N O R T H E R N T R U S T C O R P O R A T I O N Steven L. Fradkin Executive Vice President & Chief Financial Officer J.L. Kellogg School of Management,

N O R T H E R N T R U S T C O R P O R A T I O N

Steven L. FradkinExecutive Vice President & Chief Financial Officer

J.L. Kellogg School of Management, Northwestern UniversityFinance Conference 2006November 18, 2006

The Role of the CFOWhat They Don’t Tell You in Business School or in the Recruitment Process

2 J. L. Kellogg School of Management 2006 Finance Conference

Agenda

About Northern Trust

Overview

Our Businesses

The Role of the Chief Financial Officer

A personal journey to the Chief Financial Officer role

The textbook definition of the CFO’s responsibilities and how the role is changing

Myth versus Reality: What they don’t tell you in business school or in the recruitment process



3

Overview


The Northern Trust Difference

Unique in our culture, history, share ownership, and organic growth

Unique in our financial strength and stability

Unique in our business focus – one business serving two channels

Unique in our product leadership

Unique in our service model and consistent record of delivery


Northern Trust Corporation

Client-centric and Highly Focused

Northern TrustGlobal

Investments

Asset Servicing

Banking

Corporate &Institutional

Services

Serving institutionalinvestors worldwide

PersonalFinancial Services

Serving affluent private clients in U.S. and Europe

Integrated Operations & Technology Platform

Assets Under Custody

$3.3 Trillion

Assets Under Management

$667 Billion

Bank Assets

$55 Billion

As of September 30, 2006


Northern Trust Corporation

Client-centric and Highly Focused

Northern TrustGlobal

Investments

Asset Servicing

Banking

Corporate &Institutional

Services

Serving institutionalinvestors worldwide

PersonalFinancial Services

Serving affluent private clients in U.S. and Europe

Integrated Operations & Technology Platform

Consumer Finance

Retail Banking

ADRs

Investment Banking

Insurance

Venture Capital

Some businesses Northern Trust is NOT IN:

Corporate Trustee

Stock Transfer

Credit Cards

DC Record Keeping

Discount Brokerage

Merchant Card Processing

Some businesses Northern Trust has EXITED:

Primary Dealer

Corporate Finance

Futures


NTGI TraditionalAsset Management

NTGI Fully Diversified, Global,Multi-Product Asset Manager

Broad-based Orientation

From…

Tightly Focused on Core Businesses

To…

Product Orientation – Banking & Trust

Client Orientation – Asset Administration and Asset Management

PFS Chicago Presence PFS National Footprint

C&IS Domestic Business C&IS Global Enterprise

Strategic Evolution


Who Are Our Clients?

Providing Solutions for Many of the World’s Leading Organizations

One Constant: Our Focus on Our Clients


Trust, Inv. & Other Servicing Fees

Other Non-Interest Income

Net Interest Income

Total Revenues

Non-Interest Expenses

Net Income

Earnings Per Share

Assets Under Custody

Global Custody Assets


Year-to-Date9/30/06

% Growth 2005 to 2006

$1,333 Million

$363 Million

$588 Million

$2.28 Billion

$1,442 Million

$495 Million

$2.23

$3.3 Trillion

$1.54 Trillion

$667 Billion

+15%

+20%

+10%

+15%

+13%

+13%

+13%

+16%

+30%

+10%

2006 Results Reflect Excellent Performance


$0.6

$0.8

$1.1

$1.3

$1.5$1.6 $1.7

$1.5

$2.1

$2.6

$2.9

$3.3

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 3Q06

$106$130

$197

$233

$292

$326 $320$303

$479

$572

$618

$667

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 3Q06

Assets Under Custody($ Trillions)

Assets Under Management($ Billions)

12/31/95 - 9/30/06 CAGR: 17%S&P 500 CAGR: 7%

12/31/95 - 9/30/06 CAGR: 19%S&P 500 CAGR: 7%

Outstanding, Long-Term Growth in Client Assets

Acquired $75 BN Index Assets

S&P 500S&P 500


Differentiated Financial Strength

Evidenced by Strong Credit Ratings

Northern Trust Corporation is one of only seven U.S. Bank Holding Companies to carry Standard & Poor’s Long-Term Debt Rating of ‘AA- or better.’

S&P rates approximately 200 bank holding companies

Other bank holding companies with a rating of ‘AA- or better’: Bank of America, Citigroup, HSBC USA, State Street, U.S. Bancorp, and Wells Fargo.

Northern Trust is one of only sixteen U.S. Banks to carry Fitch Rating’s ‘A/B’ individual rating or better.

