OM ASSET MANAGEMENT PLC, 10-Q filed on 11/9/2016
Quarterly Report
Document and Entity Information
9 Months Ended
Sep. 30, 2016
Nov. 7, 2016
Document and Entity Information
 
 
Entity Registrant Name
OM Asset Management plc 
 
Entity Central Index Key
0001611702 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Large Accelerated Filer 
 
Document Type
10-Q 
 
Document Period End Date
Sep. 30, 2016 
 
Document Fiscal Year Focus
2016 
 
Document Fiscal Period Focus
Q3 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
 
120,157,765 
Condensed Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Assets
 
 
Cash and cash equivalents
$ 151.3 
$ 135.9 
Investments, at fair value
123.4 
97.0 
Total assets
1,338.0 
1,014.1 
Liabilities and equity
 
 
Total liabilities
1,118.2 
848.2 
Commitments and contingencies
   
   
Redeemable non-controlling interests in consolidated Funds
5.7 
Equity:
 
 
Ordinary shares (nominal value $0.001; 120,157,765 and 120,558,278 shares, respectively, issued)
0.1 
0.1 
Shareholders’ equity
238.1 
168.6 
Accumulated other comprehensive loss
(25.0)
(2.8)
Non-controlling interests
0.9 
Total equity and redeemable non-controlling interests in consolidated Funds
219.8 
165.9 
Total liabilities and equity
1,338.0 
1,014.1 
Consolidated Entity Excluding Consolidated Funds
 
 
Assets
 
 
Cash and cash equivalents
150.8 
135.9 
Investment advisory fees receivable
159.8 
151.8 
Property and equipment, net
38.5 
30.7 
Investments (includes balances reported at fair value of $123.4 and $97.0)
239.3 
202.6 
Acquired intangibles, net
86.5 
1.5 
Goodwill
272.7 
126.5 
Other assets
23.1 
23.0 
Other amounts due from related parties
1.2 
Note receivable due from related party
0.5 
Deferred tax assets
329.2 
341.6 
Liabilities and equity
 
 
Accounts payable and accrued expenses
38.0 
45.7 
Accrued incentive compensation
117.4 
134.0 
Other amounts due to related parties
195.3 
222.9 
Long-term compensation liabilities
267.1 
260.8 
Accrued income taxes
92.5 
87.7 
Third party borrowings
392.2 
90.0 
Other liabilities
10.5 
7.1 
Consolidated Funds
 
 
Assets
 
 
Cash and cash equivalents
0.5 
Other assets
0.2 
Investments, at fair value
36.2 
Liabilities and equity
 
 
Total liabilities
$ 5.2 
$ 0 
Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
In Millions, except Share data, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Cash and cash equivalents
$ 151.3 
$ 135.9 
Investments, at fair value
123.4 
97.0 
Ordinary shares, nominal value (in dollars per share)
$ 0.001 
$ 0.001 
Ordinary shares, issued (shares)
120,157,765 
120,558,278 
Consolidated Funds
 
 
Cash and cash equivalents
0.5 
Investments, at fair value
$ 36.2 
$ 0 
Condensed Consolidated Statements of Operations (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Revenue:
 
 
 
 
Management fees
$ 171.8 
$ 158.4 
$ 478.5 
$ 480.2 
Performance fees
(1.1)
3.3 
(1.9)
55.5 
Other revenue
0.1 
0.1 
0.3 
0.2 
Total revenue
170.8 
161.8 
476.9 
535.9 
Operating expenses:
 
 
 
 
Compensation and benefits
100.0 
93.7 
272.1 
314.5 
General and administrative expense
27.2 
23.3 
71.7 
66.0 
Amortization of acquired intangibles
0.9 
1.0 
0.1 
Depreciation and amortization
2.5 
1.8 
6.9 
5.0 
Total operating expenses
130.6 
118.8 
351.7 
385.6 
Operating income
40.2 
43.0 
125.2 
150.3 
Non-operating income and (expense):
 
 
 
 
Investment income
5.6 
4.2 
13.6 
9.3 
Interest income
0.3 
0.1 
0.3 
0.2 
Interest expense
(4.4)
(0.6)
(5.4)
(2.2)
Total non-operating income
1.5 
3.7 
8.5 
7.3 
Income from continuing operations before taxes
41.7 
46.7 
133.7 
157.6 
Income tax expense
7.3 
12.7 
33.8 
40.9 
Income from continuing operations
34.4 
34.0 
99.9 
116.7 
Gain (loss) on disposal of discontinued operations, net of tax
(0.4)
1.0 
1.2 
1.9 
Net income attributable to controlling interests
$ 34.0 
$ 35.0 
$ 101.1 
$ 118.6 
Earnings per share (basic) (in dollars per share)
$ 0.28 
$ 0.29 
$ 0.84 
$ 0.98 
Earnings per share (diluted) (in dollars per share)
$ 0.28 
$ 0.29 
$ 0.84 
$ 0.98 
Continuing operations earnings per share (basic) (in dollars per share)
$ 0.28 
$ 0.28 
$ 0.83 
$ 0.96 
Continuing operations earnings per share (diluted) (in dollars per share)
$ 0.28 
$ 0.28 
$ 0.83 
$ 0.96 
Weighted average ordinary shares outstanding (in shares)
119,288,903 
120,000,000 
119,600,000 
120,000,000 
Weighted average diluted ordinary shares outstanding (in shares)
119,700,000 
120,500,000 
119,759,785 
120,500,000 
Condensed Consolidated Statements of Comprehensive Income (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Statement of Comprehensive Income [Abstract]
 
 
 
 
Net income attributable to controlling interests
$ 34.0 
$ 35.0 
$ 101.1 
$ 118.6 
Other comprehensive income (loss):
 
 
 
 
Valuation of derivative securities, net of tax
(1.1)
(9.6)
(20.8)
(9.6)
Foreign currency translation adjustment
(0.3)
(0.8)
(1.4)
(1.2)
Total other comprehensive loss
(1.4)
(10.4)
(22.2)
(10.8)
Total comprehensive income attributable to controlling interests
$ 32.6 
$ 24.6 
$ 78.9 
$ 107.8 
Condensed Consolidated Statements of Changes in Shareholders' Equity (USD $)
In Millions, except Share data, unless otherwise specified
Total
Ordinary shares
Shareholders’ equity (deficit)
Accumulated other comprehensive income (loss)
Total shareholders’ equity (deficit)
Non-controlling interests in consolidated Funds
Non-controlling interests in consolidated Funds
Consolidated Entity Excluding Consolidated Funds
Beginning balance at Dec. 31, 2014
$ 61.9 
 
 
 
 
 
 
Beginning balance at Dec. 31, 2014
2,495.5 
0.1 
31.1 
5.3 
36.5 
2,459.0 
Beginning balance (in shares) at Dec. 31, 2014
 
120,000,000 
 
 
 
 
 
Beginning balance at Dec. 31, 2014
2,557.4 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity
 
 
 
 
 
 
 
Issuance of ordinary shares (in shares)
 
500,000 
 
 
 
 
 
Capital redemptions
(0.9)
 
(0.9)
 
(0.9)
 
 
Equity-based compensation
9.9 
 
9.9 
 
9.9 
 
 
Foreign currency translation adjustment
(1.2)
 
 
(1.2)
(1.2)
 
 
Net consolidations (de-consolidation) of Funds
(2,459.0)
 
 
 
 
(2,459.0)
 
Valuation of derivative securities, net of tax
(9.6)
 
 
(9.6)
(9.6)
 
 
Dividends to shareholders
(7.6)
 
(7.6)
 
(7.6)
 
 
Dividends to related parties
(21.5)
 
(21.5)
 
(21.5)
 
 
Net income
118.6 
 
118.6 
 
118.6 
 
 
Increase (Decrease) in redeemable non-controlling interest in consolidated Funds
 
 
 
 
 
 
 
Net consolidation (de-consolidation) of Funds
(61.9)
 
 
 
 
 
 
Increase (Decrease) in total equity and redeemable non-controlling interest in consolidated Funds
 
 
 
 
 
 
 
Capital redemptions
(0.9)
 
 
 
 
 
 
Equity-based compensation
9.9 
 
 
 
 
 
 
Foreign currency translation adjustment
(1.2)
 
 
 
 
 
 
Net consolidation (de-consolidation) of Funds
(2,520.9)
 
 
 
 
 
 
Valuation of derivative securities, net of tax
(9.6)
 
 
 
 
 
 
Dividends to shareholders
(7.6)
 
 
 
 
 
 
Dividends to related parties
(21.5)
 
 
 
 
 
 
Net income
118.6 
 
 
 
 
 
 
Ending balance at Sep. 30, 2015
 
 
 
 
 
 
Ending balance at Sep. 30, 2015
124.2 
0.1 
129.6 
(5.5)
124.2 
Ending balance (in shares) at Sep. 30, 2015
 
120,500,000 
 
 
 
 
 
Ending balance at Sep. 30, 2015
124.2 
 
 
 
 
 
 
Beginning balance at Dec. 31, 2015
 
 
 
 
 
 
Beginning balance at Dec. 31, 2015
165.9 
0.1 
168.6 
(2.8)
165.9 
Beginning balance (in shares) at Dec. 31, 2015
 
120,500,000 
 
 
 
 
 
Beginning balance at Dec. 31, 2015
165.9 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity
 
 
 
 
 
