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Note 10 - Fair Value Measurements

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Fair Value Disclosures [Text Block]

Note 10 — Fair Value Measurements

The following table presents assets and liabilities in our consolidated financial statements or disclosed in the notes to our consolidated financial statements at fair value on a recurring basis as of December 31, 2023 (in millions):

		*Fair value measurements using:*
		*Quoted prices*
		*in active*				*Significant*
		*markets for*				*other*				*Significant*
		*identical assets*				*observable*				*unobservable*
		*and liabilities*				*inputs*				*inputs*
		*(Level 1)*				*(Level 2)*				*(Level 3)*				*Total*
Assets:
Cash equivalents		$	894.4			$	—			$	—			$	894.4
Current investments:
Consolidated VIEs			317.6				64.7				0.1				382.4
Other investments			212.2				122.0				—				334.2
Total current investments			529.8				186.7				0.1				716.6
Seed hedge derivatives			—				1.8				—				1.8
Derivatives used in consolidated seeded investment products			—				6.7				—				6.7
Privacore option agreement			—				—				1.0				1.0
Total assets		$	1,424.2			$	195.2			$	1.1			$	1,620.5
Liabilities:
Derivatives used in consolidated seeded investment products		$	—			$	1.2			$	—			$	1.2
Derivatives used in foreign currency hedging program			—				0.7				—				0.7
Securities sold, not yet purchased			1.7				—				—				1.7
Seed hedge derivatives			—				16.7				—				16.7
Long-term debt⁽¹⁾			—				298.0				—				298.0
Deferred bonuses			—				—				117.6				117.6
Total liabilities		$	1.7			$	316.6			$	117.6			$	435.9

(1)	Carried at amortized cost in our Consolidated Balance Sheets and disclosed in this table at fair value.

The following table presents assets and liabilities in our consolidated financial statements or disclosed in the notes to the consolidated financial statements at fair value on a recurring basis as of December 31, 2022 (in millions):

		*Fair value measurements using:*
		*Quoted prices*
		*in active*				*Significant*
		*markets for*				*other*				*Significant*
		*identical assets*				*observable*				*unobservable*
		*and liabilities*				*inputs*				*inputs*
		*(Level 1)*				*(Level 2)*				*(Level 3)*				*Total*
Assets:
Cash equivalents		$	688.4			$	—			$	—			$	688.4
Current investments:
Consolidated VIEs			275.4				54.0				4.9				334.3
Other investments			171.9				89.4				0.3				261.6
Total current investments			447.3				143.4				5.2				595.9
Seed hedge derivatives			—				5.3				—				5.3
Derivatives used in consolidated seeded investment products			—				0.1				—				0.1
Derivatives used in foreign currency hedging program			—				0.4				—				0.4
Option agreement			—				—				0.8				0.8
Contingent consideration from sale of subsidiaries			—				—				12.3				12.3
Total assets		$	1,135.7			$	149.2			$	18.3			$	1,303.2
Liabilities:
Derivatives used in consolidated seeded investment products		$	—			$	0.6			$	—			$	0.6
Derivatives used in foreign currency hedging program			—				1.1				—				1.1
Securities sold, not yet purchased			0.5				—				—				0.5
Seed hedge derivatives			—				4.0				—				4.0
Long-term debt⁽¹⁾			—				295.4				—				295.4
Deferred bonuses			—				—				46.5				46.5
Total liabilities		$	0.5			$	301.1			$	46.5			$	348.1

(1)	Carried at amortized cost in our Consolidated Balance Sheets and disclosed in this table at fair value.

Level 1 Fair Value Measurements

Our Level 1 fair value measurements consist mostly of investments held by consolidated and unconsolidated seeded investment products and cash equivalents with quoted market prices in active markets. The fair value level of consolidated investments held by seeded investment products is determined by the underlying securities of the product. The fair value level of unconsolidated investments held in seeded investment products is determined by the NAV, which is considered a quoted price in an active market.

Level 2 Fair Value Measurements

Our Level 2 fair value measurements consist mostly of investments held by consolidated investment products, unconsolidated seeded investment products and our long-term debt. The fair value level of consolidated investments held by seeded investment products is determined by the underlying securities of the product. The fair value level of unconsolidated investments held in seeded investment products is determined by the NAV, which is considered a quoted price in an active market. The fair value level of our long-term debt is determined using recent trading activity, which is considered a Level 2 input.

Level 3 Fair Value Measurements

Investments

As of December 31, 2023 and 2022, certain investments within consolidated VIEs were valued using significant unobservable inputs, resulting in Level 3 classification.

Deferred Bonuses

Deferred bonuses represent liabilities to employees over the vesting period that will be settled by investments in our products or cash. Upon vesting, employees receive the value of the investment product selected by the participant, adjusted for gains or losses attributable to the product. The significant unobservable inputs used to value the liabilities are investment designations and vesting periods.

Changes in Fair Value

Changes in fair value of our Level 3 assets for the years ended December 31, 2023 and 2022, were as follows (in millions):

		*Year ended December 31,*
		*2023*				*2022*
Beginning of period fair value		$	18.3			$	8.8
Contingent consideration from sale of subsidiaries			—				12.1
Settlement of contingent consideration			(0.2	)			—
Fair value adjustments			(12.1	)			(1.2	)
Transfers from Level 1			0.2				0.3
Transfers to Level 1			(4.8	)			(2.1	)
Purchases of securities			—				1.0
Sales of securities			(0.3	)			(0.3	)
Foreign currency translation			—				(0.3	)
End of period fair value		$	1.1			$	18.3

Changes in fair value of our Level 3 liabilities for the years ended December 31, 2023 and 2022, were as follows (in millions):

		*Year ended December 31,*
		*2023*				*2022*
Beginning of period fair value		$	46.5			$	50.5
Fair value adjustments			9.0				(2.1	)
Vesting of deferred bonuses			(34.7	)			(36.5	)
Amortization of deferred bonuses			58.6				38.0
Foreign currency translation			2.4				(3.4	)
Additions			35.8				—
End of period fair value		$	117.6			$	46.5

Nonrecurring Fair Value Measurements

Nonrecurring Level 3 fair value measurements include goodwill and intangible assets. We measure the fair value of goodwill and intangible assets on initial recognition using DCF analysis that requires assumptions regarding projected future earnings and discount rates.

Refer to Note 8 — Goodwill and Intangible Assets, in Part II, Item 8, Financial Statements and Supplementary Data, for additional information on the impairment assessments. Because of the significance of the unobservable inputs in the fair value measurements of these assets, such measurements are classified as Level 3.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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