Fitch assigns their individual rating to over 100 banks


A Differentiated Price/Earnings Multiple

19.0

18.5

18.4

15.8

14.5

14.5

14.4

1.

2.

3.

4.

5.

6.

7.

Northern Trust

State Street

Mellon

Bank of New York

PNC Bank

Wells Fargo

Fifth Third

13.7

13.3

13.2

13.1

13.0

12.7

12.0

8.

9.

10.

11.

12.

13.

14.

BB&T

Huntington

SunTrust

JPMorgan Chase

KeyCorp

US Bancorp

National City

12.0

11.8

11.7

11.6

13.8

17.6

15.

16.

17.

18.

Comerica

Wachovia

Citigroup

Bank of America

As of September 30, 2006 using 2006 “Street” projected earnings

Full Peer Group

Trust/Custody Peers

NTRS Premium to Trust Peers: 8%

NTRS Premium to Full Peer Group:38%


NTRS: A High Performance Company

Note: Closing stock prices adjusted for splits and dividends. Annual EPS is as reported and adjusted for splits.

NTRS STOCK PRICE

GE EPS NTRS EPS

GE STOCK PRICE

$0

$40

$0.69

$35.30

3/31/81 9/30/06

CAGR = 16.7%

$0

$60

$0.94

$58.43

3/31/81 9/30/06

CAGR = 17.6%

$0

$3

$1.72

$0.15

CAGR = 10.7%

12/31/81 12/31/05$0

$3

$2.65

$0.20

CAGR = 11.4%

12/31/81 12/31/05


Stock Price Performance

1. Procter & Gamble +5.1%

2. FedEx +5.0%

3. Southwest Airlines +0.9%

4. Berkshire Hathaway +0.8%

5. Microsoft -2.1%

6. Starbucks -3.8%

7. General Electric -4.0%

8. Johnson & Johnson -5.2%

9. Wal-Mart -11.4%

10. Dell -28.9%

S&P 500 +3.0%

NTRS versus Fortune’s Most Admired Companies of 2005

FY 2005YTD

9/30/06

+8.8%

+5.4%

+1.5%

+8.1%

+5.7%

+13.5%

+3.0%

+10.0%

+6.5%

-23.7%

+7.0%

Northern Trust +6.7% +12.8%


NTRS+1,088%

$58.43

NTRS 17%

$4.92

1990 2000 2006

S&P 500

+305%

As of 9/30/06:

0%

400%

800%

1200%

1600%

2000%

S&P 500 9%

KBW50 +694%

KBW 50 14%

For Investors, Employees, The Community and Other Constituents…Consistently Over Time

Unique in Our Financial Strength and Stability

Delivering High Performance Results

CAGR since 12/31/90:


... And Commitment to Community & Philanthropy

Northern Trust consistently contributes approximately 1.5% of pre-tax profits to charities every year

Ranked as the 9th most generous cash contributor by Business Week in 2005

Employees donated more than 230,000 volunteer hours in 2005

Awarded more than $13 million in cash contributions in 2005 to organizations, supporting causes ranging from literacy to affordable housing

High Performance Results can be Consistent with Companies Contributing to their Communities

Named one of Global Finance magazine’s

“World’s Most Socially Responsible Companies”

Northern Trust Named one of “100 Best Corporate

Citizens”

Northern Trust named one of the

"100 Best Companies for Working Mothers"

for the 15for the 15thth consecutive year!consecutive year!

Northern Trust named one of the

"100 Best Companies for Working Mothers"

for the 15for the 15thth consecutive year!consecutive year!



17

Our Businesses


The recognized leader in providing sophisticated financial solutions to high net worth families.

Target market: Individuals or families with $75+ million in investable assets

$1 Million $10 Million $75 Million

Delivering high-touch trust, investment management andbanking solutions to individuals through 84 offices in 18 states.

Target market: Affluent individuals withat least $1 million in investable assets

Delivering comprehensive, investment solutionsthrough a multi-manager investment program.

Target market: Individuals or families with$10 to $75 million in investable assets

Wealth Management

Wealth Advisory

PrivateClient

Client Investable Assets

Personal Financial ServicesIndustry Leader in Serving the Affluent Market


Personal Trust Assets(Billions)

Source: SNL Financial as of 12/31/05

Personal Financial ServicesIndustry Leading Personal Trust Provider

Bank of America 100.8

J.P. Morgan Chase 80.5

Wachovia 59.8

Citigroup 54.6

Mellon 53.8

Wells Fargo 40.0

U.S. Bancorp 39.4

National City 35.0

PNC Financial 28.9

Northern Trust $135.4

Largest Personal Trust Bank in U.S. Source: SNL Financial

2.