 
 
Issuance of ordinary shares (in shares)
 
500,000 
 
 
 
 
 
Equity-based compensation
9.7 
 
9.7 
 
9.7 
 
 
Foreign currency translation adjustment
(1.4)
 
 
(1.4)
(1.4)
 
 
Repurchase of ordinary shares (in shares)
 
(900,000)
 
 
 
 
 
Repurchase of ordinary shares
(12.2)
 
(12.2)
 
(12.2)
 
 
Valuation of derivative securities, net of tax
(20.8)
 
 
(20.8)
(20.8)
 
 
Business acquisition
0.9 
 
 
 
 
 
0.9 
Dividends to shareholders
(10.1)
 
(10.1)
 
(10.1)
 
 
Dividends to related parties
(19.0)
 
(19.0)
 
(19.0)
 
 
Net income
101.1 
 
101.1 
 
101.1 
 
 
Increase (Decrease) in redeemable non-controlling interest in consolidated Funds
 
 
 
 
 
 
 
Net consolidation (de-consolidation) of Funds
5.7 
 
 
 
 
 
 
Increase (Decrease) in total equity and redeemable non-controlling interest in consolidated Funds
 
 
 
 
 
 
 
Equity-based compensation
9.7 
 
 
 
 
 
 
Repurchase of ordinary shares
(12.2)
 
 
 
 
 
 
Foreign currency translation adjustment
(1.4)
 
 
 
 
 
 
Net consolidation (de-consolidation) of Funds
5.7 
 
 
 
 
 
 
Valuation of derivative securities, net of tax
(20.8)
 
 
 
 
 
 
Dividends to shareholders
(10.1)
 
 
 
 
 
 
Dividends to related parties
(19.0)
 
 
 
 
 
 
Net income
101.1 
 
 
 
 
 
 
Ending balance at Sep. 30, 2016
5.7 
 
 
 
 
 
 
Ending balance at Sep. 30, 2016
214.1 
0.1 
238.1 
(25.0)
213.2 
0.9 
Ending balance (in shares) at Sep. 30, 2016
 
120,100,000 
 
 
 
 
 
Ending balance at Sep. 30, 2016
$ 219.8 
 
 
 
 
 
 
Condensed Consolidated Statements of Cash Flows (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Cash flows from operating activities:
 
 
Net income attributable to controlling interests
$ 101.1 
$ 118.6 
Adjustments to reconcile net income to net cash provided by (used in) operating activities from continuing operations:
 
 
Net (income) from discontinued operations
(1.2)
(1.9)
Amortization of acquired intangibles
1.0 
0.1 
Depreciation and other amortization
7.3 
5.0 
Loss on disposal of property and equipment
0.1 
Amortization and revaluation of non-cash compensation awards
19.7 
32.4 
Net earnings from Affiliates accounted for using the equity method
(11.8)
(9.3)
Distributions received from equity method Affiliates
2.3 
8.5 
Deferred income taxes
16.5 
19.4 
(Gains) losses on other investments
(4.3)
Changes in operating assets and liabilities (excluding discontinued operations):
 
 
(Increase) decrease in investment advisory fees receivable and other amounts due from related parties
(0.3)
19.4 
(Increase) decrease in other receivables, prepayments, deposits and other assets
(2.0)
(1.6)
Increase (decrease) in accrued incentive compensation, other amounts due to related parties and other liabilities
(36.0)
(13.5)
Increase (decrease) in accounts payable and accruals and accrued income taxes
(34.0)
9.0 
Net cash flows provided by operating activities of continuing operations
58.3 
186.2 
Net cash flows provided by operating activities of discontinued operations
0.3 
1.9 
Total net cash flows provided by operating activities
58.6 
188.1 
Cash flows from investing activities:
 
 
Purchase of fixed assets
(9.5)
(8.9)
Payments for Affiliate and joint venture equity
(0.6)
Business acquisitions net of cash acquired
(219.0)
Purchase of investment securities
(58.6)
(13.0)
Sale of investment securities
10.5 
10.9 
Consolidation (de-consolidation) of Funds
0.5 
(93.0)
Total net cash flows used in investing activities
(276.1)
(104.6)
Cash flows from financing activities:
 
 
Third party borrowings
450.1 
Repayment of third party borrowings
(148.0)
(107.0)
Repayment of related party borrowings
(37.0)
Payment to Parent for deferred tax arrangement
(22.7)
(42.9)
Payment to Parent for co-investment redemptions
(5.4)
(9.5)
Dividends paid to shareholders
(9.9)
(7.4)
Dividends paid to related parties
(19.0)
(21.5)
Repurchases of ordinary shares
(12.2)
Total net cash flows provided by (used in) financing activities
232.9 
(225.3)
Effect of foreign exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
15.4 
(141.8)
Cash and cash equivalents at beginning of period
135.9 
268.6 
Cash and cash equivalents at end of period
151.3 
126.8 
Supplemental disclosure of cash flow information:
 
 
Interest paid (excluding consolidated Funds)
2.1 
2.7 
Income taxes paid
14.1 
8.8 
Consolidation (de-consolidation) of Funds
5.7 
(2,520.9)
Non-cash capital contribution to Parent
$ 0 
$ (0.1)
Organization and Description of the Business
Organization and Description of the Business
OM Asset Management plc (“OMAM” or the “Company”), through its subsidiaries, is a global asset management business with interests in a diverse group of boutique investment management firms (the “Affiliates”) individually headquartered in the United States. The Company provides investment management services globally to predominantly institutional investors, in asset classes that include U.S. and global equities, fixed income, real estate and timber. Fees for services are largely asset-based and, as a result, the Company’s revenue fluctuates based on the performance of financial markets and investors’ asset flows in and out of the Company’s products.
The Company’s Affiliates are organized as limited liability companies. The Company generally utilizes a profit-sharing model in structuring its compensation and ownership arrangements with Affiliates. The Affiliates’ variable compensation is generally based on each firm’s profitability. OMAM and Affiliate key employees share in profits after variable compensation according to their respective ownership interests. The profit-sharing model results in alignment of OMAM and Affiliate key employee economic interests, which is critical to the Company’s talent management strategy and long-term growth of the business. The Company operates in one reportable segment.
The Company is a majority-owned subsidiary of Old Mutual plc (the “Parent”), an international long-term savings, protection and investment group, listed on the London Stock Exchange.
In June 2016, the Company announced that it had signed a definitive agreement to acquire a 60% controlling interest in Landmark Partners, LLC, (“Landmark”) a leading global secondary private equity, real estate and real asset investment firm, for $242.4 million. On August 18, 2016 the Company closed this transaction and the results of Landmark have been included in the consolidated results of the Company from that date forward.
Basis of Presentation and Significant Accounting Policies
Basis of Presentation and Significant Accounting Policies
The Company’s significant accounting policies are as follows:
Basis of presentation
These unaudited Condensed Consolidated Financial Statements reflect the historical balance sheets; statements of operations and of comprehensive income; statements of changes in shareholders’ equity; and statements of cash flows of the Company. Within these Condensed Consolidated Financial Statements, entities that are part of the Parent’s consolidated results, but are not part of OMAM, as defined above, are referred to as “related parties.”
On October 15, 2014, the Company completed the initial public offering (the “Offering”) by its Parent of 22,000,000 ordinary shares of the Company pursuant to the Securities Act of 1933, as amended (“the Securities Act”).  Additionally, the underwriters in the Offering exercised a portion of their overallotment option and purchased an additional 2,231,375 shares of the Company from the Parent.  On June 22, 2015, the Company completed a secondary public offering by its Parent of 13,300,000 ordinary shares of the Company pursuant to the Securities Act.  Additionally, the underwriters in the secondary public offering exercised their full overallotment option and purchased an additional 1,995,000 shares of the Company from the Parent. 
The Condensed Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). All dollar amounts, except per share data in the text and tables herein, are stated in millions unless otherwise indicated. Transactions between the Company and the Parent are included in the Condensed Consolidated Financial Statements, however material intercompany balances and transactions among the Company and its consolidated Affiliates are eliminated in consolidation.
These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2015 included in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on March 15, 2016. The Company’s significant accounting policies, which have been consistently applied, are summarized in those Financial Statements.
Consolidation
Affiliates
The Company evaluates each of its Affiliate and other operating entities to determine the appropriate method of accounting. Generally, majority-owned entities or otherwise controlled investments in which the Company holds a controlling financial interest as the principal shareholder, managing member, or general partner are consolidated.
Funds
In evaluating whether or not a legal entity must be consolidated, the Company determines if such entity is a variable interest entity (“VIE”) or a voting interest entity (“VOE”). A VOE is considered an entity in which (i) the total equity investment at risk is sufficient to enable the entity to finance its activities independently and (ii) the equity holders at risk 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 the entity’s economic performance. A VIE is an entity that lacks one or more of the characteristics of a VOE. Assessing whether an entity is a VIE or VOE involves judgment and analysis. Factors considered in this assessment include the entity’s legal organization, the entity’s capital structure and equity ownership and any related party or de facto agent implications of the Company’s involvement with the entity. Investments that are determined to be VIEs are consolidated if the Company or a consolidated Affiliate is the primary beneficiary of the investment. VOEs are typically consolidated if the Company holds the majority voting interest or otherwise controls the entity.
In the normal course of business, the Company’s Affiliates sponsor and manage certain investment vehicles (the “Funds”). The Company assesses consolidation requirements with respect to its Funds pursuant to Accounting Standards Codification (“ASC”) Topic 810, Consolidation, as amended by Accounting Standards Update 2015-02, Consolidation: Amendments to the Consolidation Analysis ("ASU 2015-02") relating to the consolidation of VIEs.
In evaluating whether the Company is the primary beneficiary, the Company evaluates its economic interests in the entity held either directly by the Company or indirectly through related parties. For VIEs that are investment companies subject to ASU 2010-10, the primary beneficiary of the VIE is generally the variable interest holder that absorbs a majority of the expected losses of the VIE, receives a majority of the expected residual returns of the VIE, or both. The Company generally is not the primary beneficiary of Fund VIEs created to manage assets for clients unless the Company’s ownership interest, including interests of related parties, is substantial.
The primary beneficiary of a VIE is defined as the variable interest holder that has a controlling financial interest. A controlling financial interest is defined as (i) the power to direct the activities of the VIE that most significantly impacts its economic performance and (ii) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. If no single party satisfies both criteria, but the Company and its related parties satisfy the criteria on a combined basis, then the primary beneficiary is the entity out of the related party group that is most closely associated to the VIE. The consolidation analysis can generally be performed qualitatively, however, if it is not readily apparent that the Company is not the primary beneficiary, a quantitative analysis may also be performed.
The Company consolidates VOEs when it has control over significant operating, financial and investing decisions of the entity or holds the majority voting interest. For VOEs organized as limited partnerships or as an entity with governance structures similar to a limited partnership (e.g., limited liability company with a managing member), the Company consolidates an entity when it holds the controlling general partnership interest and the limited partners do not hold substantive participating rights or rights to remove and replace the general partner or rights that could provide the limited partners with the ability to impact the ongoing governance and operating activities of the entity.
Upon the occurrence of certain events (such as contributions and redemptions, either by the Company, its Affiliates, or third parties, or amendments to the governing documents of the Company’s investees or sponsored Funds) management reviews and reconsiders its previous conclusion regarding the status of an entity as a VIE or a VOE. Additionally, management continually reconsiders whether the Company is deemed to be a VIE’s primary beneficiary who consolidates such entity. In the third quarter of 2016, following the transfer of certain seed capital investments from its Parent, the Company consolidated certain Funds pursuant to ASU 2015-02.
Derivatives and Hedging
The Company may utilize derivative financial instruments to hedge the risk of movement of interest rates and foreign currency on financial assets and liabilities. These derivative financial instruments may or may not qualify as hedges for accounting purposes. The Company records all derivative financial instruments as either assets or liabilities on its Condensed Consolidated Balance Sheets and measures these instruments at fair value. For a derivative financial instrument that qualifies as a hedge for accounting purposes and is designated as a hedging instrument, the effective portion of the derivative’s gain or loss is initially reported as a component of other comprehensive income (loss) and subsequently reclassified into earnings over the life of the hedge. The ineffective portion of the gain or loss is reported in earnings immediately.
Use of Estimates
The preparation of these Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ significantly from those estimates.
Recent accounting developments
In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which simplifies several aspects of the accounting for share-based payments, including accounting for income taxes, forfeitures and statutory tax withholding requirements, and classification within the statement of cash flows. The new guidance is effective for the first quarter of 2017 with early adoption permitted. The Company is currently evaluating the potential impact on its Consolidated Financial Statements and related disclosures.
Acquisitions
Acquisitions
Acquisitions
On August 18, 2016, the Company acquired a majority of the equity interests in Landmark Partners, LLC, a leading global secondary private equity, real estate and real asset investment firm. The Company acquired a 60% interest in Landmark in exchange for $242.4 million. There is also the potential for an additional payment of up to $225.0 million on or around December 31, 2018, subject to a service and other conditions. The equity interests of Landmark purchased by the Company entitle the Company to participate in the earnings of Landmark. Certain key members of the management team of Landmark retained the remaining 40% interest in Landmark. The Company financed the acquisition through proceeds from multiple note offerings, including $275.0 million of 4.80% senior notes due July 27, 2026 and $125.0 million of 5.125% senior notes due August 1, 2031. (see Note 7)
OMAM accounted for the acquisition of Landmark as a business combination under ASC 805, “Business Combinations,” which requires assets and liabilities assumed to be recorded at fair value. The following table presents a summary of the acquisition-date fair values of the assets acquired and liabilities assumed for OMAM’s acquisition of Landmark:
 
