Derivative Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Value of Securities Collateral for Derivative Transactions

Table 63: Fair Value of Securities Collateral for Derivative Transactions

(in Millions)	March 31, 2018		December 31, 2017
Pledged to others:
Not permitted by contract or custom to sell or repledge	$	37.8	$	39.9
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	22.8		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, which is significantly less than the notional amount.

Table 64: Notional and Fair Values of Client-Related and Trading Derivative Financial Instruments

	March 31, 2018						December 31, 2017
	Notional Value		Fair Value				Notional Value		Fair Value
(In Millions)			Asset		Liability				Asset		Liability
Foreign Exchange Contracts	$	311,510.1	$	1,995.8	$	1,999.8	$	317,882.5	$	2,527.0	$	2,522.5
Interest Rate Contracts	7,574.4		63.2		80.7		7,418.0		65.1		64.1
Total	$	319,084.5	$	2,059.0	$	2,080.5	$	325,300.5	$	2,592.1	$	2,586.6

Location and Amount of Client-Related and Trading Derivative Gains and Losses Recorded in Income

The following table shows the location and amount of gains and losses recorded in the consolidated statements of income for the three months ended March 31, 2018 and 2017.

Table 65: Location and Amount of Client-Related and Trading Derivative Gains and Losses Recorded in Income

		Amount of Derivative Gain Recognized in Income
	Location of Derivative Gain Recognized in Income	Three Months Ended March 31,
(In Millions)		2018		2017
Foreign Exchange Contracts	Foreign Exchange Trading Income	$	78.5	$	48.1
Interest Rate Contracts	Security Commissions and Trading Income	1.7		1.2
Total		$	80.2	$	49.3

Notional and fair Value of Designated Risk Management Derivative Financial 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 66: Notional and Fair Value of Designated Risk Management Derivative Financial Instruments

			March 31, 2018						December 31, 2017
	Derivative Instrument	Risk Classification	Notional Value		Fair Value				Notional Value		Fair Value
(In Millions)					Asset		Liability				Asset		Liability
Fair Value Hedges
Available for Sale Debt Securities	Interest Rate Swap Contracts	Interest Rate	$	3,307.4	$	16.9	$	11.5	$	3,423.1	$	15.7	$	14.5
Senior Notes and Long-Term Subordinated Debt	Interest Rate Swap Contracts	Interest Rate	1,050.0		9.4		4.2		1,050.0		16.0		3.7
Cash Flow Hedges
Forecasted Foreign Currency Denominated Transactions	Foreign Exchange Contracts	Foreign Currency	465.3		12.5		7.9		436.2		13.5		6.4
Foreign Currency Denominated Debt Securities	Foreign Exchange Contracts	Foreign Currency	2,785.8		6.8		48.3		2,852.8		14.9		6.6
Available for Sale Debt Securities	Interest Rate Contracts	Interest Rate	925.0		0.2		2.3		925.0		0.2		1.2
Net Investment Hedges
Net Investments in Non-U.S. Affiliates	Foreign Exchange Contracts	Foreign Currency	2,663.8		33.8		2.6		3,011.3		0.6		179.6
Total			$	11,197.3	$	79.6	$	76.8	$	11,698.4	$	60.9	$	212.0

Location and Amount of Fair Value Hedge Derivative Gains and Losses Recorded in Income

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 three months ended March 31, 2018 and 2017.

Table 67: Location and Amount of Fair Value Hedge Derivative Gains and Losses Recorded in Income

		Location of Derivative Gain/(Loss) Recognized in Income	Amount of Derivative Gain/(Loss) Recognized in Income
	Derivative Instrument		Three Months Ended March 31,
(In Millions)			2018			2017
Available for Sale Debt Securities	Interest Rate Swap Contracts	Interest Income	$	0.5		$	(2.4	)
Senior Notes and Long-Term Subordinated Debt	Interest Rate Swap Contracts	Interest Expense	(5.7		)	3.1
Total			$	(5.2	)	$	0.7

Cash Flow Hedge Derivative Gains and Losses Recognized in AOCI and Reclassified to Income

The following table provides cash flow hedge derivative gains and losses recognized in AOCI and the amounts reclassified to income during the three months ended March 31, 2018 and 2017.

Table 68: Cash Flow Hedge Derivative Gains and Losses Recognized in AOCI and Reclassified to Income

(In Millions)	Foreign Exchange Contracts (Before Tax)					Interest Rate  Contracts (Before Tax)
Three Months Ended March 31,	2018		2017			2018			2017
Net Gain/(Loss) Recognized in AOCI	$	13.0	$	8.9		$	(1.4	)	$	(0.2	)
Net Gain/(Loss) Reclassified from AOCI to Net Income
Other Operating Income	2.4		0.7			—			—
Interest Income	14.2		4.4			—			0.1
Other Operating Expense	—		(0.1		)	—			—
Total	$	16.6	$	5.0		$	—		$	0.1

Notional and Fair Values of Non-Designated Risk Management Derivative Instruments

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

Table 69: Notional and Fair Values of Non-Designated Risk Management Derivative Instruments

	March 31, 2018						December 31, 2017
(In Millions)	Notional Value		Fair Value				Notional Value		Fair Value
			Asset		Liability				Asset		Liability
Foreign Exchange Contracts	$	236.1	$	3.7	$	0.5	$	214.1	$	1.1	$	0.1
Other Financial Derivatives (1)	424.8		0.2		31.3		404.7		—		30.4
Total	$	660.9	$	3.9	$	31.8	$	618.8	$	1.1	$	30.5

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

Location and Amount of Gains and Losses Recorded in Income for Non-Designated Risk Management Derivative Instruments

The following table provides the location and amount of gains and losses recorded in the consolidated statements of income for the three months ended March 31, 2018 and 2017.

Table 70: Location and Amount of Gains and Losses Recorded in Income for Non-Designated Risk Management Derivative Instruments

(In Millions)	Location of Derivative Gain / (Loss) Recognized in Income	Amount of Derivative Gain / (Loss) Recognized in Income
		Three Months Ended March 31,
		2018			2017
Foreign Exchange Contracts	Other Operating Income	$	4.0		$	1.7
Other Financial Derivatives (1)	Other Operating Income	(4.0		)	(2.9		)
Total		$	—		$	(1.2	)

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