assets, at cost | 44.5 | 39.5 | |
Furniture and fixtures | |||
Fixed assets | |||
Fixed assets, at cost | 21.4 | 20.8 | |
Land, improvements and other | |||
Fixed assets | |||
Fixed assets, at cost | $ 18.7 | $ 17.9 |
Fixed Assets and Lease Commit82
Fixed Assets and Lease Commitments - Aggregate Future Minimum Payments for Operating Leases and Rent Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Fixed Assets and Lease Commitments [Abstract] | |||
2,018 | $ 37 | ||
2,019 | 33.9 | ||
2,020 | 35.3 | ||
2,021 | 33.6 | ||
2,022 | 26.6 | ||
Thereafter | 89.9 | ||
Consolidated rent expense | $ 37.5 | $ 35.5 | $ 36.3 |
Payables and Accrued Liabilit83
Payables and Accrued Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Accrued compensation | $ 472.5 | $ 418.5 |
Unsettled fund share payables | 103.1 | 83.2 |
Accrued income taxes | 93 | 87.7 |
Accrued share repurchases | 23.1 | 0 |
Accrued professional fees | 22.5 | 26.1 |
Other | 93 | 113.8 |
Payables and accrued liabilities | $ 807.2 | $ 729.3 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transactions | |||
Imputed interest (gains) expenses of contingent payment arrangements | $ (15,500,000) | $ (3,900,000) | $ 40,300,000 |
Prior Owner | Non- controlling Interests | |||
Related Party Transactions | |||
Investment partnerships with prior owners | 2,500,000 | ||
Prior Owner | Other Liabilities | |||
Related Party Transactions | |||
Investment partnerships with prior owners | 61,200,000 | 67,800,000 | |
Affiliated Entity | |||
Related Party Transactions | |||
Imputed interest (gains) expenses of contingent payment arrangements | 6,600,000 | (2,800,000) | |
Affiliated Entity | Other Liabilities | |||
Related Party Transactions | |||
Contingent liabilities arrangements to related parties | 9,400,000 | 8,600,000 | |
Payments associated with contingent liabilities arrangements to related parties | $ 6,800,000 | $ 0 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - $ / shares | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 31, 2017 | May 31, 2015 | |
Stockholders' equity | |||||
Common stock, shares authorized (in shares) | 153,000,000 | 153,000,000 | |||
Common Stock | |||||
Share repurchase activity | |||||
Shares repurchased (in shares) | 2,400,000 | 200,000 | 1,700,000 | ||
Average price (in usd per share) | $ 173.19 | $ 161.16 | $ 209.39 | ||
Common Stock | January 2017 Plan | |||||
Stockholders' equity | |||||
Stock repurchase program, number of shares authorized (in shares) | 1,900,000 | ||||
Share repurchase activity | |||||
Stock repurchase plan, number of remaining shares to be repurchased (in shares) | 1,600,000 | ||||
Common Stock | May 2015 Plan | |||||
Stockholders' equity | |||||
Stock repurchase program, number of shares authorized (in shares) | 3,000,000 | ||||
Share repurchase activity | |||||
Stock repurchase plan, number of remaining shares to be repurchased (in shares) | 0 | ||||
Voting Common Stock | |||||
Stockholders' equity | |||||
Common stock, shares authorized (in shares) | 150,000,000 | ||||
Class B Non-Voting Common Stock | |||||
Stockholders' equity | |||||
Common stock, shares authorized (in shares) | 3,000,000 | ||||
Preferred Stock | |||||
Share repurchase activity | |||||
Preferred stock, shares authorized (in shares) | 5,000,000 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Total fair value of share-based compensation awards vested | $ 59.4 | $ 20.7 | $ 27.4 |
Excess tax benefit recognized from share-based incentive plans | 10.9 | 5.1 | |
Total compensation cost not yet recognized | $ 63.5 | $ 66.4 | |
Weighted average period for recognition (in years) | 2 years |
Share-Based Compensation - Shar
Share-Based Compensation - Share-Based Compensation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Share-Based Compensation Expense | $ 40.4 | $ 39.2 | $ 34.2 |
Tax Benefit | $ 13.6 | $ 15.1 | $ 13.2 |
Share-Based Compensation - Tran