 
Landmark
Purchase price
 
 
Cash
 
$
238.9

Seller's expenses
 
3.5

Total consideration
 
242.4

Identifiable assets and liabilities
 
 
Cash
 
23.4

Receivables
 
8.5

Indefinite-life trade name
 
1.0

Amortizable intangible asset management contracts
 
85.0

Fixed assets
 
5.1

Other current assets (liabilities), net
 
(25.1
)
Assets (liabilities), net
 
(1.7
)
Total identifiable assets and liabilities
 
96.2

Goodwill
 
$
146.2


The primary aspects of the purchase price allocation relate to amortizable intangible asset management contracts, the indefinite-life trade name and goodwill, which is the amount by which the purchase price exceeds the fair value of the net assets acquired. The amounts recorded for certain assets and liabilities are preliminary in nature and are subject to adjustment as additional information is obtained about the facts and circumstances that existed as of the acquisition date. The final determination of the fair values of certain assets and liabilities will be completed within the measurement period of up to one year from the applicable acquisition dates, as permitted under U.S. GAAP. The final values may also result in changes to the amortization expense related to intangible assets and will be recognized in the period of adjustment. Any potential adjustments made could be material in relation to the values presented in the table above.
The fair value of the amortizable intangible asset management contracts was determined using the excess earnings method, a form of the income approach. The principle behind the excess earnings method is that the value of the intangible asset is equal to the present value of the after-tax cash flows attributable to the intangible asset only.  Excess earnings represent the earnings remaining after applying post-tax contributory asset charges to reflect the return required on other assets that contribute to the generation of the forecast cash flows of the intangible asset.

The fair value of the trade name intangible asset was determined utilizing a relief-from-royalty method. The principle behind this method is that the value of the intangible asset is equal to the present value of the after-tax royalty savings attributable to owning the intangible asset.

The fair value estimate for all identifiable intangible assets is preliminary and is based on assumptions that market participants would use in pricing an asset, based on the most advantageous market for the asset (i.e., its highest and best use). This preliminary fair value estimate could include assets that are not intended to be used, may be sold or are intended to be used in a manner other than their best use.
The fair value of the acquired amortizable intangible asset management contracts had a preliminary useful life estimate of approximately 13.4 years at acquisition. Purchase price allocated to intangible assets and goodwill is expected to be deductible for U.S. tax purposes over a period of 15 years. Goodwill is calculated as the difference between the fair value of the consideration paid and the values assigned to the identifiable tangible and intangible assets acquired and liabilities assumed.
During the three and nine months ended September 30, 2016, there were $4.5 million and $6.1 million of costs incurred in connection with the acquisition of Landmark, respectively. These costs are recorded within general and administrative expense in the Condensed Consolidated Statements of Operations.
In conjunction with the acquisition, OMAM entered into compensation arrangements with employees of Landmark where pre-acquisition equity units held by Landmark employees became subject to a service condition. These units are accounted for as stock-based compensation, were fair valued as of the closing date of the acquisition and vest over varying increments from December 31, 2018 through December 31, 2024. The aforementioned additional payment of up to $225.0 million could be paid based on the growth of Landmark’s business. This arrangement is also accounted for as stock-based compensation, fair valued as of the closing date of the acquisition, and vests on December 31, 2018. Both the pre-acquisition equity units and the potential future payment will be subsequently remeasured at the end of each reporting period.
The financial results of Landmark included in OMAM’s consolidated financial results for the three and nine months ended September 30, 2016, include revenues of $9.8 million, with $2.4 million of net income included in net income attributable to OMAM.
Unaudited Pro Forma Financial Information
The following unaudited pro forma financial information presents the combined financial results of OMAM and Landmark, as though the acquisition had occurred as of January 1, 2015. The unaudited pro forma financial information reflects certain adjustments for amortization expense related to the fair value of acquired intangible assets, interest expense related to debt incurred to finance the acquisition, amortization related to stock-based compensation arrangements entered into in conjunction with the acquisition, and the income tax impact of the pro forma adjustments. The unaudited pro forma financial information is for informational purposes only and is not necessarily indicative of the financial results that would have been achieved had the acquisitions actually occurred at the beginning of the first period presented. Further, adjustments relating to asset management contract assets are preliminary, and subject to revision, as described above.
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2016
 
2015
 
2016
 
2015
Revenues
181.3

 
182.4

 
526.9

 
598.5

Net Income Attributable to OMAM
28.5

 
27.1

 
77.8

 
94.2

Net income per share attributable to OMAM shareholder:
 
 
 
 
 
 
 
Basic
$0.24
 
$0.23
 
$0.65
 
$0.79
Diluted
$0.24
 
$0.22
 
$0.65
 
$0.78
Fair Value Measurements
Fair Value Measurements
The following table summarizes the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2016 (in millions):
 
Quoted prices
in active
markets
(Level I)
 
Significant
other
observable
inputs
(Level II)
 
Significant
unobservable
inputs
(Level III)
 
Uncategorized
 
Total value,
September 30, 2016
Assets of OMAM and consolidated Funds(1)
 
