Goodwill and Other Intangibles

6 Months Ended

Jun. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill. Changes by reporting segment in the carrying amount of Goodwill for the six months ended June 30, 2021, including the effect of foreign exchange rates on non-U.S. dollar denominated balances, were as follows.

TABLE 60: GOODWILL


(In Millions)	CORPORATE & INSTITUTIONAL SERVICES		WEALTH MANAGEMENT		TOTAL
Balance at December 31, 2020	$	636.0	$	71.2	$	707.2
Goodwill Acquired	4.2		—		4.2
Foreign Exchange Rates	(2.0)		—		(2.0)
Balance at June 30, 2021	$	638.2	$	71.2	$	709.4

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.

Other Intangible Assets Subject to Amortization. The gross carrying amount and accumulated amortization of other intangible assets subject to amortization as of June 30, 2021 and December 31, 2020 were as follows.

TABLE 61: OTHER INTANGIBLE ASSETS


(In Millions)	JUNE 30, 2021		DECEMBER 31, 2020
Gross Carrying Amount	$	211.7	$	221.3
Less: Accumulated Amortization	110.8		108.7
Net Book Value	$	100.9	$	112.6

Other intangible assets consist primarily of the value of acquired client relationships and are included within Other Assets on the consolidated balance sheets. Amortization expense related to other intangible assets totaled $3.9 million and $8.2 million for the three and six months ended June 30, 2021, and $4.2 million and $8.3 million for the three and six months ended June 30, 2020. Amortization for the remainder of 2021 and for the years 2022, 2023, 2024, and 2025 is estimated to be $6.6 million, $10.2 million, $9.9 million, $9.8 million, and $9.2 million, respectively.

Capitalized Software. The gross carrying amount and accumulated amortization of capitalized software as of June 30, 2021 and December 31, 2020 were as follows.

TABLE 62: CAPITALIZED SOFTWARE


(In Millions)	JUNE 30, 2021		DECEMBER 31, 2020
Gross Carrying Amount	$	4,511.5	$	4,337.4
Less: Accumulated Amortization	2,906.4		2,744.5
Net Book Value	$	1,605.1	$	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 $95.9 million and $189.9 million, respectively, for the three and six months ended June 30, 2021, and $91.1 million and $182.7 million, respectively, for the three and six months ended June 30, 2020.