Share-Based Compensation - Transactions of the Company's Stock Options (Details) shares in Millions | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Stock Options | |
Stock options outstanding at the beginning of the period (in shares) | shares | 1.4 |
Options granted (in shares) | shares | 0 |
Options exercised (in shares) | shares | (0.7) |
Options forfeited (in shares) | shares | (0.1) |
Stock options outstanding at the end of the period (in shares) | shares | 0.6 |
Exercisable stock options, at the end of the period (in shares) | shares | 0.2 |
Weighted Average Exercise Price | |
Stock options outstanding, at the beginning of the period (in usd per share) | $ / shares | $ 108.53 |
Options granted (in usd per share) | $ / shares | 168.60 |
Options exercised (in usd per share) | $ / shares | 97.54 |
Options forfeited (in usd per share) | $ / shares | 140.26 |
Stock options outstanding, at the end of the period (in usd per share) | $ / shares | 122.04 |
Exercisable stock options, at the end of the period (in usd per share) | $ / shares | $ 115.74 |
Weighted Average Remaining Contractual Life (years) | |
Stock options outstanding, at the end of the period (in years) | 3 years 10 months 24 days |
Exercisable stock options, at the end of the period (in years) | 1 year 8 months 12 days |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Options Narrative (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Fair value of stock options granted | $ 0.8 | $ 16.4 | $ 1 |
Total intrinsic value of options exercised | 50.8 | 27.7 | $ 130.2 |
Cash received for options exercised | 41.9 | $ 25.6 | |
Intrinsic value of exercisable options outstanding | $ 20.1 | ||
Weighted average fair value of options granted (in usd per share) | $ 48.05 | $ 39.02 | $ 54.92 |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Options available for future grant under the Company's option plans (in shares) | 3.1 | ||
Stock Options | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Vesting period of options | 3 years | ||
Expiration period of options | 7 years | ||
Stock Options | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Vesting period of options | 4 years |
Share-Based Compensation - Assu
Share-Based Compensation - Assumptions Used to Determine Fair Value of Options Granted (Details) - Stock Options | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Assumptions used to determine fair value of options granted | ||||
Dividend yield | 0.50% | 0.00% | 0.00% | |
Expected volatility | [1] | 28.00% | 30.70% | 26.70% |
Risk-free interest rate | [2] | 2.10% | 1.60% | 1.50% |
Expected life of options (in years) | [3] | 5 years 8 months 12 days | 5 years 8 months 12 days | 5 years |
Forfeiture rate | 0.00% | 0.00% | 0.00% | |
[1] | Expected volatility is based on historical and implied volatility. | |||
[2] | Risk-free interest rate is based on the U.S. Treasury yield curve in effect at the date of grant. | |||
[3] | Expected life of options (in years) is based on the Company’s historical and expected exercise behavior. |
Share-Based Compensation - Tr91
Share-Based Compensation - Transactions of the Company's Restricted Stock (Details) - Restricted Stock shares in Millions | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Restricted Stock | |
Units outstanding at the beginning of the period (in shares) | shares | 0.6 |
Units granted (in shares) | shares | 0.2 |
Units vested (in shares) | shares | (0.4) |
Units forfeited (in shares) | shares | 0 |
Units outstanding at the end of the period (in shares) | shares | 0.4 |
Weighted Average Grant Date Value | |
Units outstanding at the beginning of the period (in usd per share) | $ / shares | $ 168.84 |
Units granted (in usd per share) | $ / shares | 152.99 |
Units vested (in usd per share) | $ / shares | 166.22 |
Units forfeited (in usd per share) | $ / shares | 170.39 |