 

 
 

 
 
 
 

Common and preferred stock
$
35.9

 
$

 
$

 
$

 
$
35.9

Short-term investment funds
0.3

 

 

 

 
0.3

Consolidated Funds Total
36.2

 

 

 

 
36.2

Investments in separate accounts(2)
3.5

 

 

 

 
3.5

Investments related to long-term incentive compensation plans(3)
76.7

 

 

 

 
76.7

Investments in unconsolidated Funds(4)

 

 

 
43.2

 
43.2

OMAM Total
80.2

 

 

 
43.2

 
123.4

Total fair value assets
$
116.4

 
$

 
$

 
$
43.2

 
$
159.6

Liabilities of OMAM and consolidated Funds(1)
 
 
 
 
 
 
 
 
Common stock
$
(4.8
)
 
$

 
$

 
$

 
$
(4.8
)
Consolidated Funds Total
(4.8
)
 

 

 

 
(4.8
)
Derivative securities

 
(0.1
)
 

 

 
(0.1
)
OMAM Total

 
(0.1
)
 

 

 
(0.1
)
Total fair value liabilities
$
(4.8
)
 
$
(0.1
)
 
$

 
$

 
$
(4.9
)

The following table summarizes the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2015 (in millions): 
 
Quoted prices
in active
markets
(Level I)
 
Significant
other
observable
inputs
(Level II)
 
Significant
unobservable
inputs
(Level III)
 
Uncategorized
 
Total value December 31, 2015
Assets of OMAM(1)
 

 
 

 
 

 
 

 
 

Investments related to long-term incentive compensation plans(3)
$
66.9

 
$

 
$

 
$

 
$
66.9

Investments in unconsolidated Funds(4)

 

 

 
30.1

 
30.1

Total fair value assets
$
66.9

 
$

 
$

 
$
30.1

 
$
97.0

Liabilities of OMAM(1)
 

 
 

 
 

 
 
 
 

Derivative securities
$

 
$
(8.8
)
 
$

 
$

 
$
(8.8
)
Total fair value liabilities
$

 
$
(8.8
)
 
$

 
$

 
$
(8.8
)
 
 
(1)
Assets and liabilities measured at fair value are comprised of financial investments managed by the Company's Affiliates. $36.2 million in assets and $(4.8) million in liabilities at September 30, 2016 and $0.0 million in assets and $0.0 million in liabilities at December 31, 2015 are the result of the consolidation of Funds sponsored by the Company’s Affiliates. Of these, pursuant to ASU 2015-07, collective investment funds are multi-strategy products, uncategorized because they are redeemable monthly and valued at net asset value per share of the fund without adjustment which the Company believes represents the fair value of the investments.
The fair value of other investments is estimated based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs and therefore classified within Level II. The Company obtains prices from independent pricing services that may utilize broker quotes, but generally the independent pricing services will use various other pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. The Company has not made adjustments to the prices provided. If the pricing services are only able to (a) obtain a single broker quote or (b) utilize a pricing model, such securities are classified as Level III. If the pricing services are unable to provide prices, the Company attempts to obtain one or more broker quotes directly from a dealer or values such securities at the last bid price obtained. In either case, such securities are classified as Level III. The Company performs due diligence procedures over third party pricing vendors to understand their methodology and controls to support their use in the valuation process to ensure compliance with required accounting disclosures.
Equity, short-term investment funds and derivatives which are traded on a national securities exchange are stated at the last reported sales price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified as Level I. These securities that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs obtained by the Company from independent pricing services are classified as Level II. 
(2)
Investments in separate accounts of $3.5 million at September 30, 2016 consist of approximately 5% of cash equivalents and 95% of equity securities. The Company has valued these using the published price as of the measurement date. Accordingly, the Company has classified these investments as Level I.
(3)
Investments related to long term compensation plans of $76.7 million and $66.9 million at September 30, 2016 and December 31, 2015, respectively, are investments in publicly registered daily redeemable funds (some managed by Affiliates), which the Company has classified as trading securities and valued using the published price as of the measurement dates. Accordingly, the Company has classified these investments as Level I.
(4)
The $43.2 million and $30.1 million at September 30, 2016 and December 31, 2015, respectively, relate to investments in unconsolidated Funds which consist primarily of investments in funds advised by Affiliates and are valued using NAV which the Company relies on to determine their fair value as a practical expedient. The Company has not classified these investments in the fair value hierarchy in accordance with ASU 2015-07. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to amounts presented in the Condensed Consolidated Balance Sheets. These unconsolidated Funds consist primarily of real estate investments funds. The NAVs that have been provided by investees have been derived from the fair values of the underlying investments as of the measurement dates.
These investments are subject to longer than monthly or quarterly redemption restrictions, and due to their nature, distributions are received only as cash flows are generated from underlying assets over the life of the Funds. The range of time over which the underlying assets are expected to be liquidated by the investees is approximately one to eight years from September 30, 2016. The valuation process for the underlying real estate investments held by the real estate investments Funds begins with each property or loan being valued by the investment teams. The valuations are then reviewed and approved by the valuation committee, which consists of senior members of the portfolio management, acquisitions, and research teams. For certain properties and loans, the valuation process may also include a valuation by independent appraisers. In connection with this process, changes in fair-value measurements from period to period are evaluated for reasonableness, considering items such as market rents, capitalization and discount rates, and general economic and market conditions. 
Not included in the above are $52.3 million and $51.6 million at September 30, 2016 and December 31, 2015, respectively, of various investments carried at cost, including investments in timber and timberlands.
There were no significant transfers of financial assets or liabilities among Levels I, II or III during the nine months ended September 30, 2016 or 2015.
Variable Interest Entities
Variable Interest Entities
The Company sponsors the formation of various entities considered to be VIEs. The Company evaluates the consolidation of these entities as required pursuant to ASC Topic 810 relating to the consolidation of VIEs. These VIEs are primarily Funds managed by Affiliates and are investment vehicles typically owned entirely by third-party investors. Certain Funds may be capitalized with seed capital investments from the Company and may be owned partially by Affiliate key employees and/or individuals that own minority interests in an Affiliate.
The Company’s determination of whether it is the primary beneficiary of a Fund that is a VIE is based in part on an assessment of whether or not the Company and its related parties are exposed to the majority of the risks and rewards of the entity. Typically the Fund’s investors are entitled to substantially all of the economics of these VIEs with the exception of the management fees and performance fees, if any, earned by the Company or any investment the Company has made into the Funds. The Company generally is not the primary beneficiary of Fund VIEs created to manage assets for clients unless the Company’s ownership interest, including interests of related parties, is substantial.
The following table presents the assets and liabilities of Funds that are VIEs and consolidated by the Company at September 30 (in millions):
 
9/30/2016
 
12/31/2015
Assets
 

 
 

Investments at fair value
$
15.7

 
$

Other assets of consolidated Funds
0.2

 

Total Assets
$
15.9

 
$

Liabilities
 

 
 

Other liabilities of consolidated Funds
$
0.3

 
$

Total Liabilities
$
0.3

 
$


"Investments at fair value" consist of investments in securities. The Company has also consolidated Funds that are not VIEs, and therefore the assets and liabilities of those Funds are not included in the table above.
The assets of consolidated VIEs presented in the table above belong to the investors in those Funds, are available for use only by the Fund to which they belong, and are not available for use by the Company to the extent they are held by non-controlling interests. Any debt or liabilities held by consolidated Funds have no recourse to the Company's general credit.
At December 31, 2015, there were no Funds that were VIEs requiring consolidation by the Company.
The Company’s involvement with Funds that are VIEs and not consolidated by the Company is generally limited to that of an investment manager and its investment in the unconsolidated VIE, if any. The Company’s investment in any unconsolidated VIE generally represents an insignificant interest of the Fund’s net assets and assets under management, such that the majority of the VIE’s results are attributable to third parties. The Company’s exposure to risk in these entities is generally limited to any capital contribution it has made or is required to make and any earned but uncollected management fees. The Company has not issued any investment performance guarantees to these VIEs or their investors.
The following information pertains to unconsolidated VIEs for which the Company holds a variable interest (in millions):
 
September 30,
2016
 
December 31,
2015
Unconsolidated VIE assets
$
6,918.8

 
$
7,302.4

Unconsolidated VIE liabilities
$
4,105.1

 
$
4,189.1

Equity interests on the Condensed Consolidated Balance Sheet
$
63.2

 
$
53.2

Maximum risk of loss(1)
$
68.2

 
$
59.0

 
 