3.

4.

5.

6.

7.

8.

9.

10.

1.


Personal Financial ServicesComprehensive Advice-Based Solutions

Retirement Services Qualified Plan Services Defined Benefit Plans Defined Contribution Plans IRA Rollovers Investment Management Individual 401(k) Plans

Private Passport Online access to banking, trust,

investment management, mutual funds, and brokerage information

Corporate Banking Working Capital and General

Corporate Loans Secured and Cash Flow Lending Acquisition Financing Industrial Development Bonds Equipment Finance and Leasing

Checking & Deposit Services Personal Loans Real Estate

Development Loans Margin Loans

Stock Option Lending Home Mortgages Equity Credit Lines

Private BankingPrivate Banking Structured Investment

Services Asset Allocation Equity Investing Fixed-Income Investing

Short-Term Asset Management

Indexing Alternative Investments Single Stock Strategies

Investment Management

Comprehensive Trust Services Family Business Services Real Estate and Farm Management Minerals Management Charitable Services Trust and Estate Settlement Services Guardianship Services

Brokerage Full Service Brokerage Managed Account 10b5-1 Plans Money Market Instruments Safekeeping

Financial Consulting Retirement Planning Estate Planning Tax Planning Asset Allocation Stock Option Planning

Client


Arizona(8)

Florida(25)

Source: IXI, Claritas.Source: IXI, Claritas.

Personal Financial Services

Extensive Reach in High Growth, Target Market

84 Offices in 18 StatesOver 50% of millionaire market resides within a 45-minute drive of Northern Trust offices.

Illinois(18)

Projected MillionaireHousehold Growth(Within PFS Footprint, Millions)

Projected MillionaireHousehold Growth(Within PFS Footprint, Millions)

Colorado(1)

Nevada(1)

Missouri(1)

Minnesota(1)

Washington(1)

Michigan(3)

Texas(7)

California(11)

New York (1)

Connecticut (1)

Delaware (1)Ohio(1)

Georgia(1)

Massachusetts (1)Wisconsin(1)

47%Increase

8%CAGR

1.5

2.2

2005 2010


$23

$65

$82

$101

$114

$124

$16

$61

$52

$38

$28

$65

$0

$25

$50

$75

$100

$125

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 3Q06

Personal Financial ServicesSpotlight: Outstanding Growth in Wealth Management

Target Market: Families with $75+ million in investable assets

Industry leading technology

AUC: $124.2 billion

AUM: $24.6 billion

22% of Forbes 400

350 families

Wealth Management – Assets Under Custody$ Billions

12/31/95 to 9/30/06 % Change CAGR

Wealth Mgmt. AUC +675% +21%

S&P 500 +117% +7%

As of September 30, 2006


$128

$38

PFS Assets Under Management ($ Billions)

Dec 1995 Sept 2006

$243

$63

PFS Assets UnderCustody ($ Billions)

Reputation:

Outstanding Private Bank – Private Banking International

Serving 22% of Forbes 400 Wealthiest Families– Forbes

Fiduciary Culture:

Largest Personal Trust Bank in the U.S. – SNL Financial

Superb Ratings for Trustworthiness and Objectivity

– Spectrem Research

Institutional Scale:

World’s 10th Largest Asset Manager – Pensions & Investments Magazine

Top 500 Innovative Technology Users

– Information Week

Exceptional Client Service:

Client Satisfaction Rating of 86% – 2005 PFS Client Satisfaction Survey

Dec 1995 Sept 2006

Personal Financial Services

Growth and Industry Positioning


Fund Services

Fund Accounting Investment Operations

OutsourcingActive Collateral Management

Hedge Fund AdministrationPrivate Equity AdministrationProperty Administration

Asset ServicingSafekeepingSettlement

Income CollectionCorporate Actions

Information Services

RiskManagement

AssetManagemen

t

CashActivePassiveSecurities Lending

Manager of ManagersForeign ExchangeTransition ManagementCommission Recapture

AccountingReportingValuation

Attribution AnalysisValue at RiskCross-Border Pension Pooling

Rates of ReturnMultinational

HQ Reporting

Compliance MonitoringMarket Event Analytics

Corporate & Institutional Services

A Worldwide Leader in the Institutional Marketplace



Positioned Globally for Growth

Chicago(Corporate

Headquarters)