Units outstanding at the end of the period (in usd per share) | $ / shares | $ 162.32 |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Stock Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Fair value of restricted stocks granted | $ 59.4 | $ 20.7 | $ 27.4 |
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Fair value of restricted stocks granted | $ 36.9 | $ 28 | $ 50.7 |
Restricted stocks available for future grant under the Company's option plans (in shares) | 1,100,000 | ||
Restricted Stock | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Vesting period of restricted stocks | 3 years | ||
Restricted Stock | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Vesting period of restricted stocks | 4 years |
Redeemable Non-Controlling In93
Redeemable Non-Controlling Interests (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Changes in redeemable non-controlling interests during the period | |||
Balance, as of January 1, | $ 673.5 | $ 612.5 | |
Changes attributable to consolidated products | 12.4 | 16.1 | |
Transfers to Other liabilities | (192.3) | (69.1) | |
Transfers from non-controlling interests | 76.8 | 42.6 | |
Changes in redemption value | 241.5 | 71.4 | $ 81.6 |
Balance, as of December 31, | $ 811.9 | $ 673.5 | $ 612.5 |
Minimum | |||
Noncontrolling Interest [Line Items] | |||
Term of conditional right put interest | 5 years | ||
Maximum | |||
Noncontrolling Interest [Line Items] | |||
Term of conditional right put interest | 15 years |
Affiliate Equity - Additional I
Affiliate Equity - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Affiliate Equity | |||
Distributions paid to affiliate partners | $ 352.2 | $ 354.1 | $ 431.4 |
Payments to acquire interest in affiliates | 174.7 | 115.8 | 130.8 |
Issuance of interest in affiliates | 9 | 11.8 | $ 6.1 |
Other Assets | |||
Affiliate Equity | |||
Due from affiliates | 12.4 | 22.9 | |
Other Liabilities | |||
Affiliate Equity | |||
Due to affiliates | $ 49.2 | $ 12.1 | |
Minimum | |||
Affiliate Equity | |||
Affiliate equity, conditional right to put interest, period | 5 years | ||
Maximum | |||
Affiliate Equity | |||
Affiliate equity, conditional right to put interest, period | 15 years |
Affiliate Equity - Recognized a
Affiliate Equity - Recognized and Unrecognized Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Affiliate Equity Expense | |||
Non-controlling interest | $ 36.8 | $ 31.2 | $ 51.6 |
Total | 50 | 41.2 | 68.5 |
Non- controlling Interests | |||
Affiliate Equity Expense | |||
Total | $ 36.8 | $ 31.2 | $ 51.6 |
Unrecognized Affiliate Equity Expense | |||
Remaining Life | 6 years | 5 years | 5 years |
Non-Controlling Interest | $ 95.9 | $ 70.7 | $ 51.9 |
Controlling Interest | |||
Affiliate Equity Expense | |||
Controlling interest | 13.2 | 10 | 16.9 |
Unrecognized Affiliate Equity Expense | |||
Controlling Interest | $ 33.3 | $ 31.3 | $ 22.4 |
Remaining Life | 5 years | 4 years | 3 years |
Affiliate Equity - Effect of Ch
Affiliate Equity - Effect of Changes in the Company's Ownership Interest in its Affiliates on the Controlling Interest's Equity (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2017 | [1] | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Affiliate Equity [Abstract] | ||||||||||||
Net income (controlling interest) | $ 315.4 | $ 125.4 | $ 126.3 | $ 122.5 | $ 150.2 | $ 110.2 | $ 108.3 | $ 104 | $ 689.5 | $ 472.8 | $ 509.5 | |
Increase / (decrease) in controlling interest paid-in capital from purchases and sales of Affiliate equity issuances | (1) | 1.6 | 0.9 | |||||||||
Decrease in controlling interest paid-in capital related to Affiliate equity repurchases | (116.2) | (38) | (87.6) | |||||||||
Net income attributable to controlling interest and transfers from non-controlling interests | $ 572.3 | $ 436.4 | $ 422.8 | |||||||||
[1] | In the fourth quarter of 2017, the Company recorded a provisional one-time net benefit from changes in U.S tax laws (see Note 22) and an expense associated with the impairment of one of its Affiliates accounted for under the equity method (see Note 13). |