(1)
Includes equity investments the Company has made or is required to make in unconsolidated Funds and any earned but uncollected management/incentive fees from those Funds. The Company does not record performance/incentive allocations until the respective measurement period has ended.
In addition to the multiple unconsolidated VIE Funds, the Company determined that Heitman LLC, one of the Company’s Affiliates, is a VIE. The Company concluded that it is not the primary beneficiary of Heitman LLC because it does not hold the power to direct its most economically significant activities. The Company aggregated Heitman LLC with the Company’s other unconsolidated VIE Funds due to their similar risk profiles given that the risks and rewards are driven by changes in investment values and the Affiliates’ ability to manage those assets.
Related Party Transactions
Related Party Transactions
The Company’s Parent provides the Company with various oversight services, including governance, which includes oversight by the Parent’s board and executive committees, investor relations, procurement of insurance coverage, human resources, financial reporting, internal audit, treasury, systems, risk and tax services. That portion of the above costs which (i) are directly attributable to the Company, (ii) have been charged to the Company by the Parent and (iii) have been paid to the Parent by the Company, have been recorded in the Company’s unaudited Condensed Consolidated Financial Statements and was $0.6 million and $1.3 million in the nine months ended September 30, 2016 and 2015, respectively.
As part of its profit-interests plan, an Affiliate made tax payments on behalf of its employees who became vested in profit interests of the Affiliate. Payments totaling $5.1 million and $5.3 million were repaid by the employees of the Affiliate in the nine months ended September 30, 2016 and 2015, respectively. These balances were recorded in other assets on the Company’s Consolidated Balance Sheets.
During 2014, the Company entered into a seed capital management agreement, a deferred tax asset deed, a co-investment deed and a shareholder agreement with the Parent and/or the Parent’s subsidiaries.
During the quarter ended June 30, 2016, the Company and the Parent agreed to amend the seed capital management agreement and the deferred tax asset deed. As a result of the amendment, the Company purchased approximately $39.6 million of seed investments from the Parent in September 2016, reducing the seed capital investments managed by the Company but owned by the Parent to $94.8 million. These investments were recorded at fair value by the Company based on their most recent valuation. Additionally, under the amended agreement, the remaining seed capital investments covered by the Seed Capital Agreement will be transferred to the Company’s balance sheet on or around June 30, 2017. All seed capital was originally expected to be transferred to the balance sheet of the Company on or around January 15, 2018.
The deferred tax asset deed was amended to provide that the obligations of the Company to make future payments to the Parent under the deferred tax asset deed, which were originally scheduled to continue until January 31, 2020, shall be terminated as of December 31, 2016 in exchange for a payment of the net present value of the future payments due to the Parent valued as of December 31, 2016. The valuation shall be calculated using a discount rate of 8.5% and be paid by the Company to the Parent in three installments on each of June 30, 2017, December 31, 2017 and June 30, 2018, such payments forward valued at a discount rate of 8.5%. The determination of the appropriate discount rate reflected a continuation of certain protections provided by the Parent related to the realized tax benefit resulting from the Company’s use of the deferred tax assets. Such protections were unaffected by the amendment.  At September 30, 2016, amounts owed under the deferred tax asset deed were $175.3 million.
Amounts owed to the Parent associated with the co-investment deed were $13.1 million at September 30, 2016. As of September 30, 2016, the Company had recorded $6.6 million for redemptions and estimated taxes due under the co-investment deed. Amounts withheld in excess of the future tax liability will be payable to the Parent upon settlement.
Borrowings and Debt
Borrowings and Debt
The Company’s long term debt at September 30, 2016 was comprised of a revolving credit facility and long term bond debt.
Revolving Credit Facility
On October 15, 2014, the Company entered into a revolving credit facility with Citibank, as administrative agent and issuing bank, and Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated as joint lead arrangers and joint book runners (as amended, the “Credit Facility”). Pursuant to the terms of the Credit Facility, the Company may obtain loans on a revolving credit basis and procure the issuance of letters of credit in an aggregate amount at any time outstanding not in excess of $350 million. The Credit Facility has a maturity date of October 15, 2019. Borrowings under the credit facility bear interest, at OMAM’s option, at either the per annum rate equal to (a) the greatest of (i) the prime rate, (ii) the federal funds effective rate plus 0.5% and (iii) the one month Adjusted LIBO Rate plus 1.0%, plus, in each case an additional amount ranging from 0.25% to 1.00%, with such additional amount based from time to time on the ratio of the Company’s total consolidated indebtedness to Adjusted EBITDA (a “Leverage Ratio”) until either Moody’s Investor Service, Inc. or Standard & Poor’s assigned an initial rating to the Company’s senior, unsecured long-term indebtedness for borrowed money that was not subject to credit enhancement, or its credit rating, at which time such additional amount became based on its credit rating or (b) the London interbank offered rate for a period, at the Company’s election, equal to one, two, three or six months plus an additional amount ranging from 1.25% to 2.00%, with such additional amount based from time to time on the Company’s Leverage Ratio until it was assigned a credit rating, at which time such additional amount became based on its credit rating. In addition, the Company is charged a commitment fee based on the average daily unused portion of the revolving credit facility at a per annum rate ranging from 0.20% to 0.50%, with such amount based from time to time on its Leverage Ratio until it was assigned a credit rating, at which time such amount became based on the Company’s credit rating.
In July 2016, Moody’s Investor Service, Inc. and Standard & Poor’s each assigned an initial investment-grade rating to the Company’s senior, unsecured long-term indebtedness. As a result of the assignment of the credit ratings, the Company’s interest rate on outstanding borrowings was set at LIBOR + 1.50% and the commitment fee on the unused portion of the revolving credit facility was set at 0.25%. Prior to the assignment of the credit ratings, the Company’s interest rate on outstanding borrowings was based on the Company’s Leverage Ratio and was set at LIBOR + 1.25% and the commitment fee on the unused portion of the revolving credit facility was set at 0.20%.
Under the Credit Facility, the ratio of third-party borrowings to trailing twelve months Adjusted EBITDA cannot exceed 3.0x, and the interest coverage ratio must not be less than 4.0x. At September 30, 2016 the outstanding balance of the facility was $0.0 million ($350 million of undrawn revolving credit facility capacity). The Company’s ratio of third-party borrowings to trailing twelve months Adjusted EBITDA was 1.9x and interest coverage ratio was 32x. At December 31, 2015 the outstanding balance of the facility was $90.0 million ($260 million of undrawn revolving credit facility capacity). At December 31, 2015, the Company’s ratio of third-party borrowings to trailing twelve months Adjusted EBITDA was 0.4x and interest coverage ratio was 85.1x.
Long term bond debt
The Company’s long term bond debt was comprised of the following as of the dates indicated (in millions): 
 
 
September 30, 2016
 
December 31, 2015
Long-term debt:
 
Maturity amount
 
Debt issuance costs
 
Carrying value
 
Fair Value
 
Carrying value
4.80% Senior Notes Due 2026
 
$
275.0

 
$
(3.5
)
 
$
271.5

 
$
276.0

 
$

5.125% Senior Notes Due 2031
 
125.0

 
(4.3
)
 
120.7

 
124.9

 

Total long term debt
 
$
400.0

 
$
(7.8
)
 
$
392.2

 
$
400.9

 
$


In July 2016, the Company issued $275.0 million of 4.80% Senior Notes due 2026 (the “2026 Notes”) and $125.0 million of 5.125% Senior Notes due 2031 (the “2031 Notes”). The Company used the net proceeds of these offerings to finance the acquisition of Landmark in August 2016, purchase seed capital from the Parent and pay down the balance of the Revolving Credit Facility.
4.80% Senior Notes Due July 2026
The $275.0 million 2026 Notes were sold at a discount of $(0.5) million and the Company incurred debt issuance costs of $(3.0) million, which are being amortized to interest expense over the ten-year term. The 2026 Notes can be redeemed at any time prior to the scheduled maturity in part or in aggregate, at the greater of the related 100% principal amount at that time or the sum of the remaining scheduled payments discounted at the treasury rate (as defined) plus 0.5%, together with any related accrued and unpaid interest.
5.125% Senior Notes Due August 2031
The $125.0 million 2031 Notes incurred debt issuance costs of $(4.3) million, which are being amortized to interest expense over the fifteen-year term. The 2031 Notes can be redeemed at any time, on or after August 1, 2019 at a redemption price equal to 100% of the principal amount together with any related accrued and unpaid interest.
The fair value of the long term bond debt was determined using broker quotes and any recent trading activity for each of the notes listed above, which are considered Level II inputs.
Pursuant to ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs,” the Company records debt issuance costs of term loans as a direct deduction from the carrying amount of the associated debt liability. For debt issuance costs of revolving credit loans, the Company follows the guidance of ASU 2015-15, “Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements,” which permits presenting debt issuance costs as an asset and subsequently amortizing the deferred costs ratably over the term of the agreement.
Interest expense
Interest expense incurred amounted to a total of $5.4 million and $2.2 million for the nine months ended September 30, 2016 and 2015, respectively.
Commitments and Contingencies
Commitments and Contingencies
Operational commitments
The Company had unfunded commitments to invest up to $9.0 million and $15.7 million in co-investments with an Affiliate as of September 30, 2016 and December 31, 2015, respectively. These commitments will be funded as required through the end of the respective investment periods ranging through fiscal 2018.
Certain Affiliates operate under regulatory authorities that require that they maintain minimum financial or capital requirements. Management is not aware of any violations of such financial requirements occurring during the period.
Litigation
The Company and its Affiliates are subject to claims, legal proceedings and other contingencies in the ordinary course of their business activities. Each of these matters is 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 for matters for which the outcome is probable and can be reasonably estimated. If an insurance claim or other indemnification for a litigation accrual is available to the Company, the associated gain will not be recognized until all contingencies related to the gain have been resolved. As of September 30, 2016, there were no material accruals for claims, legal proceedings or other contingencies.
Indemnifications
In the normal course of business, such as through agreements to enter into business combinations and divestitures of Affiliates, the Company enters into contracts that contain a variety of representations and warranties and which provide general indemnifications. The Company’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred.
Foreign tax contingency
The Company has clients in non-U.S. jurisdictions which require entities that are conducting certain business activities in such jurisdictions to collect and remit tax assessed on certain fees paid for goods and services provided. The Company does not believe this requirement is applicable based on its limited business activities in these jurisdictions. However, given the fact that uncertainty exists around the requirement, the Company has chosen to evaluate its potential exposure related to non-collection and remittance of these taxes. At September 30, 2016, management of the Company has estimated the potential maximum exposure and concluded that it is not material. No accrual for the potential exposure has been recorded as the probability of incurring any potential liability relating to this exposure is not probable at September 30, 2016.
Considerations of credit risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash investments. The Company maintains cash and cash equivalents and short term investments with various financial institutions. These financial institutions are typically located in cities 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.
Earnings Per Share
Earnings Per Share
Basic earnings per share is calculated by dividing net income by the weighted-average number of shares outstanding. Diluted earnings per share is similar to basic earnings per share, but is adjusted for the effect of potentially issuable ordinary shares, except when inclusion is antidilutive. 
The calculation of basic and diluted earnings per ordinary share is as follows (dollars in millions, except per share data):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2016
 
