Goodwill and Other Intangibles

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill. Changes by reporting segment in the carrying amount of Goodwill for the years ended December 31, 2020 and 2019, including the effect of foreign exchange rates on non-U.S. dollar denominated balances, were as follows.

TABLE 89: GOODWILL


(In Millions)	CORPORATE & INSTITUTIONAL SERVICES		WEALTH MANAGEMENT		TOTAL
Balance at December 31, 2018	$	598.2	$	71.1	$	669.3
Goodwill Acquired	23.5		—		23.5
Foreign Exchange Rates	4.0		—		4.0
Balance at December 31, 2019	$	625.7	$	71.1	$	696.8
Foreign Exchange Rates	10.3		0.1		10.4
Balance at December 31, 2020	$	636.0	$	71.2	$	707.2

The goodwill impairment test is performed at least annually at the reporting-unit level. The Corporation has determined its reporting units for this purpose to be Corporate & Institutional Services and Wealth Management. Goodwill was tested for impairment during the fourth quarter of 2020 using a quantitative assessment in which the estimated fair values of the reporting units are compared to their carrying values. Impairment is deemed to exist if the carrying value of a reporting unit exceeds its estimated fair value. Based upon the quantitative assessments, there were no impairments to goodwill in 2020.

Other Intangible Assets Subject to Amortization. The gross carrying amount and accumulated amortization of other intangible assets subject to amortization as of December 31, 2020 and 2019 were as follows.

TABLE 90: OTHER INTANGIBLE ASSETS


	DECEMBER 31,
(In Millions)	2020		2019
Gross Carrying Amount	$	221.3	$	207.2
Less: Accumulated Amortization	108.7		86.6
Net Book Value	$	112.6	$	120.6

Other intangible assets consist primarily of the value of acquired client relationships and are included in Other Assets on the consolidated balance sheets. Amortization expense related to other intangible assets was $16.9 million, $16.6 million, and $17.4 million for the years ended December 31, 2020, 2019, and 2018, respectively. Amortization for the years 2021, 2022, 2023, 2024, and 2025 is estimated to be $15.1 million, $10.5 million, $10.2 million, $10.1 million, and $9.5 million respectively.

In the third quarter of 2019, Northern Trust completed its acquisition of Belvedere Advisors LLC, a provider of digital investment advisory and asset management services. The purchase price recorded in connection with the closing of the acquisition, which is subject to certain performance-related adjustments over a five-year period after the acquisition date, totaled $17.6 million inclusive of contingent consideration. Goodwill and developed technology associated with the transaction totaled $9.3 million and $8.3 million, respectively.

In the first quarter of 2019, Northern Trust completed the purchase accounting related to its acquisition of BEx LLC, a provider of foreign exchange software solutions. The purchase price recorded in connection with the closing of the acquisition totaled $37.9 million. Goodwill and developed technology associated with the acquisition totaled $12.5 million and $25.0 million, respectively.

Capitalized Software. The gross carrying amount and accumulated amortization of capitalized software as of December 31, 2020 and 2019 were as follows.

TABLE 91: CAPITALIZED SOFTWARE


	DECEMBER 31,
(In Millions)	2020		2019
Gross Carrying Amount	$	4,337.4	$	3,885.2
Less: Accumulated Amortization	2,744.5		2,377.9
Net Book Value	$	1,592.9	$	1,507.3

Capitalized software, which is included in Other Assets on the consolidated balance sheet, consists primarily of purchased software, software licenses, and allowable internal costs, including compensation relating to software developed for internal use. Fees paid for the use of software licenses that are not hosted by Northern Trust are expensed as incurred. Amortization expense, which is included in Equipment and Software on the consolidated statements of income, amounted to $366.9 million in 2020, $339.1 million in 2019, and $334.9 million in 2018.