Benefit Plans Benefit Plans (De
Benefit Plans Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Expenses related to qualified defined contribution plans | $ 20.1 | $ 18.9 | $ 18.7 |
Non- controlling Interests | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Expenses related to qualified defined contribution plans | $ 3.9 | $ 3.7 | $ 3.1 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Loss Carryforwards [Line Items] | |||
Provisional one-time net benefit from changes in U.S. tax laws | $ 194.1 | ||
Net income tax benefit resulting from re-measurement of Company's deferred tax assets and liabilities | 216.9 | ||
Provisional amount for repatriation tax liability | $ 22.8 | ||
State net operating loss carryforwards, expiration period | 19 years | ||
Foreign operating loss carryforwards, expiration period | 20 years | ||
Operating loss carryforwards, valuation allowance | $ 24.1 | $ 22.1 | |
Amount of temporary difference due to repatriation of earnings from sale or liquidation of subsidiary | 270.9 | ||
Unrecognized tax benefits that, if recognized, would affect effective tax rate | 32.4 | 26 | $ 25.3 |
Accrued income tax interest and related charges | 1.7 | 1.4 | $ 1.8 |
State and Local Jurisdiction | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 432.6 | ||
Foreign Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 61.5 | ||
Foreign Tax Authority | Valuation Allowance, Operating Loss Carryforwards | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards, valuation allowance | 24.1 | ||
Increase in valuation allowance, state net operating loss carryforward and realized deferred tax benefit | 2 | $ 1.6 | |
Foreign Tax Authority | Expire over a 20-year period | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | $ 51.8 |
Income Taxes - Income Tax Provi
Income Taxes - Income Tax Provision Attributable to Controlling and Non-Controlling Interests (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Income tax provision | ||||
Current tax | $ 182 | $ 176.3 | $ 162.2 | |
Deferred taxes | (123.6) | 59.3 | 101.2 | |
Provision for income taxes | $ 58.4 | $ 235.6 | $ 263.4 | |
Effective tax rate attributable to controlling interests | 6.80% | 32.60% | 33.60% | |
Controlling interests | ||||
Income tax provision | ||||
Current tax | $ 173.8 | $ 168.1 | $ 152.4 | |
Intangible-related deferred taxes | (98.5) | 84.3 | 77.7 | |
Other deferred taxes | (24.9) | (23.2) | 27.7 | |
Provision for income taxes | 50.4 | 229.2 | 257.8 | |
Income before income taxes (controlling interest) | $ 739.9 | $ 702 | $ 767.3 | |
Effective tax rate attributable to controlling interests | [1] | 6.80% | 32.60% | 33.60% |
Non-Controlling Interests | ||||
Income tax provision | ||||
Current tax | $ 8.2 | $ 8.2 | $ 9.8 | |
Deferred taxes | (0.2) | (1.8) | (4.2) | |
Provision for income taxes | $ 8 | $ 6.4 | $ 5.6 | |
[1] | Taxes attributable to the controlling interest divided by Income before income taxes (controlling interest). |
Income Taxes - Consolidated Pro
Income Taxes - Consolidated Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current: | |||
Federal | $ 109 | $ 103.4 | $ 106.3 |
State | 18.9 | 22.9 | 18.3 |
Foreign | 54.1 | 50 | 37.6 |
Total current | 182 | 176.3 | 162.2 |
Deferred: | |||
Federal | (124.9) | 62.3 | 103.8 |
State | 10.4 | 10 | 14.8 |
Foreign | (9.1) | (13) | (17.4) |
Total deferred | (123.6) | 59.3 | 101.2 |
Provision for income taxes | $ 58.4 | $ 235.6 | $ 263.4 |
Income Taxes - Components of In
Income Taxes - Components of Income Before Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 756.5 | $ 688.1 | $ 827.6 |
International | 310.6 | 286.5 | 263 |
Total | $ 1,067.1 | $ 974.6 | $ 1,090.6 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of U.S. Federal Statutory Tax Rate to Company's Effective Tax Rate (Details) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Income tax provision | ||||
Statutory U.S. federal tax rate | 35.00% | 35.00% | 35.00% | |
