Goodwill and Other Intangibles

12 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill. Changes by reporting segment in the carrying amount of Goodwill for the years ended December 31, 2021 and 2020, including the effect of foreign exchange rates on non-U.S.-dollar denominated balances, were as follows.

TABLE 85: GOODWILL


(In Millions)	CORPORATE & INSTITUTIONAL SERVICES		WEALTH MANAGEMENT		TOTAL
Balance at December 31, 2019(1)	$	616.4	$	80.4	$	696.8
Foreign Exchange Rates	10.3		0.1		10.4
Balance at December 31, 2020	$	626.7	$	80.5	$	707.2
Goodwill Acquired	4.2		—		4.2
Foreign Exchange Rates	(5.2)		—		(5.2)
Balance at December 31, 2021	$	625.7	$	80.5	$	706.2

(1) $9.3 million of goodwill was moved from Corporate & Institutional Services to Wealth Management for reporting purposes, to better reflect the nature of the client base.

In the second quarter of 2021, Northern Trust finalized the acquisition of Parilux Investment Technology, LLC, a provider of middle office software solutions for multi-manager investors, completing the investment in the firm that was initiated in 2018. The purchase price recorded in connection with the closing of the acquisition totaled $17.6 million. Goodwill and developed technology associated with the acquisition totaled $4.2 million and $13.4 million, respectively.

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 2021 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 2021.

Other Intangible Assets Subject to Amortization. The gross carrying amount and accumulated amortization of other intangible assets subject to amortization as of December 31, 2021 and 2020 were as follows.

TABLE 86: OTHER INTANGIBLE ASSETS


	DECEMBER 31,
(In Millions)	2021		2020
Gross Carrying Amount	$	206.4	$	221.3
Less: Accumulated Amortization	114.8		108.7
Net Book Value	$	91.6	$	112.6

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 $14.8 million, $16.9 million, and $16.6 million for the years ended December 31, 2021, 2020, and 2019, respectively. Amortization for the years 2022, 2023, 2024, 2025, and 2026 is estimated to be $9.9 million, $9.6 million, $9.5 million, $8.9 million, and $8.6 million respectively.

Capitalized Software. The gross carrying amount and accumulated amortization of capitalized software as of December 31, 2021 and 2020 were as follows.

TABLE 87: CAPITALIZED SOFTWARE


	DECEMBER 31,
(In Millions)	2021		2020
Gross Carrying Amount	$	2,982.1	$	4,337.4
Less: Accumulated Amortization	1,299.5		2,744.5
Net Book Value	$	1,682.6	$	1,592.9

Capitalized software, which is included in Other Assets on the consolidated balance sheets, 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, totaled $390.1 million in 2021, $366.9 million in 2020, and $339.1 million in 2019.