Derivative Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Financial Instruments Owned and Pledged as Collateral

The following table presents the fair value of securities that have been either pledged to or accepted from counterparties for these derivative transactions.

TABLE 113: FAIR VALUE OF SECURITIES COLLATERAL FOR DERIVATIVE TRANSACTIONS

	DECEMBER 31,
(in Millions)	2017		2016
Pledged to others:
Not permitted by contract or custom to sell or repledge	$	39.9	$	70.7
Permitted by contract or custom to sell or repledge	—		—
Accepted from others:
Not permitted by contract or custom to sell or repledge	—		—
Permitted by contract or custom to sell or repledge	4.6		—

Notional and Fair Value Amounts of Client-related and Trading Derivative Financial Instruments

The following table shows the notional and fair values of client-related and trading derivative financial instruments. Notional amounts of derivative financial instruments do not represent credit risk, and are not recorded in the consolidated balance sheets. They are used merely to express the volume of this activity. Northern Trust’s credit-related risk of loss is limited to the positive fair value of the derivative instrument, net of any collateral received, which is significantly less than the notional amount.

TABLE 114: NOTIONAL AND FAIR VALUES OF CLIENT-RELATED AND TRADING DERIVATIVE FINANCIAL INSTRUMENTS

	DECEMBER 31, 2017						DECEMBER 31, 2016
			FAIR VALUE						FAIR VALUE
(In Millions)	NOTIONAL VALUE		ASSET		LIABILITY		NOTIONAL VALUE		ASSET		LIABILITY
Foreign Exchange Contracts	$	317,882.5	$	2,527.0	$	2,522.5	$	273,213.1	$	3,274.2	$	3,221.7
Interest Rate Contracts	7,418.0		65.1		64.1		6,968.3		87.0		85.2
Total	$	325,300.5	$	2,592.1	$	2,586.6	$	280,181.4	$	3,361.2	$	3,306.9

Location and Amount of Gains and Losses Recorded in Consolidated Statements of Income

The following table shows the location and amount of gains and losses recorded in the consolidated statements of income for the years ended December 31, 2017, 2016, and 2015.

TABLE 115: LOCATION AND AMOUNT OF CLIENT-RELATED AND TRADING DERIVATIVE GAINS AND LOSSES RECORDED IN INCOME

(In Millions)	LOCATION OF DERIVATIVE GAIN RECOGNIZED IN INCOME	AMOUNT OF DERIVATIVE GAIN RECOGNIZED IN INCOME DECEMBER 31,
		2017		2016		2015
Foreign Exchange Contracts	Foreign Exchange Trading Income	$	209.9	$	236.6	$	261.8
Interest Rate Contracts	Security Commissions and Trading Income	10.7		11.4		17.5
Total		$	220.6	$	248.0	$	279.3

Types and Classifications of Derivative Instruments

The following table identifies the types and classifications of derivative instruments formally designated as hedges under GAAP and used by Northern Trust to manage risk, their notional and fair values, and the respective risks addressed.

TABLE 116: NOTIONAL AND FAIR VALUES OF DESIGNATED RISK MANAGEMENT DERIVATIVE FINANCIAL INSTRUMENTS

			December 31, 2017						December 31, 2016
					FAIR VALUE						FAIR VALUE
(In Millions)	DERIVATIVE INSTRUMENT	RISK CLASSIFICATION	NOTIONAL VALUE		ASSET		LIABILITY		NOTIONAL VALUE		ASSET		LIABILITY
FAIR VALUE HEDGES
Available for Sale Investment Securities	Interest Rate Swap Contracts	Interest Rate	$	3,423.1	$	15.7	$	14.5	$	3,873.4	$	88.3	$	16.8
Senior Notes and Long-Term Subordinated Debt	Interest Rate Swap Contracts	Interest Rate	1,050.0		16.0		3.7		1,250.0		71.8		3.3
CASH FLOW HEDGES
Forecasted Foreign Currency Denominated Transactions	Foreign Exchange Contracts	Foreign Currency	436.2		13.5		6.4		329.3		8.5		7.8
Foreign Currency Denominated Investment Securities	Foreign Exchange Contracts	Foreign Currency	2,852.8		14.9		6.6		1,431.6		151.5		0.8
Available for Sale Investment Securities	Interest Rate Contracts	Interest Rate	$	925.0	$	0.2	$	1.2	$	975.0	$	0.1	$	2.7
NET INVESTMENT HEDGES
Net Investments in Non-U.S. Affiliates	Foreign Exchange Contracts	Foreign Currency	3,011.3		0.6		179.6		2,083.6		174.6		10.8
Total			$	11,698.4	$	60.9	$	212.0	$	9,942.9	$	494.8	$	42.2

Gains/Losses of Derivative Financial Instruments

The following table shows the location and amount of derivative gains and losses recognized in the consolidated statements of income related to fair value hedges for the years ended December 31, 2017, 2016, and 2015.