State income taxes, net of federal benefit | 2.70% | 2.90% | 2.60% | |
Effect of foreign operations | (5.40%) | (4.60%) | (3.50%) | |
Equity compensation | (0.70%) | (0.40%) | 0.80% | |
Effect of changes in tax law, rates | (25.20%) | (0.30%) | (0.80%) | |
Other | 0.40% | 0.00% | (0.50%) | |
Effective tax rate (controlling interest) | 6.80% | 32.60% | 33.60% | |
Non-Controlling Interests | ||||
Income tax provision | ||||
Effect of income from non-controlling interests | (1.30%) | (8.40%) | (9.20%) | |
Controlling interests | ||||
Income tax provision | ||||
Effective tax rate (controlling interest) | [1] | 6.80% | 32.60% | 33.60% |
Effective tax rate | 5.50% | 24.20% | 24.40% | |
[1] | Taxes attributable to the controlling interest divided by Income before income taxes (controlling interest). |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred Tax Assets | ||
State net operating loss carryforwards | $ 16.8 | $ 17.4 |
Foreign loss carryforwards | 16.3 | 14.6 |
Tax benefit of uncertain tax positions | 11.4 | 12.1 |
Deferred compensation | 10.4 | 34.1 |
Foreign tax credits | 0 | 10 |
Accrued expenses | 1.3 | 3.9 |
Total deferred tax assets | 56.2 | 92.1 |
Valuation allowance | (24.1) | (22.1) |
Deferred tax assets, net of valuation allowance | 32.1 | 70 |
Deferred Tax Liabilities | ||
Intangible asset amortization | (258.6) | (396.8) |
Non-deductible intangible amortization | (150.8) | (177) |
Convertible securities interest | (77.9) | (109) |
Deferred income | (5.9) | (47.2) |
Other | (6.3) | (0.8) |
Total deferred tax liabilities | (499.5) | (730.8) |
Deferred income tax liability (net) | $ (467.4) | $ (660.8) |
Income Taxes - Changes in Unrec
Income Taxes - Changes in Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of beginning and ending amount of unrecognized tax benefits | |||
Balance, as of January 1, | $ 26.8 | $ 26.9 | $ 28.8 |
Additions based on current year tax positions | 6 | 3.8 | 2.2 |
Additions based on prior years’ tax positions | 1.5 | 0.6 | 1.6 |
Reductions related to lapses of statutes of limitations | (2.3) | (4.7) | (4.3) |
Additions (reductions) related to foreign exchange rates | 0.4 | 0.2 | (1.4) |
Balance, as of December 31, | $ 32.4 | $ 26.8 | $ 26.9 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation of the Numerator and Denominator used in the Calculation of Basic and Diluted Earnings per Share (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2017 | [1] | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Numerator | ||||||||||||
Net income (controlling interest) | $ 315.4 | $ 125.4 | $ 126.3 | $ 122.5 | $ 150.2 | $ 110.2 | $ 108.3 | $ 104 | $ 689.5 | $ 472.8 | $ 509.5 | |
Interest expense on convertible securities, net of taxes | 15.5 | 15.5 | 15.3 | |||||||||
Net income (controlling interest), as adjusted | $ 705 | $ 488.3 | $ 524.8 | |||||||||
Denominator | ||||||||||||
Average shares outstanding - basic (in shares) | 56 | 54.2 | 54.3 | |||||||||
Effect of dilutive instruments: | ||||||||||||
Stock options and restricted stock units (in shares) | 0.4 | 0.6 | 0.7 | |||||||||
Junior convertible securities (in shares) | 2.2 | 2.2 | 2.2 | |||||||||
Average shares outstanding - diluted (in shares) | 58.6 | 57 | 57.2 | |||||||||
[1] | In the fourth quarter of 2017, the Company recorded a provisional one-time net benefit from changes in U.S tax laws (see Note 22) and an expense associated with the impairment of one of its Affiliates accounted for under the equity method (see Note 13). |
Earnings Per Share - Diluted Ea
Earnings Per Share - Diluted Earnings per Share Calculations Excluding the Anti-dilutive Effect of Shares (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock options and restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0.1 | 0.6 | 0 |
Comprehensive Income - Tax Effe
Comprehensive Income - Tax Effects Allocated to Each Component of Other Comprehensive Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||