2015
 
2016
 
2015
Numerator:
 

 
 

 
 

 
 

Net income
$
34.0

 
$
35.0

 
$
101.1

 
$
118.6

Less: Total income available to participating unvested securities(1)
(0.2
)
 
(0.2
)
 
(0.7
)
 
(0.4
)
Total net income attributable to ordinary shares
$
33.8

 
$
34.8

 
$
100.4

 
$
118.2

Denominator:
 

 
 

 
 

 
 

Weighted-average ordinary shares outstanding—basic
119,288,903

 
120,000,000

 
119,569,288

 
120,000,000

Potential ordinary shares:
 
 
 
 
 
 
 
Restricted stock units
363,401

 
517,072

 
190,497

 
471,767

Weighted-average ordinary shares outstanding—diluted
119,652,304

 
120,517,072

 
119,759,785

 
120,471,767

Earnings per ordinary share:
 

 
 

 
 

 
 

Basic
$
0.28

 
$
0.29

 
$
0.84

 
$
0.98

Diluted
$
0.28

 
$
0.29

 
$
0.84

 
$
0.98

 
 
(1)
Income available to participating unvested securities includes dividends paid on unvested restricted shares and their proportionate share of undistributed earnings.
Accumulated Other Comprehensive Income
Accumulated Other Comprehensive Income
The following tables show the tax effects allocated to each component of other comprehensive income (in millions):
 
For the nine months ended September 30, 2016
 
Pre-Tax
 
Tax Benefit
 
Net of Tax
Foreign currency translation adjustment
$
(1.4
)
 
$

 
$
(1.4
)
Change in net realized and unrealized gain (loss) on derivative securities
(25.2
)
 
4.4

 
(20.8
)
Other comprehensive income (loss)
$
(26.6
)
 
$
4.4

 
$
(22.2
)
 
For the nine months ended September 30, 2015
 
Pre-Tax
 
Tax Benefit
 
Net of Tax
Foreign currency translation adjustment
$
(1.2
)
 
$

 
$
(1.2
)
Change in net realized and unrealized gain (loss) on derivative securities
(12.0
)
 
2.4

 
(9.6
)
Other comprehensive income (loss)
$
(13.2
)
 
$
2.4

 
$
(10.8
)
The components of accumulated other comprehensive income (loss) for the nine months ended September 30, 2016 were as follows (in millions):
 
Foreign currency translation adjustment
 
Valuation of derivative securities
 
Total
Balance, as of December 31, 2015
$
2.0

 
$
(6.6
)
 
$
(4.6
)
Other comprehensive loss
(1.4
)
 
(20.8
)
 
(22.2
)
Balance, as of September 30, 2016
$
0.6

 
$
(27.4
)
 
$
(26.8
)

In the nine months ended September 30, 2016 the Company recorded an unrealized loss of $(20.8) million, net of tax of $4.4 million, on the derivative contract as further described in Note 11. The Company reclassified $0.5 million from accumulated other comprehensive income (loss) to interest expense on the Consolidated Statements of Income for the nine months ended September 30, 2016. There were no material amounts reclassified from accumulated other comprehensive income (loss) to the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2015.
Derivatives and Hedging
Derivatives and Hedging
Cash flow hedge
In late July 2015, the Company entered into a $300 million notional Treasury rate lock contract which was designated and qualified as a cash flow hedge under Accounting Standard Codification 815, "Derivatives and Hedging," (“ASC 815”). The Company documented its hedging strategy and risk management objective for this contract in anticipation of a future debt issuance. The Treasury rate lock contract eliminated the impact of fluctuations in the underlying benchmark interest rate for future forecasted debt issuances. The Company assessed the effectiveness of the hedging contract at inception and on a quarterly basis thereafter. In November 2015, at the Treasury Rate Lock termination date, the Company de-designated the Treasury Rate Lock and entered into an extension for the same $300 million notional through early July 2016. In July 2016 the Company entered into a second extension to the Treasury Rate Lock in conjunction with the issuances of the previously forecasted debt. The forecasted debt issuances occurred in July 2016 and the Treasury Rate Lock, which had an accumulated fair value of $(34.4) million, was settled. Refer to Note 7, Borrowings and Debt, for additional information on the debt issuances.
Consistent with the original Treasury Rate Lock, the extended Treasury Rate Locks were designated and qualified as cash flow hedges under ASC 815. The Company documented its hedging strategy and risk management objective for these contracts in anticipation of the July 2016 debt issuance. The extended Treasury Rate Locks effectively eliminated the impact of fluctuations in the underlying benchmark interest rate for the debt issuances. The Company assessed the effectiveness of the hedging contracts at each of the extended Treasury Rate Locks’ inception dates and on a quarterly basis thereafter, where applicable. At the Rate Lock settlement the hedging contracts were evaluated to be highly effective in offsetting changes in cash flows associated with the hedged items. The Company did not record any hedge ineffectiveness for the three and nine months ended September 30, 2016.
Amounts recorded in accumulated other comprehensive income in connection with the settled Treasury Rate Lock at September 30, 2016 were $(27.4) million, net of tax of $6.0 million. This balance will be reclassified to earnings through interest expense over the life of the issued debt. Amounts of $0.5 million and $0.5 million have been reclassified for the three months and nine months ended September 30, 2016, respectively. During the next twelve months the Company expects to reclassify approximately $2.6 million to interest expense.
Discontinued Operations and Restructuring
Discontinued Operations and Restructuring
All of the Company’s discontinued operations were wound down or transferred to the Parent prior to 2015.
The Company recognized a gain on disposal, net of taxes, of $(0.4) million and $1.0 million, with basic and diluted discontinued operations earnings per share of $0.00 and $0.01 for the three months ended September 30, 2016 and 2015, respectively.
The Company recognized a gain on disposal, net of taxes, of $1.2 million and $1.9 million, with basic and diluted discontinued operations earnings per share of $0.01 and $0.02 for the nine months ended September 30, 2016 and 2015, respectively.
In August 2016, the management team of a previously disposed Affiliate of OMAM, together with subsidiaries of OMAM holding interests in that Affiliate, entered into a purchase and sale agreement with a third party, which will result in an approximately $7 million payment to OMAM upon closing of the transaction.  The transaction closed in the fourth quarter of 2016 and will be reflected in the Company’s year-end results.
Basis of Presentation and Significant Accounting Policies (Policies)
Basis of presentation
These unaudited Condensed Consolidated Financial Statements reflect the historical balance sheets; statements of operations and of comprehensive income; statements of changes in shareholders’ equity; and statements of cash flows of the Company. Within these Condensed Consolidated Financial Statements, entities that are part of the Parent’s consolidated results, but are not part of OMAM, as defined above, are referred to as “related parties.”
On October 15, 2014, the Company completed the initial public offering (the “Offering”) by its Parent of 22,000,000 ordinary shares of the Company pursuant to the Securities Act of 1933, as amended (“the Securities Act”).  Additionally, the underwriters in the Offering exercised a portion of their overallotment option and purchased an additional 2,231,375 shares of the Company from the Parent.  On June 22, 2015, the Company completed a secondary public offering by its Parent of 13,300,000 ordinary shares of the Company pursuant to the Securities Act.  Additionally, the underwriters in the secondary public offering exercised their full overallotment option and purchased an additional 1,995,000 shares of the Company from the Parent. 
The Condensed Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). All dollar amounts, except per share data in the text and tables herein, are stated in millions unless otherwise indicated. Transactions between the Company and the Parent are included in the Condensed Consolidated Financial Statements, however material intercompany balances and transactions among the Company and its consolidated Affiliates are eliminated in consolidation.
These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2015 included in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on March 15, 2016. The Company’s significant accounting policies, which have been consistently applied, are summarized in those Financial Statements.
Consolidation
Affiliates
The Company evaluates each of its Affiliate and other operating entities to determine the appropriate method of accounting. Generally, majority-owned entities or otherwise controlled investments in which the Company holds a controlling financial interest as the principal shareholder, managing member, or general partner are consolidated.
Funds
In evaluating whether or not a legal entity must be consolidated, the Company determines if such entity is a variable interest entity (“VIE”) or a voting interest entity (“VOE”). A VOE is considered an entity in which (i) the total equity investment at risk is sufficient to enable the entity to finance its activities independently and (ii) the equity holders at risk 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 the entity’s economic performance. A VIE is an entity that lacks one or more of the characteristics of a VOE. Assessing whether an entity is a VIE or VOE involves judgment and analysis. Factors considered in this assessment include the entity’s legal organization, the entity’s capital structure and equity ownership and any related party or de facto agent implications of the Company’s involvement with the entity. Investments that are determined to be VIEs are consolidated if the Company or a consolidated Affiliate is the primary beneficiary of the investment. VOEs are typically consolidated if the Company holds the majority voting interest or otherwise controls the entity.
In the normal course of business, the Company’s Affiliates sponsor and manage certain investment vehicles (the “Funds”). The Company assesses consolidation requirements with respect to its Funds pursuant to Accounting Standards Codification (“ASC”) Topic 810, Consolidation, as amended by Accounting Standards Update 2015-02, Consolidation: Amendments to the Consolidation Analysis ("ASU 2015-02") relating to the consolidation of VIEs.
In evaluating whether the Company is the primary beneficiary, the Company evaluates its economic interests in the entity held either directly by the Company or indirectly through related parties. For VIEs that are investment companies subject to ASU 2010-10, the primary beneficiary of the VIE is generally the variable interest holder that absorbs a majority of the expected losses of the VIE, receives a majority of the expected residual returns of the VIE, or both. The Company generally is not the primary beneficiary of Fund VIEs created to manage assets for clients unless the Company’s ownership interest, including interests of related parties, is substantial.
The primary beneficiary of a VIE is defined as the variable interest holder that has a controlling financial interest. A controlling financial interest is defined as (i) the power to direct the activities of the VIE that most significantly impacts its economic performance and (ii) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. If no single party satisfies both criteria, but the Company and its related parties satisfy the criteria on a combined basis, then the primary beneficiary is the entity out of the related party group that is most closely associated to the VIE. The consolidation analysis can generally be performed qualitatively, however, if it is not readily apparent that the Company is not the primary beneficiary, a quantitative analysis may also be performed.
The Company consolidates VOEs when it has control over significant operating, financial and investing decisions of the entity or holds the majority voting interest. For VOEs organized as limited partnerships or as an entity with governance structures similar to a limited partnership (e.g., limited liability company with a managing member), the Company consolidates an entity when it holds the controlling general partnership interest and the limited partners do not hold substantive participating rights or rights to remove and replace the general partner or rights that could provide the limited partners with the ability to impact the ongoing governance and operating activities of the entity.
Upon the occurrence of certain events (such as contributions and redemptions, either by the Company, its Affiliates, or third parties, or amendments to the governing documents of the Company’s investees or sponsored Funds) management reviews and reconsiders its previous conclusion regarding the status of an entity as a VIE or a VOE. Additionally, management continually reconsiders whether the Company is deemed to be a VIE’s primary beneficiary who consolidates such entity. In the third quarter of 2016, following the transfer of certain seed capital investments from its Parent, the Company consolidated certain Funds pursuant to ASU 2015-02.
Derivatives and Hedging
The Company may utilize derivative financial instruments to hedge the risk of movement of interest rates and foreign currency on financial assets and liabilities. These derivative financial instruments may or may not qualify as hedges for accounting purposes. The Company records all derivative financial instruments as either assets or liabilities on its Condensed Consolidated Balance Sheets and measures these instruments at fair value. For a derivative financial instrument that qualifies as a hedge for accounting purposes and is designated as a hedging instrument, the effective portion of the derivative’s gain or loss is initially reported as a component of other comprehensive income (loss) and subsequently reclassified into earnings over the life of the hedge. The ineffective portion of the gain or loss is reported in earnings immediately.
Use of Estimates
The preparation of these Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ significantly from those estimates.
Recent accounting developments
In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which simplifies several aspects of the accounting for share-based payments, including accounting for income taxes, forfeitures and statutory tax withholding requirements, and classification within the statement of cash flows. The new guidance is effective for the first quarter of 2017 with early adoption permitted. The Company is currently evaluating the potential impact on its Consolidated Financial Statements and related disclosures.
Acquisitions (Tables)
The following table presents a summary of the acquisition-date fair values of the assets acquired and liabilities assumed for OMAM’s acquisition of Landmark:
 
