Lease Commitments
As of December 31, 2025, 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, 2025 and 2024 were as follows.
TABLE 68: LEASE COST COMPONENTS
| | | | | | | | |
| FOR THE YEAR ENDED DECEMBER 31, |
| (In Millions) | 2025 | 2024 |
| Operating Lease Cost | $ | 87.8 | | $ | 93.5 | |
Variable Lease Cost (1) | 50.4 | | 49.3 | |
| Sublease Income | (3.2) | | (3.0) | |
| Total Lease Cost | $ | 135.0 | | $ | 139.8 | |
(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, 2025.
TABLE 69: MATURITY OF LEASE LIABILITIES
| | | | | |
| (In Millions) | MATURITY OF LEASE LIABILITIES |
| 2026 | $ | 98.0 | |
| 2027 | 99.1 | |
| 2028 | 86.2 | |
| 2029 | 71.0 | |
| 2030 | 70.3 | |
| Later Years | 315.2 | |
| Total Lease Payments | 739.8 | |
| Less: Imputed Interest | (115.4) | |
| Present Value of Lease Liabilities | $ | 624.4 | |
As of December 31, 2025, Northern Trust did not have any 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, 2025 and 2024 are presented in the following table.
TABLE 70: LOCATION AND AMOUNT OF LEASE ASSETS AND LIABILITIES
| | | | | | | | | | | |
| (In Millions) | LOCATION OF LEASE ASSETS AND LEASE LIABILITIES ON THE BALANCE SHEET | DECEMBER 31, 2025 | DECEMBER 31, 2024 |
| Assets | | | |
| Operating Lease Right-of-Use Asset | Other Assets | $ | 464.6 | | $ | 478.0 | |
| Liabilities | | | |
| Operating Lease Liability | Other Liabilities | $ | 624.4 | | $ | 648.8 | |
The weighted-average remaining lease term and weighted-average discount rate applied to leases as of December 31, 2025 and 2024 were as follows:
TABLE 71: WEIGHTED-AVERAGE REMAINING LEASE TERM AND DISCOUNT RATE
| | | | | | | | |
| DECEMBER 31, 2025 | DECEMBER 31, 2024 |
| Operating Leases | | |
| Weighted-Average Remaining Lease Term | 9.2 years | 9.7 years |
| Weighted-Average Discount Rate | 3.5 | % | 3.4 | % |
The following table provides supplemental cash flow information related to leases for the years ended December 31, 2025 and 2024.
TABLE 72: SUPPLEMENTAL CASH FLOW INFORMATION
| | | | | | | | |
| FOR THE YEAR ENDED DECEMBER 31, |
| (In Millions) | 2025 | 2024 |
| Supplemental cash flow information | | |
| Cash paid for amounts included in the measurement of lease liabilities - operating cash flows | $ | 105.4 | | $ | 94.5 | |
| Supplemental non-cash information | | |
| Right-of-use assets obtained in exchange for new operating lease liabilities | $ | 48.8 | | $ | 36.5 | |