Accumulated Other Comprehensive Income (Loss) | |||||
Pre-Tax | $ 112.3 | $ (173.3) | $ (56.1) | ||
Tax Benefit (Expense) | 7.2 | 22.9 | (13.1) | ||
Net of Tax | 119.5 | (150.4) | (69.2) | ||
Foreign currency translation adjustment | |||||
Accumulated Other Comprehensive Income (Loss) | |||||
Pre-Tax | 128 | (115.3) | (93.2) | ||
Tax Benefit (Expense) | 0 | 0 | 0 | ||
Net of Tax | 128 | (115.3) | (93.2) | ||
Change in net realized and unrealized gain (loss) on derivative securities | |||||
Accumulated Other Comprehensive Income (Loss) | |||||
Pre-Tax | (0.7) | 0.3 | 2.3 | ||
Tax Benefit (Expense) | (0.1) | (0.2) | (0.4) | ||
Net of Tax | (0.8) | 0.1 | 1.9 | ||
Change in net unrealized gain (loss) on investment securities | |||||
Accumulated Other Comprehensive Income (Loss) | |||||
Pre-Tax | (15) | (58.3) | 34.8 | ||
Tax Benefit (Expense) | 7.3 | 23.1 | (12.7) | ||
Net of Tax | $ (7.7) | [1] | $ (35.2) | [1] | $ 22.1 |
[1] | See Note 2 for amounts reclassified from Other comprehensive income (loss). |
Comprehensive Income - Componen
Comprehensive Income - Components of Accumulated Other Comprehensive Income, Net of Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||||
Accumulated Other Comprehensive Income (Loss) Net of Tax [Roll Forward] | ||||||
Beginning Balance | $ 4,426.5 | $ 3,769.1 | $ 3,643.2 | |||
Other comprehensive gain (loss) before reclassifications | 142.1 | (138.8) | ||||
Amounts reclassified | (22.6) | (11.6) | ||||
Other comprehensive income (loss) | 119.5 | (150.4) | (69.2) | |||
Ending Balance | 4,578.5 | 4,426.5 | 3,769.1 | |||
Foreign Currency Translation Adjustment | ||||||
Accumulated Other Comprehensive Income (Loss) Net of Tax [Roll Forward] | ||||||
Beginning Balance | (213.9) | (98.6) | ||||
Other comprehensive gain (loss) before reclassifications | 128 | (115.3) | ||||
Amounts reclassified | 0 | 0 | ||||
Other comprehensive income (loss) | 128 | (115.3) | (93.2) | |||
Ending Balance | (85.9) | (213.9) | (98.6) | |||
Realized and Unrealized Gains (Losses) on Derivative Securities | ||||||
Accumulated Other Comprehensive Income (Loss) Net of Tax [Roll Forward] | ||||||
Beginning Balance | 0.4 | 0.3 | ||||
Other comprehensive gain (loss) before reclassifications | (1.6) | (1) | ||||
Amounts reclassified | 0.8 | 1.1 | ||||
Other comprehensive income (loss) | (0.8) | 0.1 | 1.9 | |||
Ending Balance | (0.4) | 0.4 | 0.3 | |||
Change in net unrealized gain (loss) on investment securities | ||||||
Accumulated Other Comprehensive Income (Loss) Net of Tax [Roll Forward] | ||||||
Beginning Balance | [1] | 9.8 | 45 | |||
Other comprehensive gain (loss) before reclassifications | [1] | 15.7 | (22.5) | |||
Amounts reclassified | [1] | (23.4) | (12.7) | |||
Other comprehensive income (loss) | (7.7) | [1] | (35.2) | [1] | 22.1 | |
Ending Balance | [1] | 2.1 | 9.8 | 45 | ||
Total | ||||||
Accumulated Other Comprehensive Income (Loss) Net of Tax [Roll Forward] | ||||||
Beginning Balance | (203.7) | (53.3) | ||||
Ending Balance | $ (84.2) | $ (203.7) | $ (53.3) | |||
[1] | See Note 2 for amounts reclassified from Other comprehensive income (loss). |
Selected Quarterly Financial109
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2017 | [1] | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||
Revenue | $ 604.1 | $ 585.7 | $ 570.9 | $ 544.3 | $ 550.3 | $ 544.7 | $ 554.1 | $ 545.4 | $ 2,305 | $ 2,194.6 | $ 2,484.5 | |
Operating income | 280 | 289.5 | 275.9 | 262.5 | 301.9 | 238.5 | 247 | 246.8 | 1,107.9 | 1,034.1 | 1,123.9 | |
Income before income taxes | 264 | 282.9 | 266.9 | 253.3 | 281.9 | 226.2 | 235.9 | 230.5 | 1,067.1 | 974.6 | 1,090.6 | |
Net income (controlling interest) | $ 315.4 | $ 125.4 | $ 126.3 | $ 122.5 | $ 150.2 | $ 110.2 | $ 108.3 | $ 104 | $ 689.5 | $ 472.8 | $ 509.5 | |
Earnings per share - diluted (in dollars per share) | $ 5.50 | $ 2.22 | $ 2.22 | $ 2.13 | $ 2.67 | $ 2.02 | $ 1.98 | $ 1.90 | $ 12.03 | $ 8.57 | $ 9.17 | |
