Lease Commitments

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Lease Commitments

Lease Commitments

As of December 31, 2023, Northern Trust was obligated under a number of non-cancelable operating leases, primarily for real estate. Certain leases contain rent escalation clauses based on market indices, renewal option clauses calling for increased rentals, and rental payments based on usage. There are no restrictions imposed by any lease agreement regarding the payment of dividends, debt financing or Northern Trust entering into further lease agreements.

The components of lease costs for the years ended December 31, 2023 and 2022 were as follows.

TABLE 78: LEASE COST COMPONENTS

	FOR THE YEAR ENDED DECEMBER 31,
(In Millions)	2023		2022
Operating Lease Cost	$	109.2	$	104.5
Variable Lease Cost (1)	54.7		82.2
Sublease Income	(2.7)		(2.9)
Total Lease Cost	$	161.2	$	183.8

(1) Variable Lease Cost includes rental payments based on usage, common-area maintenance costs and property taxes.

The following table presents a maturity analysis of lease liabilities as of December 31, 2023.

TABLE 79: MATURITY OF LEASE LIABILITIES

(In Millions)	MATURITY OF LEASE LIABILITIES
2024	$	93.2
2025	100.3
2026	85.5
2027	84.9
2028	72.8
Later Years	393.5
Total Lease Payments	830.2
Less: Imputed Interest	(137.4)
Present Value of Lease Liabilities	$	692.8

As of December 31, 2023, there were no commitments for operating leases in addition to the above that have not yet commenced.

Northern Trust uses its incremental borrowing rate to determine the present value of lease payments for operating leases. Operating lease right-of-use (ROU) assets and lease liabilities may include options to extend or terminate the lease only when it is reasonably certain that Northern Trust will exercise that option. Northern Trust elects not to separate lease and non-lease components of a contract for its real estate leases. The location and amount of ROU assets and lease liabilities recorded on the consolidated balance sheets as of December 31, 2023 and 2022 are presented in the following table.

TABLE 80: LOCATION AND AMOUNT OF LEASE ASSETS AND LIABILITIES

(In Millions)	LOCATION OF LEASE ASSETS AND LEASE LIABILITIES ON THE BALANCE SHEET	DECEMBER 31, 2023		DECEMBER 31, 2022
Assets
Operating Lease Right-of-Use Asset	Other Assets	$	522.8	$	484.8
Liabilities
Operating Lease Liability	Other Liabilities	$	692.8	$	626.2

The weighted-average remaining lease term and weighted-average discount rate applied to leases as of December 31, 2023 and 2022 were as follows:

TABLE 81: WEIGHTED-AVERAGE REMAINING LEASE TERM AND DISCOUNT RATE

	DECEMBER 31, 2023		DECEMBER 31, 2022
Operating Leases
Weighted-Average Remaining Lease Term	10.1 years		9.3 years
Weighted-Average Discount Rate	3.3	%	3.0	%

The following table provides supplemental cash flow information related to leases for the years ended December 31, 2023 and 2022.

TABLE 82: SUPPLEMENTAL CASH FLOW INFORMATION

	FOR THE YEAR ENDED DECEMBER 31,
(In Millions)	2023		2022
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities - operating cash flows	$	91.4	$	70.3
Supplemental non-cash information
Right-of-use assets obtained in exchange for new operating lease liabilities	$	122.6	$	61.0