Toronto LondonNew York

Positioned to serve clients locally and capitalize on global opportunities

LuxembourgAmsterdamIsle of Man

Dublin Guernsey

Jersey

Singapore

Beijing

Tokyo

Bangalore*

Hong Kong

Trade Settlement

in 90 Markets

15 LocationsWorldwide

Clients in40 Countries

*Name change announced and to be implemented at a later date


28%

30%

36%

32%

30%

28%

31%

37%

34%

0% 25% 50% 75% 100%

Top 200 US Pension Plans

Top 100 US Corporate Plans

Top 100 US Public Funds

Top 50 US Endowments

Top 50 US Foundations

Top 50 US Healthcare Funds

Top 25 Taft Hartley Plans

UK Local Authority Plans

Top 200 UK Pension Plans

Source: Pensions and Investments 23 January 2006, 26 December 2005, and 30 May 2005; IPE Top 1000 Supplement, September 2005; and S&P Directory of Tax-Exempt Organizations, 2005.

Percent Served by Northern Trust


Strong Position in Target Institutional Segments


$108

$471

$727

$965

$1,240

$1,539

$85

$385$312

$200$149

$452

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 3Q06

Corporate & Institutional ServicesSpotlight: Outstanding International Growth

Global Custody Assets$ Billions

12/31/95 to 9/30/06 % Change CAGR

Global Custody Assets +1,710% +31%

S&P 500 +117% +7%

EAFE +66% +5%

15% 15% 15% 18% 23% 26% 30% 35% 38% 41% 46% 50%% of C&IS Total AUC


9%

19%

22%24%

21%

24%

27%29%

7%

23%

16%16%16%

21%

0%

5%

10%

15%

20%

25%

30%

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

% of Northern Trust Corporation Net Income resulting from International Activities

Corporate & Institutional ServicesInternational: Growing Contribution to the Bottom Line


$3.07

$0.55

Dec 1995 Sep 2006

$539

$67

Dec 1995 Sep 2006

C&IS Assets Under Management ($ Billions)

C&IS Assets UnderCustody ($ Trillions)

Industry has rewarded our efforts


Strong Growth in Client Assets

European Pension Fund Custodian of the Year International Custody And Fund Administration

3rd Consecutive Year (February 2006)

One of Two Custodians to Qualify In Each Region

R&M Survey (March 2006)

Custodian of the Year

Global Pensions 2006 Awards (January 2006)

Best Global Custodian – Billionaires Global Investor Global Custody Survey (May 2006)

Best Sole Custodian Global Investor Global Custody Survey (May 2006)

Best Global Custodian in Asia Global Investor Global Custody Survey (May 2006)


Northern Trust Global InvestmentsWorld Class Investment Manager

$667 BillionAssets Under Management as of September 30, 2006$667 BillionAssets Under Management as of September 30, 2006

$245 Billion(37%)

$113 Bn(17%)

$301 Billion(45%)

$416 Billion(62%)

Active

$218 Billion(33%)

Quantitative

$33 Billion(5%)

Manager of Managers

A Diversified Asset Manager

Across Asset Classes Across Client Segments

Equities

FixedIncome

ShortDuration

$539 Billion

Institutional

$128 BillionPersonal

Across Styles

Other$8 Billion

(1%)


Canadian & UK Programs Int’l/US Equity Manager of Managers Minority and Emerging Managers Investment Program Solutions International Equities EAFE Index Technology Large Cap Growth Socially Responsible Tax Advantaged Fixed Income and Equity Index Funds Core Fixed Income Municipals Government Short/Intermediate Duration Fixed Income Cash Management

Investment Options

Northern Trust Global InvestmentsA Continuum of Investment Products

Multi-Advisor Funds Hedge Funds Private Equity Small Cap Growth Mid Cap Growth Large Cap Value Exchange Fund Enhanced Index Funds International Fixed Income High Yield Stable Value

Active Investment Management

Growth & Value Equity

Short & Long Duration Fixed Income

Quantitative Management Index & Enhanced Capabilities

Manager of Managers Investment Program Solutions

Emerging & Minority Programs

Alternative Investments

PRODUCT BREADTH

Methods of DeliverySeparate Accounts

Collective Funds

Common Funds

Mutual Funds

Methods of DeliverySeparate Accounts

Collective Funds

Common Funds

Mutual Funds


Industry Has Rewarded Our Efforts

$105.5

$667.2

$0

$100

$200

$300

$400

$500

$600

$700

$800

Dec 1995 to Sept 2006 CAGR

Northern Trust 19%

S&P 500 7%

$ Billions


Dec 1995 Sept 2006

Northern Trust Global Investments

Strong Growth in Assets Under Management

10th Largest Asset Manager WorldwidePensions & Investments (May 2006)