 
Landmark
Purchase price
 
 
Cash
 
$
238.9

Seller's expenses
 
3.5

Total consideration
 
242.4

Identifiable assets and liabilities
 
 
Cash
 
23.4

Receivables
 
8.5

Indefinite-life trade name
 
1.0

Amortizable intangible asset management contracts
 
85.0

Fixed assets
 
5.1

Other current assets (liabilities), net
 
(25.1
)
Assets (liabilities), net
 
(1.7
)
Total identifiable assets and liabilities
 
96.2

Goodwill
 
$
146.2

Further, adjustments relating to asset management contract assets are preliminary, and subject to revision, as described above.
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2016
 
2015
 
2016
 
2015
Revenues
181.3

 
182.4

 
526.9

 
598.5

Net Income Attributable to OMAM
28.5

 
27.1

 
77.8

 
94.2

Net income per share attributable to OMAM shareholder:
 
 
 
 
 
 
 
Basic
$0.24
 
$0.23
 
$0.65
 
$0.79
Diluted
$0.24
 
$0.22
 
$0.65
 
$0.78
Fair Value Measurements (Tables)
Summary of the assets and liabilities that are measured at fair value on a recurring basis
The following table summarizes the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2016 (in millions):
 
Quoted prices
in active
markets
(Level I)
 
Significant
other
observable
inputs
(Level II)
 
Significant
unobservable
inputs
(Level III)
 
Uncategorized
 
Total value,
September 30, 2016
Assets of OMAM and consolidated Funds(1)
 
 

 
 

 
 
 
 

Common and preferred stock
$
35.9

 
$

 
$

 
$

 
$
35.9

Short-term investment funds
0.3

 

 

 

 
0.3

Consolidated Funds Total
36.2

 

 

 

 
36.2

Investments in separate accounts(2)
3.5

 

 

 

 
3.5

Investments related to long-term incentive compensation plans(3)
76.7

 

 

 

 
76.7

Investments in unconsolidated Funds(4)

 

 

 
43.2

 
43.2

OMAM Total
80.2

 

 

 
43.2

 
123.4

Total fair value assets
$
116.4

 
$

 
$

 
$
43.2

 
$
159.6

Liabilities of OMAM and consolidated Funds(1)
 
 
 
 
 
 
 
 
Common stock
$
(4.8
)
 
$

 
$

 
$

 
$
(4.8
)
Consolidated Funds Total
(4.8
)
 

 

 

 
(4.8
)
Derivative securities

 
(0.1
)
 

 

 
(0.1
)
OMAM Total

 
(0.1
)
 

 

 
(0.1
)
Total fair value liabilities
$
(4.8
)
 
$
(0.1
)
 
$

 
$

 
$
(4.9
)

The following table summarizes the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2015 (in millions): 
 
Quoted prices
in active
markets
(Level I)
 
Significant
other
observable
inputs
(Level II)
 
Significant
unobservable
inputs
(Level III)
 
Uncategorized
 
Total value December 31, 2015
Assets of OMAM(1)
 

 
 

 
 

 
 

 
 

Investments related to long-term incentive compensation plans(3)
$
66.9

 
$

 
$

 
$

 
$
66.9

Investments in unconsolidated Funds(4)

 

 

 
30.1

 
30.1

Total fair value assets
$
66.9

 
$

 
$

 
$
30.1

 
$
97.0

Liabilities of OMAM(1)
 

 
 

 
 

 
 
 
 

Derivative securities
$

 
$
(8.8
)
 
$

 
$

 
$
(8.8
)
Total fair value liabilities
$

 
$
(8.8
)
 
$

 
$

 
$
(8.8
)
 