TABLE 117: LOCATION AND AMOUNT OF FAIR VALUE HEDGE DERIVATIVE GAINS AND LOSSES RECORDED IN INCOME

	DERIVATIVE INSTRUMENT	LOCATION OF DERIVATIVE GAIN/(LOSS) RECOGNIZED IN INCOME	AMOUNT OF DERIVATIVE GAIN/        (LOSS) RECOGNIZED IN INCOME           DECEMBER 31,
(In Millions)			2017			2016		2015
Available for Sale Investment Securities	Interest Rate Swap Contracts	Interest Income	$	(0.8	)	$	63.4	$	(21.1	)
Senior Notes and Long-Term Subordinated Debt	Interest Rate Swap Contracts	Interest Expense	3.4			5.0		34.7
Total			$	2.6		$	68.4	$	13.6

Cash Flow Hedge Derivative Gains and Losses Recognized in AOCI and the Amounts Reclassified to Earnings

The following table provides cash flow hedge derivative gains and losses that were recognized in AOCI and the amounts reclassified to earnings during the years ended December 31, 2017, 2016 and 2015.

TABLE 118: CASH FLOW HEDGE DERIVATIVE GAINS AND LOSSES RECOGNIZED IN AOCI AND RECLASSIFIED TO INCOME

	FOREIGN EXCHANGE           CONTRACTS           (BEFORE TAX)									INTEREST RATE           CONTRACTS           (BEFORE TAX)
(In Millions)	2017			2016			2015			2017		2016			2015
Net Gain/(Loss) Recognized in AOCI	$	32.5		$	7.9		$	(1.2	)	$	1.3	$	(3.4	)	$	—
Net Gain/(Loss) Reclassified from AOCI to Earnings
Other Operating Income	5.0			(6.4		)	(8.0		)	—		—			—
Interest Income	19.3			6.4			—			0.3		2.8			5.2
Other Operating Expense	(0.1		)	(0.9		)	(1.9		)	—		—			—
Total	$	24.2		$	(0.9	)	$	(9.9	)	$	0.3	$	2.8		$	5.2

Types of Risk Management Derivative Instruments Not Formally Designated as Hedges, Including Notional Amounts and Fair Values

The following table identifies the types of risk management derivative instruments not formally designated as hedges and their notional amounts and fair values.

TABLE 119: NOTIONAL AND FAIR VALUES OF NON-DESIGNATED RISK MANAGEMENT DERIVATIVE INSTRUMENTS

	DECEMBER 31, 2017						DECEMBER 31, 2016
			FAIR VALUE						FAIR VALUE
(In Millions)	NOTIONAL VALUE		ASSET		LIABILITY		NOTIONAL VALUE		ASSET		LIABILITY
Foreign Exchange Contracts	$	214.1	$	1.1	$	0.1	$	289.6	$	0.8	$	1.8
Other Financial Derivatives (1)	404.7		—		30.4		270.0		—		25.2
Total	$	618.8	$	1.1	$	30.5	$	559.6	$	0.8	$	27.0

(1) This line consists of swaps related to the sale of certain Visa Class B common shares and total return swap contracts.

Gains/Losses of Derivative Financial Instruments

The following table provides the location and amount of gains and losses recorded in the consolidated statements of income for the years ended December 31, 2017, 2016, and 2015 for derivative instruments not formally designated as hedges under GAAP.

TABLE 120: LOCATION AND AMOUNT OF GAINS AND LOSSES RECORDED IN INCOME FOR NON-DESIGNATED RISK MANAGEMENT DERIVATIVE INSTRUMENTS

	LOCATION OF DERIVATIVE GAIN/ (LOSS) RECOGNIZED IN INCOME	AMOUNT RECOGNIZED IN INCOME
(In Millions)		2017			2016			2015
Foreign Exchange Contracts	Other Operating Income	$	8.2		$	(6.7	)	$	(10.9	)
Other Financial Derivatives (1)	Other Operating Income	(13.3		)	(6.1		)	(1.0		)
Total		$	(5.1	)	$	(12.8	)	$	(11.9	)

(1) This line includes the statement of income impact of swaps related to the sale of certain Visa Class B common shares, total return swap contracts, and credit default swap contracts.