3rd Largest U.S. Institutional Index Manager

P&I (May 2006)

4th Largest Manager U.S. Institutional Tax-exempt Assets

P&I (May 2006)

Winner: U.S. Equity (Passive) Global Investor Magazine -

Awards for Investment Excellence (April 2006)

Winner: Multi-Manager Global Investor Magazine -

Awards for Investment Excellence (April 2006)

Rated #1 Global Securities LenderInternational Securities Finance

(September 2006)


Northern Trust CorporationWell Positioned for Growth

Rich History 117 Year Heritage — Undiluted by Mergers & Acquisitions

Focused Strategy on Growth Businesses Exclusively Focused on the Management and Administration of Client Assets

Conservative Culture One of only 7 independent U.S. Bank Holding Companies Rated ‘AA- or better’ by S&P

Seasoned Management Team Northern Trust Industry

Bill Osborn - Chairman & CEO 36 Years 36 Years

Rick Waddell - President & COO 31 Years 31 Years

Sherry Barrat - President – PFS 16 Years 36 Years

Steve Fradkin - EVP & Chief Financial Officer 21 Years 21 Years

Tim Moen - EVP – Human Resources 5 Years 31 Years

Bill Morrison - President – PFS 10 Years 33 Years

Steve Potter – EVP – C&IS International 24 Years 24 Years

Jana Schreuder - President – WWOT 26 Years 26 Years

Tim Theriault - President – C&IS 24 Years 28 Years

Terry Toth - President – NTGI 19 Years 24 Years

Kelly Welsh - EVP & General Counsel 6 Years 28 Years


The Role of the Chief Financial Officer

34


A Personal Journey to the Chief Financial Officer Role

Compliance Group

International Sales

Expatriate Assignment in London

Global Sales Head

General Manager for International

Business

Financial Management

CFO

1985 1990 1995 2000 2005 2006

NTRS Stock Price EOP

$2.35 $4.92 $14.00 $81.56 $51.82 $58.43*

*As of September 30, 2006


The Role of the CFO

Source: hrvillage.com

Textbook Definition

Job Description: Responsible for all financial aspects of company operations

Provide leadership and coordination in the administrative, business planning, accounting and budgeting efforts of the company

Primary Responsibilities: Coordinate the preparation of financial statements, financial reports and special

analyses

Develop and implement finance, accounting, billing and auditing procedures

Establish and maintain appropriate internal controls

Ensure compliance with local, state and federal reporting requirements

Develop and direct implementation of strategic and operational plans

Analyze cash flow, cost controls and expenses to guide management

Serve on planning and policy making committees

And much, much more …


The Role of the CFO

Source: Deloitte CFO Center

The Changing Role of Corporate Finance: From Steward to Strategist

Steward

Strategist

FinanceManagement

StakeholderManagement

Record& Report

Analysis &Interpretation

RiskManagement

CapitalOptimization

PolicyEnforcement

Planning


The Role of the CFO – Myth versus Reality

Experience, judgment, ethics, low ego, adaptability and fortitude are all important ingredients of an effective CFO.

Myth Reality

The executive suite or “C Suite”… … is not always sweet.

The CFO role is a financial job. It is a management job with oversight responsibility for financial functions

People generally fall in line with and work together to achieve financial goals.

Driving company performance drives people crazy. Not the right job if the goal is to win a popularity contest.

All corporate functions share in the blame when things are not going well.

When things are not going well, they are called “financial problems.”

Public company quarterly earnings conference calls are effortlessly executed.

“Fencing on a tightrope, 500 feet in the air, with no safety net below.”

Rising to the CFO spot means you figured it all, or most of it, out.

Counterintuitive career findings: Rising to the CFO spot enhances job insecurity.

The CFO works with a select group of senior managers.

The CFO works with directors, investors, management, regulators, auditors, employees, vendors, communities and interest groups, to name a few. Communication and management is key.


Conclusion

“It is not the strongest of the species that survives, nor the most intelligent that survives.

It is the one that is the most adaptable to change.”

-Charles Darwin


Steven L. FradkinExecutive Vice President & Chief Financial Officer

J.L. Kellogg School of Management, Northwestern UniversityFinance Conference 2006November 18, 2006

The Role of the CFOWhat They Don’t Tell You in Business School or in the Recruitment Process

N O R T H E R N T R U S T C O R P O R A T I O N Steven L. Fradkin Executive Vice President & Chief Financial Officer J.L. Kellogg School of Management,

Documents

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