 
(1)
Assets and liabilities measured at fair value are comprised of financial investments managed by the Company's Affiliates. $36.2 million in assets and $(4.8) million in liabilities at September 30, 2016 and $0.0 million in assets and $0.0 million in liabilities at December 31, 2015 are the result of the consolidation of Funds sponsored by the Company’s Affiliates. Of these, pursuant to ASU 2015-07, collective investment funds are multi-strategy products, uncategorized because they are redeemable monthly and valued at net asset value per share of the fund without adjustment which the Company believes represents the fair value of the investments.
The fair value of other investments is estimated based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs and therefore classified within Level II. The Company obtains prices from independent pricing services that may utilize broker quotes, but generally the independent pricing services will use various other pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data. The Company has not made adjustments to the prices provided. If the pricing services are only able to (a) obtain a single broker quote or (b) utilize a pricing model, such securities are classified as Level III. If the pricing services are unable to provide prices, the Company attempts to obtain one or more broker quotes directly from a dealer or values such securities at the last bid price obtained. In either case, such securities are classified as Level III. The Company performs due diligence procedures over third party pricing vendors to understand their methodology and controls to support their use in the valuation process to ensure compliance with required accounting disclosures.
Equity, short-term investment funds and derivatives which are traded on a national securities exchange are stated at the last reported sales price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are classified as Level I. These securities that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs obtained by the Company from independent pricing services are classified as Level II. 
(2)
Investments in separate accounts of $3.5 million at September 30, 2016 consist of approximately 5% of cash equivalents and 95% of equity securities. The Company has valued these using the published price as of the measurement date. Accordingly, the Company has classified these investments as Level I.
(3)
Investments related to long term compensation plans of $76.7 million and $66.9 million at September 30, 2016 and December 31, 2015, respectively, are investments in publicly registered daily redeemable funds (some managed by Affiliates), which the Company has classified as trading securities and valued using the published price as of the measurement dates. Accordingly, the Company has classified these investments as Level I.
(4)
The $43.2 million and $30.1 million at September 30, 2016 and December 31, 2015, respectively, relate to investments in unconsolidated Funds which consist primarily of investments in funds advised by Affiliates and are valued using NAV which the Company relies on to determine their fair value as a practical expedient. The Company has not classified these investments in the fair value hierarchy in accordance with ASU 2015-07. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to amounts presented in the Condensed Consolidated Balance Sheets. These unconsolidated Funds consist primarily of real estate investments funds. The NAVs that have been provided by investees have been derived from the fair values of the underlying investments as of the measurement dates.
These investments are subject to longer than monthly or quarterly redemption restrictions, and due to their nature, distributions are received only as cash flows are generated from underlying assets over the life of the Funds. The range of time over which the underlying assets are expected to be liquidated by the investees is approximately one to eight years from September 30, 2016. The valuation process for the underlying real estate investments held by the real estate investments Funds begins with each property or loan being valued by the investment teams. The valuations are then reviewed and approved by the valuation committee, which consists of senior members of the portfolio management, acquisitions, and research teams. For certain properties and loans, the valuation process may also include a valuation by independent appraisers. In connection with this process, changes in fair-value measurements from period to period are evaluated for reasonableness, considering items such as market rents, capitalization and discount rates, and general economic and market conditions. 
Not included in the above are $52.3 million and $51.6 million at September 30, 2016 and December 31, 2015, respectively, of various investments carried at cost, including investments in timber and timberlands.
Variable Interest Entities (Tables)
Schedule of assets and liabilities and information pertains to VIEs
The following information pertains to unconsolidated VIEs for which the Company holds a variable interest (in millions):
 
September 30,
2016
 
December 31,
2015
Unconsolidated VIE assets
$
6,918.8

 
$
7,302.4

Unconsolidated VIE liabilities
$
4,105.1

 
$
4,189.1

Equity interests on the Condensed Consolidated Balance Sheet
$
63.2

 
$
53.2

Maximum risk of loss(1)
$
68.2

 
$
59.0

 
 
(1)
Includes equity investments the Company has made or is required to make in unconsolidated Funds and any earned but uncollected management/incentive fees from those Funds. The Company does not record performance/incentive allocations until the respective measurement period has ended.
The following table presents the assets and liabilities of Funds that are VIEs and consolidated by the Company at September 30 (in millions):
 
9/30/2016
 
12/31/2015
Assets
 

 
 

Investments at fair value
$
15.7

 
$

Other assets of consolidated Funds
0.2

 

Total Assets
$
15.9

 
$

Liabilities
 

 
 

Other liabilities of consolidated Funds
$
0.3

 
$

Total Liabilities
$
0.3

 
$

Borrowings and Debt (Tables)
Schedule of long term debt
The Company’s long term bond debt was comprised of the following as of the dates indicated (in millions): 
 
 
September 30, 2016
 
December 31, 2015
Long-term debt:
 
Maturity amount
 
Debt issuance costs
 
Carrying value
 
Fair Value
 
Carrying value
4.80% Senior Notes Due 2026
 
$
275.0

 
$
(3.5
)
 
$
271.5

 
$
276.0

 
$

5.125% Senior Notes Due 2031
 
125.0

 
(4.3
)
 
120.7

 
124.9

 

Total long term debt
 
$
400.0

 
$
(7.8
)
 
$
392.2

 
$
400.9

 
$

Earnings Per Share (Tables)
Schedule of calculation of pro forma basic and diluted earnings per share
The calculation of basic and diluted earnings per ordinary share is as follows (dollars in millions, except per share data):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2016
 
2015
 
2016
 
2015
Numerator:
 

 
 

 
 

 
 

Net income
$
34.0

 
$
35.0

 
$
101.1

 
$
118.6

Less: Total income available to participating unvested securities(1)
(0.2
)
 
(0.2
)
 
(0.7
)
 
(0.4
)
Total net income attributable to ordinary shares
$
33.8

 
$
34.8

 
$
100.4

 
$
118.2

Denominator:
 

 
 

 
 

 
 

Weighted-average ordinary shares outstanding—basic
119,288,903

 
120,000,000

 
119,569,288

 
120,000,000

Potential ordinary shares:
 
 
 
 
 
 
 
Restricted stock units
363,401

 
517,072

 
190,497

 
471,767

Weighted-average ordinary shares outstanding—diluted
119,652,304

 
120,517,072

 
119,759,785

 
120,471,767

Earnings per ordinary share:
 

 
 

 
 

 
 

Basic
$
0.28

 
$
0.29

 
$
0.84

 
$
0.98

Diluted
$
0.28

 
$
0.29

 
$
0.84

 
$
0.98

 
 
(1)
Income available to participating unvested securities includes dividends paid on unvested restricted shares and their proportionate share of undistributed earnings.
Accumulated Other Comprehensive Income (Tables)
Schedule of components of accumulated other comprehensive income including proportions attributable to non-controlling interests
The following tables show the tax effects allocated to each component of other comprehensive income (in millions):
 
For the nine months ended September 30, 2016
 
Pre-Tax
 
Tax Benefit
 
Net of Tax
Foreign currency translation adjustment
$
(1.4
)
 
$

 
$
(1.4
)
Change in net realized and unrealized gain (loss) on derivative securities
(25.2
)
 
4.4

 
(20.8
)
Other comprehensive income (loss)
$
(26.6
)
 
$
4.4

 
$
(22.2
)
 
For the nine months ended September 30, 2015
 
Pre-Tax
 
Tax Benefit
 
Net of Tax
Foreign currency translation adjustment
$
(1.2
)
 
$

 
$
(1.2
)
Change in net realized and unrealized gain (loss) on derivative securities
(12.0
)
 
2.4

 
(9.6
)
Other comprehensive income (loss)
$
(13.2
)
 
$
2.4

 
$
(10.8
)
The components of accumulated other comprehensive income (loss) for the nine months ended September 30, 2016 were as follows (in millions):
 
Foreign currency translation adjustment
 
Valuation of derivative securities
 
Total
Balance, as of December 31, 2015
$
2.0

 
$
(6.6
)
 
$
(4.6
)
Other comprehensive loss
(1.4
)
 
(20.8
)
 
(22.2
)
Balance, as of September 30, 2016
$
0.6

 
$
(27.4
)
 
$
(26.8
)
Organization and Description of the Business (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended 0 Months Ended
Sep. 30, 2016
segment
Aug. 18, 2016
Landmark Partners
Aug. 18, 2016
Landmark Partners
Organization, Consolidation and Presentation of Financial Statements [Abstract]
 
 
 
Number of reportable segments
 
 
Business Acquisition [Line Items]
 
 
 
Interest acquired
 
 
60.00% 
Total consideration
 
$ 242.4 
 
Basis of Presentation and Significant Accounting Policies (Details)
0 Months Ended
Jun. 22, 2015
Oct. 15, 2014
Stock offering
 
 
Ordinary shares, issued shares (in shares)
13,300,000 
 
IPO
 
 
Stock offering
 
 
Ordinary shares, issued shares (in shares)
 
22,000,000 
Overallotment option
 
 
Stock offering
 
 
Ordinary shares, issued shares (in shares)
1,995,000 
2,231,375 
Acquisitions - Narrative (Details) (USD $)
0 Months Ended 3 Months Ended 9 Months Ended 0 Months Ended
Sep. 30, 2016
Sep. 30, 2016
Senior notes
4.80% Senior Notes Due 2026
Jul. 31, 2016
Senior notes
4.80% Senior Notes Due 2026
Sep. 30, 2016
Senior notes
5.125% Senior Notes Due 2031
Jul. 31, 2016
Senior notes
5.125% Senior Notes Due 2031
Aug. 18, 2016
Landmark
Sep. 30, 2016
Landmark
Sep. 30, 2016
Landmark
Aug. 18, 2016
Landmark
Aug. 18, 2016
Landmark
Management contracts
Aug. 18, 2016
Landmark
Senior notes
4.80% Senior Notes Due 2026
Aug. 18, 2016
Landmark
Senior notes
5.125% Senior Notes Due 2031
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Interest acquired
 
 
 
 
 
 
 
 
60.00% 
 
 
 
Total consideration
 
 
 
 
 
$ 242,400,000 
 
 
 
 
 
 
Potential additional payments (up to)
 
 
 
 
 
 
 
 
225,000,000.0 
 
 
 
Retained ownership percentage by Landmark
 
 
 
 
 
 
 
 
40.00% 
 
 
 
Maturity amount
400,000,000 
 
275,000,000 
 
125,000,000 
 
 
 
 
 
275,000,000.0 
125,000,000.0 
Interest rate
 
4.80% 
4.80% 
5.125% 
5.125% 
 
 
 
 
 
4.80% 
5.125% 
Acquired infinite-lived intangible asset, useful life
 
 
 
 
 
 
 
 
 
13 years 4 months 24 days 
 
 
Costs incurred
 
 
 
 
 
 
4,500,000 
6,100,000 
 
 
 
 
Landmark revenue reported in consolidated financial results