[1] | In the fourth quarter of 2017, the Company recorded a provisional one-time net benefit from changes in U.S tax laws (see Note 22) and an expense associated with the impairment of one of its Affiliates accounted for under the equity method (see Note 13). |
Segment and Geographic Infor110
Segment and Geographic Information - Additional Information (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017segmentchannel | Dec. 31, 2017segment | Dec. 31, 2016segment | |
Segment Reporting [Abstract] | |||
Number of operating segments | 1 | ||
Number of reportable segments | 1 | 3 | |
Number of principal distribution channels | channel | 3 |
Segment and Geographic Infor111
Segment and Geographic Information - Revenues and Assets by Geographic Location (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Segment Reporting Information | ||||||||||||
Revenue | $ 604.1 | [1] | $ 585.7 | $ 570.9 | $ 544.3 | $ 550.3 | $ 544.7 | $ 554.1 | $ 545.4 | $ 2,305 | $ 2,194.6 | $ 2,484.5 |
Fixed Assets, Net | 111 | 110.1 | 111 | 110.1 | 114.1 | |||||||
United States | ||||||||||||
Segment Reporting Information | ||||||||||||
Revenue | 1,571.4 | 1,477.5 | 1,657.2 | |||||||||
Fixed Assets, Net | 97.8 | 97.3 | 97.8 | 97.3 | 98.6 | |||||||
United Kingdom | ||||||||||||
Segment Reporting Information | ||||||||||||
Revenue | 587.3 | 566.4 | 645.3 | |||||||||
Fixed Assets, Net | 11.4 | 9.9 | 11.4 | 9.9 | 12.3 | |||||||
Other | ||||||||||||
Segment Reporting Information | ||||||||||||
Revenue | 146.3 | 150.7 | 182 | |||||||||
Fixed Assets, Net | $ 1.8 | $ 2.9 | $ 1.8 | $ 2.9 | $ 3.2 | |||||||
[1] | In the fourth quarter of 2017, the Company recorded a provisional one-time net benefit from changes in U.S tax laws (see Note 22) and an expense associated with the impairment of one of its Affiliates accounted for under the equity method (see Note 13). |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares shares in Millions | 2 Months Ended | 12 Months Ended | |||
Feb. 21, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 31, 2018 | |
Common Stock | |||||
Subsequent Event [Line Items] | |||||
Shares repurchased (in shares) | 2.4 | 0.2 | 1.7 | ||
Average price (in usd per share) | $ 173.19 | $ 161.16 | $ 209.39 | ||
Subsequent Event | January 2018 Plan | |||||
Subsequent Event [Line Items] | |||||
Shares repurchased (in shares) | 0.7 | ||||
Average price (in usd per share) | $ 193.18 | ||||
Subsequent Event | Common Stock | |||||
Subsequent Event [Line Items] | |||||
Stock repurchase plan, number of remaining shares to be repurchased (in shares) | 5 | ||||
Subsequent Event | Common Stock | January 2018 Plan | |||||
Subsequent Event [Line Items] | |||||
Stock repurchase program, number of shares authorized (in shares) | 3.4 |
Schedule II Valuation and Qu113
Schedule II Valuation and Qualifying Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Income Tax Valuation Allowance | ||||
Reconciliation of beginning and ending balances of valuation and qualifying accounts | ||||
Balance Beginning of Period | $ 22.1 | $ 20.5 | $ 18.4 | |
Additions Charged to Costs and Expenses | 1.1 | 1.3 | 2.1 | |
Additions Charged to Other Accounts | 0.9 | 0.3 | 0 | |
Deductions | 0 | 0 | 0 | |
Balance End of Period | 24.1 | 22.1 | 20.5 | |
Other Allowances | ||||
Reconciliation of beginning and ending balances of valuation and qualifying accounts | ||||
Balance Beginning of Period | [1] | 10.3 | 10.6 | 12.1 |
Additions Charged to Costs and Expenses | [1] | 0.6 | 5 | 0.7 |
Additions Charged to Other Accounts | [1] | 0 | 0 | 0 |
Deductions | [1] | 7.3 | 5.3 | 2.2 |
Balance End of Period | [1] | $ 3.6 | $ 10.3 | $ 10.6 |
[1] | Other Allowances represented reserves on notes received in connection with transfers of our interests in certain Affiliates, as well as other receivable amounts, which we considered uncollectible. Deductions represent the reversal of such reserves upon collection of the amounts due. |